Biofuel Industry – No Money, No Respect

Biofuel Industry – No Money, No Respect

Ethanol Bankruptcies

Ethanol Bankruptcies

By John Addison (5/8/09).

For the moment, the price at the pump is reasonable. A spike in demand or a terrorist disruption, however, will quickly remind us that we are desperately dependent on oil as we continue to consume 140 billion gallons of gasoline per year. Even in these recessionary times of moderate demand, we are running out of easy to extract oil from dessert sands. We are turning to sources of unconventional oil, such as tar sands in Canada, to produce oil with ever increasing greenhouse gas emissions.

For a while corn ethanol looked like a promising way to end our addiction to oil. Now we are like the character in a Woody Allen comedy who explains, “I used to be a heroin addict; now I’m a methadone addict.” At a time when a billion people go hungry, many as a result of disappearing water on this heating planet, fuel from food is not the answer.

Needed is fuel from wood and waste, not food and haste. Some of the world’s best minds are focused on fuel from cellulosic and waste sources, in some cases from biological sources that remove CO2 from the air and enrich depleted soil. I am writing this article from the 31st Symposium on Biotechnology for Fuels and Chemicals sponsored by NREL. 800 global bioscientists have gathered in San Francisco to share their research and showcase their progress.

Many at the conference expressed concern and discouragement. Companies that were once darlings of Wall Street have gone bankrupt. Dozens of ethanol plants have closed as oil prices dropped. Many promising second generation plants cannot get built due to lack of project financing. People with the money see the risk as too high.

There continue to be zero commercial scale (20-million gallon per year and bigger) cellulosic ethanol plants, despite past glowing press releases that declared that they would now be running.

The biofuels industry is also under attack due to food-from-fuel and land use issues. Over one billion people are hungry or starving. Agricultural expert Lester Brown reports, “The grain required to fill an SUV’s 25-gallon tank with ethanol just once will feed one person for a whole year.” Scientific American: Could Food Shortages Bring Down Civilization?

Europe, now California, and soon many U.S. states, now insist that land use must be considered in evaluating biofuels.

During the middle of the conference, a workshop for the media was held. The theme of the workshop quickly became clear – the industry problems were the fault of regulators and we the press.

Professor Bruce Dale, Michigan State University, dismissed corn/soy land use change as an “emotional issue.” He continued, “The California Low Carbon Fuel Standard is intellectually bankrupt.” To demonstrate the flaw of land use, he stated that replacing a gasoline powered vehicle with an electric vehicle would only increase the demand for coal power and therefore do nothing to reduce greenhouse gases.

The example is quite flawed. Automakers consistently tell me that their gasoline powered vehicles are about 15 percent efficient and their electric vehicles are 60 to 70 percent efficient. EVs need much less energy.  Even if you could find an EV powered purely with coal, it would produce less lifecycle emissions than a comparable gasoline or corn ethanol fueled vehicle. According to the latest figures published by the U.S. Energy Information Administration (EIA), non-hydro renewable sources of electricity enjoyed double-digit growth during the past year while coal was down by 1.1 percent. Incremental demand for electricity is bringing more renewable energy on-line.

In fact, the California Low Carbon Fuel Standard (LCFS) is based on the peer-reviewed work of scientists using Argonne National Labs GREET model. The work, industry comments, and findings are all available at http://www.arb.ca.gov/fuels/lcfs/lcfs.htm

The LCFS encourages the reduction of greenhouse gas emissions per unit of energy delivered to the wheels of vehicles. The scientific analysis behind the LCFS includes these examples of grams of CO2e emissions per mega joule of energy:

Ø    Gasoline    Oil Refined    92
Ø    Diesel    ULSD Refined    71
Ø    Diesel    Coal-to-Liquid    167
Ø    Biodiesel    Midwest Soy    30
Ø    Ethanol    Corn with Coal Electricity    114
Ø    Ethanol    Cellulosic from Poplar Trees    -12
Ø    Electricity    California Average    27

If the biofuels industry sees a future in biodiesel and cellulosic ethanol, the industry should be encouraged by the findings of the scientists contributing to the LCFS. On the other hand, if the industry is only betting its future on corn ethanol, then the regulation is a threat.

