This Week in Energy: Study Says Biofuels Costly, Impacts Questionable
This Week in Energy is a weekly round-up of news making headlines in the world of energy. Most of these stories are posted throughout the week to our Energy Ticker page.
The purpose is to stimulate discussion on energy issues, and community members should feel free to turn these into open thread energy discussions. Suggestions and news tips are welcome. I (Sam) can be reached at editor [at] consumerenergyreport [dot] com .
NRC Report to Congress: Cellulosic Biofuel Mandates Unlikely to Be Met
A congressionally requested study by the National Research Council — an arm of the National Academy of Sciences — concluded that next-generation biofuels are costly, and their impacts questionable. “Absent major technological innovation or policy changes, the … mandated consumption of 16 billion gallons of ethanol-equivalent cellulosic biofuels is unlikely to be met in 2022,” the report stated. This conclusion should come as no surprise to readers of R-Squared Energy, as its author Robert Rapier covered this in a recent article: Cellulosic Ethanol Targets: Mandating the Nonexistent.
The report concluded that feedstock costs are likely to be prohibitive — something that R-Squared readers have heard many times over the past few years. For instance, in Bad Assumptions, Robert wrote, “Farmers are going to command the highest price they can get for any purpose-grown biomass. So I think the dreams of cheap switchgrass or miscanthus enabling cheap biofuels will fail to materialize.”
Regular readers have also been warned about costs (here) and unrealistic hype (here). One of the panel experts — an engineering professor at the University of Iowa — stated, “During the course of the debate and especially listening to the economists I came to be a little bit more aware of the limitations, a little bit more aware of the difficulties of producing biofuels and advanced biofuels.” He could have learned all about that right here a number of years ago by reading Cellulosic Ethanol vs. Biomass Gasification (2006), Cellulosic Ethanol is Dead (2008), Cellulosic Ethanol Politics (2008), or Biofuel Pretenders (2009). He could have read about the logistical challenges in Cellulosic Ethanol Reality Check (2006) or The Logistics Problem of Cellulosic Ethanol (2007).
Regarding the report’s conclusion that the mandates are unlikely to be met, Robert wrote in a 2008 article that the cellulosic ethanol mandate would not be met, and that the overall numbers from the cellulosic ethanol portion of the Renewable Fuel Standard were not “remotely credible.”
Keystone XL Pipeline, Fossil Fuel Subsidies, Chevy Volt Sales
- The New York Times editorial board came out against the proposed Keystone pipeline which would carry oil from tar sands projects in Alberta to refineries along the southern coast of the United States, urging Hillary Clinton — because the State Department has jurisdiction — to “Say No.”
- An article published in The Economist took a look at the debate from another angle. A third group which supports development of the tar sands but don’t want the pipeline built because shipping the tar sands’ crude to American refineries, where much of the value is added, means Canada will be sending money and jobs down the pipe.
- In an extract of the IEA’s World Energy Outlook, which is due to be published in full on November 9, the agency warned of ballooning fossil fuel subsidies. Global subsidies for fossil fuels are expected to reach $660 billion by the year 2020, led by Iran and Saudi Arabia.
- Jalopnik took a look at the updated sales numbers for the Chevy Volt, asking: Is the Chevy Volt a sales flop? In the first nine months of the year, GM sold less than 40% of their 10,000 vehicle target for 2011. Compared to the more than 5,000 Chevrolet Suburbans that were sold in September alone, only 3,895 Volts have been shipped off the lots all year, with 723 of them going in September (h/t to forum member Wendell Mercantile).
- An interesting group of companies — Google, BP, Morgan Stanley and Chevron — launched a project that replaces natural gas with solar power to make steam that will get more oil out of aging wells. Bear in mind though, the “greener oil” mentioned in the article title is not the oil itself, but about the extraction process being greener (solar vs. natural gas).
Peak Oil Debate, Solyndra, Plummeting Oil Prices
- The recent slide in oil prices may hit small oil companies’ spending plans for 2012. There was a lot of volatility in the futures markets this week, with crude futures dropping all the way to $75/bbl but climbing back up to $80/bbl after the EIA reported shrinking supplies in crude oil. Energy puts are at a two-year high to the S&P 500 as no bottom is seen in crude oil prices, according to Bloomberg, with traders concerned that oil will extend losses as the economy slows.
- The state of Wyoming is looking to sell some of its wind power to California, with Wyoming officials touting a new analysis that shows the Golden State can save billions of dollars importing wind power from the gusty plains. California recently set the most ambitious targets of any state, requiring one-third of its electricity come from renewables by 2020.
- Just how glitzy was the factory at recently gone bankrupt solar panel maker, Solyndra? The plant, which was the size of of five football fields, had robots whistling Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms. One former facility manager at Solyndra said it was “like the Taj Mahal.”
- Newly released e-mails show that the Department of Energy was poised to give Solyndra a second taxpayer loan of $469 million last year.
- Gregor Macdonald and Chris Nelder wrote a piece for the Harvard Business Review: “There Will Be Oil, But At What Price?” The article was a counter to Daniel Yergin’s “There Will Be Oil” essay published last month in the Wall Street Journal which received a lot of coverage.