from the You-Tube
http://www.youtube.com/watch?v=Xsc40niu9Uk&noredirect=1
Introduction
First off, apologies for this cringing pun - Eric Clapton's version "Living on Blues Power" is a great song. But, we're talking Ethanol here - and the worst drug that Mr. Clapton ever tried to kick was EtOH - for him, it was worse than heroin. But then he had affluence problems - he did not have to worry about whether he could afford his booze for a long time. And combine an addictive personality, lots of friends who also loved to imbibe, a yearning for the fun that booze can bring about (as well as rumored looseness in some women) and an unlimited bank account - that can make for a whole lot of ugly, over time.
Actually, with regards to liquid fuels, the USA shares a lot in common with Eric's permanent alcoholism problem. It was fun before it became a serious problem, and the signs that we should be looking for other ways to get around (and/or have fun) have been around for some time. And both addiction to liquid fuels and alcoholism (and lots of other "ism's") are dopamine based behaviors that get reinforced over time, morphing into a situation where continued use merely puts off the pain of not indulging in EtOH usage. They (intoxication/maintenance of the buzz and fuel usage) have a lot in common, including the disturbing tendency to do ANYTHING to keep on getting that fix, and to keep using even when the consequences can be very negative (Global Climate Change for the CO2 pollution associated with oil combustion, and the huge money/income/wealth transfer from most Americans to the fuel suppliers (= pushers, dealers)).
But, apparently Mr. Clapton kicked the EtOH "monkey" off his back a while ago, though it was not easy. Meanwhile, our country is just as firmly in denial (the mighty wide river called "De Nile) about liquid fuels - most of which are fossil based - as ever, and in this case, Ethanol is not the villain. Actually, it has bought us some breathing room, lessened our export of money for imports of oil, mitigated what is effectively a massive, regressive sales tax BY CORPORATIONS AND SOME FOREIGN COUNTRIES on the public and on governments (Federal, State, local) which are (and on occasion, they actually behave that way) supposed to behave as representatives of the general public, and not just the really wealthy fraction of the public.
So, right now there is a convoluted subsidy paid to those who produce EtOH made from biomass (in the US case, mostly corn) and indirectly to those who grow these crops that provide the sugars that the EtOH is made from of about $6 billion a year. The savings to the public are rather large - about $55 billion per year in fewer oil imports, and about $208 billion/yr not "donated" to companies that sell gasoline/oil in the US. Or more... And also on the plus side, the equivalent of about 70 million TONS/yr of sugar is removed from American diets (that gets made into EtOH and CO2) while 35 million tons/yr of high protein (DDGS) food product is co-produced. The high ammonia usage of corn gets converted into protein - it's how the "amino" gets put into "amino acids", and protein is a very valuable part of foods.
Discussion
So, spending $6 billion/yr of taxpayer money to avoid having the general public spend an extra $55 billion on imported oil at an average price of $100/bbl - why is this even the least bit controversial? And also, why is this a mystery to most, including a lot of Grade A Certified Environmentalists? Maybe it's all in how it is phrased, as well as the general ignorance of the American public when it comes to even simple aspects of the chemistry of food... like the big difference between protein and sugars, or the small difference between sugars and low molecular weight starches (like those in corn). Of the 13 billion bushels/yr of corn we harvest, about 5 billion bushels/yr are used to make a combination of EtOH, CO2 and DDGS.
Here's how it works. Right now, we produce a bit more than 900,000 bbls/day of EtOH, and this is added to about 8.6 million bbls/day of petroleum derived gasoline to make about 9.5 millions bbls/day of car fuel (see
http://ethanolrfa.org/pages/weekly-ethanol-feed-production). That 0.9 million bbls/day (mbd) of EtOH is equivalent in energy content to close to 0.6 mbd of gasoline (all petroleum derived). EtOH also adds octane (pure EtOH has an octane rating of 113) and allows the hydrocarbons in the car fuel mixture to burn cooler and with less air pollution, but let's concentrate on the energy for now. In order to make 0.6 mbd of gasoline, a lot more crude oil would be needed. Various crudes yield differing amounts of gasoline; "light sweet crude" (Gulf of Mexico, or GOMEX derived, for example) can deliver about 22 gallons of gasoline per bbl of crude, while Tar Sands sludge, even the "upgraded" Syncrude, only can provide about 10 gallons per 42 gallon bbl, while California, Saudi Arabian and Venezuela "heavy crudes" can deliver around 15 gallons/bbl. The percentage of the crappier grades (heavy crudes, tar sand sludge) is increasing in the national "mix"; these tend to be cheaper, too, than the high quality light crude oils (see
http://www.nrcan.gc.ca/energy/sources/petroleum-products-market/1519 for an explanation of this in more detail). On average about 2.5 bbls of crude are needed for each bbl of gasoline (40% yield). The US tends to be a net importer of gasoline and a net exporter of diesel due to our ability to refine "from the bottom of the barrel" feedstocks. And then there is that big petroleum secret - done correctly, the volume of products from a refinery often exceeds the volume of inputs - oil is sold by volume, not necessarily by mass. Cracking big molecules like asphaltenes into gasoline increases their volume/lowers the density, especially when the extra hydrogen needed to do this is provided by the reaction of petroleum coke and water. But it's a secret, so... mum's the word, OK?
