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By Robert Rapier on Aug 30, 2010 with 164 responses

E85 Case Study: Iowa

The Saudi Arabia of Ethanol

Iowa is to corn ethanol what Saudi Arabia is to oil. At present Iowa has the capacity to produce 3.5 billion gallons of ethanol per year, which is 26% of the nation’s total (Source). This is of course due to the large amount of corn production in Iowa, enabled by ample rainfall and rich topsoil.

But Iowa differs from Saudi Arabia with respect to energy production in one very important detail: Saudi Arabia satisfies their own energy needs with the oil they produce, and exports the excess. Iowa on the other hand exports the vast majority of the ethanol they produce while importing gasoline as motor fuel.

Gasoline consumption in Iowa is presently around 1.6 billion gallons per year (Source). This is the energy equivalent of 2.4 billion gallons per year of ethanol. Yet amazingly, Iowa does not have an E10 blend mandate that is so common in many other states. Of the 3.5 billion gallons of ethanol Iowa produces each year, only 100 million gallons is consumed in the state (less than 3%!). Perhaps even more amazing is that Iowa — seemingly the best candidate in the U.S. for biofuel self-sufficiency — ranks in the Top 10 consumers of gasoline per capita in the U.S. (Source).

Iowa is a state that by all accounts should be able to satisfy their own liquid fuel needs with ethanol, and still have some left for export. They are perhaps unique in the U.S. in that respect. Instead, petroleum continues to supply over 90% of the motor fuel in Iowa, and virtually all of the fuel used in the farm equipment for growing all of that corn. Something is wrong with this picture.

Why Isn’t Iowa Self-Sufficient?

That is a perplexing question. If ethanol is a real alternative to gasoline, why hasn’t it taken over the marketplace in Iowa? Ethanol should have a greater advantage over gasoline in Iowa than probably in any other state. And in fact, the price spread between gasoline and E85 is consistently higher in Iowa than in other states (Source). The reported price spread in Iowa as of July 2010 was 30.1%, which should be large enough to drive consumers to E85 over gasoline. So what is the problem?

There are three possible problems that I can identify: 1). Perhaps there isn’t enough E85 infrastructure in place. 2). There aren’t enough E85 vehicles on the road; 3). The price is still too high relative to gasoline.

Regarding infrastructure, as of January 2010, there were an estimated 136 service stations in Iowa selling E85 (out of 977 total service stations) and a total of 2,233 Stations selling E85 in the United States (Source). Iowa also has an incentive program in place to install new E85 infrastructure (see below), but with 136 stations across the state (and growing), availability doesn’t seem to be a major limiting factor.

The availability of E85 vehicles may be a more serious impediment. As of 2009, there are reportedly around 8 million vehicles on U.S. roads that are E85 capable (Source). Given a total vehicle population of around 250 million, that means that only around 3% of the cars on the road are E85-capable. (I could not find statistics specific to Iowa). This would seem to be a limiting factor at present for E85 penetration; E85 can’t capture 10% of the market if only 3% of the cars can burn it.

Yet even with some E85 vehicles on the road, sales of E85 in Iowa have been falling and sales of ethanol in general lag the rest of the U.S.:

Final 2009 Iowa Ethanol Sales Figures Show Step Back for State

JOHNSTON, IA – The Iowa Renewable Fuels Association (IRFA) today announced that Iowans chose E10, a 10 percent ethanol and 90 percent gasoline blend, only 73 percent of the time during 2009 according to Iowa Department of Revenue (IDR) figures. According to the Des Moines Register, Iowa ranks 32nd in ethanol sales despite being the leading ethanol producer.

“Iowa’s ethanol sales did not reach the 2009 goal of the Iowa Renewable Fuels Standard,” said Monte Shaw, IRFA Executive Director. “These are figures based on mandatory reporting of taxable gallons to the State of Iowa and the IRS – not an incomplete, voluntary report. Obviously, IRFA members are disappointed in the results. The state has also released E85 sales for the first nine months of 2009. During those three quarters, E85 sales were down 15% compared to 2008.”

The number of E85 vehicles has been slowly rising, so if E85 sales are falling then there is also apparently a cost factor that is coming into play. For much of 2008, the price differential between E85 and gasoline was 15-20% (historical pricing available at E85prices.com). For the first half of 2009, that price differential had fallen to only 10%. Clearly, if E85 is ever to become the dominant fuel in Iowa, the price differential will have to properly reflect the fuel economy difference of E85 versus gasoline. E85 contains about 25% less energy than gasoline on a volumetric basis. Owners that experience a 25% reduction in fuel economy will expect to pay 25% less for their fuel. In fact, they may expect to pay 30% less due to having to refuel more often.

But, a real game-changer could be ethanol-optimized engines such as that touted by Detroit-based automotive engineering firm Ricardo. While their engine is projected to cost more, they project that they will deliver fuel economy from E85 that is comparable to what can be achieved with gasoline. (I reported on this concept in some detail in All BTUs Are Not Created Equally). In that case, consumers may be willing to buy E85 at a lower differential. The caveats here are that the engine is still in the lab, and the higher engine cost will determine the E85 differential that consumers will expect.

Recommendations

Before making recommendations, it is important to clearly set out the objective. As I have said numerous times, corn ethanol may not be a sustainable solution that is broadly applicable across the U.S. However, I do believe that it could be a very good solution in specific regions. Ethanol made from irrigated corn and shipped to California is in an entirely different sustainability category than ethanol produced and used locally in Iowa. In fact, despite my reputation as an enemy of ethanol from people who are careless with their interpretations, I have used Iowa for years as an example of what sustainable corn ethanol could look like. I have long believed that Iowa is in a good position to lead the way forward.

So from my perspective, the objective would be to increase the sustainability of ethanol — starting in Iowa — by increasing local consumption. This would decrease U.S. dependence on foreign oil more than if we have to transport oil from the coasts inland to Iowa while transporting ethanol from Iowa to the coasts.

Pump infrastructure in Iowa does not appear to be the limiting factor. Plus, Iowa already has good incentives in place that support rolling out additional E85 pumps (See Current E85 Incentives below). Iowa also already has a tax credit in place that is specifically directed at E85 sales (which is on top of the national ethanol tax credit). Ultimately, additional incentives may be required, as evidenced by falling E85 sales in the past year. Incentives could be in the form of direct E85 tax credits or fuel tax reductions or waivers. But the real issue seems to be lack of E85 vehicles.

According to automakers, the vehicles are on the way:

US automakers on track for more ethanol vehicles

U.S. automakers also expect to meet a goal of making half their vehicle production flex-fuel by 2012, up from around 30 percent now. But they warn that they could pull back if there aren’t enough gas stations with ethanol pumps.

On the other hand comes news that people may not be interested in buying them:

Flex fuel vehicles may be on the way out

When it comes to buying cars, Americans are still using the price of the vehicle as the primary deciding factor. A well-priced, fuel-efficient vehicle is the car of choice for Americans and this is bad news for the flex fuel vehicle industry. In a survey conducted by Harris Interactive, only 5 percent of respondents said they would be extremely likely to purchase a flex fuel vehicle, even if it only added $250 to the base price of the vehicle.

So it would appear that consumers may need some convincing before they are ready to take the plunge on an E85 vehicle. There are several ways to incentivize sales of E85 vehicles. The worst is probably just to mandate that vehicles sold in the state of Iowa are E85-compatible. (I think this is the worst because mandates often have unintended consequences; hence I prefer incentives over mandates). Probably the most manageable would be rebates or expanded tax credits — at the state or federal level — for the purchase of an E85 vehicle. Instead of a Cash for Clunkers program (which I was not a fan of), we would have been better served to have a cash for E85 vehicles program.

Such a program should probably be driven from within Iowa. After all, they arguably stand to benefit from using the ethanol they produce and moving toward true energy independence. Transportation costs cited in the recent DOE study on the proposed ethanol pipeline (that I discussed here) suggested that railing ethanol costs $0.19/gallon (shipping via pipeline was cited at $0.28/gal). Imagine that only half of the ethanol produced in Iowa is used in Iowa; there is a potential shipping savings of over $330 million per year. (However, under the present system these costs are passed through to consumers out of state, so it might be hard for Iowa to justify a program on the basis of savings for Iowans).

Beyond personal transportation, corn growers should be pushing for tractors that can run off of ethanol. They can be built. In 2006 the Saskatchewan Research Council unveiled a tractor modified to operate on 100 per cent hydrated ethanol. More on that development here:

From late December 2006 to late January 2007, the 120 horsepower ethanol-fuelled tractor clocked 60 hours of running time and got fuel mileage of 24 litres per hour. It takes about 15 bushels of wheat to create one tank of hydrated ethanol for the tractor, says Rueve, explaining that the fuel consists of 94 per cent alcohol and 6 per cent water.

As farm input costs increase, both the tractor and the truck are examples of developments that may make farm operations more sustainable in the future. Meanwhile, biofuels in general offer one option for those who are looking for ways to revitalize the rural economy.

So often we hear about how ethanol is providing homegrown fuel for automobiles, and yet the tractors that produce the homegrown corn run off of petroleum. I think it would be in the best interest of Iowa and of the country as a whole (given Iowa’s importance as a food producer) to break the petroleum dependence of Iowa’s farms by building tractors that can run off of ethanol (or biodiesel).

Conclusions

Iowa could be self-sufficient with their ethanol production if certain policies are supported. Some policies are already in place that are meant to address E85 availability and cost. However, the availability of E85 vehicles and the willingness of consumers to buy them is probably the key limiting factor. Ultimately, building up an E85 market in Iowa and eventually in the rest of the Midwest could solve a number of issues for the ethanol industry. If the Midwest adopted E85 as its flagship fuel, there would be no blend wall to be concerned about, nor would an expensive ethanol pipeline be needed to export ethanol out of the region. The potential market across the Midwest is triple the nation’s current ethanol production, giving ethanol producers an ample opportunity to grow without forcing national mandates that put E15 into cars that aren’t designed for it.

Current E85 Incentives

Iowa has tax credits in place specific to E85 sales:

E85 Retailer Tax Credit

A tax credit is available to retail stations dispensing E85 for use in motor vehicles in the amount of $0.20 per gallon for calendar year 2010, and $0.10 per gallon in calendar year 2011. After 2011, the tax credit decreases by $0.01 each year and expires after December 31, 2020. Taxpayers claiming the E85 tax credit may also claim the tax credit available for retail ethanol blends for the same gallon of fuel and tax year. (Reference Iowa Code 422.11O)

And toward blending infrastructure:

Biofuels Infrastructure Grants

The Renewable Fuel Infrastructure Program provides financial assistance to E85 and biodiesel retailers. Cost-share grants are available for up to 70% of the total cost of the project, or $50,000, whichever is less, to upgrade or install new E85 or biodiesel infrastructure. Applicants may also qualify for supplemental incentives for up to 75% of the cost of making the improvement, or $30,000, whichever is less, to upgrade or replace an E85 fueling dispenser that has not been approved by an independent testing laboratory. The supplemental incentive is available only to applicants who made the improvement no later than 60 days after the date of the publication in the Iowa administrative bulletin of the state fire marshal’s order providing that a commercially available fueling dispenser is listed as compatible for use with E85 by an independent testing laboratory.

Biodiesel distributors may apply for a cost-share grant for infrastructure upgrades and installations at biodiesel terminal facilities. Facilities blending or dispensing blends ranging from B2 to B98 are eligible for up to 50% of the total project, or $50,000, whichever is less. Facilities blending or dispensing B99 or B100 are eligible for up to 50% of the total project, or $100,000, whichever is less. The Renewable Fuels Infrastructure Board was established under the guidance of the Iowa Department of Economic Development; this 11-member board has authority to determine the eligibility of applicants. (Reference Iowa Code 15G.202-15G.204)

  1. By takchess on August 30, 2010 at 6:51 am

    Can a corn be made into a version of heating oil with out adjustments to boilers?

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  2. By Rufus on August 30, 2010 at 8:28 am

    Takchess, approx. 70% of those biorefineries now remove the corn oil. It can, definitely, be used thusly.

    One slight nit-pick: Iowa ranks #4 in “per-capita” use of ethanol.

    It’s, Really, all about “the price of gas.” E85 use was expanding in ’08. Contracted when gasoline got very cheap in ’09, and is rising, again, now. A few months ago there were 2223 E85 pumps in the U.S. Today there are 2374. A 7% increase in just 3, or 4 months.

    The magic number is, probably, right around $3.00/gal for gasoline.

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  3. By mac on August 30, 2010 at 8:54 am

    A guy falls off a wagon and hits his head. When he wakes up he staggers to his feet and looks around, All he sees are fields of corn as far as the eye can see. Relieved, he says to himself: “Well, at least I’m not in hell.”

    After a while he rubs his eyes and looks around again, but all he sees are fields of corn blowing in the wind, as far as the eye can see.. After thinking about it for a moment he says to himself: “Well, I’m not in Hell, but I’m not in Heaven either. I must be in Iowa.”

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  4. By Rufus on August 30, 2010 at 9:47 am

    One thing that’s easy to overlook is, even though it Is Iowa, farmers only make up a couple of percent of the population, and Farming/Agriculture/Forestry is only something like 3% of the economy (Manufacturing is, IIRC, about 21% of Iowa’s economy.

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  5. By Brett on August 30, 2010 at 10:12 am

    One factor you didn’t consider is that many Iowans are also outdoors-people, and they see what fencerow to fencerow, river to river corn farming with absolutely no conservation requirements is doing to the environment. Who wants to support this?
    http://www.desmoinesregister.c…..river-bank

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  6. By Perry on August 30, 2010 at 10:22 am

    Rufus, that’s because ethanol plants, food processing plants, and plants that produce corn oil, cornstarch, corn sugar, and glucose fall into the manufacturing category. Meatpacking plants fall into this category as well. Iowa raises more hogs than any other state. Corn fed hogs, raised by farmers, of course.

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  7. By doggydogworld on August 30, 2010 at 10:48 am

    I think you’re really on to something here. You can argue EROEI and subsidies and whatnot until you’re blue in the face without getting anywhere, but people instantly get this concept. If Iowa really thinks ethanol is so great then why don’t they use it themselves? If ethanol can really save us from imported oil, why does Iowa rely on oil imports for virtually all their transportation fuel?

    Better yet, politicians can express this message positively. Instead of chastising Iowa for not using their own product, politicians can trumpet their plan to slash Iowa’s oil consumption 80%. Iowa will become a showcase to instruct the rest of the country. Who can argue against becoming a showcase? What can they say – “we don’t want to slash our own oil consumption, we just want to sell ethanol to you guys”? LOL. Time and money spent turning Iowa into a showcase is time and money not spent on absurdities like an ethanol pipeline to the Northeast.

    Of course the rest of the country should help pay for Iowa’s ethanol transition. Dependence on oil imports is a strategic issue affecting the entire nation. Plus, the rest of us will benefit from reduced competition for oil.

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  8. By Brett on August 30, 2010 at 11:18 am

    Dog, as an Iowan, I really don’t want to be forced to use this until the issue of conservation compliance is addressed, at a bare minimum. If you don’t live here, you don’t see how devastating corn ethanol has been to the environment. Our pheasant numbers are lower than they have ever been. Trout and smallmouth fisheries are disappearing under silt. Deer populations are exploding to the point of nuisance due to all the easy food. Water supplies across the state can not be consumed by children due to nitrate loads. Just look at the photos in the DMR link above–there is nothing anyone can say to justify that nonsense.

    How do you think the people of NY would respond to a mandate to use Marcellus shale NG, despite the damage fracking does to their water? How would Hawaiians react to a mandate to use only sugar cane ethanol, even if it meant plowing under tourist destinations to produce enough? Would Coloradans willingly dam every river in the state to meet an electric car mandate to offset the front range-dweller’s needs? All of these mandates are as possible today as Iowans using ethanol. But Iowans are supposed to suck it up and suffer this because we’re a flyover state?

    This is especially true when you look at energy conservation. It would take a very small percentage of people in major urban areas switching to public transportation to more than offset Iowa’s total annual petroleum use. Why not start by slapping a big usage fee on urban commuters instead? That requires no investment at all.

    I agree farmers should be using biodiesel. In fact, if they did, they could consume all of the capacity of every closed plant in the Midwest. But asking me–a hunter, fisher and outdoorsman–to use ethanol is like saying I should be forced to give money to a political party I don’t vote for. Until we have effective conservation compliance, and every waterway in the state is lined with grass, every field is in conservation tillage, and every tile line dumps to a wetland and not a stream, you won’t see me putting ethanol in my truck. Nor will tens of thousands of other Iowans. The only thing a mandate to sell E85 vehicles here would do is make car dealers in Omaha and Minneapolis very happy people.

    Now, the corn industry will respond with stats about how they are using less land and less chemicals and 50% less of everything today. That is true. My pre-rebuttal is this: Imagine you are on vacation with your kids, and the boy keeps punching the girl in the arm relentlessly in the back seat. You yell at him to stop, and he reduces the punches by 50%. When the daughter complains again, do you really think “But honey, he is doing it 50% less . . . suck it up and take your punches!” is an answer that is going to fly? Or is fair? Or even right? We’re entitled to clean water and a clean environment . . . not half of each. And certainly not for ethanol.

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  9. By Wendell Mercantile on August 30, 2010 at 11:25 am

    If Iowa really thinks ethanol is so great then why don’t they use it themselves?

    Bingo

    If ethanol can really save us from imported oil, why does Iowa rely on oil imports for virtually all their transportation fuel?

    Bingo

    Why haven’t Iowa farmers asked the ag implement makers to build tractors, combines, and corn pickers that run on ethanol?

    Why don’t Iowa ethanol plants build their own market for ethanol by using ethanol to power their plants? (I bet they could even negotiate a mighty attractive price.)

    Why don’t the ethanol plants in Iowa get together and build a chain of E85 service stations along the two major Interstate highways that cross Iowa: I-80 and I-35?

    Why don’t the ethanol plants and corn farmers in Iowa offer low-cost conversion kits to modify existing gasoline cars to flex-fuel, and then provide the facilities to install them at little or no charge?

    Why don’t the ethanol plants and corn farmers in Iowa work to expand their market instead of sitting back and waiting for the Government to mandate people burn their fuel?

