Forget Biofuels, Future Energy Architecture Will Have Solar at Its Core

It’s been a couple of years since I last watched Vinod Khosla talk about biofuels. During the second half of 2006 he cruised around the country giving a big pep talk on the promise of corn ethanol. This was during the news-cycle lead-up to President Bush’s early 2007 SOTUS, and the advent of US ethanol mandates. Also at that time we saw a big ethanol ipo wave, as most of the companies which are now bankrupt first came public.

Ethanol was of course doomed to fail. There is simply not enough energy content in young organic material to provide the feedstock for a sustainable business model. Vinod Khosla was told at the time that he was wrong, and, that the majority of his unsupportable claims for ethanol were incorrect. The birth-death cycle of corn ethanol now bears this out.

Despite all the lovely ethanol company websites, the false Green claims and the amber waves of grain all golden in the sun, neither corn ethanol or other biofuels were able to compete against the true miracle liquid known as oil. It wasn’t because of marketing, subsidies, consumer preference, or cultural stupidity. The failure of biofuels is a direct result of a rather brutish fact: turning organic material into liquid fuel may be an achievement in alchemy, but it does not capture much energy.

Yesterday at this week’s Milken Conference, Vinod Khosla could be found discussing the same trajectory that he promoted several years ago, this time for cellulosic ethanol (H/T to Paul Kedrosky who sent me the clip overnight). And yes, Khosla is still framing the prospect of biofuels as a scalable, workable replacement for oil. Sigh.

After spending nearly ten years myself studying energy, coal, uranium, natural gas, solar, wind, government policy, and of course the master commodity, oil, I have pretty much come up with a working model for how I think the next decade or two will play out. As for biofuels, they will play no significant role in the world’s energy mix. And while all the other fossil fuels show some possibilities for enhanced use–and here I am thinking mainly of natural gas and coal–I remain committed to oil as the miracle, concentrated energy source that can be increasingly leveraged to build out a future energy architecture. That future energy architecture in my view will have at its core solar energy. Which is kind of a nice story, poetically speaking, because oil itself is ancient solar energy.

States, regions, and countries that either have the ability or are already monetizing their oil inheritance and using the proceeds to build large array solar should be watched. This is one of the reasons I remain quite interested in (currently “doomed”) California. Whether the Californians know it or like it, they will indeed someday and maybe soon be forced to monetize their offshore oil. This would neither be a tragedy for the environment, nor a strategic folly as long as every penny of the proceeds was used to build utility grade solar in the deserts, and electrified transport along the coast. That said, my point is broader than its implications for California.

In my Oil to Solar model, the world will increasingly migrate to more efficient use of Oil, thus distributing oil’s concentrated power more deeply into the world’s population of 6.7 billion people. This of course means each person in the Western OECD countries will use alot less oil–so that 25 people in the developing countries can use oil just a little bit more, or use oil for the very first time. The global solar buildout wave, while currently underway in both developed and developing countries, will eventually accelerate in the developed world, where the legacy automobile grid is a disadvantage, but where the legacy electrical grid is a big plus.

The Oil to Solar model will, in my opinion, receive lots of marginal help from other fossil fuels and other alternative energy, such as Wind. In addition, it’s still not clear that an electrical grid can be anchored by Solar (although there is work being done in this area as well, relating to overnight storage). So it’s likely that Nuclear, Coal, and Natural Gas will continue to play a role, even long-term roles. But as a model for both investment, and policy, and as a way to avoid such dead-ends as biofuels, I think it will work as a guide for the next two decades.

Photos: Grains in the Dakotas, and, a Large PV Solar Array at Nellis AFB, Nevada.

Comments

[john s. gordon]

sir your logic is irrefutable.
> jack

2009 Apr 30 08:34 AM

[SubsidyEye]

Very well-written article, but (unfortunately) I wouldn't write off biofuels yet. They have very powerful agricultural and agri-business lobbies, and public figures (like Vinod Khosla), behind them, and the fact that as each year passes, the economic rents earned by feedstock producers -- corn and soybean farmers -- get capitalized into the value of farmland, thus entrenching the subsidies. Meanwhile, the federal blending mandates (and an increasing suite of state-level blending mandates) ensure that biofuels will continue to be produced and used for decades to come. On top of that, the airline industry is also joining the game, and looking to biofuels -- no doubt also subsidized -- to save their bacon.

P.S., Why the photo of barley? Hardly any barley is used to produce biofuels.

2009 Apr 30 08:37 AM

[billp37]

Energy Myths and Realities
Keith O. Rattie
Chairman, President and CEO
Questar Corporation
Utah Valley University April 2, 2009

home.comcast.net/~bpayne37/pnmelectric...

2009 Apr 30 08:47 AM

[Tricky]

Gregor -- I have not studied this in the depth you have, but other publications seem to think that nuclear is the clear winner on energy output produced for both: 1) energy input required to produce, and 2) land space required to produce.

Did you leave nuclear out because of the big political resistance to it or for other reasons?

