Consumer Energy Report is now Energy Trends Insider -- Read More »

By Robert Rapier on Jan 6, 2011 with 123 responses

Ethanol Exports Increase Dependence on Foreign Oil

Near the end of my recent post documenting some of the antics of various ethanol interests, I wrote the following:

“As always, I invite a response from ethanol interests or readers who wish to dispute my points. If someone wishes to engage on these points, the floor is open, and I am open to publishing any feedback.”

Someone did respond, albeit not directly to me. A reader recently alerted me to the following article written by Brian Westenhaus at the New Energy and Fuel blog:

A Look At The Ethanol Lies

Let’s start with a lie, albeit most likely the lowest level of lie, everyone is lying about ethanol.  It has gotten so that the lies are pervasive, even such that John Stossel at Fox News is making quotes and suggesting that ethanol is a huge political boondoggle. Admired bloggers like Robert Rapier have allowed emotional prejudices and technical biases to discredit their commentary.

When someone accuses me – explicitly or otherwise – of lying, they have my attention. I read the article carefully to find examples of these “emotional prejudices” and “technical biases” (I am admittedly technically biased against lots of things — for technical reasons of course). After all, if you are going to accuse someone of lying, you need to clearly show your case.

Unfortunately, the article provided not a single example from my article. It simply left the implication that somewhere in my article, there were lies. I thought this was fairly irresponsible of the author — after all in my post I did provide explicit examples from specific parties — so I challenged the author in the comments. Later, in the comments the author accused me of using “silly numbers.” Again, no examples.

Not only did I have a problem with the implication that I am lying and then failing to give examples, but the following claim was made in the article:

The [ethanol] production level is finally high enough that a bit of the production (about a million barrels per month) is going for export, offsetting the imported oil bill and adding to the pressure on oil prices.

In the comments following the article, he continued to press that argument in a response to me:

American ethanol is producing close to a million barrels a day and exports are about a million barrels a month. Its a terrific value add to oil and natural gas that’s exported for hard currency that offsets in a small way what oil imports cost.

Young man, I am very disappointed with your work. Comments like “So taxpayer-subsidized ethanol exports actually increase our oil dependence – at taxpayer expense.” is a falsehood, plain as day.

I offered to debate the matter, because how we spend our tax dollars with respect to energy policy is an important matter. Misinformation should be addressed head on. After my reply lingered in moderation limbo for several days, it was finally published, but there was no indication that the author was willing to debate the above claims. So this essay will serve to argue the point that ethanol exports do in fact increase U.S. dependence on foreign oil. Given that the author characterized this as “a falsehood, plain as day” one of us is seriously wrong.

It is a fact — acknowledged by even the most die-hard ethanol proponent — that oil is used in the production of ethanol. For example, there is diesel involved in farming and transporting corn, there are oil-based herbicides and pesticides, and there is oil involved in transporting ethanol. That alone isn’t necessarily a problem, because if it only takes a small amount of oil to produce a relatively larger amount of ethanol — and then that ethanol is used domestically to displace gasoline — then one can certainly make the case that the oil investment was worthwhile and at the end of the day U.S. oil consumption — and by extension oil imports — were actually lower because we produced and used that ethanol. The amount of oil (and other fossil fuels) used in the production of ethanol is a separate debate, but one thing is crystal clear: Oil is used in the production of ethanol.

Export that ethanol and the situation is quite different. Not only is more oil now embedded in transporting that ethanol to far-flung locations like Saudi Arabia, but there is zero displacement of domestic gasoline. So the gallon of ethanol that is exported required a fraction of a gallon of oil to produce, and yet did nothing to displace any oil domestically. Thus, each gallon of ethanol that is exported actually requires the U.S. to use more oil on a net basis. Since we don’t produce enough oil to meet our needs, that gallon of exported ethanol increases our dependence on imported petroleum. That is true, plain as day, and Brian Westenhaus is wrong.

Further, what about the assertion that exported ethanol is a “a terrific value add to oil and natural gas?” A terrific value for whom? Taxpayers, who enable the practice? Ethanol producers couldn’t afford to do this if it wasn’t being subsidized. So taxpayers pay $0.45 to subsidize a gallon of ethanol (ignoring for a moment all of the other ways ethanol is subsidized), and it is then exported out of the country. The currency is received by the ethanol company. Saudi Arabia, for instance, gets a U.S.-taxpayer funded discount on their fuel purchase. So it is a terrific value for Saudi Arabia. It is a terrific value for ethanol producers to get taxpayers to fund their export market. But it isn’t such a great value for the vast majority of taxpayers.

It is only a matter of time before this practice is stopped by certain countries that are trying to develop their own ethanol industries, just as the EU stopped the practice of U.S. biodiesel producers shipping subsidized fuel to Europe. Because the biodiesel industry had grown production based on this export market, loss of the market proved devastating. Ethanol producers should heed that lesson. Countries that don’t produce ethanol, on the other hand, will be glad to continue receiving fuel subsidized by U.S. taxpayers. I can imagine that Saudi Arabia must be chuckling at the idea that the U.S. is subsidizing their ethanol purchases, but that we’re also buying and importing more foreign oil because of said purchases.

The ethanol lobby has responded that they would love to sell that ethanol domestically, but they can’t until the U.S. government forces us to buy more ethanol. Well guess what? Nobody is forcing them to produce more ethanol than the market demands. Instead of exporting, why don’t they just scale production back a bit? That’s what other industries do when demand falls. They don’t receive perpetually growing, taxpayer-funded markets. Or, they could produce cost-competitive product so they can grow the domestic E85 market. Nobody is preventing them from doing that.

Further, since one of the rallying cries for those arguing to keep the subsidies was that ethanol reduces dependence on foreign oil, it is really a moral imperative that they don’t participate in a practice that actually increases that dependence. The hypocrisy of citing soldiers dying for oil as a reason to keep the subsidies flowing — and then turning around and exporting subsidized ethanol — is nauseating. It also completely defeats the purpose of the subsidy in the first place.

To conclude, the author of the aforementioned article wrote in his comments directed to me “I and other responsible folks need a foil to counter, and you’ll do just fine for a while longer, if you so choose.” I can certainly be your foil — if you make irresponsible arguments. I can be a foil for those who would misrepresent or mislead. But just be aware that if you choose me as your foil, 1). Arguments will be specific, fact-based, and referenced; and 2). Anecdotal evidence won’t be a part of the argument.

  1. By PeteS on January 6, 2011 at 10:05 pm

    RR – apart from all the other good reasons to follow this blog, your style of argumentation in the face of woolly thinking is pure refreshment . Thanks.

    [link]      
  2. By Marcel F. Williams on January 6, 2011 at 11:53 pm

    It would be better to produce methanol than ethanol since:

    1. methanol can be converted into high octane gasoline using the MTG process with only a 10% increase in energy cost and can be immediately mixed in with our gasoline derived from petroleum pool. New Zealand use to utilize this American invented process back in the 1990s during a previous energy crisis.

    2. methanol can be produced from urban and rural biowaste so that practically every urban and rural community in America could become gasoline producers which would help to create jobs, energy independence, and reduce global warming

    3. methanol could also be produced from electricity from hydroelectric and nuclear power plants by producing hydrogen from water and extracting CO2 from the atmosphere.

    If the Federal government and even state governments mandated that just 10% of all gasoline sold in America by 2020 be derived from carbon neutral resources, a new carbon-neutral synthetic fuel industry could emerge in America that could eventually lead to America’s complete independence from fossil fuels by mid-century.

    [link]      
  3. By Rufus on January 7, 2011 at 1:12 am

    The $0.45 is a “Blenders” Credit. Are you aware of any companies that are blending E85 and exporting that?

    [link]      
  4. By rrapier on January 7, 2011 at 1:28 am

    The $0.45 is a “Blenders” Credit. Are you aware of any companies that are blending E85 and exporting that?

    What is it with the Red Herrings lately? Do you wish to imply that subsidized ethanol is not being exported? Is that your contention?

    It doesn’t matter if it is E85, E99, or E10. We know that it is being exported. Heck the ethanol industry has been boasting about it. They thought it was a good PR move to boast about shipping it to Saudi. My point is simply that this increases our dependence on foreign oil. Do you agree or disagree?

    RR

    [link]      
  5. By Biocrude on January 7, 2011 at 2:59 am

    RR and Sam, I hope by the time others read this that the above post has been removed in accordance with your usual rules about staying on topic and no hate speech. Especially if one doesn’t even know how to spell Islam! There is no room in this world for that kind of ignorance. This is an intelligent discussion forum. (EDIT: Comment removed. In the future, you, or anyone else, can give us a heads up to remove similar foolish comments by clicking on the “Report Post” icon in the forums. -Sam)

    RR, great post and I firmly agree that we shouldn’t be exporting domestically produced ethanol. More E85 access points for use in efficient FFVs!!

    [link]      
  6. By Brian Westenhaus on January 7, 2011 at 3:02 am

    Thanks, Mr. Rapier,
    For the opportunity to allow others to see how divergent our views are. Yes I regard almost everything written or said about ethanol as a lie, including for some, perhaps for mare than a few people, all of what I have to say. But the reality remains. A reality older than mass produced Model ‘T’s. Ethanol works. Even corn fed ethanol production.

    Mr. Rapier is a popular guy. He’s an example with the renowned John Stossel. I’m OK with that, obviously, since he is. Stossel is a well regarded mass media purveyor and Mr Rapier is a well regarded blogosphere purveyor. Both clutching to a failed assumption thoroughly dis proven by reality. That he’s alarmed is a bit mystifying, though. And considering the post above as all about him, somewhat of a psychological warning sign, I would think, as it rather gives me the creeps.

    There comes a responsibility at the level he’s attained and I remain disappointed with both of them. I commend Mr. Rapier for responding, though. Everyone benefits from the discourse, no matter the preconceived opinions.

    There doesn’t seem to be any value in the post above, and that’s fine. Sometimes coming up with post materials is a desperate effort, as we both know. I will happily be Mr. Rapier’s foil. As this is his web page I leave the responsibility up to him to provide the link to the discussion on the site where I work. We’ll see if he is as forthright and honest with his visitors as we are . . .

    I have bowed respectfully to his points and managed to get his commentary out of the Akismet system, at least for a while.

    For those who don’t know what Akismet is, it removes comments from blogs that are usually advertising links, trick advertising, misdirects, off color language and most anything that would irritate a site admin that fits in the Akismet computer’s check. So if your comments aren’t coming up for days or not at all, well, you’ve made a serious comment mistake somewhere. I hope I’ve fixed up Mr. Rapier, if only for a while. That’s why all those days “After my reply lingered in moderation limbo for several days, it was finally published,” I just don’t sit at the computer checking the Akismet results. I was in D.C. as a guest of the American Petroleum Institute as well -Freed from the computer for 48 hours! I actually caught Mr. Rapier’s first and second comments as I do scan the hundreds of them that show up each day. The third and fourth loaded without my intervention.

    On the points. A debate point needs a base or foundation for the construct of the point being made. It nice to rely on silly numbers drawn from studies and such. Even the Wall Street Journal, now that Rupert Murdoch’s News Corp owns it as well as the Fox News Channel where Stossel now works, are attacking American ethanol.

    Keep these matters in mind – oil, gas, corn, ethanol, oats and even orange juice and metals are world traded commodities. You can learn the transport cost for a contract on the Chicago Mercantile website for closing a contract and taking delivery.

    With these points in mind re peruse Mr. Rapier’s thoughts above. Where does he make any sense? The main buyers of American ethanol doesn’t include Saudi Arabia that I recall. It does include developed economies seeking diversified energy resources and gasoline additives that are not environmentally toxic.

    I see just one point, albeit an error in perspective – being a noteworthy example isn’t a personal affront. I do offer that I may have accosted him personally in a mistake for which I humbly and abjectly apologize for.

    Yet Mr. Rapier is a public figure, this isn’t the first nor the last affront. It’s time for an intellectual provenance upgrade. Its also the last apology from me unless it really is personal and a mistake.

    Brian Westenhaus

    [link]      
  7. By moiety on January 7, 2011 at 3:17 am

    Rufus said:

    The $0.45 is a “Blenders” Credit. Are you aware of any companies that are blending E85 and exporting that?


     

    Yes it is to the tune of 45M gallons last year. Here is one link which cites the US DoC (commerce).

    http://sweeteralternative.com/…..to-compete

     

    It will be interesting to see how EU deals wit hthe new ethanol terminal in the Botlek which is slated to import ethanol (mainly Brazilian). Possibly the ethanol lobby in Europe is not strong enough to be able prevent subsidized product coming in especially with the EU giaks for biofuel use.

    [link]      
  8. By rrapier on January 7, 2011 at 3:54 am

    “Both clutching to a failed assumption thoroughly dis proven by reality.”

    Yet I can’t get you to actually list a single one of those disproven assumptions. You throw broad accusations, but refuse to identify a specific case. “You are wrong about ethanol” is pretty meaningless. What am I wrong about? You have to be specific or your argument has no value.

    “And considering the post above as all about him, somewhat of a psychological warning sign, I would think, as it rather gives me the creeps.”

    First, I don’t even know what you are trying to say, and second, I was unaware that you were a psychologist. I suppose this explains your refusal to actually engage on the technical points.

    “There doesn’t seem to be any value in the post above, and that’s fine.”

    This coming from a person who claimed that exported ethanol does not increase petroleum imports. I have shown that it does. Some people might find that of value – except for those who close their eyes and refuse to actually read through the argument. I suppose for people like that, there wouldn’t be any value.

    “So if your comments aren’t coming up for days or not at all, well, you’ve made a serious comment mistake somewhere.”

    Do note that unbeknownst to me, Brian’s comment was flagged as spam by the same system. My comment was in limbo for 2 days. His didn’t show up immediately, and within the hour he wrote “It seems not trusting Mr. Rapier was good judgment” and “He’s failed the integrity test.” All I can say to that, Brian, is “You must have made a serious comment mistake somewhere”, but I do find your own integrity suspect after immediately jumping to the conclusions you did.

    “A debate point needs a base or foundation for the construct of the point being made.”

    I agree. The problem is that you have made multiple responses to me, yet refused to define that base or foundation. You have refused to show that you even know what my arguments are, while insisting they are wrong. That’s an odd way to debate.

    “It nice to rely on silly numbers drawn from studies and such.”

    Yes, silly numbers and stupid studies. Would be much better just to talk broadly, generically, and long-windedly about big picture stuff – while ignoring the details.

    “With these points in mind re peruse Mr. Rapier’s thoughts above. Where does he make any sense? The main buyers of American ethanol doesn’t include Saudi Arabia that I recall.”

    The problem in failing to take the time to understand an argument is that you can’t possibly hope to refute it. All you can do is throw out Red Herrings. Whether Saudi is a main buyer, a minor buyer, or even a non-buyer doesn’t change the facts of the post: Ethanol that is exported requires additional petroleum usage, but displaces none domestically. Hence it increases our oil imports. It really isn’t a hard concept to grasp, but I am starting to gather that you aren’t much of a technical sort, nor are you interesting in grasping it, even while insisting it is wrong.

    “I do offer that I may have accosted him personally in a mistake for which I humbly and abjectly apologize for.”

    Brian, all I ask for is that if you want to suggest that my arguments are in error, you have to lay out what those arguments are and why they are in error. You have refused to do that, citing all sorts of nebulous reasons like not getting caught “looking at a few of Mr. Rapier’s trees when sound judgment and oversight requires observing the forest.” The problem is, your potshots have been at my “trees.” You can’t escape defending your points by now running into the forest.

    I don’t suspect you will hang around to discuss matters. As someone wrote to me about you, “He puts two tablespoons of ad hominem into the cup for every sip of refutation he takes.” In fact, based on what I observed at your site, you are content to just say “You are wrong” without giving me the courtesy of telling me what it is that I am specifically wrong about.

    RR

    [link]      
  9. By Someone on January 7, 2011 at 4:58 am

    It seems to me that Brian just likes to toss about broad accusations but has no specific accusations against anything you have said, and I must add, wth did the creeps comment come from? I don’t understand…

    I think Brian is just blind in his opinion, as to which, I think is blatantly obvious.

    He made soo many comments without any basis or facts to place them on, or atleast has not presented them.

