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By Robert Rapier on Aug 25, 2010 with 88 responses

Guest Essay: Why Conservatives Are Bad on Energy

Tom Rooney is President and CEO of SPG Solar, in Novato, California, one of the larger solar integrators in the country.

I am working on yet another project, due at the end of this week. Therefore, I haven’t had a chance to work much on my next essay, which will be about the potential for E85 to push Iowa much closer to energy self-sufficiency. Meanwhile, I have been sent a guest editorial on solar power by Tom Rooney, and this seems like a timely occasion to put it out for readers to chew on.

Tom is the president and CEO of SPG Solar, in Novato, California, one of the larger solar integrators in the country. His commentaries have been in the New York Times, Los Angeles Times, Miami Herald and “hundreds of papers in between.” He has also appeared on C-SPAN and Fox Business News.

Tom chose a provocative title for this essay. I say provocative because I personally consider both liberals and conservatives bad on energy in specific ways, and good in others. I think conservatives tend to overweight the role that domestic drilling can play in pushing the U.S. toward energy independence, and liberals overweight the impact that renewables can play in displacing oil.

While each has its part to play, I think each side broadly tends not to recognize just how deeply dependent we are on petroleum, and in particular imported petroleum. I think both sides would like to tell the Middle East to get lost while we either drill our way to independence if the government would get out of the way (pro-Big Oil), or make a painless switch to renewable energy if Big Oil would just get out of the way (anti-Big Oil). I have criticized both points of view, which is why conservatives have criticized me for being liberal, and liberals have criticized me for being conservative.

I don’t think my energy views are conservative or liberal, but rather I think they are reality-based. If I say that I think coal will become a much more important component of the liquid fuel mix in the future, that isn’t a hope or a wish. It is what I think will realistically happen — we will build coal-to-liquids plants to deal with declining petroleum supplies. Those on the right might hope to see it happen (pro-business, especially pro-U.S. business), but the left would adamantly oppose it on environmental grounds (unless one happens to be the governor of Montana which has lots of coal reserves). Me? I just think it’s likely to happen as petroleum depletes, so I think we have to be ready to deal with it.

With that intro (to specifically clarify that I don’t think that conservatives are all bad or all good on energy), here is the guest essay on solar energy by Tom Rooney.

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Why Conservatives Are Bad on Energy: It’s All About the Costs

By: Tom Rooney

For the R-Squared Energy Blog

Conservatives, let’s talk about energy. And why so many conservatives are so wrong — so liberal, even — on wind and solar energy.

Let’s start with a recent editorial from the home of ‘free markets and free people,” the Wall Street Journal. Photovoltaic solar energy, quoth the mavens, is a “speculative and immature technology that costs far more than ordinary power.”

So few words, so many misconceptions. It pains me to say that because, like many business leaders, I grew up on the Wall Street Journal and still depend on it.

But I cannot figure out why people who call themselves “conservatives” would say solar or wind power is “speculative.” Conservatives know that word is usually reserved to criticize free-market activity that is not approved by well, you know who.

Today, around the world, more than a million people work in the wind and solar business. Many more receive their power from solar.

Solar is not a cause, it is a business with real benefits for its customers.

Just ask anyone who installed their solar systems five years ago. Today, many of their systems are paid off and they are getting free energy. Better still, ask the owners of one of the oldest and most respected companies in America who recently announced plans to build one of the largest solar facilities in the country.

That would be Dow Jones, owners of the Wall Street Journal.

Now we come to “immature.” Again, the meaning is fuzzy. But in Germany, a country 1/3 our size in area and population, they have more solar than the United States. This year, Germans will build enough solar to equal the output of three nuclear power plants.

What they call immaturity our clients call profit-making leadership.

But let’s get to the real boogie man: The one that “costs far more than ordinary power.”

I’ve been working in energy infrastructure for 25 years and I have no idea what the WSJ means by the words “ordinary power.” But, after spending some time with Milton Friedman whom I met on many occasions while studying for an MBA at the University of Chicago, I did learn about costs.

And here is what every freshman at the University of Chicago knows: There is a difference between cost and price.

Solar relies on price supports from the government. Fair enough — though its price is falling even faster than fossil fuels are rising.

But if Friedman were going to compare the costs of competing forms of energy, he also would have wanted to know the cost of “ordinary energy.” Figured on the same basis. This is something the self-proclaimed conservative opponents of solar refuse to do.

But huge companies including Wall Mart, IBM, Target and Los Gatos Tomatoes figured it out. And last year so did the National Academy of Sciences. It produced a report on the Hidden Costs of Energy that documented how coal was making people sick to the tune of $63 billion a year.

And that oil and natural gas had so many tax breaks and subsidies that were so interwoven for so long, it was hard to say exactly how many tens of billions these energy producers received courtesy of the U.S. Taxpayer.

Just a few weeks ago, the International Energy Agency said worldwide, fossil fuels receive $550 billion in subsidies a year — 12 times what alternatives such as wind and solar get.

Neither report factored in Global Warming or the cost of sending our best and bravest into harm’s way to protect our energy supply lines.

Whatever that costs, you know it starts with a T.

All this without hockey stick graphs, purloined emails or junk science.

When you compare the real costs of solar with the fully loaded real costs of coal and oil and natural gas and nuclear power, apples to apples, solar is cheaper.

That’s not conservative. Or liberal. That comes from an ideology older and more reliable than both of those put together: Arithmetic.

  1. By patricia miller on August 25, 2010 at 4:04 pm

    wow, really enjoyed the article and the introduction… i was not aware coal had that much life left in it.

    having said that, i enjoyed seeing conservatives — and i am one — hoisted on their own petard.

    conservatives should be leading the alternative energy movement. not fighting it.

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  2. By Peter on August 25, 2010 at 5:26 pm

    “That’s not conservative. Or liberal. That comes from an ideology older and more reliable than both of those put together: Arithmetic.”

    Don’t get me wrong, there are numerous externalities that are not paid for by the fossil fuel producers or users, but if you end an article with a line like this, I would think that your argument would be backed with actual numbers. Can you direct us to your arithmetic rather than siting others who have done it and interpreting their results?

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  3. By Walter Sobchak on August 25, 2010 at 5:51 pm

    “Solar is not a cause, it is a business with real benefits for its customers.”

    Good. I am very happy for you.

    Now. Here is my take.

    Get your goddamn fingers out of my pockets.

    No subsidies for you, no special tax breaks, no slopping the hogs at the trough. No mandates, no price supports. no production quotas. No corporate welfare, no more money. The country is broke, busted, bankrupt. Nothing. Nada.

    Capish?

    If you have a viable business, that is great. Make your customers happy, and they will make you a success. But, don’t come looking for hand outs.

    Oh yes, and whining that your competitors are getting handouts or subsidies, is not a case for making the situation worse. We will happily cut them off too.

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  4. By Kit P on August 25, 2010 at 5:54 pm

    “Milton Friedman”

     

    Who?  Was he a CEO of an electric utility?

     

    Here is another guy who is likely smarter than me:

     

    Walter Kohn, PhD, who shared the 1998 Nobel Prize in Chemistry,  

    http://www.dnaindia.com/scitec…..gy_1428683

     

    This gets old fast.  What is it about the electricity generating industry that makes experts about it out of everyone?

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  5. By Perry on August 25, 2010 at 6:12 pm

    “At the end of a meeting on transmission policy in mid-1996,” he recalled, “I was on my way out the door of the governor’s office, when Governor Bush said to me, ‘Pat, we like wind.’ He was at his desk. I said, ‘We what?’ He said: ‘You heard me. Go get smart on wind.’ ”

    http://www.practicalenvironmen…..icient.htm

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  6. By rrapier on August 25, 2010 at 6:14 pm

    I would think that your argument would be backed with actual numbers.

    That would have been my primary criticism of the article as well.

    RR

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  7. By Rufus on August 25, 2010 at 6:14 pm

    Yeah, this was a pretty weak article (and, I’m a Big supporter of Solar.) Give me some of dat ‘rithmetic. Let’s start with an easy case. Let’s start with a large SW city, say Phoenix. What would be the true cost, not counting subsidies, GW Credits, or any other silliness, of producing a lot of the needed “peak” power with Solar over a reasonable time frame (say, 50 yrs?)

    What would be the cost of producing this peak power with coal/nat gas/nuclear, etc? (You are allowed to factor in “reasonable” price increases for coal/nat gas/nuclear, etc.)

    Tell me why the “installation” costs of putting up solar panels are so high, and what you are planning to do about That.

    Please, stay away from the touchy/feelie/ephemeral stuff like “$63 Billion in Health Costs” unless you are ready to really get “down in the dirt” with the numbers to defend such assertions.

