Noah Smith recently posted his list of science fiction for economists. I am happy to note as an avid sci-fi fan and armchair economist, I've read almost all of those books (excepting the final two). What surprised me most was the inclusion of my favorite science fiction novel of the last decade, The Windup Girl by the supremely talented Paolo Bacigalupi. The first time I read it, I lost myself in enjoying the setting and characters of Bacigalupi's 22nd century Thailand. I was curious to reread it and to think about the economics of the book, and was again surprised at how well thought out - and heartbreaking - that world is*.
To summarize, the book takes place in a post-oil world, where coal is the main remaining fossil resource and energy is provided primarily by agricultural resources. Although it's not explicitly mentioned, I presume that the collapse of most high-energy technology has effectively prevented solar photovoltaics from existing in any quantity (because even low-quality refined silicon requires enormous amounts of high-quality energy) and that the same applies for wind power (presumably for reasons of fabrication). Another macroscopic aspect of the world are the so-called "calorie plagues." These are engineered diseases intentionally released into the environment by large agricultural companies around the world - more on those later.
Showing posts with label biofuels. Show all posts
Showing posts with label biofuels. Show all posts
Wednesday, July 31, 2013
Thursday, May 9, 2013
TANSTACN
There ain't no such thing as carbon neutrality.
Or, at least, exceptions to that rule are few and far between.
Besides scarcity, greenhouse gas emissions are the second major concern with our current sources of energy. But one of the most frequent fallacies I encounter is the contention that if any alternative source also produces a greenhouse gas at all, or does not have a negative carbon balance, it is somehow not "green" or is just as bad as using fossil fuels.
Or, at least, exceptions to that rule are few and far between.
Besides scarcity, greenhouse gas emissions are the second major concern with our current sources of energy. But one of the most frequent fallacies I encounter is the contention that if any alternative source also produces a greenhouse gas at all, or does not have a negative carbon balance, it is somehow not "green" or is just as bad as using fossil fuels.
Convergence, or, energy is a high yielding investment until it isn't
This will be a rambling post just to help me get some thoughts down.
With the recent announcement that Chevron is essentially pulling out of all biofuels and renewables, I think it's worth noting some of the unrealistic expectations that Chevron placed on clean technology. Most notably, Chevron placed clean tech processes in direct competition for investment money with its oil exploration projects. Thanks to some of my work in graduate school from some of the best industrial practitioner educators I've ever had, I know that the IRR for a typical conventional oil exploration project is on the order of 20%.
The corresponding number for a bio-renewables project is much lower, on the order of 3-7% for the very best. This is much more typical of what you would see in agriculture. Placing investment money for bio-renewables projects in competition with oil projects, it's easy to see why bio-renewables lost out.
Besides making me profoundly disappointed in Chevron, this kind of news, to me, points to where the future of energy will go. If you accept that the world cannot indefinitely continue to power itself with petroleum-based transportation fuels, then eventually the IRRs of bio-renewable projects (or other types of renewable energy) must approach those of oil. This can happen in one of three different ways.
On the side of petroleum, either the number of opportunities for highly profitable ventures will decrease (a supply-driven slump) or there will not be enough demand to sustain these ventures at a high level of profit (a demand-driven slump).
On the other hand, a second option is for bio-renewables to decrease their costs, increase their IRRs and compete with petroleum on its own terms.
I've staked out my position on demand destruction before, and I still believe that the structural changes that might cause fuels demand to decrease in the same way the IEA and others claim will take decades longer than they predict. That environment means that high prices will continue, and supplier costs will increase as profitable opportunities for exploiting petroleum become depleted - in short, a petroleum supply driven argument. Something like a carbon tax would also help that along, by seriously affecting the economics of bitumen (somewhat less for other forms of unconventional oil, such as tight oil).
As for bio-renewables, after seven years of active work in the area, two of them professionally, realistically I can't see the IRR of any project improving much beyond that 3 to 7% level. Making a low-value product like a fuel just doesn't pay, not when there is the opportunity to avoid the cost of gathering your energy source (i.e. the sun, collected on land) by going with petroleum.
In the end, there will be convergence at some point, when a bio-rewables project and slurping up dead dinosaurs become equally attractive. However, there are too many physical limits to bio-renewable feedstocks to make them more competitive. Instead, the point at which convergence will occur will be when energy as we've known it for the past three quarters of a century is no longer a high yielding investment.
With the recent announcement that Chevron is essentially pulling out of all biofuels and renewables, I think it's worth noting some of the unrealistic expectations that Chevron placed on clean technology. Most notably, Chevron placed clean tech processes in direct competition for investment money with its oil exploration projects. Thanks to some of my work in graduate school from some of the best industrial practitioner educators I've ever had, I know that the IRR for a typical conventional oil exploration project is on the order of 20%.