    I ask you Brian, LINK them please..curiosity is slowly killing the cat here…

    Brian also states that “It’s nice to rely on silly numbers drawn from studies and such.”.. speaking from someone who was indepthly involved in such “studies and such.” in general, Brian, they make the world go round. With out studies of any kind you would not have half the knowledgeable material out there about ANY topic/item that is currently available.

    In my own personal opinion, Brian IS a Red Harring looking to divert from any LAGITAMENT ethonal fact.

    [link]      
  10. By Someone on January 7, 2011 at 5:07 am

    legitimate rather before every one goes crazy on spell check.

    [link]      
  11. By Wendell Mercantile on January 7, 2011 at 9:44 am

    It would be better to produce methanol than ethanol…

    Marcel,

    I agree. Unfortunately, there is no “Big Ag” or “Corn Cartel” supporting methanol as there was to support corn ethanol. There are also not 42 senators from 21 farm states ready to back methanol as they did corn ethanol.

    It just shows that political clout too often trumps common sense and science.

    [link]      
  12. By Wendell Mercantile on January 7, 2011 at 9:47 am

    …no matter the preconceived opinions.

    Mr. Westenhaus,

    And I’m sure you will be the first to admit you also have preconceived notions, right?

    [link]      
  13. By Stephanie Dreyer on January 7, 2011 at 10:57 am

    Robert
    As you may already know, I work for Growth Energy, the coalition of ethanol supporters. One thing that I would like to point out is that Growth Energy’s position, as laid out in our Green Jobs Waiver, is to let the market decide. We believe that with access to the market, ethanol can and will compete against oil. Why is this competition necessary? At a time when when our economy is bleeding away billions of dollars each year to foreign countries for oil, we need a fuel that is cleaner and better for our domestic economy than oil. If every car or pickup in the U.S. was flex-fuel, and nearly every fueling station had blender pumps, then we as Americans would have a genuine choice in the marketplace. We could choose gasoline, if the price were right. Or we could choose ethanol, because we want cleaner air, or want to keep our money here in America.

    In addition, a greater market for today’s ethanol will spur the commercialization of advanced biofuels such as cellulosic ethanol which promises to reduce GHG emissions by over 100 percent relative to gasoline.

    We hope that Congress will take the opportunity this year to consider long term reforms to the ethanol market, as laid out in our Fueling Freedom plan, to level the playing field and eliminate the current supports that helped the industry get on its feet. Then maybe one day, America will be able to power its economy with domestic energy sources and have enough left over to export to other countries.

    [link]      
  14. By Kit P on January 7, 2011 at 11:18 am

    Well stated Stephanie. Some lofty goals and we have to start someplace however just how and where do plan to make clean air cleaner?

    [link]      
  15. By Douglas Hvistendahl on January 7, 2011 at 11:25 am

    Note that the ethanol and oil arguments are primarily about transportation fuels. For buildings there exist many possibilities – I’ve been using fans to blow summer air through the basement and up into the house for some years now: the thermometer says my soil, two inches below the basement floor, is 5 deg F warmer than last year. Costs are paid by the decrease in cooling costs. Note: if you try this, use a dehumidifier, the first few years have much condensation. I’m working on a way to use the NIFTE pump to provide circulation to move attic heat to the soil under the house, using the temperature difference to drive it.

    Yes, we need transport fuel. But we should start with things that pay back NOW, that way we can afford R&D on other possibilities.

    We should be using methanol, and ethanol should still be in R&D, given the current production costs.

    [link]      
  16. By Rufus on January 7, 2011 at 11:40 am

    Moiety, I looked at your link, but I didn’t get out of it what you did.

    I asked if anyone was Blending ethanol (thus receiving the “Blenders Credit”,) and then shipping the “Blended” product overseas. Your link only showed “Ethanol” (presumably, unblended) Exports, not E85 Exports.

    Look, what I’m trying to determine is whether, or not, the $0.45 “Blenders” Credit is being applied to Exported Ethanol. If it is, then it should stop. I don’t think Anyone is in favor of the American taxpayer subsidizing “exported” ethanol (even though the numbers involved look to be Much, Much less than the subsidies received for Exported Agriculture Products.)

    I thought about this last night, and it occurred to me that this could be happening through the RINS Credits. If it is, that loophole needs to be plugged.

    [link]      
  17. By Wendell Mercantile on January 7, 2011 at 11:53 am

    If every car or pickup in the U.S. was flex-fuel, and nearly every fueling station had blender pumps…

    Stephanie,

    If every fuel station in the country had blender pumps, there wouldn’t be enough ethanol to supply them.

    And why do you suggest all cars and trucks be flex-fuel when the farmers in the Corn Belt don’t even use tractors and ag equipment that burn ethanol? The farmers — and the ag equipment makers — all prefer diesel, even though the technology to make compression ignition ethanol engines has existed for at least 20 years.

    Shouldn’t corn farmers be in the lead using the fuel for which they grow the feedstock?

    [link]      
  18. By Wendell Mercantile on January 7, 2011 at 12:00 pm

    Then maybe one day, America will be able to power its economy with domestic energy sources and have enough left over to export to other countries.

    Stephanie,

    I concur completely. So what is Growth Energy’s position on domestic methanol and mixed alcohol fuels? Both are consistent with your goal, but I can’t remember ever seeing any statements from your organization supporting them. Why is Growth Energy’s thrust primarily in support of ethanol, while you ignore methanol and mixed alcohol fuels made from biomass?

    [link]      
  19. By Stephanie Dreyer on January 7, 2011 at 2:26 pm

    Wendell Mercantile said:

    Then maybe one day, America will be able to power its economy with domestic energy sources and have enough left over to export to other countries.

    Stephanie,

    I concur completely. So what is Growth Energy’s position on domestic methanol and mixed alcohol fuels? Both are consistent with your goal, but I can’t remember ever seeing any statements from your organization supporting them. Why is Growth Energy’s thrust primarily in support of ethanol, while you ignore methanol and mixed alcohol fuels made from biomass?


     

    Wendell,

    While I agree that methanol may be commercially available in the future, ethanol is the only commercially viable widel available alternative that we have to oil today. By expanding the use of renewable, homegrown ethanol we can create jobs, improve our air, reduce our dependence on foreign oil and strengthen our national security.

    [link]      
  20. By Wendell Mercantile on January 7, 2011 at 2:56 pm

    While I agree that methanol may be commercially available in the future…

    Stephanie,

    And why do you believe methanol and mixed alcohols are not available and viable now? Perhaps you should ask Wes Clark why Growth Energy’s lobbying portfolio ignores the role methanol and mixed alcohols can play in being part of our domestic fuel solution.

    [link]      
  21. By Optimist on January 7, 2011 at 3:28 pm

    Stephanie,

    You make little sense, as readers of your blog may know.

    One thing that I would like to point out is that Growth Energy’s position, as laid out in our Green Jobs Waiver, is to let the market decide… If every car or pickup in the U.S. was flex-fuel, and nearly every fueling station had blender pumps, then we as Americans would have a genuine choice in the marketplace.

    Wait. I’m confused. Why do we need every car to be flex-fuel to have a choice? As it is, consumers have a choice to buy flex-fuel vehicles or not. Why does Uncle Sam need to get in the middle of that? If flex-fuel vehicles are so great, the car makers would soon offer flex-fuel versions of every car they sell. That would be choice.

    Why do we need every station to have blender pumps to have a choice? Again, if blender pumps are so great, why isn’t Iowa (ground zero for ethanol) covered in blender pumps? Why would we need the heavy (and senseless) hand of Uncle Sam in the middle of this?

    If it is choice that you want, you already have it. But I suspect it is NOT choice that you want. You want everybody to put on a forced diet of ethanol (as is done already with E10 – only now you want it to be E15). Where is our choice in that?

    Or we could choose ethanol, because we want cleaner air, or want to keep our money here in America.

    You would know that claims about cleaner air is controversial, to say the least.

    In addition, a greater market for today’s ethanol will spur the commercialization of advanced biofuels such as cellulosic ethanol which promises to reduce GHG emissions by over 100 percent relative to gasoline.

    BS! x2! As RR has reported before cellulosic ethanol technology is over a 100 years old. If it still does not pencil out, that ought to tell you something. And I suspect just the opposite is happening: as ethanol drowns in undeserved subsidies, there is less available for more promising renewable fuels. Like fuels that do not use food as a feedstock.

    And your 100% reduction in GHG statement is to silly for words. Show me one US ethanol producer that does not use fossil fuels to produce the feedstock, convert it into ethanol and ship the product.

    While I agree that methanol may be commercially available in the future, ethanol is the only commercially viable widel available alternative that we have to oil today.

    That would be news to biodiesel producers. Not to mention CNG users.

    What Congress needs to do is change the language of its mandates to throw it open to any renewable fuel. And to level the playing field, production should not be based on volume but on energy content, i.e. MMBTU per year, not gallons per year. That would allow methanol, or any other fuel to compete on a level playing field with ethanol. Would you be OK with that, Stephanie?

    [link]      
  22. By jay on January 7, 2011 at 4:21 pm

    “Yes I regard almost everything written or said about ethanol as a lie, including for some, perhaps for mare than a few people, all of what I have to say.”

    This sweeping sentence says a lot about you, Mr. Westenhaus. You regard “almost” everything written or said about ethanol as a lie? Really? Does this include the voluminous outpourings of propaganda from the corn lobby and RFA, or just folks who don’t see things your way?

    [link]      
  23. By rrapier on January 7, 2011 at 4:40 pm

    Rufus said:

    Moiety, I looked at your link, but I didn’t get out of it what you did.

    I asked if anyone was Blending ethanol (thus receiving the “Blenders Credit”,) and then shipping the “Blended” product overseas. Your link only showed “Ethanol” (presumably, unblended) Exports, not E85 Exports.

    Look, what I’m trying to determine is whether, or not, the $0.45 “Blenders” Credit is being applied to Exported Ethanol. If it is, then it should stop. I don’t think Anyone is in favor of the American taxpayer subsidizing “exported” ethanol (even though the numbers involved look to be Much, Much less than the subsidies received for Exported Agriculture Products.)

    I thought about this last night, and it occurred to me that this could be happening through the RINS Credits. If it is, that loophole needs to be plugged.


     

    Rufus,

    From the Financial Times article that I original cited when I wrote that first post on exports:

    Companies that blend US ethanol with petrol may claim the credit even if the fuel is shipped overseas. Blends of up to 90 per cent ethanol imported in Europe also enjoy customs duties that are €60-€70 lower than the €102 per cu m duty on purer “denatured” ethanol, says Christoph Berg, managing director at consultant F.O. Licht in Hamburg. The US ethanol trade data mask additional volumes hidden in petrol blends. 

    “There is increasing trade from the US to Europe which is using domestically produced ethanol and blends this ethanol with gasoline, thus being eligible for the [US] tax credit and also being eligible for lower import duties in the European Union. This of course makes quite a profitable operation,” says Mr. Berg.

    Traders acknowledged using the credit for ethanol blends before it leaves the US. “If the [credit] is not there, the demand for product stays. It just means there are higher prices,” said a senior executive at one US exporter.

    As far as the destinations go (Brian Westenhaus called my assertion that ethanol is going to Saudi Arabia “Mr. Rapier’s red herring and it’s offensive to America’s ethanol customers to make false assertions” – this was from the same article:

    “The US also ships ethanol to some major oil exporting countries including Saudi Arabia and the United Arab Emirates.”

     RR

     

    [link]      
  24. By Rufus on January 7, 2011 at 4:56 pm

    Then, we really should have an “Export” Tariff equal in size to the Blenders Credit.

    [link]      
  25. By rrapier on January 7, 2011 at 6:56 pm

    Stephanie Dreyer said:

    Robert

    As you may already know, I work for Growth Energy, the coalition of ethanol supporters.


     

    Hi Stephanie,

    Yes, I know who you are. I was quite pleased to see Growth Energy step away from the crowd with your Fueling Freedom plan — which as you may know is similar to the positions I have taken. It seemed in the summer you were ready to take on the other ethanol interests who merely wanted to continue the status quo, but by year end I was disappointed to see that you had fallen back into line with the chorus from Dinneen and company to say “We need our subsidies, and we don’t want them cut one cent.”

    We hope that Congress will take the opportunity this year to consider

    long term reforms to the ethanol market, as laid out in our Fueling Freedom

    plan, to level the playing field and eliminate the current supports that helped

    the industry get on its feet.

    I look forward to some productive discussions and debates this year. My own view is that fuel demand in the Midwest alone could consume three times current ethanol production. In an unsubsidized market, it seems that the economics of selling the fuel in your backyard would be favorable, and have the largest possible advantage against gasoline that has to come a long distance to reach the market. But E85 prices don’t trade at enough of a differential to gasoline. If you can resolve that issue, you won’t ever have to worry about government mandates again.

    RR

    [link]      
  26. By sameer-kulkarni on January 8, 2011 at 2:17 am

    Robert Rapier said:

     

    It is a fact — acknowledged by even the most die-hard ethanol proponent — that oil is used in the production of ethanol. For example, there is diesel involved in farming and transporting corn, there are oil-based herbicides and pesticides, and there is oil involved in transporting ethanol. That alone isn’t necessarily a problem, because if it only takes a small amount of oil to produce a relatively larger amount of ethanol — and then that ethanol is used domestically to displace gasoline — then one can certainly make the case that the oil investment was worthwhile and at the end of the day U.S. oil consumption — and by extension oil imports — were actually lower because we produced and used that ethanol. The amount of oil (and other fossil fuels) used in the production of ethanol is a separate debate, but one thing is crystal clear: Oil is used in the production of ethanol.

     


     

    Here is a mathematical adaptation of Robert’s remark

     

    Energy consumed in production of Ethanol (Industry average). All units are in BTU

     

    Feed Stock:

    Fertilizer: 12,981     Pesticide: 1,060        Fuel: 2,651   Irrigation: 7,046       Other (Feedstock): 3,395

     

    Total (Feedstock): 12,981 + 1,060 + 2,651 + 7,046 + 3,395 = 27,134 BTU/gallon of ethanol

     

    Ethanol Processing:

    Process Steam: 36,732        Electricity: 14,444   BulkTransport: 1,330       Other (process): 1,450

     

    Total (Processing): 36,732 + 14,444 + 1,330 + 1,450 = 53,956 BTU/gallon of ethanol

     

    TOTAL ENERGY INPUT: 27,134 + 53,956 = 81,090 BTU/gallon of ethanol

     

     

    Energy in Ethanol: 84,100                        Co-product Credits: 27,579

     

    TOTAL ENERGY OUTPUT: 84,100 + 27,579 = 111,679 BTU/gallon of ethanol

     

     

    Thus EROEI of Ethanol: 111,679/81,090 = 1.37 (+ve)

     

    Now EROEI without Co-products credits: 84,100/81,090 = 1.03 (still +ve)

     

    The fossil fuel oil which goes into ethanol sums up to: 2,651 + 1,330 = 3,981

    Let’s assume we’ve run out of Oil reserves, & the energy requirement would have to be compensated by Ethanol, so net yield of energy from Ethanol = 84,100 – 3,981 = 80,119

     

    EROEI without Oil supply: 80,119 ÷ 81,090 = 0.98 (-ve), or 80,119 – 81,090 = -971.

    So Oil equivalent to 971 BTU’s is unquestionably required for production of Ethanol.

     

    To wind up the math, if people construct facilities for converting DDGS to liquid Ethanol having a net energy yield of 3,981 BTU/gallon (or at least 971 BTU’s for Breakeven) only then we can displace the use fossil Oil.

    Pl correct me if I could have gone wrong someplace..Confused

     

    [link]      
  27. By Kit P on January 8, 2011 at 11:32 am

    “Pl correct me if I could have gone wrong someplace..”

     

    Yes, you wnet srong from the begining. College professors (in non engineering disciplines) and bloggers worry about EROEI. EROEI is a phony criteria. The job of farmers and energy producers is to provide food and energy when and where people need it. When we fail it is called a crisis and the severity can be measured in dead bodies not EROEI.

    I went to school in Indiana from 3rd grade through college. Corn was grown to produce food. The 1973 oil crisis caused by an OPEC oil export embargo affected Indiana farmers. At Purdue my senior project was looking at drying corn at power plants. Turns out it is not practical.

    The primary point here is that corn is grown for food using what ever energy it takes. The alternative is a starvation crisis if food can not be stored for winter. Indiana farmers are very good at growing corn like other Midwest farmers. Since 1973 they can grow more corn than the world needs so they have figured out how to process out some of the energy to make transplantation fuel.

