Today’s Washington Post Editorial  - http://www.washingtonpost.com/wp-dyn/con…

is the best written negative analysis of biofuels in the press - this out of an avalanche of such articles. This latter fact makes us feel that there might be again a concerted effort of the oil industry to fight of any proposed initiative to make us less dependent of our addiction to oil. Because of the high quality of this editorial, we chose it as the vehicle to take up this topic one more time. We were involved in this thirty years ago, our information is available in Reports from Congressional hearings, we tried to explain the right way of how to use ethanol those days - but to no avail. The oil lobby and the agricultural industry lobby in Washington made legislators and press close their ears then, and try to cover our eyes now.

The main points of the argument were as follows:

The problem that there is hunger in the world is not because there is no potential to grow food - but rather because there are farm policies in place - in the rich industrialized countries that have also worked out the efficient agricultural industry mechanization, and then instituted policies of subsidization of this industry -  with which developing countries could not compete. Even foreign aid programs that were plain give-away of food programs - resulted in giving “fish to the hungry rather then allowing them to fish.” Agriculture in developing countries could not compete with these give-aways and the local family farmers could only be subsistence farmers but had little chance in selling their products even in the local market - their low price was still not right. Then to top this problem, many of these developing countries became single commodity exporters and the land literally “vanished” before the eyes of these local farmers. Now that process continues into the new biofuels area. On the other hand - think of the Soviet Ukraine after the imposed Kolhosisation - when it was the subsistence farming on the small private plots that produced the food that did not come from the large collective farm, or of India that was a country of need of food hand-outs until, for political reasons (India got too close to the Soviets in those Cold War Days) the US cut off the hand-outs and you know what happened? India had an agricultural revolution and started to produce its own food - even exporting some. So first lesson here is that agricultural policy has to do with availability of food in poorer countries, rather then the ubiquitously quoted competition for land use.

Further, we testified those years that ethanol could have been produced in the US from “corn that was not grown.” Now, we knew this sounded insane - but the point was that we supported in the US, Germany, Austria, France … the price of  the commodity by dishing out subsidies for NON-PRODUCTION - the so called “set-asides” - and we said that we could produce the needed ethanol on those set asides and from those subsidy moneys we could effectively run an economically neutral program that - in those days - would not have needed any subsidies for the commercialization of the ethanol.

Now turning further to economics - WE NEVER SPOKE OF ETHANOL-FUELS - BUT OF ETHANOL ADDITIVES TO GASOLINE. This because we found out that ethanol was the most beneficial octane-boosting additive to gasoline at a time that the world was trying to eliminate the dependence on Tetra-Ethyl Lead  - that famous lead compound that was found detrimental to childrens’ learning capabilities. As three percents of ethanol in gasoline increase octane value by one point, and usually the refinery product was short by 3 to 5 octane points - this meant that somewhere between 9 - 15 % of ethanol in gasoline would have been needed - dependent on the refinery and on its feedstock.

Then further, as we anticipated that MTBE will be oulawed also, and that eventually, for reasons of being carcinogenic, the concentration of aromatics in gasoline, will also have to be reduced, and the fact that other heavy metal organic compounds will also not be allowed - so ethanol is indeed the only possible high octane additive to gasoline.

If not ethanol, then the oil industry has to establish a “reforming” capacity to finish up the low octane gasoline that comes out from the refinery.  Reforming means to change the molecular structure of the hydrocarbon - so there are more cross linked or aromatic compounds (like the benzenes) in the gasoline. This is an energy intensive process that requires normally additional 6% crude in the preparation of the final product. Now if those 6% crude can be saved by replacing - let’s say 10% of the original low octane gasoline with ethanol, this obviously enhances the economic value of the ethanol by 60%  - or its economic value is then 160% of  the price of gasoline!

Above was only the begining of our calculation of factors that we presented in the 1977-1985 years before US Congress and the US General Accountant’s office. The factor 0f 1.6 gets larger when one looks into the practical use of a motor vehicle fuel in terms of miles/gallon rather then the petroleum industry, or chemical engineering professors of thermodynamics view, that uses just BTU calculations pointing a finger at the fact that ethanol has only 2/3 the calorimetric value of gasoline. On the other hand, thanks to the fact that ethanol has an octane value of 114 vs. the low octane original refinery stream gasoline of 85, and the factual experience that the mixture with  the enhanced octane value has obtained also a higher resultant in miles/gallon terms, this gives us also an additional factor in favor of the mixtures - so that the economics of low ethanol-gasoline mixtures can be calculated with a factor pushing 2.0 - now this is not true if one insists in using ethanol as an outright fuel in the E85 form - which contains 85% ethanol mixed with 15% gasoline. In this case indeed the lower calorimetric value of ethanol, what our academic friends love to call “energy content” takes over resulting in unfavorable economics as obtained in terms of miles/gallon for this high ethanol case. The petroleum replacement value of this high mixture is thus much less, and this has then less opposition from the petroleum industry.

We know that above may seem complicated - but it is crucial to understand if we want to get maximum advantage of a smaller supply of ethanol. The market is still huge - this because we are talking of somewhere around 10-13% of the total gasoline pool of a billion gallons of gasoline used in the US per day.