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  10. By Perry on August 30, 2010 at 11:38 am

    Better question. Why is Iowa among the few states that allows the sale of 100% conventional gasoline statewide? Drowning in ethanol, but won’t even impose a 3% blend as an oxygenate? That’s just wrong.

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  11. By Rufus on August 30, 2010 at 12:07 pm

    Brett, you said,

    Now, the corn industry will respond with stats about how they are using less land and less chemicals and 50% less of everything today. That is true

    Well, there you go.

    Look, rich countries have much cleaner environments than poor countries. Rich people have much cleaner houses than poor people. It stands to reason that as Iowa corn farmers prosper they will continue to improve their stewardship of the land.

    As for equipment. You people have to remember that corn ethanol has only become a “Really Big” thing in the last few years. Tractors, and combines last Tens of years. The equipment will come. It will come when things get “settled down” a bit.

    42% of the people in Iowa, per RR’s link, are “Urban Dwellers.” Most of them wouldn’t know a John Deere from a white-tailed deer. They have jobs in Retail, Manufacturing, Insurance, Education, Government, etc. just like all the city-dwellers all over the world. They are subjected to all the anti-ethanol propaganda the denizens of Gotham, or L.A. are subjected to.

    This is a Sloooow process. First some stations, then some FFVs, then some more stations, then a recession, and low gasoline prices, then another round of anti-ethanol screed from the 7% Saudi Prince-owned Newscorp, then . . . . rinse, repeat.

    In the end, it’s all about the price of gasoline.

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  12. By russ-finley on August 30, 2010 at 12:17 pm

    Execssive government interferecne in markets becomes a game of whack-a-mole as one unintended consequence after another appears.

    We will likely eventually end up with a landscape littered with rusting government sponsored E85 pumps. Our flex fuel fleet averages just over 11 mpg city. Seems like a Rube Goldberg way to try to use less oil when you consider that a midsized hatchback hybrid gets 50 mpg.

    Source: http://www.fueleconomy.gov/feg…..eltype.htm

    Expansion of agriculture beyond what we need to stay housed, fed, and clothed is the last thing this biosphere needs.

     

    Source: http://biodiversivist.blogspot…..ified.html

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  13. By Wendell Mercantile on August 30, 2010 at 12:25 pm

    42% of the people in Iowa, per RR’s link, are “Urban Dwellers.” Most of them wouldn’t know a John Deere from a white-tailed deer.

    Not true, corn culture runs deep in Iowa. Even the city folk know the foundation of Iowa’s economy. You don’t give those Hawkeyes much credit do you?

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  14. By DWags on August 30, 2010 at 12:50 pm

    Part of the reason there’s not as much E85 sold as could be is where E85 ISN’T located:  Cedar Rapids, Marion, Hiawatha, Davenport, Bettendorf, Iowa City, Cedar Falls, Waterloo, Sioux City, Mount Pleasant…

    Regarding farmers demanding ethanol powered equipment, it works the other way around.  Implement makers make what the farmers have to buy, and there’s not much else.

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  15. By Brett on August 30, 2010 at 12:55 pm

    Rufus said,

    Brett, you said,

    Now, the corn industry will respond with stats about how they are using less land and less chemicals and 50% less of everything today. That is true

    Well, there you go.

    ———-

    Hardly. Because that number alone is deceptive. Total use of pesticides, nitrates and phosphates is up over 800% since 1950. Even if you say that genetic engineering has reduced that need by 50% in the last two decades, it is still 400% higher over 50 years.

    And the last I checked, the per household income of the average Iowa farm family was $10,000+ higher than the average Iowan. Just how well off do they need to be before we start to see change?

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  16. By Wendell Mercantile on August 30, 2010 at 1:10 pm

    Regarding farmers demanding ethanol powered equipment, it works the other way around. Implement makers make what the farmers have to buy, and there’s not much else.

    DWags,

    You really don’t think that if farmers demanded ethanol-powered ag equipment that Case IH, John Deere, New Holland, and the others wouldn’t make it?

    Manufacturers will build and supply what the market wants. That’s Marketing 101.

    Most of those Iowa corn farmers are living a double-standard: They want car owners to burn ethanol, but they aren’t ready to tell the ag equipment makers they want farm equipment that burns ethanol — they know diesel-powered equipment is more efficient and durable.

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  17. By Benny BND Cole on August 30, 2010 at 1:11 pm

    Another terrific post by RR.

    I remain skeptical about corn ethanol–yet, less imported oil is in the national interest.

    You would think Iowa would choose to lead the way, for the huge profits to be had selling to the rest of the country when they had proved the system works in Iowa.–oh, I forgot, they got Congress to force the rest of the country to buy.

    I still say a PHEV that runs on pure ethanol/methanol is a winner idea. My understandng is that with higher compression ratios, ethanol does quite well.

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  18. By Brett on August 30, 2010 at 1:12 pm

    DWags said:

    Part of the reason there’s not as much E85 sold as could be is where E85 ISN’T located:  Cedar Rapids, Marion, Hiawatha, Davenport, Bettendorf, Iowa City, Cedar Falls, Waterloo, Sioux City, Mount Pleasant…


     

    There is hardly a gas station in the state that does not have three different options at the pump:  87 octane gasoline, 89 octane 10% ethanol blend, and 91 octane 10% ethanol blend.  It is not hard today for the average Iowa consumer to find 10% ethanol–in fact, it’s more likely they’d accidentally pump it.  Despite that, we have 47% adoption.  I don’t think E85 pumps are going to change that.  That same article that cited the 47% adoption rate, I believe, also stated that a very small percentage of people who did have FF-capable cars and E85 as an option at the local station actually bought E85.

    And it is certainly not from lack of advertising and promotion.  If anything, the relentless drumbeat of ethanol propoganda itself is driving some people away.

    Part of the reason is that most Iowans can do math.  10% ethanol consistently runs 13 cents cheaper per gallon than straight gasoline here.  That’s about 5% the price of a gallon.  Yet you take an 8-15% fuel economy hit (it’s around 13% for my truck, based on a ten tank trial).  At 13 cents, I would basically be subsidizing the ethanol industry to the tune of 20 cents a gallon, and my annual fuel costs for using ethanol would be $480 higher than straight gas for every 12,000 miles driven.

    Given all the reasons outlined earlier, that math would need to be a $480 savings to even get me interested–which means E10 would need to be around 50-60 cents per gallon cheaper than gasoline.

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  19. By Wendell Mercantile on August 30, 2010 at 1:17 pm

    Part of the reason there’s not as much E85 sold as could be is where E85 ISN’T located: Cedar Rapids, Marion, Hiawatha, Davenport, Bettendorf, Iowa City, Cedar Falls, Waterloo, Sioux City, Mount Pleasant…

    DWags,

    Then why don’t the ethanol plants in Iowa step forward and build E85 refueling stations in Cedar Rapids, Marion, Hiawatha, Davenport, Bettendorf, Iowa City, Cedar Falls, Waterloo, Sioux City, Mount Pleasant…?

    Back in the 1920s when oil companies such as Sinclair, Philllips 66, Texaco and the others wanted to build the market for their motor fuel, they went out and built retail filling stations along our country’s highways. They didn’t sit back and wait for the Government to mandate it, or provide a subsidy, they were proactive and built their own filling stations or found franchise operators to sell their brand of gas.

    Why aren’t the Iowa ethanol refineries doing the same?

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  20. By ronald-steenblik on August 30, 2010 at 1:24 pm

    Rufus wrote:

    Look, rich countries have much cleaner environments than poor countries. Rich people have much cleaner houses than poor people. It stands to reason that as Iowa corn farmers prosper they will continue to improve their stewardship of the land.

    That last sentence is pure conjecture. History does not bear it out. Farmers may improve the attractiveness or other environmental amenities of their land near their house, but not beyond that — not, at least, without either being compelled to by regulation, or being compensated for their extra costs (or opportunity costs). Moreover, you are forgetting, Rufus, that over the long run it is not farmers that prosper from higher crop returns, but owners of farmland — the one input to production that is in limited supply. They may be one and the same people, but over time as farms change hands, new owners only make normal returns to their labor and to their investment in machinery.

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  21. By doggydogworld on August 30, 2010 at 1:38 pm

    Rough draft of the “Iowa Plan”, in the postiive and inspirational rhetoric of a presidential campaign speech:

    Every president promises to end our dependence on foreign oil, I have a plan to actually accomplish it. And it starts right here in the great state of Iowa. While others talked about advanced technologies and conservation, Iowans got down to work and started producing clean, renewable fuel for our cars and trucks. Iowans showed us how to get it done. As a country we need to slash oil consumption 75%. Under my plan Iowa will again show us how to get it done. By the end of my first term every gas station in Iowa will sell E-85 or biodiesel. Every vehicle sold in Iowa will be able to run on E-85 or biodiesel. Iowa will be the first state to cut oil consumption 75% and will become a showcase of energy independence, not just for the entire country but for the entire world.

    The oil indepence we achieve in Iowa will spread from coast to coast. Iowa’s neighbors Nebraska, South Dakota, Minnesota, Wisconsin and Illinois can all grow enough corn to replace gasoline with E-85. States which do not grow as much corn can make ethanol from plentiful local crops such as sugar cane or sweet sorghum, or make cellulosic ethanol from wood waste or switchgrass. We will also promote electric vehicles in our great cities and FlexFuel extended range electric vehicles like the Chevrolet Volt in our towns and suburbs.

    This great transition will face its share of roadblocks and we will not reach our destination overnight. But every journey begins with a single step. The first step of our national journey to oil indpendence begins right here in Iowa. We will free Iowa from the curse of foreign oil addicton and keep freeing states until the entire country is free. Join me and lets get it done.

    ————————–

    Any presidential candidates reading this are welcome to use this speech, in exchange for a small consulting fee Smile

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  22. By Mark Hetherington on August 30, 2010 at 1:39 pm

    See my E-85 price parity blog posting at http://jjabiofuels.blogspot.com/ .  The inability of the ethanol industry to produce a product that competes in value with hydrocarbon based gasoline is a tough hurdle for this industry to overcome.

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  23. By doggydogworld on August 30, 2010 at 1:50 pm

    Wendell Mercantile said:

    Back in the 1920s when oil companies such as Sinclair, Philllips 66, Texaco and the others wanted to build the market for their motor fuel, they went out and built retail filling stations along our country’s highways. They didn’t sit back and wait for the Government to mandate it, or provide a subsidy, …..


     

    Well, they did wait for government to build the highway. They weren’t “pro-active” enough to build the entire infrastructure needed to sell their product. But once the government built a highway it was a greenfield opportunity. The fastest to build gas stations won a first-mover advantage. It’s easy to attract speculative capital in that situation. It’s vastly tougher to attract speculative capital to try and displace an entrenched competitor. It’s doesn’t really make sense to compare the two situations.

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  24. By garsky on August 30, 2010 at 2:05 pm

    Why does every incentive have to be a positive one? Instead of getting Iowans to do something they should already be doing by paying them tax dollars to buy an FFV, why not slap a tax on non-FFVs? That way, THEY pay to do something they SHOULDN’T be doing.

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  25. By John Gear on August 30, 2010 at 2:06 pm

    Iowa could only be compared to Saudi if the Saudis took all their oil, converted it to plastics, and then melted the plastics down to recover the oil. By turning the state into an ethanol field, they are mining the soil to produce an inferior liquid fuel on a disappearing resource base.

    Ethanol isn’t just a stupid idea, it’s criminally stupid when you look at what the monoculture of synthetic nitrogen-fertilized corn does to the land, the rivers, and the Gulf of Mexico, and the climate. Worse, some ethanol plants burn coal for process heat — talk about adding insult to injury.

    The poor energy return on energy invested is just the tip of the iceberg when it comes to why corn ethanol is a horrible idea and exhibit #1 for proof that our dysfunctional political system is breaking down faster than Rome’s did. A nation with a government that pays farmers to grow fuel for cars at marginal energy profit and with cataclysmic ecological cost is a nation bent on suicide.

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  26. By ronald-steenblik on August 30, 2010 at 2:06 pm

    We will free Iowa from the curse of foreign oil addicton and keep freeing states until the entire country is free.

    Obviously to be known in future history books as “The E-Eight-Five Station Proclamation”. (Apologies in advance to Abe Lincoln buffs.)

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  27. By Wendell Mercantile on August 30, 2010 at 2:21 pm

    Any presidential candidates reading this are welcome to use this speech, in exchange for a small consulting fee

    Doggy~

    Lot’s of nice sounding platitudes in your speech, but you never said exactly how you would make it happen. Which I guess, makes it a typical political speech. :-)

    Are you going to revert to Joe Stalin mode and direct that all gas stations in Iowa install E85 pumps and mandate that drivers buy flex-fuel or convert their present cars to E85?

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  28. By rrapier on August 30, 2010 at 2:38 pm

    DWags said:

    Part of the reason there’s not as much E85 sold as could be is where E85 ISN’T located:  Cedar Rapids, Marion, Hiawatha, Davenport, Bettendorf, Iowa City, Cedar Falls, Waterloo, Sioux City, Mount Pleasant…

    Regarding farmers demanding ethanol powered equipment, it works the other way around.  Implement makers make what the farmers have to buy, and there’s not much else.


     

    According to this, there are no stations in Cedar Rapids, Hiawatha, or Bettendorf; one in each of the others except for Sioux City, which has two. You are right; that probably isn’t enough. If there is only 1 pump in a city of 25,000 people, it isn’t going to be very convenient for someone to drive across town to fill up. People do that on the way to work and school; they generally don’t like to make a special trip to do it.

    However, as noted Iowa does have some good incentive programs in place for installing E85 pumps. If the demand is there, the pumps should follow. The problem is with declining sales, retailers may be hesitant to build new pumps.

    RR 

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  29. By paul-n on August 30, 2010 at 2:40 pm

    Good post RR.

     

    One of the factors limiting the use of E85 is the nature of the flex fuel vehicles being produced.  

    Looking at the link Russ provided, there are a handful of “cars”, either medium or large, and then it’s all SUV’s/trucks/vans.

    This, of course, is from the automakers gaming the CAFE rules, they get a larger credit for the larger vehicles.

    For city dwellers, who have a higher proportion of car (and especially small car) ownership, their flex fuel options are very limited.

     

    Since the automakers are only paying lip service to the E85 concept, it would seem a better way would be to either mandate all vehicles be flex fuel, or require all manufacturers to have an approved conversion kit available for current models, and then get to work on aftermarket conversion kits, and then offer some kind of incentive on those.  

     

    Overall, it looks like a case of mismatch between the amount of effort going into producing the stuff, and that going into finding the best ways to use it.  That is not, strictly speaking, the ethanol industry’s problem, but it sure is in their interests to resolve it, as their only other option is increasing mandates, which seems to be their preferred path.

     

    As for the corn farmers degrading their land, they have the right to do that.  But no one has the right to pollute waterways.  To be fair, that is a problem for primarily for the farming industry, and the various regulatory agencies, not the ethanol industry or any other customers of the farming industry.  

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  30. By Brett on August 30, 2010 at 3:16 pm

    Paul N said:

    As for the corn farmers degrading their land, they have the right to do that.  But no one has the right to pollute waterways.  To be fair, that is a problem for primarily for the farming industry, and the various regulatory agencies, not the ethanol industry or any other customers of the farming industry.  


     

    If more than 50% of Iowa’s corn crop goes to ethanol, how does the ethanol industry escape any responsibility?  If anything, the ethanol industry is in a better position than anyone else to address it–they are probably the only industry in the corn-to-market chain that can actually identify their growers.

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  31. By Wendell Mercantile on August 30, 2010 at 3:45 pm

    or require all manufacturers to have an approved conversion kit available for current models, and then get to work on aftermarket conversion kits, and then offer some kind of incentive on those.

    Why doesn’t the ethanol industry take the lead in developing a kit to convert regular cars to flex-fuel?

    And then offer to install those kits at approved centers at low (or no) cost to car owners. That would be a positive way for the ethanol industry to build the market for E85.

    If Big Corn and the ethanol industry were to subsidize* the procurement and installation of flex-fuel conversion kits, that could only help Big Corn and the ethanol industry.
    _____________________
    * One kind of subsidy to which I wouldn’t object. But I bet Big Ethanol would rather the Government subsidize such a program.

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  32. By Charles Powars on August 30, 2010 at 4:25 pm

    RR: “…petroleum continues to supply over 90% of the motor fuel in Iowa, and virtually all of the fuel used in the farm equipment for growing all of that corn. Something is wrong with this picture.”

    Keep in mind that most farm equipment (particularly high fuel consumption equipment) is diesel cycle, which requires a high cetane number fuel. Ethanol E100 and E85 have very low cetane numbers and will not work in any straightforward way in diesel cycle engines. I have not yet researched the Saskatchewan Research Council conversion, but I suspect this was either a conversion to park ignition (like the Cummins L-10 M100 engines tested here in California decades ago) or simple “fumigation” conversions (squirt some E85 into the intake manifold, which can reduce diesel fuel consumption), or the E85 had a huge dose of cetane enhancer (toxic and expensive). None of these approaches would appeal to HD engine or farm equipment OEMs.

    I’m confident that OEMs would explain that they would require many tens of millions (perhaps as much as a hundred million) to develop, test (performance/durability/emissions), market, and warranty E85-fueled farm equipment. Moreover, they would explain that a government purchase incentive (educated guess: a few tens of thousands $ per big tractor) or mandate will be required to induce farmers to buy new E85 equipment instead of diesel equipment. And I can assure you, big-business farms are not going to buy non-OEM no-warrenty equipment or conversions.

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  33. By Wendell Mercantile on August 30, 2010 at 4:45 pm

    And I can assure you, big-business farms are not going to buy non-OEM no-warrenty equipment or conversions.

    And that means those big-business farms continue to live a double-standard. They want car owners to burn ethanol, yet have no desire to do it themselves.

    State ethanol mandates should first apply to farmers and ethanol producers

    Whenever a state passes one of those mandated ethanol laws, the first paragraph in the law should be a statement requiring that the first to comply with the mandate be the farmers, truckers, and ethanol plants working in the ethanol industry.

    After all, what’s sauce for the goose is sauce for the gander.

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  34. By Brett on August 30, 2010 at 5:06 pm

    Charles Powars said:

    RR: “…petroleum continues to supply over 90% of the motor fuel in Iowa, and virtually all of the fuel used in the farm equipment for growing all of that corn. Something is wrong with this picture.”