    Now there are some people who do not like coal. Who are these people? They are people who do not have any coal. So if California creates a Low-Carbon Fuel Standard (LCFS) that will promote sugarcane in the Imperial Valley over Iowa corn, I do not have a problem with that. However, since California rejects nuclear power over natural gas for making electricity; I must conclude that there standards are selective to give loacl business an advatage.

    While I am a big advocate of using LCA as an engineering tool to reduce the environmental impact of doing whatever. Tell me me about how you improved what you are doing. EROEI is a phony criteria used by those who explain why others someplace else should not produce something.

    From wiki

    “David Pimentel professor of ecology and agriculture at Cornell University, has called for massive reduction in world populations in order to avoid a permanent global energy crisis.”

    As an engineer, I see no technical limitations on providing food, clean water, and energy for the world population. Clearly we learned by the late 60s that the environmental impact of practices at the time were not sustainable. Yet now every key indicator of environmental quality in the US is improving thanks to incremental changes.

    However, the purpose of domestic production of transportation fuel is not about environmental improvement but economic security. Since production of biofuels must be done within current regulations, the environmental impact is considered.

    So Sam where you went wrong is entering a debate that was intended to subvert the intent of US energy policy namely provide alternatives to imported oil. The mandates to provide alternative is not a mandate to replace oil or solve global warming. The policy is working very base on the key performance indicator of the amount of biofuel produced.

    Furthermore, I think we have just scratched the surface in the US. So if polices have been affective in the US to go from 1% to 8% in less than 10 years, can similar polices work for places like India?

    [link]      
  28. By Walt on January 8, 2011 at 2:41 pm

    Robert Rapier said:

    It is a fact — acknowledged by even the most die-hard ethanol proponent — that oil is used in the production of ethanol. For example, there is diesel involved in farming and transporting corn, there are oil-based herbicides and pesticides, and there is oil involved in transporting ethanol. That alone isn’t necessarily a problem, because if it only takes a small amount of oil to produce a relatively larger amount of ethanol — and then that ethanol is used domestically to displace gasoline — then one can certainly make the case that the oil investment was worthwhile and at the end of the day U.S. oil consumption — and by extension oil imports — were actually lower because we produced and used that ethanol. The amount of oil (and other fossil fuels) used in the production of ethanol is a separate debate, but one thing is crystal clear: Oil is used in the production of ethanol.

    Export that ethanol and the situation is quite different. Not only is more oil now embedded in transporting that ethanol to far-flung locations like Saudi Arabia, but there is zero displacement of domestic gasoline. So the gallon of ethanol that is exported required a fraction of a gallon of oil to produce, and yet did nothing to displace any oil domestically. Thus, each gallon of ethanol that is exported actually requires the U.S. to use more oil on a net basis. Since we don’t produce enough oil to meet our needs, that gallon of exported ethanol increases our dependence on imported petroleum. That is true, plain as day, and Brian Westenhaus is wrong.


     

    I really believe that more of these studies need to be completed.  There was an excellent study by Lotus Engineering that looked at “well-to-wheel” for CO2 and other emissions, and some energy.  The study is here:

    http://www.ecolo.org/documents…..tus_09.pdf

    The more people who take this approach that RR is making…the more fuel technololgies will recieve a fair opportunity to compete both for investment dollars and the marketing PR of some bloggers discussing them.

    [link]      
  29. By Wendell Mercantile on January 8, 2011 at 2:58 pm

    At Purdue my senior project was looking at drying corn at power plants.

    Kit P.

    I had no idea you were a Boiler. That’s where I studied for my M.S.C.E.

    Since 1973 they can grow more corn than the world needs so they have figured out how to process out some of the energy to make transplantation fuel.

    Minor correction to that. There motive for corn ethanol wasn’t that pure.

    It wasn’t, “Gee, we have more corn than we know what to do with, how can we help humanity with that surplus?”

    It was instead, “Gee, we have more corn than we know what to do with. Is there something we could do with it that would increase the commodity market for corn?”

    [link]      
  30. By Walt on January 8, 2011 at 2:59 pm

    Wendell Mercantile said:

    It would be better to produce methanol than ethanol…

    Marcel,

    I agree. Unfortunately, there is no “Big Ag” or “Corn Cartel” supporting methanol as there was to support corn ethanol. There are also not 42 senators from 21 farm states ready to back methanol as they did corn ethanol.

    It just shows that political clout too often trumps common sense and science.


     

    Wendell/Marcel,

    There is the former “American Methanol Institute” which is now the “Methanol Institute” and run/controlled (my opinion) by foreigners.  Please don’t suggest I’m against foreigners, but do believe that foreign controlled lobby organizations can be difficult to actually support American companies.  There are lots of foreign controlled, funded lobbies in Washington, but when it comes to Methanol and Ethanol it is interesting to see how much “fight” the Ethanol lobby takes to Washington and how little the Methanol lobby does in comparison.  I totally understand it is very difficult for the methanol lobby to do much, if anything, without a lot of money compared to the ethanol lobby, but I certainly would welcome a new “American Methanol Lobby” if anyone ever wants to try to develop some good press and a new support group for methanol fuel and technologies.

    [link]      
  31. By Walt on January 8, 2011 at 3:04 pm

    Stephanie Dreyer said:

    If every car or pickup in the U.S. was flex-fuel, and nearly every fueling station had blender pumps, then we as Americans would have a genuine choice in the marketplace. We could choose gasoline, if the price were right. Or we could choose ethanol, because we want cleaner air, or want to keep our money here in America.


     

    Stephanie, AMEN to that point.  I have brought it up mutliple times on this blog, but RR is not going to address that point in my opinion.  It is something that I think is a positive issue for both methanol, ethanol and mixed alcohols…but it would definitely create competition and force the EPA to change its position on alternative fuels.

    [link]      
  32. By Walt on January 8, 2011 at 3:08 pm

    Stephanie Dreyer said:

    Wendell,
    While I agree that methanol may be commercially available in the future, ethanol is the only commercially viable widel available alternative that we have to oil today. By expanding the use of renewable, homegrown ethanol we can create jobs, improve our air, reduce our dependence on foreign oil and strengthen our national security.


     

    Actually, foreign controlled companies like Methanex, Methanol Holdings (Trindad) Limited and Saudi’s SABIC all have the potential to supply foreign produced methanol into the United States far cheaper than American produced ethanol.  I’m sure you know the price differences.

    [link]      
  33. By Walt on January 8, 2011 at 3:13 pm

    Optimist said:

    Wait. I’m confused. Why do we need every car to be flex-fuel to have a choice? As it is, consumers have a choice to buy flex-fuel vehicles or not. Why does Uncle Sam need to get in the middle of that? If flex-fuel vehicles are so great, the car makers would soon offer flex-fuel versions of every car they sell. That would be choice.

    Why do we need every station to have blender pumps to have a choice? Again, if blender pumps are so great, why isn’t Iowa (ground zero for ethanol) covered in blender pumps? Why would we need the heavy (and senseless) hand of Uncle Sam in the middle of this?


     

    I’m going to jump in here and probably get hammered for supporting flex-fuel vehicles (as it is getting to be like talking methanol in America), but I think that making vehicles flex fuel would not be that expensive.  From what I’ve seen, the auto makers could add that option on every car for less than $200 per vehicle.  It would add expensive, but nothing like Ford coming out with the announcement that the future is electric cars (e.g., at more than $35,000 each) due to the coming “higher gasoline prices” they predict.  I wonder sometimes if higher oil prices would sell more electric cars?

    [link]      
  34. By Walt on January 8, 2011 at 3:17 pm

    Robert Rapier said:

    I was quite pleased to see Growth Energy step away from the crowd with your Fueling Freedom plan — which as you may know is similar to the positions I have taken.


     

    Great, I did not know this.  Hope is in the air.

    [link]      
  35. By rrapier on January 8, 2011 at 4:58 pm

    I have brought it up mutliple times on this blog, but RR is not going to address that point in my opinion.

    Walt, I have addressed that numerous times in numerous essays. Before Growth Energy announced their plan, I had been talking to some of their members about something similar for quite some time. Go back and read my Iowa Case Study, which contains lots of links back to similar stuff where I had argued for this approach.

    RR

    [link]      
  36. By Kit P on January 8, 2011 at 5:25 pm

    “There motive for corn ethanol wasn’t that pure.”

     

    Do not know anything about the motives of Midwest farmers.  Maybe they want to keep farming.  I have no problem with farmers trying to increase the amount of commodities they sell. In the same way, I would like to see electricity provide a larger share of the transportation energy market. I would also like to see more domestic production of oil. There does seem to be enough demand to keep the dictators who divert resources for purposes that do not benefit their people supplied with enough cash to buy Russian tanks.

    [link]      
  37. By Stephen on January 8, 2011 at 8:08 pm

    Hello Robert, (I am new and accidentially posted this elsewhere on the site at first)
    I have been looking at your site and I am pretty impressed. This seems like a very solid source on energy. I am writing because I am curious about switchgrass ethanol and even sugar ethanol as opposed to corn ethanol. While the latter appears to be a failure unless oil’s price went unbelieveably up, do you know if the two former are viable? I found this article: http://www.scientificamerican

    [link]      
  38. By Stephen on January 8, 2011 at 8:11 pm

    http://www.scientificamerican……-than-corn
    This is the article I was writting about. It got cut off earlier. I thank you for your time.

    [link]      
  39. By Walt on January 8, 2011 at 10:01 pm

    Robert Rapier said:

    Walt, I have addressed that numerous times in numerous essays. Before Growth Energy announced their plan, I had been talking to some of their members about something similar for quite some time. Go back and read my Iowa Case Study, which contains lots of links back to similar stuff where I had argued for this approach.

    RR


     

    Robert,

    Can you give me the key words so I can search the site?  I tried “Iowa Case Study” and far too many articles came up, so if that is what you mean by “numerous times in numerous essays” I understand now.  I’m really just focused on the legislation to mandate auto companies to make vehicles flex fuel for a couple hundreds dollars per unit.  I’m not in favor of converting all new cars to electric vehicles because of coming high oil prices.

    [link]      
  40. By Wendell Mercantile on January 8, 2011 at 10:06 pm

    …but I think that making vehicles flex fuel would not be that expensive. From what I’ve seen, the auto makers could add that option on every car for less than $200 per vehicle.

    Walt,

    You’re right it’s not that expensive. $150-200 per car is about right. But you also have to realize that your talking about companies where their beancounters are in a constant battle with the engineers to save $0.25 in how each rearview mirror is mounted, or to save a couple of bucks on tailpipe hangars.

    The carmakers will only spend that $150-200 per car if they are forced to; or if there are incentives for doing it.

    The incentive for making flex-fuel cars is the “E-85 loophole” in how their corporate fleet fuel economy (CAFE) averages are computed. That loophole allows them to raise their CAFE high enough that they can avoid severe fines for non-compliance with the required CAFE targets.

    How the E-85 loophole works: A gas-burning Chevy Tahoe has an EPA fuel economy rating of about 15 mpg on gasoline. But if GM makes that Tahoe flex-fuel, it’s fuel economy rating for CAFE purposes jumps to over 30 mpg, even though its actual miles per gallon burning E-85 drops to about 12 mpg.

    It makes sense for GM to make big gashogs flex-fuel, but there is little incentive to make smaller cars flex-fuel since there is not a proportionally large payback in their EPA mileage ratings.

    [link]      
  41. By Wendell Mercantile on January 9, 2011 at 12:48 am

    I have no problem with farmers trying to increase the amount of commodities they sell.

    Kit P.

    I don’t either — the problem was the methods they used to do it. Instead of the traditional means of expanding a market by offering a better product or a better price, Big Ag and the Corn Cartel choose the route of using ethanol to manipulate the corn commodity market through political hijinks and cozy back room deals.

    [link]      
  42. By ronald-steenblik on January 9, 2011 at 4:27 am

    RR,

    Sorry for arriving late to the party, but first let me wish you (and other readers) a Happy New Year (one that will end with sanity to energy policy restored). Second, let me commend you for an excellent article, and for your unstinting efforts to bring hard facts and logical reasoning to the debate.

    I can feel your frustration, having also found on many occasions that my comments on other blogs have remained for days or forever in moderator limbo.

    The people from the ethanol industry who write and comment on blogs can be particularly frustrating. Brian Westenhaus’s rambling reply on page 1 is fascinating for what he says, or tries to say, and what he doesn’t. To accuse you of writing a post that is “all about you” is bizzare. (And I notice that he has yet to address your particular points.) What you document is a real-life experience of engaging in a debate on an important issue. How the process of that debate takes place is important for understanding whether there is any factual basis for the rationales given for maintaining the nation’s current fuel-ethanol policy — a policy that is proving to be increasingly costly with each passing year.

    Just for the record, I agree with your assessment of the effects of exporting ethanol on U.S. demand for petroleum products. I like, especially, your point that in other industries excess capacity is solved by reducing production. But the ethanol industry is an extension of the broad-acre crop producing and processing sector, where the ingrained impulse is to look to government to solve their problems.

    My only quible is what you write about the effects of domestic use of ethanol:

    [I]f it only takes a small amount of oil to produce a relatively larger amount of ethanol — and then that ethanol is used domestically to displace gasoline — then one can certainly make the case that the oil investment was worthwhile and at the end of the day U.S. oil consumption — and by extension oil imports — were actually lower because we produced and used that ethanol.

    The economist Harry de Gorter has shown that the way that policy is implemented matters, and that the displacement effect of ethanol under the current suite of policies is smaller than claimed by the industry

    But this ignores ‘leakage’ or indirect market effects in the fuel market. Ethanol production due to the tax credit shifts the fuel supply curve to the right, causing the market price of fuel to decline and total fuel consumption to increase. The increase in total fuel consumption is the leakage or amount of gasoline displaced. The difference between the increase in ethanol supply and the increase in total fuel consumption is the amount of gasoline replaced.

    How big is leakage in the fuel market? The most comprehensive study on leakages in the fuel market due to biofuel policy is by Drabik and de Gorter which finds that one gallon (energy equivalent) of ethanol generated by tax credits is likely to replace only 0.3 of a gallon of gasoline. This means the market effect or leakage in the fuel market is 70 percent.

    Regarding flex-fuel vehicles and blender pumps, the ethanol industry has been very clever in characterizing the current VEETC as a perpetual entitlement, even though in a rational policy world that tax credit would have disappeared once the RFS was enacted. (Note: several European countries eliminated or started phasing out fuel-tax exemptions for biofuels once those biofuels were mandated.) Then, using the rhetoric of entitlement, they deign to tell long-suffering taxpayers how THEY think the money should be spent.

    And, of course, that is on infrastructure, combined with requiring manufacturers that sell vehicles powered spark-ignition engines to make them E85-compatible. Their model, presumably is Brazil. But Brazil has a much, much smaller automobile market, and a much greater capacity to expand ethanol production. In that country, there is truly competition between gasoline and ethanol. And, because of that, there is a natural demand for FFVs. By contrast, in the United States the market for FFVs was driven by the dual-fuel loophole — a quid-pro quo for concessions on the corporate average fuel-economy (CAFE) standards that the industry is unlikely to give up by (by making all vehicles flex-fuel) without getting another regulatory favor in return.

    But, of course, despite the mandates (all gasoline contains at least 20% ethanol by law) and large tax differential between gasoline and ethanol in the main ethanol-producing states of Brazil (notably São Paulo), consumers in that country are still subject to the vagaries of world markets. And nowadays high sugar prices mean high domestic ethanol prices.

    If there is a lie being told about ethanol in the United States it is that expanding domestic ethanol production and use will substantially reduce fuel costs for drivers. The only way that will happen is if, as de Gorter describes, Congress continues to provide a tax credit to blenders on top of the mandate. If it does, then taxpayers will be, effectively, subsidizing driving and the perpetuation of vehicles based on the internal combustion engine. Is that what we really want?

    [link]      
  43. By Kit P on January 9, 2011 at 10:15 am

    “the problem was the methods they used to do it.”

    What trade association do you associate with Wendell? I only ask because because you like to denigrate others so well. Wendell’s ethics seem to be be … what the right word to be civil? Relative! I have noticed that being civil is also relative to who agrees with you. I did take a ethics class at Purdue and I conclude that Wendell should not be questioning the ethics of others.

    I happen to respect the American farmer.

