Despite the huge investments in wind and solar renewable energy in Europe, the top form of renewable energy is wood biomass. About half of Europe's much hyped effort to advance renewable forms of energy has wound up in wood fuel according to the 6 - 12 April issue of the Economist. Even in Germany, 38% of non-fossil fuel consumption is wood. In Poland and Finland, 80% of the renewable energy is from wood.
Wood, unlike wind and solar, is at least reliable. The EU effort to get 20% of its energy from renewable sources by 2020 is impossible based on wind and solar. Wood makes this possible.
Coal-fired power plants have been under pressure due to the production of carbon dioxide, which according to fable will cause catastrophic man-made global warming. So, the power companies with coal-fired power plants like wood because they can easily modify a coal-fired power plant to mix in 10% wood pellets. In Great Britain, power plants are given a huge subsidy to use wood and this is causing a number of coal-fired power plants to convert to wood use.
So much wood is being used for fuel that Europe is importing considerable wood. In 2012, Europe used 13 million tonnes or 13 billion kilograms. A tonne is a metric ton or 2204.6 pounds. Europe is expected to use 25 to 30 million tonnes of wood pellets in 2020. In 2010, wood pellet imports increased by 50%. Global trade in wood pellets is expected to shoot up from about 10 to 12 million tonnes now to about 60 million tonnes by 2020. Much of this wood comes from western Canada and the southern U.S.
Consequently, prices for wood are rising rapidly. Wood pellet prices rose from $116 a tonne in August 2010 to $129 a tonne in December 2012. Prices of hardwood from western Canada rose by 60% since the end of 2011. These wood price increases have contributed to the closing of about 20 large saw mills making particle board in Europe over the last five years. The higher prices are creating difficult times for pulp and paper companies, as well as furniture makers.
Burning wood pellets in coal-fired power plants makes no sense at all. It was early on claimed that burning wood was carbon neutral, since as the trees grew, they removed carbon dioxide from the atmosphere. There are many problems with this. If you use hardwood pellets from western Canada, the output of CO2 from coal-fired plants using 10% wood pellets occurs now and it may take 100 years of new trees growing in western Canada to remove as much carbon dioxide from the atmosphere as is being emitted now. In addition, making the wood pellets uses considerable energy and transporting them from North America to Europe uses still more. It has been calculated that with the British subsidy of 45 Pounds per MWH of electricity, switching from gas to wood saves one tonne of CO2 emission at a cost of 225 pounds. That is very expensive for an idea based on a failed hypothesis of catastrophic man-made global warming and a bad accounting of the total carbon dioxide emissions due to using wood pellet as fuel.
There are other considerations. Land not used to grow trees can be used for other purposes that have value. Taxpayers have to pay the subsidy money. Consumers pay higher electricity costs, as well as higher particle board, paper, cardboard, board, and furniture costs. They are forced to do this on the basis of a false hypothesis of catastrophic man-made global warming and concern for fossil fuel supplies in the face of the huge supplies of coal and natural gas now made available by hydraulic fracturing technology.
European socialism can sure cause Europeans to pursue and enforce some very silly ideas.
Showing posts with label Fuel. Show all posts
Showing posts with label Fuel. Show all posts
13 October 2010
The Battle Over Ethanol Limits in Gasoline
Congress has mandated that renewable fuels must provide 36 billion gallons to be blended into the domestic fuel supply by 2022. This means principally that ethanol must be blended into gasoline to meet this requirement. The ethanol trade group Growth Energy, headed up by General Wesley Clark, says this goal cannot be met unless the present EPA limit of 10% ethanol in gasoline is increased to 15%. The EPA just announced that it has increased the 10% blend limit to 15% for cars and light trucks of model year 2007 and later.
The EPA is waiting for additional research on cars and light trucks of the 2001 to 2006 model years, before deciding whether to increase the ethanol blend limit up to 15% for those models. Live stock ranchers, auto makers, oil refiners, and many environmental groups oppose an increase in the blend limit. Live stock ranchers do not want their feed costs to go up as more and more corn is converted into ethanol. Auto makers are concerned about lower performance from engines and damage caused by higher ethanol blends. Many of their warranties are voided by the use of 15% ethanol blends, called E-15. Oil refiners simply do not like having to make still more blends of gasoline. The many blends cause their production costs to go up, which means they must charge their customers more. Environmentalists are concerned that engines degraded by ethanol will emit more pollution.
There is concern about people being confused at the gas pumps by the additional blends of gasoline. But this brings up the interesting issue of even if the EPA allows 15% ethanol blends, who would want to use them? They will be more expensive per mile driven and cars and light trucks using them will suffer some performance loss. The answer is probably that some states will start requiring their use through some means or other. Will that be by subsidizing the high ethanol blends or will they actually mandate that people with newer vehicles must use the higher blends, despite their higher costs and performance degradation?
There are strong lobbyists, such as the ethanol refiners and corn farmers who are conniving to get their states to make such requirements. This will not be good for most Americans. This is just one more example of factions and special interests taking advantage of most Americans for their own financial gain by using the force of government to remove themselves from the free market into a protected, crony status. As I have often noted, the only way to prevent such crony and faction based rip-offs is to limit the power and scope of all of our governments: federal, state, and local. Questions are being asked about why this announcement was made just prior to the mid-term elections, but the increased use of ethanol is popular in many rural areas of the Midwest. Pleasing those special interests prior to the election is the reason for the timing.
The EPA is waiting for additional research on cars and light trucks of the 2001 to 2006 model years, before deciding whether to increase the ethanol blend limit up to 15% for those models. Live stock ranchers, auto makers, oil refiners, and many environmental groups oppose an increase in the blend limit. Live stock ranchers do not want their feed costs to go up as more and more corn is converted into ethanol. Auto makers are concerned about lower performance from engines and damage caused by higher ethanol blends. Many of their warranties are voided by the use of 15% ethanol blends, called E-15. Oil refiners simply do not like having to make still more blends of gasoline. The many blends cause their production costs to go up, which means they must charge their customers more. Environmentalists are concerned that engines degraded by ethanol will emit more pollution.
There is concern about people being confused at the gas pumps by the additional blends of gasoline. But this brings up the interesting issue of even if the EPA allows 15% ethanol blends, who would want to use them? They will be more expensive per mile driven and cars and light trucks using them will suffer some performance loss. The answer is probably that some states will start requiring their use through some means or other. Will that be by subsidizing the high ethanol blends or will they actually mandate that people with newer vehicles must use the higher blends, despite their higher costs and performance degradation?
There are strong lobbyists, such as the ethanol refiners and corn farmers who are conniving to get their states to make such requirements. This will not be good for most Americans. This is just one more example of factions and special interests taking advantage of most Americans for their own financial gain by using the force of government to remove themselves from the free market into a protected, crony status. As I have often noted, the only way to prevent such crony and faction based rip-offs is to limit the power and scope of all of our governments: federal, state, and local. Questions are being asked about why this announcement was made just prior to the mid-term elections, but the increased use of ethanol is popular in many rural areas of the Midwest. Pleasing those special interests prior to the election is the reason for the timing.
11 March 2009
Scrubbing CO2 Out of the Atmosphere
The 7 - 13 March 2009 issue of the Economist has an article on the use of various scrubbing processes to remove CO2 from the air. There are advocates for the use of scrubbers to clean general air, not just the air emitted from coal-fired power plants, by removing CO2. [Disclosure: I have analyzed smokestack modified lime powders in a couple of projects for the purpose of solving problems or improving the absorption capacity for SO2.] Now if this can be done without subsidies from governments by selling the CO2 to greenhouses to promote plant growth, for food and soft drink processing, fire extinguishers, gas to pressurize oil fields to squeeze out more oil, and for water treatment purposes, I am fine with this. After all, the article notes that CO2 is the 19th most important chemical commodity by weight produced in America. It does have economic value, over and above the fact that plants will not grow without it.
