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By Robert Rapier on Dec 19, 2011 with 50 responses

Range Fuels Goes Bust, Harms Biofuels Industry in the Process

Recently it was announced that Range Fuels has gone into foreclosure, thus marking the official end of their story. For all practical purposes, the company has been finished since early 2011, but the foreclosure puts an end to the notion that they will yet rise triumphant from the ashes. Last week, Heather Duncan — a reporter for The Telegraph in Macon, Georgia — called me to discuss the Range story. She has just published an excellent summary of what went wrong at Range Fuels, and what lessons might be learned from their failure:

Range Fuels failure raises the question: How much risk should the government take with taxpayer dollars?

Here I want to excerpt some of the highlights from her story, and share what I believe are the lessons to be learned here. There are a lot of nuggets from her report, but this one really highlights the overall problem in a nutshell:

Reviewer [for the USDA] Kevin Hicks predicted that construction costs would be higher than expected and that the scaled-up Soperton refinery “will probably not make ethanol on an economically viable basis. However, lessons learned may allow the next build-out to 100 million gallons to approach viability.”

He said more than half of the refinery design consisted of new technology.

“Building a new manufacturing facility with one of two new processes is a risk,” he wrote. “Building a new facility with 51 percent new processes presents enormous risk.”

Government Failed the ABC’s of Due Diligence

This has been the biggest basis of my criticism all along, and is the reason I fault the government for funding the project. The single most important element of due diligence (See my article Due Diligence: How to Evaluate a Renewable Energy Technology) is to understand exactly where a technology stands; not where proponents hope it ends up, nor where proponents project it will be. You want to know what has actually been demonstrated.

In the case of Range Fuels, they hadn’t even shown conclusively at lab scale that they could do what they were promising to do. Yet amazingly, they were making claims about what their costs were going to be. If I was reviewing this project for the government, the first thing I would have requested was to show this process operating at a laboratory scale. And that would have been the end of the story, because they were not producing ethanol from wood chips. They could produce methanol, or ethanol in a mixed alcohol product — technologies that have been around for a while. But this is not what they were claiming they would do.

Thus the problem becomes exactly as is described by Kevin Hicks above: They were attempting to build a facility with many new pieces of unproven technology, and that is a recipe for failure 99% of the time. And in this case, you have to wonder why the government felt like it was an OK risk of taxpayer dollars. Anyone who didn’t know that there was such a high risk of failure had no business reviewing the technology. Anyone who knew and proceeded anyway should have no business handling taxpayer dollars.

Blind Trust

The other nugget from Heather’s report is that the costs of the project appear to have been much higher than advertised. I had heard this privately, but she dug up some documentation that confirms this:

Range Fuels quoted various amounts at different times, but the company’s December 2008 loan application indicated that Range would chip in “a future capital raise of $375 million,” for a total of $531 million (including the Department of Energy grant and USDA loan guarantee). A January 2010 update to the USDA on the project’s commitment guidelines says the borrower is contributing $318 million for a total project cost of $480 million.

Despite these advantages, on Jan. 3, 2011, Range Fuels failed to make its scheduled payment on the USDA guaranteed loan. As a result, the payment was made from a Debt Service Reserve fund, triggering a default when the money wasn’t replenished, according to a timeline provided by the USDA.

She also points out that nobody won on this deal:

Range Fuels lost. Its private investors — including California’s state pension fund — lost.

The Bush and Obama administrations both bet on Range and lost. Environmentalists and national security advocates, both seeking more green fuel options, lost.

And taxpayers lost.

My two biggest concerns about this project — primarily based on the fact that I did not think the technology would work — were that it was a waste of tax dollars, but more importantly it would lead to a loss of confidence in other renewable energy technologies. There is no question that the failures of Solyndra and Range Fuels have done exactly that, and have jeopardized other technologies that may have more promise.

Ironically, one of the engineers on the Range Fuels project responded to my criticisms by writing to Biofuels Digest and telling them that I just didn’t understand the project, adding in a private e-mail “Why you choose to denigrate one of the pioneers of this industry I don’t know. Such articles do only harm to the biofuels industry, despite your misguided intentions.” Yes, he actually suggested that Range wasn’t the problem, it was my criticisms that were doing harm. Of course I don’t have to point out the obvious: This engineer and his firm made a lot of money cheer-leading and engineering this failed project, but they have zero accountability for the money they made at taxpayer expense.

Takeaway Lessons

The lesson that many will take away from this debacle is that the government should not be in the business of investing in risky new technologies. But I think that’s the wrong message to take away. I believe that our level of dependence on oil — especially oil imported from unstable parts of the globe — is a risk that we need to actively mitigate against. I believe there is a role for government to play in helping to mitigate this risk by encouraging alternative energy technologies. What I would say that this situation demonstrates is that they don’t necessarily have the correct model with which to do this. To me, this demonstrates that the government lacks the expertise to evaluate the level of risk in these technologies, and the process can be hijacked by those with political connections.

As I have suggested before, there is a better model that would get the government out of the risky side of this business, but could still encourage the development of alternatives. The gist is that the rewards come when the technology actually delivers on the promises, as opposed to doling out rewards when the promises are made. This would place the issue of assessing risk and investing accordingly in the private sector, while still providing funding for those that actually deliver.

