Distiller's Grains on the Brain

The always informative Energy Collective has posted this article by Professor Simon Donner of UBC trying to shed light on the media circus around the US corn crop and the food-fuel substitution argument. I like that someone is trying to dispel the myths around this, but unfortunately he falls into the same fallacy of claiming that feed uses for corn are going away that most analysts with little understanding of the corn ethanol value chain continue to emphasize. To support it, he posts this graph:

This is originally derived from another work, I believe, but all data ultimately stems from the USDA feed grains yearbook.  At first glance this appears to tell a compelling story of how the amount of animal feed in the US has declined, while the amount going to sweetener, chemical or direct food use ("other") has remained fairly constant. Since I've repeatedly asserted this but never before posted data on it, consider this the moment where I finally try to prove my claims instead of simply referring obliquely to the data sources.

The unfortunate part of this analysis is that without an understanding of the full ethanol value chain, you cannot tell the whole story. The whole story is that for every bushel of corn consumed, 17/52 by weight becomes distiller's grains, a food supplement for cattle, hogs and chickens. Cattle can consume it exclusively because they're ruminants, and hogs and chickens can consume up to 15% by weight of it in their diet. If you include distiller's grains in the mix, the story starts to support my assertion that the feed picture hasn't changed, at least in terms of quantity.

So let's look at the US feed consumption of corn.

Note that the USDA uses a slightly different calendar system than the financial world due to the growth/harvest cycle; Q1 06/07 corresponds roughly to September - November 2006. It's immediately clear that the feed business has a very cyclical component, with feeding hitting a peak around Sep-Nov each year and hitting a trough in Jun-Aug the following year. I don't know why this happens because I don't know the animal feeding business well enough. What is clear, however, is that each year since 2006 the peaks have been getting lower and the troughs have as well.

This picture changes when you start to include the mass of DDG produced each quarter, which goes exclusively into feed use:

Total Corn and Corn Derivatives Going Into Feed Uses; DDG is included on an equivalent mass basis to corn

Suddenly, the picture has become less clear, though a slight decrease is perhaps detectable. But wait! DDG is more nutritious than corn is, and the USDA last year acknowledged that a pound of DDG can be substituted for 1.22 pounds of corn in most feeding situations. If we take that into account:

Total Corn and Corn Derivatives Going Into Feed Uses; DDG included on an equivalent nutritional basis to corn

Suddenly, there are no discernible trends. At least in the sense of quantity used for feed and food, the food-fuel substitution crowd doesn't have an argument.

However, this is not where the food-fuel substitution argument against corn ethanol is strong. Where it is strong, and why I think it's significant, is in the realm of pricing.


Sources: FGYearbook Table01, Table 04, Table31, link to USDA feed grains yearbook above.

Falling Out of Love with the RFS

Believe it or not, I actually do fun and engaging things at work, so forgive me if posting has been light.

An item of discussion around the office lately has been the current drought in the American Midwest.  This drought is likely to push wholesale prices of corn to levels that have never been seen before in the US. Jim Hilker of Michigan State University has a good overview here. The upshot of this is that there have never been more voices calling for the repeal of the Renewable Fuels Standard (RFS).

As usual, most of the political storm has left people swimming in misconceptions. For one thing, the magnitude of the American drought is often couched in relative terms or in absolute differences. For context, the 2012/2013 corn crop season is still expected by the USDA to be the 8th largest US corn harvest in history, easily beating out those at the start of the last decade. Despite the hit to yields, corn in the US will still be cheaper than almost anywhere else in the world, unrelated sweet corn prices will of course stay decoupled from field corn, and meat price increases may be delayed due to the early slaughter of many livestock herds in anticipation of higher prices. But the drought has now put agricultural and energy policy directly in the public's eyes, for better or for worse.

I figure it's now an appropriate time to ramble on a bit about the RFS, who's challenging it and why, whether or not it's good policy, and what ought to be done about it in the end.

Alien Space Bats Chemistry

I recently made the mistake of visiting an alternate history forum. For me, what-if discussions with other nerds are something that makes time evaporate more quickly than nail polish remover. Even so, one particular discussion intrigued me enough that I decided to think about it in detail.

The scenario went something along the lines of this: suddenly, Alien Space Bats limit the power that can be outputted from gas expansions, and prevent the use and application of electricity while still retaining such natural phenomena as lightning. This is a contention similar to the premise behind S.M. Stirling's Emberverse, which is probably why it was being discussed. I like that series, if it isn't obvious.

Naturally, in such a world the level of technology would essentially be plunged back to the high middle ages, with an admixture of modern ideas such as germ theory, chemistry, and precision engineering. One thing that kept bothering me, though, was that people kept making outlandish claims about what chemistry would work in such an environment. Duty calls.

I'll spare you the discussion of what in particular was wrong with these claims. I will, however, bring one up because it makes for an interesting discussion of the dependency of much of the modern chemical industry on a few select feedstocks and processes.

The claim I want to discuss is that with modern knowledge but a high middle age level of technology, warfare would make heavy use of  chemical agents, such as the relatively simple WWI gases chemical mustard, chlorine, or phosgene. For reference, the molecules phosgene and sulfur mustard look like the following:

That either of these would be producible in a no-electricity environment is trivially untrue because there is an important component missing. Without knowledge or means to conduct electricity, large parts of the historical chemical industry become impossible. Put simply, one needs electrochemistry - using electrical currents to run reduction-oxidation (redox) reactions in reverse. At its simplest, this means the chlor-alkali process, for producing elemental chlorine, for example. Theoretically, once chlorine was obtained, one might be able to make phosgene by burning charcoal in chlorine and air. However, without the ability to send current between an anode and a cathode, you cannot make chlorine, thus both chlorine and phosgene chemical warfare is impossible.

