Ethanol's Persecution Complex: To Rehabilitate Its Image, It Must Understand the Issues

In his opening remarks at the 25th annual, 2009 Fuel Ethanol Workshop, Mike Bryan, the CEO of BBI International called on the attendees to "Take back control of the [fuel ethanol] industry's image."

It's no secret that the ethanol industry is having problems, mostly, in my mind, due to a classic commodity squeeze: the industry has no pricing power either for its inputs (corn and natural gas,) or its products (ethanol, with a price which closely tracks gasoline.) This is why, and Mr. Bryan said, the industry could not get plants financed a year before the financial crisis.

Conspiracy or Reality?

For Mr. Bryan, this is about jobs. He went on to say that he is "not a conspiracy theorist, but a realist," but undermined his claim to realism by going on to say, "Tell [the people who say we were building too fast,] "about the people who need those plants for jobs. Tell that to the community that wants to build an ethanol plant in their community." Profitable businesses create secure jobs; unprofitable businesses create insecure jobs. Just as I recently pointed out that investors should not be buying stocks because they need them to go up, the ethanol industry should not be building ethanol plants because they need the jobs.

Ethanol plants have been a great boon to rural economic development. As a local value added product to low value commodity corn, they keep more jobs in the community, which in turn create more jobs through economic multiplier effects... but only if the ethanol plants are profitable. If farmers invest in a local ethanol plant (50% of ethanol plants are locally owned), but that plant cannot be run because they cannot sell the ethanol for the price of the corn, there will be no jobs from the plant, and the investors will lose their investment as well. Perhaps they should have considered investments in a locally owned wind farm, or making their farming operations more energy efficient.

In short, jobs are not created by, and do not justify unprofitable investments. There are simply better uses for the money, both in terms of jobs and economic returns.

Is there a conspiracy? Oil companies don't want to change the way they do business, and be forced to blend in ethanol, nor do they like the competition, even if it is only 7% of their business. That's real money on the margin, even if land use constraints will not allow ethanol to entirely displace oil. The food processing industry has even more reason to dislike fuel ethanol. Although only about 10-15% of price rises in food are due to ethanol-induced corn price rises, ethanol makes a convenient whipping boy for price rises which arise from many factors, most importantly the rising price of energy. But having people who don't like you does not make for a conspiracy.

Peak Oil

General Wesley Clark, Co-Chairman of Growth Energy, is not a conspiracy theorist. He, too, is passionate about the need to take back the industry's image in his keynote address. For General Clark, ethanol is a national security issue, and I completely agree. Peak oil means that oil will increasingly be sold at a premium, and as scarcity increases, producing countries will have increasing incentives for producers to keep this high quality liquid fuel for themselves.

Although the most energy efficient way to power a vehicle is with electric power, batteries are too expensive and have too low an energy density to be practical for long trips. We will continue to need liquid fuels to power longer trips. As General Clark said, "Is there any doubt that the costs of Iraq are related to? This is about America’s need for imported oil. It distorts our policy. It creates friend about people who aren’t our friends; it makes enemies out of people who aren’t our enemies."

Carbon

Compared to the value of ethanol as a liquid fuel, arguments about carbon impact are de minimis. Bob Dinnen, President of the Renewable Fuels Association an industry lobby group, was the most moderated of the general speakers. Unlike the other speakers, I'm confident that his assertions can be backed up with studies. He claims a 61% reduction in greenhouse gas emissions for corn ethanol compared to gasoline. This is almost certainly the result of a best case analysis, but the worst case analysis are no more than a 30% increase in emissions, and with current technology, there is almost certainly some greenhouse gas savings. Even if there is a slight increase in carbon emissions from corn ethanol, these extra emissions are likely to be minimal, and less than tar sands..

When it comes to greenhouse gas reduction, ethanol, even corn ethanol, is not the enemy. The enemy of the human race, as Jim Hansen says, is coal, and while we environmentalists should be concerned about any lack of decrease in greenhouse emissions, we should not lose sight of the true enemy. The ethanol industry as a whole agrees that they need to increase their efficiency and reduce their carbon emissions. These should be measured as accurately as possible, but any green washing we see in the ethanol industry pales against that coming out of the coal industry. Given limited political capital, this is where environmentalists should be focusing our efforts.

Food and Fuel

Ethanol is a domestic fuel, that puts corn to a much better use than high fructose corn syrup that contributes to growing epidemics of obesity and diabetes. From a historical perspective, we pay hardly any part of our income for food. Ethanol does reduce the price of gas, and the money we pay for that gas stays closer to home. Given that, an increase in food prices from corn ethanol may still lead to a net gain for the average consumer, and the economic benefits of a domestic fuel should make us willing to pay for a small net increase in our overall food and fuel budget.

If we're concerned about Ethanol's carbon footprint, we might pause to consider the carbon impact of our food. If a rise in food prices results from corn ethanol, the decrease in our collective carbon footprint from what we eat. Whatever indirect land use impact we attribute to ethanol, we should be attributing a similar indirect land-use impact to the soda we drink that's so full of high fructose corn syrup.

Stop Exaggerating

While environmentalists should not be joining oil companies and food processors by piling on the ethanol industry over its imperfect environmental record, the Ethanol industry could do itself a lot of good by avoiding the exaggerated claims they are prone to.