Previous Articles on Range Fuels

Broken Promises from Range Fuels
(February, 2010)
Range Responds (March, 2010)
Range Fuels’ Number One Critic (June, 2010)
Range Fuels Produces Something (August, 2010)
Cellulosic Ethanol Reality Begins to Set In (December, 2010)
Range Fuels Out of Money? (January, 2011)
Vinod Khosla and the Gasification/Fermentation Debate (January, 2011)
The Media’s Role in the Range Fuels Fiasco (February, 2011)

Link to Original Article: Range Fuels Goes Bust, Harms Biofuels Industry in the Process

By Robert Rapier

  1. By Nichol on December 19, 2011 at 8:06 am

    It would have been nice to also hear if any successes came out of this venture, for the science and engineering technology of the task they now stumbled over. The only thing that can be salvaged for the public out of such bankruptcies are any new technologies, or better understanding of the total problem.

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  2. By Greg on December 19, 2011 at 10:12 am

    Hi Robert,
    Have you looked at the approach NASA is taking towards commercial space? Don’t just give money to the companies to create their business but give them measurable goals that must be met before payments are made. This would greatly reduce the big losses while continuing to move the technology forward.
    Thanks for an always interesting blog,
    Greg

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  3. By Jeffrey Fitzsimmons on December 19, 2011 at 11:28 am

    Yes, the government should encourage development by having prizes for winners of actual demonstration projects. The X prize and other models show how well this approach works. Unfortunately, it means the usual pork barrel politics will be cut out of the process.

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  4. By Benny BND Cole on December 19, 2011 at 12:00 pm

    The U.S. has a large and active venture capital and private equity industry. If there is a promising technology, let the private sector takes the risks and finance it. I also like the aforementioned idea of X prizes.

    That said, all the federal government energy and R&D boondoggles put together probably equal a few days of Iraqistan. Ethanol might be worth a myth or two.

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  5. By paul-n on December 19, 2011 at 1:12 pm

    While I agreee with the concept of only paying when the promises are delivered, not made, RR’s post also suggests another way;

    In the case of Range Fuels, they hadn’t even shown conclusively at lab scale that they could do what they were promising to do.

    I think it would be approopriate for government to help in the lab stage development of things.  That is – I think – why there are these vraious government labs all around – NREL, PNW National Lab, Sandia, Argonne etc etc.

    For the government to help inthe research part seems appropriate, as it can bring lots of tech and academice resources that a private company may not be able toa fford or even have access to..

    Certainly, in this case, it would have either found a solution to the problem, or found that there is no solution, and saved the trouble of building the plant.

     

    I am not sure the X-prixe is the best way to go.  You end up with a lot of hard working teams getting little or no reward.  Not only that, but what recent X-prize winners have gone onto comercialisation of anything?

    Even the Edison car team, that achieved the 100mpg car to win, are yet to get any real commercial backing for their concept – the major carmakers have ignored them, and no one wants to start up a new carmaker.  Would be interesting though, if the gov was to call for tenders to supply 50,000 of these vehicles – say as the next gen of postal vehicles or something – maybe then that would get the carmakers attention.

    One of the problems with the X-prize is the winner take all approach, which encourages all sorts of tech stuff to win.  What is needed, with cars for example, is no the best highest tech car possible – as it will be too expensive to build.  What is needed is an affordable way to make them efficient (and smaller), but that is an entirely different beast, and the X-prize can;t address that one.

     

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  6. By Chaz on December 19, 2011 at 3:34 pm

    I think it is safe to say that the BTU content of Range Fuels’ snake oil is zero point zero.

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  7. By rrapier on December 19, 2011 at 3:58 pm

    Chaz said:

    I think it is safe to say that the BTU content of Range Fuels’ snake oil is zero point zero.


     

    Well they did once say they would double the output of E3 Biofuels’ Mead facility. Since that project went bankrupt shortly after they made that claim, they can honestly say they did double the output. Double zero is still zero.

    RR

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  8. By robert on December 19, 2011 at 4:18 pm

    Building smaller efficient vehicles is easy. Selling ‘em is hard.

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  9. By rrapier on December 19, 2011 at 4:20 pm

    Greg said:

    Hi Robert,

    Have you looked at the approach NASA is taking towards commercial space? Don’t just give money to the companies to create their business but give them measurable goals that must be met before payments are made. This would greatly reduce the big losses while continuing to move the technology forward.

    Thanks for an always interesting blog,

    Greg


     

    To the extent that we do fund this stuff, the government needs to do a much better job of looking after our tax dollars. I would guess that there were some goals that had to be met here, but if that is the case they weren’t the right goals. I think politics and lobbying got in the way of making decisions based on sound science.

    RR

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  10. By takchess on December 19, 2011 at 4:59 pm

    I think that the Arpa-e funding which consists of science projects with large upsides, no promise of results and less funds at risk is money well spent.

    Progress payments for results is something that market can do.

    Perhaps there is a middleground. With some gov funding but investors needing more skin in the game. It should be noted a number of investers loss big bucks along with the gov in Solyndra.

    Robert, feel free to tell us what you think of Mascoma.

    Jim

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  11. By Optimist on December 19, 2011 at 5:24 pm

    Excellent write-up, RR,
    But I think you are only scratching the surface of a deeper problem: Pampered government workers with nice pay (and those benefits!) and limited (if any) accountability. See Public servants – more money, less accountability, published earlier this year.

    Combine that with the odd perception (on both the right and the left) that we know what we are talking about, and the obvious answer is hydrogen… no, methanol… no, ethanol!

    And, of course, by now Uncle Sam has spent so much money on ethanol, that some are using it as the basis of continued spending. Yeah, that’s right! We’ve wasted so much money, what is another few million$$?

