Prices of Various Energy Sources

As we continue to develop biomass as a renewable source of energy, it is important to keep the cost of energy in mind, because this has a very strong influence on the choices governments and individuals will make. I sometimes hear people ask “Why are we still using dirty coal?” You will see why in this post.

Last year I saw a presentation that projected very strong growth in wood pellet shipments from Canada and the U.S. into Europe. My first thought was “That doesn’t sound very efficient. Why don’t we just use those here in North America?”

It didn’t take very long for me to find out the answer to that. It is because wood pellets are much more expensive than natural gas in North America. On top of that it takes more effort to use wood for energy than it does natural gas. That combination means that wood has a tough time competing with natural gas in North America.

When I was looking into that issue, I compiled a list of the price for various energy types on an energy equivalent basis. The price is as current as possible unless noted. I have converted everything into $/million BTU (MMBTU), and the sources are listed below.

My preference is to use EIA data over NYMEX data because the former is an archived, fixed number. I have included energy for heating and for various transportation options. For comparison I also included the cost of electricity and the cost of the ethanol subsidy/MMBTU of ethanol produced.

Current Energy Prices per Million BTU

Powder River Basin Coal – $0.56
Northern Appalachia Coal – $2.08
Natural gas – $5.67
Ethanol subsidy – $5.92
Petroleum – $13.56
Propane – $13.92
#2 Heating Oil – $15.33
Jet fuel – $16.01
Diesel – $16.21
Gasoline – $18.16
Wood pellets – $18.57
Ethanol – $24.74
Electricity – $34.03

Observations

It isn’t difficult then to see why wood pellets have a difficult market in the U.S. For people with access to natural gas, they are going to prefer the lower price and convenience of natural gas over wood. For Europe, their natural gas supplies aren’t nearly as secure, so they have more incentive to favor wood as an option.

The cost of the ethanol subsidy is interesting. We pay more for the ethanol subsidy than natural gas costs. However, if you consider that we are paying a subsidy on a per gallon basis – and a large fraction of that gallon of ethanol is fossil fuel-derived, the subsidy for the renewable component is really high.

For instance, if we consider a generous energy return on ethanol of 1.5 BTUs out per BTU in, that means the renewable component per gallon is only 1/3rd of a gallon. (An energy return of 1.5 indicates that it took 1 BTU of fossil fuel to produce 1.5 BTU of ethanol; hence the renewable component in that case is 1/3rd). That means that the subsidy on simply the renewable component is actually three times as high – $17.76/MMBTU. Bear in mind that this is only the subsidy; the consumer then has to pay $24.74/MMBTU for the ethanol itself.

Sources for Data

Petroleum – $13.56 (EIA World Average Price for 1/08/2010)
Northern Appalachia Coal – $2.08 (EIA Average Weekly Spot for 1/08/10)
Powder River Basin Coal – $0.56 (EIA Average Weekly Spot for 1/08/10)
Propane – $13.92 (EIA Mont Belvieu, TX Spot Price for 1/12/2010)
Natural gas – $5.67 (NYMEX contract for February 2010)
#2 Heating Oil – $15.33 (EIA New York Harbor Price for 1/12/2010)
Gasoline – $18.16 (EIA New York Harbor Price for 1/12/2010)
Diesel – $16.21 (EIA #2 Low Sulfur New York Harbor for 1/08/2010)
Jet fuel – (EIA New York Harbor for 1/12/2010)
Ethanol – $24.74 (NYMEX Spot for February 2010)
Wood pellets – $18.57 (Typical Wood Pellet Price for 1/12/2010)
Electricity – $34.03 (EIA Average Retail Price to Consumers for 2009)

Conversion factors

Petroleum – 138,000 BTU/gal
Gasoline – 115,000 BTU/gal
Diesel – 131,000 BTU/gal
Ethanol – 76,000 BTU/gal
Heating oil 138,000 BTU/gal
Jet fuel – 135,000 BTU/gal
Propane – 91,500 BTU/gal
Northern Appalachia Coal – 13,000 BTU/lb
Powder River Basin Coal – 8,800 BTU/lb
Wood pellets – 7,000 BTU/lb
Electricity – 3,412 BTU/kWh

194 thoughts on “Prices of Various Energy Sources”

  1. Good job, RR!

    I think you have just shown why electric cars are such a bad idea. Even if the battery issue were to be solved, electricity is just too expensive. Makes sense: electricity can do things, much of it better and safer, that other forms of energy can not. But using electricity for transportation (or heating) is a HUGE waste.