General Clark said, "There’s plenty of all we need to have all the fuel we want and all the food we want," and Mr. Bryan said something similar. This is simply false. The US currently has about 200 million acres devoted to corn and soy. Corn Ethanol can produce about 200 gallons per acre, while soy biodiesel can produce about 50 gallons per acre of biodiesel. If all this land were converted to fuel production with corn ethanol (incidentally degrading the land and increasing fertilizer usage), that means we could produce 10 billion gallons of ethanol, the equivalent of about 8 billion gallons of gasoline per year, or about half a million barrels per day. The US consumed about 20 million barrels of crude per day in 2007, and had to import about 10.5 million barrels of that. Not all of our imported oil was used for gasoline, but not all of our corn and soy can go to displace oil, either.

The numbers don't add up. The Ethanol industry undermines its own credibility with these exaggerated claims.

The industry also uses deceptive statistics regarding indirect land use impacts. Bob Dinnen said that deforestation has to do with grazing and logging, not Ethanol. They made much of the fact that deforestation has decreased as ethanol production has increased. Correlation is not causation, nor is anti-correlation lack of causation. According to a recent article in The Economist, "rate of deforestation tends to move with prices for beef and soya, with a lag of about a year." This is because the land is cleared for grazing, and then sold on to soy farmers.. As Biodiesel producers discovered to their dismay, rising corn prices leads farmers to shift land from soy to corn, which in turn leads to rising soy prices, and hence to rising deforestation a year later.

As I left the conference on the first day, I walked by Robert Zurbin, author of Energy Victory: Winning the War on Terror by Breaking Free of Oil. He was sitting in the main lobby with a stack of books to sign. I had caught the end of his talk an hour before, in which he spun a captivating and convincing yarn about how oil had been key to allied victory in World War II. I walked up and told him how I only caught part of his talk, but liked what I had heard, and he encouraged me to buy the book. I was tempted, but then he lost the sale: he told me that, if only 50% of cars were mandated to be Flex-Fuel, it would put a "cap on the price of oil." While I agree with him that the increased choice would be good for consumers, and even moderate the oil price, there is simply note enough feedstock, either domestically or globally, and too many other valuable uses for that feedstock to cap the price of oil in the face of expanding demand (which is only likely to be restrained by price or economic downturn) and declining oil output.

There are many good reasons to like Ethanol, even Ethanol from corn. But it's only part of the solution: Ethanol is not the panacea, and it's not without adverse impacts. It's also not always good business. By acknowledging these weaknesses, ethanol advocates would do a lot to raise their credibility with many environmentalists who are natural allies with an industry taking real steps to reduce its environmental impact and enhance our energy security in the face of the much larger challenges of Peak Oil and Global Warming.

My impression is that the major agenda item on the industry's agenda is legislation requiting 50% of vehicles to be flex-fueled. This would probably be a change for the better, definitely from an economic perspective (the added cost to the vehicle is fairly minimal. Unfortunately, the use by carmakers of flex fueled vehicles as a loophole in CAFE standards serves to undermine environmental goals. If the industry wants more environmental allies today, it will need to be clear than environmental goals will not again come second. I think most environmentalists would get behind a 50% or higher requirement for flex fuels vehicles if it were in conjunction with the closure of the flex fuel loophole in CAFE standards.

Comments

[epeon:]

Ethanol makes no sense from an economic standpoint. If you really wanted to be economically efficient and serve the interests of American then you built nukes. Lots of nukes. any other story is just nonsense.

Jun 19 01:50 AM

[A Barrel Full:]

The ethanol story just shows one thing. Whatever you try to do to solve a problem, sooner or later some lobby group or other will wreck it.

As a marginal contribution its positive. As a panacea, its useless.

Jun 19 03:01 AM

[redbaron:]

'The enemy of the human race, as Jim Hansen says, is coal'

The enemy of corn ethanol fuel production growth is cost, IMHO. Ethanol fuel production, using the currently availble model, will not succede unless the cost of production can be reduced. And further, any future developed ethanol fuel production success, will also be based on it's future cost of production. If you can't make it cheap enough when oil is in this price range and natural gas is this cheap, then how will you ever compete if these same inputs return to more 'normal' levels. This will not work unless you can drive the cost of production much lower without further gov't subsidies.

Jun 19 07:33 AM

[scfranklin94:]

Ethanol = bailout for corn farmers. For every study that shows that ethanol reduces GHG, I can show you another one that says that it increases it. This industry doesn't even pay for itself at $100/bbl crude. The actual hydrocarbon offsets are minimal when you consider that you have to truck the product to refineries. It's a complete waste of time and money; anyone who tells you different is from the farm lobby.

Jun 19 09:15 AM

[SubsidyEye:]

Good article, Mr. Konrad, until the section headed "Food and Fuel". Even before that, you assert, "Unlike the other speakers, I'm confident that his [Bob Dineen's] assertions can be backed up with studies." Oh yeah? Ever looked at the RFA's studies in detail? How about the ones they use to back up their inflated claims about how much petroleum is being displaced by ethanol? A recent analysis by the Global Subsidies Initiative (and previous ones by Robert Rapier) show that the real displace ment is less than half what they claim:

globalsubsidies.org/en...

In short, I would have said, "I am confident that few of Bob Dineen's assertions can be backed up with credible, peer-reviewed studies."