But, of course, this is not the main thrust of the European viewpoint given in the article. No, the very first sentence is "Preventing catastrophic climate change, most people agree, will mean reducing the level of man-made carbon dioxide (CO2) in the atmosphere." Well now, isn't that sweet?
Here is a poll of Americans taken among adults from 5 - 8 March 2009 by Gallup. The main news is that the percent of Americans thinking that global warming is exaggerated by the media is now up to 41%, but 57% still think the media has it right or underestimates the seriousness of global warming. I am disappointed in Americans here, but it is clearly hard for them to see through the smokescreen put up by much of the media. Nonetheless, some of the 57% who think the media has it about right are watching Fox News, which is generally not very alarmist. The biggest change in the last year toward increased skepticism of the media reports on global warming is Independents whose skeptics jumped from 33% to 44%, while Republican skeptics increased from 59% to 66%, and Democrat skeptics from 18 to 22%. So, an Independent is twice as likely as a Democrat to be skeptic and a Republican is 3 times as likely to be a skeptic. The age group most skeptical and with the biggest change in skepticism is those 65 and older. The immutable group is those 18 to 29, who have been stuck at 31% skeptics. Of course, these are the most indoctrinated Americans of all.
60% worry about global warming either a great deal or a fair amount. First, not all of the 60% who worry about it are likely to be convinced that it is predominantly caused by man's CO2 emissions. Second, worrying a fair amount is not what you do when faced with a catastrophe. A catastrophe causes a great deal of worry and only 34% worried a great deal about global warming. When the question was put another way, only 38% thought global warming will pose a serious threat to themselves and their own way of life.
Well, maybe the Economist being based in the U.K. is thinking that most Britons believe that global warming is occurring, is caused by man emitting CO2, and that it is a catastrophe. Yet, the level of skepticism in Great Britain is now even higher than in the U.S.! They went through a period when they were more convinced than were Americans, but now they have examined the issue more carefully and the majority do not believe that man-made global warming is occurring and is a catastrophe. Here is a report on the Ipsos MORI poll of 1,039 Britons in June 2008. Six out of 10 people agreed that "many scientific experts still question if humans are contributing to climate change." 20% were undecided. Four out of 10 "sometimes think climate change might not be as bad as people say." Again 20% were undecided.
It is unlikely that most Chinese and most Indians agree that man-made global warming is occurring and it is a catastrophe. It does not appear that most Eastern Europeans are convinced that man-made global warming is a catastrophe. I have serious doubts that most Africans and South Americans are very worried about catastrophic global warming either. So, who do you think the people are who the Economist is talking about? I expect it is the university faculties and the media professionals they are talking about as 'most people.' Or is this just another instance of the Big Lie? Still another being the reference in the British article I linked to above that 2,500 scientists concluded in the last IPCC report that global warming was 90% certainly due primarily to human activity and that drastic action was needed to prevent it. Well, very many of the 2,500 were not scientists at all and only a small fraction were really climate scientists, and many of them did not agree with the summary conclusions.
Let us return to the Economist article. The exhaust from a coal-fired power station is around 10% carbon dioxide. The atmosphere is about 0.04% CO2. So, recapturing CO2 from the air is much less economical than recovering it from a coal-powered power plant. If it were economical to recover it from the air, then it should be more economical to recover from coal-fired power plants. In fact, this could then be a way for a coal-fired power plant to make more money. But, they do not do this because it is too expensive. While there is a fairly big market for CO2, apparently it does not pay very much and it is not big enough. But, our socialist friends at the Economist are not deterred. No, they appeal for subsidies and carbon off-sets to fund scrubbers which will operate on ordinary air.
Dr. Lackner, professor of geophysics at Columbia University and a member of the company Global Research Technologies, says they have a scrubbing technology that can remove CO2 from the air for industrial purposes at $200 per ton. To support this with carbon offsets now valued at only $10 per ton is not going to be feasible. But, environmentalists hope that carbon offsets will soon be valued at over $50 per ton and Dr. Lackner hopes to bring his costs down to $30 per ton. If so, the general air scrubbing can be accomplished with carbon offsets as the primary income. [In 1999, according to DOE, the average weight of carbon dioxide emitted per kW - hr of electric power from a coal-fired power plant was 2.095 pounds. At $30 per ton of CO2, this would increase the cost of 1 KW - hr of electricity by $0.0314.]
Then one still has to find a way to use this CO2. The Economist suggests that it might be converted into fuel for cars, but the conversion will cost about $4-5 per gallon according to a Dr. Eisaman. But, the primary cost is the energy needed to strip hydrogen electrolytically from water to combine the hydrogen with the carbon in the CO2 to make the hydrocarbon fuel for cars. So, Dr. Lackner suggests that wind farms sometimes generate too much electricity for the electric grid to handle, especially at night, so their output could be used to supply the power that produces the hydrogen from water and otherwise power the proces to make fuel from CO2. The idea is that then the air capture systems for removing CO2 from the air would have cheap enough power to allow the scrubbing of air using carbon offsets.
There is a flaw here, folks. Long before you can make this make sense, it would be more sensible to recognize that coal-fired power plants are dependable and cheap, while wind farms are expensive, undependable, and inclined to produce more power at night than during the day, when more power is needed. Clearly, the thing that must make much more sense is to put the scrubber on the output of the coal-fired power plant where the CO2 concentration is 10%, rather than feeding it regular air where the CO2 concentration is only 0.04%. Operating a scrubber on the CO2 enriched air should be much less expensive.
So, what is the motive in suggesting that we dump the coal-fired power plants and oil-based fuel for cars and replace them with wind farms, general air scrubbers, and synthetic fuel for cars that costs more than twice what gasoline costs? Why would you want to continue with the plan to bankrupt the coal-fired power plants as Obama has pledged to do? But, even more so, if CO2 makes plants grow better in greenhouses, should we not want more CO2 in the air anyway to make our crops throughout the world grow better? And to the degree that we need CO2 for industrial purposes, would it not make sense to encourage the producers of CO2 to work more closely with coal-fired power plants to make them a primary source of the enriched air with higher concentrations of CO2? And, perhaps it would make sense to build a lot of greenhouses right next to coal-fired power plants so the plant output air can be piped directly through them before we add on lots of carbon offsets and carbon taxes. I also wonder if the carbon dioxide output of gasoline and diesel is ever offset by the amount of CO2 pumped into oil fields in anyone's calculations.
Of course, I do not think it is bad in the air. First, it is known that after a certain concentration of CO2 is reached, it has less and less effect as a greenhouse gas. Its present concentration is already such that additions are doing little to add to warming. Second, there is reason to believe that increased CO2 causes increased water evaporation and cloud cover, which produces cooling. Third, the earth has often been warmer and man has flourished when it was, largely because plants and other animals tend to flourish when it is warmer. Fourth, the areas of the earth which are warming most are those where warming is the most welcome, such as northern North America, northern Europe, and northern Russia. Finally, while I think that man does cause some degree of global warming, I believe that warming has been dominated by natural forces.
But, of course, this is not the main thrust of the European viewpoint given in the article. No, the very first sentence is "Preventing catastrophic climate change, most people agree, will mean reducing the level of man-made carbon dioxide (CO2) in the atmosphere." Well now, isn't that sweet?
Here is a poll of Americans taken among adults from 5 - 8 March 2009 by Gallup. The main news is that the percent of Americans thinking that global warming is exaggerated by the media is now up to 41%, but 57% still think the media has it right or underestimates the seriousness of global warming. I am disappointed in Americans here, but it is clearly hard for them to see through the smokescreen put up by much of the media. Nonetheless, some of the 57% who think the media has it about right are watching Fox News, which is generally not very alarmist. The biggest change in the last year toward increased skepticism of the media reports on global warming is Independents whose skeptics jumped from 33% to 44%, while Republican skeptics increased from 59% to 66%, and Democrat skeptics from 18 to 22%. So, an Independent is twice as likely as a Democrat to be skeptic and a Republican is 3 times as likely to be a skeptic. The age group most skeptical and with the biggest change in skepticism is those 65 and older. The immutable group is those 18 to 29, who have been stuck at 31% skeptics. Of course, these are the most indoctrinated Americans of all.