    Keep in mind that most farm equipment (particularly high fuel consumption equipment) is diesel cycle, which requires a high cetane number fuel.


     

    But RR’s point is still valid.  We hear daily complaints about how the expiration of the biodiesel credit is killing the industry, and 70-80% of our biodiesel capacity is sitting idol because of a lack of subsidy.  

    70-80% of our biodiesel capacity in the upper Midwest more or less equals the exact amount of diesel fuel burned annually in the same region for on-farm uses.  About 90% of that is burned outside the winter months (when diesel has no “issues”), and much of the diesel-burning equipment they already own is certified and warranty-friendly for biodiesel.  If farmers in IL/IA/MN/ND/SD/WI/IN and MO –alone– were using B100 on farm and in diesel pickups, grain dryers, and other equipment, they could push us over existing capacity and create the need for more. 

    And beyond that, diesel is very prevalent in fleet-based operations–public transportation, trains, school buses and trucking.  Places with low distribution costs, and no or minimal biodiesel adoption costs.  They also tend to be very high-polluting operations, which gets us real air quaity benefits as well.  So while ethanol may not be the answer, the same argument applies to biodiesel–perhaps even better.

    Yet, while I can’t find hard numbers on biodiesel usage, what you can find suggests that 50% of farmers have adopted biodiesel, and most are burning B2 and B5 blends, at best.  Hardly a statement of support in favor of the biofuels they’re pushing.

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  35. By ronald-steenblik on August 30, 2010 at 5:42 pm

    RR, your article has so far been positively received over at the DTN Ethanol Blog. Here is one reader comment:

    The California Air Resources Board’s desire to stifle corn ethanol come January 1, 2011 may force Mid West States to take a more proactive approach toward their ethanol industry or watch it suffer. The industry may also need to get behind more Blender Pump instillations to market ethanol directly to the public as a real fuel rather than just a fractional blending component in gasoline. The California market may be hard to replace. There is no good excuse for Iowa or other Mid West States to be importing oil from Canada and Venezuela when they have ethanol to spare. (Posted by Thomas Blazek at 1:26PM CDT 08/30/10)
     
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  36. By Perry on August 30, 2010 at 5:43 pm

    Oil Should Be Around $10 a Barrel: Analyst

    http://finance.yahoo.com/news/…..&ccode=

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  37. By takchess on August 30, 2010 at 7:59 pm

    re: Oil Should Be Around $10 a Barrel: Analyst

    http://finance.yahoo.com/news/…..amp;ccode=

    What no comments?? I wonder what Morgan Downey, Oil 101, would say about this.

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  38. By Kit P on August 30, 2010 at 8:51 pm

    Moderator Note: Post deleted.

    Kit, you are no longer going to be allowed to disrupt the forums or insult the integrity of what we are trying to achive here. You can go insult the critical thinking skills of readers elsewhere.

    RR

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  39. By Oxymaven on August 30, 2010 at 10:10 pm

    Are Iowa and Saudi Arabia anyway remotely comparable? I think SA would be offended at any attempted comparison. EIA says that Saudi crude/liquids production is 10.8 mbd, so in less than a week SA produces more BTUs of liquid fuel than Iowa does in a year (and a big bunch of nat gas as a ‘co-product’). And SA has the proven reserves to produce that much for the next 60 years or longer? I think SA produces more a lot more BTUs of nat gas alone than Iowa produces ethanol BTUs?

    Can Iowa ever produce 50x more ethanol than it currently does? Could it do that sustainably for 60 years? Seems like the comparison might be Iowa versus Argentina? Maybe in 10 years we’ll have 20 ton/acre switchgrass or miscanthus or energy cane and maybe that will be contribute a lot to reducing oil or coal consumption, but it seems like it will be a long time before we might expect significant contributions by biofuels? We need biofuels and all other alternatives, but it seems pretty clear that it will take a while before we can expect them to help out much.

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  40. By Wendell Mercantile on August 30, 2010 at 10:50 pm

    EIA says that Saudi crude/liquids production is 10.8 mbd, so in less than a week SA produces more BTUs of liquid fuel than Iowa does in a year…

    Excellent point Oxymaven.

    This is a bit off topic for this thread, but I’ve been reading Robert Bryce’s newest book Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future. In the first chapter he visits a Kentucky coal mine to find that this one medium-sized mine produces more Btu’s of energy per day than the sum of the energy produced each day from all the solar panels and wind turbines in the U.S.

    It’s going to take millions of acres of corn, switchgrass, energy cane, miscanthus, yucca blossoms, or whatever, and tens of thousands of wind turbines to replace even a fraction of the energy we now get from coal, oil, and natural gas.

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  41. By savro on August 30, 2010 at 11:11 pm

    Oxymaven said:

    Are Iowa and Saudi Arabia anyway remotely comparable? I think SA would be offended at any attempted comparison. EIA says that Saudi crude/liquids production is 10.8 mbd, so in less than a week SA produces more BTUs of liquid fuel than Iowa does in a year (and a big bunch of nat gas as a ‘co-product’). And SA has the proven reserves to produce that much for the next 60 years or longer? I think SA produces more a lot more BTUs of nat gas alone than Iowa produces ethanol BTUs?

    Can Iowa ever produce 50x more ethanol than it currently does? Could it do that sustainably for 60 years? Seems like the comparison might be Iowa versus Argentina? Maybe in 10 years we’ll have 20 ton/acre switchgrass or miscanthus or energy cane and maybe that will be contribute a lot to reducing oil or coal consumption, but it seems like it will be a long time before we might expect significant contributions by biofuels? We need biofuels and all other alternatives, but it seems pretty clear that it will take a while before we can expect them to help out much.


     

    Oxy, I don’t for a second think that RR was in any way comparing Iowa to Saudi Arabia other than to point out that it’s the king of corn ethanol production just like SA is the king of oil production.

    But you raise an excellent point, one that is too often overlooked – the scale of many alternatives. It’s been stated over and over on here that biofuels and many alternatives can’t compare with the scale of fossil fuels. The final picture in Five Challenges of Next-Generation Biofuels puts it in perspective.

    We’re going to need a lot more than just ethanol or any other single alternative in order to reduce our oil consumption. It also requires that each of those alternatives be used where it’s most practical in order to maximize efficiency and value.

    Corn ethanol won’t do it alone, but as RR makes the case, it can certainly transform an entire region – the Midwest.

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  42. By doggydogworld on August 30, 2010 at 11:38 pm

    Wendell Mercantile said:

    Lot’s of nice sounding platitudes in your speech, but you never said exactly how you would make it happen.


     

    Like you said, the perfect campaign speech!

    Seriously, I think changing the political dynamic is almost as important as any actual plan. All presidential candidates make a pilgrimmage to Iowa and take the ethanol pledge. This way they can “support” ethanol while leaving it in the MIdwest where it belongs.

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  43. By Kit P on August 31, 2010 at 12:32 am

     

    “Saudi Arabia satisfies their own
    energy needs with the oil they produce, and exports the excess.”

     

    What does Saudi Arabia import? Food!

     

    Poor Saudi Arabia they have lost food
    independence.

     

    Iowa does produce $20.4 billion in AG
    products but it is only a 15% part of $135.7 billion GDP. Iowa
    ranks 30th in GDP and population. Sounds like Iowa has a
    diverse economy with growing food just the part that outsiders hear
    about.

     

    http://tonto.eia.doe.gov/state…..cfm?sid=IA

     

    “Iowa on the other hand exports the
    vast majority of the ethanol they produce while importing gasoline as
    motor fuel.”

     

    What does not have? Petroleum
    Refineries!

     

    “According to the Des Moines
    Register, Iowa ranks 32nd in ethanol sales despite being the leading
    ethanol producer.”

     

    Just what you would expect for an
    industrial state.

     

    “by increasing local consumption.”

     

    Let me see we could focus on 1% of the
    US population or what about California since RR brings it up?

     

    California is #1 with 37 million people
    and $33.9 billion in AG products. Yes, ahead of Iowa.

     

    “California is one of the top
    producers of crude oil in the Nation”

     

    “California ranks third in the United
    States in petroleum refining capacity and accounts for more than
    one-tenth of total U.S. Capacity.”

     

    “There are five ethanol production
    plants in central and southern California, but most of California’s
    ethanol supply is transported by rail from corn-based producers in
    the Midwest.”

     

    “California imports more electricity
    from other States than any other State.”

     

    California has large refineries,
    lots of AG, lots of people, imports lots of energy and claims to be
    an environment.

     

    No case study on the
    #1 state with potential for improvement  but we have one for a
    state with some of the best key performance how the should do it
    ‘better’.

     

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  44. By paul-n on August 31, 2010 at 1:15 am

    Charles wrote;

    I’m confident that OEMs would explain that they would require many tens of millions (perhaps as much as a hundred million) to develop, test (performance/durability/emissions), market, and warranty E85-fueled farm equipment.

    I’m pretty confident they would explain that too, and ask for at least that much money, but that doesn’t mean it can’t be done, or that it hasn’t already been done.

    Scania Trucks (Sweden) started making making ethanol powered diesel engines two decades ago, though they have only really caught on in the last six years or so.  They use 95% ethanol +5% ignition enhancer (type not specified).  In any case, the fuel, and exhaust must be OK because the city of Stockholm has just ordered another 85 ethanol powered buses to go with the other 600 already in operation in Sweden.

    If they wanted to, the city of Des Moines and a few others could run these sorts of buses.

    In any case, the initial development work has been done.

    I personally like the co-fuelling (fumigation) method better, as the engine is still able to operate on 100% diesel if desired, and existing engines can be adapted instead of needing a whole new engine, or major modifications.  If the farmer buys replaces piece of equipment, they could take the ethanol kit off the one they are selling and add to the new one.

    And, the ethanol does not need to be anhydrous for this, it can have water contents up to 50%.  

    Water/methanol kits have for diesel pick trucks have been available for years, they could easily be adapted for ethanol and tractors etc.

    There have been lots of studies on co-fuelling with fumigated and port injected methanol, and ethanol will work in the same way.

    The economics are a different story though. Currently in Iowa, diesel is selling for $2.90, and take out the 22.5c state road tax and 24.4c federal tax, so the farmer is paying about $ 2.33/gal, which contains 132MJ of energy (LHV) for $17.60 per GJ.

    Ethanol is $1.68 wholesale in Iowa, and contains 89MJ(LHV), so it comes out $18.90/GJ, so no real advantage.   Add in the current VEETC of 45c/gal, and the cost comes down to $13.82/GJ, a  21% saving.  Of course, if the price of diesel heads north, the difference becomes larger.

    An interesting situation is the corn farmer who runs entirely on ethanol instead of diesel. In theory, he is now insulated from diesel cost increases, but in reality, if diesel is going up, then so too will be gasoline, and the value of the ethanol he is using.  But it is helping to make agriculture oil independent, and that would be an achievement.  

     

     

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  45. By rrapier on August 31, 2010 at 2:31 am

    Russ Finley said:

    We will likely eventually end up with a landscape littered with rusting government sponsored E85 pumps.

     

    Source: http://biodiversivist.blogspot…..ified.html


     

    That may be the case, especially in places like Arizona that have to bring in ethanol from long distances. I just don’t think that’s going to be long-term feasible. But I do believe that E85 in Iowa has a chance of hanging around.

    RR

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  46. By rrapier on August 31, 2010 at 2:39 am

    What does Saudi Arabia import? Food! Poor Saudi Arabia they have lost food independence.

    Income-rich Saudi Arabia Prefers Grow-Their-Own Food Security

    From the Iowa State University Extension service of all places:

    The Saudi government has also established agricultural research stations as well as an extension service to help farmers figure out how to adapt their farming methods to the harsh desert climate. While Saudi Arabia once imported large amounts of wheat, today the country is nearly self-sufficient in wheat production, importing specialty flours and exporting surplus production. In comparison to the U.S. average wheat yield of 40 bu./ac., Saudi farmers reap 70 bu./ac. Of course, the larger yields do not necessarily mean that it wouldn’t be cheaper overall to import the wheat. But, food security is a part of national security.

    You see, that would be like Iowa if Saudi exported almost all of their food, and then turned around and had to import food for some other place. What you don’t seem to understand is that Iowa produces enough to satisfy their needs; by exporting they actually increase dependence on foreign oil.

    No case study on the #1 state with potential for improvement but we have one for a

    state with some of the best key performance how the should do it ‘better’.

    You know, you have so much knowledge to share with the world, it’s a shame that you don’t start your own blog. You could do everything exactly the opposite of what I do, and fill a gaping need.

    RR

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  47. By ronald-steenblik on August 31, 2010 at 3:36 am

    RR, your source of information on Saudi Arabia’s agricultural situation is seven years old!

    As you can see from the graphic below, Saudi wheat production peaked in the early 1990s, fell dramatically, and then had a second peak in the middle part of this decade, and is now phasing down quickly to zero.

    Wheat roduction n audi rabia, 960-2009

    Why? Because it never was sustainable. Saudi Arabia was producing wheat in the frickin’ desert! Here is a good synopsis of the situation, from 12 Apr 2008:

    What started as an ambitious dream, for a desert nation bereft of rivers and lakes to become self-sufficient in wheat, became a reality with the aid of billions of dollars from the first oil boom in the 1970s. Today, however, Saudi Arabia is preparing to phase out production by 2016. The volte face could make the Gulf nation one of the world’s top 15 importers of the cereal –even as countries across the globe grapple with high wheat prices.

    Officials say they had few options – it was wheat or water, the most precious of resources in Saudi Arabia. Now that the kingdom is enjoying a second oil boom, they say, the government has the financial clout to ensure it meets its cereal requirements from international markets. It is expected to begin importing wheat for the first time in more than 20 years in 2009. Others say the scheme dreamed up by the government in the late 1970s was one of the country’s first big white elephants, a project that was bound to fail in the long term.

    The current plan, passed by the government earlier this year, is for Saudi Arabia to reduce its production by 12.5 per cent annually to 2016, with imports making up the shortfall. There was some speculation that high global wheat prices might cause the government to consider phasing out production – currently at about 2.5m tons per year – more gradually. But Abdullah al-Obaid, the deputy minister for agriculture, told the Financial Times the plan would move ahead as scheduled.

    “There are no rivers, no lakes and the rainfall is very scarce, less than 100 millimetres per year, which is not enough by any means for agriculture. “We are depending mainly on non-renewable water resources from deep aquifers. Really, it’s a critical situation,” Mr Obaid said. “I think the government is in a good position this year, with the oil price increasing, to finance such policies because we are choosing between either that or deplete our resource, which is water. So it’s a kind of trade off.” Still, he says, agriculture – which employs about 600,000 people – remains an important sector for Saudi Arabia, noting that the wheat project helped settle Bedouin and others in rural areas.

    By the 1980s the government was subsidising the sector by paying farmers about six times global prices, helping annual production to rise from virtually zero to about 4m tons and enabling the kingdom to export and donate wheat to poor and friendly countries. The government spent SR60bn-SR70bn on the project over the long term, Mr Obaid estimates. At the time, wheat was absorbing about 40 per cent of water used for agriculture –a sector that accounts for 85 per cent of the kingdom’s total water consumption.

    The temptation to substitute “corn for ethanol” for “wheat”, and “United States” for “Saudi Arabia” in the above is almost too great. But I shall resist and only point out that the United States has its own fossil water, the Ogallala Aquifer. Iowa farmers, blessed (most years) with ample rains, do not depend on it. But the areas of the country in which corn production is expanding (eastern Colorado, the Texas Panhandle, and western Kansas and Nebraska), very much do.

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  48. By ronald-steenblik on August 31, 2010 at 3:50 am

    And here is an update on the situation in Saudi Arabia as of earlier this year:

    Saudi farmers are abandoning wheat cultivation faster than the government had anticipated under a plan to save dwindling water resources, the kingdom’s Agriculture Minister said in an interview on Tuesday.

    Saudi Arabia became a major buyer of wheat on global markets after starting the phase out programme, to be run over eight years, in September 2008.

    In an interview with Reuters, Agriculture Minister, Fahad Balghunaim, said: “In two years, since we launched the wheat reduction plan, planted area fell 40 percent, which is faster than we had anticipated.”

    In the first official comment on progress of the output reduction programme since its launch., Balghunaim said: “We were considering an annual drop of 12.5 percent in planted areas.”

    The kingdom announced in January 2008 that it would cut domestic wheat production by 12.5 percent a year to conserve the desert kingdom’s scarce water supplies and would rely entirely on imports by 2016.

    Before this measure was taken, the kingdom had ensured self sufficiency for three decades.

    The minister did not comment on what impact the accelerated scaling back of plantings might have on the kingdom’s wheat needs for the next few years.

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  49. By rrapier on August 31, 2010 at 3:51 am

    Ronald Steenblik said:

    RR, your source of information on Saudi Arabia’s agricultural situation is seven years old!

    As you can see from the graphic below, Saudi wheat production peaked in the early 1990s, fell dramatically, and then had a second peak in the middle part of this decade, and is now phasing down quickly to zero.

    Why? Because it never was sustainable. Saudi Arabia was producing wheat in the frickin’ desert!


     

    I was surprised at the link, because Saudi doesn’t seem like a place that could be sustainable in food production with their population growing as it is. But the point is that Kit is making an invalid comparison. Saudi imports food because they can’t grow enough. Iowa can produce plenty of ethanol. They just aren’t using it; instead importing gasoline that increases the country’s dependence on foreign oil.

    RR

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  50. By rrapier on August 31, 2010 at 3:53 am

    Wendell Mercantile said:

    This is a bit off topic for this thread, but I’ve been reading Robert Bryce’s newest book Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future. In the first chapter he visits a Kentucky coal mine to find that this one medium-sized mine produces more Btu’s of energy per day than the sum of the energy produced each day from all the solar panels and wind turbines in the U.S.


     

    Working my way through that one as well. I owe Robert a book review; he sent me the book a couple of months ago and I usually turn them around faster than this.

    RR

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  51. By DHARMESH MAHAJAN on August 31, 2010 at 8:36 am

    Hi Robert,

    I follow you from the days of irsquared & in the current setup, somehow I am not able to find out a way to reach achieves of your articles. Kindly let me know how I can find out an article that has got archieved in the current website.

