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By Robert Rapier on Aug 21, 2010 with 121 responses

What’s Really Holding Cellulosic Biofuels Back

There was a recent article in MIT Technology review called What’s Holding Biofuels Back? There is a relatively simple answer to the question that I will delve into below, but the short answer to “What’s holding biofuels back?” is that we placed unreasonable expectations on them to begin with, and they have simply failed to meet those unreasonable expectations. People would think it was unreasonable if Congress mandated a cure for the common cold within 5 years, but they don’t think twice when Congress mandates the creation of a cellulosic ethanol industry within 5 years. Yet either scenario requires technical breakthroughs that are not assured.

The article notes that the cellulosic ethanol mandate for 2010 in the U.S. was cut by 93.5%, and now the 2011 mandate has been slashed (as I have predicted for several years would be the case):

This year’s mandate was supposed to be 100 million gallons of cellulosic biofuels, but that was reduced to 6.5 million. Last month, the EPA announced that it would lower the requirement in 2011, from 250 million to somewhere between five million and 17.1 million gallons.

The reason?

The EPA is doing this because not enough cellulosic biofuel is being produced to meet the targets. So far, no commercial plants have been built–just some small pilot and demonstration-scale plants.

So they have identified the effect, and then go searching for causes. They quote a number of cellulosic ethanol players who blame the lack of progress on not enough funding or mandates. While it is true that if you throw massive amounts of money at the problem, you could certainly get some cellulosic ethanol facilities off the ground. But before throwing money at a problem, there needs to be a clearly identified path to long-term economic viability that is based on reasonable assumptions.

Unreasonable expectations are at the heart of the mandate-rollback. It was an unreasonable expectation for Congress to believe they could mandate technology. If something is uneconomical today, there are no guarantees that it will be economical tomorrow — even if you pass laws dictating that things must happen. You may make an uneconomical solution appear to be economical if you throw large amounts of cash at it, but then it is only “viable” as long is it continues to receive those cash infusions.

It is also true that sometimes uneconomical solutions can become economical given enough research and development, but bear in mind that we have been working on cellulosic ethanol for over 100 years. The same fundamental challenges that existed 100 years ago still exist today. (You can read more about the specific challenges of biofuels in Five Challenges of Next-Generation Biofuels).

MSNBC suggested in The green-energy landscape just keeps changing that perhaps the economics are a bit more challenging than proponents had appreciated:

Five years ago, cellulosic ethanol – produced from humble grasses and wood waste — looked as if it could be a “simple solution to pain at the pump.” [RR: Readers of R-Squared were not under that impression]. But in Science’s special report, Robert F. Service says the federal government’s plan for ramping up cellulosic-ethanol production is in “deep trouble” because the economics of ethanol don’t make as much sense as folks thought they would back then [RR: Again, regular readers were informed about the real economics of cellulosic ethanol as well as some of the unreasonable assumptions that caused various players to forecast the production of cheap cellulosic ethanol]. Technically, it’s still tougher than expected to convert cellulosic feedstock into fuel than it is to use American corn or Brazilian sugar cane.

The current issue of Science referenced in that quote has a special section on the future of energy called Scaling Up Alternative Energy. The authors dissect the alternative energy situation, and they conclude the same thing that you have heard me saying for the past five years:

The U.S. government’s flagship plan to reduce the nation’s dependence on oil by scaling up cellulosic ethanol is in deep trouble, highlighting the complex technical, economic, and political forces buffeting global efforts to create viable alternatives to fossil fuels.

Part of the problem in scaling up cellulosic biofuels continues to be technical. To brew ethanol, manufacturers use yeast to ferment simple sugars such as glucose. That task is relatively cheap and easy when starting with a raw material—or “feedstock”—rich in those simple sugars, such as sugar cane in Brazil. In the U.S., brewers using corn as a feedstock face a slightly more complex process, because they first must use enzymes to break apart the starch in corn kernels into their component glucose molecules. The task becomes even more difficult when using cellulosic feedstocks such as switchgrass, corn stalks, or wood chips. The sugars in these feedstocks are locked in cellulose, hemicellulose, and lignin, biopolymers more complex than starch. Breaking those biopolymers into intermediate compounds that can be converted to ethanol remains a difficult problem. Researchers call it “recalcitrance,” and it currently limits brewers to converting just 40% of the energy content available in cellulosic feedstocks to ethanol. Fermentation, by contrast, converts about 90% of the energy in simple sugars to ethanol. That means cellulosic ethanol plants currently need far more raw material than first-generation plants do to make the same amount of ethanol.

That’s also why I maintain that cellulosic ethanol will never be produced at a lower cost than corn ethanol: It is much more challenging to unlock the sugars in biomass than in corn. People may project lower costs, but they do so on the basis of models that have not been validated in the real world. As an example, I may presume that I can acquire waste biomass and will be paid $100/ton to take it. On that basis, I may very well project $2/gal (or lower) cellulosic ethanol — because the biomass contribution in that case is negative $1 per gallon. But I believe this is one of the most fundamental Bad Assumptions made by prospective producers of cellulosic ethanol. In the long run, nobody is going to pay me a lot of money to take their biomass, even if I find someone willing to do so today. I believe it is far more likely that I will have to pay $100/ton for large quantities of biomass to make it worthwhile for farmers to grow and harvest it. If that’s the case, then the $2/gallon ethanol case if I am being paid to take the biomass suddenly becomes $4/gallon when I have to pay for it.

I noted the unreasonable expectations in a recent story in Pacific Business News:

Biofuels have supporters, but scale remains an obstacle

“Biofuels will become increasingly competitive,” said Rapier. “I’m not looking at where things are now, but where things are going.”

That said, Rapier is also realistic about the current difficulties facing the industry.

“The thing about biofuels is that people don’t appreciate how difficult it is to compete with oil,” said Rapier. “A lot of time there are unreasonable expectations.”

Over time, I do believe that biofuels will become more competitive. But those who suggest that there is an easy path, and that cellulosic biofuels will have an easy time displacing oil — are simply creating those unreasonable expectations. Biofuels have to contend with oil, which Mother Nature already processed over millions of years with heat and pressure to produce an energy-dense, transportable mixture. With biofuels humans must grow and transport the biomass (which is far less energy dense than oil), and then add heat and pressure to convert the biomass into fuels. Thus, it shouldn’t be a surprise that biofuels tend to be more expensive than oil.

However, oil is becoming more difficult to extract, and is of course a depleting resource. Over time this will continue to drive up the cost of oil and various oil substitutes, which will improve the economic prospects for those biofuels that are not heavily petroleum dependent.

In conclusion, it is fine to set goals, as the EPA did with the cellulosic ethanol mandates. But when the goals aren’t reality-based, they will eventually need to be massively scaled down as they were. Frequently scaling back expectations will ultimately erode public confidence in the sector. So let’s operate on a more reasonable set of expectations: Prices at the pump will rise, and as they do so certain biofuel technologies will become more competitive. If Congress doesn’t attempt to anoint specific technology winners before they perform, then we won’t be collectively disappointed if they fail to deliver.

  1. By Rufus on August 22, 2010 at 12:27 am

    It ain’t easy being the Energy Czar. Get out too far ahead of the curve, and the partisans hammer you, mercilessly, with “picking winners,” and “losing touch with reality.”

    Get behind the curve, and you are bludgeoned with “slow, incompetent, unimaginative, backward . . . . . etc, etc.

    Probably, not much will happen until gasoline rises back above $3.50ish, and stays there for awhile (of course, the danger, here, is that we might, immediately, drop back into serious recession with all the complications arising, thereof *see now*)

    We will, also, need a less “radical” White House, one that does not want to srap ALL ICE Engines, immediately, and jump straight to “windmills, and BEVs.”

    The good news is that when we decide to “do it” it won’t be that difficult. The enzymes, and yeasts are there now at a cost we can afford. (Somewhere in the immediate neighborhood of $2.00/gal. it looks like.)

    One of the most remarkable statistics I’ve ever come across was the 5,000 electric plants built the year after Edison demonstrated the light bulb, and the 127,000 generating plants built in the next Five years.

    If we could do that then, we can surely build five, or six thousand small cellulosic biorefineries when we put our mind to it. It just depends on the price of gasoline. Simple as that, nothing more to it.

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  2. By rrapier on August 22, 2010 at 2:52 am

    One of the most remarkable statistics I’ve ever come across was the 5,000 electric plants built the year after Edison demonstrated the light bulb, and the 127,000 generating plants built in the next Five years

    Keep in mind, though, that the technology to build cellulosic ethanol plants existed when those electrical generating plants were built. There is a reason one was built out and not the other, and those reasons still exist today.

    RR

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  3. By David on August 22, 2010 at 2:57 am

    http://www.forbes.com/forbes/2…..print.html

    Now picture a world in which cellulose-splitting enzymes are cheaper than bottled water, and a pint poured into the steel cow behind your hut will quickly turn a hundred pounds of wood chips or grass into a gallon of diesel. However sensibly we Americans might use the enzymes in Kansas, we know where cow-gut chemistry will inevitably lead in rural Burundi, India or China. Sure, a villager will fill the still with waste cellulose first. The enzymes, however, are just as happy to take apart freshly cut wood or grass, and that’s what villagers will use instead when they need or want more energy than waste alone can supply. Just as villagers do today when they cook. The one difference is this: When the villager harvests wood or grass today, he can only bake chapatis, heat his hut or feed his cow. With cheap enzymes at hand, he can also power a generator and a motorbike.

    History has already taught us what a carbohydrate energy economy does to a rich, green landscape–it levels it. The carbon balance goes sharply negative, too, when stove or cow is fueled with anything but waste or crops from existing farmland. It’s pleasant to imagine that humanity might get all its liquid fuels from stable, legacy farms or from debris that would otherwise end up as fungus food. But that just isn’t how humans have historically fed whatever they could feed with cellulose.

    Regulators can be bribed for a few pennies a gallon in developing countries. Waivers will cost you but not that much. If cellulose can be converted to fuel more cheaply than oil in small cellulosic biorefineries, what will happen to the world’s supplies of humus and topsoil?

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  4. By Rufus on August 22, 2010 at 3:29 am

    Same thing that happens to it now. Distillation leaves the PK behind. It doesn’t add carbon, or subtract carbon. Switchgrass, miscanthus, and other C4 fixers DO, however, sequester Carbon.

    Where your argument falls apart is when you start hypothesizing about “villagers” (I take it those are those little dark-skinned peepulz) cutting down trees for alcohol. There would be no reason to do that. The enzymes are much, much more effective on low-lignin grasses than on Trees. And, Grasses grow back every year.

    A hundred years, ago, there were Billion more acres used for Agriculture than there are now. We seemed to do alright, then. Look, it doesn’t matter a whit to nature if all those Billions of acres of grass, and weeds out there are cut by us in the fall, or if they die and rot. The PK is going to be returned to the land either way. And you’re going to have your “lush, green” landscape either way.

    The only difference is, in one case you’ll have starving children (albeit, little dark-skinned “villagers,”) and in the other case you won’t.

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  5. By takchess on August 22, 2010 at 8:11 am

    Rufus,
    Funny thing, I know plenty of New Englanders heating with wood and none who burn grasses to heat their house. I think this trend will continue if we figure out CE.

    I’d be curious, as to how long it took to ramp up corn ethanol production. It seemed awfully quick. I’m sure that the public/pols felt it would take roughly the same amount of time for CE.

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  6. By Oxymaven on August 22, 2010 at 8:51 am

    EPA doesn’t set these cellulosic mandates. Congressional pinheads did. EPA just has to figure out how to implement those (frequently) goofy policies. I don’t envy them.

    While I’ve been hugely skeptical of the ability of cellulosic ethanol to make meaningful near-term contributions, I’m also not too concerned about the federal govt spending a few billion $$ trying to foster some possible alternatives to petroleum. I do think there are ways they could do that more effectively, and also that the private market could do it much more efficiently as well. When the govt plays venture capitalist, invariably politics influence who gets the funding, and I don’t think that is ever an issue for private VCs.

    Maybe it’s my agrarian roots and training, but it has always seemed to me that cost-effective biomass production, harvest and storage is one of the greatest hurdles. If we have not yet learned how to make effective use of biomass that is already collected (landfills, sewage trt plants), then we have a ways to go before we’ll be able to figure out how to develop the supply chain for energy crops. Forest products industry knows this, and they clearly feel that burning biomass for power is far more practical than transforming it to liquid fuel. Biomass power also delivers a hugely superior (i.e., much cheaper) CO2 benefit relative to corn or cellulosic ethanol.

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  7. By John on August 22, 2010 at 11:45 am

    The “15 Most Recent Comments” feature on this site is really irritating.
    Why would the software assume I don’t want to see all comments when I
    click the “(X) Comments” link following a story? Please fix.

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  8. By Perry on August 22, 2010 at 1:13 pm

    “Researchers call it “recalcitrance,” and it currently limits brewers to converting just 40% of the energy content available in cellulosic feedstocks to ethanol. Fermentation, by contrast, converts about 90% of the energy in simple sugars to ethanol.”

    This might not be a problem if the cellulosic feedstock costs 75% less than the ethanol feedstock. The cellulosic process also won’t have the dependence on natgas that ethanol does. As oil prices increase, cellulosic should become more competitive.

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  9. By PeteS on August 22, 2010 at 1:15 pm

    “The “15 Most Recent Comments” feature on this site is really irritating.”

     

    +1. First thing I do on every article is “Join the forum discussion” to see the article plus all comments (whereupon the font changes to some really crappy one — why can’t the style sheet be the same? Don’t know if it’s like that in all browsers, mine’s IE7).

     

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  10. By rbm on August 22, 2010 at 1:28 pm

    PeteS said:

    “The “15 Most Recent Comments” feature on this site is really irritating.”

     

    +1. First thing I do on every article is “Join the forum discussion” to see the article plus all comments (whereupon the font changes to some really crappy one — why can’t the style sheet be the same? Don’t know if it’s like that in all browsers, mine’s IE7).