Further on, looking at the Washington Post editorial. We clearly agree that cutting down rainforests is harming our future. We should not encourage this sort of product. But by mentioning above problem in order to badmouth the whole idea of recycling CO2 with the help of biomass is ridiculous - or rather a new oil industry ploy on creating mental obstacles to our decreasing their markets. A case in point is our story from Austria.

Back in the early 1980’s Austria had also a set-aside agricultural policy for decreasing the area for growing food crops. The Austrian General Counsel in New York, Ambassador Thomas Novotny, asked me about those Washington hearings, and sent the material to the office of Chancellor Kurt Kreisky. Low and behold, the Government announced the intention of producing ethanol to be used in motor-fuel mixtures. The following day, The Kurier, a main paper in Austria had a long frontpage title “GEMMA BROTT VERBRENNEN” - we are going to burn bread. Quite obvious that was the end of the ethanol program but not the end of biofuels in Austria. Actually, wise people realised that the issue was farm policy and excess of land availability. The only problems was the kind of crop. OK - if you cannot burn bread let us look what you can burn without serious resistance. The lowly ricinus plant, that produces oil used as a laxative, will not be missed - so - what about biodiesel made of ricinus. And that was a great idea - it took off without political problems.

As an aside, let me also mention Mr. Hermann Kahn, my mentor from the Hudson Institute, he said that if you want the maximum calorimetric value from corn or wheat - just burn it straight instead of coal. And you know what - years later Sweden decide to do just that - burn wheat instead of coal.

But then, all of the above is just the tip of the iceberg. Nobody in his right state of mind will advocate the use of  biofuel in order to continue to support our wasteful way of doing things. What is needed is a CULTURE CHANGE that leads us to ENERGY EFFICIENCY and CONSERVATION. Then for what we find that we must have in terms of energy - we try the maximum substitution with Energy from RENEWABLE SOURCES. There is quite a list of such sources and Iceland has already achieved the amazing result of being already today - a country that has no GHG emissions. It has achieved this mainly by using geothermal, solar, and wind energy. They try to go to electric systems and have very little biofuels in that mix. If there is a will there is a way. Good analysis will show the way. It is important to know where the obstacles lay, and we can avoid such obstacles if we only are ready to let go from oil industry and agricultural industry interests. Thank you Washington Post for printing the rules of the game, but please enlarge your field of vision by incorporating further views - the views that come from outside above two powerhouse networks in the Washington Lobby-world.
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The Problem With Biofuels -More proof that there are no easy solutions to climate change.

Wednesday, February 27, 2008 - A Washington Post Editorial.

AS THE United States searches for alternative ways to feed its addiction to petroleum, ethanol and other biofuels derived from organic material have been considered a miracle motor vehicle elixir. The energy bill signed by President Bush in December mandates that at least 36 billion gallons of biofuels a year be used by 2020. Yet separate studies released this month by Princeton University and the Nature Conservancy reveal that biofuels are not a silver bullet in the battle against global warming. In fact, they could make things worse.

Corn and sugar cane are common sources of ethanol. Aside from emitting fewer greenhouse gases than coal or oil when burned as fuel, these biofuel crops remove carbon from the atmosphere while they are growing — thus making them nearly carbon-neutral. But the studies show that ethanol may be even more dangerous for the environment than fossil fuels are. As the Princeton study points out, clearing previously untouched land to grow biofuel crops releases long-sequestered carbon into the atmosphere. While planting corn and sugar cane in already tilled land is fine, a problem arises when farmers churn up new land to grow more fuel or the food and feed displaced by biofuel crops.

The impact of these land-use changes is enormous. As the study from the Nature Conservancy warns, “converting rainforests, peatlands, savannas, or grasslands to produce biofuels in Brazil, Southeast Asia and the United States creates a ‘biofuel carbon debt’ by releasing 17 to 420 times more carbon dioxide than the fossil fuels they replace.” There are other negative effects. Massive amounts of water are needed to irrigate cornfields, setting up potential competition between farms and homes. The runoff of pesticides and nitrogen-based fertilizers used by farmers could lead to increased pollution and oxygen-depleted waterways. The natural gas used to make the fertilizer adds to the carbon deficit created by biofuels.

An essay in the May-June 2007 issue of Foreign Affairs by two professors from the University of Minnesota highlighted still another problem: The biofuels craze could starve people. “By putting pressure on global supplies of edible crops, the surge in ethanol production will translate into higher prices for both processed and staple foods around the world,” they wrote. “If oil prices remain high — which is likely — the people most vulnerable to the price hikes brought on by the biofuel boom will be those in countries that both suffer food deficits and import petroleum.”

The problems with corn-based ethanol, long regarded as a transitional fuel source, have been debated for years. One alternative is to squeeze ethanol out of cellulose from switch grass, cornhusks and other biomass sources. But because cellulosic ethanol remains experimental, it might be years before it makes it from the laboratory to the gas tank. It all adds up to another example that there is no quick, cheap and easy way to confront the menace of global warming.