    On any given day I might be more “Conservative/Moderate/Liberal,” and I So support Solar, but this article seemed, to me, like a cocktail party throw-away line. A few facks, pleeze.

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  8. By Kit P on August 25, 2010 at 7:36 pm

    “conservatives should be leading the
    alternative energy movement. not fighting it.”

     

    We are! As Perry pointed Governor Bush
    started the renewable energy in Texas. Now 26 states have similar
    RPS that results in renewable energy projects actually get built.

     

    The problem is the snake oil that prey
    on the the well intended. The problem is frivolous lawsuits by
    environmental activist that create uncertainty. The problem is red
    tape in states like California that drive up the legal costs and
    delay projects.

     

    What it take to make electricity with
    renewable energy is a solid conservative business plan. When you
    present a business plan to backers and utility it is the numbers bad
    mouthing coal and nuclear is a waste of their time. First they are
    interested in the numbers and second these understand the reasons why
    coal and nuclear is used to make electricity.

     

    This is where I disagree with Walter.
    So Walter do you think Hoover Dam, hydro systems managed by TVA, BPA,
    and the Corp of Engineers was a bad investment in hindsight?

     

    The point is renewable energy projects
    may have higher capital costs but the electricity they produce
    reduces the cost of NG which is beneficial to all tax payers.
    History remembers the winners like Hoover Dam but lesson can be
    learned from failures too. LFG and WWTP biogas now run fine because
    of what we learned from failures.

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  9. By MAC on August 25, 2010 at 8:07 pm

     

     

    I recebtly reaf  an article about a Big Box retailer that hired a solar company to install solar on their rooftop..

     

    Turns out …. It pays off for both the retailer snd the Solar Company,

     

    Daytime …………………………………….

    solar electricity is cheaper

     

    Than the Utility Company electricity.

     

    And solar isn’t competative ? 

     

    Solar is already competative in S, Italy wher electric rates run about  28 cents (U>S> eqiv.) kw/hr

     

    MAC

     

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  10. By Jim Takchess on August 25, 2010 at 9:12 pm

    Walter S:

    No subsidies for you, no special tax breaks, no slopping the hogs at the trough. No mandates, no price supports. no production quotas. No corporate welfare, no more money. The country is broke, busted, bankrupt. Nothing. Nada.

    The game is every pushes for every tax break they can get. No business is exempt. They owe it to the share holders. That’s why Curt Schilling is moving his business to RI from MA and why Bono moved his U2 publishing out of Ireland.
    Any company building any kind of plant is pushing the municipalities hard for tax breaks. Free money is hard to pass up.

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  11. By Al on August 25, 2010 at 9:20 pm

    Leftists think that wishing on a star will make renewable energies like wind and solar viable suddenly. They are gonna get all of us killed trying to run a government and an economy on wishful thinking. And that just makes me crazy. Well, crazier.
    ;-)

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  12. By Walter Sobchak on August 25, 2010 at 9:48 pm

    Jim Takchess said:

    “The game is every pushes for every tax break they can get. No business is exempt. They owe it to the shareholders.”


     

    Yes of course. “It’s the lure of easy money, it’s got a very strong appeal.”

     

    But that doesn’t make it right. It is wrong, and the country is broke and we have to stop.

     

    NOW!

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  13. By Walter Sobchak on August 25, 2010 at 10:01 pm

    Kit P said:

    1. So Walter do you think Hoover Dam, hydro systems managed by TVA, BPA, and the Corp of Engineers was a bad investment in hindsight?
    2. The point is renewable energy projects may have higher capital costs but the electricity they produce reduces the cost of NG which is beneficial to all tax payers.
    3. History remembers the winners like Hoover Dam but lesson can be learned from failures too. LFG and WWTP biogas now run fine because of what we learned from failures.

     

    1. I have no method of evaluating these past investment decisions. But, more importantly, that was then and this is now. The country is broke, busted, bankrupt. Just because the bilnd squirrel found an acorn at some point in the past, does not mean that it will find another one any time soon. I therefore suggest a general rule: “NO!”.
    2. NG is fairly cheap. I cannot see spending public money to cheapen it further. That would only depress exploration and production. Subsidizing one industry, in the hopes that it will, in turn, hold down the price of another commodity strikes me as a three cushion shot that is neither likely to succede, nor is necessary.
    3. This is always true. But just because failures are instructive, does not mean that we need to go deeper into debt to buy more of them. If Mr. Rooney wishes to fail, that is his privledge. He can do so without public money.
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  14. By Kit P on August 25, 2010 at 10:56 pm

    Walter maybe you think things are worse
    now than in the depression but creating productive jobs that result
    in reducing the long term cost of energy would seem to be a wise
    investment.

     

    NG is fairly cheap.

     

    Not really and it is is very volatile
    energy commodity and the primary of higher power costs. What will it be in to years? Renewable energy
    projects might be making electricity for a long time. Again I am
    primarily taking about utility scale projects that will be
    maintained.

     

    Keep in mind I an not buying Mr. Rooney
    position but advocating a conservative position by supporting
    projects that are likely to be a good investment in the future.

     

     

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  15. By paul-n on August 25, 2010 at 11:50 pm

    I’m not sure it is fair to single out conservatives here (and he didn’t, just the title does).  I am not even sure it is fair to say that governments are “bad” on energy at all.  They, and/or the energy industries they regulate, have, generally, made sure, one way or another, that people have it where and when they need it. And in (most of) the US they have kept it cheap, (though I personally don;t think that is always a good thing).

    In addition to the lack of numbers, there are these contradictory statements;

    Solar is not a cause.  It is a business with real benefits for its customers.

    Followed later by this;

    Solar relies on price supports from the government. Fair enough

    It may be of benefit to the customers, who get generous subsidies on their solar panels, but what benefit is it to everyone else who has to pick up the tab for those subsidies, but receive no benefit?  At least with fossil fuel subsidies, the benefits are available to everyone (in cheaper energy prices/better reliability etc).

    And this

    its price is falling even faster than fossil fuels are rising.

    This may be the general trend, but there is still a very large gap between them, and no likelihood of it being closed, otherwise there would be no need for those gov price supports.

     

     

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  16. By savro on August 26, 2010 at 12:25 am

    I’m not sure it is fair to single out conservatives here (and he didn’t, just the title does).

    Paul, to my understanding, the title was Mr. Rooney’s creation – not RR’s. He does seem to be singling out conservatives –or at least the usually conservative viewpoint of the WSJ editorial board– albeit with the intention of making their opinions seem un-conservative.

    That’s not to say I agree, however. I think the subjects he touched on are much broader than what was written in a few short paragraphs. Still, it’s nice to see the viewpoint from the side of the manufacturers, suppliers and installers.

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  17. By Rufus on August 26, 2010 at 3:07 am

    Let’s face it, when you get the “installed” price down to around $1.50 to $1.75 (w/o subsidies) per watt, solar starts to make a lot of sense in Phoenix, Houston, L.A., etc. You’ve got to have that “Peak” power, anyway, and coal isn’t going to be this cheap, forever.

    This price range is doable within a pretty short time horizon (if we get a lot of capacity, and talent “hooked” into the industry.) That’s what we do. We “hook’em in with subsidies, and dreams of untold riches, and then when we get’em fully invested we pull the rug out from underneath’em, and let’em sink, or swim. That’s when they get serious, and start getting efficient.

    Right now, they’re paying Way, Way Too Much to get the panels installed. And, the entrepreneurs are stuffing that cabbage into their pockets like “manna from heaven.” Eventually, that will have to go away, and the businessmen will take over.

    “Wind” is similar, but slightly farther along the curve. Actually, I think it’s kind of exciting, and we shouldn’t get “too” het up over a few subsidies. We can afford it, and the payoff will be worth it.

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  18. By paul-n on August 26, 2010 at 3:16 am

    That’s what we do. We “hook’em in with subsidies, and dreams of untold riches, and then when we get’em fully invested we pull the rug out from underneath’em, and let’em sink, or swim. That’s when they get serious, and start getting efficient.

    Sounds like a perfect plan for the ethanol industry too.  After years of subsidies and mandates, time to pull the rug!

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  19. By OD on August 26, 2010 at 4:00 am

    If peak coal truly happens in 2011, we will not need the price of solar to come down, as the price of fossil fueled electricity should outpace it soon enough.

    Good times…

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  20. By Rufus on August 26, 2010 at 4:11 am

    Paul, you may have noticed a certain amount of “rug-pulling sentiment” setting in among the ethanol supporters, including, even, . . . .gasp,. . . . of all people, Me.