60% worry about global warming either a great deal or a fair amount. First, not all of the 60% who worry about it are likely to be convinced that it is predominantly caused by man's CO2 emissions. Second, worrying a fair amount is not what you do when faced with a catastrophe. A catastrophe causes a great deal of worry and only 34% worried a great deal about global warming. When the question was put another way, only 38% thought global warming will pose a serious threat to themselves and their own way of life.
Well, maybe the Economist being based in the U.K. is thinking that most Britons believe that global warming is occurring, is caused by man emitting CO2, and that it is a catastrophe. Yet, the level of skepticism in Great Britain is now even higher than in the U.S.! They went through a period when they were more convinced than were Americans, but now they have examined the issue more carefully and the majority do not believe that man-made global warming is occurring and is a catastrophe. Here is a report on the Ipsos MORI poll of 1,039 Britons in June 2008. Six out of 10 people agreed that "many scientific experts still question if humans are contributing to climate change." 20% were undecided. Four out of 10 "sometimes think climate change might not be as bad as people say." Again 20% were undecided.
It is unlikely that most Chinese and most Indians agree that man-made global warming is occurring and it is a catastrophe. It does not appear that most Eastern Europeans are convinced that man-made global warming is a catastrophe. I have serious doubts that most Africans and South Americans are very worried about catastrophic global warming either. So, who do you think the people are who the Economist is talking about? I expect it is the university faculties and the media professionals they are talking about as 'most people.' Or is this just another instance of the Big Lie? Still another being the reference in the British article I linked to above that 2,500 scientists concluded in the last IPCC report that global warming was 90% certainly due primarily to human activity and that drastic action was needed to prevent it. Well, very many of the 2,500 were not scientists at all and only a small fraction were really climate scientists, and many of them did not agree with the summary conclusions.
Let us return to the Economist article. The exhaust from a coal-fired power station is around 10% carbon dioxide. The atmosphere is about 0.04% CO2. So, recapturing CO2 from the air is much less economical than recovering it from a coal-powered power plant. If it were economical to recover it from the air, then it should be more economical to recover from coal-fired power plants. In fact, this could then be a way for a coal-fired power plant to make more money. But, they do not do this because it is too expensive. While there is a fairly big market for CO2, apparently it does not pay very much and it is not big enough. But, our socialist friends at the Economist are not deterred. No, they appeal for subsidies and carbon off-sets to fund scrubbers which will operate on ordinary air.
Dr. Lackner, professor of geophysics at Columbia University and a member of the company Global Research Technologies, says they have a scrubbing technology that can remove CO2 from the air for industrial purposes at $200 per ton. To support this with carbon offsets now valued at only $10 per ton is not going to be feasible. But, environmentalists hope that carbon offsets will soon be valued at over $50 per ton and Dr. Lackner hopes to bring his costs down to $30 per ton. If so, the general air scrubbing can be accomplished with carbon offsets as the primary income. [In 1999, according to DOE, the average weight of carbon dioxide emitted per kW - hr of electric power from a coal-fired power plant was 2.095 pounds. At $30 per ton of CO2, this would increase the cost of 1 KW - hr of electricity by $0.0314.]
Then one still has to find a way to use this CO2. The Economist suggests that it might be converted into fuel for cars, but the conversion will cost about $4-5 per gallon according to a Dr. Eisaman. But, the primary cost is the energy needed to strip hydrogen electrolytically from water to combine the hydrogen with the carbon in the CO2 to make the hydrocarbon fuel for cars. So, Dr. Lackner suggests that wind farms sometimes generate too much electricity for the electric grid to handle, especially at night, so their output could be used to supply the power that produces the hydrogen from water and otherwise power the proces to make fuel from CO2. The idea is that then the air capture systems for removing CO2 from the air would have cheap enough power to allow the scrubbing of air using carbon offsets.
There is a flaw here, folks. Long before you can make this make sense, it would be more sensible to recognize that coal-fired power plants are dependable and cheap, while wind farms are expensive, undependable, and inclined to produce more power at night than during the day, when more power is needed. Clearly, the thing that must make much more sense is to put the scrubber on the output of the coal-fired power plant where the CO2 concentration is 10%, rather than feeding it regular air where the CO2 concentration is only 0.04%. Operating a scrubber on the CO2 enriched air should be much less expensive.
So, what is the motive in suggesting that we dump the coal-fired power plants and oil-based fuel for cars and replace them with wind farms, general air scrubbers, and synthetic fuel for cars that costs more than twice what gasoline costs? Why would you want to continue with the plan to bankrupt the coal-fired power plants as Obama has pledged to do? But, even more so, if CO2 makes plants grow better in greenhouses, should we not want more CO2 in the air anyway to make our crops throughout the world grow better? And to the degree that we need CO2 for industrial purposes, would it not make sense to encourage the producers of CO2 to work more closely with coal-fired power plants to make them a primary source of the enriched air with higher concentrations of CO2? And, perhaps it would make sense to build a lot of greenhouses right next to coal-fired power plants so the plant output air can be piped directly through them before we add on lots of carbon offsets and carbon taxes. I also wonder if the carbon dioxide output of gasoline and diesel is ever offset by the amount of CO2 pumped into oil fields in anyone's calculations.
Of course, I do not think it is bad in the air. First, it is known that after a certain concentration of CO2 is reached, it has less and less effect as a greenhouse gas. Its present concentration is already such that additions are doing little to add to warming. Second, there is reason to believe that increased CO2 causes increased water evaporation and cloud cover, which produces cooling. Third, the earth has often been warmer and man has flourished when it was, largely because plants and other animals tend to flourish when it is warmer. Fourth, the areas of the earth which are warming most are those where warming is the most welcome, such as northern North America, northern Europe, and northern Russia. Finally, while I think that man does cause some degree of global warming, I believe that warming has been dominated by natural forces.
01 May 2008
The Cost of Coal
Many commodities prices have risen considerably in the last couple of years. These include oil, concrete, steel, natural gas, corn, soybeans, wheat, wood, fish, beef, and coal. The principal reason is rapidly increased demand. This demand has grown faster than the supply of these products. The increased wealth of many people throughout the world which has been brought on by a large increase in international trade and improvements in economic freedom in China, India, Brazil, and Eastern Europe has given billions of more people much more money to bid for the supply of these products. The United States exports many of them and is making a great deal of money and providing many jobs as a result.
Let us examine the case of coal. The U.S. has an abundance of coal. Presently, 600 power plants burning coal generate 49% of the nation's electricity. This is up from 43% of the electricity in 2000. However, more than 60 coal power plant proposals were terminated in 2007 due to concerns about greenhouse gases and environmental issues in 24 states. Some of the terminations were brought about by state governments and some by utilities concerned about future carbon footprint legislation. Dozens of the original 151 proposals for new coal power plants in early 2007 are being challenged in the courts.
Meanwhile coal production was cut in China this winter by heavy snowstorms and heavy rains flooded coal mines in Australia, the world's biggest coal exporter. Yes, that is Australia, not the U.S. But U.S. coal exports increased 19.2% last year and the Energy Department is expecting a further 15% increase this year. Power plants widely use Central Appalachian coal, a grade of coal with a very high energy output. This coal sold for $40 per ton in early 2007 and is now selling at almost $90 per ton. Powder River Basin coal in Wyoming and Montana has about 0.75 times the energy per ton and was selling at $10/ton in early 2007 and is now selling for $15/ton. The lower cost is not proportional to the energy content, due to longer shipping distances to most power plants and because the shipping costs are related to the weight and volume, not to the energy content. When a substantial part of the cost is determined by the world market bidding its value up, the cost of shipping relative to the energy output is even more important. The fact that the Central Appalachian coal more than doubled in cost since early 2007, while the Powder River Basin coal went up only 50% is a sure sign that the international market is playing a major role in determining the cost of the coal.
