Oil prices have driven up food costs but the Defenders of the Status Quo are blaming alternative fuels. What’s going on here? Watch Dazed&Confused and get some clarity:
Archive for the ‘biofuel’ Category
Don’t be fooled by the Defenders of the Status Quo
Monday, April 28th, 2008Would you like 15% higher oil prices?
Friday, April 25th, 2008Merrill Lynch commodity strategist Francisco Blanch says that oil and gasoline prices would be about 15% higher if biofuel producers weren’t increasing their output. That would put oil at more than $115 a barrel, instead of the current price of around $102. U.S. gasoline prices would have surged to more than $3.70 a gallon, compared with an average of a little more than $3.25 today. Biofuels are playing “a critical role” in satisfying world demand, says Fatih Birol, chief economist of the Paris-based International Energy Agency. Without them, “it would be much more difficult to balance global oil markets,” he said.
Source: Wall Street Journal, March 24, 2008
With oil around $120, the 15% increase in oil price discussed above should the anti-biofuel propaganda prevail and biofuel production be reduced would carry us to $138. Apparently, the anti-biofuel crowd, with Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi taking the lead, wouldn’t mind that outcome.
Debunking anti-biofuel hysteria
Thursday, April 24th, 2008Roger Cohen in the New York Times:
The supposed crimes of biofuels are manifold. They’re behind soaring global commodity prices, the destruction of the Amazon rain forest, increased rather than diminished greenhouse gases, food riots in Haiti, Indonesian deforestation and, no doubt, your mother-in-law’s toothache.
Most of this, to borrow a farm image, is hogwash and bilge.
If Asian rice prices are soaring, along with the global prices of wheat and maize, it’s not principally because John Doe in Iowa or Jean Dupont in Picardy has decided to turn yummy corn and beet into un-yummy ethanol feedstock.
Much larger trends are at work. They dwarf the still tiny biofuel industry (roughly a $40 billion annual business, or the equivalent of Exxon Mobil’s $40.6 billion profits in 2007). I refer to the rise of more than one-third of humanity in China and India, the disintegrating dollar and soaring oil prices.
Hundreds of millions of people have moved from poverty into the global economy over the past decade in Asia. They’re eating twice a day, instead of once, and propelling rapid urbanization. Their demand for food staples and once unthinkable luxuries like meat is pushing up prices.
At the same time, the rising price of commodities over the past year has largely tracked the declining parity of the beleaguered dollar. Rice prices have shot up in dollar terms, far less against the euro. Countries like China are offloading depreciating dollar reserves to hoard stores of value like commodities.
Food price increases are also tied to oil being nearly $120 a barrel. Fossil fuels are an important input in everything from fertilizer to diesel for tractors.
Another myth that needs nuking is that the Amazon rain forest is being destroyed to make way for Brazilian sugar-cane ethanol. Almost all viable cane-growing areas lie hundreds of miles from the rain forest. Brazil has enough savannah to multiply its 3.5 million hectares of cane-for-ethanol production by ten without going near the Amazon ecosystem.
Brazilian rain forest is burning, as it long has, for a complex mix of economic reasons. Brazil’s successful ethanol industry — 80 percent of new cars run on ethanol or gasoline and all gasoline comprises 25 percent biofuel — is not one of them.
He calls for removing the 54cent a gallon tariff on ethanol imports.
The Saudis hate alcohol
Friday, April 11th, 2008It’s official. Right from the top. The kingdom of Saudi Arabia hates biofuels. Out of concern for the environment and world energy security, of course. At the International Oil Summit in Paris Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi promised that fossil fuels will supply the bulk of global energy needs for at least the next 50 years. He said that “ethanol and other biofuels do not meet environmental and energy security goals” and that “their cultivation eats into the human food supply, reduces the absorption of carbon dioxide as forests are cut down, has not improved the security of energy supply and has not reduced petrol prices.” Biofuels also enjoy “financial favouritism†from governments, according to the minister.