    “Instead of the traditional means of expanding a market by offering a better product or a better price “

    Of course the current traditional method of providing transportation fuel is buying it from thugs with no regard for the human rights of others. Before that it was Texas oil.

     

    “Big Ag and the Corn Cartel..”

     

    Come on Wendell that is just silly. If there is an underdog in America it is farmers. I do get a little irritated with the ‘special interest’ that keep us from new drilling off the coast of California and Florida. I am all for ‘special interests’ that produce something.

    [link]      
  44. By Wendell Mercantile on January 9, 2011 at 11:30 am

    I happen to respect the American farmer.

    As do I. I have several aunts, uncles, and cousins who are corn farmers. But farmers as individuals have little to do with the back room deals and shenanigans that go on between Corn Belt politicians and the empty suits that run the organizations that represent farmers and Big Ethanol.

    [link]      
  45. By rrapier on January 9, 2011 at 12:33 pm

    Walt said:

     

    Can you give me the key words so I can search the site?  I tried “Iowa Case Study” and far too many articles came up, so if that is what you mean by “numerous times in numerous essays” I understand now.  I’m really just focused on the legislation to mandate auto companies to make vehicles flex fuel for a couple hundreds dollars per unit.  I’m not in favor of converting all new cars to electric vehicles because of coming high oil prices.


     

    Walt,

    If you read what I wrote in Iowa Case Study, you will see me arguing for the kinds of changes that would shift consumption of ethanol closer to the source. In that essay, I linked back to Thoughts on an Ethanol Pipeline, which discusses some of these issues. Another that discusses these points is The Ethanol Question I Did Ask which also links back to previous thoughts on this theme.

    RR

    [link]      
  46. By rrapier on January 9, 2011 at 12:48 pm

    Stephen said:

    Hello Robert, (I am new and accidentially posted this elsewhere on the site at first)

    I have been looking at your site and I am pretty impressed. This seems like a very solid source on energy. I am writing because I am curious about switchgrass ethanol and even sugar ethanol as opposed to corn ethanol. While the latter appears to be a failure unless oil’s price went unbelieveably up, do you know if the two former are viable? I found this article: http://www.scientificamerican


     

    Hi Stephen,

    Thanks for stopping in; hope you will stay and discuss energy issues with us. I view the situation with the various types of ethanol like this: I think corn ethanol could work, unsubsidized, in specific situations. For instance, Iowa is probably the country’s lowest cost producer area, so Iowa and parts of the Midwest could possibly grow a major E85 market. But as long as they are trying to send ethanol across the country and even export it — I believe they will always require subsidies for that.

    Sugarcane ethanol from some tropical countries is cheaper to produce because their fuel source for their plants — bagasse — is essentially free. It ends up at the plant, pulverized and washed. So not only is it free, it was a waste product they needed to deal with. The same situation exists for U.S. sugar producers, but my understanding is that due to sugar subsidies, it always makes more sense to produce sugar than to produce ethanol from the sugar. You can also produce ethanol from molasses that is produced as a part of the process, but there is a good market for that in animal feed. (Incidentally, those who claim there is no food value lost when converting corn to DDGS must wonder why they are putting molasses back into animal feed). So there is unlikely to be much of a sugarcane ethanol industry in the U.S. unless laws are changed.

    Cellulosic ethanol is mostly still in the lab. The studies that suggest it is better than corn ethanol are based on models; nobody is actually doing it at any kind of scale. In fact, Congress had initially mandated that we use 100 million gallons of cellulosic ethanol in 2010. Guess how many qualifying gallons were produced in the U.S.? Zero. I remain doubtful that cellulosic will ever be more than a niche application. As I have discussed here on many occasions. we have known how to make cellulosic ethanol for over 100 years, and in fact had two commercial plants in the U.S. by 1920. They closed due to poor economics.

    RR

    [link]      
  47. By Rufus on January 9, 2011 at 1:21 pm

    Robert, we were putting molasses in our cattle feed back in the 50′s.

    [link]      
  48. By rrapier on January 9, 2011 at 1:32 pm

    Rufus said:

    Robert, we were putting molasses in our cattle feed back in the 50′s.


     

    Right. The point is that the carbohydrates extracted from corn have food value for the cows. So when people claim that no food value was lost because all the protein, etc. was still there — they are clearly wrong.

    RR

    [link]      
  49. By ronald-steenblik on January 9, 2011 at 1:35 pm

    More importantly, the starch has food value for non-ruminant animals, such as hogs and poultry.

    [link]      
  50. By Rufus on January 9, 2011 at 1:57 pm

    Well, I can certainly get on board with an “Export” Tariff on subsidized Ag Products (Corn, Wheat, Soybeans, Cotton, Rice, Beef, Pork, Poultry, etc.)

    [link]      
  51. By Rufus on January 9, 2011 at 2:13 pm

    And, of course, Ethanol.

    [link]      
  52. By Kit P on January 9, 2011 at 4:10 pm

    “And, of course, Ethanol.”

     

    Rufus you might explain again that American farmers can produce more ‘food value’ than we need. Exporting energy in the form of ethanol or coal because Americans can produce than we can use is very good policy. When and if we need those commodities ourselves, we just stop exporting.

     

    As part of the tax paying productive class, I am really tired of hearing that taking less money from an industry to give to the parasite class is a subsidy. While producing commodities like food, electricity, coal, and ethanol does not create city jobs; not everybody wants to live in the city.

     

    [link]      
  53. By russ-finley on January 9, 2011 at 4:25 pm

    Money quote from RR:

    Nobody is forcing them to produce more ethanol than the market demands.

    This is an example of how markets twist back on themselves in complex feedback loops and why excessive government attempts to control them usually lead to worse results. Corn consumers are paying about $26 billion more annually for corn since the mandates kicked in. They all have to pass that cost on to their customers.

     

     

    And one from Ron Steenblik:

    If there is a lie being told about ethanol in the United States it is that expanding domestic ethanol production and use will substantially reduce fuel costs for drivers.

    I also recently wrote an article dealing with a guy who showed up in a comment field parroting corn ethanol lobby propaganda.

     

    [link]      
  54. By Benny BND Cole on January 9, 2011 at 4:39 pm

    “I happen to respect the American farmer.”

    Hey, shouldn’t anybody who goes into business deserve respect? You mean as I make cabinets and furniture, that I am lower on the respect totem pole?

    Please, farmers have been milking their special status for decades. Generations, until they perceive federal subsidy as a right.

    No one gives out subsidies for furniture makers. We survive against ferocious, and sometimes subsidized, imports (China).

    Farmers work hard (or, least the illegal labor in the fields works hard)? Try getting ready for a trade show. It can mean 24/7 for weeks.

    Time for farmers, and rural America, to stand on their own two feet. No more subsidized highways, water systems, power systems, phone systems, postal service, and crop subsidies. Shut down the USDA, and shelve the food stamp program. Wipe out all ethanol subsidies.

    True, without the federal government, rural America would start to empty out.

    It’s called free enterprise.

    [link]      
  55. By ronald-steenblik on January 9, 2011 at 5:36 pm

    “Exporting energy in the form of ethanol or coal because Americans can produce than we can use is very good policy.”

    How so? With coal (ignoring negative environmental externalities), there is value added from production for export. In the case of corn ethanol, the value of the subsidy — $0.45 per gallon — is typically close to its value added (roughly, the “ethanol margin“) when sold domestically, and probably greater than the value added when exported, as transport costs to distant ports have to be incurred. That suggests that, for the economy, subsidizing exports is value subtracting. Exporting the corn feedstock as corn would likely yield more value added for the economy.

    [link]      
  56. By Rufus on January 9, 2011 at 6:42 pm

    This Study

    http://www.card.iastate.edu/pu…..8wp467.pdf

    found that the existence of ethanol in the marketplace reduced the price of gasoline by between $0.29, and $0.40 per gallon. At $0.30 that would be a saving of a little over $42 Billion/Yr thanks to Ethanol.

    [link]      
  57. By Kit P on January 9, 2011 at 7:02 pm

    “You mean as I make cabinets and furniture, that I am lower on the respect totem pole?”

     

    That’s right Benny but my lack of respect for you has nothing to do with your occupation. Some bad news for you Benny. No one needs cabinets.

     

    “It’s called free enterprise.”

     

    Where? Everyone one needs energy. To prevent gouging, energy is heavily regulated.

     

    “No more subsidized highways, water systems, power systems, phone systems, postal service, and crop subsidies.”

     

    Funny! Benny has a subsidized super highway so he can go gamble in Las Vegas. Kit P has to drive an hour to get to the interstate. My county road are paid by my low property taxes. Benny’s power system is supplied by other states. Benny’s water system is supplied by massive aqueducts that bring water from Northern California and the Colorado River.

    [link]      
  58. By russ-finley on January 10, 2011 at 1:30 am

    Good comment, Benny. The postitive image garnered by farmers is the result of effective marketing and large, well-entrenched, well-funded lobbying organizations. I wrote about this back in 2009:

    The Myth of the American Farmer

     

    [link]      
  59. By ronald-steenblik on January 10, 2011 at 3:50 am

    Rufus wrote:

    This [CARD] Study found that the existence of ethanol in the marketplace reduced the price of gasoline by between $0.29, and $0.40 per gallon. At $0.30 that would be a saving of a little over $42 Billion/Yr thanks to Ethanol.

    @Rufus: the CARD study to which you provide a link was published in April 2008, and reflects the situation during the previous decade, when demand for gasoline was still high and rising, and oil refineries were operating near capacity. When an industry is operating near capacity, its short-term supply curve is highly inelastic. As the study concludes (my emphasis):

    These reductions in retail gasoline prices are surprisingly large, especially when one considers that they are calculated at their mean values over the sample period. The availability of ethanol essentially increased the “capacity” of the U.S. refinery industry and in so doing prevented some of the dramatic price increases often associated with an industry operating at close to capacity. Because these results are based on capacity, it would be wrong to extrapolate the results to today’s markets.

    Today’s markets are marked by reduced demand for gasoline, as a combination of the recession, and the switch to more energy-efficient vehicles, and (to some extent; see comment above) ethanol.

    But the CARD study, in any case, does not refute the point I made above: that subsidizing exports of ethanol is a value-subtracting activity.

    [link]      
  60. By moiety on January 10, 2011 at 7:30 am

    Robert Rapier said:

    Hi Stephen,

    Cellulosic ethanol is mostly still in the lab.


    Stephen

    One of the few exceptions is Weyland in Bergen Norway.

    http://www.ethanolproducer.com…..-in-norway

    However you will notice that it is ‘pilot scale’ ie.e ’000kg/year as opposed to ’000ton/year.

    [link]      
  61. By Kit P on January 10, 2011 at 8:06 am

     

    Tell me Russ how many lanes of highway do you think it takes bring food to Seattle? I would estimate one each direction. Last time I was in Seattle doing a DOE required audit I found a concrete desert with 6 lanes of I-90 to service those who are trying to get out of the city everyday.

     

    “Farmers can’t be trusted ..”

     

    My respect for farmers is based on interviewing many farmers about the environmental aspects of farming for my company. More often than not while drinking coffee in their kitchen/office before walking down their operation.

     

    [link]      
  62. By Walt on January 10, 2011 at 9:05 am

    Wendell Mercantile said:

    How the E-85 loophole works: A gas-burning Chevy Tahoe has an EPA fuel economy rating of about 15 mpg on gasoline. But if GM makes that Tahoe flex-fuel, it’s fuel economy rating for CAFE purposes jumps to over 30 mpg, even though its actual miles per gallon burning E-85 drops to about 12 mpg.

    It makes sense for GM to make big gashogs flex-fuel, but there is little incentive to make smaller cars flex-fuel since there is not a proportionally large payback in their EPA mileage ratings.


     

    Interesting…you are definitely right that everything is driven by the bottomline at the bean counter level, but longer term strategy at the board level should shake up this thinking.  The problem is they don’t feel the pressure except from lobby orgs or from loading up their emails.  I think this loophole is very helpful.  Thanks.

    [link]      
  63. By Walt on January 10, 2011 at 9:19 am

    Robert Rapier said:

     

    Walt,

    If you read what I wrote in Iowa Case Study, you will see me arguing for the kinds of changes that would shift consumption of ethanol closer to the source. In that essay, I linked back to Thoughts on an Ethanol Pipeline, which discusses some of these issues. Another that discusses these points is The Ethanol Question I Did Ask which also links back to previous thoughts on this theme.

    RR


     

    Thank you.  I guess my question was whether you support a mandate for forcing auto companies to adopt the Open Fuel Standard, and make cars more flex fuel to give consumers a choice.  We can make the choice now by purchasing the E-85 kit on ebay, but the EPA gets really upset and there should be no reason for the EPA to get upset over burning clearner alcohol fuels in autos.

    I’m leaving tomorrow for another week of testing our trailer on a producing oil field where making methanol with 18.2% nitrogen, 12.39% ethane, 5.39% propane and 62.67% methane (balance unimportant) in the feed gas.  Try doing that with syngas processes in a trailer…not!  Although there is no interest in methanol in the country, generally speaking, the interest “might” increase if the “fuels” market could use it at the pump.  If not, we do import about 80+% of our methanol into the market from foreign companies so there should be no American being upset over local production from wasted, flared, stranded gas.  However, don’t be surprised if the negative press goes into full swing if we get this working from the ethanol lobby, or the foreign controlled methanol institute in DC.  Competition can cause some companies to get upset!

    If things go well we will have a new video by hopefully end of next week to prove nasty flared gas in and methanol out.  Last week our installation and tests went very well for moving from the garage to the field…without any VC money to throw around.  I’m cynical…what can I say.  The proof is in operating…not just in throwing millions and millions of dollars and financially engineering an exit strategy for VC groups.

    [link]      
  64. By russ-finley on January 10, 2011 at 11:33 am

     

    I emailed Xiaodog Du (lead author) with some questions when that study came out. I showed him examples where the ethanol lobby had done calculations (using two different methods) to come up with huge savings, which didn’t make sense to me. My final question was:

    “And finally, does this hold with 2009 prices and lower gasoline consumption as well?”

    His answer:

    “No.”

    [link]      
  65. By Walt on January 10, 2011 at 11:34 am

    This is interesting…as it a good example what happens if “Ethanol Exports Increase Dependence on Foreign Oil”

     

    “The price of crude has risen from less than $40 per barrel to more than
    $90 over the last two years and many are predicting it could break
    through the $100 mark within months.”

    http://www.guardian.co.uk/busi…..-blockades

     

    Methanol prices follow crude oil prices…and so we can expect our 80+% dependence on methanol to sting as well.

    ——————————————

    http://www.pudaily.com/News_vi…..wsID=16241

    Methanex raised its December US methanol contract
    price to 138 cents/gal on Tuesday, surprising market players who were
    expecting a rollover from November.

    Methanex’s 5 cents/gal hike over its November
    nomination makes the December contract range of 129-138 cents/gal the
    widest methanol contract spread since February 2009 and the
    fourth-largest spread of the past decade.

    Talk of a rollover began last week when Southern
    Chemical (SCC) rolled over its 129 cents/gal November price for its US
    December contracts.

    One methanol market player was surprised by the move,
    adding that it was not supported by market fundamentals. While methanol
    historically has followed crude values, it has zoomed ahead of the rise
    in oil prices over the past year.

    The price of bellwether West Texas Intermediate (WTI)
    crude has risen by 10% year on year – to $85.15/bbl in Tuesday morning
    trading from from $77.28/bbl a year earlier.

    However, methanol values have surged much higher in
    that period, with the December contract average of 133.5 cents/gal up
    more than 22% from the December 2009 contract average of 109 cents/gal.

    Other market sources found Methanex’s move a surprise
    because of little to no existing supply issues in North America. The
    restart of the M5000 plant in Trinidad is well underway, according to
    the company.

    A source also said spot pricing did not support a higher move for the contract.

    “It’s hard to understand the increase when the spot price has been flat to a tad weaker,” said the source.

    The spot methanol price has levelled off at an average
    of 117 cents/gal, compared with a high near 120 cents/gal in
    mid-November. For the past month as a whole, the spot range has
    increased about 2% from an average of 114.5 cents/gal in late October.

    [link]      
  66. By Rufus on January 10, 2011 at 1:26 pm

    So, let me get this straight. Exporting a million barrels of ethanol/Mo will cause us to import more oil (and, we must assume, cause oil prices to rise,) but doing away with a million barrels/DAY of Ethanol would have no effect?

