Several days ago, I posted about an improved variant of sugarcane, designed for use as a fuel and developed by Barbados. The post also discussed the irrationality of the 54-cent-per-gallon tariff that the US currently imposes on imports of ethanol.
Today’s Wall Street Journal has an editorial “What’s Wrong with Free Trade in Biofuels?” which amplifies the point. Excerpt:
Brazil has already established itself a low-cost producer of cane-based ethanol churned out in large volume at the oil-equivalent price of $25 a barrel without any heroic biogenetics involved. Its example is already inspiring copycat behavior by other Latin, Caribbean, African and South Asian countries, with similar conditions that make them potentially prolific exporters of biofuels.
Unfortunately, against the danger that poor countries might find profitable new niches for themselves as energy producers, rich countries have been busy erecting trade barriers to kill off the incipient competition to their own farmers. The U.S. imposes a 54-cent-a-gallon tariff on Brazilian ethanol, to discourage competition with domestic ethanol, which receives a 54-cent subsidy from taxpayers. The European Union just slapped new duties on Pakistani ethanol.
This should lay bare the fraud that what’s going here has anything to do with energy security. It has only to do with the agricultural lobby masquerading its interests behind foolish and misleading rhetoric about energy security.
Take the pressure for flex-fuel mandates, requiring auto companies to build cars capable of running on 85% ethanol. Unmodified cars can already burn fuel comprised 10% of ethanol. If we were honestly keen on diversifying supply and squeezing out imported oil, we’d throw open our dense coastal markets to ethanol producers in Brazil, India, Pakistan, Nigeria and Thailand, displacing perhaps 10 billion gallons of current gasoline use without any vehicle modification or taxpayer subsidy at all.
I don’t think the $25/bbl number for Brazilian cane-based ethanol is right; at least it’s not consistent with the $.87/gallon number quoted in the Farm Bureau article (linked from my earlier post)…but even with the $.87/gallon number (cost after ocean shipping charges $1.01/gallon) and considering the lesser energy in a gallon of ethanol vs a gallon of gasoline, the cane-based ethanol sounds like a winner. The tariff should go.
16 thoughts on “Sweet Energy, Sour Politics–Update”
I agree that the tariff is stupid and should go just on general principle but I’ve got to say I am really down on all these alternative fuels. I am afraid they are distracting us from making the real choices about our long-term energy needs.
If Brazil et al can churn out ethanol that is free-market competitive with gasoline they can do so only by using dirt cheap labor and creating a significant environmental impact. Trying to get more than a couple of percent of our liquid fuel needs from sugar cane ethanol would be to costly in human and environmental terms.
I don’t see us stitching together a viable energy system from a patchwork of diffuse sources.
Another name for ethanol that comes from sugar cane is Rum. Its no accident that the Caribbean and Brazil have developed hi yield cane. Nor that there is a 58 cent duty on cane based ethanol aka Demon Rum.
Cane based ethanol suitable for replacing gasoline would have to be 200 proof Rum. It seems to me that if our filling stations start selling pure ethanol at the pump that some teenagers might start drinking direct from the pump whilst others might suck it straight from daddy’s car’s gas tank with 4 MacDonalds straws joined end to end.
Shannon, I think a ‘patchwork of diffuse sources’ is precisely what we are looking at for energy over the next 10 years, because we are at a technology inflection point but it isn’t yet clear what the long-term winners will be. My speculation is:
*For motor fuel, we will see both biofuels and fuels produced via coal-to-liquid and gas-to-liquid technologies. This in addition to large quantities of tar-sands derived oil..and plain old oil. Also, some increased use of natural gas for local delivery vehicles, buses, etc.
*For electricity, we will see some growth in wind and solar, plus major expansion in nuclear (if we can find the polical will) together with cleaner-burning coal (probably via coal gasification) This will free up more natural gas for use in the gas-to-liquid process, local vehicles as mentioned above, and also plastics/chemicals feedstocks.
I think diversity in supply, your patchwork, is a very good thing. A diverse portfolio of energy sources protects us against sudden drops in production in one source. An array of competing energy producers should tend to push down prices. And a greater proportion of our energy supplies produced at home or at least in this hemisphere reduces our need to be involved in nasty places like the land of the Cartoon Jihad.
As to question of environmental impact: Everything I’ve seen about the Brazilian switch to ethanol indicates a very efficient production process that minimizes transport cost by locating distilleries near supply and uses silage as fertilizer.
They do have an advantage in that they can produce more crops per year of a higher sugar product than we can now, but if cellulosic ethanol production processes pan out that may change. It would seem to me that increased use of GM crops for feedstock ought to decrease environmental impact as well.
Remember too that use of ethanol drastically decreases the net input of emissions in to the atmosphere since most of the pollutants in the plants came from the atmosphere in the first place.
Here’s a USDA study that ranks ethanol highly in terms of the efficiency of energy inputs versus returns. It makes the good point that the inputs in ethanol production are largely from domestic coal and natural gas, thus more of a decrease in the need for foreign supplies of oil. If that coal can be used in a manner that sequesters the emissions so much the better.
USDA Study on Energy Efficiency of Ethnol Production
But in the meantime, the tariff should go. The decrease in prices and increase in supply ought to stimulate FFV production (which we ought to make mandatory anyway given the very low cost per vehicle) and encourage gas stations to upgrade the tanks, pumps, etc. That ought to stimulate demand enough to protect domestic producers in the long run.
Ethnol distilled for fuel is denatured so that it is undrinkable.
A diverse portfolio of energy sources protects us against sudden drops in production in one source.