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  21. By Rufus on August 26, 2010 at 4:45 am

    So, Tom, one question. Why did you limit your insult to “Conservatives?” They are only about 40% of the population. If you wanted to start your essay by pissing off a large number of readers, why didn’t you title it something like,

    “Why are Conservatives, Christians, White People, and Heterosexuals Bad on Energy?”

    Was it just a failure of imagination, or were you in a hurry?

    Or is the “Let’s begin by Making Half of the Potential Readers Mad Before the First Sentence” strategy an experimental concept, and you wanted to test it, initially, on a smaller group?

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  22. By moiety on August 26, 2010 at 5:43 am

    Regardless of production costs,impact on landscapes and resources, the imtermittancy of solar and wind requires storage for these projects to be viable if they really wish to penetrate the grid market. Small installations or small amounts (E.ON estimates below 10% penetration) do not destabilise the grid.

     

    This article wants solar to compete at this level with gas coal etc. It attacks these on the basis of subsidies but does not reveal what the differences in subsidies is.

    Some data on solar subsidies http://uvdiv.blogspot.com/2010…..power.html [thanks russ])

    The only data I know is for oil versus corn ethanol; http://www.consumerenergyrepor…..ever/#p546

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  23. By moiety on August 26, 2010 at 7:05 am

    Jim

    Thanks for that. I will see if I can get a solar collegue to cooment on that.

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  24. By Rufus on August 26, 2010 at 6:30 am

    I’m not sure Solar in the Southwest requires much storage. It’s, basically, running air conditioners, and when the Sun’s not shining you don’t need as much air conditioning, and you might even be getting a bit of wind.

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  25. By Jim Takchess on August 26, 2010 at 6:40 am

    I thought this is an interesting chart about the reduction in Solar Energy Cost.
    http://www.1366tech.com/v2/

    The first ARPA-E solicitation was extremely competitive with over 3,600 applications from across the U.S. This Lexington Ma company was one out of 37 chosen.
    http://www.1366tech.com/v2/new…..mainmenu-2

    I think this is money well spent when you consider it is a portfolio of research.

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  26. By Kit P on August 26, 2010 at 8:14 am

    peak coal

     

    Except solar does not replace coal.

     

    It is matter of scale.  If you think you can fill your drink water resovoir with an ey dropper, I think you will die of thirst.  When you start using teaspone, same result.

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  27. By Walter Sobchak on August 26, 2010 at 10:36 am

    Jim Takchess said:

    I think this is money well spent when you consider it is a portfolio of research.


     

    Good. Why don’t you spend your own money and leave the rest of us out of it.

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  28. By Walter Sobchak on August 26, 2010 at 10:39 am

    Rufus said:

    I’m not sure Solar in the Southwest requires much storage. It’s, basically, running air conditioners, and when the Sun’s not shining you don’t need as much air conditioning, and you might even be getting a bit of wind.


     

    We were in Dallas last week. It was 105 in the late afternoon. It was still in the high 90s when we went to bed. It stays way hot long after the sun is too low to run PV.

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  29. By Walter Sobchak on August 26, 2010 at 10:53 am

    Kit P said:

    Walter maybe you think things are worse now than in the depression but creating productive jobs that result in reducing the long term cost of energy would seem to be a wise investment.

    * * *

    advocating a conservative position by supporting projects that are likely to be a good investment in the future.


     

    Things are worse now because the Federal Govenment is burdened by debts and entitlements that swamp its ability to pay them. The US began the 1930s without a material Federal Debt and there were no entitlement programs.

     

    Creating productive jobs is the name of the game, but the US Federal government would no know what a productive job is, it it were struck over the head by one in broad daylight.

     

    The idea that the government, any government, can create productive jobs is the essence of socialism. The one thing we know about socialism is that it is always worse than the disease it is supposed to cure.

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  30. By Brent on August 26, 2010 at 11:02 am

    Obviously a fluff piece. It’s pretty awesome how he makes his case about photovoltaic solar cells yet admits they are uneconomic and receive tax incentives. It has been covered at length but subsidies / kWh generated are going to run at least an order of magnitude higher for solar/wind. Not to mention that solar cannot replace base-load energy, and batteries are arguably worse for the environment with heavy metal run-off issues.

    Let’s get some technical information and less PR. The hidden message is that the industrial complex is entirely reliant upon fossil energy. How are PV cells made? Is it a clean process that uses solar electricity? How are windmills fabricated in a steel foundry? Does it run on wind power? Are all of the fertilizer plants being converted to burning ethanol?

    It’s pretty obvious from a basic thermodynamics course that the fewer energy conversion steps, the more efficient the resulting fuel is. That is one example of why it is literally impossible to produce ethanol more cheaply than Fischer-Tropsch can convert coal/CH4 into liquid fuel. But I don’t write our country’s energy policy. Unfortunately for the consumer, people like the author are able to write some garbage and pawn it off to a lobbying group and produce some seriously draconic energy programs.

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  31. By Rufus on August 26, 2010 at 11:48 am

    Yeah, Walter, but by the time the Solar quit working the sea breezes were probably kicking in down on the Coast. Or, some slack could have been taken up by the local cellulosic ethanol refinery producing electricity from its waste lignin.

    My father logged cyprus trees 12 hrs for $0.25/day during the depression. If you think This is a depression, you obviously have no idea about what a “depression” is. You, also, obviously have no idea what the cost of coal to liquid fuel is, either.

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  32. By rrapier on August 26, 2010 at 1:07 pm

    Yeah, Walter, but by the time the Solar quit working the sea breezes were probably kicking in down on the Coast.

    Not in Dallas. Walter is right about Dallas; solar could take some of the load during the day but that load continues long after sundown. The desert SW, though, is a different story. That’s like Iowa and ethanol: If it can work anywhere that’s the place it should be made to work.

    RR

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  33. By paul-n on August 26, 2010 at 1:55 pm

    Rufus,  I have noticed your rug pulling sentiment, and I hope it catches on.  I think the best thing the ethanol industry could do for its image is to pull the rug itself, i.e. announce that it no longer wants or needs the subsidy.  

    while I did not agree with the GM bailout, I have to give credit to them for the PR move of their ads announcing they had paid back their “loans” ahead of schedule.  That is only a fraction of the bailout money of course, but it gives customers some confidence that they company is improving and will be able to stand alone.

    Perhaps one thing holding E85 and flex fuels back is this perception(pushed by the industry itself) that the ethanol industry cannot survive without subsidies – so what consumers, or businesses, are willing to invest in ethanol vehicles/equipment if the fuel may dissappear if the government does pull the rug?  If I was a fleet operator, I would be much more inclined to buy a fleet of flex fuels, or modify diesel engines, and invest in an E85 station, if I knew the industry was trying to get off welfare, rather than needing to stay on it.  

     

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  34. By Kit P on August 26, 2010 at 2:02 pm

    Can we start the discussion over?

     

    The production and distribution of electricity is a highly regulated public service that affects everyone.  It is neither a conservative nor liberal issue.

     

    I am not sure why Tom Rooney decided to hit a hornets nest with a baseball bat but it is not creating a discussion that benefit solar. 

     

    criticize free-market activity  

     

    Solar is not a cause, it is a business with real benefits for its customers.

     

    One of the things you see in the electricity generating industry is competing groups gaming the system for their own benefit.  For example, the liberal anti-nuke and anti-coal management at LADWP gouged (during the 2000/2001 crisis period) customers of investor owned utilities who had to play by different rules that public utilities.  At the time LADWP produced 75% of its electricity from the dirtiest coal plants in the country.  

     

    So if the people in some place like California want to mandate a certain amount of solar as public policy, I am 100% behind that policy.  I think that the federal PTC should apply because it is based on production.  I think utility scale solar who the cost are spread over many customers is a great idea.  The cost is subject to review by regulators and consumer protection shrubs.  

     

    However, I can see what is bugging Walter.  Some solar companies and business want special rules so they can game the system which are not in the public interest.   

     

    “That comes from an ideology older and more reliable than both of those put together: Arithmetic.”

     

    Exactly, but snake oil salesmen are very good at confusing people with numbers.  Tom Rooney needs to provide a link to ROI calculations so Walter can see what is getting for his tax dollar.  Show us why solar should be part of the public mix.   

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  35. By Perry on August 26, 2010 at 2:02 pm

    I’m surprised cellulosic hasn’t come into this conversation. It’s got the potential to displace more coal than wind and solar combined. Inbicon gets 13,000 tons of biopellets from 30,000 tons of wheat straw. That’s 200 billion btu’s of energy. It will do the job of 8000 tons of coal. And that’s from a puny 1.4M gpy demo plant. Extrapolate that to 100 billion gallons and you’re talking the potential to displace a billion tons of coal annually, which is about what we use today.