     


     

    Hmmm, I don’t see any crappy font changes. FYI, I don’t use MS browsers, instead Firefox/Netscape – for years.

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  11. By Kit P on August 22, 2010 at 3:16 pm

    “hugely superior (i.e., much cheaper)
    CO2 benefit”

     

    We make electricity and transportation
    fuel for people to use.

     

    “New Englanders heating with wood ..”

     

    Heating with wood and making
    electricity with nuclear power are two very effective ways to reduce
    demand for oil. We did those things before any consideration for the
    CO2 benefit.

     

    You have to look at what people do and
    why they do them. People will heat with wood to save money but not
    to reduce ghg. The forest product industry made electricity with
    wood waste because of air quality regulations.

     

    RR is correct that we can legislate all
    kinds of the things but that does not guarantee that technology will
    match magic wand fantasies.

     

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  12. By savro on August 22, 2010 at 3:28 pm

    John said:

    The “15 Most Recent Comments” feature on this site is really irritating. Why would the software assume I don’t want to see all comments when I click the “(X) Comments” link following a story? Please fix.


     

    As PeteS said, just click on “Join this forum discussion” and you’ll be directed to the forum post containing all the comments. We find it to be neater more efficient to run comments through the forums rather than through the blog. With all the comments that RR’s blog generates, it would render the scroll bar useless if 100 or so comments were displayed within the post. That’s why we decided to separate the blog posts itself from the comments while still offering a quick look at where the discussion is at by displaying the 15 latest comments to the specific blog post.

     

    First thing I do on every article is “Join the forum discussion” to see
    the article plus all comments (whereupon the font changes to some really
    crappy one — why can’t the style sheet be the same? Don’t know if
    it’s like that in all browsers, mine’s IE7).

    I use Firefox most of the time, but I know we’ve tested out the forums on all common browsers without experiencing any issues. I don’t know what you mean by crappy fonts, the forums are very neat and clean for me. If you can be more specific to what you don’t like I will try to help.

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  13. By Rufus on August 22, 2010 at 3:31 pm

    Tree trunks vs grasses is a lot like “btu” content vs Octane. What’s best for “heating water” isn’t necessarily best for powering and Internal Combustion Engine.

    Generally, the higher the rigidity (lignin content) the better for heating houses, and the lower the rigidity the better for converting to liquid fuel.

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  14. By David on August 22, 2010 at 3:51 pm

    Rufus’ little brown people comment is typical of the discouraging ad hominum attacks that appear in any online discussion. They reflect poorly on character. If he had proposed that solar ovens are a good solution for remote villages without access to an electrical distribution system, wouldn’t he be offended if I retorted with a similar retort? The implied charge of racism is the ultimate snark that is intended to shut down debate. It is quite discouraging to people of goodwill who are the recipients of such comments. I don’t know what Robert’s “rules of order” are for this forum, but such tackiness deserves some mention.

    As for the difference between the countries I am referring to and advanced countries like the USA, white folks nearly extinguished the buffalo, precisely because there was no government restriction on resource use. As any non-racist knows, human nature transcends skin color. The issue is government policy combined with the money to enforce it. In this country during Prohibition, profits from the liquor trade were sufficient to buy off the cops and the judges and to employ enough thugs to silence the rest. Profits from cellulosic ethanol are unlikely to be sufficient to duplicate this feat in the US but might be sufficient in many countries.

    It would seem to defy common sense that the waste product of biomass would be identical for soil fertility and friability to biomass. How can removing so much energy content from biomass possibly leave behind enough bulk and energy to act as a substitute food for the various fungi, earthworms, etc. that depend upon its energy for their lives and leave behind bulky waste products to keep soil friable?

    Let’s take a look at the actual make up of biomass.
    http://www.harvestcleanenergy……thanol.htm

    Cellulosic biomass is composed of cellulose, hemicellulose and lignin, with smaller amounts of proteins, lipids (fats, waxes and oils) and ash. Roughly, two-thirds of the dry mass of cellulosic materials are present as cellulose and hemicellulose. Lignin makes up the bulk of the remaining dry mass.

    Cellulosic ethanol’s favorable profile stems from using lignin, a biomass by-product of the conversion operation, to fuel the process.

    So 2/3 of biomass is converted from cellulose and hemicellulose to ethanol. The lignin is burnt, turning most of it into gas. What is left over? Smaller amounts of proteins, lipids (fats, waxes and oils) and ash. These are not the components of humus.

    Left unanswered is the basic premise of the quote that I gave. (By the way I didn’t know that the 2nd paragraph wasn’t italicized making it look like I wrote it.) I am paraphrasing that quote here to match Rufus’ statement.

    It’s pleasant to imagine that humanity might get all its liquid fuels from stable, legacy switchgrass and miscanthus fields or from debris that would otherwise end up as fungus food to power its generators and motorbikes.

    Whatever Rufus thinks of my image of villagers, there is plenty of evidence of massive human-caused soil erosion caused by simple agriculture or grazing in large areas of the world unaffected by modern industry or colonialism. Even in this country with its advanced governmental and university farm regulation and assistence programs, topsoil loss has been a major problem. Can we truly expect countries with large populations and few government services to stay on top of the threat? Putting topsoil into competition with high-priced fossil fuels seems like a huge gamble that has not been thought through.

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  15. By rrapier on August 22, 2010 at 4:19 pm

    I don’t know what Robert’s “rules of order” are for this forum, but such tackiness deserves some mention.

    David, the main rule of order is that people are civil to one another, and that excessive profanity, etc. is minimized. If there are questions of whether something might be offensive, then I would like people to err on the side of caution. Now, having said that, we don’t succeed 100% of the time. But for the most part, the forum has been pretty civil.

    So 2/3 of biomass is converted from cellulose and hemicellulose to ethanol. The lignin is burnt, turning most of it into gas. What is left over? Smaller amounts of proteins, lipids (fats, waxes and oils) and ash. These are not the components of humus.

    I agree, David, that care must be taken to manage the organic material in the soil. Harvest too much, and soil quality degrades. However, it is possible to harvest some and maintain soil quality. Woody biomass is a pretty good example. The deep roots can bring up and recycle subsoil nutrients, and the leaves, branches, etc. can add humus and nutrients back to the soil while harvesting the wood. It can be done, but is often not managed correctly.

    RR

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  16. By colonelmoore on August 22, 2010 at 4:38 pm

     

     

    Rufus said:

    Where your argument falls apart is when you start hypothesizing about
    “villagers” (I take it those are those little dark-skinned peepulz)
    cutting down trees for alcohol. There would be no reason to do that.
    The enzymes are much, much more effective on low-lignin grasses than on
    Trees. And, Grasses grow back every year.

     

    http://gas2.org/2008/03/07/fir…..ood-waste/

    KL’s cellulosic ethanol plant is converting waste wood into a renewable
    fuel. “It is now possible to economically convert discarded wood into a
    clean burning, sustainable alternate motor fuel” said Randy Kramer,
    president of KL Process Design Group, a design firm that has been
    working in corn ethanol.

     

    http://www.klenergycorp.com/te…..dstock.htm


    KLE’s Biomass Conversion Platform is an adjustable process technology
    and works for most commercially available feedstocks such as:

    • Sugarcane bagasse (herbaceous)
    • Eucalyptus (hard wood)
    • Ponderosa pine (soft wood)
    • Bamboo (herbaceous)

    There is no way of predicting that the technology of the future will favor one form of cellulose over another.  Robert said that one of the most promising technologies is termite gut chemistry.  Termites’ enzymes favor wood.

     

    Some people live in grasslands and others in woodlands.  If we are talking about tropical forests, the easy source of biomass is trees.  Perhaps after the trees are clear cut, grasses will become the preferred feedstock.

     


    KLE’s Biomass Conversion Platform is an adjustable process technology
    and works for most commercially available feedstocks such as:

    • Sugarcane bagasse (herbaceous)
    • Eucalyptus (hard wood)
    • Ponderosa pine (soft wood)
    • Bamboo (herbaceous)
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  17. By colonelmoore on August 22, 2010 at 4:56 pm

    Robert, thank you for your comment about proper management of harvesting.  The issue that concerns me is not countries with developed government and police power but those without.  Look at the per capita income of many countries of the world with large supplies of biomass.  How can they afford their own versions of the USDA and agricultural extensions or land use cops?  How do we assure that the cops are not being bribed to look the other way at unsustainable practices?

    Documents in the recent failed climate talks included massive funds transfers from developed nations to developing ones.  Did this include any money for the above institutions?  I would be willing to bet not.  This would show the state of planning for such eventualities.  The alarm that Peter Huber sounded is not to be hand waved away.

     

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  18. By Rufus on August 22, 2010 at 5:10 pm

    The thing is, the only number for cost that KL has ever released was $3.50/Gallon.

    Vs. a projected $2.00 gallon for grasses, paper, etc.

    The fact is: The More Lignin, the More Expensive.

    And, whether you employ anaerobic digestion, or direct burning, the PK, and Nutrients will be left over as high quality fertilizer/soil supplements.

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  19. By David on August 22, 2010 at 6:08 pm

    Rufus, it might be worth asking Robert why after all of his research he chose to invest in conversion of woody biomass over grass if the price is so unfavorable. Hasn’t he inveighed regularly against hyped up promises from people whose sole skill set seems to be convincing DOE or USDA to give them more grant money?

    So as to keep the point in mind, I am not talking about how good cellulosic biofuels are in developed countries with strong legal systems but rather what happens in developing countries if market forces make biofuels cheaper than oil and the price of entry is low.

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  20. By Rufus on August 22, 2010 at 6:49 pm

    Well, that’s simple, David; they’ll prosper.

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  21. By Kit P on August 22, 2010 at 7:20 pm

    Rufus, anaerobic digestion recovers about 90% of the N too.

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  22. By rrapier on August 22, 2010 at 8:54 pm

    Rufus said:

    Tree trunks vs grasses is a lot like “btu” content vs Octane. What’s best for “heating water” isn’t necessarily best for powering and Internal Combustion Engine.

    Generally, the higher the rigidity (lignin content) the better for heating houses, and the lower the rigidity the better for converting to liquid fuel.


     

    Depends on how you are making the fuel. Gasification loves lignin.

    RR

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  23. By Rufus on August 22, 2010 at 10:31 pm

    Yeah, Kit, Poet is going with anaerobic digestion. I’ve got a hunch their pathway will end up being the one taken.

    It seems a guy could get awful poor betting against Poet.

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  24. By Perry on August 23, 2010 at 10:48 am

    What we need is a better yeast. Specifically, a yeast that can improve yields of butanol. I doubt we’d hear many complaints if ethanol producers were putting out 12 billion gpy of butanol instead. Butanol is a much better drop-in alcahol, with an energy content close to gasoline. Ethanol facilities are easily converted. Problem is, butanol is toxic to the microbes at low concentrations. A bushel of corn only gives up 1.3 gallons of butanol.

    A University of Illinois metabolic engineer has taken the first step towards the more efficient and economical production of biofuels by developing a strain of yeast with increased alcohol tolerance.

    Read more: http://www.theengineer.co.uk/n…..z0xRNhHVJT

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  25. By Brian on August 23, 2010 at 11:35 am

    I tend to agree with Robert’s position that enzymatic cellulosic ethanol will not be competitive with corn based ethanol since the enzymatic process simply adds a very costly step to a well characterized fermentation process. For advanced biofuels to be cost effective, the production process needs to be simpler or the feedstock costs reductions (available on a long term basis) have to compensate for the additional feedstock processing costs.

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  26. By Benny BND Cole on August 23, 2010 at 1:30 pm

    The discusion of cellulosic is way over my head, technically.  But it sure seems like everyone promises—but no one delivers.  

    I find it interesting that even RR, ever cerebral, circumspect and cautious, allows that $4 a gallon ethanol may be possible from cellulosic.   That suggests there will be a ceiling on transportation fuel prices, and the end of the world is not coming.

    I suspect that I and our economy can easily survive $4 a gallon, even with lower BTUs per gallon.  PHEVs and high-mileage ICEs will bring down transportation costs to acceptable ranges.  The 50 mpg car replaces the 25 mpg car of yesteryear, and we keep going.

    Still, it might make more sense just to burn biomass, turn steam turbines, and run PHEVs.

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  27. By Dave N. on August 23, 2010 at 2:02 pm

    RR said on the previous article:

    Actually Larry and I are friends on Facebook. We correspond fairly often. As I have said before, I have a soft spot for butanol since I was a butanol engineer for seven years. But the biological route has some unique challenges to overcome.

    Robert, Could you be more specific about the unique challenges for making butanol from biomass? What process is this Larry (David?) using? Reading this article it appears like most of his work has been butanol from corn: how close is he to a process from biomass? This sounds like a potential route for small producers with no modifications to an ICE. An article on its own?

    Dave
     

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  28. By doggydogworld on August 23, 2010 at 2:31 pm

    Rufus said:

    One of the most remarkable statistics I’ve ever come across was the 5,000 electric plants built the year after Edison demonstrated the light bulb, and the 127,000 generating plants built in the next Five years.


     

    I question this. Edison publicly demonstrated his light bulb on December 31, 1879. It wasn’t until 1882 that his famous Pearl Street station in lower Manhattan began servicing 59 customers. In 1887 there were still only 121 Edison power stations in the US. Westinghouse didn’t form until 1886 (and never needed a huge number of power stations since AC was well-suited for long-distance carriage). There were a few small power stations which pre-dated Edison, using arc lamps and such, but thousands???

    A lot of early Edison generator sales went to individual users (e.g. the SS Columbia in 1880, printers Hinds & Ketcham in 1881 and various international exhibitions). But it’s a stretch to call these “power plants”, and there certainly were not 127,000 of them.

     

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  29. By doggydogworld on August 23, 2010 at 2:33 pm

    doggydogworld said:

    ………and there certainly were 127,000 of them. 