The corresponding number for a bio-renewables project is much lower, on the order of 3-7% for the very best. This is much more typical of what you would see in agriculture. Placing investment money for bio-renewables projects in competition with oil projects, it's easy to see why bio-renewables lost out.
Besides making me profoundly disappointed in Chevron, this kind of news, to me, points to where the future of energy will go. If you accept that the world cannot indefinitely continue to power itself with petroleum-based transportation fuels, then eventually the IRRs of bio-renewable projects (or other types of renewable energy) must approach those of oil. This can happen in one of three different ways.
On the side of petroleum, either the number of opportunities for highly profitable ventures will decrease (a supply-driven slump) or there will not be enough demand to sustain these ventures at a high level of profit (a demand-driven slump).
On the other hand, a second option is for bio-renewables to decrease their costs, increase their IRRs and compete with petroleum on its own terms.
I've staked out my position on demand destruction before, and I still believe that the structural changes that might cause fuels demand to decrease in the same way the IEA and others claim will take decades longer than they predict. That environment means that high prices will continue, and supplier costs will increase as profitable opportunities for exploiting petroleum become depleted - in short, a petroleum supply driven argument. Something like a carbon tax would also help that along, by seriously affecting the economics of bitumen (somewhat less for other forms of unconventional oil, such as tight oil).
As for bio-renewables, after seven years of active work in the area, two of them professionally, realistically I can't see the IRR of any project improving much beyond that 3 to 7% level. Making a low-value product like a fuel just doesn't pay, not when there is the opportunity to avoid the cost of gathering your energy source (i.e. the sun, collected on land) by going with petroleum.
In the end, there will be convergence at some point, when a bio-rewables project and slurping up dead dinosaurs become equally attractive. However, there are too many physical limits to bio-renewable feedstocks to make them more competitive. Instead, the point at which convergence will occur will be when energy as we've known it for the past three quarters of a century is no longer a high yielding investment.
Monday, November 12, 2012
Price Controls Have Consequences
Two recent events have brought the topic of energy price controls to my mind. The first is in Brazil, where government pressure on Petrobras, the state-owned energy producer, has caused it to continue to hold down prices on gasoline in Brazil for the foreseeable future. Thanks to governmental pressure, Petrobras has subsidized its gasoline, selling below fair market value, since 2005. Brazil's government has a strong interest in cooling down inflation and part of that is attempts to hold down the value of the currency, which is already overvalued. But trying to push against a gas price rise has led to some unintended consequences (gated, unfortunately).
Essentially, cane sugar mills that might otherwise be producing high-value ethanol to sell into the fuels market are now facing a situation where rising fundamental input prices are pushing them out of the market. The price levels of their fundamentals - labor, raw material inputs, and the like - are continuing to rise with inflation, because there is no universe in which government price controls can change the underlying market forces.
In order to remain competitive, ethanol must be sold at a significant discount by volume to gasoline, which has a higher energy content. Price controls on gasoline have historically cut the profitability of ethanol, and it is now reaching the point where cane ethanol producers cannot sell into their own domestic market because of the artificially low price of the competing product, gasoline. Perversely, this has caused the Brazilian ethanol market to preferentially export ethanol to the US once again (aided and abetted by the US's renewable fuels standard, and reversing the trend of the last few years) and to overproduce sugar, the price of which isn't being held down by the Brazilian government.
The second bit of news was brought to my attention by the always-informative Geoffrey Styles at his blog Energy Outlook. Mr. Styles' discussion is more detailed than my own, so I would definitely recommend reading his post.
After the recent election Senator Ron Wyden (D-OR) is now likely to chair the Senate Committee on Energy and Natural Resources. His views on shale gas exports show a dangerous tendency to protectionism. Essentially, Senator Wyden is worried that raising the natural gas price in the US by selling LNG onto the world market will harm America more than it will help it.
Senator Wyden's protectionist reasoning is dependent on two assumptions: first, that shale gas production in the US will continue to provide energy at the same cheap price levels we see today, and second, that a low gas price is unambiguously good for America now and in the future.
The first assumption is unambiguously wrong. The shale gas price level is so low that drilling activity has drastically decreased and continuing production is depending on co-production of natural gas liquids - so-called "wet" gas wells. "Dry" gas fields with little-to-no natural gas liquids have largely remained unexploited this year. Additionally, Mr. Styles points out one reason that the pricing mechanisms that govern gas production might currently be difficult to discern: that much of the continuing production is due to contractual obligations that require the exploitation of reserves at a set pace independent of market signals.
However, this lack of a price incentive to drill is keenly felt in industry. There is a virtual consensus that price levels must go up to encourage more drilling. If exports are blocked and contribute significantly to the price remaining low (there is some controversy as to whether exports will play a big part of this), then Senator Wyden will see his policies causing the shale gas revolution to peter out.
