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New Biofuels Alternative Could Upend Oil Markets

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Biofuel Breakthrough: Production Jumps 64%

Cellulosic ethanol production jumped 64…

Everyone is Lying About Ethanol

Let’s start with a lie, albeit most likely the lowest level of lie, everyone is lying about ethanol.  It has gotten so that the lies are pervasive, even such that John Stossel at Fox News is making quotes and suggesting that ethanol is a huge political boondoggle.

One such silliness is that Americans subsidize ethanol at the cost of $1.76 a gallon.  Gee, at 900,000 barrels a day or 37,800,000 gallons a day times 365 days times 1.76 gets to nearly $25 billion a year.  I think we’d notice that much more than the silliness we see floating out there now.  Anti ethanol is looking a lot like those incredible global warming scare tactic studies.

Actually the main cash matter is the ‘blender’s tax credit’ to the folks who mix up gasoline products for weather blends, EPA regulations, fuel additives and ethanol.  Those businesses range from family owned to big oil run operations.  The tax credit offsets their tax bill.  That permits the profit to be used for other stuff, like lower prices, dealing with the improvements for mandated fuel mixes, ethanol and additives.  That tax credit makes its way to you as a lower price and better product.  It’s a lot of money, almost $19 million per day, most of which shows up as a lower price to you.

On the other hand, 900,000 barrels of gasoline at this writing is $2.42 a gallon wholesale sourced from crude oil saving (900,000 x .75 BTU correction x 42 gallons x $2.42) over $68 million in imported gasoline costs every day. That’s better than 3.5 to 1 on the tax loss to benefit the economy for the blender to consumer part of the market alone.  This crude and gasoline displacement drives down the price of crude oil.  Maybe not a lot, but as U.S. ethanol closes in on 1 million barrels a day, that million barrels adds to the whole energy supply market keeping the next crude oil price run up further away.  What’s that worth?  – Likely many more months before the crude market skyrockets off again and very likely not as high as it would go or for as long without ethanol.

Beyond that ethanol-gasoline mixes offer the combustion engine a benefit.  The ethanol combustion byproducts are high temperature steam and CO2.  The steam has a cleaning effect on the inside of the combustion chamber and the exhaust and catalytic converter.   Your car lasts longer and needs less pollution control maintenance.  But the chemistry of ethanol and its ability to absorb water bedevils those with cheap engines.

Looked at with some sense, ethanol is looking better than the news and naysayers would have you believe.

That’s just for today. The future has some potential of great interest. Right now the U.S. corn growers with more than 30 years invested have gotten us here.  The production level is finally high enough that a bit of the production (about a million barrels per month) is going for export, offsetting the imported oil bill and adding to the pressure on oil prices.  The use of ethanol for combustion engines across the planet could displace as much as 7 million barrels a day of oil production destined for gasoline at an E-10 rate.

Further out in time ethanol fuel cells should get practical.  A fuel cell would use the ethanol so the energy available for work could be 4 to 5 times higher than burned in a combustion engine.  It would take many years, but a widespread adoption of ethanol fuel cells and increased production would be worth the energized work of about 30 million barrels of daily oil production.  Are those incentives looking better now?

But the corn based ethanol industry is planting the seeds of its own demise.  While much of what’s been lightly covered here is lost in the popular press and blogosphere, it’s definitely not lost on the ethanol and other biofuel production researchers and investors. You want to damage research into alternative fuels, destroy the base that corn ethanol has built. It would be better to expand the blender’s tax credit to include other biofuels than kill it.

In fact it’s easy to project a development of an energy industry based on major increases in efficiency such as fuel cells and major increases in supply sourced from for example, micro and macro algae. Its actually hard to imagine after a decades passing how agriculture will compete with aquaculture production.  One sees lots of basic research and development into ethanol production and the feedstock sources, but essentially nothing on corn based ethanol production.  That’s a strong hint about the future.

People say the darnedest things.  One learns to expect that.  It’s gotten so that the press and media is looking for viewers and will strive for the numbers, to hell with getting the story right or complete enough for sound analysis.  Most bloggers work at attracting people by the emotions, so they too are far from competent advisers on how consumers should build expectations.

That makes researchers, businesses and investors the ones to watch.  They’re not satisfactory sources, much information is proprietary and near sightedness tends to keep secrecy highly valued.  But there is over 80 million barrels worth of oil energy market out there take, and to ignore ethanol, set it back or choose not to incentivize or keep breakthroughs secret keeps the potential ‘pie’ smaller than it could be.

So, while the whirl of mis and dis information about the alcohols swirls about the world of media and the Internet, keep in mind the theoretical raw numbers.  Today’s daily energy of 80 million barrels of oil could be replaced with fuel cell technology powered by less than 20 million barrels of ethanol.  The U.S. 25% share of today is already nearly 20% covered.

For all the lies, this page included, a truth remains, as the energy and fuel demands of the future need addressed, humanity will figure something out – and the ethanol industry will certainly be involved in a major way.  The alcohol methanol has an advantage for fuel cells, butanol has an advantage for combustion engines, yet standardizing on one fuel, ethanol – is an advantage as well.

