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Are Biofuels Still Economically Feasible?
thefickler writes "With falling gas prices, and the end of capitalism as we know it (otherwise known as the credit crisis), the
biofuels industry is not looking as viable as it once was. Indeed biofuel production has fallen well short of expectations, with biofuel companies closing down or reducing production capacity. It appears that the industry's only hope is government support."
Are Biofuels Still Economically Feasible?
No
Were they realistically feasible in the first place?
Absolutely not. The quantity of land that would need to be re-purposed if a significant percentage of US oil usage was to be bio-fuels would be enormous.
Though I am enjoying relief from $4.00/gallon gasoline as much as the next guy, I would hold off on prognostications until summer arrives. I doubt oil will remain cheap for long. The current low is likely due to more factors than just demand destruction. Matt Simmons (author of Twilight in the Desert [no, not playing at a theater near you]) suggests the current lows have more to do with settling derivatives trades between oil companies more than anything else.
Let us not become the evil that we deplore.
It depends on what nations you are talking about. In the USA, bio-fuels might be a non starter but in poorer [tropical] nations, bio fuels are a "Godsend."
These nations put in very little in bio fuel plants like the Jatropha, then get its seeds that can yield up to 40% oil by weight.
The plant is also resistant to drought and needs very little maintenance. The trouble with the USA is that folks look to corn whenever the bio-fuels subject comes up and in many cases, this is not economic at all.
Many biofules are said to take more energy to produce them than they provide, so with dropping oil prices they are actually more feasible than they were when oil prices were high. Now if they can only pass laws mandating the use of these fuels then they will become extremely feasible.
I'm an American. I love this country and the freedoms that we used to have.
"Soylent green. The miracle food of high-energy plankton gathered from the oceans of the world."
Let's hope not. Biofuels based on corn and other food crops are bad for obvious reasons, but even non-food biofuels have their risks - among them degradation of the American/Canadian Great Plains, ecological degradation in the Third World, and the risk of invasive species (most of these non-food biofuels are fast-spreading grasses).
The most ecological energy policy is to stop the government from subsidizing oil (by building suburbia with land use restricitons), subsidizing coal, and subsidizing water. There is no magic fuel out there that will allow us to consume infinite amounts of cheap energy - nature made extracting energy expensive for a reason, and the government needs to get out of the business of trying to make it easier.
Steven Chu has been involved in overseeing the most cutting edge research into biofuels, and I expect he is going to be promoting the next generation biofuels very strongly in the new administration.
These fuels are very different than the kind of biofuels currently being produced, and will not have their shortcomings. They will not be made from corn.
The whole industry needs to be scrapped and would die an immediate brutal death except for subsidies which keep it alive.
One could say the same about many American industries which are getting bailouts.
While I don't agree with some of your reasons, I do appreciate that someone asked the question "were they ever"?
I'm not aware that biofuels had ever graduated from the direct subsidy phase. In fact, pretty much every issue that I receive of Biodiesel magazine and the ethanol & fuel reports talk about where the government money is now, where it's headed, and how to get it.
I suppose this will start a whole rant by someone(s) regarding the invisible subsidies for oil (including the intangible subsidies of environmental damage, etc.), but to imply that biofuels have been economically feasible in the US seems rather disingenuous.
(as an aside, the points I'm disagreeing on pertain mostly to food costs, as the general commodities market speculation was largely to blame for that. Quite possibly driven by biofuels speculation, but - like oil - mostly a market with no fundamentals supporting the prices)
And ethanol isn't the only biofuel. Biodiesel generally has better numbers, and methanol (which you rarely hear about anymore) has a lot going for it too.
-- The act of censorship is always worse than whatever is being censored. Always.
Gasoline might look cheap, but it's not. ...
You forgot to include the enormous government subsidy in the form of (military) security.
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o0t!
Ethanol in the US has nothing to do with alternative fuels, or replacing gasoline. It is primarily a subsidy to American corn farmers. Corn can never be a worthwhile source of ethanol.
Fact is, gasoline is cheap. Arguing about nebulous unknown "costs" in the future doesn't change it's price today. In fact, gasoline isn't just cheap, it's rock bottom dirt fucking cheap. The economics are simple, as long as gasoline is cheaper than any sort of biofuel, people will continue to use it.
This isn't the fault of the oil companies, who have been for years reshaping themselves into "energy" companies. The minute biofuel becomes competitive with gasoline, the oil companies will begin sinking their billions into controlling it. They already have the infrastructure, so it's logical for them to take it over.