Senator Wyden is also wrong to think that low gas pricing is unambiguously good for America in both the short and long term. In the short term, it is worth remembering that high energy prices are good for the (US-based) producers as well as for consumers. At minimum, keeping the shale gas price artificially low by minimizing exports will amount to a redistribution from resource extraction companies to consumers of those resources, with the results unclear.
In the long term, Senator Wyden may also find that keeping the gas price low hurts some of the very sectors he may be inclined to support. Renewable energy hopefuls for both electricity and vehicular fuel must now compete against a very cheap, high quality and clean burning substitute that was literally not in contention three years ago. Senator Wyden will undoubtedly find that holding down the price of natural gas will sound the death knell for a whole host of renewable electricity and renewable fuels projects - maybe even including some in his home state. We may venture that holding down gas prices now might well lead to a very uphill battle when the gas begins to run out and we have no renewable infrastructure to fall back on.
Price controls create perverse unintended consequences, in the energy world and out.
Essentially, cane sugar mills that might otherwise be producing high-value ethanol to sell into the fuels market are now facing a situation where rising fundamental input prices are pushing them out of the market. The price levels of their fundamentals - labor, raw material inputs, and the like - are continuing to rise with inflation, because there is no universe in which government price controls can change the underlying market forces.
In order to remain competitive, ethanol must be sold at a significant discount by volume to gasoline, which has a higher energy content. Price controls on gasoline have historically cut the profitability of ethanol, and it is now reaching the point where cane ethanol producers cannot sell into their own domestic market because of the artificially low price of the competing product, gasoline. Perversely, this has caused the Brazilian ethanol market to preferentially export ethanol to the US once again (aided and abetted by the US's renewable fuels standard, and reversing the trend of the last few years) and to overproduce sugar, the price of which isn't being held down by the Brazilian government.
The second bit of news was brought to my attention by the always-informative Geoffrey Styles at his blog Energy Outlook. Mr. Styles' discussion is more detailed than my own, so I would definitely recommend reading his post.
After the recent election Senator Ron Wyden (D-OR) is now likely to chair the Senate Committee on Energy and Natural Resources. His views on shale gas exports show a dangerous tendency to protectionism. Essentially, Senator Wyden is worried that raising the natural gas price in the US by selling LNG onto the world market will harm America more than it will help it.
Senator Wyden's protectionist reasoning is dependent on two assumptions: first, that shale gas production in the US will continue to provide energy at the same cheap price levels we see today, and second, that a low gas price is unambiguously good for America now and in the future.
The first assumption is unambiguously wrong. The shale gas price level is so low that drilling activity has drastically decreased and continuing production is depending on co-production of natural gas liquids - so-called "wet" gas wells. "Dry" gas fields with little-to-no natural gas liquids have largely remained unexploited this year. Additionally, Mr. Styles points out one reason that the pricing mechanisms that govern gas production might currently be difficult to discern: that much of the continuing production is due to contractual obligations that require the exploitation of reserves at a set pace independent of market signals.
However, this lack of a price incentive to drill is keenly felt in industry. There is a virtual consensus that price levels must go up to encourage more drilling. If exports are blocked and contribute significantly to the price remaining low (there is some controversy as to whether exports will play a big part of this), then Senator Wyden will see his policies causing the shale gas revolution to peter out.
Senator Wyden is also wrong to think that low gas pricing is unambiguously good for America in both the short and long term. In the short term, it is worth remembering that high energy prices are good for the (US-based) producers as well as for consumers. At minimum, keeping the shale gas price artificially low by minimizing exports will amount to a redistribution from resource extraction companies to consumers of those resources, with the results unclear.
In the long term, Senator Wyden may also find that keeping the gas price low hurts some of the very sectors he may be inclined to support. Renewable energy hopefuls for both electricity and vehicular fuel must now compete against a very cheap, high quality and clean burning substitute that was literally not in contention three years ago. Senator Wyden will undoubtedly find that holding down the price of natural gas will sound the death knell for a whole host of renewable electricity and renewable fuels projects - maybe even including some in his home state. We may venture that holding down gas prices now might well lead to a very uphill battle when the gas begins to run out and we have no renewable infrastructure to fall back on.
Price controls create perverse unintended consequences, in the energy world and out.
Friday, August 17, 2012
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.
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.
Monday, April 16, 2012
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.
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.
Friday, February 3, 2012
Reality Check on Joule
Companies entering commercialization tend to make some pretty bombastic claims. Among them is a company called Joule Unlimited, which was recently reported by Biofuels Digest to claim a yield of up to 25,000 gallons of ethanol per acre from the sugar produced by their product, comparing it to a yield of roughly 800 gallons per acre planted in sugarcane.
Numbers like that don't tend to inspire confidence in me. Over thirty times the yield? Time for a reality check.