Sulfur mustard is still more impossible because it's a sulfur organochlorine. Sulfur presents a problem, because getting sulfur from the Claus process via sour oil and gas is obviously not going to work. Barring the literal gathering of brimstone from active volcanos and hot springs, the only practical way to get sulfur is to roast pyrite. It's a fairly common mineral, but obtaining elemental sulfur requires roasting in an evacuated chamber. Let's not even go into the requirement for ethylene.

Either way, it seems that people's understanding of chemistry doesn't realize quite how fundamentally some of our chemistry processes depend on innovations from the late 19th and early 20th centuries like the harnessing of electrical currents. Chlor-alkali for mass production of strong base replaced millennia of producing via destructive dry distillation of minerals. Similarly, the wide availability of almost all halogen gases is almost entirely due to electrochemistry. Hydrocarbon building blocks used for precision syntheses, like ethylene, are due to the invention of catalysts and materials that can run at very high temperatures. Prior to small building-block chemicals from petroleum, people had to depend on heavy molecules from coal tar, glycerin from soap, or natural chemicals like turpentine or rosin. Take that away, and chemistry gets a lot more challenging and, well, medieval.

Pay Attention to Your Dialogue

It's often the case in games that there is a total lack of communication between the animation departments and the scriptwriters. Most of the time it's possible to ignore things that you notice, but one particularly egregious example I thought of recently made me want to post.

In Mass Effect 2, the following scene plays out:

This is one of the examples of well-done background dialogue in the Mass Effect series that reminds me how incredible it was to play. Paying attention to the dialogue, the sergeant cites the energy of the projectile as roughly 3 times that of Fat Man, the Hiroshima nuclear bomb. Crunching the numbers, one can see that this is not quite right:

For reference, Fat Man was 21 kilotons of TNT yield, and the total yield of the projectile he described is 36 kilotons of TNT and not 38, giving a ratio of 1.7 times the power of that bomb. Either way, this is an impressive amount of energy. However, what was most incongruous to me playing the later game Mass Effect 3 was the following scene:

Besides the fact that ME3 had some inconsistency between ship types in the various games (that one is a cruiser from ME1, not a dreadnought), the big thing that stands out to me is the projectiles. Take that lecture from the sergeant again and think about it: why is the city not destroyed given that several dozen near-nuclear explosions have just impacted? Oops.

Also, rail gun projectiles wouldn't really be visible to the naked eye, but the stuff surrounding them ought to be. Rail guns tested by the US Navy fire unpropelled, kinetic projectiles that look like this:

Yep, epic fail.

Market Research is Weird

Also, the EPA has a Cylon detector.
 

(Click to enlarge)

The Conversations We're Not Having on Fossil Fuel Subsidies

On The Energy Collective, Robert Rapier recently wrote an article examining many of the misconceptions in the ongoing (largely political theater) debate over oil company subsidies. It is a good article, and well worth the read. I say that the debate it centers on is political theater, though, because no one is talking about the largest and most egregious oil subsidy in the US at all.

According to the NHTSA, 193 billion dollars was spent in 2007 on highway construction and maintenance, of which only 51 percent was funded from user fees - user fees being, of course, the gasoline tax and tolls. Rapier's article goes over a good accounting of the fossil fuel subsidies in the US, but his top spot goes to purchases for the Strategic Petroleum Reserve, amounting to $1 billion annually. This might seem like a lot, but I find it difficult to believe that the national conversation has focused only on such explicit subsidies to manufacturing and some minor tax exemptions, and have consistently failed at fingering the largest tax expenditure of all:  the effective subsidy from the general taxpayer pool was 94.6 billion dollars in 2007, and undoubtedly more now.

The explicit subsidies from the general taxpayer pool for unfunded road maintenance are nearly two orders of magnitude larger than the SPR purchases Rapier noted, and we need to bring them into the conversation. In case it isn't obvious, from an economist's perspective, general taxpayer subsidies are less efficient than levying a full surcharge because the costs of driving should be borne proportionate to the amount of maintenance one incurs on roads - that is, on heavy drivers - and a fuel surcharge is a reasonable proxy for taxing vehicle miles traveled (VMT) or, alternatively, some combination of VMT and vehicle weight. An increase in the fuel tax would not be a Pigouvian tax, because the purpose is not to achieve some change but to internalize the cost of a negative externality. It would contribute to overall efficiency.

It should be obvious why the Obama administration is pushing for these small but controversial subsidies to end while ignoring the elephant in the room: gas price rises are political suicide, for him and for anyone else. Even if you accompany gas price rises with a tax cut amounting to an average of $315 a year for every man, woman, and child in America (simple division of $95 billion by 300 million, forgive me), people won't put two and two together. But if we are to have an honest talk about subsidies, then highway subsidies need to be on the table, and in line for the chopping block.

How a Dumb Article Can Lie to America

On Forbes, a contributor named Chris Helman wrote a recent piece entitled "How a Dumb Law Blocks a Great Way to Fuel America." It's one of many typical hit pieces I see against bio-based fuels and chemicals, and is a great demonstration of the many logical fallacies, half-truths and information omissions that are rampant in the coverage on Forbes in general.


The article makes the general claim of the Renewable Fuels Standard as a "dumb law," and contrasting it with something that could "fuel America." This dichotomy is silly, to say the least. While there are legitimate criticisms of the RFS, the gas-to-liquids (GTL) and coal-to-liquids (CTL) technology that Celanese is pushing has little to do with the goals the renewable fuels standard is trying to achieve - those being both carbon reduction and energy independence. In typical Forbes fashion, the Helman pays lip service to the first goal and omits or pooh-poohs the disadvantages of CTL and GTL technologies by making false comparisons to corn ethanol.