LCFS will not help the expansion of E85 stations for flexfuel vehicles. For the 2009 model year, the best rated car running on E85 in the United States was the Chevrolet HHR, with a United States EPA gasoline mileage rating of 26 miles per gallon, and an E85 rating of only 19 miles per gallon – and that’s the best from Detroit with mileage on all other U.S. flexfuel vehicles being worse. In other words, if you passed on using E85 and drove a hybrid with good mileage, you would double miles per gallon and produce far less greenhouse gas emissions than any U.S. flexfuel offering. Top 10 Low Carbon Footprint Four-Door Sedans for 2009

While the press was being scolded and air regulators were being metaphorically burned at the stake, most conference attendees had an afternoon to enjoy San Francisco. Many traveled using electric-powered buses and the hydro powered BART rapid transit system that carriers 100 million riders annually. So much for the press conference dismissing electric powered transportation as not being feasible.

Although attacking regulators, environmentalists, and advocates for the hungry will not save the biofuel industry, the federal government may save it. As the conference unfolded in California, a major announcement was made in Washington, DC, by U.S. Secretary of Energy Steven Chu when he announced that $786.5 million would be made available to accelerate advanced biofuels research and to help fund commercial-scale biorefinery demonstration projects.
One irony for the biofuel industry is that as oil prices increase, their economic model improves, but consumer demand for fuel moderates as consumers drive fewer miles, use more public transportation, and soon switch in growing numbers to electric vehicles. For decades, however, fuel will be in demand for many passenger vehicles, heavy-vehicles, long-distance goods movement, ships and airplanes. The opportunity is ripe for delivering fuel with lower lifecycle emissions. Promising cellulosic biofuel companies will be covered in my next article.

John Addison publishes the Clean Fleet Report. He is the author of a new book about the future of transportation – Save Gas, Save the Planet.

California’s Low Carbon Diet

California’s Low Carbon Diet

Beach partyWhen Coke and Pepsi were in the middle of their diet wars, California was an early battle ground. It is a state which tends to do much in excess, including drinking colas. In fact, only a handful of countries spend more money on beverages. Parties of happy and surprisingly fit youth were shown on TV commercials drinking their beverage of choice.

Now millions of Californians are being targeted as early adopters for a low carbon fuel diet. More miles, less carbon emission. It is the law. Executive Order S-1-07, the Low Carbon Fuel Standard (LCFS), calls for a reduction of at least 10 percent in the carbon intensity (measured in gCO2e/MJ) of California’s transportation fuels by 2020. Low Carbon Fuel Standard Program

Successful implementation of the LCFS will be critical to California’s even more ambitious law, the California Global Warming Solutions Act (AB-32), which requires California’s 2020 greenhouse gas emissions to not exceed 1990 emissions. The challenge is that in 2020, California’s population will be double 1990.

Because transportation is the main source of greenhouse gases in California, it is urgent that Californians use vehicles with better miles per gallon and that less greenhouse gases be emitted from the use of each gallon of fuel.

The world will learn from the successful implementation of LCFS because gasoline and diesel are currently becoming more carbon intense. There has been a shift from oil that is easy to get, to extraction and refining that increases greenhouse gases, as we make gasoline from tar sands, coal-to-liquids, and a future nightmare of shale oil. For example, monster earth movers strip-mine northern Alberta, extracting tar sands. Elizabeth Kolbert reported in the New Yorker that 4,500 pounds of tar sand must probably be mined to produce each barrel of oil. The converting of tar sands to petroleum will require an estimated two billion cubic feet of natural gas a day by 2012. Carbon intensity includes all the emissions from the earth movers and all the natural gas emissions from refining.