    Inbicon also gets 10,000 tons of feed molasses from the wheat straw. Food from fuel, so to speak. It’s almost as if the ethanol is a byproduct.

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  36. By rrapier on August 26, 2010 at 2:05 pm

    Brent said:

    Obviously a fluff piece.


     

    Brent,

    I actually mentioned this to Sam, the site editor. I said that this is obviously heavy on fluff, and the readers would probably chew him up. But, I thought it was worth putting out there to stimulate some discussion, which hopefully Tom would address. Still hoping he comes by to address some of these comments.

    RR

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  37. By rrapier on August 26, 2010 at 2:20 pm

    Perry said:

    I’m surprised cellulosic hasn’t come into this conversation. It’s got the potential to displace more coal than wind and solar combined. Inbicon gets 13,000 tons of biopellets from 30,000 tons of wheat straw. That’s 200 billion btu’s of energy. It will do the job of 8000 tons of coal. And that’s from a puny 1.4M gpy demo plant. Extrapolate that to 100 billion gallons and you’re talking the potential to displace a billion tons of coal annually, which is about what we use today.

    Inbicon also gets 10,000 tons of feed molasses from the wheat straw. Food from fuel, so to speak. It’s almost as if the ethanol is a byproduct.


     

    Of course 1.4M gpy from 30,000 tons is only 46 gallons per ton. I think it will be very hard to make an aqueous process work economically at that yield.

    RR

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  38. By Perry on August 26, 2010 at 2:35 pm

    Hog farmers wouldn’t make money off bacon alone. They have to market the ham and pork chops as well. Cellulosic breaks biomass into three valuable components. Its heating, caloric, and fuel values are maximized. Why throw a log on the fire if it could feed a chicken too?

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  39. By paul-n on August 26, 2010 at 3:14 pm

    Perry, the conversation did start with solar, and i thought we were doing well to have, for once, a thread that does not end up on ethanol!  But you are really talking about biomass displacing coal;

    Extrapolate that to 100 billion gallons and you’re talking the potential to displace a billion tons of coal annually, which is about what we use today.

    Since this thread is about arithmetic and numbers, and this blog is about “start with the data”, lets run the numbers for your idea.

    The USDA estimate total grain production for the US to be 424million tons (table “World and US Supply and Use for Grains”, page 8)

    According to Purdue University, corn stover accounts for 45% of the total dry matter, so we can say it is roughly equal in tonnage to the corn, and we’ll just assume the same for the other grains,  so we have  424 million tons of “straw” .

    That is at about 15% moisture (typical grain moisture), so we have 360 million dry tons of straw.

    The average energy content of dry straw is between 17 and 21 MJ/kg (source), so we’ll use 19Mj/kg.

    Sub-bituminous coal, such as from Powder River Basin, is 8,500/lb, or 20MJ/kg, so our 360million tons of straw equals 342 million tons of PRB  (though higher grade coal from Virginia etc is about 25Mj/kg, and would need more straw to displace)

    So, if we use 100% of the crop straw for biomass power, we can displace about one third of the billion tons of coal consumed each year.

    And if we do that, the crop fields will not maintain those yields for very long, as removing all the straw leads to nutruent depletion and soil erosion.

    If we assume we can, sustainably, use half the straw, then we can displace 180 million tons of PRB coal, about half it’s production.  There will be some increased energy cost for collecting and transporting all this straw, but we’ll ignore that for now.

    So, to displace the remaining 860 million tons of coal, we would need to use other biomass, such as trees.  

    The area of “available timber land” in US forests  is 204 million ha, or 504 million acres (pg 4) and the annual growth is 660m cubic metres (pg11).  But some of this growth is harvested for lumber, etc (453m. cu.m), leaving 213m. cubic metres available for biomass. There is actually some more biomass available, in the form of “slash”, the branches and leaves left behind after log harvesting, which is typically 1/3 the volume harvested, so we have 1/3*453=151m cu.m available.

    The average dry wood density is about 0.6ton/cu.m, and the average energy content is about 20MJ/kg (wood has some resin, so the energy content is higher than straw).  

    So we have (213+151)*0.6= 218 million dry tons of wood available, which displaces 213 million tons of PRB coal.

    So, using ALL available, sustainable, surplus biomass, we can displace 180+213=393 million tons of PRB coal, or about one third of the current national consumption.

    That is a very large gap to close – the only way biomass can displace coal is to have at least a 2/3 reduction in coal use, and I can’t see that happening anytime soon.

    We could up this number, probably double it,  by not harvesting any trees for lumber, logging national parks and reserves, etc, but then the cure is worse than the complaint, and quite unacceptable.

    So, bottom line, we don;t have the potential to displace a billion tons of coal a year with (domestic) biomass, not even close.

    In keeping with the theme of this blog, and this article, you should do these numbers yourself before making such claims – it will save both your credibility and my time.

     

     

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  40. By Perry on August 26, 2010 at 3:34 pm

    “So, using ALL available, sustainable, surplus biomass, we can displace 180+213=393 million tons of PRB coal, or about one third of the current national consumption.”

     

    We might be pleasantly surprised by how much biomass becomes “available” when cellulosic becomes widespread and profitable. Wood and grain residues only scratch the surface.

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  41. By rrapier on August 26, 2010 at 3:34 pm

    So, bottom line, we don;t have the potential to displace a billion tons of coal a year with (domestic) biomass, not even close.

    One of the great disconnects in the debate over energy is on scale. People just don’t grasp how much coal and oil we use, and thus underestimate how easily it would be to replace them.

    RR

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  42. By rrapier on August 26, 2010 at 3:38 pm

    Perry said:

    Hog farmers wouldn’t make money off bacon alone. They have to market the ham and pork chops as well. Cellulosic breaks biomass into three valuable components. Its heating, caloric, and fuel values are maximized. Why throw a log on the fire if it could feed a chicken too?


     

    Hog farmers make money because people want bacon, ham, and pork chops. If there was a good market for Inbicon’s biopellets, that market would have been developed in the abscence of the cellulosic ethanol step. What I think is probably happening is that they end up with this stuff, and are searching for good uses for it. It is the same with pyrolysis oil and char. I always hear people say “Char has many great uses.” Then I ask who is paying for it, where that market is, and how much they are paying. The reality often doesn’t match up with the beliefs.

    RR

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  43. By Perry on August 26, 2010 at 3:51 pm

    Wood pellets go for $250 a ton Robert. Biopellets are supposed to be superior to wood pellets. They should fetch a premium, because the heating value is greater. Inbicon makes 1.4M gallons of ethanol and 13,000 tons of biopellets from the 30,000 tons of straw. That’s $2.8M worth of ethanol at $2.00 a gallon, and $3.2 million worth of pellets, assuming $250 per ton. I have no idea what the 10,000 tons of feed molasses is worth. There may not even be a market for it yet. Still, I think it’s significant that 1/3 of this waste product was turned into food. The best use for wheat straw until now has been for mulch. Most of it is removed from fields after harvest. I don’t think plowing it under adds anything of value to the soil.

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  44. By paul-n on August 26, 2010 at 4:21 pm

    We might be pleasantly surprised by how much biomass becomes “available” when cellulosic becomes widespread and profitable. Wood and grain residues only scratch the surface.

    Nothing would please me more than to have lots of biomass “available”, but show me where it is coming from.  If you think there is much more available than what I identified in my last post, I’d like to see where it is coming from.

     

    Wood pellets go for $250 a ton

    That is the Home Depot retail price, after being bagged, stacked and  delivered to the store.  The wholesale price is, naturally, much lower.

    Biopellets are supposed to be superior to wood pellets.

    Depends what you are using them for.  Straw pellets have a higher ash content than wood, and the extraction of cellulosic material concentrates the ash even more.  Most pellet stoves and appliances recommend against using grass pellets for this reason.  They are fine for bulk heat in a powerplant designed to deal with ash, and the price you get for them will reflect that.   

    I don’t think plowing it under adds anything of value to the soil.

    Just as well you are not a farmer then.  From the Purdue link in my previous post;

    Removal of 60 percent of the stover material would NOT leave sufficient ground cover to satisfy conservation compliance program regulations the following spring, especially if much of the remaining residue was composed of standing stalks.

    Translation – it will lead to soil erosion.

    and ;

    If harvested stover amounts ranged from 1.8 to 2.7 DRY tons, then the total value of the nutrients removed from the field would range from about $11 to $16 per acre.

    There’s some value right there.   Additionally, the stover, or straw, adds organic matter to the soil, which increases its moisture holding capacity, and improves the structure, which allows more air movement and nitrogen fixation.  Keep removing it and eventually you will have dust, and a good puff of wind and you won;t even have that.

