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By Robert Rapier on Sep 19, 2011 with 24 responses

Why Might Novazymes Oppose My Biofuel Incentive Proposal?

Rewards for Performance, Not Over-Hyped Promises

I recently wrote a post detailing some steps that I believe should be taken to improve the nature of how we provide incentives for biofuels: How to Fix the Broken Cellulosic Ethanol Incentive System. My proposal is like a feed-in-tariff for next generation biofuels.

The highlights are that we should reward companies that deliver, and not those that make promises. We shouldn’t put the taxpayer on the hook for broken promises, and we should create a more level playing field for advanced biofuels. At present that playing field is tilted heavily in the direction of cellulosic ethanol.

The original article was edited a bit and also published at Forbes: Fixing A Broken Biofuel Incentive Program. One of the issues I noted in that story was that “you can imagine that those who are after tax dollars under the current system might strongly oppose such a change.”

There were some comments following the original essay, as well as following the Forbes version, that indicated that some people believe that I am proposing to eliminate funding for biofuels. That is untrue. The support would come from 1). The bank that loans them money on the basis of the $2/gallon subsidy; 2). A contract with the DOE to pay the subsidy; and 3). From taxpayers who will reward performance and not promises.

Personally, I believe some advanced biofuels would rise to that challenge and deliver. I believe this system would spur some that is innovation lacking under the current program. But if advanced biofuels are not able to deliver with a $2/gallon subsidy available to them, we will need to reevaluate and modify our expectations for the future. But at least unlike the current system, we will have an idea of how far out of the money these advanced biofuels are. With the current system of funding that mixes government-backed loans and subsidies with private equity, who really knows how much it costs to produce some of these fuels? Their economic models might treat a government grant as free capital that never has to be paid back, in which case it appears that their fuel is cheaper to produce than it actually is. Costs are easily disguised under the current system.

Status Quo: Who Stands to Gain?

As I noted in my essay some would oppose my proposal because they benefit under the current system. Who would those people be? Obviously, those who have gotten (or expect to get) grants and guarantees under the current system — but who will not be able to deliver per their promises — would be the ones most staunchly opposed. After all, these are the companies that are fleecing taxpayers but are ultimately unaccountable for the money they spend. A second category that might come out against my proposal are suppliers of equipment and raw materials who are benefiting under the current system. As a hypothetical, under the current system we might see ten plants built and one deliver. Under my proposed system, we might see five plants built and three deliver because more of the pretenders will be screened out. Who loses in that scenario? Anyone who lost out on building those five additional plants that ended up rusting away when they couldn’t deliver.

Following my essay at Forbes, Paige Donnelly, a Communications Manager for Novozymes, responded that she didn’t think my idea was so hot and that the status quo was just fine. Her response essentially summed up some of the misunderstandings around what I have proposed. I think it is clear that Novozymes benefits under the current system, and they will benefit as long as we continue to preferentially throw money at cellulosic ethanol since they are a major provider of enzymes to this imagined industry. They are getting money whether or not they ultimately deliver. They have gotten millions of dollars in grants under the current system, hence I am sure they enjoy the status quo. I note that because hers is unlikely to be an unbiased critique.

Rapier vs. Donnelly

Nevertheless, I shall address her points below. I did provide a response in the comments at Forbes, but I will go into a bit more detail here. Her comments are quoted in full, italicized, and denoted “PD.” My response follows each set of quoted comments.

PD: “Mr. Rapier – I read with interest your article, and proposal of a revised biofuel incentive system. As an employee of Novozymes, manufacturer of enzymes provided to the ethanol industry, I have to disagree with your assertion that cellulosic ethanol will never be commercially viable.”

I have noted that cellulosic ethanol might work in some niche situations. But scalable into the billions of gallons? Only if you find an abundant supply of free or cheap energy to remove the water from the ethanol. But if one has a free or cheap supply of energy, I bet you can find better things to do with it than separate out a tiny bit of ethanol from a lot of water. That is not the only problematic issue, but it is a big one.

PD: “Cellulosic ethanol technology has advanced enormously over just the past five years. This technology is the most advanced among next generation biofuels currently under research. In fact, the price of enzymes to convert biomass to fuel has reduced by 90 percent in just the past 5 years, making it possible to produce this fuel at $2.50/gallon on a commercial scale.”

As I have noted many times, the cost of enzymes was a problem, but it was never the biggest problem. The fall in the price of enzymes has gotten a lot of media coverage. One reason for this, I believe, is to keep up the impression that this is the key to cellulosic ethanol commercialization, and as progress continues to be made money should still flow in that direction. But the single biggest issue in my opinion is the low titers of ethanol, which require all of that water to be removed. That is, and will always be, an incredible expenditure of energy. Even if the titers marginally improve, you might move from being uneconomical to marginally economical.