     

    ….certainly were not 127,000 of them.

    Sigh.

     

    I fixed it. – RR

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  30. By rrapier on August 23, 2010 at 2:35 pm

    Benny BND Cole said:

    I find it interesting that even RR, ever cerebral, circumspect and cautious, allows that $4 a gallon ethanol may be possible from cellulosic.   That suggests there will be a ceiling on transportation fuel prices, and the end of the world is not coming.


     

    One more aspect to consider, though. If you do the calculations, you will see that there isn’t enough biomass to replace a large fraction of oil. So as long as oil is around, you might make lots of different fuels from biomass in the $4/gal range. But as soon as oil has depleted enough, biomass won’t be able to fill the gap.

    RR

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  31. By rrapier on August 23, 2010 at 2:53 pm

    Dave N. said:

    RR said on the previous article:

    Actually Larry and I are friends on Facebook. We correspond fairly often. As I have said before, I have a soft spot for butanol since I was a butanol engineer for seven years. But the biological route has some unique challenges to overcome.

    Robert, Could you be more specific about the unique challenges for making butanol from biomass? What process is this Larry (David?) using? Reading this article it appears like most of his work has been butanol from corn: how close is he to a process from biomass? This sounds like a potential route for small producers with no modifications to an ICE. An article on its own?

    Dave


     

    Dave,

    The main problem is the toxicity of butanol to the microbes. In the conventional ABE process, butanol production ceases at a concentration of under 2% butanol. That has to be separated from 98% water at great energy expense. The holy grail is to find or engineer bugs that can tolerate it up to around 8% butanol, at which point butanol phases from water. That would provide for a much less energy intensive separation.

    If I recall correctly, Larry’s process is ABE. The patent that has been granted was for higher conversion than conventional ABE, but I think he still has the low concentration issue to grapple with. There is nothing fundamentally preventing the process from being applied to cellulose, but you would add another expensive step to a process that is already going to be economically challenged.

    RR

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  32. By Rufus on August 23, 2010 at 9:53 pm

    Butanol has a higher btu content, but it’s only 85 Octane. The big oil companies want it because they can ship it through their pipelines, and keep their monopolies, but it is very expensive to produce, and is, almost surely, a dead end.

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  33. By Rufus on August 23, 2010 at 10:03 pm

    The ABE process also ends up with a Lot of Acetone (the A in ABE.) How many Billions of Gallons of Nail Polish Remover do you suppose we can use?

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  34. By paul-n on August 23, 2010 at 10:12 pm

    late to this discussion, but want to pick up on this statement from Rufus;

    Generally, the higher the rigidity (lignin content) the better for heating houses, and the lower the rigidity the better for converting to liquid fuel.

    RR has already picked up on this, that high lignin is fine (preferred, even) if producing fuel by gasificiation.  

    I think it can best be summarised by saying that low lignin, and high moisture content biomass is best suited to biological processing (fermentation, and/or anaerobic digestion), while high lignin, and drier biomass, is better suited to gasification/combustion (which includes pelletising and burning.

    Once you gasify a (dry) biomass, it is then a question of whether it is better to burn for electricity, or catalytic synthesis for liquid fuel.  Interestingly, the net energy output for synthesis (about 60%) is equal to the net energy output of the most efficient electrical generation (combined cycle GT, which can be run on biomass).  With electricity from biomass being sold for $0.10/kWh, that is about $29/million btu.  Assuming you can get the same one million btu from the same amount of feedstock, you will need your wholesale selling price to be $3/gal (115,000 btu/gal).  Even comparing to IC engines at 40%, you need $2/gal gasoline to come out ahead, and the capital costs for (most) gas to liquids processes are much higher.

    That is why there is LOTS of biomass electrical capacity (think pulp mills, and some large sawmills), and little biomass to liquids by gasification – once you have it as combustible gas, producing grid tied electricity is the best return, and lowest capital cost.

    Of course, this may change if oil goes back up to $150/barrel, but I suspect electricity prices would be moving up then too. 

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  35. By Rufus on August 23, 2010 at 10:12 pm
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  36. By Rufus on August 23, 2010 at 10:21 pm

    Spam filter ate the link. It’s at Domesticfuel dot com (Added the link to above post – Sam)

    Poet has been collecting large amounts, baling it, storing it in different ways, and studying it now for a two, or theree years. They’re learning quite a bit about where it can be stored, the shelter required, the moisture content, etc.

    They’re going to end up just where Ol’ Rufus said they would (five years ago;) 10 to 25 (max) million gallon/yr refineries. It’s Not where the “big boys” want to end up, but it’s where they’re “going” to end up.

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  37. By Perry on August 24, 2010 at 9:24 am

    “but it is very expensive to produce, and is, almost surely, a dead end.”

    I’m not so sure. Cobalt claims their demonstration plant (1M gpy) will be the world’s first profitable biorefinery. They claim to have addressed some of the problems Robert mentioned. Yield, water seperation, and feedstock costs, to name a few. These guys seem to be the real deal.

    Butanol has too many advantages to be ignored.

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  38. By Perry on August 24, 2010 at 9:29 am

    By “first profitable biorefinery”, I’m sure Cobalt means cellulosic. The demo plant processes wood waste. Cobalt claims their process produces butanol 15X faster than conventional means. Pretty interesting stuff.

    http://www.cobalttech.com/adva…..-biofuels/

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  39. By Wendell Mercantile on August 24, 2010 at 10:19 am

    but it is very expensive to produce, and is, almost surely, a dead end.

    Dead end? Maybe, maybe not. But I’m sure of one thing, the bio-fuel companies are not not going to stop work on developing ways to produce butanol just because Rufus says it’s a dead end.

    Rufus, for someone who claims not to have a dog in the corn ethanol fight, you sure do have a bias against methanol and butanol — the two fuel alcohols with arguably the most potential to break our dependence on petroleum.

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  40. By russ-finley on August 24, 2010 at 11:02 am

    Assuming for the sake of discussion that the cellulosic proponents are right (that it is only the lack of funding holding them back) then one can argue that it is corn ethanol that’s hogging up government funding and most of the market as well as we head for whatever blend limit. Sticking with road analogies, corn ethanol is not a bridge to a better ethanol technology, it’s more of a roadblock : )

    If I owned a corn ethanol refinery I sure wouldn’t want a competitor using cheaper cellulosic technology to succeed.

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  41. By Rufus on August 24, 2010 at 1:21 pm

    In the past it has been way too expensive. If Cobalt, or someone else, can solve that problem more power to them. I Don’t have a dog in that fight. Best of luck to’em.

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  42. By paul-n on August 24, 2010 at 1:25 pm

    Russ, how can you say that?  

    According to such credible sources as the (corn) ethanol industry itself, ethanol is the pathway to energy independence for America.  Surely you are not suggesting that all, or even part, of the $5bn subsidy (paid to the oil companies that blend the ethanol they are mandated to use) could be be better spent on R&D into anything other than corn ethanol?

    Seriously though, it must be an interesting time for the ethanol distillers.  If cellulosic makes it to market, then the corn ethanol distillers have an interesting choice – an expensive process addition, and more process costs, in return for freedom from corn as your only feedstock.  We presume it makes sense if the cellulosic feedstock is free, but as RR has pointed out before, if cellulosic takes off, the feedstock won;t be free for very long.  

    I think the distillers are in an OK position, it gives them more options, the corn farmers are the ones who may lose out.  Cellulosic will decrease the demand for corn, putting downward pressure on prices.  They can switch to other crops, but they may not get the $ per acre from switchgrass that they did from corn (though their inputs will be lower).

    That said, I remain of the opinion that, fuel prices need to be higher, above $4/gal at pump) for cellulosic to really be worthwhile.  And selling ethanol into that market, it is likely that all sources will be viable.

    It all comes back to the price.  If oil is cheap, nothing can really compete.  If we are, collectively, prepared to live with Euro style prices ($7/gal), then many alternatives are on the table.

    Quite simply, IF the government is serious about energy independence (and that is debatable), the best way to achieve it is to increase domestic fuel production (of all types) while decreasing total consumption.  The simplest (but least popular) way to do that is an import tax on oil.  Instead the government looks for complex (and popular) ways to do the same, and after 40 years, they are still looking… 

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  43. By Wendell Mercantile on August 24, 2010 at 1:40 pm

    I think the distillers are in an OK position, it gives them more options…

    Paul N,

    I’m not so sure of that. Based on what I know, upgrading a standard corn ethanol distillery to a plant that can produce cellulosic ethanol would require a major capital investment and major rebuild of the plant.

    Distillation is a centuries-old, well-understood, straight-forward, fairly low-tech process. Few of those who jumped into the corn ethanol market by building distilleries, had enough foresight to build a facility that could someday be easily modified or rebuilt to handle cellulose.

    I suspect that in many cases, the most cost effective way to convert a corn ethanol distillery to a cellulosic ethanol plant will be tear down the still and start over.

    For the corn ethanol people who didn’t prepare for the future, probably their worse nightmare is a cellulosic breakthrough before they have paid off the loans they took out to build their present stills.

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  44. By paul-n on August 24, 2010 at 2:40 pm

    Wendell, that then is the nature of the business!  

    I wonder where POET is at then, they would have the most to lose, but are about as big an investor in cellulosic as Rufus is a pusher!  Maybe they did design their plants with a retrofit in mind?

    That said, building cellulose plants is clearly expensive, and some years away.  Capital can be hard to come by these days, so, unless there is a breakthrough, I don’t expect to see a building boom for cellulosic – it will take a long time just to build enough to equal the corn ethanol capacity today.

    As long as the ethanol mandate remains, there’ll be demand for corn ethanol for quite some years yet.

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  45. By Perry on August 24, 2010 at 3:26 pm

    I think Cobalt plans to have a profitable demo plant, because butanol sells for about twice what gasoline does. They’re also colocating the plant with a pulp mill, so the feedstock should cost next to nothing. Supposedly, they’ll be using pine trees killed by beetles.

    Cars don’t need modification to run on butanol. It can also be used in diesel and jet engines, something ethanol just can’t do.

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  46. By paul-n on August 24, 2010 at 3:43 pm

    Perry, if they are selling butanol for twice that of gasoline, then it is obviously going into the industrial chemical market.  That is fine, but then it is no way a solution to any of our liquid fuel issues, it is just a biomass based production process.  

    And to use the product as an industrial chemical, presumably it will need to be purified to a much higher level than for use a fuel, which adds more expense.

    I wish them well, and it will be nice to know that we can have butanol as fuel, as long as we are prepared to pay twice what we are paying now (which I am, btw).

     

    If they are next to a pulp mill, the feedstock may cost nothing, but there is an opportunity cost in using it as feedstock.  Assuming the pulp mill is already burning black liquor for process steam, and electricity, like most pulp mills do, then each ton of feedstock is worth in the order of $50-100 of electricity ($0.05-$0.10/kWh).

    If all the electricity generating equipment is already there, it will must be a high margin (or highly subsidised) butanol operation to truly justify not burning for electricity.

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  47. By Wendell Mercantile on August 24, 2010 at 4:15 pm

    Wendell, that then is the nature of the business!

    I concur Paul. I was just making the point that if cellulosic does ever make a break through, the corn ethanol faction would probably play their farm state senator trump card to get Federal tax credits or subsidies in order to stay competitive.

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  48. By rrapier on August 24, 2010 at 4:26 pm

    …play their farm state senator trump card to get Federal tax credits or subsidies in order to stay competitive.

    That is exactly what the 1st generation biodiesel lobby did when 2nd generation green diesel came along and was going to compete with them:

    http://www.consumerenergyrepor…..ries-foul/

    RR

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  49. By paul-n on August 24, 2010 at 4:42 pm

    Kinda strange really.  The Fed gov throws all this money at cellulosic (though far less than the total of corn ethanol subsidies) and if they actually succeed, it will likely end up costing the Fed even more in continued corn ethanol subsidies.

    I think the real problem here i with subsidies themselves, industries get addicted to them, and those that don;t have them want them.  A much better system is a fuel tax, as RR said in that linked essay, or just an import tariff on oil.  But if it ends the favouritism, and the constant negotiations and shenanigans that go on with it, what then will the politicians have left to do?

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  50. By ronald-steenblik on August 24, 2010 at 4:43 pm

    To back up Russ’s comment, I find it is always enlightening to see what the corn-ethanol crowd over at the DTN Ethanol Blog has to say on their potential competitor. Here is one very recent comment:

    What has cellulosic ethanol production accomplished? Nothing but alot of talk and and unproven results, and they wonder why it is hard to raise capital. Cellulosic should just end it in the valley of death, before more tax dollars and or peoples money is fleeced.

    Posted by GWL 61 at 12:04PM CDT 08/24/10

    http://www.dtnprogressivefarme…..RegionCode=

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  51. By ronald-steenblik on August 24, 2010 at 4:53 pm

    A much better system is a fuel tax, as RR said in that linked essay, or just an import tariff on oil.  

    Paul, I agree that higher taxes on gasoline and diesel would help (but, as I said on another string, if there are to be reductions on ethanol or biodiesel, they need to be tied to some kind of performance metric: simply exempting them from the whole of the tax would be arbitrary.)

    As for applying an import tariff on petroleum, there is the problem of the United States’ commitments to the World Trade Organization. While it has not bound (i.e., committed to an upper limit on) the import tariff on crude oil, it has bound its tariffs on petroleum products. The current applied tariff on gasoline is 52.5 cents per barrel, or just 1.25 cents per gallon. (Contrast that with 80 cents per gallon of gasoline equivalent on ethanol.) If the United States were to raise the import tariff on crude oil significantly, guess what would happen? The United States would reduce imports of crude (except from countries with which it has a free-trade agreement, like Canada and Mexico) and increase imports of refined products. And there would be windfall profits galore for domestic producers of crude oil.