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  45. By Perry on August 26, 2010 at 4:37 pm

    “Nothing would please me more than to have lots of biomass “available”, but show me where it is coming from.”

     

    Look in your garbage can Paul. Just about everything in there can be converted to food, fuel, and/or heat. And, I don’t think wheat straw has the same nutrient value for soil as corn stover. Wheat straw is just grass. Farmers tend to clear it from their fields after harvest.

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  46. By paul-n on August 26, 2010 at 5:06 pm

    Perry, you are missing the point.  Yes there is lots of energy available in MSW, though that was not what you were talking about.  All the biomass waste we produce each year, is really just recycled biomass that originally came from a farm or forest, there is still only so much produced each year (though we have lots that is “stored” in existing landfills).

    As for wheat straw, it absolutely has value to the soil.  At my brother’s farm in australia he leaves it stand after harvest to prevent soil erosion (reduces the wind velocity at soil surface), and soil testing shows it builds up the organic content and the moisture capacity.  In the US context, wheat, at 70m tons/year, would yield max of 70mt of straw, though I suspect the real number to be lower, and then are still depleting your soil.  The highest and best use is to compost it back into the soil, and recycle the nutrients, so that you get more grain in subsequent years. A diseased crop (e.g. rust/mold) should be burnt , and this could be done off site, but that is a minority of the crops.

    I’m not saying biomass, or waste, to energy can;t work, or can’t be profitable, I’m just saying it can’t replace our current level of fossil fuel use.

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  47. By Perry on August 26, 2010 at 5:26 pm

    I think we will Paul. Vast areas of the country are arid, and aren’t being used for anything. If growing grass becomes profitable, we can grow a hell of a lot more than we do today. Inbicon showed we can get 46 gallons of liquid fuel, 900 lbs. of biopellets, and 650 lbs. of cattle feed from a ton of grass. That’s simply amazing.

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  48. By Brent on August 26, 2010 at 5:30 pm

    With all the talk about displacing only 1/3 of US coal consumption by using every available piece of biomass, I feel it is appropriate to mention this.  I worked on a solar decathalon team, that is, to make an energy efficient home for a competition.  In the end, like anything involving the feds, the competition is a complete joke.  The winning team from Germany built a 600 ft^2 home that costs upwards of $400,000 not including construction labor.  Now, considering you can buy a double wide trailer for 50k that is much larger and heat and cool it for its lifetime for less than 350k, how can this possibly make any sense?

     

    In general, the only way to make houses energy efficient is to literally halve their size.  Ever been to China? or anywhere else in the world? Americans are by far the most wasteful people in the world.  I recently saw a slideshow of “green” homes on Forbes.com (I can’t seem to locate it now) but simply adding solar panels to a mansion does not make it green.  Sure, you can possibly produce less CO2 in America by using solar energy, but they are manufactured in China using heavy metals and fossil fuels.  

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  49. By rrapier on August 26, 2010 at 5:41 pm

    Perry said:

    Vast areas of the country are arid, and aren’t being used for anything.
    If growing grass becomes profitable, we can grow a hell of a lot more
    than we do today.


     

    Arid land does not produce high biomass yields. And you have to have high biomass yields to justify the energy expense of going out, collecting the biomass, and transferring to the processing facility.

    Inbicon showed we can get 46 gallons of liquid fuel, 900 lbs. of
    biopellets, and 650 lbs. of cattle feed from a ton of grass. That’s
    simply amazing.

    Seems pretty unlikely, though. Cattle digest cellulose, which is the same thing that is used to produce the ethanol. So it would seem to be an either/or.

    RR

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  50. By rrapier on August 26, 2010 at 5:49 pm

    Has someone linked this yet? Plan B for Cellulosic Ethanol

    OMAHA (DTN) — Albert City, Iowa, farmer Aaron Bloom saw it first-hand.

    Emmetsburg-area farmers collected corn cobs-only for ethanol as part of Poet LLC’s Project Liberty, and it flopped.

    “Having to pull a cart behind a combine, some guys tried it last year and it was a disaster,” Bloom said. “Cob piles sucked in moisture. It’s so much easier to manage a baler and a stacker.”

    If you recall, I kept warning that the logistics would be challenging. Where is Rufus, who was POET’s #1 cheerleader on this corn cob venture?

    Regarding Plan B, here is what a pro-ethanol corn farmer had to say at The Oil Drum:

    Poet tries to revive cellulosic ethanol by changing its feedstock. It still won’t work. Infrastructure matters. The in place infrastructure for corn is what makes corn ethanol possible.

    Switching to bales of corn stover still leaves the question of quality standards and storage unanswered. It some ways it makes it worse. Bales pick up a lot of dirt and what not. They are labor intensive and require different trucks than grain.

    I tried to tell people that the $2/gallon cellulosic ethanol shtick had gotten way ahead of itself. Rufus kept claiming that POET could produce for that price now, and I kept saying no. Looks like I was right with respect to Plan A. Some of you guys may handwave away the challenges of cellulosic ethanol logistics, but they have been around for a very long time. Companies won’t be able to handwave them away; they will have to figure out a solution that nobody else in the past 100 years has come up with.

    RR

     

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  51. By ROBERT on August 26, 2010 at 6:49 pm

    I toured the U of Arizona entry before they drove it to Washington DC for the competition. I think they were the penultimate finisher. Like the NCAA, we need a salary cap on solar decathlon entry.

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  52. By paul-n on August 26, 2010 at 8:10 pm

    Vast areas of the country are arid

    That would be because there is not enough water to grow much – that is what arid means.  

     If growing grass becomes profitable,

    Which would imply that the farmer gets paid enough to cover the cost of growing, harvesting and transporting the grass on and from such marginal land.  That can only send the cost of the feedstock to the mill in one direction.

     

    Inbicon showed we can get 46 gallons of liquid fuel, 900 lbs. of biopellets, and 650 lbs. of cattle feed from a ton of grass. That’s simply amazing.

    Not really, it has been know for a century you can do that.  What is not known is if you can do so profitably (unsubsidised) – that would be amazing, but we are yet to see it.  

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  53. By Kit P on August 26, 2010 at 8:11 pm

    (though higher grade coal from Virginia
    etc)

     

    Eastern coal country is heavily wooded
    with lots of waste hard wood rotting on the ground. You will run out
    of engineers to design 50 MWe wood waste plant before you run out of
    wate wood.

     

    An operator at the plant will not have
    to live in Brents’s double wide but can afford a nice 2000 sq foot
    brick all electric house on few acres. Heating costs about for 50
    years about $60k. It costs nothing for heating with wood. None of
    that sissy wood pellets stuff either.

     

    “underestimate how easily it would be
    to replace them..”

     

    The French do not use coal to make
    electricity. When the French building nukes it was not because the
    ran out of engineers but demand. French nuke plants load follow most
    to the year too.

     

    Maintaining our life style does not
    require sacrifice with respect to electricity. I am not so sure
    about transportation fuel but I think we can use a lot less without
    it being a sacrifice. Simple things like carpooling more than one
    person in a SUV.

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  54. By Walter Sobchak on August 26, 2010 at 8:21 pm

    Rufus said:

    1. My father logged cyprus trees 12 hrs for $0.25/day during the depression. If you think This is a depression, you obviously have no idea about what a “depression” is.
    2. You, also, obviously have no idea what the cost of coal to liquid fuel is, either.

     

    1. You get no street cred for what your father did. It is certain that the Great Depression was an unpleasant experience for everyone involved. But that was then and this now. We have a different set of problems now, and they will need a different set of solutions than the problems of the 1930s. The good news is that we are now a very rich country and few folks have to stand in bread lines. The flip side is that we are are up to our gills in debt and have less financial flexibility than we did in the 1930s.
    2. You are correct, I have no idea what the cost of coal to liquid fuel is. But, it was not a question I raised or factoid I cited. I am perfectly willing to say for coal to liquid what I will said for solar. NO SUBSIDIES!
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  55. By paul-n on August 26, 2010 at 8:31 pm

    In general, the only way to make houses energy efficient is to literally halve their size

    I don;t think this is the only way, but it is certainly the easiest way, does not involve expensive “green building” consultants, and is the only way that costs you less money rather than more.

    I think this approach sums up practical energy efficiency;

    http://www.passivehouse.com/En…..ssiveH.HTM

    Though their standards for heat and elec/sq.ft seem too easy to meet.

    The point of this approach is to minimise the energy use first, by practical means, before worrying about supplying that energy  I have seen one off grid house that captures all these concepts nicely, and was no more expensive to build than a normal house.  What was expensive was their micro hydro system + back up generator, but when your house is 10miles from the grid, you don;t have many options if you want electricity.  