You also say, "Although only about 10-15% of price rises in food are due to ethanol-induced corn price rises, ethanol makes a convenient whipping boy for price rises which arise from many factors, most importantly the rising price of energy." Note: 48.5% of the Consumer Price Index (CPI) for food is the cost of food eaten outside the home -- i.e., in restaurants and cafeterias. As we all know, or should know, the cost of the commodities that go into those meals accounts for a very small part of the cost of the meals. Of the remaining 51.5%, the farmgate cost of commodities accounts for about 20% of the cost of groceries -- the rest is processing, packaging, marketing and transport. Hence even 10% of a 5.5% increase (following a 4% increase the year before) in an annual $1.17 trillion worth of household expenditure on food (excluding alcoholic beverages, like beer, the cost of which was also affected by the rising costs of grains) is significant.

You also claim that "Ethanol ... puts corn to a much better use than high fructose corn syrup that contributes to growing epidemics of obesity and diabetes." That is merely an assertion. Got any studies to prove that? Ethanol is subsidized; high-fructose corn syrup is not, or at least not directly. Mainly it exists thanks to policies that in the past depressed the price of corn and that still raise the domestic price of sugar. We should be reforming those policies, not trying to tackle the problem of obesity through creating an artificial market for fuel ethanol.

I find it incredible that you write, "While environmentalists should not be joining oil companies and food processors by piling on the ethanol industry over its imperfect environmental record ... ." Um, the food processors and oil companies have been rather silent on the "imperfect environmental record" of the corn-ethanol industry. It has been scientists and environmental activists that first raised this clarion call.

That said, I am at least glad that you call into question the industry's claim that there is an organized conspiracy against ethanol, and counsel them to avoid "the exaggerated claims they are prone to." If only the politicians that are in the industry's pocket would also follow that same advice.

Jun 19 09:23 AM

[jerrydd:]

Corn ethanol can be a very good source of fuel when done right. You can cut the input energy greatly by recycling the heat, ect and the dried mash is an even better source of food than raw corn.

If ethanol needs a market they can make their own by
installing E-85 pumps themselves at independent gas stations since big oil won't.

Little has been said about the other products of ethanol like the DDG, corn stalks, cobs which too can be easily turned into energy of 2-3x's as much as the ethanol by the F-T process making diesel, gasoline and electricity. This is the same process that Shell, others make diesel from stranded NG. There are many ways to make ethanol/corn crop much more eff, profitable.

Next yr oil will be back up to $140/bbl and we need ethanol as part of the near term solution though in the long run other crops like hemp, crop, forest, yard waste by the F-T process is a better way for biofuels.

I take exception to the statement that batteries cost too much for EV's. That's just another oil, car company lies like much of the ethanol misinformation they put out.

The only thing making batteries cost more now is a lack of orders to ramp up real production. If EV's were mass produced they would quickly become less costly than ICE's as so many fewer parts, costs. I know I drive my EV's every day for under $.01/mile for fuel. That's 250mpg cost equivalent.

And my 2 seat, 80mph, 100+ mile range EV sportwagon could be mass produced for under $10k based on other comparable material/weight vehicles now built and my boat production experience.

Don't forget in 1911 the Baker Electric went 110 miles and 45mph, as high as the roads then allowed and Jay Leno's still uses some of it's original NiFE batteries!

We'll need every energy solution but coal and imported oil to make our country thrive. Ethanol, conservation/ eff, NG for the next few yrs are our best choices. After that we need EV's, NG, ethanol, F-T biofuels, plug in hybrids to take us into the future.

This is for you all as my EV's solve my transport problems very cheaply and i can fuel them from solar thermal, wind or my favorite, tidal/river generators which I've built before along with windgens.

What's holding all this back is the huge subsidies for oil, coal that is in our income taxes already. Oil needs a $1.50/gal tax to pay for these direct, indirect subsidies and $20-30/ton on coal. With this we can give income tax cuts or low cost health care so the public comes out about even and the best thing is our enemies like Iran, Russia, oil dictators and terrorist pay most of the cost by driving oil prices down. Another is we can remove all subsidies for RE, EV's, ect and use that to pay down the US debt.

If we don't do something like the above our country is screwed.

Jun 19 09:37 AM

[SubsidyEye:]

"The dried mash [from corn ethanol] is an even better source of food than raw corn." -- Jerrydd.

Only for fattening cattle. It is an inferior product for hogs and poultry (because they have problems digesting the cellulosic residues, and they need the starch for energy), which account for a significant share of the feedcorn consumed in the United States (2/3 of the corn consumption in Iowa).

Jun 19 10:01 AM

[MellowGuy:]

The government confuses the economics of the issues with quotas, tariffs, and other regulations.

Gasoline is improved by the addition of oxygenates, but complete replacement is difficult.

Alcohol is an oxygenate, but it has problems with transportation and corrosion. ETBE is an oxygenate that can be produced from alcohol without the accompanying problems.

The mpg ratings of new vehicless needs to be available for 10% ethanol fuel, and it would be nice to know how milage is affected for older vehicles.

Although I am not for subsidizing imports, the high tariffs on ethanol and sugar are an indirect burden on the American consumer.