“we have to look beyond biofuels… and concentrate instead on truly renewable sources of energy,” he said, flagging solar energy as “perhaps the best source” of alternative energy, predicting researchers will succeed in making solar cells “more effective†to expand use. What the Saudis omit is that we no longer produce electricity from oil so solar power is no threat. This cannot be said about alcohols which directly displace oil and snatch petrodollars from the Saudi coffers.
Merrill Lynch analyst Francisco Blanch just told the WSJ that without biofuels, the price of oil would be about 15% higher than it now is. This means at least $13 higher. This year the US will import 5 billion barrels. At $13 saving for each barrel, that adds up to a saving to the country as a whole of $65 billion in foriegn oil payments due to current biofuel programs.
That shows that our biofuels program has cost the Saudis billions. No wonder they are opposed to it. It just needs to be taken further.
“Food vs Fuel” Argument is False
Wednesday, April 9th, 2008Here is some interesting data that shows that the food vs fuel argument is false.
| Â |
2002
|
2006
|
2007
|
2015 (Projected)
|
|
Harvested corn
acres & yield
|
69.3M
(129.3 bu/A)
|
70.6M
(149.1 bu/A)
|
86.5M
(151.1 bu/A)
|
85.0M
(180 bu/A)
|
|
Total Corn Supply
Available
(prod = carry in)
|
10,573 Mbu
|
12,512 Mbu
|
14,393 Mbu
|
17,232 Mbu
|
|
Ethanol per Acre
|
350 gal/A
|
404 gal/A
|
435 gal/A
|
575 gal/A
|
|
Ethanol produced
|
2.96B gal
|
5.8B gal
|
8.3B gal
|
15.3B gal
|
|
Corn used for
ethanol
|
1,093 M bu
(10%)
|
2129 M bu
(17%)
|
3010 M bu
(21%)
|
4,695 M bu
(27%)
|
|
Corn Supply
(Less Used for Ethanol)
DDG Disp (M bu eq)
Total
|
9,480
189
9,669 M bu
|
10,383
515
10,898 M bu
|
11,383
792
12,175 M bu
|
12,537
1,452
13,989 M bu
|
Â
Note the bottom line. AFTER corn crop removal for ethanol production the US produced a net of 9.7 million bushels in 2002, 10.4 million bushels in 2006, and 12.2 million bushels in 2007.Â
Thus despite the growth of the corn ethanol industry (or actually because of it, as I’ll explain below) the net corn food product of the USA increased 17% between 2006 and 2007, and 26% since 2002. Overall, US farm exports are up 23%.
The reason why this is so is because agriculture is not a zero sum game. Only about 30% of US arable land is actually being farmed (it’s more like 15% in the third world). As a result of the ethanol program, the price received by farmers increased over the past year from $3.50/bushel to $5 per bushel. (There are 56 pounds of corn in a bushel – that’s actual grain, not corn on the cob. So $5/bu corn is $0.09/lb). By increasing the price the farmer gets from $0.07/lb to $0.09/lb, the program caused a great increase in the amount grown, both by increasing acreage and intensity of effort, and thus yield. This puts more corn on the market, and actually acts as a factor to decrease the price that grain merchants can charge for the corn, since they need to sell it all. (Adam Smith discusses this very issue in The Wealth of Nations.)
However, the retail price of corn, as well as all other food commodities, is being driven up an average of 4% by increased fuel prices, which are up 40% this year, as well as increased demand from China and India. The increased fuel prices affect retail food prices by increasing the price of production (of both agricultural products and especially fisheries), transport, wages, and packaging, which are the majority of cost of retail food. (At $5/bu, a $2.50 box of cornflakes, which contains 15 oz or corn, contains corn that cost 8 cents when bought from the farmer.