In summary, getting the energy equivalent of 0.6 mbd of gasoline would need a crude oil input of 1.5 mbd. And at $100/bbl, that's a cool $150 million/day of avoided imports, or close to $55 billion/yr.
There is another aspect to this, also good. The US now consumes about 19.5 mbd of crude oil, which is about 25% of all the oil extracted worldwide. However, we now import around 11.2 mbd of crudes - see (or switch to monthly mode)
http://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_ep00_im0_mbblpd_a.htm, which means we now supply about 8 mbd (see
http://www.eia.gov/dnav/pet/pet_sum_snd_d_nus_mbblpd_m_cur.htm). If we had to buy an additional 1.5 mbd of crude oil off of the international market (in other words, import it), this would mean that either the world would have to come up with another 1.5 mbd on top of the 74 mbd now extracted, or more importantly, the US would have to compete with the other importing countries for some share of the approximately 42.6 mbd that is exported - see
http://www.graphoilogy.com/2011/10/daniel-yergin-massively-reduced-his.html#more. More likely, the latter would take place by outbidding those with either less money or less credit, and in turn the price of exported oil would shift upwards. Each shortage of ~ 1 mbd (or increase in demand) raises the price of oil about $20/bbl, so an increase in demand of 1.5 mbd would crank up the world oil price by $30/bbl.
Another way to view it is via "price elasticity" - alias PE - see
http://blahla.wordpress.com/2007/10/29/price-elasticity-in-the-real-world-oil-prices/. In this article, PE for oil , defined as the ratio of the change in supply to the change in price is about 0.1. So, changing the supply by 1.5 mbd is changing it by 3.5%. In turn, this would raise the price of oil by 35% (from roughly $95/bbl to near $128/bbl. These two estimates are pretty close. In the long run, this price spike would result in less petroleum usage by the US - we are down from 21.6 mbd in mid 2008 to around 19.5 mbd, which is good, but it takes a while for this to happen, and that is not good. Of course, this would probably trash our fragile economy in the process.... as occurred in 2008, where the high price of oil became, in effect, the final sack of cement loaded on the proverbial camel, and the one that broke the proverbial camel's back...
Anyway, raising the total crude price for oil by $30/bbl would be a $585 million/day defacto tax by US oil corporations and the countries/companies who supply that oil on both American consumers and American governmental entities, such as all governments, school districts, transit authorities, etc. This adds up to real dollars - about $214 billion/yr, and it would up out money exported from $420 billion/yr (11.5 mbd * $100/bbl) to $617 billion (13 mbd * $130/bbl), or $197 billion MORE than the already obscene $420 billion/yr. You can thus end up exporting $197 billion/yr more than we presently are exporting for oil by importing another 1.5 mbd of crude oil - and not the good stuff (light sweet crude) but probably "Saudi sour heavy crude", which the KSA cannot presently sell because most oil refineries in the world are not presently set up to handle. If you feed sour heavy crude into an oil refinery designed for light sweet grades, that $20 billion refinery will get trashed and made inoperable in just a few months...
The US EtOH industry is supported by about $6 billion/yr in taxpayer subsidies; all this allows the price of EtOH sold into the market to be $6 billion/yr less than it would normally be. However, this is definitely "small potatoes" compared with what would happen otherwise. The demand for corn to make EtOH is about 5 billion bushels/yr, and at an average yield of 175 bushels/acre, this means that without this demand for corn, 28.5 million acres less of corn, worth $32.5 billion, would not have been planted (about 90 million acres/yr is planted for corn in the U.S.). Of course, that would completely tank the price of corn (now $6.50/bushel, or about 11.6 cents/lb), and the most immediate victim would be.... third and fourth world farmers, who would be put out of business when the US decided to dump excess corn onto the world market at $2.80/bushel (5 c/lb) - this actually happened in 2001-2003, wreaking havoc on Mexico's farmers. However, this also would effectively tank the US rural economy, followed by tanking wheat, soy, and milk prices, but with the ultimate consumer experiencing essentially no benefit. And after a year or two of negligible farm production, serious price spikes for food would result until various economic equilibria are more or less re-established. After all, you can't go without food production for too long before lots of people notice there is little or no food available at any price...
According to this report (
http://www.ethanolrfa.org/news/entry/university-report-ethanol-reduced-gas-prices-0.89-in-2010/), US consumers saved an average of 89 cents/gallon for their gasoline via all this homegrown EtOH. And according to this report, about 500,000 jobs have been created in the US farm-EtOH-equipment complex:
http://awakeatthewheel.net/2009/12/10/500000-jobs-created-by-u-s-ethanol-industry/. However, maybe you think we don't have enough unemployment, or that those 500,000 people would actually have other viable means of employment. In that case, can I interest you in Enron bonds, which are generally considered worthless? But hey, if you believe those employed in the EtOH to fuel business have other means of economic viability, you'll probably believe anything...