Wednesday, January 25, 2012
The Problem With Biodiesel
I have mentioned before on this blog that for the largest American culprit of the biofuels-oriented "food-fuel substitution" argument, corn ethanol, I don't think the argument is as watertight as I once did. However, one point I feel that I did not emphasize enough is that in many cases - most outside of the United States - there is a clear and observable food-fuel substitution going on. One of the most obvious culprits is biodiesel.
Over the weekend, Michael Pollan (of The Omivore's Dilemma fame) posted "The problem with ethanol." on his twitter account. I don't use twitter and don't know if anyone's replied to him, but regardless I feel I must point out the colossal error that Pollan commits: the SciAm pictures concern palm plantations and land expropriation for biofuels, but not for ethanol. Palm plantations produce palm oil, and palm oil for biofuels is, one way or another, turned into biodiesel, for which virtually the only export market is Europe. It's only one negative aspect of the knock-on effects of biodiesel standards in the EU - and digging deeper, there are many others as well.
Over the weekend, Michael Pollan (of The Omivore's Dilemma fame) posted "The problem with ethanol." on his twitter account. I don't use twitter and don't know if anyone's replied to him, but regardless I feel I must point out the colossal error that Pollan commits: the SciAm pictures concern palm plantations and land expropriation for biofuels, but not for ethanol. Palm plantations produce palm oil, and palm oil for biofuels is, one way or another, turned into biodiesel, for which virtually the only export market is Europe. It's only one negative aspect of the knock-on effects of biodiesel standards in the EU - and digging deeper, there are many others as well.
Saturday, November 5, 2011
Playing the algae game
Note: I am teaching a one-shot class on advanced biofuels in
November. While this class is to high school kids, it will still require
a lot of organized content to throw at them, so I am gathering my
thoughts here.
Now that the epic saga of the Project From Hell XIX, Return of the Spawn of the Scope Creep is over, it seems an appropriate time to gather my thoughts about other sources of next generation biofuels. One of the ones widely acknowledged to be slightly farther off, but promising, is the use of algae as a feedstock for so-called third-generation fuels. However, I'm very, very skeptical of any of the claims being made about algae (I spent about a year trying to work with the finicky little bastards in the lab and know their peculiarities) and even more so about extremely widespread algal biofuel cultivation. Here's why.
Now that the epic saga of the Project From Hell XIX, Return of the Spawn of the Scope Creep is over, it seems an appropriate time to gather my thoughts about other sources of next generation biofuels. One of the ones widely acknowledged to be slightly farther off, but promising, is the use of algae as a feedstock for so-called third-generation fuels. However, I'm very, very skeptical of any of the claims being made about algae (I spent about a year trying to work with the finicky little bastards in the lab and know their peculiarities) and even more so about extremely widespread algal biofuel cultivation. Here's why.
Wednesday, November 2, 2011
Gasification as a route to biofuels
Note: I am teaching a one-shot class on advanced biofuels this November. While this class is to high school kids, it will still require a lot of organized content to throw at them, so I am gathering my thoughts here.
The problem of liquid transportation fuels, in many ways, is filled with less than perfect solutions brought on by our limited development of technology. Corn ethanol is the biggest bogeyman, although these days I'm less certain that its demise is inevitable, for other reasons. The other, lesser-known equivalent is biodiesel, which is a much better fuel in terms of EROEI, GHG balance and competition with food resources. Unfortunately, the size of the resource is miniscule compared to fuel requirements of the world. While new methods of biodiesel production are out there that will make the fuel more easily and make better use of its byproducts (an area I once did research in), the fact remains that the amount of oil that can be gotten from plants and animal wastes aren't going to be making up more than 2-3% of the total liquid fuel supply, simply by virtue of the fact that there will never be enough oil to go around (and yes, I am discounting algae). Plant starch is easier to find in nature than oil, hence the scale of ethanol production from starch being much larger than biodiesel production, which can draw only from the pool of oilseed and rendered animal byproduct markets. The largest resource is, of course, lignocellulosic biomass itself, which is the feedstock of choice for all next generation biofuels that you'll see in the next few years.
So what to do with all this biomass? There has been a lot of focus on fermentation routes from the biofuels community. This is the result of a confluence of infrastructure and human capital from the ethanol industry and amazing players in enzyme engineering. Enzyme engineering is so good these days that tough cellulosic feedstocks can actually be hydrolyzed into sugars and fermented using parts of the corn ethanol fermentation train. A great example of this is POET's Project Liberty, which will derive a great deal of its cost advantage from being built "over the fence" from a corn ethanol plant.
