Category Archives: ethanol

Also on Obama

Subsidies for corn ethanol, and ethanol mandates generally, are bad.

“Clean coal” is very bad except as part of a bridging strategy to something better, in which case it’s only moderately bad.

If you think I’m being tough on the new guy, I should say that I think he’s a hell of a lot better than the alternative would have been.

Stop subsidizing ethanol

I haven’t had very much time for the National Review since it devolved from Republican-oriented conservatism into full-throated Bushism a few years ago, but maybe its editors are looking ahead to a post-GWB America and realizing they’re going to have to stand for some principles again.

And this is a good one: mandating the consumption of ethanol and subsidizing its production is bad policy, for the United States and for the world.

Congress has created an artificial demand for ethanol to satisfy the farm lobby, which is one of the most powerful in Washington. To make matters worse, almost every major candidate for president in the last 20 years has supported ethanol subsidies because of the program’s importance in the capital of corn, Iowa, which holds the nation’s first presidential caucuses. Hillary Clinton and Barack Obama are not exceptions to this rule. Both voted for the 2007 energy bill, and both declared their support for ethanol while campaigning in Iowa. Obama, from the corn-growing state of Illinois, has been singing ethanol’s praises for a long time.

But John McCain somehow made it through the early primary gauntlet without going back on his long-held opposition to ethanol subsidies. To be sure, he took a lower profile on the issue and made some comments about how ethanol “makes sense” now that oil prices are so high, but when questioned about these pro-ethanol comments he reiterated his opposition to the federal government’s meddling in the market.

The Iowa caucuses are over, and McCain no longer has any reason to obscure his opposition to U.S. ethanol policy. In fact, he has several good reasons to voice his opposition to the ethanol mandate loud and clear. For one thing, he can point to it as a clear difference between himself and both remaining Democrats. They support a policy that is contributing to higher food prices for Americans. McCain opposes it.

Both Democrats (and McCain) appear to be in favour of doing all they can to make gasoline cheaper, too, even as all three paint themselves as greenies. It’s not what you’d call a consistent position, and it speaks to the difficulty that even a U.S. president who wants to tackle pollution and global warming will have in actually doing so.

Small and close beats big and far

… and we’re back!

Via Green Options comes this study (PDF) from the Minneapolis-based Institute for Local Self-Reliance, arguing that the costs of large wind-power and ethanol facilities outweigh the benefits.

The major benefit: economies of scale. Great big windmills, or huge farms of them, generate a hell of a lot more power than little ones do, so the fixed costs — paying somebody to maintain them, for instance — can be spread out more. The same is roughly true for big ethanol plants. This has long been an economic truism, that (up to a point) bigger is generally cheaper.

The major problem: transmission and transportation costs. A great big wind farm usually needs to be in the middle of nowhere, either so fewer neighbours will be offended or to take advantage of high enough winds to turn all the turbines. If you’re generating gobs of electricity in the middle of nowhere, you have to get it to where the consumers are, and that takes expensive transmission towers and wires, which take studies and permits of their own.

Overall, transmission and array losses increase the cost of power production.  A project 500 miles distant could cost about 1.8 cents/kWh more than a local project.  Higher wind speeds could lower generation costs to offset or exceed these higher transmission-related costs.  A wind speed 5.3 percent higher would be needed to offset a 500 mile trip.

The second diseconomy of scale for wind farms can occur in higher infrastructure and maintenance costs. While large projects save on site development and legal costs by spreading them over several turbines, a single owner-operator with one turbine can avoid legal and permitting fees (about $20/kW).

The same sort of problems apply to large ethanol plants, the report’s author John Farrell writes, with the added difficulty that a big producer tends to depress the local price of the stuff by flooding the market.

Now, one solution to the legal and permitting problems surrounding large installations is to reduce the red tape entrepreneurs need to cut through to build them. Set some simple standards and enforce them, rather than fussing endlessly over details. Particularly, don’t get caught up in battles over whether the neighbours have a right to an un-bewindmill’ed view of the landscape. They don’t, beyond the right not to be assailed with great rackets and other interference on their own property, and that should be reflected in the law.

But even so, the costs of transmission and transportation are large and not subject to government policy. (Not to sensible government policy, anyway.) If Farrell’s figures are right, they jibe with my instinct that distributed generation of renewable electricity is better than centralized, and that ethanol’s generally more trouble than it’s worth no matter how you make it.

My only reservation about Farrell’s work is that he asserts, twice and without demonstrated foundation, something like this:

The most significant diseconomy of scale is that bigness leads to absentee ownership, significantly reducing the benefits to rural communities of harnessing renewable energy.  Public policymakers should decide whether the loss of those rural development benefits is worth the small decrease in production costs.