Jun 19 10:02 AM

[billp37:]

www.americaspower.org/

----- Forwarded Message -----
From: "Scott Barker, America's Power Army" <sbarker@americaspo...
To: [e-mail]
Sent: Thursday, June 18, 2009 3:49:22 AM GMT -08:00 Tijuana / Baja California
Subject: Tell Congress no on higher electricity prices

Dear William --

If you're concerned about electricity prices you need to do more than worry -- you need to e-mail your Member of Congress today and tell him or her to add consumer protections to the climate change bill.

Here's what's happening:

The U.S. Congress is working on climate change legislation to reduce emissions of carbon dioxide and other greenhouse gases. Formerly titled the "American Clean Energy and Security Act of 2009, it is commonly called "Waxman-Markey" after its authors, Rep. Henry Waxman (D-CA) and Rep. Edward Markey (D-MA). It passed the U.S. House Energy and Commerce Committee in late May and it might be voted on in the House before the end of June.

Most everyone agrees that the bill will raise energy prices. One way for electric companies to achieve major reductions in carbon dioxide and other greenhouse gases in the next few years is to switch from affordable coal to more expensive natural gas – causing prices to go up.

Let me repeat that – most everyone in Washington, D.C. AGREES that this bill will make YOUR electricity bill go higher.

If you want to do something about it, you need to e-mail your Member of Congress today and ask him or her to change the climate change bill to guarantee that consumers are protected.

Please let me know if you have any questions or thoughts.

Thanks,

Scott Barker
On behalf of America's Power Army.

Jun 19 10:08 AM

[John Lounsbury:]

In my opinion, ethanol (or any biofuel) is most attractive if made from waste. Does anyone have numbers for the amount of processable waste that is currently going to incineration, landfills, etc? How much potential fuel are we not taking advantage of? And producing more methane in landfills, to boot.

Jun 19 11:28 AM

[Ferdinand E...:]

This is a valuable article, as are the comments. The best of A BARREL FULL.

Marginally valuable, but not a panacea.

I think that with discussions like this we are going to get at the truth. Thanks everybody.

Jun 19 12:22 PM

[redbaron:]

John L, I have no numbers, but before one could collect such data, one would have to decide what to include. For instance, crop waste from corn harvesting is left on the fields currently, and that is being considered as a possible feedstock for cellulosic ethanol production, if that process is ever perfected. Collecting crop waste, however, would require not only new technology for fermentation, but also some new technology from farm equipment makers to collect and store this material, and spending dollars to store it and haul it. Currently, that material essentially has no value, so the question would become, 'how much do you spend collecting, storing, and hauling material that today essentially has no value'? If you factor in zero cost for the feedstock, that is not realistic due to the fact that someone has to collect it, store it, and haul it to the processing plant, and the point becomes, you can't do that for nothing!


On Jun 19 11:28 AM John Lounsbury wrote:

> In my opinion, ethanol (or any biofuel) is most attractive if made
> from waste. Does anyone have numbers for the amount of processable
> waste that is currently going to incineration, landfills, etc? How
> much potential fuel are we not taking advantage of? And producing
> more methane in landfills, to boot.

Jun 19 02:06 PM

[Biodiversivist:]

Both groups "commission" studies. They pay for studies that support their cause. This is a far cry from real peer reviewed science. In the few instances where a third party has investigated, the studies paid for by the RFA have been found deeply flawed. This has essentially become a propaganda war in an attempt to sway the masses. Here is a recent commissioned study by the GMA:

www.foodbeforefuel.org...

Greenhouse gas emissions are just one of many concerns. Expanded crop production exacerbates the Gulf of Mexico dead zone, eutrophication of lakes, rivers and other waterways, usurpation of water supplies, and worst of all, crop expansion into intact ecosystem carbon sinks--wetlands, grasslands, forests, peat bogs and our own conservation reserve lands. Any expansion of modern industrial grain agriculture is an environmental disaster. Doing so for food is a necessary evil. 3 billion more people are on the way. Magnifying that damage to prop up old technology like internal combustion engines which throw away 80% of the energy in a tank of gas is just dumb from an environmental perspective. Environmentalists are not supporting oil companies. That linkage backfires whenever the RFA tries to use it. The argument that tar sands will be used if we don't make corn ethanol is also false. Liquid fuels are fungible. If we don't use tar sand oil, someone else will. If ethanol helps lower the price of gas, it will also increase the consumption of gas. Using far less liquid fuel via new technology that radically improves efficiency, like the hybrid cars now hitting the market is vastly superior to trying to replace gas in SUVs with food based biofuels.

Jun 19 02:10 PM

[envirodoc:]

Good article. I have previously commented on tthe methanol issue on Seeking Alpha. Served as Corp.Dir. Energy & Envronment, for Georgia -Pacific for 12 years I had resposibilty for 200 plants, including one of the two methanol plants at that time in USA. The plant was built during World War II and used cellulose waste as its raw material.The only reason it was justified ecomomically was that it built with federal funding!
I recall receiving a request for info. on methanol, from the president of the Oregon Senate during the oil crisis in the 1970's. When I submitted the above data he quickly lost interest.
There has been a lot of concern recently on CO2 emisisons & global warming. Recent reseach however, reports that CO2 in the atmosphere protects the earth from harmful UV radiation from the sun! These scientists are more concerned that reducing nitrogen levels will be necessary to support life on earth in the future.

Jun 19 02:48 PM

[cornrefiner:]

High fructose corn syrup, sugar, and several fruit juices are all nutritionally the same.