The other route I feel is getting much less attention is gasification. In this general category of processes, fast pyrolysis of biomass quickly turns most of it into carbon monoxide, hydrogen, and ash/char residue, and the gas is swept downstream into other uses. People have been doing fast pyrolysis for a long time. Before oil products became abundant, many chemicals were made using coal tar from pyrolysis. Steam gasification (a process using steam as a heating medium) of lignite is featuring prominently in coal-to-chemicals industry in China. For example, most of the growth in PVC-making over the past few years has been from vinyl production based on acetylene, which in turn is derived from ethylene and coal-bsed sodium carbide.
I'm cautiously optimistic about gasification as a route to biofuels. It has a few things going for it over biofuels and a few things going against it.
The problem of liquid transportation fuels, in many ways, is filled with less than perfect solutions brought on by our limited development of technology. Corn ethanol is the biggest bogeyman, although these days I'm less certain that its demise is inevitable, for other reasons. The other, lesser-known equivalent is biodiesel, which is a much better fuel in terms of EROEI, GHG balance and competition with food resources. Unfortunately, the size of the resource is miniscule compared to fuel requirements of the world. While new methods of biodiesel production are out there that will make the fuel more easily and make better use of its byproducts (an area I once did research in), the fact remains that the amount of oil that can be gotten from plants and animal wastes aren't going to be making up more than 2-3% of the total liquid fuel supply, simply by virtue of the fact that there will never be enough oil to go around (and yes, I am discounting algae). Plant starch is easier to find in nature than oil, hence the scale of ethanol production from starch being much larger than biodiesel production, which can draw only from the pool of oilseed and rendered animal byproduct markets. The largest resource is, of course, lignocellulosic biomass itself, which is the feedstock of choice for all next generation biofuels that you'll see in the next few years.
So what to do with all this biomass? There has been a lot of focus on fermentation routes from the biofuels community. This is the result of a confluence of infrastructure and human capital from the ethanol industry and amazing players in enzyme engineering. Enzyme engineering is so good these days that tough cellulosic feedstocks can actually be hydrolyzed into sugars and fermented using parts of the corn ethanol fermentation train. A great example of this is POET's Project Liberty, which will derive a great deal of its cost advantage from being built "over the fence" from a corn ethanol plant.
The other route I feel is getting much less attention is gasification. In this general category of processes, fast pyrolysis of biomass quickly turns most of it into carbon monoxide, hydrogen, and ash/char residue, and the gas is swept downstream into other uses. People have been doing fast pyrolysis for a long time. Before oil products became abundant, many chemicals were made using coal tar from pyrolysis. Steam gasification (a process using steam as a heating medium) of lignite is featuring prominently in coal-to-chemicals industry in China. For example, most of the growth in PVC-making over the past few years has been from vinyl production based on acetylene, which in turn is derived from ethylene and coal-bsed sodium carbide.
I'm cautiously optimistic about gasification as a route to biofuels. It has a few things going for it over biofuels and a few things going against it.
Wednesday, October 26, 2011
Corn Ethanol: a complicated bogeyman
In terms of biofuels, the ugly kid on the street has been and continues to be corn ethanol. Critics lambast its poor lifecycle GHG balance, its low EROEI, and that it competes directly with our food supply, all compared unfavorably with sugarcane ethanol, and even moreso with cellulosic ethanol. As always, however, the picture is definitely not as simple as media make it out to be.
The more I learn about corn ethanol, the more it seems like it will be around to stay for a few generations yet. It has a lot of things going for it that make it more attractive as a source for biofuels and as a valuable product than you might expect. I'm going to try and go over to show how corn ethanol has value, what it's got going for it over sugarcane ethanol, and why it's probably going to stay around to compete with cellulosics.
The more I learn about corn ethanol, the more it seems like it will be around to stay for a few generations yet. It has a lot of things going for it that make it more attractive as a source for biofuels and as a valuable product than you might expect. I'm going to try and go over to show how corn ethanol has value, what it's got going for it over sugarcane ethanol, and why it's probably going to stay around to compete with cellulosics.
Thursday, October 6, 2011
Sugarcane ethanol: o que aconteceu, brasileiro?
Although there's a significant amount of debate as to whether or not the use of food products in biofuels causes a rise in the price of food in general (the so-called "Food vs. Fuel Debate"), when we look at specific markets and feedstocks there are quite a few trends that show the trade-offs between using food sources as fuels. Nowhere is this more apparent these days than in Brazil. The country was once touted as a potential fuel ethanol exporter for the entire world. Its sugarcane fields are vast and it had the mechanization and infrastructure - built in the 1980s, no less - to make ethanol from cane juice. Unlike in corn ethanol, no enzymes are required to liquefy and saccharify (that is, break into digestible sugar monomers) the feedstock; you can almost literally dump raw cane juice into a massive industrial scale fermenter. The only way American corn ethanol got off the ground were
stupidly high tariffs on imported ethanol, ostensibly to offset the blending credit but in reality stupidly propping up fuel prices. Let me tell you, trade policy
maneuvers like that take some balls; the Bush administration apparently had some to spare.