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  52. By paul-n on August 24, 2010 at 5:30 pm

    Ron, I think we can (and should) have an entirely separate thread on this very topic (I may yet write a starter post on it).  Just to be clear, when I say a tariff on imported oil, I do also mean oil products, not just crude.  Effectively, any liquid fuel would be subject to the tax, on a per btu basis.

    International agreements/obligations has never really stopped the US from doing anything before, and it certainly shouldn’t in this case.  I’m sure Uncle Sam can find some way to get around it, it certainly does with softwood lumber, beef imports, etc etc.

    I would also think such a move would be supported by most OECD countries, who are oil importers and would benefit from lower world prices.  The only losers would be OPEC, and I don;t think too many tears will be shed for them.

    Keep the continental production (Mexico and Canada) out of the tariff.  

     

    And there would be windfall profits galore for domestic producers of crude oil.

    But that is the whole point, and equally for any alternative transport fuel producers, which includes ethanol, CNG and even electricity.  Right now it is Saudi Arabia that is making windfall profits, I’d much rather see those profits stay here.

    All proceeds from the import tax should, of course, be returned to the people either by income tax cuts or an Alaska style dividend

    The other thing I like about the import tariff, is that it would give some measure of certainty that the prices are going to stay high for some time.  It removes the ability of the “oil market” to drop prices to undermine investment in alternatives.  There is a much greater incentive for a fleet operator to make a change if he knows the high prices will be around for longer than his payback period.

    None of this means it is politically acceptable of course, but other than that (minor) issue, there is a lot going for it.  Would also end all this nonsense of govt trying to pick winners in the alt fuels race.  If fuel prices are double, it would attract plenty of private venture capital without any help.

    Just theorising here, but the current approach doesn;t seem to yielding much more!

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  53. By Rufus on August 24, 2010 at 5:56 pm

    Just to be clear: No importer (or, Brazilian exporter) has ever paid a dime of that $0.51/gal secondary tariff on imported ethanol.

    You see, you can import up to 7% of the prior year’s domestic ethanol production through the Caribbean Basin Agreement “Free” of that tariff. Brazil has never come close to that 7% Cap. Thus, every drop of ethanol Brazil has ever exported to the U.S. has been Free from that tariff.

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  54. By paul-n on August 24, 2010 at 6:11 pm

    So whose fault is that?  Looks like the Fed gov went to quite some length to create this loophole, though I’m not exactly sure why.

    The government of course, does that (loopholes)with everything, though I’m not exactly sure why.  

    A simple per btu tax on any imported fuel that arrives on a ship, with no exemptions, would do the job just fine.  Then get rid of all the production subsidies, and no domestic producer ethanol included) would want to sell on the world market when they can get a better price for less transport at home.

    More local production and less imports was the original idea of the whole ethanol and biofuel initiative – instead many of the players are gaming the system and then complaining when the whistle is about to be blown

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  55. By Rufus on August 24, 2010 at 7:27 pm

    I just brought that up because Ron said this:

    (Contrast that with 80 cents per gallon of gasoline equivalent on ethanol.)

    The point is, if you would have wanted to import a couple of hundred million gallons of Brazilian ethanol last year you would not have had to pay anything more than the $0.02 gallon primary tariff. Again, our Southern neighbors have never come close to broaching the 7% loophole.

    In fact, this year the U.S. producers have exported a considerable amount of ethanol to Brazil. (And, no, that exported ethanol has not been blessed with a “blenders credit.”)

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  56. By paul-n on August 24, 2010 at 9:28 pm

    And once you import that Brazilian ethanol, I presume you then get the blender’s credit, of $0.51?

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  57. By Perry on August 24, 2010 at 10:08 pm

    Paul N said:

    If they are next to a pulp mill, the feedstock may cost nothing, but there is an opportunity cost in using it as feedstock.  Assuming the pulp mill is already burning black liquor for process steam, and electricity, like most pulp mills do, then each ton of feedstock is worth in the order of $50-100 of electricity ($0.05-$0.10/kWh).

    Cobalt is probably following the Inbicon model by colocating next to a pulp mill Paul. Inbicon colocated with a coal-fired power station. They get electricity for their cellulosic process, and return bio-pellets to the coal plant. It’s a way for Inbicon to cut their electric bill, and the coal plant has a low carbon fuel source in return. From 30,000 tons of wheat straw, Inbicon makes 1.4M gallons of ethanol, 13,000 tons of biopellets, and 10,500 tons of feed molasses. Cellulosic is getting there, but there’s no “one size fits all”. Rufus is probably right about a bio-refinery in every county eventually. That’s the model that makes the most sense.
     

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  58. By Rufus on August 25, 2010 at 12:22 am

    Yes, Paul, they’ve been paying the $0.02 gallon primary import duty, and Receiving the $0.51 gallon Blenders Credit.

    I think Perry is, absolutely, right. The plants will be different in different areas. It just makes sense.

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  59. By paul-n on August 25, 2010 at 1:04 am

    Pay 0.02 and get 0.51, sounds like a great business deal to me.  Still, if it’s cheaper than imported gasoline (per btu) then it is actually reducing oil dependence, though not helping for energy independence.

     

    Perry,  co locating with any heat producing operation is a great option for ethanol plants, and I have long supported that.  They are a great use for low grade heat.

    What is dissapointing is that 1.4m gal of ethanol from 30,000 tons of straw is only 47 gal/t, a 20% energy yield, and that is with getting all the free heat.  This is no better than old school concentrated acid hydrolysis (although Blue Fire claim to get about 80gal/t, but are not in production yet).

    Clearly, the process is not economic, at current fuel prices, unless you can get some value from all the byproducts.

    I do like the county model too, less feedstock miles is better.  However, there are not that many”county” coal fired, or other power plants lying around.  If you have to pay for the process heat you are at a huge disadvantage.

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  60. By ronald-steenblik on August 25, 2010 at 2:03 am

    Whoa, guys, I’ll answer you separately.

    Paul writes:

    International agreements [and] obligations [have] never really stopped the US from doing anything before, and it certainly shouldn’t in this case.  I’m sure Uncle Sam can find some way to get around it, it certainly does with softwood lumber, beef imports, etc etc.

    That is absolutely not the case. The U.S. Government takes its international agreements and obligations, especially at the WTO, very seriously. Softwood lumber involved a case of claimed injury from low prices from a particular country (Canada), and specific trade remedies. That case followed the usual legal channels, including both WTO and NAFTA jurisprudence. If any WTO member were to raise its general (i.e., MFN) tariffs on crude oil and petroleum products above the bound level, it would likely face multiple challenges from not just OPEC members of the WTO (notably, Saudi Arabia and Venezuela) but also non-OPEC producer countries (Norway and the UK, for example) and the numerous countries that are not major producers but are major refiners. Among the rights of the WTO members are to demand compensation for trading losses incurred as a result of another members’ breaching of commitments.

    I would also think such a move would be supported by most OECD countries, who are oil importers and would benefit from lower world prices. The only losers would be OPEC, and I don’t think too many tears will be shed for them.

    No. What I suspect other OECD countries would much prefer is that countries currently appling lower end-user taxes on petroleum products than they do raise their domestic prices to something more in line with prices in their countries. As for OPEC members of the WTO, see answer above.

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  61. By ronald-steenblik on August 25, 2010 at 2:27 am

    Rufus wrote:

    The point is, if you would have wanted to import a couple of hundred million gallons of Brazilian ethanol last year you would not have had to pay anything more than the $0.02 gallon primary tariff. Again, our Southern neighbors have never come close to broaching the 7% loophole.

    I have addressed this kind of claim before (see comment 97 on “A Better Ethanol Policy”), yet Rufus keeps trying it out on other strings.

    It is true that consumers don’t normally pay for imported ethanol that has had to incur a tariff of 2.5% + $0.54/gallon, though I ask Rufus to provide proof that nobody has EVER paid the import tariff. The United States used to import a lot more ethanol from Brazil when there was a loophole that allowed a drawback on the duty for certain fuels that the importer exported, notably jet fuel. That loophole was closed beginning in October 2008, however, and one can see the effects of that change in the drastically reduced direct imports of ethanol from Brazil since then.

    As for Brazilian ethanol dehydrated in the Caribbean and then shipped onwards to the United States (i.e., the volume that comes in under a tariff-free quota), the quota has not been 100% filled, but the volume imported certainly has increased rapidly over the years. See page 6 of this PowerPoint presentation.

    http://www.ethanolsummit.com.b…..292127.pdf

    It is, of course, not cost-free to process Brazilian ethanol through the Caribbean. Additional costs are incurred through extra handling, and the need for smaller ships, and that is passed on to U.S. importers through higher prices. Numerous articles have pointed out the inefficiencies inherent in this arrangement — e.g., http://www.livemint.com/articl…..l?atype=tp

    Look at an International Trade Economics 101 textbook, Rufus: the effect of an import tariff on a product is to raise the domestic price of that product in the country that applies the tariff — whether the country actually imports the product or not (unless the country would be a net exporter without subsidies). Classic example: rice in Japan. If it didn’t, then you and U.S. domestic industry would not be fighting so hard to retain the tariff.

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  62. By Rufus on August 25, 2010 at 2:41 am

    Paul, in the SE I think there are Two models that will work. I think they will both get some play.

    1) Process the lignin into biogas through anaerobic digestion, and feed the biogas not used for process heat into a gas turbine to produce electricity. This is, basically, I think, the Poet model.

    2) Process the lignin into biopellets, and ship them out to be co-fired in existing coal plants.

    Actually, I guess there’s a third. An Abengoa model, I believe. in which you would build your own small biomass powered plant in conjunction with the ethanol refinery.

    Both one, and two would have their selling points.

    BTW, Poet is phasing out their talk of “cobs,” and are morphing it into “stover.” By taking everything that comes out the back of the combine (cobs, husks, leaves, etc,) it costs less per ton, and you get from two to three times more biomass. I haven’t heard of any “pushback” from the farmers. Not too surprising; it’s been accepted for awhile that you could take 1/3 of the stover w/o harming the land, and you’re talking $120.00 to $150.00 an Acre (minus $35.00/acre for harvesting) as opposed to $60.00 (minus $35.00 for harvesting.)

    1000 Acres Times $120.00 – $35.00/acre turns out to be a lot more interesting number than is $60.00 – $35.00.

    Figuring 80 Million Acres of Corn harvested (we normally harvest between 82, and 84 Million,) this could add somewhere between 7, and 9 Billion Gallons of ethanol/yr to the fuel mix. That’s a pretty big chunk.

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  63. By Robert Rapier on August 25, 2010 at 2:53 am

    Process the lignin into biogas through anaerobic digestion, and feed the biogas not used for process heat into a gas turbine to produce electricity. This is, basically, I think, the Poet model.

    No. Lignin is very difficult to degrade. Very few microbes are capable of degrading lignin into biogas; biogas generally originates from components other than lignin (like cellulose).

    RR

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  64. By Rufus on August 25, 2010 at 3:04 am

    You’re obfuscating, Ron. Who’s fighting to retain the tariff? I’m not. I could care less. It turns out that U.S. Corn ethanol is cheaper to produce. Look at the world markets. Corn ethanol is kicking Cane’s butt. Heck, we were exporting ethanol to Brazil a couple of months, ago.

    They are a dippy Socialist country that employs Slave Labor, and transports their ethanol to the coast by truck. They are, also, limited big-time by the fact that cane has to be processed within a couple of week of having been harvested. That means their refineries sit idle most of the time. The other major sugar-producing country is India, and their Ag system is just as bad as Brazil’s. India is apt to slap “Export” controls on their ag products at Any time.

    A Refiner in the Netherlands can order corn ethanol for delivery six months, or a year from now, and be pretty danged certain they’re going to get their product at the agreed-upon price. With Brazilian ethanol? I don’t know. I wouldn’t want to bet on it.

    Brazil had their day in the sun in 2008, when the oil-deranged speculators used a “100 year flood” (that, actually comes along about every ten to fifteen years) to convince the dummies that the corn crop was “washed out” for the year. The farmers, of course, replanted, and turned in a pretty good crop. Since then it has been “all downhill” for the “Cane” ethanol.

    Sure, the producers would keep the tariff if given their druthers. Like anybody, anywhere, they’ll take for free “anything” that might have a future value. But, if you look closely, you won’t see anyone pounding the table, and sweating bullets over the tariff. It, quite simply, Ron, isn’t a playah.

    It’s Pure Heck when you win, and it turns out not to matter, isn’t it?

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  65. By Rufus on August 25, 2010 at 3:11 am

    Robert, maybe I’m misunderstanding Poet’s plan, but I sure thought that was what they were planning. Maybe there’s a nuance there I’m not picking up on.

    It wouldn’t be the first time. :)

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  66. By ronald-steenblik on August 25, 2010 at 6:47 am

    Rufus said

    You’re obfuscating, Ron. Who’s fighting to retain the tariff? I’m not. I could care less.

    You sure throw around insults pretty readily, Rufus. So, I’m obfuscating, eh? “Who’s fighting to retain the [ethanol import] tariff?”, you ask. I have certainly gotten the impression from previous satements that you are, Rufus. But if you have changed your mind, I’ll take your word for it. As for others, just look at the public statements of the ethanol-industry organizations, like this one from July 22, 2010:

    Wesley Clark, the co-chairman of Growth Energy, told the Senate Agriculture Committee today his organization supports continuation of the current ethanol tax credit and the extension of the tariff on imported foreign ethanol. [Emphasis added.]

    And here is Bob Dinneen, President and CEO of the Renewable Fuels Association, in his 2010 State of the Industry Address, delivered on February 16, 2010:

    And this year, in particular, will challenge this industry in new ways and as never before. We must break through the blend wall; we must address questions about ethanol‟s carbon footprint; and, most importantly, this year we have to extend the tax incentive and offsetting secondary tariff for ethanol fuels. [Emphasis added.]


    Need I provide other examples?