    You numbers would suggest Powder River Basin Coal is the future of energy. Any idea why it is ~4 times cheaper than Northern Appalachia Coal?

    If you're concerned about global warming, I guess it is time to start working on a method to transfer (more) heat to outer space. Call it the "Heat the Universe"/"Cook the Universe" project.

  2. Do these numbers simply reflect the amount of energy in the fuel, or do they also consider the efficiency of actually getting the energy out of the fuel?

    I'm thinking specifically of coal vs natural gas…my understanding is that gas, but not coal, can be used in combined-cycle turbines, which are higher efficiency than straight steam turbines. If this is the case, then some of the cost gap between coal and nat gas would seem to disappear.

  3. Mind if I cry foul? Where are the subsidies for gasoline and diesel? Figure in the 100's of billions we spend securing the sea lanes for mideast oil and it's a whole new ball game.

    And the cost difference for electricity and gasoline isn't apples to oranges either Optimist. Electric is more efficient than gas engines. Maybe what we need is a cost per mile comparison.

  4. Iraq was a trillion dollar war. While I don't for a minute believe it was a war for oil,it's a sad fact that Saddam wouldn't have been enabled without the oil revenues. We pay a lot more for gasoline than the price at the pump.

  5. Overall it seems like a half-baked analysis. If we just look at fuel costs, then solar and wind win hands-down. Where's the analysis of up-front capital cost, O&M expenses, any price on carbon, and factoring in costs of any other pollution, fuel security (oil), and other externalities?

  6. Thanks, RR. A very interesting list.

    Clearly, there are other factors to consider – such as capital costs, taxes, and transportation costs. (Coal is cheapest at the mine head, not so cheap after being shipped from Australia to Europe). And a joule from burning coal is not as useful as a joule from electricity. In fact, as you know, we would need several joules from burning coal to give us a single joule of electrical energy. But the list is a good place to start.

    I doubt that Europeans are using wood specifically to cut their high dependence on Russian gas. Russian gas supply has actually been quite reliable — it is the implicit political strings that make EUnuchs nervous. But it is hard to take Eurogovs seriously when their response is to seek increased gas supplies from ultra-reliable Algeria (scene of significant Islamist incidents) and even more reliable Turkmenistan (which maybe really does deserve Benny's epithet of "Thug State").

    European govenrment energy policies are most easily explained by the ruthless pursuit of tax revenues from their own serfs and by sad self-delusion.

  7. Figure in the 100's of billions we spend securing the sea lanes for mideast oil and it's a whole new ball game.
    O, come now. In the post 9/11 world we would be spending a lot (the bulk of?) that money, even if the ME had no oil. True, oil seem to do wonders in moving American presidents ("Call me Commander-in-Chief, for short…") to action, but it's not the only factor.

    Maury, electricity will still lose handily in a $/mile comparison, especially if you add in the vehicle cost.

    Perhaps the answer to energy independence is using coal-water slurry fuel in diesels…

  8. Overall it seems like a half-baked analysis.

    It is not an analysis. It is simply the cost per BTU of various energy sources.

    If we just look at fuel costs, then solar and wind win hands-down.

    How so? Show me where I can purchase solar and wind for prices cheaper than this.

    Where's the analysis of up-front capital cost, O&M expenses, any price on carbon, and factoring in costs of any other pollution, fuel security (oil), and other externalities?

    You are confused. Those sorts of things are reflected in the price. I am simply looking at $/BTU that you would actually spend today.

    RR

  9. Mind if I cry foul? Where are the subsidies for gasoline and diesel?

    That is a topic that has been covered here many times. What can truly be called subsidies might amount to a nickel a gallon. The BTUs in a gallon are higher, so you are talking about subsidies that are a tiny fraction of those given to ethanol for the energy that is created.