Until some new process is created which can demonstrate large volume production of biofuel at prices better than gasoline, we're stuck with gasoline. The moment such a process is created, auto makers, consumers, and the oil companies will all switch on their own.
The difference is that most of those industries have actually been profitable at some point in the past and have some potential for making a profit in the future. I don't foresee a future in which biofuels could possibly be economically viable unless you are talking about at a very small, local level where you can use waste material from restaurants to run a half dozen cars or where farmers grow corn for human or animal consumption and use some of the leftover biomass to make fuel for their tractors. As soon as you cross the line from recycled biomass to newly grown biomass specifically for fuel, you find an entire industry based on a fundamentally flawed economic model. Basically, it's the dot-com boom all over again---a company loses money on every sale but tries to make it up in volume.
The amount of energy put into biofuel in the form of fuel to run tractors, transport it to market, etc. exceeds the amount of energy you get out of it. Therefore, by definition, short of a significant change in the fundamental technology of farming or in the types of crops grown, biofuel will never---can never---be commercially viable. (Source: Cornell/UC Berkeley study circa 2005. And then, there's the fact that the U.S. seems myopically focused on using corn as a source, which is quite possibly the worst thing you could possibly plant for fuel purposes by almost any useful metric---output relative to soil damage, output per acre, etc. It's a joke.
About the only thing slightly promising in that area is the whole algae thing. but I'm not holding my breath. Even if it eventually proves financially viable, you're still dumping CO2 into the atmosphere. And I suspect that when you factor in all the hidden maintenance costs, etc, it will end up being unprofitable just like the rest of them.
The GP poster may have said it in a flamebait-like way, but that doesn't mean the post was wrong. On the contrary. it was dead on accurate, at least if you limit biofuel to current farming technology and current sources of biomass. Realistically speaking, dumping more and more money into biofuel research is not the answer. We already have much better sources of energy---solar, wind, geothermal, tidal---that don't pollute our atmosphere significantly, don't contribute to global warming significantly, and at least in the case of solar and wind, don't require nearly the overhead in terms of maintenance, repairs, infrastructure, etc. because they can be set up at the local level (or, in the case of solar, even the household level). Power storage. That's where we should be spending research dollars. That's a problem that will still be needed even if biofuels did become commercially viable, but with better power storage, biofuels would have no real purpose for existing.
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They don't run out, and they aren't located underneath countries that don't like us much.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
If we had kept even moderately higher oil price levels after the scare of 73' then we would have a way less dependence on all the middle eastern oil. When the price went down after that it just killed the efficiency and alternate fuels industry that had sprung up, all the ideas(patents) to be bought out by oil companies. Now it could happen again, and in 20 years well wonder why we didn't ever do anything about our dependence on foreign oil.
We blame this crisis fully on the mograge market but some blame is surely to put on the oil prices, and now as they go back down we'll forget. Just like you would be crazy to have a nation import all its food, its stupid to import most of your energy, an equally important resource. There is a reason Japan has such high tariffs on food, and there is a reason we need to subsidize ways to make our economy less reliant and more self-sufficient.
These waves of volatility in energy are very bad for ventur capitilism into energy fixes but that does not meen they are bad ideas. Toyota makde great strides by continuing to invest in efficiency well afer the 70's scare and it worked. Governments need to realize this and help new companies that are not Toyota.
Sugar-cane is a fast-growing weed where most of the mass of the plant can be used for creation of fuel. America's problem is that ethanol production out of corn is tied up in the farm bill, which not only pays farmers not to grow sufficient amounts of anything to keep the price high, but causes a diversion of product away from food, forcing the price high.
The increase in production of corn-based ethanol in the US caused the price of tortillas to jump in Mexico a couple of years ago, leading to increased numbers of illegals being captured at the border (and of course, the number that get through are far, far greater than the number that get caught).
I **WISH** we could use sugar instead of corn here... the corn industry has us on lockdown and is fucking everything up. They're in collusion with our domestic sugar growers to keep sugar tariffs as well. We're practically the only developed country that has a sugar tariff, and that's why we have "high fructose corn syrup" in everything, and why American Coca-Cola tastes like filthy, disgusting shit, compared even to the Coke in Canada.
Its a bloody agricultural mafia.
You're making two assumptions: 1) Global warming is man-made. 2) Humans have the ability to reverse the warming that we are seeing. I'd be interested to see any proof that supports both of those assumptions, because if either one of those assumptions is incorrect, then all we're doing is wasting money and energy solving a problem that doesn't exists or that we can't fix.