    Regards
    Dharmesh

    [link]      
  52. By Kit P on August 31, 2010 at 9:49 am

    “But the point is that Kit is making
    an invalid comparison.”

     

    That’s right! Iowa has a diverse
    economy and imports a little energy to produce goods and services it
    exports. You import what you do not have and export what you have
    plenty of. It is called trade.

     

    There is a focus by many on just energy
    based on emotional issues. However, energy is just a means to an end
    in the context of of overall society. Without energy 3 million could
    not live in Iowa, 3 million could not live in NYC, and 30 million
    could not live in the Saudi desert.

     

    I can make an erosional argument out of
    food just as logically as energy. Sure we can have an invalid
    comparison contest. However, my invalid comparison is better than
    yours. So ha ha!

     

    Energy is an erosional issue for the
    very reason that we all depend on others. I like getting some of my
    energy from places like Iowa because it is an alternative places that
    do not like selling us energy except for the idea that they can buy
    weapons to kill us.

     

     

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  53. By doggydogworld on August 31, 2010 at 9:54 am

    Wendell Mercantile said:

    This is a bit off topic for this thread, but I’ve been reading Robert Bryce’s newest book Power Hungry: The Myths of “Green” Energy and the Real Fuels of the Future. In the first chapter he visits a Kentucky coal mine to find that this one medium-sized mine produces more Btu’s of energy per day than the sum of the energy produced each day from all the solar panels and wind turbines in the U.S.


     

    You should have known to stop reading right there. This statement is absurd on its face to anyone familiar with US energy dynamics. A trivial amount of fact checking shows how absurd:

    Kentucky produced 120m tons from 469 mines in 2008. The average mine thus puts out 256,000 tons/year:

    http://www.eia.doe.gov/cneaf/c…..able1.html

    The largest coal mine in Kentucky, the Cardinal/Warrior mine in the western part of the state, is 20x that size at 5.1m tons/year:

    http://www.eia.doe.gov/coal/pa…..able9.html

    At 25 mmBTU/ton the average Kentucky mine outputs 0.006 quads and Cardinal/Warrior 0.13 quads. This cool LLNL chart, my favorite high-level view of US energy flow, shows primary energy from all coal is 19.76 quads vs. wind at 0.70 quads and solar at 0.11:

    https://publicaffairs.llnl.gov/news/news_releases/2010/images/energy-flow-annotated.pdf

    A “medium-sized” Kentucky coal mine supplies far less energy than either wind or solar. The largest Kentucky mine supplies about as much energy as solar and much less than wind.
    FWIW, US solar and wind were on a path to overtake total coal output from all Kentucky mines by 2013, but many new projects were put on hold after the financial system nearly collapsed. I don’t have a good feel for the growth trajectory the next few years.

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  54. By Wendell Mercantile on August 31, 2010 at 11:33 am

    Doggy~

    In his book, the Kentucky coal mine Bryce visits and describes is the Cardinal/Warrior mine. The impression I got was that Cardinal/Warrior is a typical Kentucky coal mine, and not the state’s largest.

    Thanks for the feedback and correction.

    Perhaps when RR finishes his review, we can start a discussion line on the Bryce book.

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  55. By rrapier on August 31, 2010 at 12:11 pm

    Kit P said:

    “But the point is that Kit is making an invalid comparison.”

    That’s right! Iowa has a diverse economy and imports a little energy to produce goods and services it exports. You import what you do not have and export what you have plenty of. It is called trade.


     

    And thus you miss the point entirely. First, they don’t import “a little energy.” Importing >90% of your transportation fuel is not “a little.” Furthering, they are not importing what they don’t have. They have plenty of transportation fuel in the form of ethanol. They have so much that if they pursued the right policies they wouldn’t have to import transportation fuel and would still have some left for export. Instead, they have chosen to export their ethanol, which means they have to import transportation fuel. That makes the U.S. more dependent upon imports than if Iowa used their own ethanol.

    I like getting some of my energy from places like Iowa because it is an alternative places that do not like selling us energy except for the idea that they can buy weapons to kill us.

    Yet the irony is that because you use energy from Iowa on the East Coast instead of them using it themselves, we have to import more energy from places that do not like us. So your position is yet again contradictory.

    RR

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  56. By ronald-steenblik on August 31, 2010 at 12:22 pm

    Kit P wrote:

    I can make an erosional argument out of food … . Energy is an erosional issue … .

    Is that a typo, or are you making a pun? I can agree that farming is an erosional issue, but only strip mining (for coal and uranium) and growing crops for energy would qualify as erosional energy issues in my book. The Dust Bowl was, of course, very, very erosional for those who experienced it.

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  57. By rrapier on August 31, 2010 at 12:53 pm

    DHARMESH MAHAJAN said:

    Hi Robert,

    I follow you from the days of irsquared & in the current setup, somehow I am not able to find out a way to reach achieves of your articles. Kindly let me know how I can find out an article that has got archieved in the current website.

    Regards

    Dharmesh


     

    Hi Dharmesh,

    All articles from the old R-Squared are hosted here. What will happen is if you do a Google search, it will redirect from the old site to the article here. What we haven’t gotten worked out yet (but are still working on it) is to get specific archived comments imported over here. Everything is still there in Blogger, but there is a problem with the import feature for comments. But the articles themselves are all here.

    Cheers, RR

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  58. By Kit P on August 31, 2010 at 1:44 pm

    Ron, no pun intended.  Your back yard and my backyard contribute to the loading of Chesapeake Bay from soil erosion.   The geological term is mass wasting.

     

    The important question to ask can we produce the essentials for living such food, clothing, and shelter without significant environmental impact.  Our goal is to maximize the benefit while minimizing the impact.  The energy industry does a good job of this.  In fact I can not think of any industry that does a better job.

     

    For example, a power plant operator uses a little gasoline to drive to work but produces a huge amount of energy.  A large power plant can supply a city of a million families.  Furthermore, there are people who job it is minimize things like erosion. 

     

    “erosional issue”

     

    So Ron if you want to discuss an issue you have to quantify it in relation to the benefit and define what society is willing to accept.  In other words, first we am going to meet regulations and second we reduce the impact to as low as possible.

     

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  59. By rrapier on August 31, 2010 at 2:06 pm

    Kit P said:

    In other words, first we am going to meet regulations and second we reduce the impact to as low as possible.
     


     

    Like using ethanol close to the source instead of shipping it halfway across the country, and not backfilling with gasoline that has to be shipped halfway across the country. That would certainly reduce the impact. Just saying…

    RR

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  60. By Benny BND Cole on August 31, 2010 at 2:32 pm

    OT, but maybe RR wants to follow up later.  I have grave misgivings about the role of the NYMEX in oil prices.  Evidently, others believe we are in a glut right now…..

     

    The price of a barrel of oil would be closer to $10 if the commodity wasn’t traded as an investment instrument, given the record-high levels of U.S. oil inventories, Peter Beutel, president of Cameron Hanover, told CNBC Monday.

    “I honestly think that if there were no investors using oil as an asset that the price of oil right now would be $10 or $15 or $18, but it wouldn’t be anywhere near where it is,” Beutel said.

     ”We have so much oil right now, more than we’ve had in 27 years. Why is it 27 years? Because that’s how far our records go back. It’s probably the most in 50 or 100 years,” he added.

     Part of the reason the price of oil is currently above $74 (BIS: US@CL.1) a barrel is because of a belief in the economic recovery, Beutel said.

     Comments by Federal Reserve Chairman Ben Bernanke over the weekend gave the commodity a boost as he signalled a willingness to support the fragile economic recovery with additional policy measures.

     From a historical perspective, Beutel pointed out that the current level of inventories is even higher than when the price of oil was below $20 a barrel.

     ”We’ve got 50 million barrels of crude more than we had two years ago. We have 176 million of distillate,” Beutel said. “When I started in the business back in 1980 we used to think to ourselves: “Gee, we would love it if we had 140 million barrels of distillates to start the winter.”

     

     

     

     

     

     

     

     

     

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  61. By Mac on August 31, 2010 at 2:36 pm

    Doggy~

    In his book, the Kentucky coal mine Bryce visits and describes is the Cardinal/Warrior mine. The impression I got was that Cardinal/Warrior is a typical Kentucky coal mine, and not the state’s largest.

    Wendell said to doggy dog,

    “Thanks for the feedback and correction.

    Perhaps when RR finishes his review, we can start a discussion line on the Bryce book.”

    Apparently doggy dog world is not the only one to question Bryce’s grip on the truth.

    Denise Bode, who is CEO of the American Wind Association takes on Bryce in a short film on the AWEA website calling him “a fossil fuel industry mouthpiece” . She rips into remarks Bryce penned in a recent op-ed piece Bode says the Bryce article contradicts well known, official U.S. Government statistics.

    The Renewable Energy Standard is being discussed in Congress. Bode says lobbying efforts by the fossil fuels industry is behind Bryce’s spin. and that the Fossil Fuels and Nuclear industries already have substantial “Heritage” subsidies which are permanently set in law and need not face periodic Congressional review.as the renewables do.

    If interested here’s Denise “hot under the collar”………….

    http://www.awea.org/

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  62. By Kit P on August 31, 2010 at 3:00 pm

    “You should have known to stop reading right there.”

     

    Wendell you may be able to learn something from a journalist so keep reading.

     

    “This statement is absurd on its face to anyone familiar with US energy dynamics.”

     

    That would me, and it does not sound absurd maybe some old data.  Of course understand the dynamics of making electricity does not come from national lab cartoon.

     

    If you are getting electricity from Kentucky coal, then you do not care about wind and solar as can seen by this map.

     

    http://tonto.eia.doe.gov/state…..cfm?sid=KY  

     

    “Coal-fired plants typically generate more than nine-tenths of the electricity produced in Kentucky.”

     

    Of course Iowa is a different story because it has been a leading wind generated electricity producer laving more NG and PRB coal to make ethanol.  

     

    MAC does not understand that AWEA is not very accurate in their claims either.

     

    Wind, coal, and nuke power plants pay taxes.  More than 26 states have RPS.  Even if a national standard is passed it will not help the wind industry to build wind farms where there are not wind resources.  There is also a production tax credit that mostly favors wind.  

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  63. By rrapier on August 31, 2010 at 4:25 pm

    Kit P said:

    Of course Iowa is a different story because it has been a leading wind generated electricity producer laving more NG and PRB coal to make ethanol.  


     

    It’s not that different of a story:

    http://apps1.eere.energy.gov/s…..m/state=IA

    78% of electricity generated within the state comes from coal. That is still well above the national average. Another 10% comes from nuclear, 5% from natural gas, and 4% from wind. (That is 2005 data, and more wind power has been installed since then; still their coal usage is more than 10 times their wind usage). Their per capita wind usage is quite high, but they are heavily dependent upon coal for electricity.\

    According to:

    http://www.eia.doe.gov/emeu/st…..state=IOWA

    Since 2005, wind consumption went up by 24 trillion BTUs and coal consumption went up by 55 trillion BTUs.

    RR

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  64. By Rufus on August 31, 2010 at 5:06 pm

    You know, I don’t think that if all the people in Iowa that owned a flexfuel vehicle (and, Knew they owned a flexfuel vehicle) used Iowa E85 it would come anywhere close to using all the Ethanol produced in Iowa.

    Should we Mandate that All vehicles sold in Iowa be flexfuel, and that All flexfuel vehicles be sold in Iowa?

    What about Illinois? They produce a lot of ethanol (but, not as much “per-capita” as Iowa.) Same for Indiana, and Ohio, and Missouri, and Kansas.

    Oops, we forgot Nebraska. They are probably almost neck, and neck with Iowa.

    And, then there’s Minnesota. They have almost 3 times as many E85 Pumps as Iowa. Do we tell them they can’t use any E85? Or, do we require them, also, to use, exclusively, E85.

    They just installed 5 new E85 pumps on Long Island, NY. Do we “tear them out?” They do have a couple of ethanol refineries in NY. And, a couple in Ky, and Tn, and one, I think, in Pa. Tx has four. I’m getting confused.

    Are you sure we can do this?

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  65. By rrapier on August 31, 2010 at 5:15 pm

    Rufus said:

    You know, I don’t think that if all the people in Iowa that owned a flexfuel vehicle (and, Knew they owned a flexfuel vehicle) used Iowa E85 it would come anywhere close to using all the Ethanol produced in Iowa.


     

    That is explicitly noted in my article. Did you read it? I said Iowa has enough to be self-sufficient and to export the excess. I provided the numbers. I doubt any other state has that capacity; I am sure Minnesota doesn’t (they are a large ethanol producer, but also a large gasoline consumer) but would have to check Nebraska.

    Minnesota with three times the pumps of Iowa should be a good position with respect to infrastructure to consume the 1 billion gallons per year they currently produce. Why would I tell them they can’t use E85? What I would do is encourage them to use E85.

    I am just really not sure I see your point. I have already shown that the Midwest as a whole would have a market that is triple current ethanol production. Here I just made a case study of Iowa. I can only presume that you didn’t read it based on your comments here.

    RR

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  66. By ronald-steenblik on August 31, 2010 at 5:16 pm

     Rufus wrote:

    They just installed 5 new E85 pumps on Long Island, NY. Do we “tear them out?”

    No. We drop the secondary tariff on imported ethanol.

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  67. By Wendell Mercantile on August 31, 2010 at 5:20 pm

    Should we Mandate that All vehicles sold in Iowa be flexfuel, and that All flexfuel vehicles be sold in Iowa?

    No, we shouldn’t mandate anything. The ethanol industry should get off their rear ends and instead of waiting for Government-imposed mandates, take positive steps to build their market in Iowa. For example:

    1. Develop kits to convert regular gas vehicles to flex-fuel and then offer to install them at little or no cost to Iowa car owners.

    2. Build their own network of E85 filling stations along I-80 and I-35 and in the major Iowa population centers. Instead of worrying about how to build an ethanol pipeline to the East Coast, they first need to densify and build their market in Iowa.

    3. Make E85 such a bargain that people in Iowa will want to buy nothing else but flex-fuel vehicles.

    When Iowa’s dominant fuel becomes corn ethanol and they have stopped needing to import fossil fuels into the state, they can then work on marketing ethanol beyond their borders.

    What about Illinois? They produce a lot of ethanol (but, not as much “per-capita” as Iowa.) Same for Indiana, and Ohio, and Missouri, and Kansas.

    RR’s case study was for Iowa, but obviously the same lessons apply to the other Corn Belt states The ethanol producers in Illinois, Indiana, Ohio, etc. should be working just as hard to build the markets within their states as the Hawkeye corn farmers and ethanol producers.

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  68. By Rufus on August 31, 2010 at 5:21 pm

    If we sent all the flexfuel vehicles to Iowa who would burn the ethanol from the new “Cellulosic” Ethanol Plants in E. Tennessee?

    What about that Canadian Oil that is, presently, going to Iowa? Wouldn’t we have to go ahead and ship that farther South to make up for the ethanol that wouldn’t be going down there?

    And, while we’re doing all This, shouldn’t we require that all Iowa farmers use John Deere tractors (produced in Iowa?) It’s wasteful to ship John Deeres out of state, and allow some farmers to “import” tractors made in other states, not to mention, . . . . gasp, tractors made in other “Countries.”

    And, what’s this deal about people in Mississippi buying Fords made in Michigan, and shipping Mississippi-made Nissans to Chicago, and L.A?

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  69. By Wendell Mercantile on August 31, 2010 at 5:26 pm

    And, while we’re doing all This, shouldn’t we require that all Iowa farmers use John Deere tractors

    No, not necessarily John Deere, but we should mandate that all Iowa farmers use tractors, combines, and corn pickers that burn only ethanol. That should be the first paragraph in any ethanol mandate bill.

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  70. By Kit P on August 31, 2010 at 5:26 pm

    It’s not that different of a story:

     

    Of course it is, big difference.  I have no trouble explaining why wind farms are built places with good wind resources and use NG or oil to make electricity.  With a production tax credit, wand farms are economical.

     

    This is a story of wind farms getting built where they have cheap PRB coal generated electricity.  For those who are concerned with AGW, renewable energy has to compete where coal is cheap.

     

    Eastern coal is a bit more expensive so new nukes can compete with coal.  TVA just announced that that over the next decade they will be shutting down 1000 MWe of older coal capacity and will finish a nuke that was not completed because of economics.  

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  71. By Charles Powars on August 31, 2010 at 5:29 pm

    Please indulge me an opinion re the OT subject of Bryce’s “Power Hungry” book. There is considerable overlap between “Power Hungry” and Bryce’s earlier book, “Gusher of Lies.” I thought Gusher was a better book (but terrible title) because, among other things, it makes what I consider to be a compelling case that “energy independence” (which is the mantra of many politicians and op ed writers) is neither a prudent nor realistic goal.

    Power more directly takes on popular renewable and “green” technologies such as wind and solar. He makes a case that Natural-Gas-to-Nuclear (N2N) is the best energy strategy.

    My opinion is that while Power includes lots of source citations, it also contains some exaggerations, and many of the anecdotes and comparisons are carefully selected to support Bryce’s thesis. But Bryce’s exaggerations and selective comparisons are far less grievous than those of many “green” energy advocates (including Denise Bode).

    (And this is really subjective opinion): The big difference is associated with what I call our “wanna-believe” instincts. We wanna-believe that installing wind turbines will supplant dirty coal combustion. Solar panels on our roof will run our meters backwards. You can drink the exhaust cars and smells like french fries trucks will free us from imported oil and ecological calamities.

    So our wanna-believe instincts makes us outraged by any exaggerations by Bryce, other “green” technology skeptics, and certainly the evil oil companies. But we are accepting of exaggerations by “green” technology advocates such as Bode and alternate energy companies including their funders/investors and especially researchers.

    I look forward to reading RR’s take on “Power Hungry”.

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  72. By rrapier on August 31, 2010 at 5:30 pm

    Rufus said:

    If we sent all the flexfuel vehicles to Iowa who would burn the ethanol from the new “Cellulosic” Ethanol Plants in E. Tennessee?


     

    When some are actually operating, get back to me.

    What about that Canadian Oil that is, presently, going to Iowa?
    Wouldn’t we have to go ahead and ship that farther South to make up for
    the ethanol that wouldn’t be going down there?

    No, it may be more efficient to put something else in the south. Probably from a port.