    What am I missing?

    Ron, you will notice that in my upthread comment I stated that I did not think American Taxpayers should be subsidizing Exported ethanol (Nor, exportd corn, wheat, soybeans, coal, cotton, rice, beef, poultry, or pork.)

    [link]      
  67. By rrapier on January 10, 2011 at 2:41 pm

    So, let me get this straight. Exporting a million barrels of ethanol/Mo will cause us to import more oil (and, we must assume, cause oil prices to rise,) but doing away with a million barrels/DAY of Ethanol would have no effect?

    Rufus, let’s break this down into two pieces. First, do you agree that exporting ethanol will cause us to import more oil? If not, please explain.

    Second, as I have said many times, I think ethanol that we produce and use locally — predominantly enabled by natural gas — can have an effect. It just isn’t a huge effect because our oil usage is so large.

    Finally, I presume that you are aware that the same organization that published the study you cited above also published this one:

    http://www.card.iastate.edu/ab…..aspx?id=67

    • If the mandates are kept in place but the tax credits and trade protection are allowed to expire, no more than 300 jobs would be lost in the ethanol industry in 2014.

    • Ending the tax credit and tariff would reduce ethanol prices by 12 cents per gallon in 2011 and by 34 cents per gallon in 2014. Because most gas sold in the United States contains 10 percent ethanol—a limit the Environmental Protection Agency may increase to 15 percent this fall—lower ethanol prices lead to modest savings at the pump: a penny or two per gallon next year and 3 to 5 cents per gallon in 2014.

    So they suggest that eliminating the tax credits and tariffs while keeping the mandates in place would cost no more than 300 jobs. At a cost of $6 billion, preserving those jobs amounts to $20 million per job.

    RR

    [link]      
  68. By rrapier on January 10, 2011 at 2:45 pm

    Kit P said:

    As part of the tax paying productive class, I am really tired of hearing that taking less money from an industry to give to the parasite class is a subsidy. While producing commodities like food, electricity, coal, and ethanol does not create city jobs; not everybody wants to live in the city.

     


     

    You know, you have alluded to this a couple of times. Is that the position you want to take? That the ethanol “subsidies” aren’t really subsidies? If you want to defend that position, let me know and we can flesh it out.

    Further, despite being asked numerous times you have never said why you think the tax credits are a good idea on top of the mandates. It is funny to watch you when you have absolutely no rational answer to a question. While normally full of things to say, on this you just ignore it and pretend the question wasn’t asked. So in the unlikely case that you are overlooking it, let me emphasize once more:

    WHY DO YOU THINK TAX CREDITS ARE NEEDED FOR THE ETHANOL INDUSTRY WITH THE RENEWABLE FUEL STANDARD IN PLACE? IS THIS A RESPONSIBLE USE OF TAX DOLLARS?

    Be prepared to defend your answer.

    RR

    [link]      
  69. By Rufus on January 10, 2011 at 3:31 pm

    Robert, as you know, I was pretty much agnostic about continuing the tax credits.

    Somewhat to my surprise, they were extended, so, well, I guess we’ll just borrow another $6 Billion from China in the form of a bond that we’ll “roll over” into infinity, and get a four, or five cent savings on our gasoline. Could be worse, I suppose.

    As for your question: Of course, for every gallon of ethanol we export we will have to import approx. 0.8 gallons of gasoline. That’s a no-brainer.

    And, as I’ve said a couple of times already, I don’t think the American Taxpayer should be called on to subsidize exported ethanol. Nor should they be forced to subsidize exported corn, soybeans, cotton, wheat, rice, coal, beef, pork, or poultry. I don’t know how much clearer I could be.

    [link]      
  70. By rrapier on January 10, 2011 at 3:57 pm

    I guess we’ll just borrow another $6 Billion from China in the form of a bond that we’ll “roll over” into infinity, and get a four, or five cent savings on our gasoline. Could be worse, I suppose.

    Rufus, you know better than that. You are essentially arguing that there are no consequences because we don’t have to pay our debts. In that case, let’s have national health care for everyone and buy everyone a new home. We will just have the Chinese pay for it and never pay it back.

    I don’t know how much clearer I could be.

    I was just trying to confirm that it wasn’t the idea that ‘exported ethanol increases petroleum imports’ that you had an issue with. You have confirmed that you agree that this is true.

    RR

    [link]      
  71. By Rufus on January 10, 2011 at 4:12 pm

    No, no, no, Robert. I just stated a fact. I didn’t say there were “No Consequences.” There are Always, “consequences.” It’s just that in this particular case they are not particularly large (buying everyone a house, however, as we’ve seen, has Large consequences.) :)

    And, of course, I’ve argued quite consistently that the marginal gallon of ethanol replaces approx. 0.80 gallons of gasoline.

    [link]      
  72. By Optimist on January 10, 2011 at 5:11 pm

    Walt said:

    Optimist said:

    Wait. I’m confused. Why do we need every car to be flex-fuel to have a choice? As it is, consumers have a choice to buy flex-fuel vehicles or not. Why does Uncle Sam need to get in the middle of that? If flex-fuel vehicles are so great, the car makers would soon offer flex-fuel versions of every car they sell. That would be choice.

    Why do we need every station to have blender pumps to have a choice? Again, if blender pumps are so great, why isn’t Iowa (ground zero for ethanol) covered in blender pumps? Why would we need the heavy (and senseless) hand of Uncle Sam in the middle of this?


     
    I’m going to jump in here and probably get hammered for supporting flex-fuel vehicles (as it is getting to be like talking methanol in America), but I think that making vehicles flex fuel would not be that expensive.  From what I’ve seen, the auto makers could add that option on every car for less than $200 per vehicle.  It would add expensive, but nothing like Ford coming out with the announcement that the future is electric cars (e.g., at more than $35,000 each) due to the coming “higher gasoline prices” they predict.  I wonder sometimes if higher oil prices would sell more electric cars?


     

    Walt,

    You’re right. It’s not expensive. To me that means it does not require subsidies. If the market demands more ethanol, all carmakers would jump to provide more flex-fuel vehicles – at a cost of next to nothing. That so few carmakers are offering flex-fuel would suggest that just the opposite is happening: demand for ethanol remains weak, in spite of all the (wasteful) efforts by the prostitutians.

    IMHO, the electric car is an expensive joke, whose bluff will eventually be called. We’ll see.

    [link]      
  73. By Optimist on January 10, 2011 at 5:25 pm

    Time for farmers, and rural America, to stand on their own two feet. No more subsidized highways, water systems, power systems, phone systems, postal service, and crop subsidies. Shut down the USDA, and shelve the food stamp program. Wipe out all ethanol subsidies.

    True, without the federal government, rural America would start to empty out.

    Rural America has already mostly emptied out, with some plains states qualifying for Frontier status with their current population densities. Farm subsidies haven’t been about keeping the small farmer in business for decades. It’s mostly a hand out to Big Ag, an attempt to keep farms at maximum productivity. One can argue about whether or not it works as intended.

    Funny! Benny has a subsidized super highway so he can go gamble in Las Vegas. Kit P has to drive an hour to get to the interstate. My county road are paid by my low property taxes. Benny’s power system is supplied by other states. Benny’s water system is supplied by massive aqueducts that bring water from Northern California and the Colorado River.

    There is also the small matter that people in Benny’s situation outnumber people in Kit’s situation by 100:1. Get over it, Kit. It’s called democracy.

    [link]      
  74. By Benny BND Cole on January 10, 2011 at 6:26 pm

    Optimist-

    I may die before I get a chance, but I would like to write a book, “Red State Socialist Empire.”

    In fact, rural American benefits from huge federal and cross-subsidies for infrastructure and related services, such as rails, air service and postal service (you think the postal service runs a loss on its NY-LA trade?).

    Every year, $8 billion is larded into rural America just so they have land line phone service. The Department of Defense in some regards is a rural job and lard bank.

    A lot of this started when FDR was prezzy and LBJ a TX congressman. They got together and invented aid to rural areas, for electricity and water projects. The sense of rural Senators and Congressman that they should get subsidies has grown exponentially ever since. Kentucky gets back $1.50 for every $1 it sends to DC, or about $4,000 for every resident in net income.

    Every rural statye is a huge net beneficiary of federal spending. They are subsidized by urban states.

    It is simply laughable when you hear right-wing pettifogging by rural politicians.

    Hey, I have a great idea–how about each state gets back the equivalent of what they send to DC. That balances the federal budget, and ends regional subsidies.

    Hey, what happened to all the right-wingers now? They don’t like subsidies and deficits?

    [link]      
  75. By Walt on January 10, 2011 at 8:36 pm

    Optimist said:

     

    Walt,

    You’re right. It’s not expensive. To me that means it does not require subsidies. If the market demands more ethanol, all carmakers would jump to provide more flex-fuel vehicles – at a cost of next to nothing. That so few carmakers are offering flex-fuel would suggest that just the opposite is happening: demand for ethanol remains weak, in spite of all the (wasteful) efforts by the prostitutians.

    IMHO, the electric car is an expensive joke, whose bluff will eventually be called. We’ll see.


     

    Optimist, I was thinking more in line with a mandate like what is outlined in the Open Fuel Standard sitting in the house and senate waiting for more support.  This is happening here in America now with the EPA pushing hard on companies who vent methane, CO2 or other emissions, or flare gases into CO2 emissions.  They ruled methane, CO2 and other type emissions are now dangerous pollutants, and once they were determined to be pollutants it gave them the power to regulate them, and mandate their reduction.  The last few yearsr I did not see any pressure on the oil companies to stop flaring here in America, so I was spending all my time traveling overseas, and speaking on the issue in major flaring areas.  The past 2 months have really changed, as some local states now are putting pressure with the EPA to stop flaring, or shut down production.  This is a type of mandate that has not really legally been adopted, but they know it is coming and they are moving quickly to seek out solutions.  A mandate by the congress to make more flex fuel autos would drive consumers to consider more options…and demand would follow.  There no reason to charge $1,000 or more for a flex fuel auto if it could be easily installed in more cars and trucks.  I would not want to subsidise the autos to make flex fuels…I’m tired of my tax dollars being used to directly fund every corporate give away.

    I have my own reasons why I believe more flex fuel cars are not on the road, but that takes me into a lot of history not worthy of discussion here.

    [link]      
  76. By ronald-steenblik on January 11, 2011 at 2:48 am

    It is simply laughable when you hear right-wing pettifogging by rural politicians.

    Hey, I have a great idea–how about each state gets back the equivalent of what they send to DC. That balances the federal budget, and ends regional subsidies.

    Well said, Benny! But of course, we know your proposal will never happen: the make-up of the Senate (many more rural than urban states) ensures that net per capita transfers will always flow from the urban coasts to the rural heartland. The only thing we can hope for is to make those transfers the least economically and environmentally harmful as possible. That, at a minimum, means changing the entitlement rhetoric so effectively used by rural-state politicians. When states raise and spend their own money, how they spend it is up to them. But when they are spending other states’ money, the people of those other states should demand a large say in how that money is spent.

    [link]      
  77. By Kit P on January 11, 2011 at 6:42 am

    “It’s called democracy.”

     

    We live in a republic Optimist. It is set up to avoid the tyranny of the majority. However, my point is that renewable energy is an invention of liberal city folks. If you want us to make you ethanol or electricity with wind turbines you have to pay extra.

     

    “Every rural statye is a huge net beneficiary of federal spending.”

     

    “Well said, Benny!”

     

    Have you looked at Benny’s data Ron?

     

    I have looked at Benny’s data and it is just nonsense. I do not know where Ron or Optimist live but do you think that the people of Eastern Washington asked the federal government to build nuclear weapons there? Do you think that the people of Nevada voted to test nuclear weapons there?

     

    Tell me Optimist & Ron where the power plants are that provide your electricity? Same place Benny’s are, some place else. Built there not to create jobs for rural people but because you do not want them in your back yard. Same with the military bases. Maybe we should take Benny’s land away for the public good and build a nuke plant there.

     

    Ethanol is simply a case of looking for something to be unhappy about without considering the merits. In any case, it is a very small program and not the cause of the large deficit.

     

     

    [link]      
  78. By rrapier on January 11, 2011 at 11:21 am

    Moiety said:

    Robert Rapier said:

    Hi Stephen,

    Cellulosic ethanol is mostly still in the lab.


    Stephen
     

    One of the few exceptions is Weyland in Bergen Norway.

    http://www.ethanolproducer.com…..-in-norway

    However you will notice that it is ‘pilot scale’ ie.e ’000kg/year as opposed to ’000ton/year.


     

    Hi Moiety,

    This is what I mean by “in the lab.” Iogen has also run a pilot plant for several years, but have never advanced to the stage of building a commercial facility. And they have been at this game longer than just about anyone running; you have to wonder why it is that they don’t build a full-scale plant. I know why they don’t. The economics of the process are terrible.

    RR

    [link]      
  79. By rrapier on January 11, 2011 at 11:31 am

    Kit P said:

    Ethanol is simply a case of looking for something to be unhappy about without considering the merits. In any case, it is a very small program and not the cause of the large deficit.


     

    Once more, Kit, so often eager to show us what he knows, has failed to answer these questions:

    WHY DO YOU THINK TAX CREDITS ARE NEEDED FOR THE ETHANOL INDUSTRY WITH

    THE RENEWABLE FUEL STANDARD IN PLACE? IS THIS A RESPONSIBLE USE OF TAX

    DOLLARS?

    The obvious conclusion is that Kit can’t answer them rationally, so he is left with straw men like “people looking for something to be unhappy about,” or “this isn’t the cause of the large deficit.” LOL. I am unaware of anyone who made this claim. What is the cause of the is lots of decisions like this, where we made poor decisions on taxing and spending. These decisions simply add billions each year to the deficit. For you, “billions of dollars” may be peanuts; for me it is real money that my kids are going to have to pay back while receiving zero benefit for it. You would think a fiscal conservative like yourself would be all over this, but for some reason you have always been eager to give this particular issue a free pass. Of course if this was solar power we were spending these subsidies on, he would tell us how solar power doesn’t work.

    RR

    [link]      
  80. By rrapier on January 11, 2011 at 11:40 am

    Kit P said:

    However, my point is that renewable energy is an invention of liberal city folks. If you want us to make you ethanol or electricity with wind turbines you have to pay extra.


     

    Yes, these liberal city senators like Charles Grassley who fight tooth and nail for subsidies the industry doesn’t need. It is people like him who want the ethanol made, and not content to merely subsidize it, also forces us to buy it. So we have no choice, and get to pay extra. I bet liberal city folks like Barbara Boxer can strongly support these programs of her fellow liberal city senator, Charles Grassley.

    Kit, for someone who recently said you have no respect for Benny (which is a “no-no”), you certainly don’t write things to garner any respect from anyone.

    RR

    [link]      
  81. By gail-tverberg on January 11, 2011 at 11:50 am

    Robert Rapier said:

    “Both clutching to a failed assumption thoroughly dis proven by reality.”

    Yet I can’t get you to actually list a single one of those disproven assumptions. You throw broad accusations, but refuse to identify a specific case. “You are wrong about ethanol” is pretty meaningless. What am I wrong about? You have to be specific or your argument has no value.

     

    Robert, as you may have noticed, I got myself a little bit in the middle of this. I wrote a post on Our Finite World trying to explain some of the corn ethanol issues I see, including

    1. Not a good enough energy return

    2. Tends to raise food prices, through resource competition.

    3. Damage to the environment from farming practices.

    4. Seems to require mandates or subsidies to be salable.

    5. Likely to decline in supply, at the time petroleum supplies decline.

    I posted some of it as comments to Brian Westenhaus’s blog. I really didn’t get into the exporting of ethanol issue to any significant extent, partly because I hadn’t researched the issue, and partly because corn ethanol seems to have so many other problems. 

    To its benefit, we are at least not badly worsening our balance of payments with exported ethanol, since we are getting paid for its export.

    Gail

     

     

     

    [link]      
  82. By ronald-steenblik on January 11, 2011 at 12:11 pm

    @Gail: Welcome, and nice comments. But I have to disagree with this part of your comment:

    To its benefit, we are at least not badly worsening our balance of payments with exported ethanol, since we are getting paid for its export.

    By that logic, then we should subsidize the export of everything that isn’t nailed down. We might be the poorer for it, but our balance of payments will be in the black!