The big increases in corn prices (mostly, this gets complex, but I am a farmer-not a corn grower though but I know about this subject - so I'll make it simple for you) were due to the wall street thieves getting bumped out of speculating on repackaged mortgage debt instruments and taking their cash and getting into commodities skimming/speculating.
All those people do is rape industry after industry and then pass along the misery and use the controlled press to try and put the blame anyplace but their greed. Biofuels and natural gas are now our two most credible alternative sources for domestically produced energy for the existing vehicles and equipment we have out there, and knocking this industry off right now goes right along with what they did in the 80s when we had a renaissance of alternative energy. they flooded the planet with cheap oil then and squashed the alternatives. They are doing it again, right on schedule just when it started to look decent.
There are NO "electric tractors" or road trucks out there now for replacements, and even if there were, it would still be way more expensive to switch to them. Personal light vehicles are another matter, but again, there just aren't any electric cars out there beyond a pitiful small handful of big golf carts masquerading as cars and a few dozen Teslas and so on, again, it would take dozens of trillions to change over our infrastructure to all electric. You need something to feed those ICE powered vehicles.
There is no one size fits all energy solution, but knocking off the only credible thing we have to insure against wildass price swings in petroleum fuels along with supply issues (hello, the mideast is daily always one bad "executive decision" away from a huge war, not the tiny wars they have no,w I mean a BIG one, imperilling the supply) is remarkably short sighted and naieve. The farm I am on now could be powered with biofuels, the trucks and trains that get that food to you in your mom's basement could be powered with biofuels, but having to replace way over a million dollars in equipment with unobtanium brand electric equipment is crazy. Multiple that crazy by..EVERY farm out there and you fail it.
Biofuels create hundreds of thousands of new points of production for SOME fuel alternative, and increased R&D HAS been helping. Everyone in the industry knows corn is just a stepping stone, now you know as well, consider yourself informed now. We've been doing corn because that is what the farms are set up to produce in bulk, that's all. Farming is a specialist industry, you don't throw yout mp3 player at a server problem when a rack of blades is the correct tool. And we don't grow as much sugarcane in the US because *it can't be done most places*. We do grow sugar beets, and they have been used, but again, speciality production. And they just took a huge area out of sugarcane production down in the Florida to help with the long term water supply around the 'glades, so that the cities can have some water mostly so they can keep wasting it on fountains and golf courses.
There has to be thousands of really smart biogeeks working on better biofuels right now, telling them to stop what they are doing and slashing funding is GUARANTEED to cause massive energy shortfals off the practical kind in the future.
Jeebus, how soon do people forget? The same wall street pirates were responsible for a lot of the near 5 buck a gallon prices of fuel this summer. Wake up.
My guess is, you are both too young to remember previous fast oilshocks, and also not even remotely related to anything agricultural, because your statements and conclusions are 100% wrong. No offense but, get the data first. One of the points about insuring DOMESTIC supply is that it is a national security issue, you can't trust everything to the capitalist pig globalist market, haven't you seen how that works lately? Want to help Mexican campesinos? End NAFTA, everyone wo thought about it predicted
The amount of energy put into biofuel in the form of fuel to run tractors, transport it to market, etc. exceeds the amount of energy you get out of it. Therefore, by definition, short of a significant change in the fundamental technology of farming or in the types of crops grown, biofuel will never---can never---be commercially viable
As it applies to Corn based ethanol, true. But there are a lot of different options for biofuels. Ethanol is an unrealistic option for many reason, the limitations of corn is only one of the thorns in its side.
Soy-Diesel is a net gain, but at ~50 gallons per acre there is no way to get the volume needed to make a dent. There are other slightly more exotic that can push bio-diesel up to 200 gallons per acre, but they require a growing climate that is only available in a small section of the US.
Algae farms on the other hand, can pump out thousands of gallons of bio-Diesel per acre, can be designed to run in low pop/non-farmland south west US, and can be used to clean exhaust from existing coal fired power plants. Of all the bio fuel options, these are really looking like the hot ticket right now.
-Rick
"Most people in the U.S. wouldn't know they live in a tyrannical state if it walked up and grabbed their junk." - MyFirs
Do they take into account the sunlight that went into the plants that went into fossil fuels?
In either case, they shouldn't - the sun would have shined whether or not there was a plant there.
In any case, I don't believe Brazil are secretly consuming oil to hide the fact that biofuels are a net energy loss.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."