     

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  67. By Rufus on August 25, 2010 at 7:37 am

    Ron, you keep admitting that no one has ever paid it, and then you keep throwing it out there. Then you name me as a big proponent when I have Many times over the last several months, on this blog, stated that I really don’t see how it’s a Big deal.

    Oh, sure, the lobbying organizations support keeping it. It has “some” value, some day, “possibly.” And, of course, the members, for the same reason, would like to keep it. But, as I said, No One is really “Pounding the Table” over it. “Alarm Bells” are not going off in ethanol plants across the country, and for good reason. The reason is, NO ONE HAS EVER PAID IT, and NO ONE EVER WILL. Cane ethanol has had its day. Its weaknesses have been exposed. It’s a Dog.

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  68. By savro on August 25, 2010 at 8:15 am

    Rufus said:

    Cane ethanol has had its day. Its weaknesses have been exposed. It’s a Dog.


     

    You may want to take a look at this, Rufus. This project that Petrobras is funding plans on going hyperlocal.

    Biofuel plant in Wyo to work with sugar cane waste

    Wyoming is a long way from places where sugar cane is grown, but a test plant in the northeast part of the state will soon be turning sugar cane waste into biofuel.

    KL Energy Corp., based in Rapid City, S.D., and Brazil’s state-run oil company Petrobras announced an agreement Tuesday to produce cellulosic ethanol from sugar cane bagasse, the waste created when sugar cane is processed into sugar.

    Under the agreement, Petrobras will invest $11 million to adapt KL Energy’s test plant in Upton, Wyo., to use the waste and other materials. The plant has been using pine tree waste to produce ethanol.

    –SNIP–

    KL Energy will use sugar cane waste from Louisiana since it doesn’t grow in Wyoming.

    Sugar cane is grown in tropical areas as well as the southern reaches of the U.S. in Florida, Louisiana and Texas.

    –SNIP–

    The company plans to build plants near the source of the material to be converted into ethanol and other byproducts that can be sold. The plants would be smaller in size and production than the huge plants

    envisioned by most in the fledgling biofuels industry. But the plants would be cheaper to build and would save on transportation costs by staying near the source material.

    http://www.businessweek.com/ap…..Q45B00.htm

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  69. By ronald-steenblik on August 25, 2010 at 8:25 am

    Rufus wrote:

    Ron, you keep admitting that no one has ever paid [the secondary ethanol tariff], …

    No I didn’t. I said that “consumers don’t normally pay for imported ethanol that has had to incur” the secondary tariff. But that is not the same as “no one has ever paid” the tariff. U.S. import statistics show a sharp decline in direct imports of ethanol from Brazil starting in October 2008, but they have not disappeared entirely. What we don’t know is how much of those imports were for non-fuel (i.e., beverage and industrial) uses, which are not subject to the secondary tariff, and how much was for fuel.

    But, in any case, my point is that whether any ethanol is imported on which the secondary tariff is paid is immaterial. What matters is that the tariff likely discourages imports and raises domestic prices. Perhaps not all the time, but whenever Brazilian ethanol devlivered to the coastal states would have been cheaper than U.S. ethanol delivered to those same locations, were it not for the tariff.

     

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  70. By Rufus on August 25, 2010 at 9:15 am

    Sam, they’re right about “small plants using local feedstock,” but KL has been quite the gadfly (they kind of remind me of Coskata.) Their main problem is: they’ve never been able to “profitably” produce ethanol with “their” process. Maybe they’ll “change processes.” Who knows.

    Ron, there you go again. Talking in circles. Let’s Cut to the Chase. No drop of Brazilian Ethanol has ever been charged the $0.54 Tariff. They have Never come close to reaching the cap of 7% of the previous year’s domestic production.

    One More Time. NO Brazilian Ethanol Has Ever Paid the $0.54 Tariff.

    They Have Never Come Close.

    And, Yes, Every Bit of it Has Received the $0.51 Blenders Credit.

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  71. By Rufus on August 25, 2010 at 9:22 am

    Let me put it another way: There has never been a day that a Brazilian Exporter had to factor in the cost of the Tariff on a tanker of ethanol. It has Never been that close.

    Look, every year corn hits what is referred to as the “July High.” This is the, oftentimes, annual high price for corn that comes about right before the harvest. Usually, after the “July High” corn will fall about $0.50/bu over the next couple of months. We are There, Now.

    You can buy Unsubsidized corn ethanol in New York for about $1.90/gal. What can you buy Cane ethanol for in Rio de Janiero, right now?

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  72. By Perry on August 25, 2010 at 9:33 am

    “KL Energy will use sugar cane waste from Louisiana since it doesn’t grow in Wyoming.”

    There’s more than meets the eye here Samuel. Verenium has been making cellulosic from bagasse for the last two years in Jennings, Louisiana. The heart of sugarcane country. BP bought Verenium’s cellulosic operation in June. Verenium keeps the enzyme production part of the company. This looks like a case of monkey see, monkey do. Petrobas probably saw the BP press release and decided they had to get with the program. In Wyoming, of all places.

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  73. By savro on August 25, 2010 at 9:51 am

    Perry said:

    “KL Energy will use sugar cane waste from Louisiana since it doesn’t grow in Wyoming.”

    There’s more than meets the eye here Samuel. Verenium has been making cellulosic from bagasse for the last two years in Jennings, Louisiana. The heart of sugarcane country. BP bought Verenium’s cellulosic operation in June. Verenium keeps the enzyme production part of the company. This looks like a case of monkey see, monkey do. Petrobas probably saw the BP press release and decided they had to get with the program.


     

    I find it hard to believe that Petrobras’ slapping down of $11 million on a test plant is a simple case of monkey see, monkey do.

    In Wyoming, of all places.

    It’s only the test plant that’s in Wyoming. The end of the article mentions that they plan to build a bunch of small, but local plants in cane country.

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  74. By Perry on August 25, 2010 at 10:04 am

    Don’t get me wrong Samuel. I’m glad to see anything that cuts dependence on oil. But, Petrobas announcing an agreement less than a month after BP’s deal to buy Verenium looks a bit half-cocked. Did they put any planning and foresight into this, or did they just jump at an opportunity for a press release? $11 million is chump change for Petrobas. A rounding error on a day’s retail sales. I’d like to be wrong. I’d love to see Petrobas get excited about biofuels. I won’t hold my breath though.

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  75. By savro on August 25, 2010 at 10:15 am

    Perry said:

    Don’t get me wrong Samuel. I’m glad to see anything that cuts dependence on oil. But, Petrobas announcing an agreement less than a month after BP’s deal to buy Verenium looks a bit half-cocked. Did they put any planning and foresight into this, or did they just jump at an opportunity for a press release? $11 million is chump change for Petrobas. A rounding error on a day’s retail sales. I’d like to be wrong. I’d love to see Petrobas get excited about biofuels. I won’t hold my breath though.


     

    The reason why $11 million is chump change to a company like Petrobras is because they don’t treat it as chump change. I find it hard to believe that Petrobras is putting up $11 million for the sake of a retaliatory press release without believing in the merit of the investment itself.

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  76. By ronald-steenblik on August 25, 2010 at 10:47 am

    Rufus wrote:

    Ron, there you go again. Talking in circles. Let’s Cut to the Chase. No drop of Brazilian Ethanol has ever been charged the $0.54 Tariff. They have Never come close to reaching the cap of 7% of the previous year’s domestic production.

    I’ll let others decide whether I’m talking in circles, but you’re simply repeating yourself. Got any proof that no Brazilian ethanol has ever been charged the $0.54/gallon tariff? Like I said, the statistics show some imports of ethanol directly from Brazil — i.e., not processed through Caribbean countries (which show up in the statistics as imports from those countries). But what’s your point? Mine is that a tariff is a barrier, whether anybody pays the tariff or not. Citing the possibility of avoiding the tariff by shipping via the Caribbean (up to the quota) does not render that question moot.

    To respond once again your point that Brazil has “never come close to reaching the cap of 7% of the previous year’s domestic production”, that is a selective reading of the statistics. As shown in the graph to which I linked, imports via the Caribbean increased strongly from 2005 through 2008 (the graph shows only 1/4 year’s worth of data for 2009), having bumped along in the range of 50 million gallons a year from 1991 through 2004. In 2006, 2007 and 2008, the quota was 75% filled, and in the last two of those years the volume shipped was essentially equal to the quota for the previous year. Dehydration capacity is not created instantaneously, so it is not surprising that there has been a lag between the growth in the quota and growth in volumes shipped under the CBI quota. So what?
    I reiterate again, such trade incurs costs! Look at it this way: if you were a U.S. exporter, which would give you a greater profit, shipping directly to another country or unloading, processing and then reloading the stuff at some points inbetween?

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  77. By PeteS on August 25, 2010 at 12:21 pm

    Samuel R. Avro said:

    First thing I do on every article is “Join the forum discussion” to see

    the article plus all comments (whereupon the font changes to some really

    crappy one — why can’t the style sheet be the same? Don’t know if

    it’s like that in all browsers, mine’s IE7).

    I use Firefox most of the time, but I know we’ve tested out the forums on all common browsers without experiencing any issues. I don’t know what you mean by crappy fonts, the forums are very neat and clean for me. If you can be more specific to what you don’t like I will try to help.

    Hi Sam, thanks for the comment and sorry for not getting back earlier. First thing to say is that the only reason I even bring it up is because I’m an avid reader of both RR and his commenters, so please take this in the spirit of someone who appreciates this site a great deal. So thanks is due to RR, yourself, and the many other contributors.
     

    I’ve tried to capture what I’m talking about in some screenshots, here:

    http://s556.photobucket.com/al…..=slideshow

    If I have this right, you can see four screenshots there, annotated as rr1 thru rr4, which should approximate what I see on my screen. I’m using IE7 (specifically 7.0.5730.13).

    Some observations:

    rr1 – “front page of blog” … nice layout and font, fairly easy on the eyes, but can’t read the whole article or see comments. Quickest way to see both is click “Join forum discussion” … which leads to ….

    rr2 – forum discussion … hmm, have the whole article and comments but the font is pretty ugly. You can also see the various controls, like the “Quote and Reply” and “No Tags” buttons don’t fit in their respective panels, and are truncated.

    rr3 – “last 15 comments” … this shows part of the “15 most recent comments” section of the page you get when you click “Read Full Story”. I don’t use this much because I find the partial list and reverse chronological order not all that useful. But worth pointing out some differences in layout from the “Forum discussion” comments shown in rr4.

    - Alignment of the Author/Date strings … these are aligned at the top of the left panel in the “last 15″, but at the bottom in the “Forum discussion”. So on a long comment, the Author is the last thing you see when you scroll to the bottom. I often have to scroll down first, for instance to see if my “Rufus filter” needs to be applied. Wink

    - Different formatting on block quotes between “last 15″ and forums… minor, but noticeable. Possibly it’s the different spacing rather than the different background colour that’s most off-putting.

    And of course, it’s all different again in the “WYSIWYG” (or should it be “WYSINWYG”) comment editor when you go to actually create a comment.

    There’s possibly a few other minor things, but I’ve wasted enough space here. Thanks for entertaining the rant, and don’t worry, I’m not losing that much sleep over it regardless. Cool

     

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  78. By paul-n on August 25, 2010 at 12:44 pm

    @ Ron,

    I’ll defer to your experience on the trade commitments.

    Perhaps then the way to go is a retail fuel(oil) tax, across the board (as all the Euro countries do) and pay larger tax credits/production allowances/reduced royalties for domestic production.  There are probably a few other ways to do it, but just not a simple as the import tariff.

    I wonder if the US would ever impose a softwood lumber style tax on Cdn oil imports because they were too cheap!

     

     

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  79. By PeteS on August 25, 2010 at 1:10 pm

    Still catching up on the comments on this post, sorry for the following extremely dumb question:

     

    RR mentioned in an earlier comment that butanol “phases out” of a water solution at concentrations above 8%. What does that mean? A little knowledge is probably a dangerous thing, so I’m familiar with the concept of “phase transitions” (solid to liquid to gas), but no idea if they relate to this “phasing out”. I guess the point is that the butanol and water become more easily separable, but what exactly happens? Butanol and water are both polar molecules, which is why one is soluble in the other, right? Does the solution become saturated at some point so that butanol can be skimmed off the top? For some reason I’m having more difficulty picturing what saturation means when we’re talking about two liquids instead of, say, water and an ionic salt. Do they remain miscible or does the butanol float ( – a quick search tells me isobutanol is about 80% density of water).

     

    Like I said, dumb question, thanks in advance for the education.

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  80. By ronald-steenblik on August 25, 2010 at 1:25 pm

    Paul, the United States already provides a number of tax-related measures to encourage oil production. The Obama Administration has proposed ending several of them, and earlier this year a bill was introduced in the U.S. Senate to end $3.5 billion per year worth of tax breaks for the oil and gas industry. But the bill was voted down, roundly.

    I am curious why you think that rather than move in the direction of reducing subsidies to the oil and gas industry, the United States should increase them. If you are going to invoke the “it improves energy security” argument, I would note that – besides contributing to environmental problems — any artificial accelleration of production of a fossil resource only hastens the pace at which domestic supply drops when production from those deposits start running out. Isn’t it better for the industry to respond to market forces? Moreover, don’t forget that there are plenty of countries (e.g., Norway and the UK) with high taxes on final petroleum products that are nonetheless significant producers of oil and gas. (What they can’t sell at home they export.)

    Regarding the softwood lumber dispute, I was speaking in an abbreviated way. The charge was not simply that Canadian exports were too cheap, but that Canada unfairly subsidized producers of spruce, pine and fir lumber. The dispute centred on stumpage fees – i.e., what companies were charged for the privilege of harvesting timber on public land. Many in the U.S. regarded Canadian stumpage fees as being too low, making them de facto subsidies.