    [link]      
  83. By sameer-kulkarni on January 11, 2011 at 12:15 pm

     

     

    Yes, you wnet srong from the begining. College professors (in non engineering disciplines) and bloggers worry about EROEI. EROEI is a phony criteria. The job of farmers and energy producers is to provide food and energy when and where people need it. When we fail it is called a crisis and the severity can be measured in dead bodies not EROEI.

     

    @ Kit.P I would have completely agreed with you if

    1. The corn would have been grown organically without the usage of pesticides & fertilizers

    2. Process steam would have been generated from burning agro-wastes instead of combusting Natural Gas

    3. Electricity would have been completely supplied by solar/CHP from agro waste facility instead of coal

    4. Fuel ethanol itself would be have used for transportation of feedstock & ethanol to the blending stations.

    (Whilst some ethanol producers would have implemented a few or all of the above recommendations, I am just generalizing)

    So EROEI of ethanol is not only a measure of the net energy yield of the process theoretically but also viability of the process being a truly renewable. EROEI would have definitely been phony criteria if fossil fuel combustion wouldn’t have led to climate change. Btw I’m a Chemical Engineer working on fermentation.

     

    Now there are some people who do not like coal. Who are these people? They are people who do not have any coal. So if California creates a Low-Carbon Fuel Standard (LCFS) that will promote sugarcane in the Imperial Valley over Iowa corn, I do not have a problem with that. However, since California rejects nuclear power over natural gas for making electricity; I must conclude that there standards are selective to give loacl business an advatage.

     

    Well environmentalists didn’t like MTBE either & recommended it be replaced with Ethanol. The only potential ethanol (made from corn) has, is to be a good fuel additive not a fuel substitute.

     

    “David Pimentel professor of ecology and agriculture at Cornell University, has called for massive reduction in world populations in order to avoid a permanent global energy crisis.”

     

    He could have rather recommended massive control instead of massive reduction.

     

    As an engineer, I see no technical limitations on providing food, clean water, and energy for the world population. Clearly we learned by the late 60s that the environmental impact of practices at the time were not sustainable. Yet now every key indicator of environmental quality in the US is improving thanks to incremental changes.

    However, the purpose of domestic production of transportation fuel is not about environmental improvement but economic security. Since production of biofuels must be done within current regulations, the environmental impact is considered.

     

    It depends upon each individual’s perspective because 30-40 years down the line economic security will have to work hands in glove with the environmental improvement. Also if ethanol is truly an alternative fuel, then why does the price of ethanol rise when crude oil jumps? http://www.agmrc.org/renewable…..dustry.cfm

     

    So Sam where you went wrong is entering a debate that was intended to subvert the intent of US energy policy namely provide alternatives to imported oil. The mandates to provide alternative is not a mandate to replace oil or solve global warming. The policy is working very base on the key performance indicator of the amount of biofuel produced.

     

    So why export such a precious commodity ??

     

    Furthermore, I think we have just scratched the surface in the US. So if polices have been affective in the US to go from 1% to 8% in less than 10 years, can similar polices work for places like India?

     

    Here in India an Ethanol blend of 5% with petrol & people are already using ethanol doped petrol in their cars. It has been mandated that by 2010 the blend wall has to be increased to 10%. Existing plants make ethanol from sugar molasses. Cultivation studies are being conducted to assess the viability of other prospective feedstocks like sugar beet & Sweet sorghum. However there is still a huge Ethanol deficit as even 5% blending is yet to be achieved successfully in all the states. Some petroleum companies are importing ethanol from Brazil. I guess after reading this article they might consider importing some from US as well.

     

     

     

    [link]      
  84. By russ-finley on January 11, 2011 at 12:34 pm

    Good points, Ron, Benny. Just two days ago, while riding my electric bike past a power plant on my way to a military base …here in Seattle, I was thanking my lucky stars I didn’t live in close proximity to a stinking (literally) corn ethanol refinery.

     

    [link]      
  85. By russ-finley on January 11, 2011 at 1:44 pm

    Gail Tverberg said:

    To its benefit, we are at least not badly worsening our balance of payments with exported ethanol, since we are getting paid for its export.

    Adding to what Ron said,  it would be interesting to travel back in time, eliminate the ethanol mandates, and see how much corn we would be exporting today. With world population growing by 25 million a year and with more people affording to eat more animal protein fed in part by corn, demand for corn is growing, as witnessed by its price. My guess is that we would be profitably exporting record amounts of corn.

    [link]      
  86. By rrapier on January 11, 2011 at 3:18 pm

    Walt said:

    This is happening here in America now with the EPA pushing hard on companies who vent methane, CO2 or other emissions, or flare gases into CO2 emissions.  They ruled methane, CO2 and other type emissions are now dangerous pollutants, and once they were determined to be pollutants it gave them the power to regulate them, and mandate their reduction.  The last few yearsr I did not see any pressure on the oil companies to stop flaring here in America, so I was spending all my time traveling overseas, and speaking on the issue in major flaring areas.  


     

    Are you talking about flaring from coal production or oil production? In the U.S., flaring is only allowed for oil installations offshore, and even then it is regulated and monitored.

    RR

    [link]      
  87. By Kit P on January 11, 2011 at 7:19 pm

    Btw I’m a Chemical Engineer working on fermentation.

     

    Good for you Sam. The last environmental chemistry class I took was taught was grad student from India. Very competent Have you studied US energy policy? The purpose of corn ethanol in the US is to provide an alternative to imported oil.

     

    “It depends upon each individual’s perspective because 30-40 years down the line economic security will have to work hands in glove with the environmental improvement.”

     

    My perspective is being 30-40 years down road. I am still waiting for all those perfect solutions that critics suggest for replacing incremental improvement. I think all those ethanol plants will be gold mines in another 10 years.

     

    “Here in India ..”

     

    Thanks for the info, give it some more change.

    [link]      
  88. By jay on January 12, 2011 at 1:02 am

    Kit P said:

    The purpose of corn ethanol in the US is to provide an alternative to imported oil.

     

     I think all those ethanol plants will be gold mines in another 10 years.


    Kit, 

    I think the purpose of corn ethanol in the 2000-2010 era was to provide oxygenate options for blending into gas stocks that didn’t taint water supplies, to replace MTBE. It has succeeded but as you know there’s a firm 16bgpy ceiling on annual corn ethanol volumes. So as for EtOH plants being in business in 10 years, much less gold mines, I doubt it. All are on subsidized life support and hoping cellulosic ethanol wakes from its slumber in time and with enough volume to keep them in high corn and corn cobs when the subsidy ends and other oxygenate fuels enter the market, such as HMAs or MeOH.  

    That our government subsidizes a fuel they won’t allow to grow past a certain volume is a sad but true paradox of political ball busting and environmental imperatives. But at least by subsidizing corn ethanol production the volume ceiling will be reached all the sooner and the world will move on to what’s next. When investors who’ve still got dry powder focus their attention on the fuel(s) that have the scalability to fill the 21bgpy RFS gap beyond corn ethanol, you may be rethinking your bets. 

    All in my humble opinion of course.

    [link]      
  89. By ronald-steenblik on January 12, 2011 at 3:44 am

    Jay writes:

    [T]here’s a firm 16 bgpy ceiling on annual corn ethanol volumes.

    No there isn’t. The (current — Congress has already revised it once) federal Renewable Fuels Standard (RFS), Ver. 2.0, only sets 15 billion gallons per year as the annual federal quota for ethanol that meets the lowest life-cycle emissions of the standard. That tranche of the RFS-2 could be met from ethanol made from any source (corn, cane, sorghum, wheat, whey) that achieves at least a 20% fewer emissions of greenhouse gases over its life cycle than gasoline, and is not specific to corn.

    More to the point, there is nothing in the law that would prevent domestic sales of corn ethanol beyond 15 billion gallons a year. And some of the corn, whether or not it is eligible to benefit from the federal blenders’ credit (VEETC), would continue to benefit from state-level incentives.

    So, your remark that “at least by subsidizing corn ethanol production the volume ceiling will be reached all the sooner and the world will move on to what’s next” strikes me as equivalent to arguing that, “at least by fritting away our money, our wallet will be emptier all the sooner, and we can move on to developing an austerity budget.”

    [link]      
  90. By rrapier on January 12, 2011 at 10:48 am

    Jay said:

    All in my humble opinion of course.


     

    Hello Jay,

    Off topic, but Mark R. spent some time in my office yesterday. He filled me in on what it is you are attempting to do in Montana. Until then I wasn’t quite sure what the relationship between the two of you actually was, but now I understand. Best of luck in your endeavors there.

    RR

    [link]      
  91. By jay on January 12, 2011 at 12:46 pm

    Ronald Steenblik said:

    No there isn’t. The (current — Congress has already revised it once) federal Renewable Fuels Standard (RFS), Ver. 2.0, only sets 15 billion gallons per year as the annual federal quota for ethanol that meets the lowest life-cycle emissions of the standard. That tranche of the RFS-2 could be met from ethanol made from any source (corn, cane, sorghum, wheat, whey) that achieves at least a 20% fewer emissions of greenhouse gases over its life cycle than gasoline, and is not specific to corn.

    More to the point, there is nothing in the law that would prevent domestic sales of corn ethanol beyond 15 billion gallons a year. And some of the corn, whether or not it is eligible to benefit from the federal blenders’ credit (VEETC), would continue to benefit from state-level incentives.

    So, your remark that “at least by subsidizing corn ethanol production the volume ceiling will be reached all the sooner and the world will move on to what’s next” strikes me as equivalent to arguing that, “at least by fritting away our money, our wallet will be emptier all the sooner, and we can move on to developing an austerity budget.”

    Okay, 15bgpy. At any rate the dialog around ethanol represents a business/regulatory firewall of sorts to insulate and protect the corn ethanol franchise. CE hasn’t worked so far, and the need for annual crops to make ethanol in the first place is misguided, in my opinion. There are plenty of carbon wastes being ignored at this country’s increasing environmental peril, and there are definitely better, stronger, cleaner and cheaper alcohol fuels. 

    As for frittering away money and needing austerity measures, that’s exactly what the government is (and isn’t) doing now. I stand by my statement that the country needs to move on where clean fuels and the environment are concerned.  

    [link]      
  92. By jay on January 12, 2011 at 1:38 pm

    Robert Rapier said:

    Best of luck in your endeavors there.

     

    Thanks, Robert. Although I need to say upfront that we’ve blown through “attempting” in favor of just doing it even if it takes everything we’ve got to turn it on. I personally don’t have an exit strategy or a plan B.  We’ve closed the door on failure as an option because we’re confident where we’re headed. And as a result of our laser focus on a successful outcome there are a lot of people here in Montana beginning to understand and support the project for this reason alone. They’ve never heard of a better idea for making clean fuels. Have you?

    We’ve got all the biomass, sewer sludge, trash, coal, methane and CO2 we will ever need. We have the clean fuel to beat, and the economic imperatives and potential upside of insatiable global markets to inspire project stakeholders to see it through simply to see what’s on the other side of risk/reward because they’re tired of promises that haven’t materialized and energy/environmental half truths that have become gospel in some circles, and the stuff of rhetorical legend on the interwebs. 

    As Mark may have said more than once, if we’re half wrong with our projections the beancounters will still be doing backflips. 

    This project is akin to Wright Brothers at Kitty Hawk…all we need to do is get off the ground and stay there to wow you and the folks in hometown America, all of whom are looking for loose change in between their couch seats. Something you might not be able to appreciate. ;-)

    Talking about the current dysfunctional situation in liquid fuels and waiting for other shoes (energy shortfalls, economic contraction, environmental mayhem) to drop is failure enough at this point.  We tarry and obfuscate over EtOH cocktails on the fantail of the Good Ship Lollipop at our peril, and I’m sure you know this better than anyone else I’ve interacted with on the topic. 

     

     

    [link]      
  93. By Kit P on January 12, 2011 at 8:24 pm

    “I think the purpose of corn ethanol in the 2000-2010 era was to provide oxygenate options for blending into gas stocks that didn’t taint water supplies, to replace MTBE.”

     

    That was one of the reasons Jay.

     

    “So as for EtOH plants being in business in 10 years, much less gold mines, I doubt it.”

     

    Tell me Jay what you think transportation fuels will cost 10 years from now?

     

    Fifteen years ago I decided to get out of nuclear power because plant after plant was closing since natural gas generation was cheaper than a poorly managed nuke. Now the 104 nuke US plants are the lowest cost base load generation even lower than coal.

     

    You may be right that something better may come along Jay which pushes ethanol out of the market. It will not be methanol however. One of the things I learned about renewable energy is that it has as many enemies as nukes. If something better comes along, the same people that are against it will make the same statements about whatever is new. What the mix will be in 10 years, I do not know just that it will never be good enough for the critics.

    [link]      
  94. By Wendell Mercantile on January 12, 2011 at 2:36 pm

    We’ve got all the biomass, sewer sludge, trash, coal, methane and CO2 we will ever need.

    Jay~

    And by the way, except for CO2, all excellent feedstock from which to make methanol.

    [link]      
  95. By ronald-steenblik on January 12, 2011 at 7:22 pm

    Jay wrote:

    I stand by my statement that the country needs to move on where clean fuels and the environment are concerned.

    And I agree. My point is that corn ethanol production is NOT limited, and there is every reason to worry that it will continue to have the upper hand vis-à-vis alternatives.

    [link]      
  96. By Walt on January 13, 2011 at 4:26 pm

    Robert Rapier said:

    Walt said:

    This is happening here in America now with the EPA pushing hard on companies who vent methane, CO2 or other emissions, or flare gases into CO2 emissions.  They ruled methane, CO2 and other type emissions are now dangerous pollutants, and once they were determined to be pollutants it gave them the power to regulate them, and mandate their reduction.  The last few yearsr I did not see any pressure on the oil companies to stop flaring here in America, so I was spending all my time traveling overseas, and speaking on the issue in major flaring areas.  


     

    Are you talking about flaring from coal production or oil production? In the U.S., flaring is only allowed for oil installations offshore, and even then it is regulated and monitored.

    RR


     

    Robert, I am talking about oil production.  There are a lot of flares now on landfills, coal mines, oil fields, etc. in the USA.  The field I’m working on now is flaring currently.  Michigan, like other states, allows an exemption from the “no flare order” and so some companies flare 50,000 scfd and others flare up to 100,000 scfd.  They would like to not flare at all, but the pressures are just coming.  I have the list for flares in Texas and in Louisiana as well and they are NOT all offshore I can assure you.  The flares in Michigan have been this way since the 1950′s or so, and are grandfathered in under the exemptions.  Those new one’s will not be so easy to flare.

    [link]      
  97. By Walt on January 13, 2011 at 4:42 pm

    Jay said:

    They’ve never heard of a better idea for making clean fuels. Have you?


     

    Jay, I agree…but the definition of clean fuels needs to be broaded in the media to include methanol and mixed alcohols.  I spent some time yesterday with a writer for Road & Track magazine who just spent time at the Detroit Auto Show, and it was clear that about every engineer he knows at the magazine and maybe even with the autos like methanol and higher BTU fuels, but we both agreed at the corporate level it may never see any more light than what it did in California…at least for methanol.  Ethanol he believes is a very poor fuel, and especially at its cost, but that is not likely to change anyone’s mind in DC or in Iowa.  The fact remains that methanol and higher alcohols may be really moving to other countries in my opinion, but at this stage we need to keep trying to push the story.  My technology will never make their magazine…but we just need to keep trying to explain methanol and mixed alcohols can help support gasoline supplies…even made in America.  Algae jet/diesel/gasoline is a long way from reality.  We start production tonight…so let’s see if we can make this work.  Heading back there now to work through late night.  22 degF here, and last night it got down to 15 degF…turning wrenches in blizzard snow and cold makes interesting gas flows, liquid line freezes, etc.  Good experience!

     

    [link]      
  98. By Wendell Mercantile on January 13, 2011 at 5:58 pm

    Algae jet/diesel/gasoline is a long way from reality.

    Walt,

    Here is a company that claims they can make an economic substitute for 100LL AvGas from biomass, but one that will be a hydrocarbon fuel and not an alcohol.