As far as $2.50 a gallon on a commercial scale, since nobody is producing on a commercial scale this is a projection. Projections require assumptions which sometimes don’t turn out as planned. I will be a believer in $2.50 ethanol when someone is actually willing to sign a contract to deliver commercial volumes. I note that in early 2010 Novozymes predicted costs of $2 cellulosic ethanol for 2011. Where is it?

PD: “We are currently seeing viable, cost-effective processes at demonstration scale today. Novozymes has partners working toward the goal of commercialization around the world, with the first commercial scale plant under construction in Crescentino, Italy right now, and plants in the US from our partners due to follow shortly thereafter.”

Cost-effective at demonstration scale? I suspect you are again making projections about demonstration scale projects that could be cost-effective in your opinion when scaled up. But the complexity of the process and economies of scale would argue strongly against anyone being able to produce cost-effective cellulosic ethanol at a demonstration scale.

PD: We must also remember that no industry of comparative size and magnitude has ever gotten off the ground without government support. This includes telecommunications, the internet and our existing oil industry. If we want to stop pumping our dollars into foreign bank accounts, we need to invest in domestic fuel programs that are sustainable and have the capacity to significantly reduce the fuel we currently import into our country.

First off, I doubt that “no industry of comparative size and magnitude” has gotten off the ground without government support. I suppose it depends on what you consider government support, but I am unaware of direct cash subsidies to Microsoft or Apple (for example) in order to get their industries moving. But that is irrelevant, because I am not proposing to stop investing in domestic fuel programs. I am proposing to stop funding processes than can’t deliver per their promises. Processes that may never be viable will continue to benefit under the current support programs, and taxpayer will foot the bills. Actually it’s worse than that because our children are going to get the bills.

Biofuels that receive little fanfare today have the most to gain under my proposal, but if cellulosic ethanol is on the verge of being viable — as you believe — then it would also benefit immensely. Instead of spending $250 million tax dollars to subsidize a 50 million gallon cellulosic ethanol facility, we will spend maybe $500 million subsidizing the product. The caveat is that a process must actually be capable of delivering — and they must have enough data to convince a bank to loan money on the basis of the process — in order to collect. But we would no longer use tax dollars to subsidize processes that never deliver. I expect that fewer tax dollars would be spent under my proposal, but there will be a lot of bang for for what is spent.

PD: Ethanol is the only alternative we have today that can provide a significant step forward in this process. Traditional ethanol has reduced our gasoline consumption by 10% and could go even further if we were allowed to use higher concentrations of ethanol in our cars. Cellulosic ethanol can leap us forward even farther due to the abundance of this resource and the fact that most of the feedstock we could use to produce this ethanol is actually considered waste product today.

Ethanol is the alternative because it has had the political support and we are mandates to use it in our fuel supply. If that support had been behind methanol, it would be the alternative. In fact, as I have pointed out before unsubsidized methanol is cheaper on a per gallon and per BTU basis than is subsidized ethanol. Under my proposal, methanol would have a much better chance of making inroads as transportation fuel either directly or through conversion to di-methyl-ether (DME).

PD: “I also want to address some specifics in your report:

• Administer the program from DOE vs. EPA – sounds good, but it’s a jurisdictional issue. The RFS is run under the EPA’s Clean Air Act. If you move jurisdiction, you’d have to redo the entire program, requiring a lengthy amount of time and taking govt. focus away from more important issues right now such as creating jobs.”

And how well is the program working under its current jurisdiction? How much of the hundreds of millions of gallons of mandated cellulosic ethanol have been produced under current jurisdiction? I am trying to fix something that has not delivered. If it takes time to move that from EPA to DOE so be it. The DOE has better expertise for evaluating technologies, but if that’s a showstopper for you then assign some engineers at the EPA to evaluate them.

PD: • “You mentioned a carve-out for cellulosic ethanol. That’s incorrect–the RFS2 notes cellulosic biofuels, so your argument for biomass-based di-methyl-ether is already covered.”

Cellulosic ethanol has had all of the hype and all of the political support. It has gotten the lion’s share of the grants and loan guarantees. That is essentially a carve-out. And why should we care if the fuel is cellulosic? Not all biomass is cellulose. How much chance do biomass-based mixed alcohols have under the current program? Not much. After all, our politicians would have to be educated about mixed alcohols and someone would have to hire lobbyists and carry that banner. Every competing fuel would have to do that under the current system; spending time and money trying to convince politicians that their process has merit. In the system I am proposing, all of these fuels have a shot without requiring specific political support. Under my system more dollars can be spent on developing fuels because less is spent on lobbying politicians.