Robert Zubrin
author “Energy Victory”
I feel the need, the need for speed
Monday, March 10th, 2008Well we’ve got more details on that Lotus Exige 270E Tri-Fuel, a GEM FFV (which stands for gasoline-ethanol-methanol flex fuel vehicle, but you knew that already right?):
The heart of the Exige 270E Tri-fuel is a Roots-type supercharger (with a sealed-for-life internal mechanism meaning that it does not require the use of the engine’s oil) and air to air intercooler attached to the tried and tested 4-cylinder, 1.8 litre 2ZZ-GE VVTL-i engine. Using a development of the supercharger and intercooler package from the Exige S, the Exige 270E Tri-fuel has peak power of 270 hp (201 kW / 273 PS) at 8000 rpm, 184 lbft (260 Nm) of torque at 5500 rpm, up by 51 hp (38 kW, 52 PS) or 19% and 25 lbft 45 Nm or 14% over the standard gasoline Exige S. Maximum engine speed is 8000 rpm (8500 rpm transient for up to 2 seconds).
The low carbon number alcohol fuels methanol and ethanol give more power when burned in the engine than conventional gasoline (petrol) fuel. The performance benefits come largely from the high heats of vaporization of methanol and ethanol, which give strong charge-cooling effects, and the increased octane ratings. There are other secondary thermodynamic effects. Methanol’s higher heat of vaporization leads to a slightly higher performance relative to ethanol. All charge air ducting has been kept as short as possible with large diameter pipes making sure that the bends in these ducts are not too tight, to the benefit of throttle response and efficiency. The Roots-type Eaton M62 supercharger is turned by the crankshaft, and has an integral bypass valve for part load operation.
The 2ZZ VVTL-i engine has two cam profiles – a high speed cam and a low speed cam. The seamless switch point between these two cams is completely variable depending upon driving conditions and engine load. This gives the Lotus Exige 270E Tri-fuel a smooth and linear surge of power from idle speeds all the way to the maximum 8500rpm. An electronic drive-by-wire throttle ensures the quickest engine response possible whilst keeping the emissions as clean and as low as possible, to meet relevant legislative demands. Six fuel injectors have been fitted to increase fuel flow to the engine at normal and higher engine speeds and loads.
We called Lotus but it seems this car is not being offered for sale by Lotus U.S.dealers (Lotus is a British firm.) As always — this is a good opportunity to let your local auto dealers know that you want fuel choice, and they should bring it on.
Stop OPEC’s hold
Sunday, March 9th, 2008Scott Blanchard writes in The Birmingham News:
A little-known section of the Energy Security Act of 2007 contained a provision that would require within five years all new vehicles sold (foreign and domestic) in the United States be capable of running on alcohol fuels (a k a “flex fuel”) as well as gasoline. It costs, on average, about $100 to make a car flex-fuel capable. The most common flex fuel available today is ethanol, or E85, but flex-fuel cars can run on any alcohol-based fuel such as methanol or butanol and, of course, on gasoline.
This one provision would have had the effect of creating an international standard for flex-fuel automobiles. In turn, it would have had a domino effect forcing foreign automakers to equip their vehicles for flex fuel (or risk losing the huge U.S. market). [...] gasoline would be forced to compete with alcohol fuels. [...]
[Let's] seek to persuade our members of Congress that it is in our interest to have fuel choice. Had the Open Fuel Standard mentioned above been enacted (and not removed at the last moment due to lobbying by Nissan Motor Co.), we would be well on our way toward weaning ourselves off the shackles of our oil addiction.
How do you say farvegnugen in Swedish?