    AvGas Alternatives: The Swift Fuel Proposition

    According to Swift Enterprises, Ltd., they have developed an unleaded 100LL replacement fuel, called 100SF. They claim that it exceeds the energy content and octane number of conventional 100LL. The new fuel contains two chemical components that when mixed together meet or exceed most performance parameters of 100LL. Because of this, 100SF requires minimal engine modification to run in the current general aviation fleet. 100SF does not abstract water, which means that standard general aviation practices of draining a sample of fuel and checking for water still hold true. The components that make up 100SF are bio-derivable (sugars, cellulose, and lignin). Using sorghum as an example, 89 gallons of 100SF can be produced from 1 ton of sorghum biomass. The fuel contains no alcohol or oxygenates, but ethanol and ethanol plants can be used in the production process. The uniqueness of this approach is the fact that the Swift process does not produce alcohol, but rather hydrocarbons already present in petroleum fuels, from biomass.

    [link]      
  99. By rrapier on January 14, 2011 at 2:52 pm

    Walt said:

    Robert Rapier said:

    Walt said:

     

    Robert, I am talking about oil production.  There are a lot of flares now on landfills, coal mines, oil fields, etc. in the USA.  The field I’m working on now is flaring currently.  Michigan, like other states, allows an exemption from the “no flare order” and so some companies flare 50,000 scfd and others flare up to 100,000 scfd.  They would like to not flare at all, but the pressures are just coming.  I have the list for flares in Texas and in Louisiana as well and they are NOT all offshore I can assure you.  The flares in Michigan have been this way since the 1950′s or so, and are grandfathered in under the exemptions.  Those new one’s will not be so easy to flare.


     

    Can you give me an actual onshore example — with the amount flared (and a source for the information)? I want to be sure we are talking about apples and apples. Chemical and oil facilities will have flares to deal with emergency situations. That is commonplace, and the flare generally runs with a small amount of gas flowing to it just to make sure it is available in case of emergency. But you seem to be saying that at some onshore oil production facilities the associated gas is flared.

     

    RR

    [link]      
  100. By Walt on January 15, 2011 at 1:22 pm

    Wendell Mercantile said:

    The components that make up 100SF are bio-derivable (sugars, cellulose, and lignin). Using sorghum as an example, 89 gallons of 100SF can be produced from 1 ton of sorghum biomass. The fuel contains no alcohol or oxygenates, but ethanol and ethanol plants can be used in the production process. The uniqueness of this approach is the fact that the Swift process does not produce alcohol, but rather hydrocarbons already present in petroleum fuels, from biomass.


     

    Wendell,

    This is great news.  Yes, depending on CAPEX and OPEX this looks very very promising.  I look forward to their progress and will definitely follow their information as this would be an excellent solution.

    [link]      
  101. By Walt on January 15, 2011 at 2:06 pm

    Robert Rapier said:

    Can you give me an actual onshore example — with the amount flared (and a source for the information)? I want to be sure we are talking about apples and apples. Chemical and oil facilities will have flares to deal with emergency situations. That is commonplace, and the flare generally runs with a small amount of gas flowing to it just to make sure it is available in case of emergency. But you seem to be saying that at some onshore oil production facilities the associated gas is flared.

     

    RR


     

    Robert, I would rather not mention sites in Michigan (I have a list of all gas flaring exemption orders and sites), but you can get a similar list directly from the DEQ.  For those wells subject to Special Order 3-71, they are able to query database (contact contact Larry Organek for the database through this link here:  http://www.michigan.gov/deq/0,…..-,00.html) to determine wells that have been granted an exception to that Order. Essentially, the exception is an allowance to flare gas from wells that produce from the Salina-Niagaran formations.  From that list you can use google maps to see the flares if you doubt what I’m saying.  You can also inquire whether Michigan allows any gas flares onshore, or no gas flares onshore per the legislations.
     

    If you doubt me, here is the no flare order for Michigan and the conditions for exemption.  Again, request the list of those who applied for exemption to see who is flaring beyond a temporary open flow test at initial production.

    http://www.michigan.gov/docume…..6597_7.pdf

    For the database in Louisiana, contact:  Mr. Kjel Brothen from Louisiana Department of Natural Resources. Flaring of gas is prohibited in most instances. The rule addressing this is LAC 43:XIX Subpart 15-Statewide Order No. 45-I-A.

    For the database in Texas, contact Mr. Gil Bujano from Rail Road Commission (RRC):  Below is link for the rule (32) outlining flaring issues.

    http://info.sos.state.tx.us/pl…..&rl=32

    http://www.rrc.state.tx.us/for…..atasht.pdf

    You can also see some flares “onshore” in the USA here:

    http://www.ngdc.noaa.gov/dmsp/…..lares.html

    See the google move video at 2:36 in the video to see some flares…although unidentified.  There is of course not a lot of oil & gas flares of associated gas in the USA or Canada or Norway according to a recent report here:

    http://bakerinstitute.org/publ…..ecured.pdf

    I would disagree with you that little or no flaring exists onshore in the USA except at refineries or petchem.  The work required to go through the thousands of companies flaring under exemptions, and determining which are onshore and offshore is not something that is easy or inexpensive.  The research is above to get you started if you firmly disagree that no flaring exists in America of associated gas.  I hope this is helpful and not in any way intended to avoid your request for an example.

    [link]      
  102. By ronald-steenblik on January 16, 2011 at 4:37 am

    Wow, that is a very generous sharing of data, Walt!

    [link]      
  103. By Kit P on January 16, 2011 at 8:28 pm

    Still reading Deep Water

     

    “At the start of production in April 1994, Shell continuously flared or vented between one and six million cubic feet of natural gas per day, without the required federal permission. The flaring and venting continued for more than four years until the Minerals Management Service announced it had discovered this violation as well as Shell’s failure to record and report the releases. In a 2003 civil settlement, Shell agreed to pay $49 million, …”

     

    You have to wonder why some at Shell are not in federal prison.

    [link]      
  104. By Walt on January 17, 2011 at 2:16 am

    Kit P said:

    Still reading Deep Water

     

    “At the start of production in April 1994, Shell continuously flared or vented between one and six million cubic feet of natural gas per day, without the required federal permission. The flaring and venting continued for more than four years until the Minerals Management Service announced it had discovered this violation as well as Shell’s failure to record and report the releases. In a 2003 civil settlement, Shell agreed to pay $49 million, …”

     

    You have to wonder why some at Shell are not in federal prison.


     

    Kit,

    I have been in Shell’s offices in Nigeria to discuss flare down options.  The meetings were very professional and cordial, and engineers get very interested in new technologies or advanced to overcome the problem.  The problem comes from the highest levels of management.  Shell like Exxon (and most super majors) have their own R&D, and so anything at the country-by-country operator level gets pushed back to head office, and killed.  In Nigeria, Shell has literally destroyed dozens of communities of villagers due to these massive flares (I have all the list of operators flaring in Nigeria and it is crazy what is flared).  It is so much worse than you could believe…here is just a small sampling:

    http://wiwavshell.org/shell%E2…..n-nigeria/

    My theory is that Nigeria is a market where plant/equipment are funded offshore, imported in to create as few real jobs as possible, and then all the crude, LPG and natural gas is exported leaving little benefit beyond taxes to the federal government.  Due to constant corruption promoted by military and politicians at all levels (read Washington, DC too) the money really never gets down to the people.  Any unrest is really very good for higher oil prices as super major traders can use these “flare ups” (so to speak) as a means to push oil prices higher.  Without constant “hot spots” and terrorism threats in various markets, I now see to a large degree why a few lawsuits and settlements are just part of doing business.  Shell and others don’t value life or community living in markets they own/control for many generations.  Of course, this is totally different in places like Qatar where Shell has done an AMAZING job to demonstrate to the world how workers are treated, and how living standards are raised.

    It is a balancing act between what they can get away with while people suffer and put up a fight, and what they cannot get away with and need to act humanitarian upfront rather than react.  Things are changing, and a few websites above expose in court just how bad it is, but often people settle for $50 to $100,000 to walk away and waive their right to sue.  Look at what is ongoing in the gulf of Mexico.  I’m afraid to say it is getting worse for families there, and a lot of families have waived any right to sue for pennies on the dollar.

    However, there is hope (in my opinion) that States and Provinces are doing a pretty good job in America, Canada, etc. on flaring reductions, but in other parts of the world it is not so easy.  There is no technology solution to convert methane to liquids below 30 mmscfd economically and anything from 10-30 mmscfd really needs to be incorporated into the up-front development drilling program.  That can be an added $150-300 million CAPEX that is not so easy to get absorbed.  Reinjection and/or power generation are the only options below those volumes, and neither of those are always possible.  Pipelines are no option for remote or isolated fields/wells.

    Things are improving…but I must admit I have been very disappointed in Shell’s attitude in Nigeria…and it comes from Netherlands down.  Don’t blame the Nigerians…I’ve had a company there since 2006 and put many, many proposals together and these people are truly suffering for generations due to these super majors and their classic power plays to make money at the expense of human life.  I’ve tried to make a difference, but it is too time consuming and expensive to fight that battle.  Shell and others can/do make your life miserable if you live in those countries as the lawsuit above shows.

    [link]      
  105. By Walt on January 17, 2011 at 2:37 am

    I know this is off topic, but in case people don’t read the lawsuit link with Shell in Nigeria, I did want to quote from the site:

    An estimated 1.5 million tons of oil has spilled in the
    Niger Delta ecosystem over the past 50 years. This amount is equivalent
    to about one “Exxon Valdez” spill in the Niger Delta each year.”

    [link]      
  106. By Kit P on January 17, 2011 at 7:17 am

    “Nigeria”

     

    Walt I live in the US. If you make a ‘material false statement’ to the US NRC and those folks will put you in jail. I have worked for three multinational companies. We had one standard for doing business. After you show that you can protect workers and the environment, then you can think about making a profit.

     

    The people that died listed in Deep Water had names:

     

    “On board the Bankston, the atmosphere was grim. The crew was forbidden to call home until there was more definitive information. By 11:30 p.m., the managers had taken a final mus ter and 11 men were missing: Jason Anderson, Dale Burkeen, Donald Clark, Stephen Curtis, Roy Kemp, Gordon Jones, Karl Dale Kleppinger, Blair Manuel, Dewey Revette, Shane Roshto, and Adam Weise.”

     

    The rules of law change when yo step off dry land. You are guilty until proven innocent. The US Coast Guard does not need a reason to board a vessel and do a safety inspection. Not having a strong safety culture is expensive.

     

    Flaring is done for safety and the environment. I suspect that Walt can not show any justification for not flaring.

    [link]      
  107. By Walt on January 17, 2011 at 7:22 pm

    Kit P said:

    Flaring is done for safety and the environment. I suspect that Walt can not show any justification for not flaring.


     

    Kit,

    Have you ever checked into a mental institution for an evaluation of your faculties?  The more I read your comments on this blog, I wonder if you have a mental instability the way you talk to people and use your keyboard.  I suggest you read the allegations in court documents before making such wise crack, unsubstantiated comments.

    [link]      
  108. By Kit P on January 17, 2011 at 10:36 pm

    Help me out here Walt, what part is ‘unsubstantiated comments’?

     

    One of the reasons flares have been mandated is to reduce the environmental impact of sour gas. Is Walt saying that I am incorrect? Flares are also used to ignite unexpected release of methane and toxic gases to prevent explosions and personnel from being overcome. Is Walt saying I am wrong about this?

     

    The bounding parameter is that energy where it is not needed has little value but has significant environmental impact and is dangerous.

    [link]      
  109. By rrapier on January 19, 2011 at 11:41 am

    I would disagree with you that little or no flaring exists onshore in

    the USA except at refineries or petchem.  The work required to go

    through the thousands of companies flaring under exemptions, and

    determining which are onshore and offshore is not something that is easy

    or inexpensive.  The research is above to get you started if you firmly

    disagree that no flaring exists in America of associated gas.  I hope

    this is helpful and not in any way intended to avoid your request for an

    example.

     

    Walt, I am just unaware of any examples. Reading through some (not yet all) of your links, it looks like the flaring is what I expect flaring to be associated with: Upset conditions. You can’t make any kind of business utilizing gas that is only available during process upsets.

    What I am looking for (and there may be an example within all of those links) is an example of an onshore operator flaring anything other than baseline amounts of natural gas (to keep the flare lit) during normal operating conditions. It isn’t that I agree or disagree; I am just unaware of this in the continental U.S. today. So a specific example would be most helpful.

    For instance, one of your links explicitly states: “The operator of a gas gathering system, gas plant, gas compressor facility or other gas handling equipment not directly associated with lease production of gas, shall not intentionally allow gas to be released for a period of more than 24 hours after the start of an upset condition.” It allows an exception only during emergency conditions. I know that when I worked at both chemical plants and oil refineries, we had to report all flaring. So it is hard for me to understand how anyone could get away with simply flaring natural gas.

    RR

    [link]      
  110. By Walt on January 19, 2011 at 2:25 pm

    Robert Rapier said:

    What I am looking for (and there may be an example within all of those links) is an example of an onshore operator flaring anything other than baseline amounts of natural gas (to keep the flare lit) during normal operating conditions. It isn’t that I agree or disagree; I am just unaware of this in the continental U.S. today. So a specific example would be most helpful.

    For instance, one of your links explicitly states: “The operator of a gas gathering system, gas plant, gas compressor facility or other gas handling equipment not directly associated with lease production of gas, shall not intentionally allow gas to be released for a period of more than 24 hours after the start of an upset condition.” It allows an exception only during emergency conditions. I know that when I worked at both chemical plants and oil refineries, we had to report all flaring. So it is hard for me to understand how anyone could get away with simply flaring natural gas.

    RR


     

    Robert,

    I will be on site next week and will take a picture.  It is a very large flare (probably 100,000 scfd) and email you.  There are flares everywhere in Michigan on oil fields…you can drive down I-75 and see them along side the highway.  I’m surprised you have never seen them except in emergency shut-downs.  Flares do not need to be operational at all facilities as some people imply.  Their are lots of facilities who have removed flares (like right here in Michigan at the Michcon facility) and only have a vent/flare stack in place for emergency shut-downs.  Oil fields are a bit more complicated.  I was talking with a guy in Kentucky on Monday that has flares on some oil fields, and he has not felt the pressure yet to deal with them, but he knows of Michigan is being more concerning.

    I’ll email you privately pictures next week.

    [link]      
  111. By rrapier on January 20, 2011 at 2:04 pm

    Walt said:

     

    Robert,

    I will be on site next week and will take a picture.  It is a very large flare (probably 100,000 scfd) and email you.  There are flares everywhere in Michigan on oil fields…you can drive down I-75 and see them along side the highway.  I’m surprised you have never seen them except in emergency shut-downs.  Flares do not need to be operational at all facilities as some people imply.  Their are lots of facilities who have removed flares (like right here in Michigan at the Michcon facility) and only have a vent/flare stack in place for emergency shut-downs.  Oil fields are a bit more complicated.  I was talking with a guy in Kentucky on Monday that has flares on some oil fields, and he has not felt the pressure yet to deal with them, but he knows of Michigan is being more concerning.

    I’ll email you privately pictures next week.


     

    Walt,

    While a picture would be nice, I won’t be able to estimate flow or know whether an upset condition caused the flaring if it looks excessive. Flaring is regulated by the EPA; as I said any time we ever had a flaring incident we had to report it. So if someone is flaring like this, there should be EPA records of how much and how often. That’s basically what I am looking for; this has to be publicly reported somewhere. I just want actual, verifiable, and quantifiable examples.

    RR

    [link]      
  112. By Walt on January 20, 2011 at 8:23 pm

    Robert Rapier said:

     

    That’s basically what I am looking for; this has to be publicly reported somewhere. I just want actual, verifiable, and quantifiable examples.

    RR


     

    Robert,

    You are making me laugh.  I’ve been working with GGFR since 2006 on gas flaring reduction.  If you think you are going to go find flare data from the EPA that you can easily access you don’t need me.  Be my guest.  If you cannot find any EPA data, then you are right.  There are no flares in the USA onshore.  Congratulations.  I only believe what I see with my eyes…and these flares are not emergency…they run 24/7.

    [link]      
  113. By rrapier on January 21, 2011 at 2:48 pm

    Walt said:

     

    Robert,

    You are making me laugh.  I’ve been working with GGFR since 2006 on gas flaring reduction.  If you think you are going to go find flare data from the EPA that you can easily access you don’t need me.  Be my guest.  If you cannot find any EPA data, then you are right.  There are no flares in the USA onshore.  Congratulations.  I only believe what I see with my eyes…and these flares are not emergency…they run 24/7.