It is interesting to note that while new coal-fired power plants in the U.S. are largely being axed due to environmental concerns, Western European nations are rapidly increasing the number of their coal power plants. See the NY Times article "Europe Turns Back to Coal, Raising Climate Fears." Italy plans to produce 33% of its electricity from coal in five years, which is up from 14% now. More plants are being built in Germany and the Czech Republic. About 50 coal power plants are expected to be opened in the next 5 years in Europe. As I have pointed out before, the Europeans love to criticize the U.S. for its CO2 emissions, but our emissions are growing less rapidly than are theirs. Coal produces about two times as much CO2 per unit of electricity as does natural gas. Meanwhile, India and China are opening about 1 new coal power plant a week between them.
Both natural gas and oil are alternatives to coal for electrical power generation. Both have had larger price increases even than coal, however. Coal in 2006 cost only $1.69 per BTU, while natural gas cost $6.87/BTU. Thus, the heat output per dollar for coal was 4.1 times greater than that of natural gas. For most of us, this means that our electric bills will be going up considerably. The more we switch from coal to natural gas and oil, the more our electric bill will go up. The cost of reducing carbon dioxide emissions will be very high.
On the other hand, if we emulate the Europeans and use more coal, crops and other plants will luxuriate in CO2 fertilizer and our cool planet will perhaps become slightly warmer than it might otherwise be. Of course, over most of the last 400,000 years the planet has been colder than now. We call these colder periods Ice Ages. We are about due to begin another Ice Age, if the pattern holds up. Let us hope that producing a wee bit more CO2 will have a significant warming effect, despite the weak evidence that it might have done so to date. And if it were to cause a temperature increase, would it be cause man's emissions were significant compared to the much greater emissions from the oceans and from decaying plant matter, not to mention all of the animals breathing?
Let us examine the case of coal. The U.S. has an abundance of coal. Presently, 600 power plants burning coal generate 49% of the nation's electricity. This is up from 43% of the electricity in 2000. However, more than 60 coal power plant proposals were terminated in 2007 due to concerns about greenhouse gases and environmental issues in 24 states. Some of the terminations were brought about by state governments and some by utilities concerned about future carbon footprint legislation. Dozens of the original 151 proposals for new coal power plants in early 2007 are being challenged in the courts.
Meanwhile coal production was cut in China this winter by heavy snowstorms and heavy rains flooded coal mines in Australia, the world's biggest coal exporter. Yes, that is Australia, not the U.S. But U.S. coal exports increased 19.2% last year and the Energy Department is expecting a further 15% increase this year. Power plants widely use Central Appalachian coal, a grade of coal with a very high energy output. This coal sold for $40 per ton in early 2007 and is now selling at almost $90 per ton. Powder River Basin coal in Wyoming and Montana has about 0.75 times the energy per ton and was selling at $10/ton in early 2007 and is now selling for $15/ton. The lower cost is not proportional to the energy content, due to longer shipping distances to most power plants and because the shipping costs are related to the weight and volume, not to the energy content. When a substantial part of the cost is determined by the world market bidding its value up, the cost of shipping relative to the energy output is even more important. The fact that the Central Appalachian coal more than doubled in cost since early 2007, while the Powder River Basin coal went up only 50% is a sure sign that the international market is playing a major role in determining the cost of the coal.
It is interesting to note that while new coal-fired power plants in the U.S. are largely being axed due to environmental concerns, Western European nations are rapidly increasing the number of their coal power plants. See the NY Times article "Europe Turns Back to Coal, Raising Climate Fears." Italy plans to produce 33% of its electricity from coal in five years, which is up from 14% now. More plants are being built in Germany and the Czech Republic. About 50 coal power plants are expected to be opened in the next 5 years in Europe. As I have pointed out before, the Europeans love to criticize the U.S. for its CO2 emissions, but our emissions are growing less rapidly than are theirs. Coal produces about two times as much CO2 per unit of electricity as does natural gas. Meanwhile, India and China are opening about 1 new coal power plant a week between them.
Both natural gas and oil are alternatives to coal for electrical power generation. Both have had larger price increases even than coal, however. Coal in 2006 cost only $1.69 per BTU, while natural gas cost $6.87/BTU. Thus, the heat output per dollar for coal was 4.1 times greater than that of natural gas. For most of us, this means that our electric bills will be going up considerably. The more we switch from coal to natural gas and oil, the more our electric bill will go up. The cost of reducing carbon dioxide emissions will be very high.
On the other hand, if we emulate the Europeans and use more coal, crops and other plants will luxuriate in CO2 fertilizer and our cool planet will perhaps become slightly warmer than it might otherwise be. Of course, over most of the last 400,000 years the planet has been colder than now. We call these colder periods Ice Ages. We are about due to begin another Ice Age, if the pattern holds up. Let us hope that producing a wee bit more CO2 will have a significant warming effect, despite the weak evidence that it might have done so to date. And if it were to cause a temperature increase, would it be cause man's emissions were significant compared to the much greater emissions from the oceans and from decaying plant matter, not to mention all of the animals breathing?
19 April 2008
Food Riots and Food Fuels
Believe it or not, there is a substantial number of people who recognize that turning foods such as corn and soybeans into fuel for cars does not make sense. Steven Milloy, who publishes JunkScience.com and DemandDebate.com and is an adjunct scholar at the Competitive Enterprise Institute, has written a commentary on food riots and other consequences of the Green lobbyists. The article is entitled A New 'Green' Body Count Begins.
The human population is growing and with it the demand for food and fuel. People in many areas of the world are finally improving their diets and traveling and trading more. The agricultural effort world-wide has been remarkable in doing such a great job in meeting the increased demand for food. The foolish campaign against Frankenfoods, especially strong in childish Europe, is doing what it can to restrict the increase in food production. In general, the Greens are not friendly to farmers. They do not like them using woodlands, prairie lands, or marsh lands. They do not like them using fertilizers and insecticides. They do not like them using water or fuel. They sometimes do want them to produce fuel from foods such as corn, soybeans, sugar cane, and biomass. The use of biomass such as general leaves and stalks is not yet economical and may never be very economic, due to the need to haul large masses of material to biomass fuel plants, as Steven Milloy points out. So, the conversion of valuable food such as corn and soybeans into fuel is now what is happening. This reduces the food supply and drives up prices to the point that many of the poor in the underdeveloped world cannot afford enough food.
Steven Milloy points out food riots in Haiti, Egypt, Cameroon, Ivory Coast, Senegal, and Ethiopia. He does not mention the anger in Mexico due to rising tortilla prices. He does note that troops have been deployed to protect the farm fields and food warehouses in Pakistan and Thailand. Indian and Turkish government officials are quoted as saying it is foolish to turn food into biofuels.
Milloy goes on to note that the Greens are doing everything they can to prevent us from having adequate power. They propose biomass fuel disasters. They oppose every economical means of generating power, however. The Sierra Club wants to shut down our coal power plants. The Natural Resources Defense Council opposes nuclear power plants. Earth First! opposes almost every source of power, including natural gas, whose cost is rising rapidly now due to the failure to build more nuclear power plants, restrictions on new coal power plants, and restrictions on developing new oil fields in the stable western countries. Maryland Gov. Martin O'Malley has declared that no wind mills will be allowed in Maryland, since they are an eyesore! It is clear that the Greens simply do not want to allow people to have power.