Ethanol-rich Brazil rode through the era of high gas prices with nary a scratch and blistering economic growth. But this year, Brazil imported ethanol from the United States, and on net terms became a fuel importer. What the hell?
Ethanol-rich Brazil rode through the era of high gas prices with nary a scratch and blistering economic growth. But this year, Brazil imported ethanol from the United States, and on net terms became a fuel importer. What the hell?
Friday, July 15, 2011
The Energy-Water Nexus
I've been thinking a lot recently about water issues (which may or may not be related to work). There's been a lot of talk recently about an emerging "Energy-Water Nexus" that threatens future economic growth in the United States. Essentially, it follows from the observation that water supply and energy supply are largely interdependent. This makes a good deal of sense. Thermal electric power generation uses huge amounts of water, for example, to reject heat to the environment at the lower end of the thermodynamic cycle. Vast quantities of water are required for coal mining, gas extraction, and oil production. In turn, surface water and groundwater must be transported or extracted, and saltwater desalinated, for use in industry or in the home.
At first glance, this doesn't seem to be a problem - not particularly at least. After all, the volumes of water we extract have a far lower energy intensity than the water intensity of energy. Four things speak against that simplistic viewpoint - one of them an emerging trend.
First and foremost, the amount of water used in industry faces some pretty stiff competition. More than 70% of the water used worldwide is used in agriculture. Globally, industrial uses - including thermal power generation - account for maybe 16%. This might seem obvious, but for all the energy we expend on purifying and extracting water, only a little bit is going back to extracting and producing more energy.
Second, the amount of water we use is increasing, and pressure is being put on the energy side of things. With population growth comes increased water consumption. That much is obvious; what is less obvious are the first order effects on agriculture. Furthermore, with economic growth, power consumption and thus water devoted to power consumption rises linearly. To put that in perspective, we can compare the global statistics I cited above to the ones for the United States: Fully 53% of our water is used in industry, of which a whopping 49% (that's about 92.5% of what's used in industry as a whole) devoted to power generation. With economic growth in China and India, and soon Africa, starting, water stress suddenly is a whole lot closer to reality.
Third, all water issues are, with rare exception, local issues. Water isn't evenly distributed, and the weight of water makes it difficult to transport, so local areas must find their own solutions to water issues. Some places are already running short of water resources for industry. Two big examples are the middle Yellow River region in China and the Jamnagar industrial district in Gujarat, India. In the former, rampant industrial overinvestment has lead to water-guzzling factories being shut down and heavy rationing instituted. In the latter, overreliance (no pun intended*) on groundwater has caused water tables to fall to dangerously low levels - farmers outside the area have to drill 30ft deeper wells every year, and what they get is increasingly saline because of contamination from seawater.
Fourth, the emerging trend is even more water intensity in our energy consumption, with the rise of biofuels and biochemicals. Irrespective of subsidies, the economics of high oil prices have driven the adoption of these new technologies, almost all of which are water intensive. Consider that the processing of one gallon of corn ethanol requires 30 gallons of water consumed in the most advanced plant in the United States. A more typical case is 300-600 gallons.
So there's a darned good reason that a lot of the power and chemical process industry is starting to care about water issues again.
* The megacomplex of refinery and chemical plants in Jamnagar is owned by Reliance Heavy Industries. Yeah, probably no one got that.
At first glance, this doesn't seem to be a problem - not particularly at least. After all, the volumes of water we extract have a far lower energy intensity than the water intensity of energy. Four things speak against that simplistic viewpoint - one of them an emerging trend.
First and foremost, the amount of water used in industry faces some pretty stiff competition. More than 70% of the water used worldwide is used in agriculture. Globally, industrial uses - including thermal power generation - account for maybe 16%. This might seem obvious, but for all the energy we expend on purifying and extracting water, only a little bit is going back to extracting and producing more energy.
Second, the amount of water we use is increasing, and pressure is being put on the energy side of things. With population growth comes increased water consumption. That much is obvious; what is less obvious are the first order effects on agriculture. Furthermore, with economic growth, power consumption and thus water devoted to power consumption rises linearly. To put that in perspective, we can compare the global statistics I cited above to the ones for the United States: Fully 53% of our water is used in industry, of which a whopping 49% (that's about 92.5% of what's used in industry as a whole) devoted to power generation. With economic growth in China and India, and soon Africa, starting, water stress suddenly is a whole lot closer to reality.