High fructose corn syrup is simply a kind of corn sugar. It has the same number of calories as sugar and is handled similarly by the body.

The American Medical Association in June 2008 helped put to rest misunderstandings about this sweetener and obesity, stating that “high fructose syrup does not appear to contribute to obesity more than other caloric sweeteners.”

Even former critics of high fructose corn syrup dispel long-held myths and distance themselves from earlier speculation about the sweetener’s link to obesity as the American Journal of Clinical Nutrition releases its 2008 Vol. 88 supplement's comprehensive scientific review.

Consumers can see the latest research and learn more about high fructose corn syrup at SweetSurprise.com.

Audrae Erickson
President
Corn Refiners Association

Jun 19 04:34 PM

[Tom Konrad:]

SubsidyEye, I actually agree with you. Like any lobby group's studies, the RFA's will be biased... However, this puts Mr. Dinnen on a higher level than the others I quoted, whom I doubt even have biased studies to back up thier assertions, which was my point.


On Jun 19 09:23 AM SubsidyEye wrote:

> Good article, Mr. Konrad, until the section headed "Food and Fuel".
> Even before that, you assert, "Unlike the other speakers, I'm confident
> that his [Bob Dineen's] assertions can be backed up with studies."
> Oh yeah? Ever looked at the RFA's studies in detail? How about the
> ones they use to back up their inflated claims about how much petroleum
> is being displaced by ethanol? A recent analysis by the Global Subsidies
> Initiative (and previous ones by Robert Rapier) show that the real
> displace ment is less than half what they claim:
>
> globalsubsidies.org/en...
>
>
> In short, I would have said, "I am confident that few of Bob Dineen's
> assertions can be backed up with credible, peer-reviewed studies."
>
>
> You also say, "Although only about 10-15% of price rises in food
> are due to ethanol-induced corn price rises, ethanol makes a convenient
> whipping boy for price rises which arise from many factors, most
> importantly the rising price of energy." Note: 48.5% of the Consumer
> Price Index (seekingalpha.com/symbo...) for food is the
> cost of food eaten outside the home -- i.e., in restaurants and cafeterias.
> As we all know, or should know, the cost of the commodities that
> go into those meals accounts for a very small part of the cost of
> the meals. Of the remaining 51.5%, the farmgate cost of commodities
> accounts for about 20% of the cost of groceries -- the rest is processing,
> packaging, marketing and transport. Hence even 10% of a 5.5% increase
> (following a 4% increase the year before) in an annual $1.17 trillion
> worth of household expenditure on food (excluding alcoholic beverages,
> like beer, the cost of which was also affected by the rising costs
> of grains) is significant.
>
> You also claim that "Ethanol ... puts corn to a much better use than
> high fructose corn syrup that contributes to growing epidemics of
> obesity and diabetes." That is merely an assertion. Got any studies
> to prove that? Ethanol is subsidized; high-fructose corn syrup is
> not, or at least not directly. Mainly it exists thanks to policies
> that in the past depressed the price of corn and that still raise
> the domestic price of sugar. We should be reforming those policies,
> not trying to tackle the problem of obesity through creating an artificial
> market for fuel ethanol.
>
> I find it incredible that you write, "While environmentalists should
> not be joining oil companies and food processors by piling on the
> ethanol industry over its imperfect environmental record ... ." Um,
> the food processors and oil companies have been rather silent on
> the "imperfect environmental record" of the corn-ethanol industry.
> It has been scientists and environmental activists that first raised
> this clarion call.
>
> That said, I am at least glad that you call into question the industry's
> claim that there is an organized conspiracy against ethanol, and
> counsel them to avoid "the exaggerated claims they are prone to."
> If only the politicians that are in the industry's pocket would also
> follow that same advice.

Jun 19 07:01 PM

[Tom Konrad:]

SubsidyEye: in response to htis comment:

> You also claim that "Ethanol ... puts corn to a much better use than
> high fructose corn syrup that contributes to growing epidemics of
> obesity and diabetes." That is merely an assertion. Got any studies
> to prove that?

My assertion is not based on 1) Americans eat too many calories, many in the form of HFCS. 2) Displacing gasoline in your car does little or no net harm, and may do some slight good. Hence use #2 is better than use #1.

Jun 19 07:06 PM

[Tom Konrad:]

I totally agree with you, John, that biofuel from waste is a very good thing (as opposed to the kinda sorta good thing that is corn ethanol) athough there may be better ways to displace carbon emissions using waste, such as recycling the recyclables, and gasifing the remaining organics to generate electricity.

As for the quantity available, it's limited, and very difficult to turn into fuel. I have an upcoming article on advanced biofuels with more detail (will publish Monday.) The difficulty imposed by the impurity of wate streams is the reason why waste to electricity may be a better use.


On Jun 19 11:28 AM John Lounsbury wrote:

> In my opinion, ethanol (or any biofuel) is most attractive if made
> from waste. Does anyone have numbers for the amount of processable
> waste that is currently going to incineration, landfills, etc? How
> much potential fuel are we not taking advantage of? And producing
> more methane in landfills, to boot.

Jun 19 07:16 PM

[Tom Konrad:]

Does anyone else find these comments from the corn lobby as annoying as I do? The issue I'm taking about is not high fructose corn sysrup vs sugar, it's high frutose corn syrup vs ethanol.