2009 Apr 30 09:08 AM

[Fred W]

Vinod Khosla is over-rated and continues to show general incompetence (or dishonesty) when discussing alternative energy technologies--especially biofuels. VK was in the right place at the right time to make a lot of $--similar to a land developer in 2002-4 where everybody made a killing. You didn't need to be "right", you just needed to be able to "sell it", and similarly to P.T. Barnum, VK is good at selling.

2009 Apr 30 09:33 AM

[Steve in Greensboro]

Thanks, Mr. Macdonald for the note.

Solar, wind and biofuels will all never be economically viable and will all die immediately when government subsidies are removed.

Nuclear is the reverse. It is currently economically viable, but is being suppressed by government.

Why? Because politicians are lawyers and not engineers.

2009 Apr 30 09:44 AM

[tessant]

great article. glad i connected with you on solarfeeds...

2009 Apr 30 10:04 AM

[Tricky]

Another shame about nuclear being shunned -- my understanding is that we have ample supply for the raw material from the US and Canada, so supply is in friendly hands. Much harder to say that about solar/wind if production were to go into very large scale -- many or most parts would be produced in low cost countries.

Steve -- I don't mind if the govt subsidizes research/prototypes of alt energy on a SMALL scale until the technology proves itself to be economically viable, if ever.


On Apr 30 09:44 AM Steve in Greensboro wrote:

> Thanks, Mr. Macdonald for the note.
>
> Solar, wind and biofuels will all never be economically viable and
> will all die immediately when government subsidies are removed.<br/>
>
> Nuclear is the reverse. It is currently economically viable, but
> is being suppressed by government.
>
> Why? Because politicians are lawyers and not engineers.

2009 Apr 30 10:14 AM

[YoYoMama]

See www.chron.com/disp/sto..., airline industry trending towards use of biofules.

2009 Apr 30 10:18 AM

[satchv2]

Please lets get real. Regardless of solar or other green energy we still need ( unless a new storage device can be developed) new fired plants to provide load availability when solar or wind power is not available.

Biodiesel produced out of non conventional sources can help provide fuel required and will not cause problems in the food chain.

Reality is fossil fired plants or nuclear will be required .

2009 Apr 30 10:32 AM

[Wisdom vs. Information]

thanks for another solid blog GM; however, utility scale solar probably will need a new technology, and I am cautious about thin film.

there is a big difference between distributed (rooftop) solar and utility solar. because solar production can be distributed (ie, built onto your roof or backyard), the 50% delivery losses of utilities and costs of delivery infrastructure get factored into its efficiency (or price if you like). Prices of panels are plummeting, and prices of BOS are dropping merely dramatically. by the end of 2010 DISTRIBUTED solar SHOULD provide electricity to homes and businesses competitively with the utlities, without subsidies (sorry doubters, it is true. do the math if you do not believe me); however, at utility scale, solar panel ASPs must drop tremendously, maybe impossibly. the utility scale solar projects being built now will NEVER pay for themselves, as far as consumption is measured.

as CSi prices fall below +$1kW over thin film (and this will probably happen), there becomes no reason to choose thin film. beware thin film because today's gaudy profits may become tomorrow's surprise bankruptcy

i am in solar because i believe in distributed power generation. for any of you shouting "this is proof that subsidies work," yawn. this would have happened naturally as fossil fuels became more expensive, without the bad experiments like thin film, Li batteries and ethanol; and, without the stupefying government administrative ineffiencies. those ineffiencies mean more consumption, and that is the worst thing for the environment

2009 Apr 30 11:55 AM

[William Taylor]

One word: Jhatropa. Learn about it. Know that it has the highest yield per acre by far. Know that it grows on non feedstock scrub land. Know that a plant lives for over 20 years. Know that it is being looked at by some very important companies, including BP.

2009 Apr 30 12:18 PM

[searcher]

'Alchemy' does have a fascination component that captures the imagination of many of us still yearning for agrarian 'simplicity'. Sustenance provides ample motivation for the continuation of agrarian models. The trade offs for biofuels, other than as marginal co-generation, are heavily negative due to the net-net energy deposit imposed by water conservation and transportation of input and output for even the most efficient use of biofuel material.

2009 Apr 30 12:53 PM

[jack kreg]

as a long term CA resident, I sense that the time for a drilling initiative is at hand. Here's, how the drilling gets sold to the voters, they get an annual royality payment. Fortunately, voters in CA can step in front of the socialist who run the state, and write an initiative that is in their own interests, as opposed to the legislature, whose laws are generally focused on increasing taxes and revenues to the state, to spend raising state worker already lavish salary's not to mention their lifetime retirements and health care, and retirement beginning at 50 years of age, 30 years of service.
Drilling in CA, and annual royality's for voters.
JC, Lake Forest, CA

2009 Apr 30 02:03 PM

[Road Runner]

The author said, "After spending nearly ten years myself studying energy, coal, uranium, natural gas, solar, wind, government policy, and of course the master commodity, oil, I have pretty much come up with a working model for how I think the next decade or two will play out. As for biofuels, they will play no significant role in the world’s energy mix. ".

It would have been nice it you included more details about your working model. That's what would have been interesting to me. Without the reasoning behind your opinion of why biofuels will not be significant in the future, I just have to throw your opinion in the trash can along with all the other thousands of unsubstantiated opinions about the future of energy.