PD: • “Eliminate all grants and loans for facilities – this is an option only when all support for petroleum fuels (depreciation allowances, exploration credits, etc.) are removed. If we are truly aiming for a technology-neutral playing field, biofuels shouldn’t be disadvantaged either.”

No. I don’t think you understand the nature of what I am proposing at all. Biofuels would not be disadvantaged. If I offered a $2/gallon subsidy to advanced biofuels across the board, how exactly are they disadvantaged relative to petroleum? This would sharply tilt the playing field in their direction. Further, there would be no need for government-backed loans and grants for these facilities because the fuel producer would have a bankable off-take agreement. Support for petroleum here is totally irrelevant, because I have stacked the deck in favor of advanced biofuels if even a fraction of them can deliver per their claims.

The biggest winner under my system would in fact be cellulosic ethanol if it can deliver per the claims you have made. But it also has the most at stake. Cellulosic ethanol has been enjoying subsidies and preferential treatment already. If it can’t deliver, then it will lose that. When you accuse me of wanting to cut support, then I can only read that as concern that you won’t be able to deliver — since that is the only case in which support will be cut.

In conclusion, I don’t believe you have offered any substantive rebuttal to my proposal. Your reply would be more appropriate to someone who advocated cutting off all funding for biofuels — something I have not done. But we have seen no signs that the current system is about to pay dividends — only promises that they are just over the horizon. We see a lot of people who would like to build plants, but who have delayed those plans due to economic concerns. Offer someone $250 million to build a cellulosic ethanol plant, and you may never see any returns at all from that money. Offer $250 million for the fuel — with a contract signed by the government to pay for it — and companies will have years of security around their fuel sales. In that case, getting private funding shouldn’t be an issue if a company has a viable process.

Disclosure: I used methanol, di-methyl-ether, and mixed alcohols as examples of fuels that could benefit, but I have no financial interests in any of the fuels I discuss here.

Update: The discussion continues. Paige responded to my comments at Forbes. She once more made the accusation that I wish to starve support for biofuels, claimed that ethanol’s dominance over methanol is because it is a “superior fuel”, and said the system is working as intended. I have issued a response to her latest comments.

  1. By doggydogworld on September 19, 2011 at 1:18 pm

    The main problem I see with your plan is bankers, VCs and entrepreneurs don’t like to take on a lot of political risk. Even with a contract in hand the gov’t can later come back and revise or renege (DoD contractors can tell you all about this). Also, the DOE can’t sign an open-ended contract for an unlimited number of facilities, yet the incentive available for a single facility may not justify the risk of developing an entirely new process.

    Also, the structure of $2/gal for the first 250m gallons and $1 for the next 250m gallons incents small facilities. A 500m gpy plant would get $750m the first year and nothing ever again while ten 50m gpy plants would get $750m each year for 10 years (10x as much total subsidy).

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  2. By Joel Balbien on September 19, 2011 at 1:31 pm

    Robert, I like your approach of substituting a more efficient market based mechanism for bureaucratic approaches to promoting the substitution of domestic & low carbon biofuels for imported fossil fuels. A viable alternative would be to have DOE simply procure carbon neutral jet fuel, gasoline, or diesel blend stock in a competitive auction. Biofuel suppliers would build and finance their own infrastructure and buy necessary offsets to achieve carbon neutrality. DOE would provide winning bidders with a standard Low Carbon Fuel (LCF) futures contracts (cash payment upon delivery of qualified biofuel), and then auction off whatever biofuel the military cannot use in a process similar to the operation of the Strategic Petroleum Reserve. Under this mechanism, instead of offering a $500M loan guarantee, DOE would simply ask for competitive bids to supply up to $500M in carbon neutral blend stock, and then accept bids so as to maximize the BTU’s delivered. EPA’s only role would be to validate carbon neutrality. CNG, CSNG, and CBG could be included once sufficient CNG refueling and storage infrastructure for interstate trucking was in place. All bidders would pay a price for the DOE evaluation of their technology.

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  3. By Walt on September 19, 2011 at 1:42 pm

    Our company would fully support this approach, with one suggestion.  We would ask that flared gas that is being wasted from oil production, and county landfills be included in the feed stock supply to make fuels and chemicals.

     

    I recongnize that some will not support any sort of fossel fuel development to reduce our reliance on imported oil, but in this case these wells have been drilled and many have been flaring gas for more than 20 years.  The flaring continues to grow rapidly and in my communications with regulators they are not likely going to force any flaring reductions.  There is simply too much money to the state government to allow these oil wells to continue to flare at near optimum capacity of oil production, and reducing the flares would also reduce the oil production.  The state would loose revenues, and the oil companies would also loose revenues by restricting production.