You’d expect this from an outfit calling itself the Institute for Local Self-Reliance, of course, but you’d also expect some research proving the point. Farrell’s work is heavily footnoted for its other facts and figures, but the idea that absentee ownership is bad is taken as a given. There’s a reference to another ILSR report called Energizing Rural America, supposedly published in April, that’s missing from the group’s website. I believe this is it, but it doesn’t seem to me to prove that local ownership is better. Better for the locals, yes, but it rather goes without saying that if ownership is good, and locals are owners, local ownership is good for locals. I’d want to see evidence that local ownership is intrinsically good for everybody before buying into that conclusion.

Some good thoughts on ethanol

This outfit called the Network for New Energy Choices really has it in for corn-based ethanol. The group’s staff and advisory board seem heavily weighted toward more engineering-based renewable sources of energy, such as wind power, which might explain a few things, but their report “The Rush to Ethanol” (PDF) makes some excellent points. Chief among them is the obvious one: corn ethanol, produced and burned carelessly, can be worse for the environment than gasoline.

The report, unfortunately, also trots out some leftie-green objections to ethanol: biofuels plants are run by great big corporations and not community-based ones; industrial uses of crops tend to encourage farmers to plant specially engineered strains, and so on. A lot of this stuff is neither here nor there — asking energy policy to do work that actually shouldn’t be a matter of government concern at all, or at least no more than it already is. The family farm, for instance, with which the Network for New Energy Choices is unduly concerned. matters in U.S. politics because of the overrepresentation of sparsely populated agricultural states in Congress and the presidential primaries. Really, it ought to matter no more than the family cobbler shop or the family real-estate firm, and approving or dismissing a policy on ethanol should take no notice of it.

Nevertheless, the network is right to propose hard-edged standards for deciding what “good” ethanol is, and being a lot more discriminating when the subsidies are being ladled out. The group practically dismisses corn ethanol entirely, and puts all its hope into cellulosic ethanol (which gets its energy from the woody structures of plant cells rather than from starchy sugars, and which isn’t even really close to being commercially viable):

In particular, criteria for sustainable cellulosic feedstock production should include:

  • Establishment of maximum harvesting levels for agriculture residues;
  • Use of designated cropland rather than protected land conversion, with a ban on converting highly erodible land in the Conservation Reserve Program to crop production;
  • Promotion of native species planted in diverse composition;
  • Promotion of best-feedstock-production scenarios that would involve mixed perennial grasses and trees that can be harvested on a rotating basis;
  • Financial support for small farmers growing energy crops in establishment years before crops can be harvested; and
  • Development of woody crops and grasses in buffer areas between forest remnants and croplands that
  • enhance biodiversity and habitat protection for threatened interior forest wildlife.

Also, and this is key, the group proposes enforcing the same standards on imported ethanol. If you couldn’t do it in the United States, you can’t do it somewhere else and sell the product in the United States, either. I’m not sure this can be applied perfectly rigidly — some agricultural practices might be fine in different climates that are destructive in the United States, for instance — but as a rule, it’s wrong to encourage others to do things that you’d actually ban in your own country.

Latest Ottawa Citizen column, on ethanol

Specifically, on the American and Canadian love affair with so-so alternatives to gasoline:

Whether ethanol is a good substitute for gasoline depends on whom you ask; it’s cleaner, but it doesn’t push a car as far as the same amount of gasoline does. Nevertheless, both the United States and Canada are big fans of ethanol. Five per cent of all the vehicle fuel sold in Canada is to be ethanol by 2010, and the U.S. is adopting similar rules.

To be precise, we’re big fans of a particular kind of ethanol — the kind that comes from corn and other grains. Trouble is, those aren’t a really good source of ethanol, they’re just what we happen to grow a lot of.

‘The Persian Gulf of ethanol’

Maclean’s magazine’s Washington correspondent Luiza Ch. Savage, in Iowa to report on the presidential candidates’ sucking up to early-primary voters, succinctly explains why the U.S. government is in love with corn-based ethanol.

Pig junk food

PigOh good Lord. The Wall Street Journal is reporting (short “preview” only, though a bit more is clipped here) that ethanol mandates and subsidies (government support for the corn-based biofuels industry, in other words) have driven the price of industrial-grade American corn so high that it’s no longer economical for farmers to feed their livestock with the stuff.