So, how do we plan for a future without power. Well, in Maryland officials are planning rolling blackouts beginning in 2011. As I have noted, we already have nightly brownouts. Personally, I would much rather live with coal-fired power plants and with nuclear power plants! I want my power and, indeed, it is essential for my laboratory business that I have high quality and dependable power. The damn Greens can go and live in Antarctica or take over Paraguay and use as little power as they wish to use!
The human population is growing and with it the demand for food and fuel. People in many areas of the world are finally improving their diets and traveling and trading more. The agricultural effort world-wide has been remarkable in doing such a great job in meeting the increased demand for food. The foolish campaign against Frankenfoods, especially strong in childish Europe, is doing what it can to restrict the increase in food production. In general, the Greens are not friendly to farmers. They do not like them using woodlands, prairie lands, or marsh lands. They do not like them using fertilizers and insecticides. They do not like them using water or fuel. They sometimes do want them to produce fuel from foods such as corn, soybeans, sugar cane, and biomass. The use of biomass such as general leaves and stalks is not yet economical and may never be very economic, due to the need to haul large masses of material to biomass fuel plants, as Steven Milloy points out. So, the conversion of valuable food such as corn and soybeans into fuel is now what is happening. This reduces the food supply and drives up prices to the point that many of the poor in the underdeveloped world cannot afford enough food.
Steven Milloy points out food riots in Haiti, Egypt, Cameroon, Ivory Coast, Senegal, and Ethiopia. He does not mention the anger in Mexico due to rising tortilla prices. He does note that troops have been deployed to protect the farm fields and food warehouses in Pakistan and Thailand. Indian and Turkish government officials are quoted as saying it is foolish to turn food into biofuels.
Milloy goes on to note that the Greens are doing everything they can to prevent us from having adequate power. They propose biomass fuel disasters. They oppose every economical means of generating power, however. The Sierra Club wants to shut down our coal power plants. The Natural Resources Defense Council opposes nuclear power plants. Earth First! opposes almost every source of power, including natural gas, whose cost is rising rapidly now due to the failure to build more nuclear power plants, restrictions on new coal power plants, and restrictions on developing new oil fields in the stable western countries. Maryland Gov. Martin O'Malley has declared that no wind mills will be allowed in Maryland, since they are an eyesore! It is clear that the Greens simply do not want to allow people to have power.
So, how do we plan for a future without power. Well, in Maryland officials are planning rolling blackouts beginning in 2011. As I have noted, we already have nightly brownouts. Personally, I would much rather live with coal-fired power plants and with nuclear power plants! I want my power and, indeed, it is essential for my laboratory business that I have high quality and dependable power. The damn Greens can go and live in Antarctica or take over Paraguay and use as little power as they wish to use!
24 March 2008
Corn for Real Food or Energy Myth?
The ethanol scam, con, fraud, boondoggle, looting, tax, myth, price inflater is a study in governmental willingness to set obviously wrongheaded policies in law in the name of the General Welfare. Ethanol is being sold as a route to energy independence and as a way to reduce pollution. Its consequences for food production and costs are too rarely discussed among Americans. Its cost is too little understood. There are glaring problems with the mandated requirements for present and further ethanol use, which must be known to the politicians who have given us the ethanol laws. A shocking immorality is revealed in this story. This story is rich in the lesson that politicians cannot be entrusted with the Public Interest or the General Welfare without the most severe limitations of their power, such as are imposed by the Constitution, but whose provisions they ignore. This is not surprising, since Teddy Roosevelt and Woodrow Wilson began a long history of blatantly ignoring the limits of their power and trained Congress to do the same.
Let us follow the story of Congress and their mandates for ethanol use and their subsidies to encourage its production and use. Archer Daniels Midland began pushing for the use of ethanol as a fuel additive to reduce pollution in the 1970s. In the early 1980s, they were producing 175 million gallons of ethanol a year. ADM established a close working relationship with Sen. Bob Dole (Rep., Kansas) and gave the Republicans more than $1 million in the 1992 election and Democrats about $455,000. Bob Dole then helped ADM and corn farmers to line up billions of dollars in subsidies and tax breaks. The Cato Institute estimated that almost half of the profits of ADM were the result of product sales protected by or or subsidized by government in 1995. The 10% ethanol and 90% gasoline mixture E10 was required, especially in the winter months, in areas deemed to have a smog problem, under the rationale that the ethanol additive burned more cleanly.
The 2005 Energy Policy Act requires refiners to use 7.5 billion gallons of biofuels and specifically 250 million gallons of cellulosic ethanol in 2012. This cellulosic ethanol is ethanol made from plants or plant parts other than the corn fruit and the sugar of sugar cane. In 2006, ADM produced more than 1 billion gallons of ethanol. 200 subsidies and tax breaks were providing between $5.1 and $6.8 billion to make sales of ethanol possible. In June, Congress passed The American Fuels Act of 2007, which had been introduced by Barack Obama (Dem., IL), Tom Harkin (Dem., IA), and Richard Lugar (Rep., IN) to mandate increased use of biodiesel and provides tax credits for the production of cellulosic ethanol. This law requires the production of 36 billion gallons of ethanol by 2022. Of this amount only 15 billion gallons of ethanol are expected to come from corn, since that will be a bit more than half the present corn crop. The remaining 21 billion gallons of ethanol and biodiesel must come from other sources, which have not been developed. When introduced, the proposed bill was even more outrageous: it called for a mandate of 60 billion gallons of biofuels by 2030! Former Sen. Edwards called for 65 billion gallons of biofuels by 2025. Sen. Clinton voted against ethanol 17 times before she began her presidential campaign and turned into a supporter. Sen. McCain, who had been a doubter, became more positive when his campaign was well underway. Obama, Edwards, Clinton, and McCain were driven by the desire for votes in the Iowa caucuses. President Bush has been an enthusiastic supporter since his 2006 State of the Union address.
None of the sources of ethanol or biodiesel are even close to being economical and competitive with fossil fuels and nuclear power. The least subsidized source is ethanol from sugar cane, but we grow little sugar cane in the U.S. Brazil grows more than any other country and produces the cheapest ethanol, but it is nonetheless heavily subsidized in Brazil where a dictator first established the ethanol use requirement in 1975. There they directly subsidize hydrous-ethanol (5% water), ban diesel-powered cars, put a 21.5% import duty on foreign ethanol, and provide an alcohol storage program. They also provided subsidies to car manufacturers who made cars capable of running on ethanol concentrations which started at 10% and grew to numbers as high as 26%, though this number varies through the 20 to 26% range under democratically elected governments. Because of this commitment to ethanol, Brazil has found that ethanol made from corn in the U.S. is cheaper than ethanol made from sugar cane in more marginal land brought under production for the purpose in Brazil. They import American ethanol, despite the protective tariff!
So where does ethanol production, essentially that from corn, stand in the U.S.? About 5.4 billion gallons per year (bgy) was produced in 2006. Most of this went into the E10 gasoline fuel mix, which is 90% gasoline. The Congressional mandate is for 9 bgy in 2008, 15.2 bgy in 2012, and finally 36 bgy in 2022. This is a hugely ambitious program and yet the 36 bgy will provide the energy equivalent of 7% of current oil use. And that figure is a figment of the imagination for a number of reasons which we will examine.
Ethanol from corn requires energy to produce it. This energy needs to be measured to understand what part of the enormous effort to create 36 bgy of ethanol will actually result in a net energy gain. What fraction of the 7% substituted for gasoline in cars can really be realized as new energy? Corn requires plowing, fertilizing, and harvesting, which commonly uses diesel fuel on the farm. The fertilizer requires that large amounts of natural gas be used to make it. This fertilizer then has to be transported to the farm. Further fuel is often used to irrigate the corn fields. The corn when harvested has to be delivered to the fermentation plants where it will be converted into ethanol and that process requires fuel to generate heat and energy to handle and move materials. Waste water has to be disposed of and cleaned up. Once the ethanol is made, it cannot be transported in relatively efficient gas pipelines because its water content makes it incompatible with the seals and other materials of pipelines. So, more expensive transport by truck and train is required.