     

    Therefore, if the federal government would offer an incentive to produce liquid fuels and chemicals from flared gas wells, or landfill flare reduction, then I would see a lot of wasted resources be converted to “domestic” fuel and chemicals.  The waste is growing rapidly without pressure to stop the flaring as long as oil prices remain high, and the gas is only wasted until pipelines are built and in place (in some cases less than 12 months, and in other cases flares have continued for 20 years waiting for pipelines).

    ————————

    Flaring of gas surges as shale oil, gas plays unfold

    * Texas permits so far in 2011 five times total in ’08

    * Vastly more permits in new Eagle Ford than older Barnett

    * Volume of gas flared in Bakken up 1200 percent since -04

    * Critics say waste of resource as well as pollution

    http://www.reuters.com/article…..amp;rpc=43

    ———————-

     

    I’ve had multiple discussions with flaring operators, and they want top dollar for the gas at the well head, or they will wait for pipelines over the next 3-5 years to get top dollar.  It is a simple mexican standoff as to who will pay the highest prices for the flared gas will oil prices are high, and more money is invested in drilling than in reducing wasted associated gas.

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  4. By Benny BND Cole on September 19, 2011 at 1:54 pm

    More truly superb commentary form RR.

    Like many others, I am sure, I weary of this or that outfit claiming they will be able to produce a fuel for $2.50 a gallon. Fine, Go ahead and do it. Get private backing, and go for it. The world is awash in capital, and plenty of people in the energy sector have received venture capital.

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  5. By rrapier on September 19, 2011 at 2:03 pm

    doggydogworld said:

    Even with a contract in hand the gov’t can later come back and revise or renege (DoD contractors can tell you all about this).


     

    That’s a legal issue, but I don’t see how the government can simply renege on a properly structured contract unless they are allowed out clauses.

    Also, the DOE can’t sign an open-ended contract for an unlimited number of facilities, yet the incentive available for a single facility may not justify the risk of developing an entirely new process.

    Yes, there would have to be some limit to the amount of funding committed to this. It would have to be a large number to provide the incentive, but I think due to the competitive nature only a select few will collect.

    Also, the structure of $2/gal for the first 250m gallons and $1 for the next 250m gallons incents small facilities. A 500m gpy plant would get $750m the first year and nothing ever again while ten 50m gpy plants would get $750m each year for 10 years (10x as much total subsidy).

    The nature of biomass density and logistics ensures that biofuel facilities will be small. I don’t believe there is a biofuel facility (of any kind) in the world as large as 500 m gpy, and you certainly won’t see a 2nd generation facility of this size.

    RR

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  6. By Michael Cain on September 19, 2011 at 3:41 pm

    I suppose it depends on what you consider government support, but I am unaware of direct cash subsidies to Microsoft or Apple (for example) in order to get their industries moving.

    I agree strongly with the sentiment, but wish you had chosen different specific firms. Neither Apple’s initial hardware, nor Microsoft’s software, were capital intensive businesses. It’s much harder to find successful start-ups in the last 20-30 years that required large amounts of capital just to get started. And there are some who will assert that integrated circuits would not have been invented without military research funding; I disagree with that, but there’s little question that the demands of military projects created a ready-made market for ICs.

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  7. By russ on September 19, 2011 at 4:26 pm

    Michael Cain said:

    I suppose it depends on what you consider government support, but I am unaware of direct cash subsidies to Microsoft or Apple (for example) in order to get their industries moving.

    I agree strongly with the sentiment, but wish you had chosen different specific firms. Neither Apple’s initial hardware, nor Microsoft’s software, were capital intensive businesses. It’s much harder to find successful start-ups in the last 20-30 years that required large amounts of capital just to get started. And there are some who will assert that integrated circuits would not have been invented without military research funding; I disagree with that, but there’s little question that the demands of military projects created a ready-made market for ICs.


     

    None of the Silicon Valley new ventures were capital intensive? If you look you will find many, many examples.

    DARPA and other government labs always have and I hope always will provide the basis for many private businesses to build and grow on.

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  8. By Walt on September 19, 2011 at 4:42 pm

    Although this is not really on point with the above article, it is a very useful document just recently published on a excellent study commissioned by Holland, Michigan on an integrated approach to energy.