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  12. By Wendell Mercantile on December 19, 2011 at 5:53 pm

    …is zero point zero.

    Thank you Dean Vernon Wormer. I concur. :-)

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  13. By carbonbridge on December 19, 2011 at 6:22 pm

    Robert Rapier said:

    Heather Duncan — a reporter for The Telegraph in Macon, Georgia — just published an excellent summary of what went wrong at Range Fuels, and what lessons might be learned from their failure:


     

    RR:  There are two articles here, some people will miss the second one.  I applaud this reporter, she’s been doing some digging which others have never attempted nor accomplished.  And similar to her first article on this subject published December 2nd, – other national media will again be following her lead for the second and third time around.  The entire Biofuels Industry is sharing this Khosla black eye.  Thanks for being so up-front here Vinod…

    Range Fuels biorefinery in foreclosure Effort to transfer ownership fails
    By S. HEATHER DUNCAN
    http://www.macon.com/2011/12/0…..osure.html

    Irrespective of RR’s commentary, this particular story isn’t dead yet.  To my knowledge, Range has not filed for bankruptcy, it simply is in a big foreclosure regarding a specific development site where millions of taxpayer dollars were spent.  Heather’s first article (URL above) which was linked on this blog – also outlined that Range’s ‘final report’ on this taxpayer-funded ‘ligno-cellulosic ethanol’ project will NOT be available to the public.  I’m aware of people who will file a FOIA to pursue such documentation.  If public dollars were used and wasted, then public citizens should have the opportunity to examine and learn from what went wrong.

    Don’t forget that this whole Soperton biofuels project was billed and shouted from the rooftops as a ‘ligno-cellolosic’ project.  It wasn’t.  Last time I’d checked, Range’s new ‘in-house’ patent attorney has filed at least 36 patent filings, — and a new group of these applications have been published since the project itself shut down much earlier this calendar year.  

    The process of filing patents today is getting stranger by the month…  Formerly, it used to be that patent applications were kept secret until accepted and published by the USPO.  However, the USPO has been making certain patent apps public long before they ever are argued, discussed, debated, etc.  I’m personally familiar with this process having patent applications surface on the internet seventeen months after being filed, – and three weeks in advance of the USPO even informing patent attorneys who filed such applications – that this exposure process was going on.

    In closing, I don’t expect one in fifty readers to really give a damn here concerning this subject matter.  Yet I anticipate that this new investigative reporter from Macon, Georgia, will ultimately be publishing even further details.  There are just sooooo many details being blacked-out.  Good job Heather!!!

    -Mark

    Her newest articles below:

    Range Fuels failure raises the question: How much risk should the government take with taxpayer dollars?

    By S. HEATHER DUNCAN
    http://www.macon.com/2011/12/1…..amble.html

    A blind bet Taxpayers may never learn what their Range Fuels investment bought
    By S. HEATHER DUNCAN
    http://www.macon.com/2011/12/1…..z1gruaUWue

     

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  14. By Ben on December 19, 2011 at 6:38 pm

    If there’s a poster-child for biofuels boondoggles, well, Range Fuels is surely right out of central casting. RFA and other nest-feathering operations in Washington too eagerly join in defence of such hooligans peddling hype and sizzle to position themselves and private equity in the shameless game of IPO musical chairs. That’s not what was intentioned when George H.W. Bush and Sen. George Mitchell agreed, in an uncommon moment of bipartisanship, to an oxygenate content for liquid fuels in the Clean Air Act Amendments of 1990 over objections from the oil industry (and with a big wink out of Detroit and the Corn Belt’s grain processing giants). The whole history of what Dineen and others have been up to these past couple of decades has been chronicled and will be forthcoming, next year. An advanced copy will be provided to the White House and the GOP nominee’s policy advisors. Dr. Paul will has been offered a preview as will Cato-types. Who knows, perhaps even the Koch brothers may yet have need to choose which principles matter most in the ongoing Capital/Wall Street/Silicon Valley hustle of no-fault loans, subsidies and musical chairs. It should be fun.

    We can expect RR to offer a decent slice of the “dance” with his own
    version of things in 2012. To that end, I’ll simply add, thanks for the public service!

    All the best to the blog’s readers/contributors. Happy holidays.

    Ben

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  15. By Rufus on December 20, 2011 at 12:03 am

    First Choren, then Range, and Enerkem isn’t looking too sporty at the moment. It’s looking bleak for the Gasification folks.

    A couple of commercial size Enzymatic Projects will start producing in 2012; we’ll see how they do.

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  16. By paul-n on December 20, 2011 at 1:51 am

    First Choren, then Range, and Enerkem isn’t looking too sporty at the moment. It’s looking bleak for the Gasification folks.

    On this,  I agree.  What the gasification folks need to do, is what their process is best suited for – making methanol.

     

    Range’s approach to gasify then methanol then ethanol is like making a left turn by doing three right turns.

    Methanol is liquid fuel, is blendable into gasoline, and is (relatively) easy to produce with gasification of solid stuff.  

    Current rules allow 3% methanol by volume – that would be 4.5bn gal a year of the stuff – that is a lot of wood waste turned into fuel, and about 140,000 barrels/day of oil imports avoided.  Why bother withe more expense and risk to turn it into ethanol to then do the same thing with it?

     

    Leave the ethanol to sugary and starchy feedstocks, where it works best.