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  81. By paul-n on August 25, 2010 at 2:16 pm

    Hi Ron,

    The direction I think we should be moving in is to make energy more expensive, so that the economy gradually (or quickly) adjusts to use less of it.  For the goal of oil independence, I don’t think it is possible (or desirable) to increase domestic production of oil, and oil alternatives (ethanol, etc) to meet current demand.  However, if the price is higher, demand is reduced, (eventually) and alternatives are viable, so the gap can be closed.  yes, domestic production of oil will increase too, but if the primary goal is oil independence, then that is OK.

    Whether the high price is achieved by an import tax, or a carbon tax is secondary, IMO.  A broad “all fuels tax”, which includes the alts, would leave them as unprofitable as they are now, and defeat the purpose.

    Agree about Norway and UK (though UK is now a net importer).  I like their approach, keep the price high so the precious commodity is not wasted, unlike the OPEC countries.  Any fuel not put to good use at home can be exported.  But when the price is kept low, fuel is not always put to good use, and much of it produces little economic value (e.g.commuters sitting in traffic jams, use of oil for space heating, etc)

    AS for the softwood lumber dispute, I find it odd for the US to point the finger at Canada over low stumpage rates, is this not the equivalent of the “stripper well” credit applied to low productivity oil wells?  Canada gives extraordinarliy low royalty rates to oilsands producers, which is directly equivalent to the low stumpage rates, but no one has proposed countervailing duties on oilsands oil

    What place does one country have to tell another what royalties it charges on it’s state owned resources?  Canada could put an import tax on US made vehicles, because many (most) are made in plants that were built with the aid of generous tax credits, and this is a definite subsidy (as is the bailout, but Canada and Ontario were silly enough to participate in that).

    There are so many ridiculous subsidy schemes, of all types, but governments have a habit of singling out the ones that are politically advantageous at the time.  

    The US is not self sufficient in either oil or lumber, and imports both from Canada, where both are produced on government lands, with very low royalty rates. But the treatment of the two commodities by the US government is very different.  

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  82. By Wendell Mercantile on August 25, 2010 at 3:18 pm

    The US is not self sufficient in either oil or lumber,

    Why aren’t we sufficient in lumber? Flying across the countryside one sees literally billions and billions of trees.

    It would seem the wood is there. Why aren’t we using it? Is it environmental reasons? Or the labor cost of harvesting it in the U.S.? I’m curious, I thought we had all the wood we need (at least for structural wood), and didn’t know we aren’t self-sufficient.

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  83. By rrapier on August 25, 2010 at 3:42 pm

    RR mentioned in an earlier comment that butanol “phases out” of a water solution at concentrations above 8%. What does that mean?

    Not a dumb question at all Pete. It just means that at that level two phases form; a lighter phase that contains mostly butanol and a heavier phase that is mostly water. So if you mixed up 10% n-butanol with 90% water, you would have a bottom phase of something like 92% water, 8% butanol, and an upper phase of something like 90% butanol (I forget the exact concentration of the upper phase, but it is in that ballpark). So ideally if you are producing butanol you would like to get to the phasing point, skim off the butanol rich phase, and purify that.

    RR

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  84. By rrapier on August 25, 2010 at 3:45 pm

    Verenium has been making cellulosic from bagasse for the last two years in Jennings, Louisiana. The heart of sugarcane country.

    I have always maintained that the first place cellulosic ethanol should make sense is at the sugar mills. They already have a bagasse disposal problem, so not only do they have free feedstock that is already at the plant, but they would have to dispose of it in any case so converting it solves two problems.

    RR

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  85. By paul-n on August 25, 2010 at 4:30 pm

    Wendell, Canada supplies about 1/3 of the lumber sold in the US, and has done so for quite some time.  The US probably could be “lumber independent”, and I think the real reason it is not is that it is cheaper to just buy it from Canada

     

     Much of the (remaining) forest in the US is in parks/reserves etc.  Most US lumber production comes from privately owned land, so the landowner is naturally looking to make a return on that.  

     

    But the real reason is that Canada has huge amount of forest, on government land, that is just sitting there doing nothing, so it can produce lumber with far less overhead than US producers (just like Saudi can with oil).  To use an overused cliche, Canada is literally the Saudi Arabia of forests.   So the gov sell rights to cut the lumber, and collect royalites (stumpage) on the cubic volume of lumber cut – very similar to oil production royalties. 

    In my travels I have seen Canadian lumber and plywood from southern California to central Alaska – haven;t been to the midwest or east, but I am sure it is there too.

    Because the US market is down, and the US duties, Canada is now selling lumber to China (who don’t have many trees left).

    Not surprsingly, with all these trees, Canada is interested in lingocellulosic biofuels, but to date have had the same trouble turning wood into liquid fuel as everyone else – it’s expensive.

    Canada’s poster child for cellulosic is Iogen, who have been backed by Shell.  Like the US companies, they have extracted lots of money from gov, industry, investors, produced some ethanol, and are still not stand alone viable.  According to this press release, Shell has agreed to fund them for two more years.  They have been making ethanol, from wheat straw, since 2004, and still don;t have a commercial process, and are even further away from doing it with wood, so I am not holding my breath here.

    They have also pursued another pathway, pyrolysis oil, with equally little success.  Easy and cheap to turn wood into liquid, but you have a molasses like liquid that is really only suitable for open flame burning (boilers etc) and can’t be used as an engine fuel.  You could gasify it and go from there, which they are looking at, but it is yet another expensive pre-treatment step.

    But answer your original question, it simply comes down to the fact that Canada has lots of trees and not many people, the US has many people and not as many trees, and wants to keep some of those standing.  Importing lumber from Canada is a good deal for both countries.

    If an actual breakthrough in wood – to liquid fuel were to occur, it would make for interesting times in the lumber industry!

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  86. By Wendell Mercantile on August 25, 2010 at 11:44 pm

    The US probably could be “lumber independent”, and I think the real reason it is not is that it is cheaper to just buy it from Canada

    Thank you for the detailed explanation Paul. Some of it is as I guessed — we do have the wood, but for environmental and economic reasons we don’t use it. For example, we have bunches of loggers in the Northwest out of work because of the spotted owl.

    In my state, we have a vast acreage of wood in tree farms that are raised and harvested to make pulp for paper. This is off point, but when people say we shouldn’t use paper to save trees, I tell them growing a tree on a farm to make paper is no different than growing wheat to make bread.

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  87. By paul-n on August 26, 2010 at 12:32 am

    Wendell, we could do a whole separate thread on wood-energy and the issues that go along with it.  

    The lumber industry does have itself to blame, partly.  Most people don;t mind logging, they just don;t want the forest destroyed in the process.  Find a way to resolve that, and you can have owls and 2×4′s from the same land.  Not as easy and cheap as clear cutting, but selective harvesting from intact forest can be done, and was done before mechanised harvesting.  

    If you want to clear cut, then farm trees, like you say, but forest lands, should remain forest lands – that does not mean lumber can’t be harvested.  I know of several farmers in Australia that gave up on sheep and cattle and grew trees and now make more money for less work than they ever did – you just don;t want to lose your crop to a fire!

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  88. By ronald-steenblik on August 26, 2010 at 3:21 am

    Paul, I’m not going to stick my toe into the extremely controversial Softwood-Lumber dispute than I have already. My only point was that bi-lateral trade disputes are dealt with bilaterally. A general tariff affects everybody. I will agree 100% with this comment of yours, however:

    There are so many ridiculous subsidy schemes, of all types, but governments have a habit of singling out the ones that are politically advantageous at the time.

    Regarding the producer and consumer prices of crude oil and petroleum products, I would not agree that “whether the high price is achieved by an import tax, or a carbon tax is secondary.” It is absolutely primary. All manner of economic distortions and unintended consequences are created by import tariffs. A carbon tax (especially if combined with a pollution charges on other pollutants), however, would address your opposition to a broad “all fuels tax”, which as you point out “would leave alternative fuels as unprofitable as they are now”.

    As I tried to point out in a previous comment (either in this string or another; I forget), in the United States (and in Canada, too?) fuel taxes are supposed to be user charges, and the money is hypothecated to the building and maintenance of highways (with some diverted to cross-subsidize public transport). However, the contribution of fuel taxes to U.S. federal highway costs has continuously declined over the years such that revenues from fuel taxes barely cover half of the costs. A large proportion of the rest of the expenditure is made up through general appropriations from the budget — i.e., taxpayers — which many people see as unfair.

    So, the first order of business, if one takes the view that road users should pay for their use (which, of course, can also be done through tolls), is to raise the tax on ALL road-transport fuels so. Now — and I am surprised the biofuels industry has not used this argument — one could argue that fuels that have lower energy density (i.e., propel vehicles fewer miles per gallon) should be taxed at a rate proportional to their energy content. Australia is in the process of applying such a policy (though not exactly: the differentiation is according to broad bands of energy density). Such a reasoning would imply that the portion of the road tax considered a user charge should be 1/3 less for ethanol than whatever is applied to gasoline.

    The next step is for the user price to cover other expenses, such as maintaining strategic stockpiles. Whether those are only needed for petroleum fuels and not for biofuels would make an interesting discussion.

    The third step then is to look at tax differentiation on the basis of CO2 emissions and other pollutants. In theory, such differentiation is rather straightforward for emissions that are proportional to use, but much more difficult when the emissions (e.g., PM10) vary by fuel quality, engine type, condition and the behaviour of the driver, or according to local meteorlogical conditions (e.g., ground-level ozone). But, as we have seen in the debates over life-cycle emissions from ethanol, even differentiating on the basis of CO2 emissions is contentious. We are seeing an experiment in such proportional differentiation (as opposed to thresholds, such as in the RFS) with the Low Carbon Fuel Standards that has been applied in British Columbia and which is soon to go into effect in California.

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  89. By Larry Johnson on August 26, 2010 at 10:23 am

    Interesting comments; some more accurate than others. The most important factor holding back investment in commercial production of cellulosic ethanol is a lack of a market. Ethanol has a market cap in the U.S. of 10% of gasoline, a standard set in 1978, purely on political considerations. Currently we have enough corn ethanol to satisfy that market so there is no place for new ethanol to go except the export market. No prudent investor will invest in a manufacturing industry when there is no existing market for the product.

    A second factor is the lack of government leadership on this issue. I hate to depend on government but when an issue affects energy, agriculture and environmental policies, we know government WILL be involved.

    Technology is certainly not perfected but several technologies are ready to scale up to commercial production as soon as the capital is available. Once the first commercial production facilities are operating, gains in efficiency will be rapid.

    Granted, there are countless other issues, special interests and questions to be answered but they will fall into place if we can get by these initial hurdles. After all, we are discussing a truly historic change from fossil fuels to renewable energy; don’t expect it to happen overnight.

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  90. By Wendell Mercantile on August 26, 2010 at 11:06 am

    Currently we have enough corn ethanol to satisfy that market so there is no place for new ethanol to go except the export market.

    Larry~

    What do you mean no place for new ethanol to go? Why doesn’t the ethanol industry work to expand the market so there is a place for new ethanol to go, instead of just waiting for the government to pass a mandate or push the blend wall forward?

    Why aren’t ethanol distilleries building their own chains of E85 filling stations along the Interstate highway system?

    Why isn’t the ethanol industry developing and selling “after market” kits to convert existing cars to flex-fuel? They could even set up their own chain of service centers to install them at no or low-cost for car owners.

    Why aren’t corn farmers and the ethanol industry demanding that the ag implement companies start making tractors and corn pickers that run on alcohol? If all the tractors, combines, and corn pickers in Iowa ran on alcohol, that woudl be a significant place for “new” alcohol to go.

    Why aren’t the owners of ethanol stills converting their plants to run on alcohol instead of natural gas? (That would be a tremendous and exciting way for the ethanol industry to expand the market for their product — all they would have to do is start burning the same fuel they make and sell their fuel to themselves. I bet they could even negotiate an attractive price. ;-) )

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  91. By paul-n on August 26, 2010 at 12:15 pm

    Agreed with Wendell 100% here.  The ethanol industry has been given a huge hand up with both a mandate and a subsidy.  That is enough to create a viable industry – if they want to grow into a larger one, they can do it themselves, same as any other industry.

    Ethanol does NOT have a market cap of 10% of gasoline, it has a blend cap.  There is nothing to stop ethanol (as E85) from capturing 20, 30 or 85% of the gasoline market, it’s just the the blend limit in normal gasoline is 10%, that’s all.

    Instead of trying to find more ways to sell their product, by finding ways for customers to want to use their product, the ethanol industry is trying to find ways to have customers be forced to use their product.  

    The industry needs to get off its collective butt (and off the taxpayers back) and develop their markets, just like anyone else.  Its goal should be to be the “fuel of choice” not the “fuel you are required by law to use”

    To Wendell’s list of examples I would also locomotives, and buses, which, like any diesel engine vehicle, can be co fuelled (or even 100% fuelled) on ethanol.

    If the ethanol industry believes its own spin, that it is truly good for the country, it will should seek to become a viable, profitable industry, not a welfare case that can only survive by mandate and/or subsidy – the country has enough of those already.  

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  92. By paul-n on August 26, 2010 at 12:49 pm

    Ron,  agreed about softwood lumber, we could go on for days about that one, or the made in America steel for the stimulus program, etc etc.

    I am personally a support of the carbon tax, and of course, we already have one here in BC, albeit at a level so low it doesn’t make enough difference to change anyones behaviour, so it is ineffective.

    But my comments are aimed at the goal achieving oil independence, not reducing carbon emissions.  It is theoretically possible to replace oil imports with ethanol imports, which would be (nominally) carbon neutral, but the country would just be switching dependence from one imported fuel to another.  To achieve oil independence, as fast as possible, may involve increasing domestic (continental) production of oil, not decreasing it.  It does mean that reserves get depleted faster, if production increases, but it also means that some non economic resources become economic reserves.  Most importantly, it means the alternatives are profitable.  There will, as you point out, be unintended consequences, but that is always the case.

    I also see an import tax as more (domestically) politically acceptable than a broad carbon tax.