Friday, March 7th, 2008The Methanol Institute reports Volvo and Lotus are showing gasoline-ethanol-methanol flex fuel vehicles (GEM FFVs):
Even President George Bush was impressed when he walked on to the exhibit floor of the Washington International Renewable Energy Conference and saw Volvo’s display of seven trucks powered by alternative fuels, including methanol/ethanol and DME. Volvo had showcased the carbon-dioxide-neutral trucks in Stockholm and Brussels last year. The Swedish automaker pointed to the production of methanol from the gasification of biomass as a carbonneutral pathway. According to Volvo Environmental Projects Manager Henrik Landälv, while one of the trucks is dedicated to run on either methanol or ethanol, these are pre-commercial prototypes that will require additional development. Based on a their evaluation, Volvo found methanol and DME to be superior to ethanol and biodiesel for climate impact, energy efficiency, land use efficiency, fuel potential, and fuel costs. Back across the pond, Lotus Engineering unveiled the Exige 270E Tri-fuel at the Geneva International Motor Show. Tri-fuel runs on any mixture of methanol, ethanol and gasoline, with a top speed of 158 mph, and jumping from 0-60 mph in 3.88 seconds. According to Geraint Castleton-White of Lotus, “For car companies and the motorist, the use of sustainable alcohols like synthetic methanol requires relatively fuel changes to the vehicle.”
 Lotus Exige 270E Tri-Fuel: a gasoline-ethanol-methanol flexible vehicle.Â
As Michael Ledeen would say: Faster please!
Fields of Fuel
Thursday, March 6th, 2008New movie featuring several Set America Free Coalition members.
Rick Santorum agrees it’s time to Set America Free
Thursday, January 31st, 2008Senator Santorum writes in the Philadelphia Inquirer:
It’s been two years since President Bush admitted we are “addicted to oil.” This expensive addiction has taken a toll on our economy while funding major sponsors of the jihadis and other terrorists that seek to harm us.
We have been told the only way to break this addiction is to reduce consumption, as in the recently passed mandate to increase fuel efficiency. I am all for conservation and improving fuel economy, as with hybrid cars, but even if everyone drove a hybrid it would just slow the rate of growth in our consumption of oil. Those savings will be more than offset by our reduction in national oil production because we are unwilling to drill in Alaska and offshore. In other words, the Middle East, Russia and Venezuela have us over a barrel.
I suggest that in the short term, we dig our way out of this problem. The United States is the “Saudi Arabia of coal,” and Pennsylvania is sitting on hundreds of years of this affordable and accessible resource, which, with innovative technologies – spearheaded by Pennsylvanians – we can use cleanly and right away.
Pennsylvania coal already generates most of the electricity in this state. The industry is in the process of doing it more cleanly through clean-coal technologies, such as gasification of coal into methanol, a form of alcohol that can be burned in internal combustion engines directly or used to manufacture synthetic gasoline and chemicals. These technologies can lead to a whole host of new clean uses that can help us reduce oil imports.
Just two hours up the road from Philadelphia, the nation’s first coal-to-gas-to-diesel facility may soon be developed in Schuylkill County; word was expected today on a U.S. Department of Energy loan of $100 million to help enable construction. This fuel, which is currently being used in another coal-rich country, South Africa, can be used to power jets, heat your home, and run diesel engines.
Across Pennsylvania, farmers are also digging and planting corn and other crops that will be turned into ethanol that can replace gasoline in our cars. Most cars in America can’t run on ethanol, however, so who is going to install ethanol pumps at the gas station without the cars to run on it? At this point I would say to all of my hard-core conservative friends: Hold on to your hats.
What we need is a government mandate! We need to mandate that all cars sold in the United States, starting with the 2010 model year, be “flex-fuel vehicles” – that is, they should be able to run on a blend that is 85 percent ethanol and 15 percent gasoline (the so-called E85 blend), or even a coal-derived methanol/gas mixture. This mandate would cost a fraction of the new fuel economy standard with the added benefit of saving barrels more oil.
What would Chávez and company do in response? Jack up production to kill this industry off before it gets off the ground. So – hold on again, conservatives – let’s put a temporary tax trigger on imported oil if the price hits $50 per barrel. Anyone think it will go that low without this idea?
Finally, Congress should immediately repeal the protectionist $26 per barrel tax on imported ethanol. So while we may have a tax increase if oil prices drop, we offset that with an immediate tax cut on ethanol. That’s a net win for taxpayers and our energy security. Ethanol will begin to flow into this country from poor third-world countries that don’t have oil or much in the way of terrorists. U.S. popularity would soar in the third world and help the poor of those countries as well as ours.