    And, while we’re doing all This, shouldn’t we require that all Iowa
    farmers use John Deere tractors (produced in Iowa?) It’s wasteful to
    ship John Deeres out of state, and allow some farmers to “import”
    tractors made in other states, not to mention, . . . . gasp, tractors
    made in other “Countries.”

    You are really reaching with the apples and oranges comparisons. This may be one of the worst-thought-out things you have ever posted. I can go down the list of all the things wrong with your comparison, but for now I will just let you ponder on it a bit more.

    RR

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  73. By Rufus on August 31, 2010 at 5:32 pm

    Surely, Wendell, if we can mandate that all Iowans use E85 we can mandate that all Iowa Farmers use Iowa-made tractors, and combines.

    And, that all Mississippians drive Mississippi-made cars.

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  74. By Rufus on August 31, 2010 at 5:41 pm

    Ah, Tn is going to get oil from the famous “Port” Oil Fields.

    I was afraid, for a minute there, that we would have to get our “replacement” liquids from some Foreign oil fields, like maybe in Saudi Arabia, or Russia.

    But, we still haven’t solved the problem of where to ship that Canadian Oil that was going to Iowa. They don’t have an “East-West” Pipeline, but I guess we could load it on Trains, and ship it to Vancouver for transport to China. Right?

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  75. By Wendell Mercantile on August 31, 2010 at 5:52 pm

    Rufus~

    A special case for you — you must drive a Tunica County-made car. ;-)

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  76. By rrapier on August 31, 2010 at 5:56 pm

    Charles Powars said:

    I thought Gusher was a better book (but terrible title) because, among other things, it makes what I consider to be a compelling case that “energy independence” (which is the mantra of many politicians and op ed writers) is neither a prudent nor realistic goal.


     

    I thought it was better because it cited me so many times. :)

    I watched the Denise Bode “rebuttal.” Way over the top. The ad homs were a bit too much.

    RR

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  77. By rrapier on August 31, 2010 at 6:00 pm

    Rufus said:

    Ah, Tn is going to get oil from the famous “Port” Oil Fields.

    I was afraid, for a minute there, that we would have to get our “replacement” liquids from some Foreign oil fields, like maybe in Saudi Arabia, or Russia.


     

    Of course what happens now is that some of that Russian and Saudi oil makes its way to the Midwest, and the whole point is that there isn’t a good reason for that.

    But, we still haven’t solved the problem of where to ship that Canadian
    Oil that was going to Iowa. They don’t have an “East-West” Pipeline,
    but I guess we could load it on Trains, and ship it to Vancouver for
    transport to China. Right?

     

    If demand for their oil went down, why would they keep producing at the same rate? Really, your argument is nonsense.

    RR

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  78. By Rufus on August 31, 2010 at 6:07 pm

    This is “extremely troubling.”

    http://corncommentary.com/2010…..s-economy/

    We are going to “Export” over $107 Billion worth of Agricultural Products this year, while, at the same time,

    “Importing” $77 Billion worth of Ag Products.

    Surely, this is Madness. Why are we “importing” ag products when we have an abundance of ag products, here? Why are we “Exporting” when we’re not using all of our own? Why are we Importing wine from France, when we produce very good wines in California? Why are we importing Colson Beer? Haven’t they ever heard of Budweiser?

    And, you’re not going to believe this; Minnesota “exported” cheese last year, and actually imported large amounts of cheese from Europe. This is “craziness.” I hope someone is looking into it.

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  79. By Rufus on August 31, 2010 at 6:11 pm

    If demand for their oil went down, why would they keep producing at the same rate? Really, your argument is nonsense.

    Oh, I get it. If that Iowa ethanol gets burned in Des Moines instead of Denver it will cause a “Drop in Demand” for Oil.

    Well, now that you explain it That Way, sure.

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  80. By Optimist on August 31, 2010 at 6:16 pm

    Rufus: Take a chill pill, dude.

    I can see RR touched a nerve: you are responding angrily and making no sense.

    You, of all people, should be able to see that RR’s proposal makes a lot of sense. What, you don’t want Iowa to use its own ethanol? What? Iowans to good for the wonderfuel? You don’t want Iowa to be energy-independent? What happened to nobody ever died defending a cornfield?

    Or are you admitting that ethanol is NOT such a wonderfuel, and prefer that it be used elsewhere?

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  81. By paul-n on August 31, 2010 at 6:19 pm

    Kit wrote’

    “There are five ethanol production
    plants in central and southern California, but most of California’s
    ethanol supply is transported by rail from corn-based producers in
    the Midwest.”

     

    “California imports more electricity
    from other States than any other State.”

     

    California has large refineries,
    lots of AG, lots of people, imports lots of energy and claims to be
    an environment.

     

    No case study on the
    #1 state with potential for improvement  but we have one for a
    state with some of the best key performance how the should do it
    ‘better’.

     

    If your “potential improvement” means growing biofuels in California, there is one factor that you are missing – California is running out of water!

    It is already a net importer of water, and irrigation water is being already reduced to meet the ever growing needs of the cities.  There is lots of farmland doing nothing in the central valley because there is no water to irrigate it and it only gets 7″ of rain a year. 

    Granted, most of northern Ca has a wetter climate, but has less prime ag land, and more hills and forest.  

    So unless they can do something with the trees (which I think they can do), any large scale production of biofuel will be by diverting land and water from food production..

     

    As for importing the ethanol from the midwest by rail;

    It is 1700 miles from Des Moines to LA, and a ton of freight moves 480 miles per gallon, so it takes 3.5 gal to move a ton of ethanol.  That ton contains 335 gallons of ethanol, so we have a gal of diesel used per 100 gal of ethanol shipped.  Unless those ethanol tankers can go back loaded with something else, then they go back empty, which is more fuel used.  (An empty car is 76,000 lbs, and can carry 186,000 lbs, so the unloaded weight is 41% of the cargo weight).You could backload with petroluem products, since that is what the ethanol gets mixed with anyway.    Otherwise, the cars go back empty and petroluem is shipped by pipeline to Iowa from elsewhere, like the GOM. 

    Assuming the cars go back empty, then there is a total of 1.4gal of diesel used per 100 gal of ethanol.

    We do still need to pipe gasoline back to Iowa, but we can assume tnis is done by electrically powered pumps, so no increase in net oil consumption there.  

    So, to transport the 100gal of ethanol from Iowa to California has used 1.4 gallons of diesel, or an energy equivalent of 2.1gal of ethanol.

    California uses 15bn gallons of gasoline per year (EIA) and if 10% of that is ethanol that is 1.5bn gal/yr.  The act of transporting that from Iowa will have used 21 million gallons of diesel fuel.

    According to this report (tbl1 p39), the average rail trip length for ethanol is 1207 miles.  If we assume that it can all be used in the Midwest, the rail transport distance could be reduced by 80% , if not more.  So for the current annual production of 11bn gal, transporting this to the rest of the country will use 80%x140 million gallons of diesel per year, equivalent to crude imports of 8,000 bbl/day — $204m leaving the country (%70bbl) every year that did not need to.

     

    Admittedly, a drop in the barrel, but every bit counts, and if we are to move forward by efficiency, not austerity, then we should look to eliminate wasteful uses of oil – this certainly looks to be one of them.


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  82. By Wendell Mercantile on August 31, 2010 at 6:24 pm

    And, you’re not going to believe this; Minnesota “exported” cheese last year, and actually imported large amounts of cheese from Europe.

    Rufus~

    Gasoline and ethanol are theoretically fungible, right? Minnesota cheese isn’t. A true cheese connoisseur in Saint Paul may have a powerful hankering for an Emmentaler than can only be satisfied with a cheese imported from Switzerland and that a Minnesota Colby wouldn’t fill.

    (Let me know where you find that “Colson Beer.” We have only imported Molson where I live.)

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  83. By rrapier on August 31, 2010 at 6:25 pm

    Optimist said:

    Rufus: Take a chill pill, dude.

    I can see RR touched a nerve: you are responding angrily and making no sense.

    You, of all people, should be able to see that RR’s proposal makes a lot of sense. What, you don’t want Iowa to use its own ethanol? What? Iowans to good for the wonderfuel? You don’t want Iowa to be energy-independent? What happened to nobody ever died defending a cornfield?

    Or are you admitting that ethanol is NOT such a wonderfuel, and prefer that it be used elsewhere?


     

    What’s weird is that he initially thought this was a good idea. Very supportive of the idea of using Midwestern ethanol in the Midwest. Suddenly, a complete about face. It is as if he got new marching orders to oppose this dangerous idea…

    RR

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  84. By rrapier on August 31, 2010 at 6:28 pm

    Rufus said:

    If demand for their oil went down, why would they keep producing at the same rate? Really, your argument is nonsense.

    Oh, I get it. If that Iowa ethanol gets burned in Des Moines instead of Denver it will cause a “Drop in Demand” for Oil.

    Well, now that you explain it That Way, sure.


     

    Of course it will. Do you think ethanol magically transports itself to Denver? What is wrong with you? It’s like somebody has hacked your account, or I am thinking someone told you to oppose this. You certainly didn’t oppose it before, and now you are opposing it with some vigor. Something has changed.

    RR

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  85. By rrapier on August 31, 2010 at 6:38 pm

    I just want to point out that when I first brought up the idea of using Midwestern ethanol in the Midwest, here was the response from Rufus:

    In general, I think your argument makes sense. I would point out that
    before the recession is was costing way more than $0.19/gal to get
    ethanol from the Midwest to the East Coast.

    Now he comes out vehemently opposed. I think someone said something to him. I can think of no other explanation for general agreement to vehement opposition and ridicule in about a week. Does anyone else have a theory? Split personality?

    RR

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  86. By Benny BND Cole on August 31, 2010 at 6:47 pm

    Rufus: I think you should identify yourself. If you really are a retired insurance salesman living in rural Mississippi, I think there is little reason to be shy.

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  87. By paul-n on August 31, 2010 at 6:57 pm

    Rufus wrote;

    But, we still haven’t solved the problem of where to ship that Canadian Oil that was going to Iowa. They don’t have an “East-West” Pipeline, but I guess we could load it on Trains, and ship it to Vancouver for transport to China. Right?

    You don’t have to solve that problem, Canada already has.

    If you mean a pipeline that runs from Eastern Canada (Ontario) to Western Canada, then you are correct, we don’t have one.  However,

    there is already one pipeline that runs east-west from the Alberta oil fields to Vancouver, and oil IS being exported to China, today. 

    http://oilsandstruth.org/oil-e…..nd-kitimat

    Ignore the anti oilsands propaganda on this site, but their numbers for the pipelines are accurate.

    Current capacity is 300,00bbl/day to Vancouver, an expansionwould take it to 700,000, and the proposed new pipeline to Kitimat (mid north BC coast) would be 500,000bbl day.

    Last year exports were 3.3m tones, or about 45,000 bbl/day, and rising fast – all of it to China.

    It is possible that some of this oil would go to California, but you know that most of it will head west to China/Japan/Korea.  

    That meant the US had to get that 45kbd from somewhere else.

    That is why Trans Canada Pipelines is wanting to build its Keystone XL pipeline to take Alberta oil to the Gulf coast – so the refineries there  can process that instead of imported stuff.  They are actually planning to pipe heavy crude, instead of upgrading it in Alberta, that will be done at the US refineries (=more jobs for US).

    But, a bunch of people in Congress (and others)  are trying to block the pipeline, saying it jeopardises America’s “clean energy future”.

    If America doesn’t want it, the Cdn companies will gladly sell it to someone else – China has plenty of US bonds to get rid of!

     

    Meanwhile, Alaska is getting ready to produce heavy crude, they have 20bn barrels of the stuff, just harder to get out of the ground. Assuming those politicians (oddly enough, many  from farm states) really don’t want heavy crude coming into the lower 48, this stuff can be exported to China too, which means more light oil imported from somewhere else.

    Nothing against ethanol here, but these politicos will make America more dependent on overseas oil, not less.

     

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  88. By Rufus on August 31, 2010 at 7:06 pm

    As you all know, I’m very much in favor of producing, and Using, ethanol, Locally. I am Not sure it’s such a hot idea to spend $4 Billion on a pipeline from the Midwest to the East Coast. I’m, also, not sure it’s a “terrible” idea. I am, I guess, more, or less, agnostic about it.

    On the other hand, it’s obvious that we can’t, in the year of our Lord, 2010, use all of the current ethanol in the Midwest. The “Infrastructure” just isn’t there. My impression was that the conversation was getting just a little bit silly. It was going from “We need to build out the necessary infrastructure” to “Everyone in Iowa should be forced to use E85, immediately.”

    If I seemed, “vehement,” and “in need of a chill pill” it was a failure to communicate. What I was attempting was sarcasm, and snark (in a “nice” way, of course.) :)

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  89. By Rufus on August 31, 2010 at 7:28 pm

    Valero just announced it intends to sell E85 at all of its new Corner Store filling stations. They, currently, own, and operate about 1,000 stations.

    http://e85vehicles.com/e85/ind…..l#msg27225

    Having to wait 4 years, or so, for the UL Certifications was a big thing. It hurt. The Big, Deep Pockets Companies weren’t going to get onboard until their liability was covered. Getting more (and, better) flexfuel cars on the road was necessary, also. The Detroit 3 will probably put 2 Million on the road in 2011, and close to 3 Million in 2012.

    We forget, sometimes, how New this deal really is. All ideas won’t be “winners.” I think Poet, even, is starting to realize that, maybe, the pipeline might not have been the “greatest” idea they’ve ever had. The DOE put out a pretty negative opinion on it, and we haven’t heard Poet, or Magellan do too much squawking about it.

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  90. By Mac on August 31, 2010 at 7:52 pm

    Yup,

    Denise Bode works for the windmill industry and Bryce works for the fossil fuels industry,

    Yup

    What a profound insight.

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  91. By Kit P on August 31, 2010 at 8:48 pm

    “Why are we Importing wine from
    France, when we produce very good wines in California?”

     

    Welcome back Rufus. You are right, not
    one good box wine comes from France! I bet you can not buy Velveeta
    France either. I have tried to explain to my French co-workers the
    virtues microwaved mac and cheese for lunch instead of driving their
    big American cars to Burger King. Who knew?

     

    Rufus does a great job of
    communicating.

     

    “You, of all people, should be able
    to see that RR’s proposal makes a lot of sense.”

     

    You can’t make this stuff up.

     

    Paul wrote

     

    “there is one factor that you are
    missing – California is running out of water!”

     

    Hey guy, you should read the California
    energy plan. A product of consensus not common sense.

     

    I agree that some of the ethanol production should be local. Washington and Oregon can produce some too and barge it to
    California,

     

    There is a principle you are missing.
    After all that preaching about how ‘green’ California is, over
    charging them for energy is too much fun to pass up.

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  92. By Kit P on August 31, 2010 at 8:53 pm

    “Bryce works for the fossil fuels
    industry,”

     

    Bryce is a journalists, he sells books.
    Very few journalists have made the effort to be knowledgeable about
    energy and the environment. You can find some good text books when
    go go to college and study such subjects.

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  93. By doggydogworld on August 31, 2010 at 10:40 pm

    Rufus said:

    And, you’re not going to believe this; Minnesota “exported” cheese last year, and actually imported large amounts of cheese from Europe. This is “craziness.” I hope someone is looking into it.


     

    If Minnesota successfully lobbyied to mandate minimum cheese consumption for the other 49 states while also managing to get tariffs imposed to eliminate foreign competition then I would be 100% in favor of “looking into it”. Same holds true for John Deere tractors, cars made in Mississippi and all your other examples. Conversely, if Iowa shipping ethanol to the coasts and importing gasoline was merely a resopnse to the free market forces of supply and demand I would fight against any attempt the make Iowans use their own ethanol.

    All I’m saying is that if Iowa and other Midwest states want ethanol mandates and taxpayer subsidies they need to first eat their own cooking.

     

    Rufus said:

    Should we Mandate that All vehicles sold in Iowa be flexfuel, and that All flexfuel vehicles be sold in Iowa?

    We should mandate all cars sold in the US be able to burn E-85. Even better, if the cost is only a couple hundred bucks also add support for hydrous ethanol and methanol or M85. That would at least give us a fighting chance to react to an oil supply disruption without shutting down our economy. It also allows for a quicker ramp in case of a breakthrough in cellulosic ethanol or something. Cars are 15 year assets, it’s simply prudent planning to add a little cheap fuel flexibility to them.
     

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  94. By Mac on August 31, 2010 at 10:52 pm

    To Kit,

    Every dog has his day and I guess that goes for sociopaths also,

    Mac

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  95. By Wendell Mercantile on August 31, 2010 at 11:14 pm

    Oh, I get it. If that Iowa ethanol gets burned in Des Moines instead of Denver it will cause a “Drop in Demand” for Oil.

     

    Rufus~

    What’s the matter?  You have a bad day at Harrah’s or the Hollywood Casino in Tunica? Wink  I thought you were the advocate of everyone burning bio-fuels made in their county’s own ethanol still or bio-fuel plant? (By the way, how many ethanol stills are there in Tunica County?  I mean the legal ones, not those making moonshine.)

    Have you ever driven through Iowa? They literally have an ethanol still about every 30 miles. That’s just about your ratio of one per county. You should be like a pig in slop (Sorry, that’s an old Corn Belt metaphor — couldn’t help it)  at the idea of Iowa being corn ethanol self-sufficient with everyone getting motor fuel from their local still.

     

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  96. By Wendell Mercantile on August 31, 2010 at 11:22 pm

    We should mandate all cars sold in the US be able to burn E-85.

     

    Only if the ethanol industry pays the extra little bit of cost of making them. That’s the least the ethanol industry should want to do to expand their market for E85.  I’d think the ethanol industry would be anxious to do that.

    I also still want to know why the ethanol industry and Big Corn haven’t developed conversion kits to make regular cars flex-fuel. And why they don’t then offer to install those kits on cars at little or no cost to the consumer. Seems that’s the least they could do to entice us to burn E85.  

    It’d be sort of like the old days when cigarette companies had salesmen stand across the street from high schools giving away little boxes of cigarettes and free lighters.

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  97. By Mac on August 31, 2010 at 11:33 pm

    What ? what ? what ? Bryce is just a journalist, Wow ! He’s no better than Thomas L Freidman,

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  98. By ronald-steenblik on September 1, 2010 at 1:50 am

    Rufus wrote:

    Why are we Importing wine from France, when we produce very good wines in California?