Third, all water issues are, with rare exception, local issues. Water isn't evenly distributed, and the weight of water makes it difficult to transport, so local areas must find their own solutions to water issues. Some places are already running short of water resources for industry. Two big examples are the middle Yellow River region in China and the Jamnagar industrial district in Gujarat, India. In the former, rampant industrial overinvestment has lead to water-guzzling factories being shut down and heavy rationing instituted. In the latter, overreliance (no pun intended*) on groundwater has caused water tables to fall to dangerously low levels - farmers outside the area have to drill 30ft deeper wells every year, and what they get is increasingly saline because of contamination from seawater.
Fourth, the emerging trend is even more water intensity in our energy consumption, with the rise of biofuels and biochemicals. Irrespective of subsidies, the economics of high oil prices have driven the adoption of these new technologies, almost all of which are water intensive. Consider that the processing of one gallon of corn ethanol requires 30 gallons of water consumed in the most advanced plant in the United States. A more typical case is 300-600 gallons.
So there's a darned good reason that a lot of the power and chemical process industry is starting to care about water issues again.
* The megacomplex of refinery and chemical plants in Jamnagar is owned by Reliance Heavy Industries. Yeah, probably no one got that.
Thursday, July 7, 2011
Humectants and BEEF
I cut most of the beef out of my diet about two years ago; that said, I'll admit that I still have a weakness for the occasional steak. And on the subject of steak, I recently found out something cool about biofuels and animal feed.
Animal feed supply is one of the biggest industries in the United States. Two of the biggest sources of animal feed, particularly for slaughter cattle, are DDGS (dried distiller's grains and solubles) and soy flour. DDGS is the dried byproduct of fermentation from grains, these days typically ethanol but including some beer manufacturers. It's such a huge source of feed that some ranches are now relocating to be near ethanol plants to take advantage of wet distiller's grains (WDG), which have a shorter shelf life but are cheaper since they don't need to be dried.
Soy flour is the other main source of feed; a tiny, TINY proportion of commercially grown soybeans goes to people. The remainder is crushed for its oil, with some having protein extracted by hexane washing, and is toasted and fed to cows. But powdered soy flour isn't directly edible, so typically a feedlot will add a humectant - a moisturizing agent - to make it possible for cows to eat.
Over the past 50 years, this was typically yellow grease. Yellow grease is nasty stuff - it's essentially what comes out of the frialator at restaurants. Most food outlets pay for their used oil to be disposed of by professional retrieval companies, which then sell it on the market. In recent years, yellow grease prices have gone up because it turns out it's an excellent feedstock for biodiesel. Well, not so excellent, since it's got catalyst poison making up 50% of its mass, but there are ways to get around that (no joke). Point is, it's cheaper than virgin oil by a lot, so the biodiesel manufacturers that are smart have equipped themselves to deal with this heavy feedstock.
At first, feedlot owners weren't too happy about that. But recently, feedlot owners have discovered that raw glycerin, a byproduct of the biodiesel process that contains about 50% water, lots of glycerin, and other contaminants, can be relatively cheaply processed without glycerin concentration - the energy-intensive step - to be a humectant for soy flour. And get this - turns out the cows like it even better, and it's cheaper than yellow grease anyway. The biodiesel manufacturers I talked to are currently giving it away for five and a half cents a gallon.
Considering I spent a good two years of my time at MIT trying to find a home for raw glycerin, this makes me very happy. Also it's great not to have my ribeye cut contain recycled Mickey D's. But more importantly, it's now providing an important secondary revenue source for biodiesel manufacturers, letting more of them continue producing even when diesel prices are low.
Animal feed supply is one of the biggest industries in the United States. Two of the biggest sources of animal feed, particularly for slaughter cattle, are DDGS (dried distiller's grains and solubles) and soy flour. DDGS is the dried byproduct of fermentation from grains, these days typically ethanol but including some beer manufacturers. It's such a huge source of feed that some ranches are now relocating to be near ethanol plants to take advantage of wet distiller's grains (WDG), which have a shorter shelf life but are cheaper since they don't need to be dried.
Soy flour is the other main source of feed; a tiny, TINY proportion of commercially grown soybeans goes to people. The remainder is crushed for its oil, with some having protein extracted by hexane washing, and is toasted and fed to cows. But powdered soy flour isn't directly edible, so typically a feedlot will add a humectant - a moisturizing agent - to make it possible for cows to eat.
Over the past 50 years, this was typically yellow grease. Yellow grease is nasty stuff - it's essentially what comes out of the frialator at restaurants. Most food outlets pay for their used oil to be disposed of by professional retrieval companies, which then sell it on the market. In recent years, yellow grease prices have gone up because it turns out it's an excellent feedstock for biodiesel. Well, not so excellent, since it's got catalyst poison making up 50% of its mass, but there are ways to get around that (no joke). Point is, it's cheaper than virgin oil by a lot, so the biodiesel manufacturers that are smart have equipped themselves to deal with this heavy feedstock.