    See this for instance:

    http://zfacts.com/p/63.html

    "Ethanol Today," (8/'05) states "Five years ago, a US General Accounting Office report showed that ethanol had received $11.6 billion in tax incentives since 1968, while the oil industry had received over $150 billion in tax benefit over the same period.
    Probably true.

    But the oil industry produced 1068 times more energy so the subsidy rate per unit energy was 54 times higher for ethanol. That's like ethanol gets 54¢ and oil gets 1¢. Now if we had oil subsidies, and we do, and ADM is making more profit than …

    RR

  10. We spent a lot more than $150 billion since 1968 on oil security Robert. What does it cost annually to keep two carrier groups in the Persian Gulf? What do we spend on military bases in Iraq,Kuwait,and Qatar? Those are costs we wouldn't have if not for oil. I bet if we spent $300 billion military dollars guarding corn fields you'd include that in ethanol costs.

  11. Those are costs we wouldn't have if not for oil.

    You can't possibly say that. We have troops in unstable areas all over the world, whether they have oil or not. I bet we would have troops there because of our relationship with Israel regardless of the oil.

    But feel free to include those costs. Add them up and do the $/BTU analysis. Please show your work and let's discuss.

    RR

  12. You numbers would suggest Powder River Basin Coal is the future of energy. Any idea why it is ~4 times cheaper than Northern Appalachia Coal?

    There has definitely been a shift toward the Powder River coal. It is much easier to get to with heavy equipment. To my knowledge it doesn't require coal miners to go underground.

    RR

  13. Thanks Robert.

    Cost per Million Btu clearly explains why ethanol plants don't use ethanol as their source of energy for making more ethanol ~ even though they continually claim they produce more energy than they consume.

    It also explains why farmers don't use ethanol to power their ag equipment.

    And if fuel stations priced their fuels by energy content instead of by volume, there would also be few drivers who would choose to buy ethanol.

  14. You should change your title to Price, not Cost, of Various Energy Sources. That way alot of readers (as you can see already) will understand it's just a table of prices.

    Best,

    G

  15. I'm with you Wendell. Let's not do anything until we have a substitute that's cheaper than gas and has the same energy content. As luck would have it,we have infinite quantities of oil.

    Let's throw some other alternatives on the list,just for the heck of it. Algenol is a good $20 per gallon. No idea how many BTU's its got,but I'm sure it ain't enough to compete with good ole gasoline.

    What's wood gasification going for again…$5 a gallon? How about biodiesel? Do any of the other alternatives come anywhere close to ethanol's BTU per dollar….with or without subsidies?

  16. You should change your title to Price, not Cost, of Various Energy Sources.

    I went back and changed it in the text, but you are correct that the title change makes it clearer. Thanks Gregor.

    RR

  17. Optimist wrote: you have just shown why electric cars are such a bad idea. Even if the battery issue were to be solved, electricity is just too expensive.

    Maury wrote: And the cost difference for electricity and gasoline isn't apples to oranges either Optimist. Electric is more efficient than gas engines. Maybe what we need is a cost per mile comparison.

    The EPA already does those types of comparisons. Let's compare the 2001 Toyota RAV4 EV to the gasoline version.

    The electric version costs $391 to travel 15,000 miles, assuming electricity costs $.08/KWH.
    http://www.fueleconomy.gov/feg/2008car1tablef.jsp?id=17328
    But according to
    http://www.eia.doe.gov/cneaf/electricity/epm/table5_3.html
    Average residential retail price of electricity in 2009 was $.1168/KWH. So that would bump up the cost of the electricity to travel 15,000 miles in a RAV4 EV to $571.

    The gasoline version costs $1670 to travel 15,000 miles assuming gasoline costs $2.67 gallon.
    http://www.fueleconomy.gov/feg/2008car1tablef.jsp?id=17189
    That's actually slightly less than the average US retail price of gasoline, which is currently $2.74/gal according to
    http://www.fuelgaugereport.com/

    So fuel costs roughly 3x as much to run a 2001 Toyota RAV4 on gasoline as on electricity. So the problem is not that electricity is too expensive. Of course that's just retail fuel costs and doesn't include the cost of the vehicle or batteries.