     

    Walt, I get the feeling that you think I am trying to trap you or trick you. I have not once denied what you are claiming, I am just asking for data. Flaring is regulated by the EPA. Either they have data on it, or someone is breaking the law and can be reported and dealt with. I don’t trust my eyes or your eyes more than I trust flow meters. What may look like a flaring situation may be the emergency flare — which does run 24/7. If someone is flaring 100,000 scf a day, there exists data for that.

    But so far you have given me no verifiable example of anyone flaring gas onshore (other than previously mentioned emergency flares). I have just gotten a lot of assurances that it happens. This is something that you have obviously spent a lot of time looking at, so I would have thought you could have pointed me right to the data. But the longer this dance goes on, the more puzzled I become.

    RR

    [link]      
  114. By Walt on January 21, 2011 at 7:22 pm

    Robert Rapier said:

    But so far you have given me no verifiable example of anyone flaring gas onshore (other than previously mentioned emergency flares). I have just gotten a lot of assurances that it happens. This is something that you have obviously spent a lot of time looking at, so I would have thought you could have pointed me right to the data. But the longer this dance goes on, the more puzzled I become.

    RR


     

    Robert,

    I must be mistaken.  All the flares must be operating and reporting to EPA as emergency flares in America.  I’ve never been able to get the data from the EPA for emergency flares so you will need to do the research yourself.  In regard to exemptions, as I sent to you already in the link for Michigan, they can flare an allowance of associated from wells that produce from the Salina-Niagaran formations.  I would be surprised all the flares in that are exempted in the Salina-Niagaran formations are for emergency only, but you would have to ask the EPA.  This is a state exemption, not EPA.

    To avoid any more dancing, you will need to do the research yourself to get the lists of those who are flaring from the 3 states I provided, or contact the EPA directly.  The databases are available if you want to request them and pay for them in Louisiana and Texas. They are not easily available online for you to access…and if no flaring exists except for emergencies I would not waste time researching those sites.

    [link]      
  115. By Walt on January 21, 2011 at 8:29 pm

    This announcement today was interesting in light of the article above…how are they going to meet the blending requirements if they are exporting?

    ————————————

    The Obama administration has remained supportive of the renewable
    fuel, and the EPA has said a congressional mandate for increased ethanol
    use can’t be achieved without allowing higher percentage blends.
    Congress, driven by a broad coalition of members from farm states, has
    required refiners to blend 36 billion gallons of biofuels, mostly
    ethanol, into auto fuel by 2022.

    Agriculture Secretary Tom Vilsack said after the decision that
    expanding the use of ethanol in gasoline “gives consumers the option of
    purchasing domestically produced renewable transportation fuels” and
    supporting American farmers and ranchers.

    Members of the ethanol industry say that use of the fuel can help
    reduce the country’s dependence on foreign oil while boosting a domestic
    industry and creating jobs. The industry group Growth Energy petitioned
    the EPA to raise the blend in March 2009. Tom Buis, president of the
    group, said Friday there are still steps to go to get more ethanol on
    the market but he is optimistic.

    “Ultimately we will get this marketplace open because it’s a win for
    America, a win for consumers and a win for our economy,” he said.

    The ethanol industry estimates that almost six out of 10 cars on the
    road would be able to use ethanol under the new standards. EPA estimates
    that almost 190 million cars on the road could use the 15 percent
    ethanol by 2014.

    ————————————

    http://www.msnbc.msn.com/id/41…..vironment/

    [link]      
  116. By rrapier on January 22, 2011 at 1:41 pm

    Walt said:

     

    Robert,

    I must be mistaken.  All the flares must be operating and reporting to EPA as emergency flares in America. 


     

    I give up. You have claimed that natural gas flaring is going on. I have asked you for data. You have provided none, and now want me to do the research to back up your claims.

    I did send a note to one of my contacts at the EPA on this. I will let you know what he says. I also don’t believe a state can exempt anyone from an EPA requirement, otherwise California would have long ago exempted themselves from the ethanol requirement. They have requested waivers multiple times from the EPA but they weren’t granted. Why request a waiver if you can just exempt yourself?

    RR

    [link]      
  117. By Walt on January 22, 2011 at 4:36 pm

    Robert Rapier said:

     

    I give up. You have claimed that natural gas flaring is going on. I have asked you for data. You have provided none, and now want me to do the research to back up your claims.

    I did send a note to one of my contacts at the EPA on this. I will let you know what he says. I also don’t believe a state can exempt anyone from an EPA requirement, otherwise California would have long ago exempted themselves from the ethanol requirement. They have requested waivers multiple times from the EPA but they weren’t granted. Why request a waiver if you can just exempt yourself?

    RR


     

    If you just want all of flaring and venting for the USA it is located on this site.

    http://tonto.eia.doe.gov/dnav/…..mmcf_a.htm

    I believe various gas flaring and venting is reported to the states alone, but if you do find any EPA reporting files on individual wells, and they are all emergency than you have permission to publicly call me a liar and one who cannot back up my claims.  I gave you the resources and links for 3 states who have databases of companies flaring.  In Michigan they are exempt from the no flare regulation in a certain formation as explained in the legislation.  If the EPA is upset, they should sue Michigan to bring those operators in compliance and fine those operators.  I’ll leave that up to the justice department and your contacts if you know who might bring the suit.  I know they are exempt under State law as I see the flares.

    [link]      
  118. By rrapier on January 22, 2011 at 8:56 pm

    Walt said:

     

    If you just want all of flaring and venting for the USA it is located on this site.

    http://tonto.eia.doe.gov/dnav/…..mmcf_a.htm


     

    That is more like what I was looking for. That does seem like an awful lot. Hopefully my guy at EPA can clarify.

    Thanks, RR

    [link]      
  119. By Kit P on January 23, 2011 at 4:01 pm

    “That does seem like an awful lot.”

     

    In for the entire US in 2009, 165,360 million ft^3 were flared. At 1,000 BTU/ft^3 or 165,400,000 MMBTU, we get about 25000000 MWh assuming a ICE/generator at 50% efficiency. If this gas was all at one location you would need about 3000 MWe of capacity.

     

    While that is indeed an ‘awful lot’, I would think that it would be converted to electricity if it was practical. As a rule of thumb. I think that a 1 MWe ICE/generator is the minimum economical size.

    Again from Deep Water,

     

    “At the start of production in April 1994, Shell continuously flared or vented between one and six million cubic feet of natural gas per day, without the required federal permission. The flaring and venting continued for more than four years until the Minerals Management Service announced it had discovered this violation as well as Shell’s failure to record and report the releases. In a 2003 civil settlement, Shell agreed to pay $49 million,”

     

    For the Shell platform, that works out to be a 200 kwh generator.

    What Walt needs to show is not the total amount of gas flared but how much gas is flared at each location. Are there locations that are worth doing with the gas?

    [link]      
  120. By Walt on January 24, 2011 at 5:12 am

    Kit P said:

    “That does seem like an awful lot.”

     

    In for the entire US in 2009, 165,360 million ft^3 were flared. At 1,000 BTU/ft^3 or 165,400,000 MMBTU, we get about 25000000 MWh assuming a ICE/generator at 50% efficiency. If this gas was all at one location you would need about 3000 MWe of capacity.

     

    While that is indeed an ‘awful lot’, I would think that it would be converted to electricity if it was practical. As a rule of thumb. I think that a 1 MWe ICE/generator is the minimum economical size.

    Again from Deep Water,

     

    “At the start of production in April 1994, Shell continuously flared or vented between one and six million cubic feet of natural gas per day, without the required federal permission. The flaring and venting continued for more than four years until the Minerals Management Service announced it had discovered this violation as well as Shell’s failure to record and report the releases. In a 2003 civil settlement, Shell agreed to pay $49 million,”

     

    For the Shell platform, that works out to be a 200 kwh generator.

    What Walt needs to show is not the total amount of gas flared but how much gas is flared at each location. Are there locations that are worth doing with the gas?


     

    Kit, this gas is flared/vented because it is not possible to use it for “on-sight” power generation in most cases.  The flares are mostly under 1 mmscfd (about 80% I would guess) and certainly nothing like what is going on offshore in the Gulf of Mexico, or Russia, Nigeria, Indonesia, etc.

    You are right that most flared gas could be used for power generation “off-site” if the flares could be combined, but that will take pipelines and gathering systems which generally require “pre-planning” to link all the various operators together.  I have found operators that do have close projects are not going to spend any money to tie in their gas to other operators to develop a mid-stream (NGL) or downstream (electricity) operation.  These operators have no money to invest generally after the project is funded, completed and operating.  Any new CAPEX or improvements is out of the question until they are “guaranteed” no risk of loss on eliminating the flare, or there is a lot of money in the solution to eliminate the flare, or they are forced by the State or EPA.

    Shell is the perfect example.  These guys fail to report anything…ever claiming it does not exist.  The only way to find out who is flaring is not by looking for the flared gas reporting…which they don’t like to do…but rather to find the permits for exemption to the non-flaring order.  They do file the permits for exemption to flare if they are going to flare for “temporary” reasons during after production testing.  The only problem is that they keep flaring until someone starts to complain (see Shell above…probably a whistleblower who was later fired).

    It is a lot of digging as the States don’t make any of this data easily available…and seldom do they return your emails.  It is an issue that gets operators angry and especially now with the new EPA reporting rules in effect this year.  People are steaming made they have to report even more carefully now.  Many of them do report (please don’t get me wrong), but they do it reluctantly and under an exemption of the no flare order.  I just don’t thinking making/generating off-site electricity will be the answer, however, they will definitely start working on on-site electricity due to the EPA reporting rules.  Everyone is “starting” (my opinion) to feel the pressure to do something with this wasted resource.

    I do hope we can help with GasTechno, but producers want no risk, no new technologies and they want no pressures to change.  Thus, if I can assume all these roles/risks then I suspect some will listen attentively, and move beyond denial.

    [link]      
  121. By Walt on January 24, 2011 at 5:24 am

    Robert Rapier said:

    Walt said:

     

    If you just want all of flaring and venting for the USA it is located on this site.

    http://tonto.eia.doe.gov/dnav/…..mmcf_a.htm


     

    That is more like what I was looking for. That does seem like an awful lot. Hopefully my guy at EPA can clarify.

    Thanks, RR


     

    That is really a basic list that has been out there a very long time, and seldom moves up/down.  What I would like to know if he does respond to you is whether or not the new reporting rules cover flared gas on oil & gas sites, or were they exempted like the biomass flaring/vented was just exempted a couple weeks ago?  I’m hearing new rumors that oil & gas flaring could be exempted from the new legislation of reporting at small volumes.  Remember, this is mostly considered CO2 emissions after the flare tip, and the CO2 venting is focused on large industrial operations.

    I would like to know if they now are putting more pressure to count ALL emissions and volumes.  For example, the list of companies using flares is based on Permit By Rule 106.492 in
    Texas
    (http://www.tceq.state.tx.us/pe…..lares.html).
    There are emissions (VOCs, NOx, SOx, CO, H2S, PM10) from these flares.  Do the new reporting rules cover these emissions, or are they exempt?

    The differences between “venting” CO2 emssions and “flaring” CO2 emissions is a tricky loophole with some legislation.  I can assure you that the biomass plants below are not just venting 100% pure CO2 as is sometimes implied.

    This is compared to this new announcement:

    FOR IMMEDIATE RELEASE

    January 12, 2011

    EPA to Defer GHG Permitting Requirements for Industries that Use Biomass

    The
    U.S. Environmental Protection Agency (EPA) is announcing its plan to
    defer, for three years, greenhouse gas (GHG) permitting requirements for
    carbon dioxide (CO2) emissions from biomass-fired and other biogenic
    sources. The agency intends to use
    this time to seek further independent scientific analysis of this
    complex issue and then to develop a rulemaking on how these emissions
    should be treated in determining whether a Clean Air Act permit is
    required.
     

    “We
    are working to find a way forward that is scientifically sound and
    manageable for both producers and consumers of biomass energy.  In
    the coming years we will develop a commonsense approach that protects
    our environment and encourages the use of clean energy,” said EPA
    Administrator
    Lisa P. Jackson.  “Renewable, homegrown power
    sources are essential to our energy future, and an important step to
    cutting the pollution responsible for climate change.”

    http://yosemite.epa.gov/opa/ad…..%20-%20Air!OpenView

    [link]      
  122. By Walt on January 24, 2011 at 6:43 am

    Robert Rapier said:

    Walt said:

     

    If you just want all of flaring and venting for the USA it is located on this site.

    http://tonto.eia.doe.gov/dnav/…..mmcf_a.htm


     

    That is more like what I was looking for. That does seem like an awful lot. Hopefully my guy at EPA can clarify.

    Thanks, RR


     

    Robert,

    Let me tell you the real story…for those interested.

    Imagine an ethanol technology that claims to be up to 70% cheaper in CAPEX over existing commercial applications, with all the lab data and garage data to prove the science…as well one of the most well respected scientific boards on the planet regarding the kinetics.  That should be enough to have both government, industry and finance take a solid second look at the claims, the operating plant, etc.  In fact, the ethanol marketing machine goes nuts with news like this from everything I’ve seen quoted…not to mention the VC marketing machine.

    However, what would be even more exciting is to take methane as your preferred feedstock, and so you now can be an environmental technology to boot and reduce methane emissions where venting of coal mines or where fugitive emissions is a problem, or you can reduce CO2/other pollutant emissions from wasted associated flared gas or landfill gas, etc.  You could also use biogas, stranded gas from coal bed methane or just plain old natural gas (clean/green).  All of this feedstock would be turned into Ethanol with up to a 70% lower CAPEX.

    Do you think it would get attention by the Ethanol lobby or the environmental community seeking to reduce emissions?  You can bet on it.

    However, what if the technology cannot make ethanol, but makes methanol and ethanol?

    Everything else being equal, and…in fact, when Bloom Energy announced they can take 100% pure clean natural gas (with no impurities) and use a catalytic reaction to make electricity with a fuel cell that has up to a 20% lower CO2/carbon footprint than traditional electrical generators….we actually take the same methane molecule and rather than fully combust it to electricity we partially combust it to methanol reducing the CO2 emissions by 40%…not 20%.  Now, that is a mighty claim…of course.  But ask Bloom to do that with landfill gas, biogas, flared gas and any off-spec gas without increasing CAPEX to clean up the gas for their Bloom box…not going to happen.

    What is a tragedy in this country…and it continues to get worse and worse…is that the Methanol lobby has the brass to silence my historical efforts to put this new technology out in front of the media as a “possible solution” for domestic methanol production.  Oh, they put me in a short article they did on the Chinese methanol market in their newsletter (as I recall), but nothing like all the smoke and mirrors that the ethanol lobby spins on new technologies, new funding by DOE/EPA/etc.

    In fact, you want to know how bad methanol is in Washington…look at this link:

    http://oscar.virginia.edu/rese…..x15637.xml

    Try finding that link plastered all over the media…as they are researching what we do (with a few twists)…but you are not going to find that in every chemical engineering article, or even promoted heavily due to how terrible methanol is for America.  Just ask the #1 importer and controller of the market…Methanex and their lobby the Methanol Institute.  Sure, everyone is going to China with methanol…and ethanol is the savior of America…but it is certainly not on technology merit, and most certainly not because we want to reduce flared gas emissions or convert biogas to anything except electricity or ethanol.

    Ok, I vented…but when $11 million gets put into a methane-to-methanol facility led by the top Universities…it gets no press.  Ethanol did this it would be up and down the media like a firestorm…especially if they could reduce methane and CO2 emissions by 40% over Bloom Energy.  In fact, it should have made 60 minutes…the bastion of investigative journalism in America.

    [link]      
  123. By Kit P on January 24, 2011 at 10:25 am

    “The flares are mostly under 1 mmscfd (about 80% I would guess) and

    …. I just don’t thinking making/generating off-site electricity will be the answer …”

     

    I agree Walt.

    “I do hope we can help with GasTechno, .. and move beyond denial.”

    Walt you may want to consider that Walt might be in denial. Flaring small amounts of gas is not a problem. Larger amounts of gas can be used to make electricity at a cost of about $50/MWh. It sounds to me Walt like you have failed to present a business model for showing the benefit out weigh the risk. I think part Walt’s problem is not understand ghg regulations and who does. Your average for profit thinker is not worried about AGW. First show them how they can make a profit. Then say ‘oh BTW you can outrageous claims about saving the planet’.

    [link]      
Register or log in now to save your comments and get priority moderation!