Corn has been the foundation of much livestock feed for decades, partly thanks to different government subsidies that glutted the market and drove the price down so low that farmers who raised animals almost couldn’t afford not to use it. It’s high-energy, low-priced feed that fattens animals up to market weights fast, though research suggests that animals getting low-quality nutrition end up as low-quality food for humans. Michael Pollan treats this at some length in his book The Omnivore’s Dilemma, but here’s a quickie version:

We have come to think of ”cornfed” as some kind of old-fashioned virtue; we shouldn’t. Granted, a cornfed cow develops well-marbled flesh, giving it a taste and texture American consumers have learned to like. Yet this meat is demonstrably less healthy to eat, since it contains more saturated fat. A recent study in The European Journal of Clinical Nutrition found that the meat of grass-fed livestock not only had substantially less fat than grain-fed meat but that the type of fats found in grass-fed meat were much healthier. (Grass-fed meat has more omega 3 fatty acids and fewer omega 6, which is believed to promote heart disease; it also contains betacarotine and CLA, another ”good” fat.) A growing body of research suggests that many of the health problems associated with eating beef are really problems with cornfed beef. In the same way ruminants have not evolved to eat grain, humans may not be well adapted to eating grain-fed animals. Yet the U.S.D.A.’s grading system continues to reward marbling — that is, intermuscular fat — and thus the feeding of corn to cows.

Anyway, now that corn is expensive, farmers are finding alternatives. According to the Journal, one of them is human junk food:

“Pigs can be picky eaters,” Mr. Smith says, scooping a handful of banana chips, yogurt-covered raisins, dried papaya and cashews from one of the 12 one-ton boxes in his shed. Generally, he says, “they like the sweet stuff.”

I don’t know — maybe raisins and papaya and cashews make higher-quality pig feed than corn does. But chocolate syrup and expired cookies and candy bars and “uncooked french fries, Tater Tots and hash browns” can’t possibly. Ick.

I wonder what we’d feed animals if governments weren’t busy screwing up the agriculture markets so badly. I bet it wouldn’t be old candy bars.

(Via Marginal Revolution. Photo credit: “Oinc!” Flickr/Gato Azul.)

The price of milk depends on the price of corn

dairyA tidy little story on the rising price of milk in New York state reveals a taste of what we’re in for in surrendering the price subsidy that dirty and non-renewable fossil fuels have been providing us:

Beginning Tuesday, a gallon of milk will go up to $3.54 in New York state – 60 cents more than it was at the beginning of the year and 29 cents higher than two months ago.

Economists say the hike is caused by the demand for clean-burning ethanol, which is made from corn, the primary feed for dairy cattle.

It’s one thing when it’s just tortillas in Latin America, something else when it’s a gallon of kid-juice down at the Quick-E-Mart.

Corn is the standard inexpensive feed used on most dairy farms, at least in North America. It’s not what cattle really naturally eat, but it does the job. The need to farm cheaply has been entrenched in Canada, in particular, by the cartel system the government enforces. In Canada, if you want to produce and sell milk, you have to buy a piece of the national production quota, which is distributed among the provinces by an arcane formula that puts most of Canada’s milk production in Ontario and Quebec.

According to the Dairy Farmers of Ontario, if I’m reading this PDF on the most recent round of quota sales and purchases right, the going rate for the right to produce and sell one kilogram of butter fat per day is just short of $30,000. That’s a hell of a barrier to entry for anyone with a better idea for feeding cattle and making milk, or indeed anyone who wants to produce a higher-quality, smaller-footprint product — perhaps getting out ahead of where he or she expects the market to be in a few years and switching to pasturing cattle instead of feeding them corn — and is willing to accept a reduced profit margin right now to do it.

The effect is to support current farmers’ ways while pushing them to extract maximum short-term profit from their operations, and discourage innovation or preparations for any possible quake in the economy.

In other words, if you’re Canadian and you think the price of milk seems high now

Photo credit: “Silhouetted,” Flickr/Nicholas_T

Biofuel prospects in oil-rich Alberta

Map of AlbertaThe Edmonton Journal‘s Hanneke Brooymans is writing an excellent series on the prospects for biofuels in Alberta. Brooymans is a longtime environment reporter and her expertise shows.

Part One is a survey of the ethanol and biodiesel scene today.

Alberta took a big step towards a biofuels future last October when it announced a $239-million bioenergy program.
It was taking a cue from the federal government, which had announced the previous May its intention to legislate the blending of ethanol into the gasoline we pump into our vehicles.
Ottawa backed this up in March by budgeting $2 billion over the next seven years to promote investment in renewable fuels. Though the federal ethanol mandate is not yet law, it’s coming, and many provincial governments are acting to ensure their voters don’t miss out on a guaranteed market.
Provinces like Saskatchewan, with three ethanol plants, and Ontario, with 10 ethanol plants either operating or under construction, have proved that when it comes to producing fuel from crops, initiative matters more than the plain dumb luck associated with petroleum deposits.
Figuring out the formula to attract these plants is becoming crucial, as federal and provincial cash pours into the industry, allowing companies to pick and choose where to locate.