Only if the energy sources are fungible which most of the alternative fuels are not. You cannot substitute ethanol for biodiesel for example. Using non-fungible sources actually makes the system more vulnerable to spot shortages. It is the same effect that we see with the boutique gas blends in different parts of the country.
Diesel and gasoline aren’t fungible, so if biodiesel and diesel are as fungible as gasohol and gasoline, biofuels don’t necessarily add to the non-fungible problem. (The 85% ethanol stuff sort-of does, because most cars can’t use it, but every car that can also runs on straight gas.)
> If Brazil et al can churn out ethanol that is free-market competitive with gasoline they can do so only by using dirt cheap labor and creating a significant environmental impact.
“can only” How so? Crop growing can be quite mechanized, so the few folks who have jobs have high paying jobs. Agriculture need not have a significant environmental impact.
biofuels don’t necessarily add to the non-fungible problem
Gasoline and diesel are made from the same raw material in the same facilities. They’re availability and prices usually move in rough sync. With biofuels we are talking about adding separate sources and separate engines to the mix. So we would have gasoline, diesel, biodiesel, ethanol (various blends), natural gas etc. and that all that just for transportation energy. Logistically, it would be like supporting an army that using rifles shooting many different calibers of ammunition. We have already seen the problem caused by regional formulations of gasoline creating shortages.
Crop growing can be quite mechanized,
Yes but sugar cane production in Brazil isn’t and won’t be for some time. I would worry that making ethanol a major export would create an incentive to maintain a large pool of poorly paid unskilled labor in the sugar cane growing regions.
Agriculture need not have a significant environmental impact.
The biggest impact that agriculture has on the environment is the sheer physical footprint of the cleared fields. The ecological impact of using sugar cane to provide more than a couple of percentage points of our liquid fuel requirements would be huge. Look at the impact of sugar cane production in Louisiana.
> [Gas and diesel] availability and prices usually move in rough sync.
That’s actually a bad thing.
> With biofuels we are talking about adding separate sources and separate engines to the mix.
Separate sources is good (it’s diversification) and separate engines isn’t true. Diesel and biodiesel are interchangeable, as are gasohol and gasoline. The 85% ethanol is different, but the engines that can use it are perfectly happy with gasoline/gasohol.
> I would worry that making ethanol a major export would create an incentive to maintain a large pool of poorly paid unskilled labor in the sugar cane growing regions.
Huh? What are those folks doing now? If it’s better than working on a cane farm, why would they change?
Diversity is only good if provides some form of substitution. Multiple fuels don’t. I grew up on farm where we had a mix of gasoline and diesel powered machines. Having both types of engines doesn’t provide any kind of redundancy when you run out of gasoline, your gasoline engines stop working. If you don’t have a duplicate diesel machines, your dead in the water. Plus you have to keep both kinds of fuel on hand. Its a pain. Multiple fuels would cause the same problems.
Biodiesel isn’t seamless substitute for petroleum diesel. Gasoline engines have to be tweaked for anything over about a 15% ethanol mix (IIRC) etc. Creating a patchwork fuel system would be a logistical nightmare, period.
But the major point is that no biomass fuel is ever going to get over a a couple of percentage points of total fuel use. Its a distraction. People seem to think wow in 10, 15 years we can have 75% of our transportation fuel coming from biomass. Horsefeathers.
“Alternative” energy sources are dangerous distractions that lull people into thinking that energy choices are easy to make if only all the evil greedy people would just get out of the way.
I am not mistaken all new cars sold in Brazil are designed and built to run on pure ethanol, pure gasoline or any blend of the two. While we cannot be self sufficient in liquid fuels, we can largely decide on where and whom we rely on for liquid fuels. I would much prefer to depend on Caribbean and Central American countries than on Saudi Arabia.
Start with eliminating tariffs on imported ethanol from friendly counties. Tweak the technology to include methanol and take a page from the Brazilians and and mandate that all new cars sold in the US be able to run on any variation of gasoline, ethanol or methanol.
Every major car maker that does business here sells cars in Brazil. We can start tomorrow if we wanted too.
Ethanol only exists because it provides a subsidy to ADM and the farmers period end of story.
The negative environmental impact of biomass fuels as currently mandated will continue increase in magnitude as more biomass based fuels are manufactured. The demand for biodiesel in Europe is leading to the destruction of native rain forests so palm oil plantations can be planted to provide a source of biodiesel.
Biodiesel now gets the same tax credit that ethanol does. The statutes currently allow palm oil based biodiesel to recieve the tax credits. However, the usual suspects (domestic biodiesel producers and US farmers) are trying to make sure palm oil based biodiesel does not get the tax credit.
Once again showing that biofuels are all about subsidizing US farmers and Ag processors, not providing any kind of realistic source of energy.
Much of the support for biofuels tends to be of the nature of if it is not oil it has to be better for the environment. Nothing could be further from the truth. I spent a lot of my life living in ag regions and I assure you the negative environmental impact of farming can be stunning.
People forget that droughts and crop failures do occur. What will happen when there is a drought related crop failure in the major corn producing regions?
I am not opposed to biofuels as a concept. I believe the current subsidy and mandated usage system make it impossible to tell if it actually is an economically and environmentally sustainable source of fuel.
Brazil is mostly a tropical nation. How does ethanol do in cold weather? I want to see it work in North Dakota in January.
Ethanol is the alcohol in alcoholic drinks and has a fantastically low freezing point, something like -100 or thereabouts. The problem with ethanol and low temperatures is that it is strongly hydroscopic (water-absorbing) so it grabs any water vapor that enters the fuel system. In low temperature conditions, the water will freeze out and possibly clog the fuel system.
Has anyone looked at depolymerization? Pebble bed reactors? Or am I behind the curve already.
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