  18. “Powder River Basin Coal – $0.56
    Northern Appalachia Coal – $2.08”

    The only important criteria for energy is having when and where you need it in a useful form.

    Northern Appalachia Coal fires the boilers that make electricity for much of the east coast (including mine). PRB coal has a much lower BTU content so it cost more to ship by rail. When I lived in the PNW, PRB supplied a large part of my electricity. Clee's too.

    PRB coal is also much lower in sulfur but as older coal plants install more advanced pollution controls Northern Appalachia Coal is regaining market share.

    So Rufus, can you explain why Poet uses PRB at ethanol plants in western South Dakota?

  19. “The electric version costs $391 to travel 15,000 miles, ..”

    Clee what makes you think that you could drive an BEV 15,000 miles in a year. BEV are practical only if you do not drive very much.

  20. “Fibrowatt has chosen a second site in North Carolina for a power plant fuelled by poultry litter and expects to pick a third site in the US state within about three months.”

    http://www.bioenergy-business.com/index.cfm?section=lead&id=11325&action=view&return=home

    This is an old press release but what got my attention is press releases today from the watermelons who are going nuts. Watermelons love renewable energy in general but do not like the specifics.

  21. Milton Copulus, the head of the National Defense Council Foundation, has a different view. And as the former principal energy analyst for the Heritage Foundation, a 12-year member of the National Petroleum Council, a Reagan White House alum, and an advisor to half a dozen U.S. Energy Secretaries, various Secretaries of Defense, and two directors of the CIA, he knows his stuff.

    After taking into account the direct and indirect costs of oil, the economic costs of oil supply disruption, and military expenditures, he estimates the true cost of oil at a stunning $480 a barrel.

    That would make the "real" cost of filling up a family sedan about $220, and filling up a large SUV about $325 (when oil was $10 a barrel cheaper than it is now!).

    Due to the enormous military cost of protecting Persian Gulf imports, the hidden cost of oil from that region amounts to $7.41 per gallon of gasoline. The cheapest gas out in my part of the Bay Area is $3.11 a gallon for regular. Add them together, and the true cost of my gas is probably around $10.52 a gallon.

    We use 21 million barrels a day of oil. At $480 a barrel, that's $10 trillion a year draining from the national coffers.

    And we haven't even tried to count the blood.

    http://tinyurl.com/ykdypfj

  22. So fuel costs roughly 3x as much to run a 2001 Toyota RAV4 on gasoline as on electricity. So the problem is not that electricity is too expensive. Of course that's just retail fuel costs and doesn't include the cost of the vehicle or batteries.

    Thanks for addressing this Clee. Most of the electric rav4 blogs I have been to state it takes roughly $3 to charge, for a 80-100 mile charge. So about what I pay for 1 gallon of gas to go 25 miles. No way is it even close to what gasoline costs. Electricity prices would have to more than double to compare.

  23. Clee what makes you think that you could drive an BEV 15,000 miles in a year. BEV are practical only if you do not drive very much.

    Many of these 100% electric rav4 owners are driving more than 15K per year:

    link

    I would be interested in what you consider 'not very much'. A 100 mile per charge battery should be more than enough for the vast majority of commuters. It won't get you across the country for summer vacation, but that's where trains and planes could come in, if the latter isn't dead when oil prices skyrocket again.

    OD

  24. We use 21 million barrels a day of oil. At $480 a barrel, that's $10 trillion a year draining from the national coffers.

    I always crack up at those kind of analyses. The entire federal budget is only about 1/3rd of that number, which should tell you that it is complete bunk. I mean, seriously? You believe we are spending 3 times the federal budget on just oil?

    RR

  25. You used the average retail price for electricity, but you used wholesale prices for the others.

    Only because I couldn't find an average wholesale price. (Of course I didn't spend very long looking for it either, because I was in a hurry). If you have one, I will plug it in.