Part Two takes a suitably skeptical look at the environmental impact of biofuels.

All told, the federal mandate of five per cent ethanol in gasoline blends by 2010 should reduce greenhouse-gas emissions by about three million tonnes a year, said [mechanical engineer and biofuel efficiency analyst Don] O’Connor, who finds this objective worthwhile. (In 2004, all the vehicles, trucks, motorcycles and off-road vehicles that consume gasoline in Canada emitted about 98 million tonnes of the gases.)
“The challenge with the transportation sector is finding anything that works to reduce greenhouse-gas emissions,” O’Connor said.
When you look at all other options, there isn’t much low-hanging fruit, he said. There are other fuels that would produce lower greenhouse-gas emissions, but you’d need to buy a redesigned car at the same time. “The nice thing about biofuels, whether it’s ethanol or biodiesel, is you can blend them into the existing fuels and use them in every single car that’s on the road today.”
Dale said carbon dioxide is not the most worrisome greenhouse gas generated in biofuel production.
Nitrous oxide, for example, is about 300 times more potent than CO2. Nitrous oxide is produced naturally in the soil by micro-organisms that are very sensitive to how the land is farmed. So it matters, for example, how much fertilizer farmers use to grow their grains for ethanol, he said.

Part Three examines the economics of biofuels for individual farmers (and tells the particularly interesting stories of canola farmers who power their equipment with canola oil they process themselves).

[Farmer Ken] Herlinveaux estimates it costs about 13 to 15 cents a litre to make the canola oil fuel, if they use low-grade canola. Regular diesel costs about 67 cents per litre for farmers. For someone who uses up to 12,000 litres of fuel a year, that’s a big saving.
Herlinveaux used to make biodiesel with his canola oil, but found his machinery will run just as well on straight canola oil.
While this biofuel literally helps Herlinveaux run his farm, canola growers would like to see the federal government do something that would help them all — adjust the mandate for a higher concentration of renewable fuel in diesel.
“We’d like to see a gradual increase in the mandate levels,” said Tyler Bjornson, vice-president corporate affairs, Canola Council of Canada. The council feels confident growers could meet a mandate of two per cent biodiesel by 2010 and five per cent by 2015, he said.

It’s not clear whether the series is finished with Part Three, which ran today. If not, I’ll point to Part Four tomorrow.

Ethanol perhaps not so clean after all

Ethanol’s big appeal is supposed to be that it’s clean-burning, compared to gasoline. It still emits greenhouse gases, but doesn’t contribute to urban smog in the same way as traditional out-of-the-ground hydrocarbons when burned in a vehicle engine.

Well, I guess that’s technically true. According to researchers at Stanford, it contributes to smog in a different way. The New Scientist reports:

Mark Jacobson at Stanford University in California, US, modelled emissions for cars expected to be on the road in 2020. An E85-fuelled fleet would cause 185 more pollution-related deaths per year than a petrol one across the US the model predicted – most of them in smoggy Los Angeles, California.

The findings run counter to the idea that ethanol is a cleaner-burning fuel. Cars running on gasoline emit a number of pollutants – including nitrogen dioxide and organic molecules like acetaldehyde – that react with sunlight to form ozone.

However, ethanol is an even bigger culprit. Along with many of the same pollutants as gasoline, a large amount of unburned ethanol gas escapes into the atmosphere. That vapour readily breaks down in sunlight to form acetaldehyde, which can send ozone levels soaring.

This is only one study (here’s the summary at the Journal of Environmental Science and Technology, where Jacobson’s study is published; the full thing requires a subscription), but here we see the clearest example yet of the problem with governments’ “picking winners” among new technologies. Governments in the U.S. and Canada are pushing automakers to produce engines that comfortably burn high-ethanol blends of fuel, and legally requiring the inclusion of smaller amounts in the stuff that comes out of every pump.

The journal notes this very problem:

[R]ushing ahead to fix one problem can create another, cautions Hadi Dowlatabadi of the University of British Columbia (Canada). In a previous ES&T study, he found that a U.K. policy designed to reduce carbon emissions created air-quality problems by encouraging particulate-spewing diesel vehicles. He praised the new paper for “trying to point out an issue ahead of time”.

Incidentally, the New Scientist account includes a frankly bizarre passage near the end:

However, the small potential increase in pollution-related deaths predicted in the study could be a risk worth taking for a renewable fuel, environmentalists may argue.

Huh? Economists concerned with our very-long-term prospects might make that argument, or geo-strategy thinkers looking to wean the West off its dependence on a non-renewable substance whose production occurs (the Alberta oilsands notwithstanding) in unstable semi-hostile regimes abroad, but renewability in itself isn’t something I can imagine many environmentalists would be willing to pay some human lives for.