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  17. By paul-n on December 20, 2011 at 2:00 am

    Mark wrote;

    Heather’s first article (URL above) which was linked on this blog – also outlined that Range’s ‘final report’ on this taxpayer-funded ‘ligno-cellulosic ethanol’ project will NOT be available to the public.  I’m aware of people who will file a FOIA to pursue such documentation.  If public dollars were used and wasted, then public citizens should have the opportunity to examine and learn from what went wrong.

    It ought to be a condition of the funding that if the process fails, and the loan guarantee is exercised, then the US government gets ownership of all the IP, which can then be made public.  

    How can the public ever benefit if the information is withheld?  

    What is the point of a failed vanture of a soon to be bankrupt company, hanging onto “proprietary” information?

    The gov should have palyed hardball on this – if the guarantee is called upon, we get your patents.

    That’s how they would do it on Dragon’s Den or Shark Tank .

    Maybe the gov should contract the selection of DoE projects to them – they could hardly have done any worse, and would likely be far better at sorting hype from reality

     

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  18. By Rufus on December 20, 2011 at 2:18 am

    You’re still dealing with an imported fossil fuel of finite quantity, and one that is subject to Explode upward in price at any moment.

    As it is, the World Price of Nat Gas is $10.00/kcuft, and upward, depending on the region. How would nat gas to methanol work out at those prices?

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  19. By Wendell Mercantile on December 20, 2011 at 11:57 am

    In the case of Range Fuels, they hadn’t even shown conclusively at lab scale that they could do what they were promising to do.

    Agree. The failure is not about process, but about scale and logistics. The long pole in the tent is — and always will be — logistics. Something too many who become infatuated with developing a new or innovate process forget.

    Never fall in love with a process — no matter how technically sweet or innovate — if the logistics can’t support it.

    At it’s heart, the Manhattan Project succeeded in WW II because a hard-charing Army general named Lesley Groves solved the huge logistical process it needed. Robert Oppenheimer and his team of PhD’s and scientists all understood the science needed early on.

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  20. By rrapier on December 20, 2011 at 1:48 pm

    Rufus said:

    First Choren, then Range, and Enerkem isn’t looking too sporty at the moment. It’s looking bleak for the Gasification folks.

    A couple of commercial size Enzymatic Projects will start producing in 2012; we’ll see how they do.


     

    But don’t confuse gasification — which is commercially employed on a very large scale — to the subset that is biomass gasification. Gasification itself works just fine; that is how most of the methanol in the world is produced, and it is how South Africa produces a lot of their transportation fuel from coal. It is just more challenging when biomass is the feedstock.

    RR

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  21. By Optimist on December 20, 2011 at 2:07 pm

    First Choren, then Range, and Enerkem isn’t looking too sporty at the moment. It’s looking bleak for the Gasification folks.

    Thermochemical is the way to go, if you intend to play in the big leagues. Fermentation-distillation is too slow (fermentation) and energy-intensive (distillation). Great for moonshine, not so great for large quantities of low value fuel.

    Keep in mind that gasification is great for using waste materials of unspecified chemical make-up, and good for using 100% of the carbon in such material.

    So enjoy the moment, Rufus. Gasification will be back to kick butt.

    On this, I agree. What the gasification folks need to do, is what their process is best suited for – making methanol.

    Maybe. I still think rebewables need to aim for drop-in replacements, as the Navy’s Green Strike Force is going to be paying top $ for.

    On that topic, I have a question, RR: Which process is better for converting syngas into hydrocarbons: conventional Fischer-Tropsch or Range Fuel-type methanol, followed by Exxon-Mobil’s Methanol to Gasoline?

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  22. By Wendell Mercantile on December 20, 2011 at 4:13 pm

    Fermentation-distillation is too slow (fermentation) and energy-intensive (distillation). Great for moonshine, not so great for large quantities of low value fuel.

    Roger that. They still make corn ethanol using centuries-old technology. The corn ethanol industry is filled with slow learners.

    Buy as I’ve said now too many times, corn ethanol has never been about breaking our grip on needed to import foreign oil.

    From day one it has been about increasing the commodity market for corn. Then the corn people thought of cloaking their real goal in euphemism and spin to mislead our political system. (Obviously not all that difficult.)

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  23. By Optimist on December 20, 2011 at 4:43 pm

    What? You don’t trust Congress to do the right thing? [Looking shocked]

    Have to say: the problem is that there are so many slow learners outside the ethanol industry. Some are still waiting for the hydrogen fairy to vaporize OPEC. Uncle Sam, meanwhile is getting stoned on ethanol. That guy always has some alcohol-related problem, doesn’t he?

    And then, for comic relief, we have the corn ethanol lobbyists begging us to give their infant industry a chance to grow up! Question to Rufus: if the ethanol industry took 5,000+ years and it is still in its infancy, how long (and how much) will it take for it to grow up?

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  24. By Rufus on December 20, 2011 at 10:04 pm

    Future ethanol production is all about gene-splicing, etc. Syngenta just contracted with a large corn ethanol plant to supply them with corn that produces its own amylase, removing the need to use enzymes in the process.

    Not ezzackly a 5,000 year old technology.

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  25. By Rufus on December 20, 2011 at 10:24 pm

    Enogen corn is bio-engineered specifically to express the alpha amylase enzyme necessary for dry grind ethanol production directly in the endosperm of the grain itself, eliminating the need to add liquid amylase. It is the first corn output trait designed to allow ethanol production to be more efficient, cost effective and better for the environment.

    http://www.ethanolproducer.com…..en-in-2012

    This ain’t your Grandfather’s corn, and this ain’t your Grandfather’s Century.