    RR

  26. I think the writer is math challenged Robert. I come up with about 3.5 trillion using his figures. He made a $56 TRILLION dollar error further down in the story. I do find it hard to believe oil is costing us trillions each year. But, if you include the military costs of securing those oil supplies,gasoline is easily costing us twice what we pay at the pump.

  27. Only because I couldn't find an average wholesale price.

    I found an average wholesale for 2007, but nothing more recent. So that would still not be an appropriate comparison. Maybe I should just use the industrial price, which is quite a bit less than retail and much closer to wholesale.

    RR

  28. A graph of holesale electric rates in Pacific Northwest can be found at;

    http://www.ferc.gov/market-oversight/mkt-electric/northwest/elec-nw-nw-pr.pdf

    The wholesale price averages between 4 and 6c/kWh, but has been as low as 2 and as high as 10

    Residential Electricity Rates for Pacific Gas & Electric (central and northern California)

    Tier 1 (Baseline) $0.11877
    Tier 2 (101-130% of baseline) $0.13502
    Tier 3 (131-200% of baseline) $0.27572
    Tier 4 (201-300% of baseline) $0.40577
    Tier 5 (Over 300% of baseline) $0.47393
    Average $0.18471

    Of course, baseline quantities vary by region and season, but are between 10 and 20kWh/day, so it's very easy to go over that. So if you have an (all) electric vehicle with a 20kWh battery,you will always be into the higher tiers.

    That Tier 2 rate is pretty easy to get to, and at that point, you are paying $80/MBTU, and $120 in Tier 3.

    So if Clee wants to charge and drive his electric car, he'd better not do so in any months that he runs the air conditioner or the heater, and probably should turn off the beer fridge too.

    Of course, only the Cal gov't would require such an insane pricing structure that no one can understand.

    Compare the difference between the wholesale and residential, and you can see why the California electric utilities ARE in favour of electric vehicles.

    Just for interest, that rate of $0.27/kWh is pretty close to what RR pays in Hawaii – where some of the electricity is still generated from oil. Better to drive on oil directly.

    RR, your article is a good comparison, though I think it would be more useful to have two columns – one for wholesale prices (nymex, etc) and one for retail prices, as they are quite different. The average residential rate for natural gas is 50-100% higher than NYMEX. Retail gasoline is higher too, nobody gets to fill up at the NY spot price.

    At the level of the car driver trying to work out the true cost of driving on gasoline, NG or electric, he has no choice but to pay retail. Wil be interesting when electric car drives have to pay their share of road taxes too, which currently they don't, so, as with ethanol, they are being subsidised by everyone else.

    For completeness, the wood pellet price is the residential price, per ton in 40lb bags. Bulk delivery, where available, is cheaper, as are off season purchases (same with propane too). Wholesale pellet prices are about $150/ton, or $10/MBTU. A cord of firewood (in BC) is $185 for douglas fir, which works out to about $6-7/MBTU. And, this is about the only fuel that you can get for free, with a little elbow grease.

    BUt based on those prices for coal, I am going to build a clean burning, coal fired steam car. Even at 10% efficiency, on powder river coal, it will cost 1/10th the amount per mile as gasoline!

  29. Optimist,

    I had an exchange with a few people on The OIl DRum about coal-water mixture.

    I saw presentation on CWM in Australia in the early90's. Was claimed to have to have all the handling properties of #6 heavy fuel oil, though less energy content per kg. It works fine in boilers , but not in internal combustion engines, or turbines.

    Here is what I found after doing some digging – the Wikipedia post is very "hopeful" to say the least.

    A $41million (!) study was done by the NREL in the '90's, and it was a complete failure, though as much for logistical than technical reasons. The end result of the 12 year (!) project was 1.2 hours of operation of a twin cylinder modified diesel engine on coal-water fuel at the engine company's test facility in Wisconsin.