     

    —————————–

    In January 2011, the leadership of the City of Holland, the Holland Sustainability Committee and the
    Board of the Holland Board of Public Works, charged the Community Energy Plan Project Work Team2
    (―PWT‖ or ―Team‖) to develop a 40-year integrated energy strategy for the City. The Team included
    representatives from the City and the consultants. The PWT met regularly from January 2011 through
    August 2011 to establish the energy baseline and develop the CEP recommendations. Numerous
    meetings were held to engage the community in the process, including two Energy Town Hall Meetings.
    A full list of the meetings and participation is summarized in Appendix 1.

    http://www.cityofholland.com/s…..packet.pdf

    —————————-

     

    The program is being discussed tonight at City Hall and I understand many people are going to turn up to support this plan, even those outside of the Holland.  This is a very conservative Dutch part of Michigan (like Grand Rapids, Zeeland, etc) and often when Michigan is suffering the west side of the State is booming and growing.  The area is an international city, and from the report you can see they did not focus on being competitive with only their Michigan neighbors.  The study looks at the world and puts Holland on the map.  This is very impressive for a city to take the study to this length and create a road map over the next 40 years involving energy.  Enjoy!

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  9. By perry1961 on September 20, 2011 at 9:42 am

    “Perry your math skills are a little deficient or maybe it is your logic. There are no average drivers, just individual drivers. ”

    Kit, the fleet average in the US is about 25 MPG. The average driver will log 15,000 miles annually. That comes to 600 gallons of fuel, and a cost of about $2100 per year. EV’s cost less than $1/gallon to run, so the difference is $1500 per year for the “average” driver.

    My math is just fine. Better than average imo…..

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  10. By perry1961 on September 20, 2011 at 7:00 am

    Biofuel subsidies are, in effect, a subsidy for internal combustion engines. Maybe we should let nature run its course and make the transition to EV’s that much quicker. If the average driver trades in his car for an EV today, he’ll save $1500 annually in fuel costs. That savings rises to $2400 annually with $5/gallon gasoline. Even a Volt would pay for itself in 15 years.

    Throw in a $2/gallon subsidy and we’re back to square one. Instead of trading in the old clunker, drivers will continue to complain about the “price premium” of EV’s. Of course, congress would have to respond by increasing incentives for EV’s. And around and around we go.

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  11. By Kit P on September 20, 2011 at 9:07 am

    “If the average driver trades in his car for an EV today, he’ll save $1500 annually in fuel costs. ”

     

    Perry your math skills are a little deficient or maybe it is your logic. There are no average drivers, just individual drivers. Since I have a relatively short commute, a EV would fit my needs nicely. If I drive 20 miles a day and someone else drives 100 miles a day the average is 60 miles a day. However, the person who drives 100 miles a day can not depend on a EV because of the limited and variable range.

     

    However, I can not save $1500 annually in fuel costs because they only around $500. The way to save money on fuel cost is to drive less or carpool. Furthermore since I do not drive much what is the point of having an expensive car.

     

    “Even a Volt would pay for itself in 15 years. ”

     

    There is no good reasons to think that EV will last even 5 years. The reason I think that my Corolla will last 30 years is because I have two used cars in the drive way that have lasted 20 years demonstrating that the ICE will last a long time before engine wear causes them to start burning oil.

     

    I do not have a problem with incentives for EV or biofuels. We prove the merits of something by doing. Maybe someday an electrical engineer will be bragging about his 20 year old EV or a chemical engineer about his hydrogen fuel cell car but for the time being bragging rights go to mechanical engineers and the ICE.

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  12. By Kit P on September 20, 2011 at 11:32 am

    “My math is just fine. ”

     

    Okay it is your logic that is bad but I suspect you did not ace your calculus final in 20 minutes. As any engineer will tell you, the trick is properly applying the math to the science.

     

    In this case, using a simple mathematical average for American drivers is the incorrect application of the math. So a Corolla with unlimited range gets an average of 35 mpg and cost $16k while a comparable EV cost $40k but has a range of 60 miles.

     

    As it turns out, the actual average for our Corolla is 20k miles per year mostly on long trips where it gets 40 mpg. However, an EV can not be used for long trips.

     

    Our second car is a PU that can make long trips is mostly used for short trips and gets average 25 mpg and cost $1200 more than 10 years ago. That is $120 a year capital costs and 5000 miles per year. So the 200 gallons of fuel cost $600. Total cost $720/yr.

     

    An EV costs $40k or $4000/yr over 10 years. For my to commute to work via EV would cost me $3000/yr.

     

    Wendell on the other hands saves $4000/yr by walking to work. One could also argue that he only saves $720/yr.

     

    So Perry I work in the electricity generating industry and we would love to take some of the market share from the oil companies. I think it would be great if you take your money and buy one. Like I said, I do not even have a problem if the government gives you incentives.