On Jun 19 04:34 PM cornrefiner wrote:

> High fructose corn syrup, sugar, and several fruit juices are all
> nutritionally the same.
>
> High fructose corn syrup is simply a kind of corn sugar. It has the
> same number of calories as sugar and is handled similarly by the
> body.
>
> The American Medical Association in June 2008 helped put to rest
> misunderstandings about this sweetener and obesity, stating that
> “high fructose syrup does not appear to contribute to obesity more
> than other caloric sweeteners.”
>
> Even former critics of high fructose corn syrup dispel long-held
> myths and distance themselves from earlier speculation about the
> sweetener’s link to obesity as the American Journal of Clinical Nutrition
> releases its 2008 Vol. 88 supplement's comprehensive scientific review.
>
>
> Consumers can see the latest research and learn more about high fructose
> corn syrup at sweetsurprise.com/.
>
> Audrae Erickson
> President
> Corn Refiners Association

Jun 19 07:19 PM

[changenow:]

You people make me sick with your arrogance. WHO is checking on indirect land use for OIL refineries? or the emissions used to produce oil? Or the emissions used to transport oil from our Middle east so called friends? NOONE is looking at the big picture here. American ethanol is being blamed for Brazil cutting down rainforests to produce more sugarcane. IT is all politics and all you see is what big oil and the gma want you to. we have a chance to be independent from foreign countries, and help fix our wonderful nation's economy, but you people can't see past the end of your noses. American ethanol producers are not only fighting for their business, but for you people in this country

Jun 19 10:33 PM

[SubsidyEye:]

Changenow: everybody who looks at the life-cycle emissions of ethanol compares them with the life-cycle emissions of gasoline. Otherwise none of the discussion would make sense. And what these studies, including those by organizations (like Argonne National Laboratory) that are generally enthusiasts for alternative fuels find is that even when considering only direct greenhouse gas (GHG) emissions -- i.e., ignorring direct or indirect land-use change -- making ethanol made from corn and processing it in coal-fired distilleries releases as much, and perhaps a little more, GHG as gasoline when both are compared over their full life cycles. Transporting corn ethanol from the Midwest to coastal states, such as California, further reduces any advantage it has over gasoline.

Some investigators, such as the New Fuels Alliance, have also looked at land-use change associated with petroleum production, including oil sands.

newfuelsalliance.org/N...

With some exceptions, these studies generally show relatively small land-use impacts per unit of energy delivered for gasoline (less than 1% of total life-cycle emissions) -- which should not be surprising given that a fair amount of petroleum is produced in deserts or offshore. With direct land-use change so small, induced indirect land-use change is also likely to be small.

Of course, land-use change isn't the only difference between ethanol and gasoline. One study,

growthenergy.org/2009/...

claims that we should take into account emissions from the U.S. military for the protection of petroleum supply lines. Doing that, the authors claim, would double the carbon footprint of gasoline produced from crude oil extracted in the Persian Gulf region. But the study arrives at its estimate by allocating all the military's GHG emissions it approtions to the protection of oil supplies (26.2%) to U.S. oil imports from that region only. Whatever share of miliary emissions one believes should be assigned to the protection of oil supplies, their approach exaggerates the carbon footprint of Persian Gulf sourced petroleum tremendously, because it concentrates all of the ascibed military emissions to that one source, and only to U.S. imports. Yet, to the extent it can be argued that part of the purpose of the U.S. military is to protect oil supply lines, it is likely that it is also protecting oil supplies to its allies, particularly Japan and European importers.

Ironically, what the U.S. Government's own calculations show (see Slide 18 in PDF linked below) is that GHG emissions from the production of crude oil in most Persian Gulf countries are actually lower than from U.S. domestic petroleum. It is mainly either the transport of the crude to the United States, or its processing, that give some of the fuels higher well-to-tank emissions:

netl.doe.gov/energy-an...

What Biodiversivist points out needs to be stressed again: the reductions in GHG emissions from the substitution of corn ethanol for gasoline are marginal at best. The 100% reductions in GHG emissions per gallon that are achieved through conservation -- avoiding the consumption of fuel in the first place -- are where we should be concentrating our efforts.

Jun 20 05:28 AM

[SubsidyEye:]

Tom Konrad: thank you for replying to commentators' specific points. Many bloggers on Seeking Alpha do not bother to do that. I, for one, appreciate your efforts.

I gather I need to elaborate on my point challenging your claim that using corn starch for the production of ethanol is better than using corn starch for the production of high-fructose corn syrup (HFCS). First, from an economic standpoint, I would still like to see evidence that, after taking into account the subsidies for the production of ethanol, there is greater value added to the economy from producing ethanol than from producing HFCS.

Let's now factor health and other effects. There has been a lot of bad press about HFCS -- some probably meritted, some not. I think this article in the San Francisco Chronicle probably gets it about right, in my opinion:

sfgate.com/cgi-bin/art...

But, again, one has to also look at the environmental and health effects of diverting corn ethanol to corn starch. For one, the combustion products of ethanol are not benign: on balance, its substitution for gasoline reduces some pollutants but reduces others. Various independent studies have argued that increased use of ethanol actually slightly increases total U.S. emissions of harmful pollutants.

And how about the health effects? You speak, Mr. Konrad, of the "small" average increases in the prices of food consumed in the United States, and dismiss them as inconsequential. Bear in mind, those induced price increases were higher for foods consumed by poor people (pork meat, poultry meat and eggs) and families with young children (milk). The distributional consequences of policies matter.