    They clearly had some major problems;

    "because carryover of incompletely burned coal particles (in the exhaust) caused a fire in the baghouse and damaged some of the bags. Although a design to solve this problem was developed, it was not
    implemented. No further CWF tests were conducted before the project was withdrawn. "

    CWM is as sexy as cellulosic ethanol, and about as impossible. For an engine/turbine. I would go the gasification route as you get all the (many) nasties out before they grind up your engine, but that is not convenient for mobile engines.

    There is very little continuing work on CWM, though at those coal prices, you might expect otherwise.

  30. Maury,

    Let's throw out a few sense check numbers.

    Suppose…
    The world has spent $5 trillion in external oil related costs (including war) over the past 20 years.
    Assume global consumption of 75 million barrels per day over that period.

    Then we get around $9 per barrel of external oil costs. A $9 incremental oil price might mean an extra 30 to 50 cents per gallon of gasoline.

    There are other external costs, like pollution, security, goofy legislation (we should add the cost of grilling energy CEO's to the bill, for example), etc. But it seems pretty hard to get to $480, or even. That would be $265 trillion all-in cost of oil over 20 years. Seems hard to me to get it well over a few tens of dollars per barrel.

  31. Hmm.. what the heck? A MBTU is equal to 1.06 x 10^9 joules or 277 kWh, or 27.77 USD per MTBU at 10 cents/kWh, and kWh hour prices vary, I use this as a guide. A gallon (3.6 L) of gasoline contains about 160 MJ of thermal energy, so 6.6 gallons contains a MBTU, or 19.80 USD/MBTU @ 3 USD/gallon. However, the thermal value is the total thermal energy, a gasoline engine only uses about 25% of this to move the car, while an electric car gets about 90% efficiency from the plug to move the car. These values don't include the thermal efficiency of producing the electricity and transmission losses, but from a electricity from the plug point of view, electricity is cheaper than gasoline. In the winter engine heat from ICE offsets the advantages of electric somewhat, since the thermal losses from ICE engines are used for heating while the electric car just has to use more battery power. Extra insulation for electric vehicles is a must.

  32. RR, your article is a good comparison, though I think it would be more useful to have two columns…

    I really did this on the spur of the moment, and I see a few areas that I could beef up. Forbes has invited me to blog for them, and I plan on cleaning this one up (and the comments here have been helpful) and using this as my first essay there.

    RR

  33. Jens,

    Your number of 90% electric efficiency is what you get for the motor itself. You also have charging loss into the battery, and sicharging losson the way out.

    For a vewry detailed review of driving a Tesla, in real world conditions, have a look at this article.

    http://evworld.com/article.cfm?storyid=1733&first=2423&end=2422

    In this, the car owner states that "Due to cooling and other losses in charging, filling from empty takes about 68 kWh, or 26% more than the 54 kWh battery holds."

    You can expect some loss on the way out of the battery, and through the control system, and then 10% loss (90% eff) at the motor itself. Combine all this (0.74*0.9*0.9) and you are at 59% plug to wheel efficiency.

    Granted, with an electric car you get regenerative braking, but this is really reducing a parasitic loss, not improving the drivetrain efficiency.

    so even at your rate of $28/MBTU, you need to buy 1.6 ($47)) to get your one MBTU at the wheel.
    With gasoline, your average efficiency is closer to 15%, so you need to buy six units at $18 (=$108) to get your one MBTU. If you add in the road taxes you should be paying, but aren't then you'll probably come up to about $55-60 for the electric. Half the price, to be sure, but then you can get almost that improvement with a Prius.

    Now, with that 66kWh charge, every couple of days you PG&E electricity rates would easily be in tier 2 territory ($0.2752/kWh). then your charge is costing you about $130, so you are worse off than gasoline.

    "We're estimating our own average demand is 330 Wh/mile overall, after charging losses."
    So that is 33kWh for 100 miles, at $0.27/kWh, that is $8.91/100mi. For gasoline, at $2.50/gal, you would need to use 3.5gal/100miles, or 28mpg to be equal. And 28 mpg does not require a $100k high tech car.

    Now, if you live in the midwest, and electricity is $0.07/kWh, it's a different story.

    There are lots of variables to the cost of driving an electric car, once you have laid out the vast sums to buy one.