     

    Saving must be based on individual savings not on averages. If you have a lot of extra money for a second car, I see not problem with EVs. Please indulge yourself but it is not a good way to save money.

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  13. By Optimist on September 20, 2011 at 3:10 pm

    Even a Volt would pay for itself in 15 years.

    Not compared to a Prius III, which gets 50 mpg.

    Biofuel subsidies are, in effect, a subsidy for internal combustion engines.

    And there are many good reasons the ICE is proving so resilient, and so extremely hard to knock off its perch. Apart from the old familiarity, it also has convenience going for it. Add the benefits of liquid fuels, i.e. high energy density (which means quick refueling, cheap transportation and low fuel weight), and it is hardly a foregone conclusion that the typical car of 2100 or 2500 will be an EV.

    Going out on a limb, I’d predict that the average car of 2100 would be an ICE vehicle propelled by a mix of fossil and renewable fuel. (The exact mix would depend on markets and technology: even though renewables get better over time, recovery from oilwells is also improving.) Hence the US military’s focus on drop-in fuels.

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  14. By Benny BND Cole on September 20, 2011 at 4:58 pm

    Optimist:

    you may be right, but there are a few maybes out there.

    1. Fossil fuels: Unfortunately, the globe’s oil supply is largely locked-up in thug states. Another cut-off, for any reason, would change attitudes. So could more price spikes. CTL and GTL is spreading, but is it enough?

    2. Lithium batteries are improving at about an 8 percent annual rate. Roughly speaking, in about ten years lithium batteries’ capacities and range should about double, while manufacturing costs decline. The PHEV kills the range anxiety concern.

    3. Urban dwellers and governments may decide that clean air and relative quiet is a right, not a convenience. If PHEVs do get better, some cities may ban ICEs, or tax heavily. While I tend to favor free markets, free market fail when pollution is concerned. I would not argue against such a ban, phased in.

    I recognize I do not have the right to pollute air that other people breathe, or to pollute their property. If this attitude becomes more common, we may see pure ICEs face eventual extinction.

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  15. By perry1961 on September 20, 2011 at 11:55 pm

    “So a Corolla with unlimited range gets an average of 35 mpg and cost $16k while a comparable EV cost $40k but has a range of 60 miles”

    Actually, a comparable EV for a Corolla owner would be the Mitsubishi i, which lists for $20,000 or so. Also, you neglected to mention maintenance costs. The average maintenance cost for an ICE is 25 cents/mile. Your Corolla no doubt costs less, but the truck you paid $1200 for 10 years ago? That’s got to cost a small fortune Kit.

    Have you seen the maintenance requirements for the Leaf? Check coolants, rotate tires. Rotate tires, check coolants. That’s it. No timing belt or sensors to replace at 75,000 miles like I recently did. That ran me $800. Yes, an EV will need a battery every 100,000 miles. But, maintenance will still run less than 10 cents/mile. And, when your Corolla finally gives up the ghost, as all ICE’S eventually do, it will be about time to change the brushes on the EV’s electric motor. At a whopping cost of $100 or so.

    Those electric motors will last forever. And, the batteries will probably fetch a nice price when traded in. Companies are looking to use them for emergency electrical back-up. A charged EV battery can run a household for two days in case of power failure. A stack of them that still hold 80% of thier charge could power a large business for who knows how long. Lots of variables here. I think the EV/PHEV will be the long term winner, even with $3.50 gasoline. There’sw no doubt in my mind that the ICE gets kicked to the curb with 5 or $6.00 gas.

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  16. By Kit P on September 21, 2011 at 10:09 am

    “That’s got to cost a small fortune Kit. ”

     

    Not actually Perry, I have only had to replace the starter motor, battery, and water pump.

     

    It sounds like you do not actually have any experience with EVs and want to compare your vision with reality. My wife Corolla cost about $16k and does not have a timing belt.

     

    “Corolla finally gives up the ghost, as all ICE’S eventually do, it will be about time to change the brushes on the EV’s electric motor. At a whopping cost of $100 or so. ”

     

    Perry does not know much about motors and batteries.

     

    “Those electric motors will last forever. And, the batteries will probably fetch a nice price when traded in. ”

     

    In some junk yard! You have to pay some one to take dead batteries. Burned up motors may have scape value

     

    “A charged EV battery can run a household for two days in case of power failure. ”

     

    Even $20k in batteries will not run a heat pump for two days. I do have fire wood for an emergency like an ice storm in the winter.

     

    Perry is just repeating things he has heard. There is not reason to think batteries will last for 100k miles and they will cost $18k to replace. Motors burn up.