    I gather you are not a wine drinker, Rufus. Wines differ in taste according to grape variety, the soil in which they are grown, local climate, etc. People like variety. France and Italy each produce around 5.0 million tonnes of wine a year; the United States, with five times the population (though with a per capita wine consumption about one-sixth of France’s) produces around 2.3 million tonnes (Source). So, the two countries consume about the same amount in total, but France produces twice as much as the United States. Ergo, France is a large net exporter, and the United States is a net importer. It’s called comparative advantage.

    By the way, a lot of France’s wine is produced very near a port (Bordeaux), and can be shipped by sea at low cost (and low carbon footprint) to the U.S. eastern and Gulf coasts. California wine has to be transported to the eastern U.S. markets by more expensive rail or trucks, or by ship via the Panama Canal.

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  99. By paul-n on September 1, 2010 at 2:49 am

     

    We should cut Rufus a bit of slack here – he has, after all, gone this entire thread without once mentioning the Buick Regal.

    I wonder if that is because now that it is actually on sale,  GM makes absolutely no mention about ethanol/flex fuel in its sales information for this car – is it no longer flex fuel?  There were a flurry of announcements back in May, but now, nothing.

    If it can indeed achieve the mileage on E85 that it does on gasoline, I’m sure they would be saying something

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  100. By Mac on September 1, 2010 at 4:23 am

    Robert,

    Denise Bode does NOT make an ad hominem argument against Bryce. She mentions the fact that Bryce in t his op ed piece contradicted published, and well-known government statistics. She attacked Bryce’s scholarship.not his persona.

    If she had said Bryce is an adulterer and therefore you can’t trust anything Bryce says, then Denise Bode would be making an ad hominem argument.

    An Ad Hominem is a general category of fallacies in which a claim or argument is rejected on the basis of some irrelevant fact about the author of or the person presenting the claim or argument.

    That’s OK Robert, I understand,
    You are reviewing Bryce’s book.

    Mac

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  101. By rrapier on September 1, 2010 at 4:26 am

    Mac said:

    Robert,

    Denise Bode does NOT make an ad hominem argument against Bryce. She mentions the fact that Bryce in t his op ed piece contradicted published, and well-known government statistics. She attacked Bryce’s scholarship.not his persona.


     

    She spent the first minute or so of the clip trying to paint him as a mouthpiece of Big Oil. That is an ad hominem. She fooled you into thinking he works for the fossil fuel industry. That was of course the intent: Question the guy’s associations, which will then hopefully have the reader questioning his argument merely on the basis of her claimed associations.

    RR

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  102. By Mac on September 1, 2010 at 4:49 am

    Fine Denise Bode said Bryce is a spokesman for big oil, I once accused President Clinton of being a spokesman for the Democrats.

    Max

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  103. By Mac on September 1, 2010 at 5:17 am

    Robert,

    Like I said, I once accused Clinton of being a Democrat.

    Besides, Bode took Bryce to task for his factual transgressions which you chose to ignore (except to blow her off).saying she was over the top and was arguing ad hominem.

    Big deal…. Bode said Bryce is a spokesman for fossil fuels So what ?

    Denise Bode is a self-confessed spokesman and lobbyist for Big Wind.

    Big Deal. None of this has anything to do with the facts.

    Mac

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  104. By Rufus on September 1, 2010 at 6:40 am

    As far as That goes, Robert, you accused me of, perhaps,” receiving a phone call,” and changing my opinion. Is that not an “ad hominem?”

    Paul, I don’t believe the 2.0 TDI engine is available until October, or November. You might be seeing the non flexfuel 2.4 L engine in those commercials.

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  105. By takchess on September 1, 2010 at 6:44 am

    RR
    off topic
    latest in termite gut stuff,I know this is of interest to you.
    http://www.greencarcongress.co……html#more

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  106. By Rufus on September 1, 2010 at 11:43 am

    Littlewally,

    I think he was probably being a touch sanguine with the 15% number, but the problem is: there is no real testing done by the manufacturers, or the EPA on ethanol mileage. If I understand this right, the EPA, basically, uses a “formula” (based on btu content, but Not taking Octane into consideration) to determine E85 mileage.

    As a result, all we, really, have is anecdotes. I think some Dodge Caravans get around 15%. The 3.5 L Chevy Impala does give up around 20% (this I know to be true, because I drive one.)

    The anti-ethanol forces have been so successful in their ethanol-disparagement campaign that I doubt that GM will make a big deal out of the increased ethanol efficiency of the 2.0L TDI engine right away. I expect that they will pitch the greater “performance” of the engine (a performance that is achieved using E85, btw,) and ease into the improved ffv efficiencey part.

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  107. By Michael Cain on September 1, 2010 at 10:08 am

    I also still want to know why the ethanol industry and Big Corn haven’t developed conversion kits to make regular cars flex-fuel. And why they don’t then offer to install those kits on cars at little or no cost to the consumer. Seems that’s the least they could do to entice us to burn E85.

    Among other reasons, because they can’t afford to assume the costs of the drive-train warranties such a conversion would void.

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  108. By Robert on September 1, 2010 at 10:15 am

    >California wine has to be transported to the eastern U.S. markets by more expensive rail or trucks, or by ship via the Panama Canal.

    The govermint should build a $4 billion wine pipeline to transport California wine to Iowa.

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  109. By doggydogworld on September 1, 2010 at 10:45 am

    Wendell Mercantile said:

    We should mandate all cars sold in the US be able to burn E-85.

     

    Only if the ethanol industry pays the extra little bit of cost of making them. That’s the least the ethanol industry should want to do to expand their market for E85.  I’d think the ethanol industry would be anxious to do that.


     

    This isn’t about expanding the market for ethanol. It’s about weaning our transportation system away from total dependence on oil bought in a global market controlled by people who hate us. It’s a national strategic issue. You don’t push that cost onto one small group. Should machine gun bullet manufacturers have to supply our armed forces with donated guns to build a better market for their product?

    It’s silly to apply free market logic to imported oil. The global oil trade is dominated by a cartel which would be illegal under US free market laws. This cartel’s very existence is devoted to subverting the free market forces of supply and demand. As long as we build cars which run exclusively on the cartel’s product we put ourselves in a position of servile dependence. Only by forcing oil to compete with other forms of energy can we break the cartel.

    I’d much rather we build cars that can run on wind, nuclear, coal, hydro and natgas. That would give us true fuel flexibility. Make OPEC compete against fuels which cost 90% less and emit no CO2. But battery technology, while promising and worthy of support, is too immature and expensive for a full roll-out today. FFVs are mature and dirt cheap, though. The flexibility they offer is severely limited and sub-optimal, but it still beats completely locking ourselves into utter dependence on a cartel.

     

    But the technology for that is too expensive.

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  110. By LittleWally on September 1, 2010 at 10:53 am

    Valero has only indicated it will be installing E85 at its ‘new’ stations “as they are built”, not retrofitting their current 1000+ stations.  They say they will install more to ‘fill demand’, so I’d expect they’d be evaluating their first dozen or so E85 pumps and see if there really is sufficient demand. 

    Are there any case histories out there of any gasoline marketer who can say they are selling enough E85 to be profitable?  If there were, I’d sure think the E85 advocacy groups would be touting them constantly. 

    Minnesota has had an E10 mandate since ~1989, and a new E20 mandate is supposed to start Jan 2013.  That doesn’t necessarily mean a universal E20 blend (although it could end up being that), but maybe a mix of E10 + whatever and E85 so that 20% of annual gasoline fuel use is ethanol.  They are doing their own studies in addition to the DoE and EPA studies to see what kinds of compatibility, emissions etc issues there might be.

    Buick Regal is a great car, and the FFV version was supposed to be in country by ‘late August’ according to GM’s earlier statement.  But I agree with Paul that if it could do what Rufus expects it to do, we’d be seeing a whole lotta PR about it by now in the vehicle blogs and from the ethanol industry.  As far as I know, the only statements about it are as follows:  “According Jim Federico, vehicle line executive for the global midsize platform, combining direct injection and turbocharging will allow the new engine to get much closer to the volumetric fuel efficiency of gasoline while running on ethanol. Until now, normally aspirated flex-fuel engines typically have gotten about 15 percent worse fuel efficiency on ethanol. The Regal engine should cut that deficit to the mid-single digits and future versions should be just about even.”  Don’t know why he thinks that the current mileage penalty is only 15% versus EPA and DoE experiments that show it to be 26%.  It won’t be long until we’ll know for sure.

     

     

     

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  111. By ronald-steenblik on September 1, 2010 at 11:05 am

    Robert (not Rapier) said:

    The govermint should build a $4 billion wine pipeline to transport California wine to Iowa.

    Now there’s an idea!

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  112. By ronald-steenblik on September 1, 2010 at 11:51 am

    Rufus wrote:

    [T]here is no real testing done by the manufacturers, or the EPA on ethanol mileage. If I understand this right, the EPA, basically, uses a “formula” (based on btu content, but not taking octane into consideration) to determine E85 mileage.

    Rufus, do you have an authoritative source for that claim: a link to an EPA document, for example? I am not arguing that you are wrong, but it is a pretty important point if it can be substantiated.

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  113. By Kit P on September 1, 2010 at 12:38 pm

    Following RR’s theory, California could increase the market for grapes by using the ethanol to fuel cars.  Aside from a good marketing campaign, the is the best use for California wine.  It is like California’s cheese marketing campaign for happy cows .  How do you know when you are near a California CAFO?  Your eyes are watering and you have thankfully lost your sense of smell!

     

    I have lived in California, Spain, and Washington State.  Generally I prefer a local wine which is why I would buy a Spanish red table wine one when I lived in California.  Washington State has better reds too.

     

    As Ron suggests it is a matter of personal taste.  One local joke about the local red wine was that it was only suitable cleaning engine blocks.  You would see kids pulling a small wagon with a 5 gallon refillable bottle over to the bodega.  A fill up cost a 25 cents.  A good bottle Spanish red table wine cost $1 but was from a different region, Rioja. 

     

    As long as ethanol has to be shipped to a blender, it does matter where it goes from there.  It is like putting electricity into the grid.  Electricity does not come out with label 10% wind. 

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  114. By paul-n on September 1, 2010 at 12:38 pm

    Rufus, I was actually going through GM’s US and Canadian websites.  Even under the “future cars” section, where they have the 2L turbo Regal, there is no mention of ethanol.

    For an example of a model release where they are serious about ethanol, look at this one from GM’s Australian division, Holden, for their new Commodore (Impala sized range) – includes this example of how to make a pick up aerodynamic;

     

     

    The “fuel efficiency pdf’s” have a lot of information,but  there are still no explicit figures of the fuel efficiency when running on E85 compared to E10.  You can imagine the performance of these vehicles with the 6LV8 option!

    I cannot believe that for the million’s of FFV’s produced, the CAFE rules and ethanol exemption, and a tens of billion dollar industry in ethanol, that they do not do official testing on E85.

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  115. By Perry on September 1, 2010 at 12:49 pm

    The world’s population is expected to rise 40% in the next 40 years. Supplies of basic commodities, including fresh water, are tight already.

    MAPUTO, Mozambique – Young men angry over the rising cost of food, fuel and water rampaged through Mozambique’s capital Wednesday, throwing stones, looting shops and drawing police fire that killed at least seven people.

    http://news.yahoo.com/s/ap/201…..e_protests

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  116. By rrapier on September 1, 2010 at 1:10 pm

    Besides, Bode took Bryce to task for his factual transgressions which you chose to ignore (except to blow her off).saying she was over the top and was arguing ad hominem.

    I don’t know whether the “transgressions” are factually incorrect or not. I haven’t looked into the claims either way (and have not gotten that far into the book). So my “blow off” is just because I don’t know. But I do know she spent quite a bit of the clip dramatically claiming that Big Oil was behind all of this.

    Big deal…. Bode said Bryce is a spokesman for fossil fuels So what ?

    It’s factually incorrect. I think it is a pretty big deal when the person you are debating misrepresents your position. I have had it done to me on a number of occasions, so I can sympathize.

    RR

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  117. By rrapier on September 1, 2010 at 1:18 pm

    Rufus said:

    As far as That goes, Robert, you accused me of, perhaps,” receiving a phone call,” and changing my opinion. Is that not an “ad hominem?”


     

    I am trying to explain a sudden 180 degree shift in your position. There aren’t many explanations for it; that is one.

    But what if I opened up my rebuttals to you by saying “As we know, Rufus is a spokesman for ethanol. His opinions can’t really be debated, because he is going to defend ethanol against any criticisms, even those that are overwhelmingly legit because that’s what he is paid to do.” I am certainly trying to poison the well.

    I decided a long time ago that 1). You are likely an ethanol lobbyist; 2). It didn’t matter. On point 2, however, if you start to argue a really irrational point, or show a very fast shift in your position, I think (1) easily explains that.

    RR

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  118. By Rufus on September 1, 2010 at 1:21 pm

    No, Ron, I don’t have verification of that. I’ve read it a few places. I’m pretty sure that Outlaw1 (he lists his real name, but I forgot it – it’s Phil something,) who posts at e85vehicles.com stated as such. That’s important, because, in several years, I’ve never known him to post anything that was inaccurate. I’ll try to find some authentication for that in the next couple of days.

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  119. By rrapier on September 1, 2010 at 1:26 pm

    Kit P said:

    Following RR’s theory, California could increase the market for grapes by using the ethanol to fuel cars.  Aside from a good

     


     

    There is a great deal you do not comprehend. My “theory” is clearly one if you think the above is an apt analogy.

    As long as ethanol has to be shipped to a blender, it does matter where
    it goes from there.  It is like putting electricity into the grid. 
    Electricity does not come out with label 10% wind.

    Of course that isn’t true. You are clearly unaware of this, but blended ethanol can’t be pipelined in our current pipeline infrastucture. So the “blender” that Iowa would have to get it to for California distribution would be in California. You obviously haven’t grasped that point with your electricity analogy. What did you once say about people talking when they don’t know what they are talking about?

    RR

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  120. By russ-finley on September 1, 2010 at 1:50 pm

    I interpret Robert’s article as a thought exercise, not a serious proposal for legislation.

    Continuing in that vein, any given region that switched to ethanol would subject themselves to the price swings associated with both corn and the fossil fuels used to fertilize and harvest it.

    Ethanol presently costs more than gasoline. Without a subsidy, this is when oil companies that are mandated to blend ethanol start to lose money and begin subsidizing corn ethanol.

    “Ethanol may continue to rally as corn, a main feedstock for the fuel, rose to a 14-month high of $4.455 a bushel today on speculation U.S. grain demand will increase after Russia halted exports amid its worst drought in half a century.”

     Source

    Corn ethanol competes for arable land. It’s price is tightly linked to food speculation. If (and when) food processors outbid fuel producers for the same feedstock, you will get more ethanol refinery failures:

     “…an uproar has begun over the subsidies Pacific Ethanol is set to get from the state’s new budget. Critics say that the alternative fuels fund is meant to help support new technologies that a need a boost to market, not to bailout corn ethanol plants.”

    Source

    VeraSun wants farmers to pay them back as part of its bankruptcy plan:

    “Got my letter yesterday. They want my money back for the corn I sold them 3 months before they filed… I don’t know about everybody but my corn was contracted 2 months before the 90-day period. We delivered the corn got payed like we have on earlier contracts. Now they want it back.”

    Source 

     

     

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  121. By Rufus on September 1, 2010 at 9:56 am

    What did Einstein say? “Things should be made as simple as possible, but now simpler.”

    I don’t think I’ve changed my thinking. As I said, I’m ambiguous about the pipeline. I do think more work, from all involved, should be put into promoting E85 (and, other higher blends) in the Midwest.

    Many of the prior comments, however, were overlooking the practical constraints as they exist, today. There Is a history, and there Are consequences of that history. The oil companies, and a few of their mouthpieces in the “environmental” movement have been hammering on ethanol for years. UL, for reasons they haven’t disclosed, Did choose to hold back certification for E85 pumps since, when, 2007 (?) in spite of all the accrued evidence, both here, and in Brazil.

    And, quite honestly, many of the refineries, and their lobbying group, RFA, have been as worthless as teats on a boar hog as regards E85, and higher blends.

    And, the auto manufacturers haven’t done such a hot job, either. Initially, it was a CAFE dodge. They adjusted the CRU to allow the big V8 engines in the PUs, and SUVs to operate, minimally, on higher ethanol blends, never really expecting anyone to use the stuff. Only recently have they actually started thinking about making some of their engines true Flexfuels.

    So, there’s a lot of baggage, here. When some posters started espousing silly ideas about requiring all vehicles in Iowa to run on E85, and so forth, I got a little sarcastic.

    Anyway, as I’ve stated before, the deal from here on out is largely independent of what is said, or written, or what the gummint does, or doesn’t do, or whatever. Mr. Market is starting to take control, now. From here on out it will be pretty much a matter of “Gasoline Prices, Gasoline Prices, and The Price of Gasoline.”

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  122. By paul-n on September 1, 2010 at 3:34 pm

    Interesting stuff from Russ.

    At $4.55/bu for corn, and 2.65 gal of EtOH per bu, that is $1.67/gal for the feedstock, and with the ethanol price now at $1.95, they have an operating margin of 28c, though it was as low as 18c back in August.

    Not a lot to pay for the capital, natural gas, staff  etc needed to run a distillery – no wonder some of them are bankrupt.

    Just as other countries can (and are) outbidding the US for oil, they can outbid the ethanol industry for corn.  Good for the corn farmers though.

    There must be a reason, though I don;t know what it is, why the distillers do not buy gasoline and blend it into ethanol themselves, to sell their product as E85.  Then they can claim the tax credit, not the oil companies.  They can also sell some/all the product directly to consumers, by passing the middleman of the oil companies – which is in itself a good argument for the fuel being used where it is produced.

     

     

     

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  123. By Oxymaven on September 1, 2010 at 5:01 pm

    Since there have been a number of comments about wine and ethanol, you might be interested in knowing that it’s not uncommon for surplus wine (even good wine) to be distilled into fuel grade ethanol.