    In a grid environment building to this standard is a great thing, just take the small amount of electricity you will use from the grid, and don;t waste your money on solar panels, deep geothermal etc etc.

     

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  56. By Rufus on August 26, 2010 at 8:35 pm

    Actually, Robert, as you know, X, the guy you quoted, is a “pro-corn” ethanol, ANTI-Cellulosic ethanol blogger that’s trying, desperately, not to get banned for the second time at the Oil Drum.

    Poet has been working with “collection,” now, for a couple of years. They have pretty much decided on going with everything – leaves, husks, cobs, etc. that comes out of the back end of the combine. That still leaves enough Stover for the field, and pays the farmer quite a lot more. It, also, requires less investment in equipment.

    If you’ll recall, I’ve said from the start that biomass from the field Will work, but that the final price will end up closer to $60.00/Ton than $45.00/Ton.

    Well, the number Poet is bandying about now is . . . . wait for it . . . . $60.00/Ton.

    Going from straight cobs to cobs, leaves, husks, etc takes you from, basically, a break-even proposition for the farmer to somewhere around $40.00 to $50.00/acre “After the Costs of Harvesting.” I continue to believe they’ll pull it off.

    Anyways, the “future” of ethanol is Not in Corn residue, or MSW, Although they Will contribute. The Future of Ethanol is in all those acres going to waste in weeds, bushes, and faux livestock operations with one cow, or horsie on 20 acres of rye grass. I’ve shown where a typical Southern County can use just a small percentage of this wasted land, and provide for all of their transportation fuel needs.

    As for the Southwest, you’re probably looking at something like Agave Cactii. You’re talking beaucoup tons/acre with Agave.

    Look, the “Anti,” whether it’s ethanol, Solar, Wind, or whatever always fall back on the same strawman, ie. it may not be able to provide for ALL of our needs so it’s No Good. This, of course, is a totally invalid argument.

    If we can save some coal by using some Solar, and Wind/Wave in the appropriate locales, and do it at a long-term cost that’s reasonable, well, let’s look into it. If we can “economically” replace some middle-eastern oil with ethanol from grasses/corn cobs/ etc then let’s try to work out a business model to do so. If we need to use a considerable amount of coal for quite awhile let’s, at least, try to burn it as cleanly, and efficiently as we can.

    And, let’s be very careful about about basing All of our decisions on someone else’s ‘talking points.” They might, without knowing, be parroting someone else’s “Agenda.” The man was right about ‘rithmatic; he just should have used some.

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  57. By Rufus on August 26, 2010 at 8:56 pm

    If I can get it past the spam filter, here is a good article on Cobs vs Stover by Dan Danielson at DTN.

    http://www.dtnprogressivefarme…..73d9fa0122

    It was one of his analysis a year, or so, ago, that convinced me that $45.00/Ton was too low.

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  58. By Jim Takchess on August 26, 2010 at 8:59 pm

    http://cleantechnica.com/2010/…..ors-races/

    More on conservatives.

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  59. By Rufus on August 26, 2010 at 9:24 pm

    I like Cleantechnica. They are a good source of information on Solar, Wind, etc. On the other hand, that Kraemer woman is an idiot (as is anyone who consistently drinks the koolaid from “Either” end of the table.)

    Let’s be honest. Liberals, unchecked, will, fairly quickly, get you broke. They’ll find more hare-brained schemes to throw “Your” money at than you could have ever imagined existed.

    Conservatives, however, if given total control Will, about once a generation, take a garden variety crash/recession, and put you dead into a Total Depression.

    Choose your Gurus, wisely. :)

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  60. By rrapier on August 26, 2010 at 9:32 pm

    Actually, Robert, as you know, X, the guy you quoted, is a “pro-corn” ethanol, ANTI-Cellulosic ethanol blogger that’s trying, desperately, not to get banned for the second time at the Oil Drum.

    I don’t think he was ever banned. He lost his log-in info and made a new account. But if you think his post is trying to curry favor – please. He still manages to hack people off most of the time.

    If you’ll recall, I’ve said from the start that biomass from the field Will work, but that the final price will end up closer to $60.00/Ton than $45.00/Ton.

    I don’t recall, but I do recall that I have consistently said that I didn’t think they would get biomass for that price. Remember, this is one of those bad assumptions that I think companies make: Pricing their biomass too low in their models.

    RR

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  61. By Perry on August 26, 2010 at 9:43 pm

    “they will have to figure out a solution that nobody else in the past 100 years has come up with.”

     

    There’re a lot of smart people working on a number of solutions Robert. KL Energy makes ethanol from woodchips for $3.50 a gallon. 10 years ago, the cost would’ve been 10X that. That $3.50 cost probably won’t change much when oil hits $150 a barrel again, since they don’t rely so much on petroleum inputs. You can be sure their cost from bagasse will be even cheaper, since the sugar content is so much higher. That ethanol might even be competitive at today’s prices.

     

    These biopellets sound like just what the doctor ordered. Coal plants need ways to lower their carbon output. Cellulosic producers need cheap power. There’s a synergy there that wouldn’t have been possible 100 years, or even 10 years ago. Coal plants didn’t give a hoot about their carbon output back then. Times are changing.

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  62. By Rufus on August 26, 2010 at 10:00 pm

    Everyone seems to be overlooking the fact that, in spite of having built everything from scratch, designed everything from scratch, and operating off of six, or seven year old technology, Inbicon is still profitable at $2.30/gal for their ethanol. Actually, they are profitable for $2.00/gal due to a European Carbon Credit thing with their lignin.

    Novozymes says Poet can make it work for $2.00 gal (w/o subsidies,) and Poet, always the cautious ones, are saying they “think” they can get it down to $2.00, or less.

    The important thing here, I think, is that Novozymes, and Dupont Danisco, with experience, now, in several operations are both saying the same thing. And, I’d bet you anything the price of oil will rise faster than the price of grass.

    Uh, . . . . maybe I should rephrase that: The price of “Switch” grass. Some of that Mississip “toke” has been catching a pretty good bid. :)

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  63. By rrapier on August 26, 2010 at 10:52 pm

    Inbicon is still profitable at $2.30/gal for their ethanol.

    I was looking for details of this. Got a link detailing their financials?

    RR

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  64. By rrapier on August 26, 2010 at 10:57 pm

    KL Energy makes ethanol from woodchips for $3.50 a gallon. 10 years ago,
    the cost would’ve been 10X that.

    What makes you think that? I was making it 15 years ago, and it certainly wasn’t 10 times that. In fact, it wasn’t even double that.

    That $3.50 cost probably won’t change
    much when oil hits $150 a barrel again, since they don’t rely so much on
    petroleum inputs.

    Wood chips aren’t very energy dense. If they are co-located such that they are getting sawmill residue, that’s one thing. If they are having to gather chips specifically for the process, their costs will go up a lot as oil prices rise.

    RR

     

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  65. By Rufus on August 26, 2010 at 11:01 pm

    I can’t give you a link on that. It was an interview with one of the Inbicon people that I ran into, somewhere. I remember, it stuck with me because the number was so close to what Novozymes, and Poet were discussing for Project Liberty. Sorry

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  66. By rrapier on August 26, 2010 at 11:38 pm

    Rufus said:

    I can’t give you a link on that. It was an interview with one of the Inbicon people that I ran into, somewhere. I remember, it stuck with me because the number was so close to what Novozymes, and Poet were discussing for Project Liberty. Sorry


     

    I will just say that it seems unlikely to me that they can make an unsubsidized profit at that price. When you consider what it takes to make the process go, I just don’t believe that in the real world where they have to pay capital costs they can make money at that price. When they talk about making a profit, you really have to dig a bit to figure out if there is government money helping to enable that profit.

    RR

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  67. By Perry on August 26, 2010 at 11:39 pm

    You were making cellulosic from woodchips 15 years ago Robert? That’s fascinating. I don’t know how you could have produced it for $7 a gallon, since the cost of enzymes has dropped 30-fold in those 15 years. Poet claimed their cost from corn cobs would be $4.13 a gallon when they started building the pilot plant in ’08. Now, the cost is down to $2 or so. That’s a 50% drop in less than 2 years.

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  68. By rrapier on August 26, 2010 at 11:50 pm

    Perry said:

    You were making cellulosic from woodchips 15 years ago Robert? That’s fascinating. I don’t know how you could have produced it for $7 a gallon, since the cost of enzymes has dropped 30-fold in those 15 years. Poet claimed their cost from corn cobs would be $4.13 a gallon when they started building the pilot plant in ’08. Now, the cost is down to $2 or so. That’s a 50% drop in less than 2 years.