However, the effects of higher grain prices were not confined to the United States. Because grain markets are globalized, the proportional increases in prices of basic food commodities in the poorest countries of the world -- where people purchase semi-processed not highly-processed grains -- were much greater, on the order of 15% or more for extremely poor people for whom food already constituted more than half of their household expenditure.

In any case, whatever the science concludes on the health harms or benefits of HFCS, readers unfamiliar with the statistics are likely to conclude from your article that ethanol production has somehow drastically reduced U.S. consmption of corn sweeteners. It hasn't. According to USDA statistics,

ers.usda.gov/Briefing/...

the consumption of corn for corn-based sweteners peaked in 1999/2000 and declined by less than 5% through the 2007/08 marketing year. For HFCS specifically, consumption was 9% down on the peak (2001/02) in 2007/08. Some of the reduction may reflect higher glucose and fructose yields in the refining process. Consumption of corn for corn sweetners in 2008/09 is expected to be 3% lower than in 2007/08 (4% lower for HFCS), but much of that decline can probably be attributed to a weakening economy.

In short, the huge increase in the use of corn starch for corn ethanol may have slightly reduced the amount of corn sweeteners produced in the country, but not by a huge amount. Other factors, such as changing consumer purchasing behaviour in response to fears over possible adverse health effects of HFCS has probably played a stronger role.

But, to repeat: if obesity is your concern, supporting the production of corn ethanol is an expensive and blunt instrument for acomplishing that goal. It is not even a 3rd or 4th-best policy.

Jun 20 06:40 AM

[SubsidyEye:]

Correction: I meant to write in the above: "For one, the combustion products of ethanol are not benign: on balance, substituting ethanol for gasoline reduces some pollutants but INCREASES others." See, e.g.: ewg.org/book/export/ht...

Jun 20 06:55 AM

[SubsidyEye:]

Tom Konrad: "Like any lobby group's studies, the RFA's will be biased... However, this puts Mr. Dineen on a higher level than the others I quoted, whom I doubt even have biased studies to back up their assertions, ... ."

Sorry, but I disagree. When a public figure makes a point simply according to their own lights, they may actually from time to time be right. If they are wrong, it is easy to refute them with facts. When somebody cites authority, it takes much more knowledge and work to check out that authority and -- if necessary -- prove that it is wrong. Few people bother to do that. So somebody who knowingly cites an inaccurate or strongly biased study is wrong from the get go. They are more of a saboteur of public debate than somebody who is clearly shooting from the hip.

Jun 20 08:53 AM

[GMBiofuelsGuy:]

Tom Konrad: I work in Biofuels at General Motors. Toward the bottom of your blog, you reference the CAFE break that automakers receive for building flex-fuel vehicles. The Renewable Fuel Standard indexes these out around 2014. At GM, we have been building 3X as many FFVs annually as qualify for a CAFE break. Current plan has GM at 61 percent FFVs by 2012. Now, we just need to see a commesurate increase in the number of fueling stations that offer E85, which is the point of our commitment to FFVs.

Jun 20 10:22 AM

[tylakewalker:]

The most efficient and cost effective biofuel is sugarcane based ethanol. That is true today and it has been true for over 30 years. U.S. government policies are so deeply mired in politics and corrupted by lobbying that I have lost hope for this country. We will continue to argue and point figures while other countries rapidly develop effective alternative energies.

Jun 20 10:48 AM

[jerrydd:]

Hi Subsidyeye,

I was talking about it as a food for cattle and humans. And it can be F-T ed into gasoline, diesel, ect.

On Jun 19 10:01 AM SubsidyEye wrote:

> "The dried mash [from corn ethanol] is an even better source of food
> than raw corn." -- Jerrydd.
>
> Only for fattening cattle. It is an inferior product for hogs and
> poultry (because they have problems digesting the cellulosic residues,
> and they need the starch for energy), which account for a significant
> share of the feedcorn consumed in the United States (2/3 of the corn
> consumption in Iowa).

Jun 20 10:59 AM

[SubsidyEye:]

Hi Jerrydd. I realized you were talking about cattle; my point is that the use of DDGS ("dried mash") for cattle is all the industry ever wants to talk about, making the ethanol co-product sound like a boon for all. My point was that DDGS is not so great a feed for hogs and poultry, which account for a substantial use of corn as feed.

But DDGS as a better food for humans? I knew the USDA was working on that; but is the co-product now being fed to people? What about the high phosphate and sulphur content of DDGS. And, more worryingly, the high levels of antibiotics?

hpj.com/archives/2009/...

As for processing DDGS into liquid fuels through a Fischer-Tropsch process, that would blow the economics (and the energy balance) of the corn ethanol plant out the window. Ethanol plants depend on being able to sell the DDGS (1/3 of the corn used by weight) at approximately the same price as raw corn. Turning the stuff into F-T fuel -- which is expensive even using relatively low-cost biomass, such as wood chips, at $40/tonne -- ain't going to happen any time soon using DDGS with an opportunity cost of $150/tonne or more.

Jun 20 12:10 PM

[Tom Konrad:]

Thanks for the info on the FFV break phasing out in 2014. Good news.
A large %age of FFvs is a good thing, but it's no substitute for efficienct vehicles.