     

    For those who have an EV in a mild climate a word of warning. Do not depend on it to keep you alive driving across the desert on a very hot day or in a very coal buzzard until you know what the reliability is under extreme conditions. This true for ICE too but most of us that drive understand starter motor and batteries can fail.

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  17. By perry1961 on September 21, 2011 at 10:41 am

    “My wife Corolla cost about $16k and does not have a timing belt. ”

    Then it has a timing chain, which still needs to be replaced every 60,000 miles.

    “In some junk yard! You have to pay some one to take dead batteries. Burned up motors may have scape value”

    These batteries won’t be dead after 100,000 miles Kit. They will be down to about 80% efficiency. A Mitsubishi i owner who drives only 25 miles a day could easily use the battery for another 5 years. You need to learn more about electric motors. If you think an ICE is an engineering marvel, the electric motor is a major miracle. I’ve “burned up” the electric motor on my inside AC unit twice, and had it repaired cheaply each time.

    “Even $20k in batteries will not run a heat pump for two days. I do have fire wood for an emergency like an ice storm in the winter. ”

    No, it won’t run a heat pump or an AC unit. But, it will run a kitchen, TV’s, washer, dryer, and household lights. That beats the hell out of the generator I keep for emergencies. It only runs two circuits max.

    “Perry is just repeating things he has heard. There is not reason to think batteries will last for 100k miles and they will cost $18k to replace. Motors burn up.”

    Kit just insults anyone who won’t come around to his 1960′s mindset. EV batteries are warrantied for 100,000 miles. Someone smarter than Kit obviously thinks they’ll last that long. The batteries will not cost $18,000 to replace. Laptop batteries dropped from $2000 to $250 over a 15 yr. period. That’s the power of mass production. Kit should spend more time educating himself, and less time throwing around bogus insults.

    [link]      
  18. By .5mt on September 21, 2011 at 11:53 am

    This luker thinks Perry has fiigured out Kit.

     

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  19. By mac on September 21, 2011 at 11:54 am

    Perry,

    The old brush type DC motors were not as efficient as the new Brush-less DC.

    The carbon from the brushes rubbing against the armature would foul the windings and bearings, cause arching, shorts and overheating in old perm. magnet DC motors..

    The new brush-less DC motors moved the permanent magnets from the armature to the stator and now switch polarity with transistors and software. (instead of mechanical brushes)

    This is a better solution for DC motors (although a bit more expensive)

    However, the best solution is perhaps what Nissan and Tesla are doing — using asynchronous AC motors that contain no permanent magnets whatsoever.

    This completely eliminates the “rare earth” problem. Since there are no permanent magnets in the motor, hence there is no need for neodymium, etc.

    For modern brush-less DC motors or AC induction motors (since there is only one moving part) the main maintenance problem is simply keeping the armature bearings lubricated.

    Could an electric motor run a million miles ? Sure. Just keep those bearings lubricated and don’t burn out the windings by overloading the motor.

    There is just one basic moving part in an electric motor. Hard to beat…..

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  20. By Herm on September 21, 2011 at 2:19 pm

    Actually the Nissan Leaf uses an ac motor with rare earth permanent magnets, so does the new iMiev.. the Volt (2 motors), Tesla and Fisker (2 motors) use induction AC motors with no magnets.. Coda is also using an ac induction motor I believe.  They are all 1 million mile motors unless overheated, and it wont take much to overheat one unless proper protection is designed in.

    Inverters dont have a reputation for long life in the home PV application (8 years?) but perhaps this is due to being attached to local grid and lightning strikes.. in a car the inverter would be more isolated.

    Motors that use permanent magnets are a bit lighter per the output power level, but the magnets are sensitive to shock and high temperature.. plus they are fairly expensive due to the rare earths needed..   they can be recycled and reused without limits, unless they rust away. There is probably a cost advantage for using a PM motor in a car with no transmission.

    http://en.wikipedia.org/wiki/N…..ium_magnet

    Batteries?.. most manufacturers are offering 8 year warranties and expect a 20% range degradation by the 10th year (Tesla is less since they use laptop batteries).. hopefully that will improve to 15 years but its not a big showstopper.. cost is the biggest issue at this moment.

     

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  21. By perry1961 on September 21, 2011 at 5:53 pm

    Thanks Mac and Herm. This site has some nice graphics on the various motors. I can see why the brush motors are being phased out. AC induction and brushless DC are up to 98% efficient.

    http://www.evworks.com.au/tech…..ion=motors

    [link]      
  22. By Kit P on September 21, 2011 at 8:42 pm

    “Kit should spend more time educating himself, and less time throwing around bogus insults. ”

    Okay then let me do some fact checking to see if I need educating by Perry.