     

    I don’t know how many times I have said it, but enzymes are not the only way to make cellulosic ethanol. That’s why I kept saying that this big drop in enzyme costs wasn’t the game-changer everyone thought, because there were always ways to make it cheaper than with enzymes. There are several different ways to hydrolyze cellulose; enzymes being one of the more expensive.

    RR

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  69. By paul-n on August 27, 2010 at 1:24 am

    Just to back up RR’s point that enzymes are not the only way to go, here is a description of a backyard way to make ethanol from wood (sawdust) that involves no enzymes at all, no fancy equipment etc etc – just wear full protective gear;

    http://journeytoforever.org/bi…..wdust.html

    In the author’s word’s, “This is the old way of making ethanol from cellulose. It works, but it’s not efficient, and not economical.”

    Now, it just might be economical if you get your fuel/heat, and sulphuric acid for free (both of which can often be found at coal fired power station), and have cheap or free labour, land, etc etc.  That said, I’m not sure it would ever be “efficient”.

    This pathway is what Blue Fire ethanol is pursuing, and, of course, they have not made it “efficient”enough to be “economical” yet.

     

    Coal plants need ways to lower their carbon output.

    An upgrade to older equipment (turbines, boilers, heat recovery, etc), that achieves even a 1% improvement in efficiency would yield much greater output (=carbon reduction/kWh) than using the straw pellets as fuel.

    A 500MW coal plant will use about 250 t/coal/hr (20GJ/ton and 33% eff), or about 2.2mt/yr.  A 1% point improvement, to 34, will increase output to 500×34/33= 515MW, or, achieve the 500MW output for a saving of 65,000 tons of coal per year (11days worth).

    This 1.4mgpy plant produces 13,000 tons of bio pellets per year, displacing about 12,000 tons of coal, or two days worth, for a 0.5% “carbon reduction”.  So much ethanol has to be produce there to produce enough straw pellets to make a meaningful carbon reduction?

    There are good reasons to make ethanol at a coal plant (free heat) and good reasons to burn the residuals (free fuel), but carbon reduction is not one of them.

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  70. By Rufus on August 27, 2010 at 2:22 am

    Paul, “Carbon reduction” is, fast, becoming “yesterday’s cause.” We’re almost to September, and that rhymes with “November.”

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  71. By rrapier on August 27, 2010 at 2:34 am

    Paul N said:

    Just to back up RR’s point that enzymes are not the only way to go, here is a description of a backyard way to make ethanol from wood (sawdust) that involves no enzymes at all, no fancy equipment etc etc – just wear full protective gear;

    http://journeytoforever.org/bi…..wdust.html

    In the author’s word’s, “This is the old way of making ethanol from cellulose. It works, but it’s not efficient, and not economical.”


     

    I just read through it, and while generally correct there are some errors. First:

    Once the reaction is complete, you can simply dump in yeast and expect the mixture to ferment. The pH of the mixture is so low, that is the substance is so acidic, that any microorganism such as yeast that you dump in is simply going to explode. Of course, they will be very tiny explosions.

    First, “can simply dump in yeast” should be “can’t simply dump in yeast.” You hydrolyze with acid, but then you have to raise the pH to do the fermentation. Later, they write:

    The material is lignin or the substance that bonds sugar molecules together to make cellulose out of them.

    Lignin does not bind sugar molecules together. The molecules are simply bound together in long chains which is what cellulose is: Chains of sugar molecules. But you can have cellulose without lignin. Lignin is structural material for wood; it surrounds the cellulose in a matrix that makes it difficult to access. But it has nothing to do with binding the sugar molecules together.

    Otherwise, that’s a pretty good description of the strong acid hydrolysis technique. However, that is NOT the technique I used in graduate school. My recent essays on the MixAlco process describe what we were doing. We experimented with a number of different hydrolysis schemes.

    At the end of the day – and due to the nature of the process – I don’t think cellulosic ethanol can ever be more than marginally economical in certain niche locations. I will state with absolute certainty that it isn’t a scalable solution for the country’s energy needs. Like I have written before, we will see a lot of press releases on big breakthroughs, and after a few years people will wonder why we didn’t build a lot of plants.

    RR

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  72. By Rufus on August 27, 2010 at 3:56 am

    You don’t know what their cost is going to be. Any more than I know what their cost is going to be. They, actually, said they thought they could do it for $2.35/gal, and we hoping to get it down to $2.00. Novozymes said they thought Poet would be able to do it for $2.00 Now, Poet is saying they hope they can get it down to $2.00, or less.

    They were talking $45.00/ton, but, you, nor I, know what they were actually plugging into their own spreadsheets. Anyway, $15.00/ton would probably be in the $0.20/gal range. Significant, but hardly a “showstopper.”

    The main thing, right now, of course, it Money, and Politics. What a Shock! Absolutely, Nobody that’s capable of “fogging a mirror” would put up a dime at this point until the EPA, Congress, DOE, and the White House make known the rules. Poet’s plan is, not only to build a 25 mgpy cellulosic plant, but to double the capacity of the 55mgpy Corn plant that it will be colocated with (to use the excess lignin.)

    Considering that this will be a first-of-a-kind plant, I would say they’re looking at an investment in excess of $200 Million for the total package. It ain’t no “done deal” that they’ll get that money. The question in my mind is, “will they scale it back, and self-finance if they don’t?” And, “could they?”

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  73. By rrapier on August 27, 2010 at 2:39 am

    Perry said:

    Poet claimed their cost from corn cobs would be $4.13 a gallon when they started building the pilot plant in ’08. Now, the cost is down to $2 or so. That’s a 50% drop in less than 2 years.


     

    I might add that if you saw my earlier link, POET is now saying that cobs aren’t going to work for them. Claiming $2/gal and then coming back later to say “We have to change our game plan” means they counted their chickens way too soon. So, no, the cost was never $2/gal. It was what they thought it might be, but their projections didn’t work out. (They were also basing this on $45/ton biomass, which I said at the time was too low and now they are admitting was too low).

    RR

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  74. By Rufus on August 27, 2010 at 4:07 am

    Actually, I think the “good news,” here, is that Poet spent a couple of years learning how to collect the feedstock, and working with the farmers all the way. The first year the “cobs only” idea looked best, but the second year they had more farmers involved, and some really crappy weater, and it became apparent that the “cobs only” was problematic

    But, then it became apparent that the farmers wanted to do something, they just wanted to “get paid” for it. The KISS principle rose to the top, again. Farmers know how to “bale.” Farmers have “balers.” Let’s do “Bales.”

    So, Poet was able to find the flaws, and the solutions before getting committed to a non-optimum process. I’m impressed.

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  75. By rrapier on August 27, 2010 at 4:29 am

    Rufus said:

    You don’t know what their cost is going to be. Any more than I know what their cost is going to be.


     

    That’s not quite true. I do have some ideas of what their costs are going to be, because I have run those models. I know how much biomass tends to cost, conversion rates, capital costs, etc. That’s why I have been correct on how this cellulosic business would play out. So far things are just like I said they would be: A lot of promises, not much activity around building actual plants. 

    They were talking $45.00/ton, but, you, nor I, know what they were
    actually plugging into their own spreadsheets.

    Again, not quite true. I know when someone forecasts $2/gallon cellulosic ethanol that they are plugging very low biomass costs into their spreadsheets. You simply can’t make it for cheaper than you can make corn ethanol, so the only way anyone is forecasting costs in that ballpark is to lowball their biomass costs.

    RR

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  76. By Rufus on August 27, 2010 at 4:46 am

    Well, it doesn’t matter. If they’re anywhere near those numbers it’s a winner. Unless gas falls back to $2.50/gal, and stays there. In which case, we’re ALL winners. ‘cept for cellulosic, of course. :)

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  77. By Rufus on August 27, 2010 at 4:55 am

    Just one thing, though. They seem to be figuring on getting somewhere between 80,000 and 100,000 btus of extra lignin for every gallon of ethanol produced. That could be worth anywhere from $0.30 to $1.30 depending on the cost of nat gas. Also, it would make their “Corn” ethanol acceptable in Caliornia. Don’t know what That might be worth.

    But, back to what we can quantify. I don’t think many people expected to get nearly that much usable lignin back out. Did you?

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  78. By rrapier on August 27, 2010 at 5:48 am

    You have to consider the state that lignin is in. It comes out of the process soaking wet, and energy has to be added to get it dry enough to burn. So those numbers they quote for dry lignin don’t take into account that this isn’t net. Think about using soaking wet hay for fuel, and that’s the kind of thing you are talking about.