    I also agree with you about the fuel taxes/highway cost issue.  I a a big believer that “road taxes” should cover the cost of roads.  There are more ways to tax than just fuel, though it is the best way, as it discourages unneccessary driving.  Tollways are fine with me too, though an alternative is an annual charge, at registration, based on miles driven.  But really, a fuel tax does the job, if you are driving, you are using fuel and you can;t avoid that tax, just base on the energy content, not volume

    I am also in favour of higher annual registration fees, and differentiated on the basis of vehicle size or engine capacity, as is done in Europe/Japan.  You are paying just to have the roads available, whether or not you drive on them.  If you change your life to not own a car, then you don’t pay.

    I am not so sure about the carbon/pollutant pricing part of it.  As you say, ethanol has shown the difficulty of getting parties to agree on this.

    My objective here was to outline a simple, implementable plan to forcefully move towards energy independence.  Trying to have a plan the equitably prices pollutants etc is much harder, and may end up being so complex that people don;t understand it, business will try to game it and politicians won’t implement it.  The carbon trading scheme would be an example of this

    Simpler is better here, but more importantly, no plan, no matter how good in concept, is of any use if it will never get implemented, or is watered down so much (like the BC carbon tax) that what is implemented does not achieve any real change.

    I would gladly take increased domestic oil production , and the co2 emissions that come with it, in return for oil independence.  Once we are off imported oil, and in a high oil price economy, we are already well down the path of moving off oil altogether.  I think an import tax is the best (i.e. least politically painful) way to start, as any other ways (pollution pricing, carbon taxes, rationing, etc etc)seem to all be political non starters.

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  93. By paul-n on August 26, 2010 at 12:51 pm

    Ron – did you get the email/personal message I sent you?  There should be a red flag next to the mail icon at the top right of your CER page.

     

    P.

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  94. By htomfields on August 31, 2010 at 6:48 pm

    The metabolic versatility of this enzyme (xtreme xylanase) will enable economic enzyme production, biomass pretreatment process versatility, and significant equipment and operational cost savings that could make affordable cellulosic ethanol a reality.

    http://www.inl.gov/research/xt…..e-xlanase/

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  95. By moiety on September 1, 2010 at 2:52 am

    Larry Johnson said:

    Technology is certainly not perfected but several technologies are ready to scale up to commercial production as soon as the capital is available. Once the first commercial production facilities are operating, gains in efficiency will be rapid.


     

    Rhat is the kind of assumptions that RR fights against. Technology development may not be rapid at least no more rapid that current developments. Manufacturing of Adipic acid from phenol which I mentioned earlier is an example of not rapid development.

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  96. By Patrik Lownertz on September 14, 2010 at 6:21 am

    One of the key reasons why cellulosic biofuels have are slow to emerge is that when policies have been established fundamental analysis in terms of existing technologies and development barriers, conversion efficiencies and land use efficiency have often been disregarded for short term convenience in terms of regulatory effort and easy market introduction. This has slowed introduction of second generation fuels but will also have serious long-term effects in terms of a lower system capacity ceiling and higher biofuel cost.

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  97. By Bob De Maria on October 12, 2010 at 7:22 pm

    Great question, a great article, and really thoughtful responses.

    In addition to what has been said, one might also consider the fact that only a few sources of lignocelulosic feedstock have been given very serious attention by the Federal Government, none of which can be found in areas high population areas such as we have here in the Mid Atlantic Region of the U.S.

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  98. By Dima Galkin on December 7, 2010 at 5:40 pm

    Mr. Rapier,

    Your opposition is valuable in creating a debate about cellulosic ethanol, which is important in discovering whether it is truly a worthwhile pursuit. For that, I commend you.

    However, your math is not quite right. In the bad assumption that you describe, you assume the conversion process will yield 100 gallons per ton of feedstock. However, ZeaChem has already reached 135 gallons per ton of feedstock (http://www.technologyreview.co…..od=related). Moreover, even if cellulosic ethanol producers had to pay for their feedstock, the feedstock would possibly be cheaper than $100 per ton (based on my research looking into NREL and Oak Ridge reports).

    More importantly, the assumption that cellulosic producers will receive money for accepting feedstocks has some merit. For example, I am researching the feasibility of using green waste from forests to produce cellulosic ethanol while reducing the amount of waste fuel available for forest fires to grow excessively large and create a lot of damage on the urban/forest frontier.

    In this case, fire departments, communities living near forests, and insurance companies–just to name a few entities–could discover economic benefit by having less frequent and less damaging fires, so they may be willing to pay to have the green waste collected and managed elsewhere, e.g. at a cellulosic ethanol production facility.

    In terms of comparing cellulosic ethanol to corn ethanol, a number of companies are working on enzymes and other strategies that can make cellulosic ethanol more efficient. If the additional step of breaking apart the cellulose, hemicellulose, and lignin can become more efficient and cheaper, then the cost of producing cellulosic ethanol can be almost the same as that of producing corn ethanol. Add in government subsidies justified by the lesser environmental impact of cellulosic ethanol relative to its corn cousin, and you have cellulosic ethanol being cheaper to make.

    Sincerely,
    Dima Galkin

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  99. By Wendell Mercantile on December 7, 2010 at 6:01 pm

    Add in government subsidies…and you have cellulosic ethanol being cheaper to make.

    Add in subsidies paid for by whom?  The U.S. is now $13 trillion in debt.

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  100. By paul-n on December 7, 2010 at 6:26 pm

    If the additional step of breaking apart the cellulose, hemicellulose, and lignin can become more efficient and cheaper,

    Well, of course.  If you can make the expensive hurdle to commercialisation cheap enough, it will be commercial.  But no one has been able to do that, despite a century of trying to do so.

     

    the assumption that cellulosic producers will receive money for accepting feedstocks has some merit. For example, I am researching the feasibility of using green waste from forests to produce cellulosic ethanol while reducing the amount of waste fuel available for forest fires to grow excessively large and create a lot of damage on the urban/forest frontier.

    It has merit?  The reason it is “green waste” now is because there is no use for it.  But forestry waste can simply be left where it is (though not in piles) – forests have been dumping their waste on the forest floor for quite some time.  The communities sometimes do pay for fuel reduction by controlled burning – mimicking a natural process, and a cheap method.  

    Harvesting for biomass is much more expensive – only the fuel producer will be paying for that.

    By the way, if the biomass is being harvested, then there are more options than just cellulosic ethanol.  With wood pellets selling for up to $200 per ton, and the wood pellet market doubling twice in the last eight years, the cellulosic folks might just find they have to outbid someone.

    In that scenario, $100/ton might not be out of the question…

     

    As for subsidies – what Wendell said.

     

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  101. By Dima Galkin on December 7, 2010 at 7:19 pm

    Paul, just because something hasn’t been done in the last century, doesn’t mean it can’t be done. As for competing with wood pellet sales, I haven’t come across information on that. Could you point me to information on that, please?

    Paul and Wendell, the debt is another issue. But, since there already are subsidies, there don’t need to be additional government expenditures. I was referring to existing subsidies. Moreover, an existing debt doesn’t necessitate zero expenditures. And again, moreover, there are other expenditures which can be reduced in order to decrease the deficit.

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  102. By rrapier on December 7, 2010 at 9:28 pm

    Dima Galkin said:

    Mr. Rapier,

    Your opposition is valuable in creating a debate about cellulosic ethanol, which is important in discovering whether it is truly a worthwhile pursuit. For that, I commend you.

    However, your math is not quite right. In the bad assumption that you describe, you assume the conversion process will yield 100 gallons per ton of feedstock. However, ZeaChem has already reached 135 gallons per ton of feedstock (http://www.technologyreview.co…..od=related).


     

    Well, you can certainly count me among those who don’t believe that number. A bone dry ton of biomass contains around 15 million BTUs. 135 gallons of ethanol contains 10.3 million BTUs. The composition of biomass is less than 50% cellulose. So they are claiming yields that are beyond the theoretical limit, and they certainly haven’t accounted for the energy inputs (i.e., that certainly isn’t a net energy).

    RR

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  103. By paul-n on December 7, 2010 at 9:39 pm

    Dima,

     

    I am not saying it can’t be done, I am saying that after a century of efforts, it still can’t be done competitively. So then you have to subsidise it, and if you subsidise anything enough, then it will be “competitive”.

     

    For wood pellet information, a good place to start is here;

    http://www.pellet.org

     

    We also had a discussion on this site about pellets last week;

     

    The world market for pellets has increased from 1.5m tons/yr to 10mtpy in the last decade, and still growing.  Every bit of wood, that is on the back of a truck, now has a floor price, as a pellet feedstock.  And you can set up a pellet mill anywhere, at any scale, and make pellets far simpler, with minimal energy inputs than cellulosic ethanol.

    You can also make pellets out of straw, stover, paper, etc.  Anything that is a feedstock for cellulosic ethanol, except municipal waste, is a feedstock for pellets.  

    So if the ethanol producer is relying to getting paid to take woodwste, my bet is a pellet producer can outbid the fuel producer for the same feedstock.  As could a wood powered CHP plant.

    But, that is just my bet – don’t let that stop you from moving forward with a cellulosic plant, if you can make a go of that is great – just don’t ask for it to be subsidised – we have seen enough of that already.  

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  104. By savro on December 8, 2010 at 2:03 am

    Dima Galkin said:

    As for competing with wood pellet sales, I haven’t come across information on that. Could you point me to information on that, please?

    Thanks for your comments, Dima.

    I don’t have any numbers, nor do I have a link to point you to, but I recently visited a wood biomass plant (they feed electricity directly into the grid) and had a chance to ask some questions while watching a tractor-trailer dump its load of wood pellets into their storage facility. What I learned is, that the U.S. Forest Service (this facility is located just outside the boundaries of a National Forest) at times was providing them with what the plant manager termed “dead, down and leaning” trees. This was not their only source of wood chips mind you; most of their deliveries were being purchased and shipped in from providers across their region.

    It doesn’t seem like there’s that much “green waste from forests” to be had –at least easily and economically collectible– (although I may be wrong on this) and, if there was, the market for it would be much larger than just the cellulosic ethanol crowd. It’s not just the biomass-to-electricity plants that would be interested; I was also told about rising competition for the “dead, down and leaning” trees from the area paper mills.

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  105. By moiety on December 8, 2010 at 3:18 am

    Dead, down and leaning trees would be windfall. The problem with collecting windfall is that it is normally a manual job in the initial phase (or at least more manual involving more work hours or consideration; for example windfall will normally be amoungst upstanding trees and may be lodged etc). Clearing windfall (bucking) can be especially dangerous as it is not always clear how the tree will move. The job is usually done by a speciualised person (bucklogger). Windfall should not account for a large proportion of the forest and is expensive to clear.

    Eg of the dangers

    http://www.youtube.com/watch?v…..eature=sub

     

     

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  106. By paul-n on December 8, 2010 at 4:21 am

    Good find Moiety.  Unfortunately, on average three people die each year doing hand log cutting here in BC, and about 20 in the forestry/lumber industry in total .  Big trees and rocky terrain of coastal mountains makes it that much more dangerous.  Logging of smaller trees on rolling land in the interior is much safer.  Cutting/chipping of young trees grown for biomass is safer still.

    Removing windfall wood is hard work – I get some occaisonally for firewood along roadsides – pulling it out from inside the forest is near impossible, unless you have a good network of trails, and on some terrain, that is just not possible.

    I think it is better to leave real forest areas as real forest, even the windfall – it becomes homes for various critters. The areas that are already 2nd growth etc, are the ones to use for biomass.

    Sam, what I see in my area is that as soon as wood is on a truck, it has a value.  Good logs are taken to the log sort and sold as sawlogs, bent/split/small logs are taken to the pulp mill for pulp feedstock, and “slash” from logging operations, land clearing, power line maintenance, and wood waste from the local landfill, is also taken to the pulp mill and burned for electricity.  

    One ton of green slash (40% water, 60% wood) turns into $50 of electricity ( and good deal of process heat), and costs nothing to process.  To use it as ethanol feedstock, you would be lucky to get 300kg of cellulose out of it, which would make about 30gal of ethanol, worth $60, and take a lot of effort to do so.  

    I think the pulp mill could easily outbid the ethanol operation for the slash or pulping logs.

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  107. By Dima Galkin on December 9, 2010 at 12:01 pm

    Well, you can certainly count me among those who don’t believe that number. A bone dry ton of biomass contains around 15 million BTUs. 135 gallons of ethanol contains 10.3 million BTUs. The composition of biomass is less than 50% cellulose. So they are claiming yields that are beyond the theoretical limit, and they certainly haven’t accounted for the energy inputs (i.e., that certainly isn’t a net energy).

    RR

    What about the hemicellulose? Does that not also contribute to the total BTUs?

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  108. By rrapier on December 9, 2010 at 12:20 pm

    What about the hemicellulose? Does that not also contribute to the total BTUs?

    There are processes that will go after the hemicellulose as well, but they are more expensive and the contribution from hemicellulose is not large enough to warrant another step.

    To me, gasification is the gold standard. It converts all of the carbon, and still only nets back about 50% of the BTUs of the starting biomass in the product. I know from discussions with POET they were able to take a clean, high cellulose feedstock — corn cobs — and they could get up to about 90 gallons per ton. But this still hasn’t prompted them to build a plant.

    RR

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  109. By Dima Galkin on December 9, 2010 at 9:11 pm

    According to POET’s website, they are about to build a plant, and they have pretty optimistic goals for ethanol production.
    http://www.poet.com/innovation…..c/plan.asp

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  110. By rrapier on December 9, 2010 at 11:38 pm

    Dima Galkin said:

    According to POET’s website, they are about to build a plant, and they have pretty optimistic goals for ethanol production.

    http://www.poet.com/innovation…..c/plan.asp


     

    Old information. The last I heard was that their plans were on hold. I think they would build a plant if they can get the government to pay for a big chunk of it. But ethanol producers right now are fretting over low margins; do you think cellulosic would be any better for them?