     

    “Then it has a timing chain, which still needs to be replaced every 60,000 miles. ”

     

    2007 Toyota Corolla scheduled maintenance

    http://www.toyota.com/t3Portal…..S0019f.pdf

     

    There is no a maintenance for the timing chain scheduled or otherwise. It may be my ’1960′s mindset but I looked for a car that did not requiring replacing the timing belt. Strike one for Perry educating me. You will also notice that spark plugs do not need to be changed for 120k miles. My wife’s Corolla is getting its first non-scheduled maintenance, replacing the breaks at 105k miles.

     

    I used to do my own tune ups, oil changes, and break jobs because of the required frequency but I only do it know to teach the kids a little about cars.

     

    “A Mitsubishi i owner who drives only 25 miles a day ”

     

    I checked I can not buy a Mitsubishi electric vehicle.

    http://autos.msn.com/browse/Mi…..x?ICID=FAC

     

    So unless you live in Japan you are making up stuff Perry and representing wishful thinking like facts.  The MiEV will be available in 2012 and hopefully it will sell better than the Leaf. I had a 1986 Colt which my wife loved. Since I had to keep running, I will agree that it is bad example of a good ICE. The 2007 Corolla is the same size as ’89 Camry. A five passenger car that you can comfortable drive across country. The MiEV is an enclosed golf cart. Nothing wrong with that if it meets safety standards for driving on the highway.

     

    “That beats the hell out of the generator I keep for emergencies. ”

     

    I have a flash light and some candles. Is there some reason you would want to run the washer and dryer in an emergency.

     

    “Kit just insults anyone who won’t come around to his 1960′s mindset. ”

     

    Come on Perry, you are just repeating what you read on the internet. It might be an insult if it was not true.

     

    “That’s the power of mass production. ”

     

    They have been mass producing batteries for over a 100 years. Batteries are heavy, expensive, inefficient, unreliable fire hazards. The are really great for low power demand applications but they are really bad idea for storing energy for transportation.

     

    Diesel or biodiesel is very good for that. Diesel electric drive is common in heavy equipment and ship propulsion. So the MiEV is building on existing technology. Ditch the battery.

     

    “DC are up to 98% efficient. ”

     

    What the link actually says,

     

    “with efficiencies up to 90% ”

     

    Up to, infers less than is what can be expected, just ask Herm.

     

    “unless overheated ”

     

    I am think I know a lot more about this stuff except for maybe Herm. Batteries and motor efficiency depends on load. Test drives have shown that the 100 mile Leaf is a 60 mile Leaf. How is the power lost. Heat, which is the enemy of batteries and motors. So is moisture, vibration, and dirt but no reason to expect an EV will be affected by these things.

     

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  23. By Rufus on September 21, 2011 at 10:04 pm

    Abengoa is Rolling the Dice.

    The countdown to commissioning can officially begin for Abengoa Bioenergy’s first commercial-scale cellulosic ethanol plant. On Sept. 20, the company announced it has received the air permit for the 23 MMgy multi-feedstock facility to be built in southwest Kansas near Hugoton, and said construction activities at the site are already underway. The plant is expected to be complete in about two years, which is also when the first full-scale harvest will be expected from 20,000 acres of switchgrass to be established through a USDA Biomass Crop Assistance Program project that was approved in late July.

    Abengoa has been working toward commercializing its cellulosic ethanol production process for a decade and, while the outcome has been a long time coming, the company’s efforts have been rewarded with a flurry of positive outcomes throughout the summer—first signing feedstock supply agreements with area farmers for corn stover and wheat straw, then receiving BCAP project area approval for switchgrass, and finally receiving an offer from the U.S. DOE on its $133.9 million loan guarantee application. The DOE’s conditional commitment is expected to be finalized by Sept. 30.

    Abengoa CEO Manuel Sanchez said the completion of this first cellulosic project will serve as a stepping stone toward the expansion of cellulosic capabilities at all of the company’s production facilities. “The construction of this ‘first of a kind’ commercial-scale biorefinery facility will us to utilize our proprietary technology that has been developed and proven over the last 10 years to produce renewable liquid fuel from Earth’s most abundant organic feedstock source – plant fiber,” he said.

    A True Commercial-Scale, Enzymatic Cellulosic Ethanol Plant Starts Construction.

    [link]      
  24. By Rufus on September 21, 2011 at 10:18 pm

    It’s a Ballsey call by Abengoa; there will be no government tax credit for cellulosic ethanol producers when this plant comes online. The Cellulosic Producers Tax Credit expires in Dec, 2012.

    And, they’re not just some VC playing with someone else’s money. They’re a real company that could get hurt, badly, if this thing doesn’t work.

    [link]      
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