2009 Apr 30 02:05 PM

[User 296829]

Cellulosic ethanol will never be the answer, only about 5% of the "mush" that the switchgrass , or whatever, gets turned into in the refining process ends up being usable fuel. Now think about ther tractors that have to plant and harvest the crop, the tractor trailers that have to transport the crop, the tractos trailers that then have to ship the ethanol, the energy and water that is used in refining the crop to get the fuel, and tell me that is the answer. Ethanol is a waste of money, and does nothing to reduce oil usage. It doesn't even improve air quality, in fact some studies show it makes it worse.

Solar has benefits, but right now the cost payback is very long, making investing in it, when a new better product may be out next year difficult.

Oil, nat gas, coal and nuclear are the answer. All are relatively cheap to produce and can continue to power the world for a long time.

2009 Apr 30 03:06 PM

[Axil]

The time is right to support a new nuclear technology in America.

In his open letter to the President Obama, the climatologist Dr. Jim Hanson recommended the Thorium fuel cycle and the Liquid Fluoride Thorium Reactor (LFTR). Dr. Edward Teller, the father of Fusion, after a lifetime of work on every aspect of nuclear technology had at the end of his life come to this conclusion in his final study: the LFTR is the best of all possible reactor types.

The LFTR, which is currently in development in France, Japan, and Russia, is a little known but very simple, efficient, and elegant type of reactor which allows for base load, load following, or peak power production. It can start up on any kind of nuclear fuel, bomb material, or nuclear waste product to produce very efficient, high temperature heat and at the same time breed more fuel in the bargain. This thrifty approach to nuclear energy greatly appeals to me, but I became even more interested in the LFTR when the details of a new patent were revealed by Dr LeBlanc (see below @ minute 53). It opens up the possibility of building a very compact but powerful reactor that can run for 30 years without refueling. With no danger of a core meltdown or runaway reaction, it can be operated remotely in an unattended fully automated intrusion detecting mode and sited underground while it breeds self perpetuating new fuel within the thorium structure of the reactor itself.

In order to get to its fuel, U233 that has been produced inside the very solid metal walls of this 200 ton reactor containment vessel, a proliferator must destroy and disassemble the reactor, lift its heavy reactor core out of a 100 meter deep reinforced aircraft crash proof hole in the ground, then cut the thorium containment vessel up into small pieces while enduring heavy killing gamma radiation exposure, next reprocess these reactor pieces using isotopic separation since the U233 is denatured with enough U238 to make chemical separation of bomb grade U233 impossible, and do all this without being detected. Now, this is a tall order for any proliferator and may just be an impossible assignment.

At the end of the service life of the Lftr, the reactor vessel is sent back to the factory where it is reduced to liquid fluoride salts that become the feedstock of a next new Lftr. This feedstock can only be used by the new Lftr and not for bombs. A few handfuls of waste products are held at the factory for a few hundred years to cool down before they are mined for the many precious elements contained within like platinum and iridium. Now that is what I call a safe, efficient and thrifty mode of operation!

To learn more see one of the following:
Aim High
rethinkingnuclearpower...

What Fusion Wanted To Be
www.youtube.com/watch?...

Liquid Fluoride Reactors: A New Beginning for an Old Idea
www.youtube.com/watch?...

2009 Apr 30 04:37 PM

[Canuck2]

Forget nuclear alternatives, the future is the Blacklight Power process, which has absolutely no pollution, costs only a fraction of that of nuclear energy, uses only water (even salt water) as fuel, and generates additional hydrogen fuel in the process at no cost.

Go to www.blacklightpower.com/
to read all about it

2009 Apr 30 05:41 PM

[Dennis U. Atuanya]

As discussed in my Biofuels And The Future Of Energy article, the US corn ethanol program was doomed from onset because of the feedstock corn. First it is a food crop and so has all the food-energy crises associated with it. It has poor ethanol productivity and even poorer energy balance. Brazil, with sugarcane has been much more successful. Sugarcane has energy balance values 8 to 10 times those of corn. Brazil has ethanol blend ratios of E25 to E100(100% ethanol) and just about every service station is an ethanol station. Most ethanol milling plants are energy self-sufficient. They use the milling residue known as bagasse to generate additional power and sell the excess to the utilities raking in millions of dollars just on that alone. Lignocellulosic feedstock such as miscanthus hold even greater prospects than sugarcane.
As exploration for fossil fuels moves to more challenging terrains, any future recovery will be set by technological and financial constraints. Recourse to renewables and biofuels will be imperative to drive the increasing energy demand.
Fossil fuels will remain dominant in the future energy mix, but renewables and biofuels will play increasing roles.

Dennis U. Atuanya

2009 May 01 04:49 PM

[CaptainJJack]

I will make a prediction:

The future source of the energy to drive our cars will come from COAL using the same process the Germans and the South Africans used. There is no new technology required.

Yes, it is a global warming nightmare, but it is economically viable at $50/oil, the US and China have hundreds and hundreds of years of supply, and I am sure that the propaganda will include "carbon capture".

We have a potential environmental Armageddon shaping up.

2009 May 04 07:15 AM