At first, feedlot owners weren't too happy about that. But recently, feedlot owners have discovered that raw glycerin, a byproduct of the biodiesel process that contains about 50% water, lots of glycerin, and other contaminants, can be relatively cheaply processed without glycerin concentration - the energy-intensive step - to be a humectant for soy flour. And get this - turns out the cows like it even better, and it's cheaper than yellow grease anyway. The biodiesel manufacturers I talked to are currently giving it away for five and a half cents a gallon.
Considering I spent a good two years of my time at MIT trying to find a home for raw glycerin, this makes me very happy. Also it's great not to have my ribeye cut contain recycled Mickey D's. But more importantly, it's now providing an important secondary revenue source for biodiesel manufacturers, letting more of them continue producing even when diesel prices are low.
Wednesday, July 6, 2011
So I herd you liek screwing over Indonesia
Reading the latest edition of World Ethanol & Biofuels report makes me seriously wonder if Europe just wants to shoot itself in the foot. Among many other things, it just reimposed tariffs on imported biodiesel - not just a small one, but 400 Euros per tonne - to punish American manufacturers re-exporting through Canada, which apparently counts as European. There are no words in the English language to describe how stupid this is. The US has spare biodiesel capacity, to the tune of hundreds of millions of gallons per year, but almost no market. Europe has a ridiculous market - and the US already exports regular diesel to them - but somehow it seems fixated on preserving a few, low-skilled jobs, damn the consequences.
Let's get this straight: they allow imported oil with a nominal tariff, and imported American diesel with a nominal tariff, and have no problem with biodiesel, ostensibly because it reduces carbon emissions and stuff. But on the other hand, they let dozens of plants in the US than can produce this green fuel idle, to "preserve" uneconomical jobs in Europe... and spend more carbon to import the caustic soda needed... and don't build any spare capacity... and the net effect on the US biodiesel industry is called "rape." For the poor Indonesian biodiesel industry, which can't export biodiesel to the largest biodiesel market, yet has cheaper soda (from Australia), and is forced to instead export low value-added palm oil instead in exchange for slashing and burning its rainforests, this state of affairs is the same as for the US biodiesel industry, except with the words "no lube" appended.
And above it all European citizens are now complaining that biodiesel is too expensive.
I WONDER WHY?
Let's get this straight: they allow imported oil with a nominal tariff, and imported American diesel with a nominal tariff, and have no problem with biodiesel, ostensibly because it reduces carbon emissions and stuff. But on the other hand, they let dozens of plants in the US than can produce this green fuel idle, to "preserve" uneconomical jobs in Europe... and spend more carbon to import the caustic soda needed... and don't build any spare capacity... and the net effect on the US biodiesel industry is called "rape." For the poor Indonesian biodiesel industry, which can't export biodiesel to the largest biodiesel market, yet has cheaper soda (from Australia), and is forced to instead export low value-added palm oil instead in exchange for slashing and burning its rainforests, this state of affairs is the same as for the US biodiesel industry, except with the words "no lube" appended.
And above it all European citizens are now complaining that biodiesel is too expensive.
I WONDER WHY?
Thursday, June 23, 2011
There is a difference
Many bio-based chemical product companies advertise that their wares are completely identical to petrochemicals of the same type. That's never true. They may be functionally identical, but there's an important aspect that many overlook.
Most everyone has heard of radiocarbon dating - that is, given that Carbon 13 has a half-life of about 6,700 years, you can tell the approximate age of a sample of biomaterial through the relative proportion of 12C vs 13C, since unlike a living organism, a dead one doesn't keep its proportion of 13C constant through biological processes. Now think about the beginning instead of the end.
Petroleum extracted from underneath geological strata are millions of years old. They have almost no 13C left. As a result, the products from petroleum are uniformly lighter than bioproducts, which tend to have the natural background rate of about 1.1% 13C in them. It's the difference between a molar mass per carbon atom of 12.011 vs 12.000, but when you're dealing with huge volumes, turns out it matters, at least to chemical manufacturers.
And that is the end of the only somewhat useless factoid of the day.
Most everyone has heard of radiocarbon dating - that is, given that Carbon 13 has a half-life of about 6,700 years, you can tell the approximate age of a sample of biomaterial through the relative proportion of 12C vs 13C, since unlike a living organism, a dead one doesn't keep its proportion of 13C constant through biological processes. Now think about the beginning instead of the end.
Petroleum extracted from underneath geological strata are millions of years old. They have almost no 13C left. As a result, the products from petroleum are uniformly lighter than bioproducts, which tend to have the natural background rate of about 1.1% 13C in them. It's the difference between a molar mass per carbon atom of 12.011 vs 12.000, but when you're dealing with huge volumes, turns out it matters, at least to chemical manufacturers.
And that is the end of the only somewhat useless factoid of the day.
Subscribe to:
Posts (Atom)