Studies of the net gain in energy from ethanol vary, but the highest estimates are that it produces 1.3 times as much energy as it takes to obtain it. More realistic and recent estimates have tended to conclude that one gets about an equal amount of energy, so there is no net gain at all. A recent study by researchers at Cornell University and the University of California - Berkeley found that it took 29% more energy to produce ethanol from corn than it gave back! What is more, as more and more land is devoted to corn production for ethanol, more and more of the land will be less and less suitable and productive. The amounts of fertilizer and irrigation water needed will increase. The distance to markets may also increase. So more and more energy will be required and the process of producing net energy will become tougher and improbable. So the idea that ethanol is renewable energy is entirely wrongheaded. There is always an exchange of used coal, gasoline, diesel, and electric power for an approximately equal amount of energy in the form of ethanol.
In order to achieve this magnificent goal of zero net energy, we will soon be subsidizing the manufacture of ethanol and other biofuels to the tune of $8.6 billion per year. These subsidizes are further supplemented by tax-exempt bonds to finance ethanol plant construction, loan guarantees, state vehicle fleet purchases of biofuel-using vehicles, irrigation water subsidized by government, and the benefit of the state and federal mandates that require the use of ethanol whether it is economical or not.
This failure to create net additional energy using ethanol, makes a lie of the idea that ethanol will help to make the U.S. more independent of unreliable and unfriendly governments with control of oil resources. There are still more problems with this argument. First, if the object is to have more options for energy, then we clearly should not exclude Brazilian ethanol from the U.S. market by imposing a $.54 per gallon tariff on it. Second, corn-derived ethanol depends mostly on the corn crop output of the Midwest, which is generally a more risky outcome than is the international supply of oil. Based on data from 1960 to 2005, corn yields may readily decline by 11.9% in a given year, while the corresponding year to year equally likely decline for oil from the Middle East is 6.8%. In one out of every 20 years, corn yields can be expected to decline by 31.8%, while the corresponding oil decline would only be 14.9%. A further problem is that corn yields tend to fall if it is too hot in August. Such heat calls for more total energy use to cool homes and cars, which may result in more ethanol use when less future ethanol can be produced due to lower corn yields.
This same failure to create net additional energy also places limits on the argument that we can reduce the amount of money going to oil-rich Muslim countries where that money is used against us by Muslim terrorists and despotic governments by using more ethanol instead of oil. There may be some substitution of coal and natural gas for oil in the making of the ethanol, but these are often substitutes in other of our energy needs anyway. That is, coal and natural gas are used in many industrial processes and in generating electric power in competition with oil. If we use coal and natural gas to create ethanol, we increase their demand and their prices, which then makes oil look more attractive where it can be used as an alternative.
Ethanol has been touted as a means to reduce smog and pollution, as mentioned above. However, a 2006 study by Robert Niven of the Australian Defense Force Academy shows that E10 increases the total emissions of hydrocarbons and toxic compounds relative to gasoline, when evaporative emissions are fully accounted for. E85 is even worse. There is a slight advantage to using E10 with respect to greenhouse gas emissions, if you ignore the energy used to produce it in the first place, but it is microscopic at about a 1 to 5% level. This apparent low level advantage means that it costs about $250/ton to decrease greenhouse gases, according to the International Energy Agency. This is ridiculously expensive, and it actually is much more expensive given that this neglects the greenhouse gases emitted when using the other energy sources used to produce the ethanol. In fact, taking that into account will mean that the use of ethanol will create almost two times as much greenhouse gases as gasoline does.
A given volume of ethanol will produce about 66% as much energy as an equal volume of gasoline. This means that when ethanol is mixed with gasoline, a driver on the road must stop more often to refill his vehicle's tank. In the workplace, this is a cause of decreased productivity. For already busy people, this is a waste of time. For a given amount of transportation need, there must then be more fuel tankers on the road and on the rails and larger fuel storage facilities at refineries, shipping centers, and at the local gas stations to handle the larger volumes of fuel. There must also be more pumps and gas stations to pump it into vehicle tanks. Our time and scarce resources must be devoted to satisfying these requirements.
So, in the interest of a zero-sum game with respect to energy and an increase in greenhouse gases, we are converting valuable foods into vapors. What are the consequences of doing this?
Corn production for food purposes and for ethanol production use was subsidized, according to the Environmental Working Group, to the tune of $9.4 billion dollars in 2005. Note that this is larger than the ethanol subsidy numbers given above because it includes the normal subsidies for corn food production which does not go into ethanol. Corn for food is the most heavily subsidized of the major crops. This money is provided by heavier taxes and earns the taxpayer higher food prices in the grocery store, since some of it is in the form of price supports and it discourages productivity improvements. Corn costs more there as a result and so does corn syrup, corn oil, and meats such as beef, pork, and chicken which depend upon corn feed products very heavily. All the products with these as ingredients cost more because of these subsidies.
Distillers can produce 2.7 gallons of ethanol from one bushel of corn. American farmers produced 10.5 billion bushels of corn in 2006. If the entire corn crop of 2006 were turned into ethanol, only 28.3 billion gallons of ethanol would result. This would leave us short of the 36 bgy requirement for 2022. Of course, corn will still need to be used for food purposes in 2022 and the thought is that only 15 bgy of the required 36 bgy of ethanol will come from corn. Assuming that other ethanol sources are developed, this requires that the capacity to produce another 9.6 bgy of corn ethanol be developed by 2022. This requires an increase in corn production by 34% relative to 2006, while falsely assuming that our food needs will not increase also between now and 2022. This in turn means that huge tracts of farmland will either have to be diverted from growing other crops or from ranching or that much of the land once farmed long ago in the U.S. and now returned to forests will have to become farmland again.
Much of the land in the U.S. no longer farmed went out of production because it was less suitable for farming than the more efficient lands now being farmed. The loss of forests, which have increased greatly since the early 1900s, will be very substantial. These forests help to remove CO2 from the atmosphere as they grow and remove much more than does land planted in corn. So, those who believe that an increasing CO2 concentration in the atmosphere is a terrible thing, will see some negative effect here. The less suitable farm lands which will be returned to production will require larger amounts of fertilizer, pesticides, and water in general than does the land presently under till for corn. This means that the ethanol produced from this corn will cost more, that more pollution from fertilizer and pesticides will occur, and that more precious water will be used and contaminated. Even on optimal corn-growing farmland, it takes 1700 gallons of water to produce one gallon of ethanol. Another effect has already been observed: land will be planted in corn and rather than rotating with soybeans or another legume, it will be planted in corn again. This will mean that presently good farmland will either need more fertilizer or it will wear out. Meanwhile, the price of farmland suitable for growing corn has increased dramatically, which has increased the costs for those newcomers who would buy farmland to put to use in growing corn either for food or ethanol. The value of farmland in Iowa increased 18% in 2007.
From 2001 to 2006, the percentage of the U.S. corn crop used for ethanol production rose from 3% to 20%. As a result of limited increases in total corn production, the futures price of corn rose by 80% in 2006 alone. University of Minnesota economists C. Ford Runge and Benjamin Senauer wrote an article for Foreign Affairs entitled "How Biofuels Could Starve the Poor." They note that filling the gas tank of a SUV with pure ethanol made from corn takes 450 pounds of corn. This is enough calories to feed a person for a year. The price of beef, pork, and poultry rose more than 3% in the first 5 months of 2007. Tortilla prices rose 60% in Mexico, causing food riots. Butter prices increased 40% in Europe. Pork prices rose 20% in China. All this because the U.S. is the biggest exporter of food in the world. Much of our corn crop has always been exported, but now that it draws higher prices as future ethanol, it is boosting the cost of foods dependent upon corn around the world. Runge and Senauer believe 600 million additional people may go hungry by 2025 due to the increased use of corn to produce ethanol.