    Of course, they’re doing the same thing with cellulose. This is the century of Biology, boys. That drilling holes in the ground, and sending our young men to fight the heathens over what comes out is sooo 20th century.

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  26. By Wendell Mercantile on December 20, 2011 at 11:22 pm

    Future ethanol production is all about gene-splicing, etc.

    Sorry Rufus. Future ethanol production is about scale and logistics. Splice genes and make new enzymes all you want, but if the logistics won’t support it, it won’t happen — at least not without continued infusions of government support.

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  27. By paul-n on December 21, 2011 at 1:51 am

    with corn that produces its own amylase, removing the need to use enzymes in the process.

    Not ezzackly a 5,000 year old technology.

    Actually – it is.  Barley already supplies its own amylase and *has* been fermented for over 5000 years

    From wiki;

    Beer is one of the world’s oldest prepared beverages, possibly dating back to the early Neolithic or 9500 BC, when cereal was firstfarmed,[11] and is recorded in the written history of ancient Egypt and Mesopotamia.[12] Archaeologists speculate that beer was instrumental in the formation of civilisations.[13]

    The earliest known chemical evidence of beer dates to circa 3500–3100 BC from the site of Godin Tepe in the Zagros Mountains of western Iran.[14]

     

    @ Optimist.  Methanol is already a drop – in fuel.  It can be used in flex fuel vehicles, and can very easily co-fuel in diesel engines and gas turbines.  For most non-flex fuel vehicles, replacement of a couple of seals, and adjustment of the iginition timing, and off you go.

    A good example is here, and note the emissions achieved when he ran it on M60, using the stock exhaust/emissions system.

    http://www.nationalreview.com/…..ert-zubrin

     

    Doing methanol to gasoline is pointless. It loses 20% of the methanol energy in the process, and adds significant expense.  Not only that, the engines are actually more efficient – miles/btu on methanol – in Zubrin’s test he got 33% more miles/btu.  If you take into account the 20% conversion loss, driving on methanol derived gasoline will need 40% more methanol feedstock than driving on the methanol itself!

    Given that methanol can be mixed in at up to 3% presently, that is scope for 4.5bn gal of methanol a year.  Then start using it in flex fuels, and diesel co fuelling, and the volumes that can be used go way up.  

    Converting it to gasoline – the least efficient fuel – is just a waste of energy, in so many ways.

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  28. By Rufus on December 21, 2011 at 3:55 am

    :) Good one, Paul. I didn’t know that about Barley. You learn something every day.

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  29. By perry1961 on December 21, 2011 at 10:32 am

    “Doing methanol to gasoline is pointless. It loses 20% of the methanol energy in the process, and adds significant expense.”

    Some might argue that doing natural gas to methanol is just as pointless. Natural gas burns so much cleaner, and a teaspoons’ worth won’t blind or kill you. Which would save more oil, putting 3% methanol into gas blends or converting cars and heavy trucks to run on CNG? Not that any of these herculean efforts to save the ICE will succeed. Internal combustion was great when oil was 5 cents a barrel. Not so great at $100 per barrel.

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  30. By Wendell Mercantile on December 21, 2011 at 10:36 am

    Paul said: Methanol is already a drop – in fuel. It can be used in flex fuel vehicles, and can very easily co-fuel in diesel engines and gas turbines.

    Rufus said: You learn something every day.

    Time for lesson No. 2 today Rufus.

    We need passage of the Open Fuels Standard Act of 2011. Which in short says that flex-fuel cars be capable of burning methanol instead of only ethanol; and diesel, bio-diesel, and DME from a methanol feedstock for compression-ignition engines. Open Fuel Standard Act of 2011

    Cost of outfitting each new car would be only incrementally more, and open the auto fuels market to methanol made from what are proving to be our vast reserves of natural gas.

    I can only imagine the knee-jerk opposition from the NCGA, Bob Dineen’s RFA, and Big Ag about being faced with realistic market competition for what has been a protected corn ethanol market.

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  31. By paul-n on December 21, 2011 at 12:56 pm

    Perry – I am a fan of CNG and have espoused that position numerous times here.

    However, the cost of a CNG conversion is substantial (it is more expensive than it needs to be due to some EPA regs, but that’s another matter), so it is best suited to high mileage vehicles – such as commercial couriers, city buses, hwy trucks, trains etc.

    So once we have converted that relatively small fraction of vehicles, what then to do with the rest?

    It is not an either/or situation, we can do both.

    Doing NG to methanol has the advantage of creating an easy to handle, environmentally bening liquid fuel, that will be used domestically – instead of being exported like LNG is starting to be.   Methanol would also be ideal for stranded NG, like the Alaskan north slope, or parts of N. Dakota, where the costs of NG pipelines are not worth it.

     

    The purpose of something likle the Open Fuels act is to allow as many alternative fuels as possible – they all displace oil, so they all should be allowed to be used (subject to normal environmental and emission rules etc).

    The current situation has government picked winners – e.g. ethanol and excludes others – e.g. methanol – from widespread adoption.  I actually am OK with gov picking things like ethanol, what I am not OK with is then excluding others, to create, in effect, a mandated monopoly for ethanol.

    That is what needs to change, and is why the ethanol lobby is resisting the de-feathering of their nest.