    RE FFVs and mileage penalty, the DoE ORNL group has lab tested a number of FFVs and found all suffer a 25-30% mileage penalty. They have also looked at the Saab biopower inside and out, and as I recall, if they tune it to be optimized for E85 there was some improvement in the mileage penalty (e.g., instead of 25% reduction, only a 20% reduction), but then there was a 33% decrease in power when using gasoline. So it’s not really a ‘flexible’ fuel vehicle then.

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  124. By Rufus on September 1, 2010 at 5:23 pm

    Except, Paul, that’s not the way the numbers really work out. The ethanol refinersa are paying about $4.05 for their corn (they buy from the farmers’ today, not from the CBOT in Dec.)

    http://news.ncgapremium.com/in…..&mid=7

    Also, they’re getting, probably, about $1.25 of DDGS for every bushel, plus, maybe, $0.25 of corn oil, and about 1/3 of them are selling their CO2 (about 17.5 lbs.)

    And, they’re getting closer to 2.9 gallons of ethanol, on average (Poet gets 3 gallons/bu.)

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  125. By Rufus on September 1, 2010 at 5:26 pm

    You’re right, Oxy. The only “Production” Flexfuel, to date, that I’m aware of will be the Regal with the 2.0 TDI.

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  126. By paul-n on September 1, 2010 at 6:09 pm

    Thks Rufus, I couldn;t find what the DDGS were worth – clearly, if you can;t recover their value, you are not going to be very profitable.

     

    I have said before that the real problem with flexfuels is that by needing to maintain the ability to run on regular gasoline (E10-E0), you give up the high compression operation that is possible with E85-E100.     If you turbo boost it enough, you do get the effective compression up in to the teens, like the Ricardo engine.

    A more efficient way still is to just have a car with a diesel engine, set up for co fuelling with ethanol, that would be a truly efficient flex fuel, with the best of both worlds.  Unfortunately it would also come with the expense of both worlds too, especially since you then need the expensive diesel emissions control gear.

    BUt given that ethanol specific engines can use much less btu/mile than gasoline engines, that is how ethanol can displace the most oil – if the drivers are prepared to give up gasoline altogether.  For anything outside of a dedicated fleet, there is no point, at present.

     

     

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  127. By paul-n on September 1, 2010 at 6:49 pm

    I have finally found a good American study on using ethanol in diesel engines.

    http://www.afdc.energy.gov/afd…..dy_adm.pdf

    This was done by NREL in the early ’90′s on a fleet of highway trucks owned by – Archer Daniels Midland!

     

    They ran on E95 (5%gasoline, not diesel) upped the compression ratio from 18 to to 23:, and added glow plugs for cold starting.

    The average fuel economy was about 8% less than diesel, though one of the four trucks was within 2%, so maybe the drivers had some influence.   They had some trouble with glow plugs, and injectors gumming up – problems which have been solved in todays flex fuel cars.

    Emissions were reduced for NOx and PM, but increased for HC and CO, though all within the limits of the day.

    Back then, wholesale cost for ethanol was $1.18/gal, and even then got a $0.51/gal tax credit!

    Not surprisingly, even with tax credits,  ethanol was not cost competitive with the diesel fuel, which was, in 1992, all of $0.58/gal !!

    So, 20yrs later, ethanol has gone up by 50%, diesel by about 500%, we still have a tax credit, and ethanol is still not being used in diesel engines.

    With emissions standard for PM10 and NOx getting tougher each year, this looks like a good way to meet them.

    The technical problems experienced back then have largely been solved, but no one, including the ethanol industry, seems to be making any efforts in this direction.

    I would think this would absolutely be worth trying this again.  After all, once the problems are solved, they’re solved forever.  If the price of oil goes up faster than ethanol, it gives the nation’s farms, trucks and trains a way to keep their costs down, and keep oil money in the country instead of out.

    For two decades of flex fuel development, lots of technical trials and successes, and tens of billions in ethanol subsidies, moving ethanol all over the continent, all we have is ONE variant of ONE vehicle that is about to be released, that is optimised for ethanol.   

    I always come back to the conclusion that the whole ethanol industry, while it has the potential to be a serious oil substitute, is more (entirely?) focused on increasing their mandates and tax credits, instead of increasing the usefulness of their product..  Nothing explicitly wrong with doing that, they are a for profit industry, and can game the system to maximise returns for minimising effort.  BUT the reason they are subsidised by the fed government is for the purpose of displacing oil imports.  If there are more ways that ethanol can replace more gasoline/diesel than it is today, then they should be working, seriously, on them.  If they are not then they do not deserve either their tax credit or blend mandate – the money should go to other areas/initiatives that are serious about maximising oil reductions.  The country has neither the time nor the money to waste on an industry that is not prepared to make itself as useful as possible.

     

     

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  128. By Charles Powars on September 1, 2010 at 7:03 pm

    Paul: These were 2-stroke cycle diesel engines that haven’t been available for sale for on-road applications in the US for the last few years because there is no hope of making them comply with current EPA and CARB emissions regulations. They used a variation of the modifications DDC developed for the methanol 2-stroke diesels that powered a hundred-plus buses and a a few trucks in California in the 1980s. These modifications (e.g., bypass air control) enable 2-stroke diesels to run on low-cetane alcohols with minimal glow plug assist, but they aren’t applicable to the 4-stroke diesels now used for all on-road and most off-road applications.

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  129. By rrapier on September 1, 2010 at 7:11 pm

    Interesting comments, Paul and Charles. I was going to say that this looks like good material for a post. Isn’t Scania using ethanol in diesel engines? Do you know any details there Charles?

    RR

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  130. By Rufus on September 1, 2010 at 7:44 pm

    Paul, to optimize an engine for ethanol you have to (1) Increase the Compression, and (2) Reduce the Displacement.

    The Variable Geometry Turbocharger addressed number 1 (that’s about as far as the Saab Biopower got,) but that left (2.) The answer there turns out to be that Ethanol allows much more aggressive EGR (exhaust gas recirculation.) Sucking more of the inert exhaust gas back into the cylinder has the same effect, I assume, as reducing the displacement of the engine.

    Of course, with VVT the amount of EGR can be “tuned” on the fly, as it were. Under heavy acceleration the amount of EGR can be tuned back, to zero if necessary, and the Fuel poured to it, all the while dialing up the turbo to cram in the air, and raise the “Compression.” Voila, 220 HP out of an engine that a few moments before was pushing a fairly heavy sedan around to the tune of 25 mpg.

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  131. By Wendell Mercantile on September 1, 2010 at 8:56 pm

    I always come back to the conclusion that the whole ethanol industry, while it has the potential to be a serious oil substitute, is more (entirely?) focused on increasing their mandates and tax credits, instead of increasing the usefulness of their product..

    Very perceptive Paul. If the ethanol industry really wanted to grow by increasing the market for ethanol, corn farmers and the ethanol industry would be pioneers in using those E95 diesel engines ADM experimented with in the 1990s. Thank you for finding this and exposing the ethanol industry for what they are.

    The ethanol industry and Big Corn have no business asking for a flex-fuel mandate for cars until every tractor and corn picker in Iowa is running on an E95 diesel engine.

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  132. By Wendell Mercantile on September 1, 2010 at 9:04 pm

    I also still want to know why the ethanol industry and Big Corn haven’t developed conversion kits to make regular cars flex-fuel. And why they don’t then offer to install those kits on cars at little or no cost to the consumer. Seems that’s the least they could do to entice us to burn E85.

    Among other reasons, because they can’t afford to assume the costs of the drive-train warranties such a conversion would void.

    —————————————————————————

    Michael,

    Then that means the ethanol industry either has no vision and guts, or that our legal system has become so litigious and complex that companies can’t do even simple, straight-forward things to grow their markets.Embarassed

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  133. By paul-n on September 1, 2010 at 9:17 pm

    RR/Charles, 

    Quite so about the good old 2 strokes, but, that doesn’t mean we can do it again with modern engines – Scania has been doing it for almost 20 yrs.

    From Scania in 2007, when supplying ethanol buses to Brazil;

    “Scania recently unveiled its third-generation ethanol engines, which have the same thermal efficiency as a regular diesel engine and meanwhile are certified for both Euro 5 and EEV standards. Euro 5 becomes compulsory in the EU in October 2009.”

    Now, the Euro V standards are less stringent than the current US ones, though Euro VI, due in 2003, is the same (good summary of emissions rules here) so Scania is likely working on this.

    Also from Scania, they up to 43% thermal efficiency from these engines on ethanol.  That’s even better than this testing by  the US EPA on running diesels on methanol and ethanol.  They got 40% efficiency on diesel, 41% on E100 and 42% on methanol, with much lower emissions, under the current US regss for diesel engines.  They were using  a modified VW Jetta engine with ordinary Flex Fuel vehicle catalytic converter – far cheaper than SCR systems!

    Interesting question – if a diesel engine runs on ethanol, only, is it still a “diesel” engine, for emissions standards?  I say this because the rules specify “diesel” engines – they haven’t contemplated alternative fuel engines yet, for road trucks.

     

     

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  134. By Charles Powars on September 1, 2010 at 9:20 pm

    RR: “Isn’t Scania using ethanol in diesel engines? Do you know any details there Charles?”

    As I indicated in my Reply #33, the addition of “ignition improvers” is one way to make low-cetane fuels work in diesel engines. This is what Scania is doing, along with other things like increased CR and EGR. Ignition improvers are usually organic nitrates or organic peroxides, which, when used as significant fuel fractions, introduce new problems while improving compression-ignition characteristics.

    While Scania doesn’t usually include these details in press releases, their ethanol fuel includes 5% by Vol. Beraid 3540, which is apparently a propylene glychole. I’m now way over my head with respect to chemistry, so I’ll stop here. Others with more chemistry expertise may be able to add or explain (e.g., cost implications).

    Interestingly, Scania has experimented with a “greener” ignition improver, rapeseeed methyl ester:

    http://epubl.luth.se/1402-1536…..827-SE.pdf

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  135. By Kit P on September 1, 2010 at 9:27 pm

    “our legal system has become so
    litigious”

     

    Wendell a process server is on the way to your
    house to sever you papers. The lawyers will think of a reason to
    take everything you own later.

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  136. By paul-n on September 1, 2010 at 9:43 pm

    Good find Charles.

    Rapeseed Methyl Ester, is of course, “biodiesel

    Interesting paper, and biodiesel is much cheaper than propylene glycol.  (I had also read that ethylene glycol (anti-freeze) also works as an ignition improver, but it too, is more expensive, and quite toxic)

    I like the EPA VW Jetta test engine because they didn;t need any additive at all, and the engine would still work using hydrous methanol/or ethanol. Their whole test engine was put together with various off the shelf car engine components – how easy is that to produce?

    As Rufus points out,  turbo charging and EGR make it work, and that’s what the EPA testing used.  BUt they got much better results than the Buick engine because they have a higher compression engine to start with.

    If we are going to move to high compression, turbo engines, I would much prefer ones based on diesel engine components than gasoline, as the longevity is much greater.

     

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  137. By Dave N. on September 1, 2010 at 10:48 pm

    An old topic from two posts ago: but Paul N. did the calculations of how much coal can be replaced with various biomass coming up with about 1/3 of our current coal use. Paul, I would say it is even worse as you used the heating value of the fuel and did not include boiler efficiencies. Based on the majority of coal fired generation (P.C.) being in the 30′s and up to electricity, and biomass being in the upper teens to lower 20′s, I would say you could roughly divide your number by 2: or 1/6 of the coal can be replaced. Yes, there are technologies to improve the effic. of biomass, but the extra cost is significant.

    I’ve done the numbers a different way for my company: if we wanted to replace all 46% of the nations electricity produced by coal with forest based biomass sustainably, how many acres would that take? Using historical average growth rates it works out to roughly 2x the entire land area of the US (lakes, deserts, farms, etc.)

    In other words, it’s not even worth discussing. I wish our policy makers in DC (I’m trying to be nice here) could follow the basic math of this fact and move on to the real solutions.

    Note that if we doubled the biomass effic. we’re still talking the entire US land area. Don’t forget that people own land for lots of reasons and cutting it is either way down that list of reasons for some people, or is out of the question completely for others. Are we going to mandate that every landowner must contribute their “fair share” of biomass for energy?

    Two afterthoughts: 1. Don’t get me wrong, I believe biomass is part of the solution, but probably for use in creating transportation fuels as this string is discussing. 2. If anyone asks for my calculations/assumptions I’d be glad to share; just note I’m slow in responding because I’m very limited in my chances to post.
    Dave

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  138. By Wendell Mercantile on September 1, 2010 at 11:05 pm

    Using historical average growth rates it works out to roughly 2x the entire land area of the US (lakes, deserts, farms, etc.)

    Dave N,

    There is historical precedent for that. In the 16th and 17th centuries in England, the people nearly denuded their country of trees, cutting them down for fuel and to make charcoal for their rudimentary glass factories and iron works.

    They were consuming very little energy by today’s standards, and yet did not have even enough bio-mass to support that fairly primitive lifestyle. About all the common people could do with firewood (when they could find it) was some cooking, and perhaps provide a little warmth in the dead of winter. They spent most of the long winter nights at the high latitudes of England in the dark — wrapped in robes, furs, and coarse wool blankets..

    Only when they started burning coal were they able to allow the trees to return and make England once more the green and pleasant land it is today.

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  139. By rrapier on September 1, 2010 at 11:09 pm

    Using historical average growth rates it works out to roughly 2x the entire land area of the US (lakes, deserts, farms, etc.)

    Hi Dave,

    That is similar to the story on biofuels. If you want them to displace a lot of oil, you run out of land area very quickly.

    RR

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  140. By paul-n on September 1, 2010 at 11:27 pm

    Hi Dave,

    I think you need to be very careful how you word this to those in DC – given their history of misapplying facts such as you present, here’s how I can see them reacting;

    1. OK, we need to use all the land of the US, and force everyone to grow biofuels

    2. We need the same amount of land again, with lots of forest – who has that?.

    3. US decides to annex Canada 

    4. Canadians don;t know what to do because they are not sure whether this is a bad or good thing – we get to do unlimited travel to the warm parts of the US, but will have no one to beat in hockey and can’t escape  US TV when we come home!

    Thankfully, we can rely on the gov not to do something as silly as invade another country just for its energy resources.

     

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  141. By Perry on September 2, 2010 at 1:37 am

    Half the land in the US is used to feed livestock. 800 million acres for grazing and another 200 million for stuff they like to eat. Corn, soybeans, alfafa, and barley.

    Compare that to the 13 million acres we use to grow all our fruit and veggies, or the 140 million acres encroached on by humans. I like beef as much as anyone, but HALF the country?

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  142. By paul-n on September 2, 2010 at 2:29 am

    @ Dave N;

    I would say it is even worse as you used the heating value of the fuel and did not include boiler efficiencies. Based on the majority of coal fired generation (P.C.) being in the 30′s and up to electricity, and biomass being in the upper teens to lower 20′s, I would say you could roughly divide your number by 2: or 1/6 of the coal can be replaced. Yes, there are technologies to improve the effic. of biomass, but the extra cost is significant.

    When we start to use such large numbers, we inevitably have to make equally large assumptions.  Yes, many biomass to electricity (steam based) plants are less efficient, but that is mainly because they are smaller.  There is no real reason why biomass plants can’t be as efficient as coal.  You can always torrefy the wood (uses 10% of its energy) and then you have a product that has very similar combustion and handling properties to coal (but is much cleaner).  

    Extra cost, yes, but if it were actually being considered on such a large scale, it would be worth it.

    In any case, no matter how efficiently it is used, biomass just can’t replace any one of the three fossil fuels, at their current level of use.  But there are places (and I live in one of them) where it can be a cost effective fuel for electricity generation, simply because there is so much of it lying around (or standing dead).  

    That said, I think there is much otherwise unproductive/abandoned land that can grow trees or other (perennial) biomass energy crops, where you just need heat value, not ethanol feedstock.  Yields are low, but so are the inputs and labor costs.  I know of several marginal farms in Australia that gave up on sheep and cattle and just grew trees (for woodchips/pulp).  They did complain that watching them grow was boring, but at least their bank accounts grew too, and was much less work, and risk.  One of them did a good sideline in farming kangaroos, (which are butchered and sold for meat same as bison is here) which gravitated to his “forested farm” – all he had to do was work out how to round them up!

    Turning woody biomass into liquid motor fuel is the dream, and its doable, but just not worth it until gasoline is $5/bl.  And when it is at/above that price, demand for it will have been forced back such that biofuels might be able to supply a good part of the demand.

    I’d be interested to see details of your company.  If you don;t want to show them publicy, register for this site and then use the internal email function.

     

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  143. By paul-n on September 2, 2010 at 2:54 am

    Perry said:

    Half the land in the US is used to feed livestock. 800 million acres for grazing and another 200 million for stuff they like to eat. Corn, soybeans, alfafa, and barley.

    Compare that to the 13 million acres we use to grow all our fruit and veggies, or the 140 million acres encroached on by humans. I like beef as much as anyone, but HALF the country?


    Perry, where did you get these numbers?

    From the USDA, in 2002

    Cropland (including set-aside), 442m ac (19.5%)

    Grassland/pasture/range 587m ac (25.5%)

    Forest 651m ac (28.8%)

    Urban 60m ac (3.1%)

    Other/special/reserve 564m ac (23.2%)

     

    Not all of the range is cattle, and not all of the cropland is cattle feed – I would guess the total is easily less than a quarter of the country.

    Cattle on grassland can be efficient – they do the biomass collecting and conversion for us, on land that is too marginal for much else (except perhaps biomass crops).

    After all, before man came along the plains bison owned almost all the country.

     

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  144. By John Gear on September 2, 2010 at 4:15 am

    Robert Rapier said:

    Mac said:

    Robert,

    Denise Bode does NOT make an ad hominem argument against Bryce. She mentions the fact that Bryce in t his op ed piece contradicted published, and well-known government statistics. She attacked Bryce’s scholarship.not his persona.


     

    She spent the first minute or so of the clip trying to paint him as a mouthpiece of Big Oil. That is an ad hominem. She fooled you into thinking he works for the fossil fuel industry. That was of course the intent: Question the guy’s associations, which will then hopefully have the reader questioning his argument merely on the basis of her claimed associations.