Dennis T. Avery, director of global food issues at the Hudson Institute, says "We would effectively be burning food as auto fuel in a world that is not fully well-fed now, and whose food demand will more than double in the next 40 years." Because of the recent advances in many Third World countries, 2 billion people are making the transition from grain diets to meat diets. It takes a lot of corn to feed livestock and to produce the meat they are seeking. The U.S. has been the biggest exporter of this meat and has the potential to profit greatly from the further growth of this market. That cannot happen if we shoot ourselves in the foot by making our meat prices too high due to our escalating corn costs. The market for exported corn products such as corn, corn oil, and high-fructose corn syrup and the products made from them (Coca-Cola, etc.) is also a large one. This is not good for either us or the rest of the world.
On top of this, we tax ourselves heavily to provide for the ethanol subsidies and protections, we endure higher car fuel prices, pay higher food prices, and we have to build new kinds of cars, new kinds of refineries, new storage tanks, new tanker trucks, new rail cars, we use more water, we cause more pollution, and we create more greenhouse gases. So, why do we do this when none of the widely claimed energy advantages hold water when examined? It is because the governments and the politicians who run them always want more power and are eager to hand out goodies to special interests such as ADM and the corn farmers in this case, as long as they can get away with selling a myth to the public.
The mandate for increased ethanol use is adding to the present forces pushing us toward a possible recession. It adds to fuel and food costs and causes much economic uncertainty about the future, which causes less business investment and encourages consumers to spend less on goods and services other than food and fuel. We must kill this ethanol myth. That a representative republic can fall for such a scam is disgraceful. We must prove that we can be fooled only sometimes and for awhile, but then we come awake and exercise our rational faculties and finally Stand Sure against the con artists.
Let us follow the story of Congress and their mandates for ethanol use and their subsidies to encourage its production and use. Archer Daniels Midland began pushing for the use of ethanol as a fuel additive to reduce pollution in the 1970s. In the early 1980s, they were producing 175 million gallons of ethanol a year. ADM established a close working relationship with Sen. Bob Dole (Rep., Kansas) and gave the Republicans more than $1 million in the 1992 election and Democrats about $455,000. Bob Dole then helped ADM and corn farmers to line up billions of dollars in subsidies and tax breaks. The Cato Institute estimated that almost half of the profits of ADM were the result of product sales protected by or or subsidized by government in 1995. The 10% ethanol and 90% gasoline mixture E10 was required, especially in the winter months, in areas deemed to have a smog problem, under the rationale that the ethanol additive burned more cleanly.
The 2005 Energy Policy Act requires refiners to use 7.5 billion gallons of biofuels and specifically 250 million gallons of cellulosic ethanol in 2012. This cellulosic ethanol is ethanol made from plants or plant parts other than the corn fruit and the sugar of sugar cane. In 2006, ADM produced more than 1 billion gallons of ethanol. 200 subsidies and tax breaks were providing between $5.1 and $6.8 billion to make sales of ethanol possible. In June, Congress passed The American Fuels Act of 2007, which had been introduced by Barack Obama (Dem., IL), Tom Harkin (Dem., IA), and Richard Lugar (Rep., IN) to mandate increased use of biodiesel and provides tax credits for the production of cellulosic ethanol. This law requires the production of 36 billion gallons of ethanol by 2022. Of this amount only 15 billion gallons of ethanol are expected to come from corn, since that will be a bit more than half the present corn crop. The remaining 21 billion gallons of ethanol and biodiesel must come from other sources, which have not been developed. When introduced, the proposed bill was even more outrageous: it called for a mandate of 60 billion gallons of biofuels by 2030! Former Sen. Edwards called for 65 billion gallons of biofuels by 2025. Sen. Clinton voted against ethanol 17 times before she began her presidential campaign and turned into a supporter. Sen. McCain, who had been a doubter, became more positive when his campaign was well underway. Obama, Edwards, Clinton, and McCain were driven by the desire for votes in the Iowa caucuses. President Bush has been an enthusiastic supporter since his 2006 State of the Union address.
None of the sources of ethanol or biodiesel are even close to being economical and competitive with fossil fuels and nuclear power. The least subsidized source is ethanol from sugar cane, but we grow little sugar cane in the U.S. Brazil grows more than any other country and produces the cheapest ethanol, but it is nonetheless heavily subsidized in Brazil where a dictator first established the ethanol use requirement in 1975. There they directly subsidize hydrous-ethanol (5% water), ban diesel-powered cars, put a 21.5% import duty on foreign ethanol, and provide an alcohol storage program. They also provided subsidies to car manufacturers who made cars capable of running on ethanol concentrations which started at 10% and grew to numbers as high as 26%, though this number varies through the 20 to 26% range under democratically elected governments. Because of this commitment to ethanol, Brazil has found that ethanol made from corn in the U.S. is cheaper than ethanol made from sugar cane in more marginal land brought under production for the purpose in Brazil. They import American ethanol, despite the protective tariff!
So where does ethanol production, essentially that from corn, stand in the U.S.? About 5.4 billion gallons per year (bgy) was produced in 2006. Most of this went into the E10 gasoline fuel mix, which is 90% gasoline. The Congressional mandate is for 9 bgy in 2008, 15.2 bgy in 2012, and finally 36 bgy in 2022. This is a hugely ambitious program and yet the 36 bgy will provide the energy equivalent of 7% of current oil use. And that figure is a figment of the imagination for a number of reasons which we will examine.
Ethanol from corn requires energy to produce it. This energy needs to be measured to understand what part of the enormous effort to create 36 bgy of ethanol will actually result in a net energy gain. What fraction of the 7% substituted for gasoline in cars can really be realized as new energy? Corn requires plowing, fertilizing, and harvesting, which commonly uses diesel fuel on the farm. The fertilizer requires that large amounts of natural gas be used to make it. This fertilizer then has to be transported to the farm. Further fuel is often used to irrigate the corn fields. The corn when harvested has to be delivered to the fermentation plants where it will be converted into ethanol and that process requires fuel to generate heat and energy to handle and move materials. Waste water has to be disposed of and cleaned up. Once the ethanol is made, it cannot be transported in relatively efficient gas pipelines because its water content makes it incompatible with the seals and other materials of pipelines. So, more expensive transport by truck and train is required.
Studies of the net gain in energy from ethanol vary, but the highest estimates are that it produces 1.3 times as much energy as it takes to obtain it. More realistic and recent estimates have tended to conclude that one gets about an equal amount of energy, so there is no net gain at all. A recent study by researchers at Cornell University and the University of California - Berkeley found that it took 29% more energy to produce ethanol from corn than it gave back! What is more, as more and more land is devoted to corn production for ethanol, more and more of the land will be less and less suitable and productive. The amounts of fertilizer and irrigation water needed will increase. The distance to markets may also increase. So more and more energy will be required and the process of producing net energy will become tougher and improbable. So the idea that ethanol is renewable energy is entirely wrongheaded. There is always an exchange of used coal, gasoline, diesel, and electric power for an approximately equal amount of energy in the form of ethanol.
In order to achieve this magnificent goal of zero net energy, we will soon be subsidizing the manufacture of ethanol and other biofuels to the tune of $8.6 billion per year. These subsidizes are further supplemented by tax-exempt bonds to finance ethanol plant construction, loan guarantees, state vehicle fleet purchases of biofuel-using vehicles, irrigation water subsidized by government, and the benefit of the state and federal mandates that require the use of ethanol whether it is economical or not.