On Jun 20 10:22 AM GMBiofuelsGuy wrote:

> Tom Konrad: I work in Biofuels at General Motors. Toward the bottom
> of your blog, you reference the CAFE break that automakers receive
> for building flex-fuel vehicles. The Renewable Fuel Standard indexes
> these out around 2014. At GM, we have been building 3X as many FFVs
> annually as qualify for a CAFE break. Current plan has GM at 61 percent
> FFVs by 2012. Now, we just need to see a commesurate increase in
> the number of fueling stations that offer E85, which is the point
> of our commitment to FFVs.

Jun 21 09:05 PM

[WayneS:]

The enemy of the human race is ... the human race.
Coal. oil and natural gas are natural biofuels.
All others are synthetic - man made - No matter how you produce energy, entropy reigns supreme. The same amount of "pollution" will be produced. Chemistry remains the same.
Everything that has been written above can be found in Kent's Mechanical Engineers Handbook on Power, copyright 1910.
Nothing has changed.

Jun 22 03:49 PM

[jerrydd:]

Very good points Subsidyeye. I've learned some things.
On mash how do they do beer without the same problems? It's beer mash that I was going by as human food thinking it would be the same.
I also didn't know they got that much for DDGS.
As for F-T one could sell the DDGS and F-T the cobs/stalks using the waste heat for electricity and ethanol processing. One might be able to heat it enough to kill the bacteria so antibiotics are not needed and recycle the heat for processing.
One should be about to combine these to make seriously more profit while reducing CO2 footprint.


On Jun 20 12:10 PM SubsidyEye wrote:

> Hi Jerrydd. I realized you were talking about cattle; my point is
> that the use of DDGS ("dried mash") for cattle is all the industry
> ever wants to talk about, making the ethanol co-product sound like
> a boon for all. My point was that DDGS is not so great a feed for
> hogs and poultry, which account for a substantial use of corn as
> feed.
>
> But DDGS as a better food for humans? I knew the USDA was working
> on that; but is the co-product now being fed to people? What about
> the high phosphate and sulphur content of DDGS. And, more worryingly,
> the high levels of antibiotics?
>
> hpj.com/archives/2009/...
>
>
> As for processing DDGS into liquid fuels through a Fischer-Tropsch
> process, that would blow the economics (and the energy balance) of
> the corn ethanol plant out the window. Ethanol plants depend on being
> able to sell the DDGS (1/3 of the corn used by weight) at approximately
> the same price as raw corn. Turning the stuff into F-T fuel -- which
> is expensive even using relatively low-cost biomass, such as wood
> chips, at $40/tonne -- ain't going to happen any time soon using
> DDGS with an opportunity cost of $150/tonne or more.

Jun 23 02:40 PM

[Jgib:]

Just what is normal - average? I think not.


On Jun 19 07:33 AM redbaron wrote:

> 'The enemy of the human race, as Jim Hansen says, is coal'
>
> The enemy of corn ethanol fuel production growth is cost, IMHO. Ethanol
> fuel production, using the currently availble model, will not succede
> unless the cost of production can be reduced. And further, any future
> developed ethanol fuel production success, will also be based on
> it's future cost of production. If you can't make it cheap enough
> when oil is in this price range and natural gas is this cheap, then
> how will you ever compete if these same inputs return to more 'normal'
> levels. This will not work unless you can drive the cost of production
> much lower without further gov't subsidies.

Jun 23 11:49 PM

[Jgib:]

I'm amazed that the discussion of ethanol never mentioned sugar as the prime raw material. brazil has already proven that as fact, haven't they?

Jun 23 11:50 PM

[SubsidyEye:]

Jgib: Brazil has much more favorable conditions for producing sugar than the United States. Producing ethanol from sugarcane and sugar beets are proven technologies, but would cost even more in the United States than it currently does to produce ethanol from corn. The only revelence that sugarcane has to the discussion of ethanol in the United States is that it would clearly make a lot more sense to remove barriers to imports of ethanol from Brazil than it would be to keep artificially propping up the domestic corn-ethanol industry.

Jun 25 05:50 AM

[Kirbydude:]

As an Iowan I love ethanol. Jobs are created, small towns are enriched and corn is used locally for refinement and in feed. The DDGS can be enhanced with low cost enzymes that benefit all animals, even pigs and birds, and produce less harmful waste and a cheaper and better product. The cost of food is related to so many factors, but if you can produce an input miles from a feed facility it brings the cost down that much more. Why has Iowa grown to #1 in hogs and egg layers? Beef is next!

Plus ethanol will evolve, a move to algea and switchgrasses as inputs in not far off. In fact, its being done now. Farmers do have a good lobby and for good reason. Come to Iowa, drive the roads and look at what farmers do. Its awesome, and what the world will need for ever. The strides made in agriculture are amazing if looked at and I find every day that farmers are bigger stewards of the land than anyone i've met. They actually practice their steward ship rather than preach it.

Are subsidies perfect, no, will ethanol get better, yes. There are even plants recycling their CO2 now imagine that impact on the ethanol process. And, with seed genetics we're probably looking at 300+ bushels per acre in 10-20 years compared to 125-150 now. Farmers rock, and ethanol is here to stay. Instead of knocking it down, speak up on ways to better it, Iowans are always looking to reason.

Todd

Jul 30 03:43 PM