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  32. By paul-n on December 21, 2011 at 1:11 pm

    @ Rufus – all grains create amylase in the malting process.  In essence, the grain is soaked to make it sprout – this is where it releases amylase to convert its starch store into sugar for the sprout to use.  The process is then stopped by drying the grain – if it is to be transported – or by imediately boiling it (“mashing”) to dissolve  all the sugars and start fermentation.

    Even corn can be done like this – here’s a link on how to do it to make your own moonshine!

    http://www.stillcooker.com/mal…..g-corn.php

    Barley produces more amylase than any other grain – so it malts easier/faster – probably why it has been used for so long.

    With corn, I am guessing that it is easier/faster to use commercial amylase from Novozymes etc for industrial distilling – though I’d like to think that JD still does it the traditional way. 

    I’ll also guess that corn bred for max yield also has minimum amylase – that is what they are trying to correct.

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  33. By carbonbridge on December 21, 2011 at 1:28 pm

    Wendell Mercantile said:

    Paul said: Methanol is already a drop – in fuel. It can be used in flex fuel vehicles, and can very easily co-fuel in diesel engines and gas turbines.  Wendell said: We need passage of the Open Fuels Standard Act of 2011.  Cost of outfitting each new car would be only incrementally more, and open the auto fuels market to methanol made from what are proving to be our vast reserves of natural gas.


     

    Wendell, Paul & Others:  The Open Fuels Standard Act deserves some attention.  This legislation is struggling to attract more Congressional Representatives to sign on and endorse this rather simple proposal.  The end-result for American consumers, air quality, choice of liquid fuels – all made possible by a simple $35 FFV engine program chip – is rather tremendous.

    We’ve had previous discussions on this blog before about programming a FFV chip to adjust for multiple fuels, — not solely fermented C2 corn Ethanol (E-85) oxygenated blends.  And this multi-fuel capacity for automobiles begins with C1 Methanol and its hybrid cousin, C1-C10 Higher Mixed Alcohols. 

    Below is a link to an article which I co-authored with Jay Toups of Bioroot Energy from Darby, Montana, nearly three months ago – and shared with the folks at Open Fuels Standard in Washington, D.C.  This introduction about a direct cousin to Methanol is published on their website.

    -Mark

    Higher Mixed Alcohol Fuel:  An Introduction

    Wednesday, October 5, 2011

    http://www.openfuelstandard.or…..ction.html

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  34. By rrapier on December 21, 2011 at 1:31 pm

    CarbonBridge said:

    Wendell Mercantile said:

    Paul said: Methanol is already a drop – in fuel. It can be used in flex fuel vehicles, and can very easily co-fuel in diesel engines and gas turbines.  We need passage of the Open Fuels Standard Act of 2011.  Cost of outfitting each new car would be only incrementally more, and open the auto fuels market to methanol made from what are proving to be our vast reserves of natural gas.


     

    Wendell, Paul & Others:  The Open Fuels Standard Act deserves some attention.  This legislation is struggling to attract more Congressional Representatives to sign on and endorse this rather simple proposal.  The end-result for American consumers, air quality, choice of liquid fuels – all made possible by a simple $35 FFV engine program chip – is rather tremendous.


     

    I am actually writing about this in the book now. I am making some common sense energy suggestions: Open Fuels Standard, fleet conversions to CNG, incentives to use ethanol locally, etc. What are some others that readers might like to see mentioned in the book?

    RR

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  35. By Rufus on December 21, 2011 at 2:33 pm

    You might mention what is, almost certainly, going to be the biggest move in the near term: smaller, localized ethanol refineries utilizing local ag waste (corn stover, etc.)

    The savings from eliminating the transportation of feedstocks, and end products long distances. And, the added benefit of electrical generation from the leftover lignin, esp. in the Southeast.

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  36. By rrapier on December 21, 2011 at 2:49 pm

    Rufus said:

    You might mention what is, almost certainly, going to be the biggest move in the near term: smaller, localized ethanol refineries utilizing local ag waste (corn stover, etc.)


     

    I actually do discuss this in my chapter on ethanol. I go through the history of ethanol, the current status, and how we can make the program better and more sustainable.

    I think some people are going to be quite surprised at my treatment of ethanol in the book. And it is kind of funny, because sometimes when I start writing I don’t know for sure where I am going to end up. On all of our energy options, I cover the warts too, but my argument is that ethanol can be a very important part of our energy picture — particularly if we focus on E85 in the Midwest.

    RR

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  37. By Rufus on December 21, 2011 at 3:30 pm

    There Is one other thing that I would definitely incluce if I were trying to write such a book. Yeah, good luck with that! :)

    With the modern, turbocharged, DI, 2.0 L, and smaller, engines hitting the market now, there are only two more improvements needed to start getting basically equivalent mileage with E85 and gasoline.

    Those two improvements are:

    1) either widespread inclusion of block heaters (ala, Ford’s Swedish Focus,) or, probably preferable, Heated Injectors (Delphi will be supplying those in the Fall of 2012,) and

    2) an ethanol sensor in the gas delivery system (the O2 sensor just can’t deliver the goods.)

    Inclusion of these two impending improvements will put you in the catbird’s seat in Late 2012 when one, or both of these technologies hit the showrooms.

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  38. By Optimist on December 21, 2011 at 5:17 pm

    Not ezzackly a 5,000 year old technology.

    You’re right: it’s even older than that. When exactly did Noah get out of the ark? 6,000 BC?

    This ain’t your Grandfather’s corn, and this ain’t your Grandfather’s Century.

    Nope. But the basics don’t change. As Wendell commented, the logistics (as well as the rate and efficiency) preclude fermentation-distillation.