This failure to create net additional energy using ethanol, makes a lie of the idea that ethanol will help to make the U.S. more independent of unreliable and unfriendly governments with control of oil resources. There are still more problems with this argument. First, if the object is to have more options for energy, then we clearly should not exclude Brazilian ethanol from the U.S. market by imposing a $.54 per gallon tariff on it. Second, corn-derived ethanol depends mostly on the corn crop output of the Midwest, which is generally a more risky outcome than is the international supply of oil. Based on data from 1960 to 2005, corn yields may readily decline by 11.9% in a given year, while the corresponding year to year equally likely decline for oil from the Middle East is 6.8%. In one out of every 20 years, corn yields can be expected to decline by 31.8%, while the corresponding oil decline would only be 14.9%. A further problem is that corn yields tend to fall if it is too hot in August. Such heat calls for more total energy use to cool homes and cars, which may result in more ethanol use when less future ethanol can be produced due to lower corn yields.
This same failure to create net additional energy also places limits on the argument that we can reduce the amount of money going to oil-rich Muslim countries where that money is used against us by Muslim terrorists and despotic governments by using more ethanol instead of oil. There may be some substitution of coal and natural gas for oil in the making of the ethanol, but these are often substitutes in other of our energy needs anyway. That is, coal and natural gas are used in many industrial processes and in generating electric power in competition with oil. If we use coal and natural gas to create ethanol, we increase their demand and their prices, which then makes oil look more attractive where it can be used as an alternative.
Ethanol has been touted as a means to reduce smog and pollution, as mentioned above. However, a 2006 study by Robert Niven of the Australian Defense Force Academy shows that E10 increases the total emissions of hydrocarbons and toxic compounds relative to gasoline, when evaporative emissions are fully accounted for. E85 is even worse. There is a slight advantage to using E10 with respect to greenhouse gas emissions, if you ignore the energy used to produce it in the first place, but it is microscopic at about a 1 to 5% level. This apparent low level advantage means that it costs about $250/ton to decrease greenhouse gases, according to the International Energy Agency. This is ridiculously expensive, and it actually is much more expensive given that this neglects the greenhouse gases emitted when using the other energy sources used to produce the ethanol. In fact, taking that into account will mean that the use of ethanol will create almost two times as much greenhouse gases as gasoline does.
A given volume of ethanol will produce about 66% as much energy as an equal volume of gasoline. This means that when ethanol is mixed with gasoline, a driver on the road must stop more often to refill his vehicle's tank. In the workplace, this is a cause of decreased productivity. For already busy people, this is a waste of time. For a given amount of transportation need, there must then be more fuel tankers on the road and on the rails and larger fuel storage facilities at refineries, shipping centers, and at the local gas stations to handle the larger volumes of fuel. There must also be more pumps and gas stations to pump it into vehicle tanks. Our time and scarce resources must be devoted to satisfying these requirements.
So, in the interest of a zero-sum game with respect to energy and an increase in greenhouse gases, we are converting valuable foods into vapors. What are the consequences of doing this?
Corn production for food purposes and for ethanol production use was subsidized, according to the Environmental Working Group, to the tune of $9.4 billion dollars in 2005. Note that this is larger than the ethanol subsidy numbers given above because it includes the normal subsidies for corn food production which does not go into ethanol. Corn for food is the most heavily subsidized of the major crops. This money is provided by heavier taxes and earns the taxpayer higher food prices in the grocery store, since some of it is in the form of price supports and it discourages productivity improvements. Corn costs more there as a result and so does corn syrup, corn oil, and meats such as beef, pork, and chicken which depend upon corn feed products very heavily. All the products with these as ingredients cost more because of these subsidies.
Distillers can produce 2.7 gallons of ethanol from one bushel of corn. American farmers produced 10.5 billion bushels of corn in 2006. If the entire corn crop of 2006 were turned into ethanol, only 28.3 billion gallons of ethanol would result. This would leave us short of the 36 bgy requirement for 2022. Of course, corn will still need to be used for food purposes in 2022 and the thought is that only 15 bgy of the required 36 bgy of ethanol will come from corn. Assuming that other ethanol sources are developed, this requires that the capacity to produce another 9.6 bgy of corn ethanol be developed by 2022. This requires an increase in corn production by 34% relative to 2006, while falsely assuming that our food needs will not increase also between now and 2022. This in turn means that huge tracts of farmland will either have to be diverted from growing other crops or from ranching or that much of the land once farmed long ago in the U.S. and now returned to forests will have to become farmland again.
Much of the land in the U.S. no longer farmed went out of production because it was less suitable for farming than the more efficient lands now being farmed. The loss of forests, which have increased greatly since the early 1900s, will be very substantial. These forests help to remove CO2 from the atmosphere as they grow and remove much more than does land planted in corn. So, those who believe that an increasing CO2 concentration in the atmosphere is a terrible thing, will see some negative effect here. The less suitable farm lands which will be returned to production will require larger amounts of fertilizer, pesticides, and water in general than does the land presently under till for corn. This means that the ethanol produced from this corn will cost more, that more pollution from fertilizer and pesticides will occur, and that more precious water will be used and contaminated. Even on optimal corn-growing farmland, it takes 1700 gallons of water to produce one gallon of ethanol. Another effect has already been observed: land will be planted in corn and rather than rotating with soybeans or another legume, it will be planted in corn again. This will mean that presently good farmland will either need more fertilizer or it will wear out. Meanwhile, the price of farmland suitable for growing corn has increased dramatically, which has increased the costs for those newcomers who would buy farmland to put to use in growing corn either for food or ethanol. The value of farmland in Iowa increased 18% in 2007.
From 2001 to 2006, the percentage of the U.S. corn crop used for ethanol production rose from 3% to 20%. As a result of limited increases in total corn production, the futures price of corn rose by 80% in 2006 alone. University of Minnesota economists C. Ford Runge and Benjamin Senauer wrote an article for Foreign Affairs entitled "How Biofuels Could Starve the Poor." They note that filling the gas tank of a SUV with pure ethanol made from corn takes 450 pounds of corn. This is enough calories to feed a person for a year. The price of beef, pork, and poultry rose more than 3% in the first 5 months of 2007. Tortilla prices rose 60% in Mexico, causing food riots. Butter prices increased 40% in Europe. Pork prices rose 20% in China. All this because the U.S. is the biggest exporter of food in the world. Much of our corn crop has always been exported, but now that it draws higher prices as future ethanol, it is boosting the cost of foods dependent upon corn around the world. Runge and Senauer believe 600 million additional people may go hungry by 2025 due to the increased use of corn to produce ethanol.
Dennis T. Avery, director of global food issues at the Hudson Institute, says "We would effectively be burning food as auto fuel in a world that is not fully well-fed now, and whose food demand will more than double in the next 40 years." Because of the recent advances in many Third World countries, 2 billion people are making the transition from grain diets to meat diets. It takes a lot of corn to feed livestock and to produce the meat they are seeking. The U.S. has been the biggest exporter of this meat and has the potential to profit greatly from the further growth of this market. That cannot happen if we shoot ourselves in the foot by making our meat prices too high due to our escalating corn costs. The market for exported corn products such as corn, corn oil, and high-fructose corn syrup and the products made from them (Coca-Cola, etc.) is also a large one. This is not good for either us or the rest of the world.
On top of this, we tax ourselves heavily to provide for the ethanol subsidies and protections, we endure higher car fuel prices, pay higher food prices, and we have to build new kinds of cars, new kinds of refineries, new storage tanks, new tanker trucks, new rail cars, we use more water, we cause more pollution, and we create more greenhouse gases. So, why do we do this when none of the widely claimed energy advantages hold water when examined? It is because the governments and the politicians who run them always want more power and are eager to hand out goodies to special interests such as ADM and the corn farmers in this case, as long as they can get away with selling a myth to the public.
The mandate for increased ethanol use is adding to the present forces pushing us toward a possible recession. It adds to fuel and food costs and causes much economic uncertainty about the future, which causes less business investment and encourages consumers to spend less on goods and services other than food and fuel. We must kill this ethanol myth. That a representative republic can fall for such a scam is disgraceful. We must prove that we can be fooled only sometimes and for awhile, but then we come awake and exercise our rational faculties and finally Stand Sure against the con artists.
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