    RR

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  111. By ronald-steenblik on December 10, 2010 at 2:45 am

    I don’t have anything to add to this discussion, but I wanted to commend everybody (especially Robert, Paul, Sam, Wendell and Moiety) for a very civil and informative discussion. I’ve learned a lot. This is blogging at its best.

    Actually, I do have something to add. A picture — or, in this case, a cartoon — is worth a thousand words:

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  112. By Tesla_X on December 10, 2010 at 3:02 pm

    Gents,

    Looks like some impending news on the DOE front?

    http://gigaom.com/cleantech/do…..ear-ahead/

    In the biofuels sector, said Silver, the agency is seeing more partnerships between “producers and off-takers.” Partly as a result of these alliances, he said, the “first couple biofuels deals” will be announced, “shortly.” He declined to provide more specifics, but said biofuels will likely be among the next several loan guarantees. In the coming year, he said, we’re also likely to see “additional interest” in nuclear and “advanced fossil fuel technologies,” such as “clean coal” and carbon capture.

    From your various perspectives, who do you think will get loan guarantees ‘shortly’?

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  113. By rrapier on December 10, 2010 at 8:20 pm

    Tesla_X said:

    From your various perspectives, who do you think will get loan guarantees ‘shortly’?


     

    The way our energy policy tends to work is that the most politically connected are too often the ones who get this sort of money.

     

    RR

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  114. By paul-n on December 11, 2010 at 4:22 am

    Great cartoon Ron  - that sounds like quite a few “cleantech” companies!

     

    Since we have part of this thread on what to do with wood, and that is my favourite subject, I will post here some numbers I did up in response to RR’s same article on The Oil Drum, in response to the question about how to get the best “value” or “utility” out of wood – wood to liquids, pellets, or burn directly for heat and/or power?  

    A dry ton of wood has about 20GJ energy content.

    To do wood to gas to liquids (F-T), you would do no better than the Bintulu plant, which gets 50% yield, and likely somewhat less, but we’ll use 10GJ.   You would also receive about 1GJ as electricity from the process heat.

    Wood to methanol could give slightly better energy yield, up to 60%, but no one is doing this presently.

    Wood to ethanol, using the lignin to power the process, would yield less than 50%, but no one is doing this.

    To make wood pellets, you use about 10% of the energy to make the pellets, so 18GJ, and if burnt at 90% efficiency produce 16GJ of heat.

    We can also use the woodchips for electricity, by gasifier-then ICE (25% eff) and you will get 5GJ electricity PLUS 10GJ of waste heat from the engine (5GJ exhaust, 5GJ coolant) which you can use directly.  if all you wanted was heat, you could use the 5GJ of electricity can be used to run a heat pump, and with CoP of 3:1, you will turn the 5Gj into 20GJ of heat, for a total of 30GJ of heat out.

    The real question of course is the $$. Ignoring the (substantial) capital costs of wood to liquids plants, what are all these energy outputs worth?

    Wood to liquid yields 10MJ fuel, or 80gal, worth about $160 at $2/gal, and 1GJ elec (0.28MWh) worth about $28c, for a total of $188/ton.

    Wood pellets sell wholesale for $160/ton, and at 8%moisture are $174/dry ton, but we needed 1.11 tons to make them, so $157/ton.  This is  $ 7.85/GJ – close to residential/commercial natural gas, and when burned at 90% eff is $8.72/GJ heat.

    Doing gasification-electricity route yields 5GJ electricity, worth $140, plus 10GJ of heat, worth $87.20,for a total of $247/ton.

    For reference, the current futures market for 2×4 lumber is about $270per thousand board feet, or about $207per ton. But you need good straight wood for lumber, and some of the wood (20%) as energy to mill and kiln dry it. A ton of wood in the field yields 2/3 a ton of lumber, using the remainder as energy.

    So, a (dry)ton of wood in the field, can be worth;

    $139 as lumber

    $140 as electricity only

    $157 as wood pellets

    $188 as liquid fuel plus some electricity

    $240 as electricity and heat

    What is wood being used for today?

    The lumber industry is capital intensive, barely profitable, and is shrinking.

    There are some stand alone large wood to electricity plants, but they are capital intensive, only marginally profitable unless subsidised, and same for the cost of getting wood to co-fire with coal, unless subsidised.

    The world pellet market (mostly Europe) has quadrupled in volume,  in the last decade, to ten million tons/yr. It is the fastest growing and most profitable wood products market. The equipment is simple, and they can be made at factory or one man small scale.   It is even profitable to ship them from Vancouver through the Panama Canal to Europe!

    There are a couple of demo wood to liquids (FT) plants in Europe, and one being built in Edmonton, Canada. They are VERY capital intensive, and seem to need to be paid to take wood (wood waste)

    Doing electricity plus heat, needs a use for the heat. One of the largest consumers of wood pellets, Sweden, makes extensive use of CHP plants with district heating systems, and is building more of them.

    I am evaluating a project to do wood CHP at a local commercial greenhouse – you can see the difference in value for an electricity project when there is a beneficial use for the heat!

    Wood to electricity can be done at any scale, from as low as 10kW, and thus at any place.  If you can do it anywhere, then you can take it to a place that needs a lot of heat, and then you can truly maximise the value of wood “waste”.

    Compared to pellets or electricity+heat, converting wood to ethanol, or any liquid, sure seems like a lot of work for the same or less money.  An oil price rise will change this, but it won’t change the huge capital costs of wood to liquids plants

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  115. By Kit P on December 11, 2010 at 9:14 am

    “Since we have
    part of this thread on what to do with wood”

     

    Great post if you
    are marketing wood and do not give a crap about the environment.

     

    Here is how you
    should analysis it. The place to star a LCA and economic analysis is
    with the task at hand. If you need a sheet of plywood, what is the
    most economical way to get it with the least environmental impact
    using ISO 14000 methods.

     

    If you have an
    environmental problem like dairy farm manure or forest health issue,
    first you look for the root cause to identify the corrective actions.
    In the case, there is too much BOD & COD. If you have too
    energy, convert it to a more useful form with AD or a fluidized bed
    boiler.

     

    If you need lots of
    electricity and home heating, build a nuke plant. I can not think of
    anything less environmentally than shipping wood from BC and the PNW
    to northern Europe. Renewable energy done wrong is far worse than
    coal done right.

     

    Often over looked is
    the non-energy environmental impact of transportation. Safety is the
    biggest issue but time wear and road wear also put nasties into the
    air and water.

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  116. By paul-n on December 11, 2010 at 3:07 pm

    If you need a sheet of plywood, what is the

    most economical way to get it with the least environmental impact

    using ISO 14000 methods.

    Sure, but when you have wood waste and beetle kill wood,  you can’t use that for milling lumber, so that is off the table right from the start.  

    If you have an

    environmental problem like dairy farm manure or forest health issue,

    first you look for the root cause to identify the corrective actions.

    Yes, the pine beetle is a definite forest health issue, and no one has been able to work out what the root cause is.  Meanwhile there are over five hundred million tons of standing dead trees (in BC alone ) that get drier, and cause bigger fires each year – that is a definite environmental problem.  The corrective action is to remove the trees so that new young ones can grow – nothing lives in a standing dead forest.

    If you need lots of

    electricity and home heating, build a nuke plant.

    A great statement if you are marketing nuke plants and do not care about rural jobs.

    So spend all this money on out of province companies to use an out of province fuel to make electricity, while the in-province dead trees still stand there and the people in depressed rural towns that could have jobs harvesting them are unemployed.  To add insult,  and now send their electricity money out of their town to somewhere else, and their towns are still surrounded by fire hazards. 

    As you said, if you have a problem, you have to look at the root cause of it.   Lack of electricity is not the problem – it is lack of rural jobs and economic opportunity, and too much wood waste/dead wood – building a nuke plant does not solve either, but turning wood waste into electricity turns waste into a valuable product while providing jobs.

    I can not think of anything less environmentally than shipping wood from BC and the PNW to northern Europe.

    Have you seen what they are doing in China?

    Often over looked is

    the non-energy environmental impact of transportation. Safety is the

    biggest issue but tire wear and road wear also put nasties into the

    air and water.

    You must be talking about LA and other such large cities.  They go through more roads and tires in a year than BC does in a decade, or than the forestry industry would use in a century, and the runoff in the LA river after a rainstorm is quite different to the Columbia River.  Properly managed forestry operations have minimal environmental impacts (outside the actual operation area).  They did learn that, if you create washouts, fuel spills and other environmental problems, you will not be allowed to log anymore, so they learned not to cause environmental problems while going about their business.  

     

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  117. By Kit P on December 11, 2010 at 5:19 pm

    Forest health issue are very complex. Pine beetles may just be a symptom of something else. Fires is a natural part of the environment with trees that were adapted to it. Then man started ‘managing’ fires. Now intense fire destroy the fores rather than rejuvenate it.

     

    “A great statement if you are marketing nuke plants and do not care about rural jobs.”

     

    Nuke plants are great rural jobs.

     

    We do not put nukes in cities but near cities. There is plenty of demand for both wood waste and nuke plants. Together wood and biomass on produce about 23% of the electricity in the US.

    “You must be talking about LA and other such large cities.”

     

    No, you have to differentiate between transportation to produce energy and transportation in general. If you try to supply NYC with energy from wood from BC your will have some transportation issue.

     

    Think of it this way. Say the PNW needs 3000 MWe of new base load capacity. That is 60 biomass plants and 300 truck loads a day. That will solve your unemployment problems. Two nuke plants and 20 biomass plants is a lot more practical.

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  118. By Tesla_X on December 11, 2010 at 6:17 pm

    Re: DOE LGs… Robert and Paul…

    Robert, thank you for the response…and you are probably right, but:

    http://gigaom.com/cleantech/do…..ear-ahead/
    “In the biofuels sector, said Silver, the agency is seeing more partnerships between “producers and off-takers.” Partly as a result of these alliances, he said, the “first couple biofuels deals” will be announced, “shortly.” He declined to provide more specifics, but said biofuels will likely be among the next several loan guarantees. ”

    Down in the Southeast, there are a limited number of candidates that I can see, among them are:

    BP-Verenium: in stage 2
    Flambeau River
    Fulcrum: got their term sheet recently
    Poet?
    BlueFire: stage 2

    …wondering who the next 2 might be?

    BP seems the best connected politically of the bunch, but it might not be a politically popular choice due to all the Gluf Mojo and all.

    Wondering what things would look like if one had to rank them in terms of most likely to be awarded a DOE LG?

    As for Paul’s post above?

    “Wood to ethanol, using the lignin to power the process, would yield less than 50%, but no one is doing this.”

    I believe Bluefire is planning to do something like this.

    The recent wood waste supply agreement for ~$25/ton delivered and the biomass boiler+turbine fed by them will supply both feedstock for the acid hydrolysis/ethanol process and waste lignin to thermal energy for the facility. Via a steam turbine, it will also apparently provide all the needed power to the facility, with the excess exported to grid. Heard the excess might be in the ~8-15MW range, which would make the plant essentially a combined woody wastes to ethanol and green electricity facility, the first of its kind in the neighborhood.

    The low cost of feedstock, if the generic waste wood/lignin numbers I’m assuming are accurate (5000-8000BTU/lb at various moisture levels), equates roughly to a fuel cost of about ~$1.50-$2.50/MMBTU input to the process.

    As far as I can tell, that is pretty cheap fuel for either green electrical generation or carbs for ethanol production, even at half the ethanol yield per ton of feedstock vs. corn at ~$200/ton.

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  119. By paul-n on December 11, 2010 at 10:01 pm

    Two nuke plants and 20 biomass plants is a lot more practical.

    That may well be true, but try telling that to the 40 BC towns that miss out on having their own biomass plant while two nukes get built in Wa state.  And what happens to all the dead wood around those towns?

    If you live in a town surrounded by forest and not much else, it is not a bad idea to learn how to make a (sustainable) living from said forest.  It is a way for the town to control its own economy – being reliant on just one commodity (lumber) has been quite an issue for the timber towns – now they can diversify.

    They did, originally have high hopes about wood to liquids, but that has hit reality.  Wood pellets and electricity are not as sexy but they can be profitable and can be done with today’s technology.

    Each town/ company can play the cards as they see them – if it is really worth someone’s while to do a biomass plant, they should not be told no because of a nuke getting built 1000 miles away.  If they build too many and flood the market with electricity, well, that will sort it self out too – markets are good at that sort of thing.  Might be just what is needed to keep the Kitimat aluminium smelter going/expanding instead of closing and just selling their electricity.

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  120. By paul-n on December 11, 2010 at 10:12 pm

    Tesla,

    The Blue Fire business model is pretty much how every pulp mill operates, B.F. is just using the cellulose for a different product.  Pulp mills have found that sometimes it is better to do more electricity and less pulp, when you have high electricity prices and variable feedstock quality. The power turbine operator at my local mill said that if they were building from scratch, they would likely just do the power and forget the pulp mill – the return on capital is much better.

    $25/ton for green wood is a pretty good deal – that is just $500 for a 20t truckload – but can they rely on that for the years needed to pay off the plant?   

    Seaside pulp mills have the advantage of being able to source their biomass from quite some distance by water, which opens up many options, and more competition amongst suppliers.

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  121. By Kit P on December 12, 2010 at 5:30 pm

    “but try telling that to the 40 BC towns”

     Is anyone trying to tell BC towns to build nukes? If you live some place that does not use a lot of electricity and has a lot of wood waste, making electricity with wood makes perfect sense.

    “they should not be told no because of a nuke getting built 1000 miles away.”

    Again I have heard no one suggest this.

     

    “Might be just what is needed to keep the Kitimat aluminium smelter going/expanding instead of closing and just selling their electricity.”

     

    You can not run an industrial economy on wood unless your goal cut down all the trees.

     

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