    Enzymes and gene-splicing is great for pharmaceuticals (like insulin). They’re OK when you produce food. For low value-high volume products, like liquid fuels, they’re not the way to go. A cheap enzyme is nowhere near the value of an expensive catalyst as used in a refinery.

    …smaller, localized ethanol refineries utilizing local ag waste (corn stover, etc.)

    Really? When did the break-through happen? Last I heard, there was still no affordable way to convert waste to ethanol. Or did you mean any minute now

    Not that any of these herculean efforts to save the ICE will succeed.

    The ICE is under threat? Is that from the hydrogen fairy or the electric myth?

    Internal combustion was great when oil was 5 cents a barrel. Not so great at $100 per barrel.

    Funny, oil has been @$100/bbl pretty much all year. The ICE still dominates all forms of transportation. Have we gotten used to $100/bbl? What is next?

    And, in related news: General Motors admitted Thursday that it won’t sell the 10,000 Chevrolet Volts that it had hoped to sell in 2011, and said that it would buy the plug-in electric car back from any customer fearful about its safety.
    Got that, Perry? GM set the bar as low as possible without getting into “why bother” territory. Even then they failed to deliver. I guess the electric myth is not the threat you had in mind.

    What are some others that readers might like to see mentioned in the book?

    I vote for all your regular comments, like: Don’t exclude Big Oil from renewable energy credits as in the Tyson Foods-COP fiasco, base federal incentives on delivered kWh, not promises, etc.

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  39. By Wendell Mercantile on December 21, 2011 at 10:11 pm

    Some might argue that doing natural gas to methanol is just as pointless. Natural gas burns so much cleaner, and a teaspoons’ worth won’t blind or kill you.

    Perry~

    I’m all in favor of NG-powered cars — particularly for fleet ops. But in the short term, it would probably make more sense to power liquid-fuel piston-engine cars with methanol made from NG, than to reconfigure cars to operate with a CNG or LNG.

    The best would be a true open fuels, flex-fuel engine that gave the car owner the option of gasoline, diesel, ethanol, methanol, butanol, DME, bio-diesel, natural gas, etc. Drive up, pick a fuel, fill up, and drive away. Sell the fuel by energy content instead of volume, and let the cost of the Btus delivered help make the decision which to use.

    On such a world, the energy costs and thermodynamic of making ethanol form corn would soon relegate that fuel to the backseat.

    Some true flex-fuel vehicles already exist: The Army’s Abrams tank can literally run on any liquid that burns. The jets I flew in the Air Force could also burn almost any liquid. During our annual combat certification, we were regularly quizzed on the procedure for landing on an Autobahn and refueling at a German gas station. We had to be able to get into the engine’s fuel and know how to change the density settings in the master fuel control to burn Benzin. (Admittedly easier to do with the turbine engines jets, tanks, and helicopters use. Unfortunately, turbine engines are too expensive and inefficient to be the solution to an Open Fuel Standard for cars transportation.)

    Cars with true open fuel standards would quickly send the NCGA and RFA scurrying back to growing corn for food. There is little question in my mind that adopting an Open Fuels Standard would quickly show the corn ethanol wave has crested.

    Bob Dineen and the corn ethanol lobby have reason to be very afraid of the Open Fuels Standard Act.

    Merry Christmas and have a great 2012 Bob.

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  40. By russ-finley on December 24, 2011 at 1:30 pm

    Happy Holidays Wendell,

     

    The Army’s Abrams tank can literally run on any liquid that burns

     

    As you know, jet turbines are not fussy about what you feed them. I worked my way through engineering school as a lineman and mechanic at Purdue airport. Some of the older business jets were certified to burn a mixture of regular aviation gas and Jet A if Jet A was not available at an airport.

    A reiprocating ICE is designed around a specific fuel. Designing one that could  burn such a variety of fuel would be expensive, and not very efficient (gas mileage would be poor). Engineering is the art of compromise.

    At the end of WW II the reciprocating engine had reached its tehcnological limits as an aricraft engine. The complexity had reached epic proportions. Were it not for the incorporation of an engine that spins instead of jerks, the airline industry would barely exist ; )

     

     

     

     

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  41. By russ-finley on December 24, 2011 at 1:57 pm

    Paul N said:

     

    Archaeologists speculate that beer was instrumental in the formation of civilisations

     

    …on the back of a napkin while throwing back a few at a local pub.

     

     

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  42. By russ-finley on December 24, 2011 at 2:05 pm

    RR,

     

    Here’s a biofuel company that’s rolling in (tax) money:

     

    http://seattletimes.nwsource.c…..aza19.html

     

    Remove the subsidy and it would disappear because there is no hope of ever making it cheaper. Aren’t fuels made from edible vegetable oils limited in scale by competition for land for food, fiber, and biodiversity?

     

     

    [link]      
  43. By rrapier on December 24, 2011 at 3:10 pm

    Russ Finley said:

    RR,

     

    Here’s a biofuel company that’s rolling in (tax) money:

     

    http://seattletimes.nwsource.c…..aza19.html

     

    Remove the subsidy and it would disappear because there is no hope of ever making it cheaper. Aren’t fuels made from edible vegetable oils limited in scale by competition for land for food, fiber, and biodiversity?


     

    The cellulose to ethanol to jet fuel idea they mention has to be one of the silliest ones I have ever heard. Would be terribly inefficient.