  34. RR,

    Blogging for Forbes – well done!

    A couple of other fuel price suggestions for you;
    :Straight vegetable oil (soy or Canola), (wholesale/futures, and retail at Costco)
    :Methanol (from Methanex website).
    :kiln dried lumber (compare with wood pellets!)

    Your analysis of the ethanol subsidy, and how much carbon neutral fuel you get for it is eye opening, to say the least. Now I am going to try to work out the same for biodiesel….

  35. paul wrote:So if Clee wants to charge and drive his electric car, he'd better not do so in any months that he runs the air conditioner or the heater, and probably should turn off the beer fridge too.

    Yes, definitely a consideration. Those tier rates are quite steep. The spouse wants an EV, though may balk at the MSRP. But the air conditioner and heater don't turn on much at our house because I'm stubborn 😉 I don't want to grow soft here in CA, so the thermostat is 80F in the summer and 58F in the winter. That way when I visit family back east I can shrug off the weather. Yes, I'm weird that way.

    PG&E has an "Experimental Time-of-Use Low Emission Vehicle rate"
    http://www.pge.com/about/environment/pge/electricvehicles/fuelrates/index.shtml
    Of course if it makes too much sense, they'll probably cancel it. For now it starts as low as 5-6 cents/KWH off-peak (night), 10 or 10.4 cents/KWH partial peak and 28 cents/KWH when one is most likely to want air conditioning. Add on that, having an EV will likely push one into Tier 3, which cuts down on the fuel cost savings. That's about 11 cents/KWH Tier 3 off-peak, (not 27 cents/KWH) in the experimental TOU LEV rate.
    http://www.pge.com/includes/docs/pdfs/about/rates/rateinfo/rateoptions/res/e-9.pdf
    Get into Tier 4 and PV starts looking cheap in comparison. Yes, I like seeing my meter run backwards during peak hours because of the PV on my roof. Buy low, sell high with net-metering. Still, if we get an EV, it will be to make the spouse happy, not to save money.

  36. "Then we get around $9 per barrel of external oil costs. A $9 incremental oil price might mean an extra 30 to 50 cents per gallon of gasoline."

    That's by dividing the cost of oil security by 75M bpd Armchair. But,the US only uses 20M bpd,yet provides virtually all the security. Divide those costs by what we use and we're talking up to an extra $2 a gallon for gasoline. What's the ethanol blenders credit cost again?

  37. “Paid $34K with 34K mile”

    I paid half of that for my wife's new Corolla.

    Look at the pictures. People in shirt sleeves wearing flip flops. Now it does sound like a typical California solution. Drive a 4wd SUV where it does not snow.

    How is this better than using less energy in my ICE POS with 260k miles?

  38. @ Maury Regarding the efficiency bit included in the number

    The efficiency of collection of the resources and transmission are included in these figures. The efficiecny of use is not.

    @ Kit P; this is exactly the solution that we must focus on; what use3s less energy. A small diesel can outperform a hybrid at least here in the European market in terms of mpg.
    What is crazy especially with congestion charges in London is that I will get an allowance for driving a hybrid SUV (say hybrid 30mpg) but get no allowance for driving a car of 60 mpg or even smaller cars that can get 100 mpg. And remember in England the emissions in terms of soot have to meet minimum requirements so it is not as if there is a crap load of smoke coming from the tiny cars.

  39. Paul, are you sure the mechanical efficiency of a gasoline engine is only 15%, I have it on very good authority that the mech efficiency of a cyclist is 21-22%. as a side note, wikipedia has 18-20% which isn't that impressive.

    The stuff you said about the tesla's real efficiency is interesting, and as I suspected electric cars aren't as green as they initially would appear. That aside, as FF runs down there will be no alternative for heavy and fast personal transportation.

  40. Maury,

    Taking your line a bit further, we'll assume the US doesn't need to provide "security" for domestic production, or Canadian imports, which combined are about 8mbpd.

    So we are left with 11mbpd for the security costs, and so your $2/gal is now about $3.60/gal (which coincidentally is about the amount of European fuel taxes)

    We are just speculating about the original amount, at $5trillion, but there is no question that there is a large external cost for imported oil, that does not appear in it's price.

