Farm Bill and Ethanol Subsidies

Just a quick note to update on the Farm Bill. The Des Moines Register is reporting that there has been substantial progress in the Federal Farm Bill because of compromises coming from both sides of the issues. The latest word is that the ethanol subsidies in the form of the blenders tax credit will be reduced from 51cents per gallon to 45 cent. The money saved will be diverted into a fund to encourage cellulosic ethanol production.
Although I don't think that it would be healthy to the United States to damage the extensive investment in the ethanol industry by totally throwing out the blenders credit, this is a very good step if it becomes law in the farm bill. The blenders tax credit mainly benefits the blenders who are rarely ethanol producers. It works well because it encourages blenders to use ethanol over gasoline, but reducing it by 6 cents per gallon probably won't diminish ethanol blending. Also, the government is taking the right steps in adjusting towards the future of ethanol, which is cellulosic.
Finally, I think it will be interesting to watch the outcome if this reduction in the blenders credit becomes law. The Bush administration has hinted at their willingness in recent months to lower the import tariff on ethanol designed to prevent overseas ethanol producers such as Brazil from enjoying the taxpayer funded subsidies such as the blenders credit. However, if the blenders credit is reduced, these tariffs could be reduced from the 53 cents per gallon currently seen to say, 48 cents per gallon. This would make Brazillian ethanol more attractive towards importing without seriously harming the domestic production and would possible take the pressure off the corn crop in the short term.

For more details or updates, check out the Des Moines Register at:
www.desmoinesregister.com

Gasifier Pilot Plant

GM's partner in turning lignocellulosic feedstocks into ethanol, Coskata, has announced the location of their pilot plant to test the feasibility of their process. The 40,000 gallon per year plant will be located 30 miles Southeast of Pittsburgh Pennsylvania and will showcase their gasification process to convert wood, agricultural waste, and industrial waste products into ethanol. The plant plans on producing ethanol by early 2009 and company reps have hinted that the process could cost as little as $1 per gallon of ethanol. This of course excludes any additional costs that might arise in terms of debt interest payments on building or materials. The good thing is that this plant will bypass any cereal grains and so will probably not be restricted by high feedstock prices, at least in the near term.
Some interesting stats on Coskata's production process as outlined in studies by Argonne National Laboratories. First is that the process will reduce GHG emissions by 84% compared to gasoline (corn-based ethanol reduces GHG emissions by 16%). Also, the ethanol can be produced in an efficient manner so that 7.7 energy units exist per energy unit of input (corn ethanol has a ratio of 1.6). And finally, the process uses less than a gallon of water to produce a gallon of ethanol as compared to corn ethanol where the process requires 3 gallons of water for every gallon of ethanol produced.
Although the main 50 million gallon per year ethanol plant is not scheduled for production until 2011, this is a major step in bring cellulosic ethanol into the mainstream and the numbers are encouraging that the process works.

Ethanol AND Hybrid Technologies

I've said this is previous posts but I will say it again. The only way that the United States and the rest of the world is going to come to a reasonable answer relating to the complex topics of environmental impact, foreign oil dependency, and others relating to transportation fuels is to combine several meaningful solutions. By doing a quick search of the major automakers in America, it becomes horrifyingly clear that there is absolutely no interest by these companies in helping the public solve any of these problems. To illustrate my point, think of all the flex-fuel vehicles on the road today. Save the Chevy Malibu I would have to say that every single one is an SUV. And the hybrid-dominated companies don't have clean hands either. I can say that there is not a single company that has the foresight and innovation to build a hybrid car and install components capable of running 85% ethanol. Think of how easy it would be for Toyota to equip their prius, for only $100 to $200 dollars, with ethanol capable components. They would be able to corner the entire market, particularly here in the Midwest. So why won't they do it? I honestly don't have an answer. Combining the two most promising emissions/cost reducing mechanisms that are available seems like the right way to go.
Thankfully, a company out of Stolkholm Sweden named Scania, has already made 14 hybrid-electric city buses. I know that this isn't the answer that I was looking for in personal car production but it is a good step. These buses are already running and the data indicates the the combination of the two technologies has reduced GHG emissions in the buses by 90%!! And the buses are able to extend their fuel economy by 25%. Incredible. Hopefully Scania's lead will help push automakers here in the US to start thinking about the big picture and not just about ethanol versus hybrid versus hydrogen versus fuel cell -- that kind of thinking will get us nowhere.

If any of you are interested in this combination of technologies, I encourage you to write a quick e-mail to your car-maker. I did and the more they hear from us the less they will be able to ignore the fact that we want a combination of solutions capable of solving all of the issues.

For more info. on the hybrid-electric bus:
http://www.greencarcongress.com/2008/04/scania-double-d.html#more

Ethanol Going Greener

In anticipation of Earth Day tomorrow, I think it is time to reflect on one of the key benefits that ethanol offers -- its earth-friendliness. This fuel is renewable and, although its water/energy usages have been questioned, it still reduces some GHG emissions over gasoline (even if it is only a small amount). And so during the debate about food prices and yes/no debates on ethanol usage, I think there is one thing that a lot of people have missed.

Argonne National Labs completed a study and found that even though the meteoric jump to cellulosic ethanol production has not occurred, CORN-based ethanol has actually gotten greener since 2001. They found that ethanol plants have gotten more efficient in how much ethanol they can derive from corn -- 2.81 gallons per bushel of corn used is now the average, a 6.4% increase from 2001. Also, the total energy used in an ethanol plant to convert this corn into ethanol including fossil energy and electricity declined by 21.8%!! Think about that. That's phenomenal that after only 5 years (the survey compares 2006 data with 2001 data), the industry was able to reduce its total energy needs by 1/5th! This means that the energy balances would have to be recalculated in order to reflect this new data.

The report goes on to say that electricity grid use is down 15%, and that many plants have switched from coal to natural gas as a source of power, which reduces the GHG emissions even further. The survey found that a lot of these benefits were available because of better Dried Distillers Grains (DDGS) handling as most plants ship wet grains to farmers for feed instead of using a lot of energy in drying the DDGS. (Which is also the step in the ethanol process when most of the Volatile Organic Compounds (VOCs) are released making ethanol's NOx (nitric oxide) reduction benefit questionable). NOx is a major contributor to urban smog.

Finally, the report found that water consumption decreased 26.6% in ethanol plants during this five year period. This is a 1/4 decrease in water usage!! And in just five years! Think about what innovations are just around the bend after the Department of Energy poured billions of dollars into biofuels research.

The point is, we don't have to wait for ethanol to get greener... it already is. Sure there are still some areas that need to be improved. But overall this domestic fuel is keeping money in America, providing a dependable and renewable resource, and is cutting the amount of pollution and waste that has become so prevalent in this country.

Just today the DOE (Department of Energy) announced additional funding for cellulosic ethanol startup companies whose locations you can see below. The age of cellulosic ethanol is closer than we may think.

For the original Argonne National Labs' study:

http://www.ethanolrfa.org/objects/documents/1652/2007_analysis_of_the_efficiency_of_the_us_ethanol_industry.pdf