    RR


     

    Sorry RR, an allegation of bias due to personal interest is not an ad hominem attack.  Saying that his mother is ugly as sin and that he inherited all his looks from her is ad hom.  Saying that he’s got a personal interest that distorts all his thinking is simply another way of attacking his credibility — compare, “I love Robert Redford’s movies, and really value his contributions to independent films, but he’s taken so much money from wind turbine makers that you can’t rely on anything he says about climate change, because he’s just feathering his own nest and seeking subsidies for his wind interests.”  Say nice things about him, but attack him as biased (a mouthpiece for wind) — see the difference?

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  145. By Kit P on September 2, 2010 at 9:25 am

    The good news is:

     

    Urban 60m ac (3.1%)

     

    This happens to be where 99.99% of the people live that think the planet is being destroyed.  

     

    After all, before man came along the plains bison owned almost all the country.

     

    Thirty million thundering across the plain in great herds and not one EIS.

     

    You can still  see buffalo many places including the site of the huge prehistoric Lake Missoula.

     

    http://www.nature.nps.gov/nnl/…../index.cfm

     

    I know of environmental activist who live on the mud flows of active volcanoes.  They like to talk about the scaring and erosion caused by man but they are pretty much clueless about the environment they live in and how it got that way.  

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  146. By Wendell Mercantile on September 2, 2010 at 10:21 am

    …the huge prehistoric Lake Missoula.

    You mean there was once a huge lake in western Montana, Idaho, and eastern Washington and our ancestors let it dry up? I guess they weren’t very environmentally sensitive, were they? Too bad there wasn’t a government agency back then to stop that or we would still be enjoying the waters of that vast lake.

    Al Gore’s timing is plum awful, he should have been around 15,000 years ago. He probably could have also done something back then to stop the thick glaciers that once devastated and wreaked havoc over the fertile area where I now live.

    According to what I’ve read, ice almost 5,000 ft thick made much of the upper Midwest and Northeast absolutely inhabitable 12-15,000 years ago. Obviously a lack of government oversight.

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  147. By Wendell Mercantile on September 2, 2010 at 10:59 am

    Interesting question – if a diesel engine runs on ethanol, only, is it still a “diesel” engine, for emissions standards?

    That’s an excellent question Paul. Same question also applies to dimethyl ether (DME). Do compression ignition engines burning E95 or DME (easily synthesized from methanol) have to meet the same emission standards that engines burning No. 2 diesel fuel have to meet?

    If anyone from the EPA scans this blog can you jump in with an answer?

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  148. By Rufus on September 2, 2010 at 11:16 am

    An ad hominem, also known as argumentum ad hominem (Latin: “to the man”), is an attempt to link the validity of a premise to a characteristic or belief of the person advocating the premise.[1] The ad hominem is a classic logical fallacy.[2] The argumentum ad hominem is not always fallacious, for in some instances questions of personal conduct, character, motives, etc., are legitimate and relevant to the issue.[3]

    So, an Ad Hominem argument is not, necessarily, a “fallacious” argument, but It Is Still and “Ad Hominem” argument.

    If I say, “RR, who is an ex-Conoco employee, and who is working on a competing technology, thinks the enzymatic process for extracting ethanol from biomass is a flawed process, I AM making an Ad Hominem Argument.

    It may be valid. It may be relevant. It may even be important. But, it’s still an ad hominem argument.

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  149. By Wendell Mercantile on September 2, 2010 at 11:20 am

    Rufus~

    If I attribute some ridiculous argument you’ve made to having had a bad day at the Hollywood Casino in Tunica would that be an ad hominem attack?

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  150. By russ-finley on September 2, 2010 at 12:54 pm

    Paul N said:

    BUt given that ethanol specific engines can use much less btu/mile than gasoline engines, that is how ethanol can displace the most oil – if the drivers are prepared to give up gasoline altogether.  For anything outside of a dedicated fleet, there is no point, at present.

     

     


     

    Those are all good points, Paul. Roughly 50% of the cars in Europe are diesel, but only about 2% here in the States. Americans have favored the quieter, cheaper, and cleaner gasoline cars because fuel costs so much less here.

    The new TDI cars are pretty quiet and thanks to the low sulfur fuel supply, they can now also meet air pollution standards. The Jettas cost only a few grand more than the Prius, although they still rank lower on reliability. Certainly, they would cost even more if they had the ability to burn ethanol and diesel but the usual reasons for not buying them are fast disappearing.

    Engine systems are designed around fuel supply, not usually a “potential” fuel supply. Corn ethanol cannot scale. Cellulosic is not economically viable and is not likely to ever be so. Importing cane ethanol defeats the independence argument, which I don’t buy in the first place. We don’t know what will win the race against the government backed competition.

    I have a friend who bought a Jetta to burn biodiesel in. She ended up paying $2,600 for a new pump. The mechanic at the dealership said that biodiesel was the culprit so she stopped using it. The 2009 Jetta is only warrantied for 5% biodiesel .

    With the new battery technologies, electrification of transport is proving to be a cheaper way to gain efficiency. A diesel hybrid might be very efficient, but also very pricey, as you know. And, I’m not sure how well it would work. You would need a heavier lead acid battery and starter to get the engine going (which is also heavier), which turns itself off and on repeatedly in city traffic, and needs to recharge the battery every time it uses it.

    My older car would not start yesterday. No spark to the ignition. As I stood there looking at all of the crap that could be causing the problem (a broken wire to the coil)  I vowed to buy a Nissan Leaf next year once the early adopters have flushed out any major problems. We are a two car family. The other car can be used for long trips, which is a hybrid and still gets a solid 40 mpg with a cargo carrier on the roof going over mountain passes.

    Imagine what airline travel would be like today if the jet turbine had never been invented.

     

     

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  151. By Kit P on September 2, 2010 at 2:29 pm

    “Obviously a lack of government oversight.”

     

    It must have been the herd mentality!

     

    I think it acceptable mitigation strategy to manage natural pollution.  There is a possibility of unintended consequences.  Some species thrive on the waste of other species.  There was an experiment with adding fertilizer to pristine salmon spawning area.  In the past, dying salmon carcasses would feed bacteria and so forth and so on.  When salmon would hatch, the little critters would eat other little critters.

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  152. By paul-n on September 2, 2010 at 3:39 pm

    Thirty million thundering across the plain in great herds and not one EIS.

    Well, you know someone had to do an EIS sooner or later – turns out, the wandering herds are (or were) the best thing for the grasslands;

    http://seedmagazine.com/conten….._Pastures/

    Yep, having animals on that land actually improves it, if they are managed to emulate herd activity.

     

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  153. By Nick G on September 2, 2010 at 3:49 pm

    Wouldn’t you agree that the price of oil and gasoline ought to be much higher in the US? After all, there are large external costs that aren’t captured in the price right now: oil wars, pollution, spills, etc, etc?

    If the price of gas were to, say, be twice as high, wouldn’t ethanol be more than competitive? After all, diesel is only about 20% of the energy inputs to ethanol – most of ethanol’s energy inputs have prices that are decoupled from the price of oil: nat gas and coal. Right now BTUs from nat gas are roughly 40% as expensive as oil BTUs, and coal BTUs are even cheaper, perhaps 20% (of course, everyone would prefer nat gas to coal to minimize CO2, but it seems likely to be used to some degree). Even if nat gas and coal prices were to double along with oil (unlikely, given the supplies of both), there would be a wide margin to make ethanol more than competitive.

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  154. By paul-n on September 2, 2010 at 4:43 pm

    Russ,

    Too bad about your friend and her Jetta – she would have ben fine if she had an older one, but the high tech and expensive common rail injection systems are not very tolerant of impurities.

    Here’s a website from a guy who has an older one, and takes his fuel consumption very seriously;

    http://www.stealthtdi.com/

    His lifetime average for 330,000 miles is 44mpg = roughly double the passenger fleet average, and almost as good as a prius!

    The oldstyle diesel could run on almost any “oil” as long as you started them on diesel, and stopped them on diesel.  I once read about an army tank (German WW2 by memory), that could, if needed, run on it’s own engine oil.  You got about 20-30 minutes before the engine seized, but if it got you out of trouble then…

     

    And as for this;

    imagine what airline travel would be like today if the jet turbine had never been invented.

    Well, for one thing, air travel would likely be more fuel efficient than it is today, but slower and shorter trips.  

    Take a look at this report on the history of airline fuel efficiency.  Lots of good stuff in there, but I think this graph sums it up best;

     

    ASK is Available-Seat Kilometres, the default metric for fuel efficiency.  Amazing that it took 50 years to get back to being as efficient as the Lockheed Constellation of the 50′s!

    Of course, we get to go faster, further, higher etc, but we probably also (now) get worse service and worse food than the passengers back then!

    Interestingly, they found that the Airbus A380 could have been made 10% more efficient if it’s wingspan was wider.  But they didn’t do that for practical reasons as it would be too wide in the gate areas at many airports!

    Bombardier is selling lots of it’s Q400 turboprops now, as they are unbeatable for short haul routes, and under 200miles that are actually faster than jets (don’t have to climb as high).

    Still, given the advances in piston engines, aerodynamics, materials etc, one wonders what a modern version of the Constellation would achieve.

     

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  155. By Wendell Mercantile on September 2, 2010 at 5:26 pm

    Interestingly, they found that the Airbus A380 could have been made 10% more efficient if it’s wingspan was wider. But they didn’t do that for practical reasons as it would be too wide in the gate areas at many airports!

    But they could have made the wing tips fold up as they do on Navy jets. Would have cost a bit more to build, but in the long run would have been worth the effort — and fuel savings.

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  156. By rrapier on September 2, 2010 at 6:07 pm

    Nick G said:

    Wouldn’t you agree that the price of oil and gasoline ought to be much higher in the US? After all, there are large external costs that aren’t captured in the price right now: oil wars, pollution, spills, etc, etc?


     

    I absolutely agree:

    http://www.consumerenergyrepor…..-planning/

    One of the problems we have is that cheap energy has resulted in a very high level of dependence. As the market makes energy more expensive, it causes great economic hardship for people. If the government proactively made energy more expensive to reflect the externalities and the risks of excessive dependence, it could be done in a way that would be far less regressive than simply allowing the market to do it.

    RR

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  157. By paul-n on September 2, 2010 at 6:57 pm

    Wendell, Airbus did actually consider that and dropped the idea deeming it “an unneccessary complication and expense”  They were trying to make the wings smaller than they are today, but decided that airport expansions would accomodate them – and they were right.  There are now two types of international airports – those that can take an A380, and all the others…

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  158. By paul-n on September 2, 2010 at 7:46 pm

    If the government proactively made energy more expensive to reflect the externalities and the risks of excessive dependence, it could be done in a way that would be far less regressive than simply allowing the market to do it.

    The key is to make the monthly cost “affordable”, but to have high unit costs to encourage efficiency.  These seem mutually exclusive, but it can and is  commonly (though not universally) done in the water,  electricity and phone business through their rate structures.

    With “increasing block rates”, as use you use more of the commodity in any given billing period, the price goes up.  

    The idea is of, course, is to make the customer take pro active efforts to not get into that high rate tier, and if you stay in the low tiers your monthly bill is fine.  

    Consider this rate structure from Irvine Ranch Water Company in the LA area;

    Irvine Ranch Service Area Residential Water Rates (Potable)
    Monthly water service charge $8.00 (up to a 1″ meter)
      Tier Percent of Allocation Cost per ccf
    Commodity charge

    Low Volume 0 – 40% $0.91
    Base Rate 41 – 100% $1.21
    Inefficient 101 – 150% $2.50
    Excessive 151 – 200% $4.32
    Wasteful 201+% $9.48

     

    The “allocation” is based on 55gal/day/person for indoor use, and an outdoor allowance where appropriate (i.e SF houses, not condos).  The “ccf is one hundred cubic feet, or 748 gallons.

    So if you only use water indoors, at 55/gal/day you will only use 2.2 ccf/person and pay about $3/mo/person.  Move up through the tiers and the rate doubles, quadruples and then 8x, though $24/mo/person is still cheap.  So you stay out of those tiers unless you have a really good reason.  There are some homeowners who have their million dollar houses, and million dollar gardens, and use lots of water.  They have $1000mo water bills, and accept that as the price.  They are actually close to paying enough that you could make that water by ocean desalination, where you have unlimited supply, just very expensive.

    You can imagine the effect on driving (and carpooling, transit, walking, etc) patterns if gasoline prices were structured similarly;

    first 5gal/week $3

     5-10 $6

    10+ $12

     

    Unfortunately it is not nearly as simple to implement as for gasoline as for a single supply/single customer utility, but it could be done.

    Some national version of a gasoline fleetcard could be set up ( a modern version of wartime rationing), though it would need to be very carefully done.  I’m sure someone would write an iPhone app for that so you always knew where you were in relation to your allowance.

    Would also be very politically unpopular, at least at first, but it would probably be quite effective.  The revenue raised, should of course, be “given back” by some means – for example an Alaska style dividend to all people (incl children) and/or increasing the income tax free threshold level.

    One can imagine the political minefield in trying to determine what the allowances are for whom, (per person? or per family, vehcile, etc) but it’s really no different to setting tax rates.

     

    A final note, that top tier water rate of $9.48 per 100cu.ft of water is about equal to the average water+sewer rate in Portland and Seattle, and half the combined rate in Anchorage and Fairbanks (Alaska).

    If anyone wonders why southern California is running out of water they need look no further than how cheap it has been, and how hard it is to raise the rates.  A perfect example of RR’s cheap = dependence.

     

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  159. By paul-n on September 2, 2010 at 8:26 pm

    We can probably do a whole separate thread about pricing structures. This article just came out yesterday from Jeff Rubin, about gas taxes and the like in Denmark.

    100 to 180% tax on the value of your vehicle when you buy it! 

    Gasoline is about $US 7.20/gal  No wonder no one drives.

    The tax rate decreases if the vehicle gets better than 38 mpg, and if you could buy one with 82mpg the tax rate would be zero.

     

    Of course, this doesn’t mean Denmark got it right, they have among the highest income taxes in the world, 63% when you are over $70kUS!

     

    If I had a choice of high fuel tax or high income tax, I’d go high fuel, but not both!

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  160. By ronald-steenblik on September 3, 2010 at 3:25 am

    Thanks, Paul, for the fascinating data on the history of aviation fuel efficiency. Was familiar with the trajectory of jet engines, but not prop planes. (I love historical counterfactuals, and as a kid I was a great fan of the Consetellations. Never flew one, but admired them from the outside; several were parked at the airport near where I grew up.)

    Just to warn everybody, the airline industry constantly refers to the progress they have made in fuel efficiency since 1960, and always refer back to the DH Comet 4. Yet it is clear (see Figure 1, here) that much more popular jet planes, such as the Boeing 707-120B, were already being manufactured in that year with fuel efficiencies 30% or better than the DH Comet 4. But try to make that point among spokespersons for the airline industry, or those in government who regulate them. You may well be told: “No, dammit, we want to be able to claim a whopping 70% improvement in 40 years, so shut up!”

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  161. By paul-n on September 3, 2010 at 6:01 am

    Ron, there are still two “Connies” flying the airshow circuits.

    http://www.conniesurvivors.com…..F-BHML.htm

    Check out this video from Australia of a night time takeoff.  The flames coming out of the engine exhausts are, aparently, quite normal, though I think passengers would have found them quite disconcerting!

    http://www.youtube.com/watch?v…..re=related

    Amazing that a plane designed in the 40′s still rules the roost for fuel efficiency (and character).  But then so does the Citroen 2CV! which got 61 mpg back in the 50′s!

    If i searched enough, I could probably find a similar fuel efficiency graph for cars, the MPG of the 2CV is unmatched even by the Prius, and that is 50 years later and $$$ more!

    We don’t need super high tech hybrids to save fuel, we just need to be happy to slow down a bit, although, when you add it all up, the average speed is only 5 miles an hour.

    There are so many examples (as the low tech magazine shows) where things were done so much more efficiently back in the day.  We do not need to go back to those days, but I think there is much that has been forgotten, and can be re-learned.  Like the Connie, many of the old models of whatever (cars, planes, boats, steam trains) could be made much more efficient with modern technology, materials etc.  But there is always this tendency to eat up the efficiency gains with more weight/performance/luxury etc.  As Adam Smith said, our wants are unlimited!

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  162. By ronald-steenblik on September 3, 2010 at 8:29 am

    Paul wrote:

    We don’t need super high tech hybrids to save fuel, we just need to be happy to slow down a bit … There are so many examples (as the low tech magazine shows) where things were done so much more efficiently back in the day.  … I think there is much that has been forgotten, and can be re-learned. Like the Connie, many of the old models of whatever (cars, planes, boats, steam trains) could be made much more efficient with modern technology, materials etc.  But there is always this tendency to eat up the efficiency gains with more weight, performance, luxury, etc.  As Adam Smith said, our wants are unlimited!

    Absolutely, Paul. I couldn’t agree more. And as for your last sentence, that is precisely the conclusion of a paper to which I linked earlier (or on another string) regarding light. We may have reached near saturation for lighting within our homes in the developed world, but there remains still the great outdoors (think sports stadiums, skating rinks, roads, etc.). 

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  163. By ronald-steenblik on September 3, 2010 at 8:37 am

    In this video you can really see the flames!

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  164. By Wendell Mercantile on September 3, 2010 at 11:24 am

    There are now two types of international airports – those that can take an A380, and all the others…

    The actual upgrade needed at those airports isn’t always readily apparent. The weight bearing capacity of the runway and taxiways is just as important as having space at the terminal to accommodate the wingspan. Sometimes a runway or taxiway can take a low number of overloads, but for extended, daily use, the runway and taxiways have to be beefed up.

    In 2004, Air Force One and a C-17 landed at the airport at Las Cruces, NM and did almost $1,000,000 of damage to the runway by exceeding its load bearing capacity. Eeven after the airport manager warned the President’s advance team the airplane’s would exceed the load bearing capacity of the runway, AF One and the C-17 landed anyway. (The Laws of Physics can’t be ignored, even for the President. At least Las Cruces got a new runway out of the deal — at U.S. taxpayer expense.)

    When the A380 came to Oshkosh for AirVenture 2009, they had to carefully map out which part of the runway it would use and its taxi route into where it would park during the airshow. The taxi route not only had to deal with weight bearing capability, but the distance the wings extended out past the taxiway. Areas along the taxi route where airplanes normally park had to be kept clear. During AirVenture there can be more than 10,000 airplanes parked on the airfield, and ground traffic control becomes a real issue.

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