By. Brian Westenhaus

Source: A Look at the Ethanol Lies




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  • Anonymous on January 05 2011 said:
    Obviously ethanol has a part to play in the optimal energy picture of the future. The problem is how much. That is something my students will be asked to think about, assuming that the ignoramuses allow me to teach energy economics again. I might even think about it myself, if the oil price does again what it did in 2008.
  • Anonymous on January 05 2011 said:
    Ethanol free fuel in not an optionGasoline requires an oxygenator for it to burn completely in the engine cylinders and ethanol is by far the lowest price, safest and cleanest oxygenator available. Ethanol blended fuels cause complete combustion of gasoline reduces carbon monoxide and other harmful emissions. Before ethanol was added to gasoline to raise the oxygen content, oil companies added MTBE to raise the oxygen content. Gasoline blended with MTBE (reformulated gas) has around the same BTUs as ethanol blended gasoline (E10), so again the less BTU argument is baseless. MTBE is a known carcinogenetic that has contaminated ground water and drinking water for over 15 million Americans.
  • Anonymous on January 05 2011 said:
    Who needs blender pumps when you can blend your own?If every driver added one gallon of E85 to their tank every fill up we would use every drop of ethanol produced in this country and our dependence on foreign oil would further decline. I know people who add ethanol to their tank every time they fill up. Tests have shown that any vehicle can use more than 10% ethanol. They start by adding one gallon of E85 and then fill up the rest of the tank with regular E10. Just add the ethanol side of the equation. One gallon of E85 + thirteen gallons of E10 (85 + 130) = 215. Since you used a total of 14 gallons, divide 215 by 14 and you get 15.35 or 15.35% ethanol. Others add two gallons of E85 (2 x 85) + twelve gallons of E10 (170 + 120) = 290. 290 / 14 (total gallons of fuel) = 20% ethanol. Depending on what year vehicle you have, you may be able to use up to E50.
  • Anonymous on January 06 2011 said:
    E10 itself is extremely destructive to over $2 trillion of American vehicles, boat motors, ATVs, motorcycles, and open-cycle engines. This is according to the auto and motor manufacturers, the American Motorcycle Association, and the Outdoor Power Equipment Institute. Even the proponents of ethanol admit the incompatibility of ethanol to many metals, plastics, and elastomerics.On a personal note, my 2000 Town & Country van fuel line connection broke from E10 embrittlement, my Husqvarna chainsaw clutch engages during idling (ethanol burns hotter), my HomeLite tool fuel line dissolved in the fuel tank which then leaked fuel in my garage, my 50HP boat motor suffered damage, and my generator won't start if the E10 fuel is a few months old. Further, when running for the 2008 state legislature, a WA state Dept of Ecology official told me that any more than 2% ethanol in the fuel and Seattle exceeds EPA Ozone Attainment levels. So ethanol kills.
  • Anonymous on January 08 2011 said:
    I don't want to run my engine on corn.Oh wait, I have no choice. I live in America, home of the free.
  • Anonymous on January 10 2011 said:
    I don't buy the "$68 million in imported gasoline costs" savings claim, since the amount consumers pay for the ethanol that replaced the imported gasoline is never mentioned. That aside, the author has a point in claiming that alcohols should have a role in our vehicle fuel supply; I was glad to see the mention of methanol in that discussion (http://oilprice.com/components/com_jcomments/images/smiles/smile.gif). But a government policy which favors ethanol over methanol is probably worse than nothing. To deal with the almost inevitable escalation in the price of oil, we need engines which can run reliably and efficiently on gasoline, ethanol or methanol, the later of which can be made from grass clippings, waste wood, coal, methane, even surplus electricity. Cars with protected fuel systems and variable compression ratios could handle any mix of these fuels; short of that, subsidizing ethanol is likely to cost more than it saves.
  • Anonymous on March 10 2011 said:
    We need for motorcycle, aircraft, motorboat, and chainsaw/weedwhacker engines to be redesigned to withstand ethanol. That would resolve objections raised by various ethanol opponents. One thing nobody above pointed out is that ethanol has an antiknock (octane) rating of well over 100, so as far as that goes it would be good for motorcycles which need 91 octane gasoline to run properly. Aircraft piston engines require 100 octane, and its very hard to get that without using a little tetraethyl lead. So its especially desirable for piston-engine aircraft and fuel systems be redesigned to withstand ethanol and butanol, which I hope can someday be producible from biomass at a practical cost.
  • Anonymous on March 11 2011 said:
    I still think we could fuel the USA and the economic recovery by switching to a natural gas based energy systems. Transportation included, of course
  • Anonymous on March 13 2011 said:
    You are certainly right, Bill, if you are thinking in terms of many years - or possibly many many years. Things dont happen in the real world the way they do in the diagrams in the first part of your Econ 101 textbook.
  • Damon Lee on May 03 2014 said:
    Lies? Ethanol damages engines and fuel delivery systems, causing costly repairs each year. Ethanol receives huge government subsidies, if it were worth it's salt, it could stand on it's own without tax dollars having to lend support. It takes a gallon of gas to produce five quarts of ethanol, a net of one quart gain. Most ethanol in the US is produced from corn, which basically rapes the land of nutrients and moisture, therefore needing huge amounts of fertilizer and irrigation to grow.. Runoff from this damages the water supply. So, in effect it's not the win - win they, or you, want us to think.

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