    RR

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  79. By Rufus on August 27, 2010 at 7:06 am

    After they’ve produced their gallon of ethaol they’re running the lignin through an anaerobic digester, and coming out with enough biogas to provide process energy for four gallons of corn ethanol.

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  80. By paul-n on August 27, 2010 at 9:55 am

    Now why would you bother with AD, when the lignin burns fine as is (once dewatered)?  You have just lost more potential energy, as some of the lignin is turned into CO2, though you do get gas instead of solid, but the overall energy yield is still lower.

    They must have determined that it is a better way, but it’s just another conversion step that loses energy.

    if the plant was co located with a coal plant in the first place, where you have free low grade heat, then I don;t think you would bother with AD, just dry the lignin (with your free heat) and burn it for electricity.

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  81. By Perry on August 27, 2010 at 10:06 am

    “This 1.4mgpy plant produces 13,000 tons of bio pellets per year, displacing about 12,000 tons of coal, or two days worth, for a 0.5% “carbon reduction”. ”

    It’s just a pilot plant Paul. A commercial plant would produce 50 or 100M gpy. Two days worth becomes 40 or 80 days worth of fuel, and a 10 or 20% reduction in CO2. These aren’t your typical straw pellets either. Being made from just the lignin, they must be more energy dense. And they would burn cleaner too. At any rate, the coal plant gains a customer and a clean fuel source. A good deal for both sides.

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  82. By Kit P on August 27, 2010 at 10:19 am

    “Now why would you bother with AD, ..

     

    Because you are a good environmental
    engineer and your LCA shows you that recovering more more N. P, &
    K reduces environmental impact and increases profitability. Say
    saying to the guy who is always taking about doing it better but
    lacks the tools to do it better.

     

    It must be the conservative in me that
    likes innovation based on proven methods not what some wing nut
    college professor thinks will make an interesting project for grand
    students.

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  83. By Perry on August 27, 2010 at 10:25 am

    “I don’t think cellulosic ethanol can ever be more than marginally economical in certain niche locations.”

     

    There’re over 600 coal plants and 500 pulp mills in the US. That’s a lot of niche locations. A 100M gpy facility at each would displace 110 billion gallons of gasoline. We could all use E85 and maybe export a few gallons.

     

    “You simply can’t make it for cheaper than you can make corn ethanol”

     

    Not with $75 oil or $4 a bushel corn. But, what if they double in price again, and cellulosic costs continue to drop?

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  84. By rrapier on August 27, 2010 at 1:20 pm

    Perry said:

    “I don’t think cellulosic ethanol can ever be more than marginally economical in certain niche locations.”

     

    There’re over 600 coal plants and 500 pulp mills in the US. That’s a lot of niche locations. A 100M gpy facility at each would displace 110 billion gallons of gasoline. We could all use E85 and maybe export a few gallons.


     

    I have written before about the logistical problem this entails. Simply put, a 100M gpy facility would require the biomass equivalent of over a million and a half trees per year. Start calculating the number of rail cars or trucks in and out of the facility and then the required biomass storage space. There is a good reason that you won’t see 100M gpy facilities popping up everywhere. This just isn’t as easy as you guys envision it to be. You see headlines about enzyme breakthroughs and start fantasizing about plants across America. Meanwhile, you must be scratching your heads over why plants aren’t being rolled out. Iogen has had the capability for a long time, and they still haven’t built a plant. In the real world, companies must deal with problems that you guys just gloss over in your fantasies.

    The other thing I would point out is that while pulp mills would seem to be a logical fit for conversion into cellulosic ethanol facilities due to the logistics largely being addressed, wood is a much more problematic feedstock for cellulosic ethanol. Wood tends to contain lots of complex aromatic compounds that can foul up the process. I am aware of a pulp mill in Sweden that was converted, but I also know of some of the things they struggle with.

    RR 

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  85. By Oxymaven on August 27, 2010 at 2:05 pm

    POET is now constructing their biomass storage / handling facility and says they need 22 acres to store 23,000 tons, about 1 month feedstock for their 25 MGY facility.
    New Purdue U study says cobs costs will probably be closer to $100/ton. POET has some other thoughts on that study.
    Rufus, I don’t think POET is still planning to add another 55 MGY corn ethanol plant at Emmitsburg.
    I think POET has approached cellulosic pretty responsibly, but I think their slow progress is just indicative of how difficult it is to establish the supply chain for a non-commoditized feedstock. Farmers do not jump on bandwagons driven by venture capitalists. They need to see evidence over several growing seasons before they will invest in new crops etc.
    One final question that I’ve asked before – does anyone think that POET can successfully scale up 1000x from only a 25,000 gpy pilot plant? I think DoE says they want to see data from 1 MGY or higher demo plants before they’ll provide a loan guarantee. Dupont / Genera / U. Tenn built a $40 million 250,000 gpy pilot plant – is that one 10x too big? But that still is not ‘demonstration’ scale, so probably won’t qualify for DoE $$?

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  86. By Mercy Vetsel on August 29, 2010 at 2:38 pm

    What nonsense. I can’t believe RR would give bandwidth to such a ridiculous argument as the “oil companies get subsidies too” argument by corporations looking for handouts.

    Based on figures from the New York Times and Cato (an organization strongly opposed to subsidies), the subsidies are tiny in relation to the size of the industry, on the order of 1% to 3%.

    http://www.nytimes.com/2010/07…..bptax.html ($4 billion year to oil industry versus $500+ billion of oil consumed in US)

    http://www.cato.org/pub_displa…..ub_id=7066 (subsidies less than 3% of price of oil today)

    It’s one thing to recognize that the utterly indefensible nature of oil subsidies or to argue that environmental costs or defense spending needs to be added to the price of oil and coal, but to how silly to pretend that these subsidies explain the cost difference between expensive alternatives like solar and low cost (albeit dirty) sources like coal.

    These CEO beggers rattling their tin cups actually demonstrate with crystal clarity that they aren’t anywhere close to being cost competitive. If sensible policy suddenly came to be with all government subsidies eliminated entirely except possible R&D and if coal and oil consumption were tacked with taxes to reflect their true cost, solar panels would still not be cost effective. In fact, if coal were banned entirely, it still wouldn’t make economic sense to use solar panels to produce electricity with the current technology.

    As a bit of special irony, a lot of the same type of alternative energy subsidies that the Rooney’s of the world feed off of go to the oil companies anyway. They have their own “alternative energy” operations in place for harvesting cash from taxpayers.

    -Mercy

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  87. By Mercy Vetsel on September 5, 2010 at 12:13 am

    A quote from Kristin Anderson commenting on the same essay at Cleantech blog neatly punctures this subsidy argument by providing the actual numbers from the US Department of Energy by mwh:

    -Mercy

    https://www.blogger.com/comment.g?blogID=16432059&postID=8269506222033469009
    The article from Mr. Rooney, whose business and self interest depends on the success of the solar industry, has not seemingly offered an accurate/realistic assessment of solar or renewable energy at all.

    For example, according to the US DOE, Energy Information Administration, the rate of subsidies in the energy arena is as follows: http://www.eia.doe.gov/oiaf/se…..df/execsum
    Table ES5. Subsidies and Support to Electricity Production:
    Subsidy and Support per
    Unit of Production
    (dollars/megawatthour)
    Coal $0.44
    Refined Coal $29.81
    Natural Gas and Petroleum Liquids $0.25
    Nuclear $1.59
    Biomass $0.89
    Geothermal $0.92
    Hydroelectric $0.67
    Solar $24.34
    Wind $23.37
    Landfill Gas $1.37
    Municipal Solid Waste $0.13

    Remember these are not my numbers, these are from the US Department of Energy and clearly show that the subsidies/support are $0.44 per MWh for coal and $0.25 per MWh for natural gas, from the most recent data available, 2007. These pale in comparison to the subsidies for wind and solar at over $23.00 and $24.00 per MWh respectively; nearly 100 times the rate of coal and natural gas. The Stimulus Act provides for millions more in solar and wind subsidies, which increase the rate of subsidies even more.

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  88. By Kerry Langley on September 6, 2010 at 10:27 am

    I consider myself a conservative politically, but I also run a business that is 100% focused on finding innovative mortgage funding solutions for homeowners and homebuyers to use to retro-fit or purchase certified energy efficient homes. My liberal “green” friends are all confused because they don’t know which box to put me into … what does it have to be Box A or Box B? What makes one side of the political spectrum think that they own this subject?

    I strongly disagree that conservatives are bad on energy … I think that people are either good or bad on energy …

    Check out the recent post on my blog … a real world solution to funding energy retrofits for homes all across the country … with PACE financing facing issues with Fannie/Freddie, I guess a true patriot needed to come up with a solution that worked …

    http://americansforenergyindep…..dence.org/

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