Conclusion
As it turns out, it is unlikely we can grow sufficient crops to make an additional 13 mbd of EtOH. And while various people deride all the effort to grow crops and then extract the sugar and starch and convert it into fuel (EtOH), while the proteins, fats, vitamins, mineral and complex food items (fiber, enzymes, DNA, RNA, etc) get extracted as DDGS, what's the alternative? Aside from bankruptcy, and eliminating 1/3 of all farmers in the country (and there are far too few), for starts. After all, when rural times get tough, farms consolidate and get even bigger, as the remaining surviving farmers try to cut costs while they also cut output in the hopes that prices will eventually recover.
At our present gluttonous levels of gasoline consumption, we can never self supply. But let's say we employ a touch of magic, say from this cutie:
from
http://sjrlc.lib.overdrive.com/312ACD2C-9CD7-42E5-B655-DE8E61E7DDAE/10/420/en/ContentDetails.htm?ID={FC341246-2BD2-4C1C-AE25-8A08FB334BAE}Let's pay her those exorbitant union wages, and wish for a car fleet that get an average of 42 mpg, like the ones that exist already in Europe and Japan. And presto! That would cut our gasoline consumption to roughly 5.0 mbd, and we would only need to use roughly 4.1 mbd of gasoline, this effectively gets rid of the need for most imports of crude oil, and would up the biofuel content of gasoline to roughly 18% from the present 10%. And with the higher octane fuel, we could actually increase the compression ratio of the engines, resulting in still better fuel economy...
Next, lets say that we travel only half the number of vehicle miles in fuel driven cars as we presently do. So however this gets done - more electric mass transit, more ride sharing, more electric or plug-in hybrid cars, more examples of sensibly locating residence near the workplace, or at least near a transit line, that would drop our automobile fuel consumption to near 2.5 mbd, and with an EtOH content of near 36%, 100 octane or better fuel should be available. And higher octane leads to higher compression ratios, which means that you can get more work from a given gallon of fuel. The Scania high compression all EtOH engines (see
http://www.scania.com/Images/P07X03EN%20New%20ethanol%20engine_tcm10-178705_81054.pdf) get about 42% of the fuel energy out as mechanical energy, versus maybe 26% for an all gasoline low compression engine. See also
http://www.epa.gov/otaq/presentations/sae-2002-01-2743-v2.pdf for details on a small EtOH engine (a modified 1.9 liter VW diesel engine) running at a 19.5:1 compression ratio. Cool, with over 40% thermal efficiency possible (versus 26% for a low compression gasoline powered one). See also
http://www.americanenergyindependence.com/alcoholengines.aspx and
http://www.caddet-re.org/assets/no91.pdf.
And when we actually use about 2.5 mbd of liquid fuels to get around, funny things happen. But good things, too. We could actually make that much renewable fuel (probably a mix of ethanol and hydrocarbons derived from syngas derived from biomass). We do know that about 1 mbd of EtOH will still be supplied from crops, as it is and probably always will be cheaper than making EtOH from cellulose. But, no more need to waste $200 billion/yr in military protection/enforcement for overseas oil fields/oil countries. And all that money now exported (and what about 5 years from now when the price for oil on world markets is more like $200/bbl, as it doubles every 5 years..) could remain in country, doing good things for our economy.
And yes, there's even a place for wind turbines in this, as well as the replacement of all the natural gas used in boilers to distill EtOH and also to dry the wet distillers grains and convert that clay like mess into storable DDGS using corn stover as the fuel. All those EtOH facilities are also a great electricity customers. And making the ammonia to grow the crops can also be done with electricity from wind turbines (nationwide, we'd need about 69 GW of wind turbine capacity to make 18 million tons/yr of renewable energy sourced ammonia). After all, over half of the protein Americans consume is synthetic ammonia derived. And providing hydrogen to reduce the CO2 by-product from the crop to EtOH as add-ons to existing EtOH facilities also would be a great market for renewable electricity (electricity from wind turbines plus water gives hydrogen and oxygen). This would increase EtOH production by 50% using exactly the same amount of biomass grown.
Of course, if we keep pouring our money down the drain by spending it on imported petroleum, well, we won't have much left of a country, let alone sovereignty. Instead, we will get a financial coup d'etat, and somebody from Goldman Sachs will get appointed as our real leader (Italy, Greece, for starts), and the next stage of ravaging our poor and middle class can then commence. After all, any sins committed in the name of financial austerity really are good for us, and should probably be redefined to get any semblance of morality out of the discussion. Just ask the people of Greece and Italy...
Anyway, any comments?
DB
from http://my.firedoglake.com/
Images from Vestas (http://www.vestas.com)
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