“All unconventional forms of oil are worse for greenhouse-gas emissions than petroleum,” said Alex Farrell, of the University of California at Berkeley. Farrell and Adam Brandt found that the shift to unconventional oil could add between fifty and four hundred gigatons of carbon to the atmosphere by 2100. Article

So, how can California reduce the carbon emission from fuel use? As a major agricultural state, E10 ethanol will be part of the solution. E10 can be used in all gasoline vehicles including 40 mile per gallon hybrids and in the new 100 mile per gallon plug-in hybrids being driven by early adaptors. Higher percentage blends of next generation ethanol are even more promising. Biodiesel is better at reducing carbon intensity than corn ethanol. Most heavy vehicles have diesel engines, not gasoline. Exciting new European diesel cars are also starting to arrive.

There are over 25,000 electric vehicles in use in California. Heavy use of electricity for fuel would take California far beyond the minimal target of a ten percent reduction in carbon intensity. This is especially true in California where coal power is being phased-out in favor of a broad mix of renewable energy from wind, geothermal, solar PV, large-scale concentrated solar, ocean, bioenergy and more.

California Low Carbon Fuel Standard Technical Analysis documents that there is a rich diversity of sources for biofuels within the state and in the USA including the following in million gallons of gasoline equivalent per year:

In-state feedstocks for biofuel production Potential volume
California starch and sugar crops = 360 to 1,250
California cellulosic agricultural residues = 188
California forest thinnings = 660
California waste otherwise sent to landfills = 355 to 366
Cellulosic energy crops on 1.5 million acres in California = 400 to 900
California corn imports =130 to 300

Forecasted 2012 production capacity nationwide Potential volume
Nationwide low-GHG ethanol = 288
Nationwide mid-GHG ethanol = 776 to 969
Nationwide biodiesel = 1,400
Nationwide renewable diesel = 175

A variety of scenarios have been examined with detailed analysis by U.C. Berkeley, U.C. Davis, and stakeholder workgroups that include technical experts from the California Energy Commission and the California Air Resources Board. Several scenarios are promising including one that would achieve a 15% reduction in carbon intensity with the following percentage mix alternate fuels and vehicles of some 33 million light duty vehicles by 2020:

Fuels:
Low-GHG Biofuel 3.1%
CNG 1.7%
Electricity 0.6%
Hydrogen 0.4%
Low-GHG FT Diesel .9%
Sub-zero GHG Biofuel 3.9%

Vehicles:
CNG vehicles 4.6%
Plug-in hybrid vehicles 7.4%
Flex-fuel vehicles 34.7%
Diesel vehicles 25.5%
Battery electric vehicles 0.5%
Fuel cell vehicles 1.9%

The ultimate mix will be determined by everyday drivers in their choice of vehicles and fuels. Low emission choices are becoming more cost-effective with the growth of electric vehicles, waste and renewable hydrogen, fuel from biowaste and crops grown on marginal land, and even fast growing poplar trees that absorb more CO2 than is emitted from resulting biofuels. The alternatives make fascinating reading for those interested in future scenarios for fuels and vehicles:

California Low Carbon Fuel Standard Technical Analysis and Scenario Details
California Low Carbon Fuel Standard Policy Analysis

California’s ambitious goals to reduce greenhouse gas emissions will benefit by the increased motive energy per CO2e that is described in these scenarios. California will also benefit from vehicles that will go more miles with the same energy input. Vehicles are getting lighter and safer as high-strength carbon fibers and plastics replace heavy metal. The shift to hybrids and full electric-drive systems allow replacement of heavy mechanical accessories with light electric-powered components. Hybrids allow big engines to be replaced with smaller, lighter engines. Pure electric vehicles can eliminate the weight of engines and transmissions. Less fuel weight is needed. Aerodynamic vehicles are becoming more popular.

Employer programs are leading to more flexible work, less travel, and increased use of public transit. Demographics may also cause a shift to more urban car sharing, use of public transit, bicycling, walking, and less solo driving. It can all add-up to a celebration of low-carbon living.

John Addison publishes the Clean Fleet Report which includes over 50 articles about clean transportation.