    RR

    [link]      
  44. By carbonbridge on December 24, 2011 at 11:20 pm

    Robert Rapier said:

    The cellulose to ethanol to jet fuel idea they mention has to be one of the silliest ones I have ever heard.  Would be terribly inefficient.   …I am actually writing about this in the book now.  I am making some common sense energy suggestions:

    And Wendell said:  Bob Dineen and the corn ethanol lobby have reason to be very afraid of the Open Fuels Standard Act.


     

    Thanks Russ for the Seattle article link.  I winced as I read through it as I understand something about basic efficiency of harvesting a carbon atom [building block] and then re-assembling it via a myriad of known processes to form a synthetic kerosene jet fuel.  And going from cellulose to [fermented] oxycarbon ethanol and THEN back to hydrocarbon jet fuel is a rather long and expensive mechanism to achieve any variety of drop-in jet fuel.

    We’ve read recent articles where the military is paying exorbitant prices to showcase ANY new biofuel volume being integral to their basic needs – even if it is just one ounce of new volume to a given barrel of consumable liquid fuels product.

    Politicians, grant givers and both private and public investors alike are easily fooled by hype and presentation as they do not understand the mechanics and EFFICIENCIES of these various ‘building block’ fuel assembly processes.  Efficiency of assembly is synonymous with cost to produce and profitability. 

    Isn’t that the root cause of this very thread which we have been re-discussing for the past 18 months?

    -Mark

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  45. By Optimist on December 27, 2011 at 5:52 pm

    We’ve read recent articles where the military is paying exorbitant prices to showcase ANY new biofuel volume being integral to their basic needs – even if it is just one ounce of new volume to a given barrel of consumable liquid fuels product.

    Oh, I won’t knock the Navy. Their efforts seem WAY more focussed and realistic than anything Uncle Sam has come up with so far. I think the Navy might just get us there, unlike anything coming out of Washington.

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  46. By Wendell Mercantile on December 27, 2011 at 8:59 pm

    Were it not for the incorporation of an engine that spins instead of jerks, the airline industry would barely exist ; )

    Russ,

    ’tis true. The big piston engines airplanes of the 1950′s needed constant maintenance, and the on-board flight engineers were really on-board mechanics. They carried bags of tools and spark-plugs with them and it wasn’t uncommon for someone to crawl out inside a wing to get a cranky engine running again — all w/o the passengers knowing what was happening.

    Some of those super-sophisticated piston engines were downright dangerous. We lost more B-29s in WW II because it’s Pratt & Whitney R-4360 “Wasp Major: engine tended to overheat and catch fire, than we lost to Japanese air defense. (It was actually somewhat rare for a B-29 to return from a mission over Japan with all four engines running normally.)

    You are correct. Without the jet-engine, long-range, high-speed air travel would not be what it is today.

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  47. By Eric Sutherland on January 3, 2012 at 6:31 pm

    Mr. Rapier,
    I ran acoss your blogs on Consumer Energy regarding the failed Range Fuels plant in Georgia.

    Thanks to you, I sort of got lost for a few hours looking at the material on that web site and others, but I won’t hold it against you. You are a good writer/reporter/analyst.

    The origin of my curiosity was this article in our local business report. Fort Collins CO seems to be bound and determined to match the Federal Government in investing tax dollars in “innovation” eneterprises. We are now millions into it.
    http://www.ncbr.com/article.asp?id=59990
    I wondered if you might have some thoughts about the possibilities that Enerjetic might actually be pursueing. If you read the comments on the article, it does not seem as thought everyone is convinced.

    Fort Collins is a great place, but we tend to have rather gullible public officials ready to throw money at anyone promising “economic development”, especially if it involves pseustainability.

    I started in local politics trying to stop the waste of millions of ratepayers dollars on junk REC’s. We have public power here and truly are in the catbird seat with the lowest rates and highest reliability in the region. However, we have not done much to convert this leadership into real changes that promise a sane energy future for our children. Yet we constantly claim to be leaders in clean energy. Go figure.

    I would greatly appreciate your thoughts.

    Thanks,
    Eric Sutherland
    Fort Collns, CO

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  48. By paul-n on January 4, 2012 at 1:39 pm

    Eric, considering that these are the same Kleppers that were involved with Range Fuels from the start – which was not even disclosed in that article – which do you think is more likely – a successful project or $millions of gov money spent for no real result?

     

    Also, gasifying dried distillers grains is, literally, using food for fuel.   Dried grains are excellent animal feed, the US even exports the stuff to China!

     

    If the project is built, it should run on wood waste and the like, and use the grains for feeding something – burning them is an absolute waste.

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  49. By Optimist on January 5, 2012 at 5:37 pm

    Thanks to you, I sort of got lost for a few hours looking at the material on that web site and others, but I won’t hold it against you.

    Sounds more like you need to be thankful, assuming you get around to convincing those local officials that maybe Bud Klepper is not such a great investment opportunity.

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  50. By carbonbridge on January 5, 2012 at 8:42 pm

    Range Fuels Goes Bust, Harms Biofuels Industry in the Process

    Fed-backed Range Fuels sells plant for pennies on the dollar

    By Kirsten Korosec | January 5, 2012, 1:10 PM PST

    What went wrong with Range Fuels? Blogger Robert Rapier warned back in 2010 and debunked Range Fuels claims long before mainstream media took notice. Last month, Rapier took a look back at the Range Fuels failure, which I suggest you check out, and offered up several explanations, including the lack of due diligence from the government and the company’s attempt to build a factory with many new pieces of unproven technology.

    http://www.smartplanet.com/blo…..llar/11809

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