    Sounds like a bona fide case for an import tariff to recover these costs, which would have the double effect of encouraging conservation while spurring domestic production of oil and alternatives – subsidised only buy the users of imported oil, instead of the taxpayers.

  41. Another observation, in Finland the price of gasoline (95 octane) is 6.70 USD a gallon right now, as Paul seems to have fairly accurately pinned the tax. There are very few electric cars on the roads even with these prices but pretty much the same number of other cars . As I've seen others say, the demand for oil is quite price inelastic, and remains so now.

  42. Jens,

    The widely quoted efficiency of a gasoline engine of 25% is when running at constant speed and optimum conditions. You then have (ever increasing) parasitic loads like electronics, air conditioning, power steering etc, so your shaft output is even less.

    The analyses I have seen show overall hwy efficiency of about 20% and city of about 11% (lots of stop-starting, so not only is energy wasted by braking, but also the engine is rarely running at optimum efficiency. Combine these for 15%, givem that most vehicle miles are in the city

    You can see some evidence of this if you look at hybrid fuel efficiency figures – they get close to the same, or slightly more in the city, as they have recovered the braking waste, and by stopping the engine at rest, and electric assist on acceleration, the engine is in it's efficient range much more often.

    The cyclist is extremely efficient, as they do lots of coasting, and only add as much power as needed (plus they carry a minimum of excess weight).

    However, if you look at the (US) food production system, there is a lot of fossil fuels used to produce the cyclists food. One study shows that the cyclist gets 2.4% mechanical energy out for all the fuel inputs into producing the food. So unless he grows his own food, the cyclist is using a surprising amount of fossil fuel, indirectly.

    For a great read about Transport Efficiency, that compares all modes of transport, have a look at this link:

    http://knol.google.com/k/speed-costs-power#

    Their conclusion starts with the great line
    "This analysis shows that light personal vehicles perform far better than heavy ones. " and they infer that future vehicles will, inevitably, be lighter and smaller, regardless of their power source.

  43. Paul, I've been on the import tariff wagon for some time now. We should do it for national security,if nothing else. How far would we go to protect those oil fields in the Middle East? As things stand,we're obligated to defend the Saudi's from all threats. And yeah,we'd even go nuclear if it came to that. We'd also watch with shock and awe as Saudi's flew airliners into our skyscrapers. An import tariff would go a long way towards getting off the OPEC addiction.

  44. This is a terrific post, as it informs the debate.

    But one cannot draw conclusions from raw data.

    Maury is right–we just dumped $1 trillion in Iraq. Was that about human rights? If so, why we did we establish an Islamic state governed by Sharia law? This is odd, as we had the example of Turkey, a secular state (though Islamic population) nearby. My guess is that it was indeed about the oil. A bad bargain.

    Our military fights wars using compressed hundred dollar bills for bullets. At least I think so–$1 million per soldier per year in marginal costs. I am afraid to ask what is the total cost. We seem to get in prolonged wars with people who pay their "soldiers" about $1,000-$3,000 a year.

    Moreover, people in cities breath foul air due to auto exhaust–this is a cost of ICEs. I maintain property right include the right not have have people dump trash onto your property–or befoul the air you breathe.

    If you had a stream running through your property, and someone upstream started pooping into the stream, what is your reaction? That your riparian and property rights are being violated. And they are.

    The PHEV is wonderful technology.

    For reasons of bona fide national security, economic growth and clean air, I dearly hope the PHEV becomes the accepted norm in my lifetime. I am holding my breath (I live in L.A.).

    I suspect Japan and France will move to PHEVs, and nukes. I also suspect living standards in those two nations will accelerate past ours, as well as quality of life.

  45. In reply to Paul:

    I really don't see a 10:1 ratio for fossil fuel use to produce food joules, because obviously in the past using horses or human labour for farming still produced extra calories. I just don't see mechanized farming as being worse than 10% as efficient as by horses or human labour locally. I've seen this theory bandied about elsewhere though, it's not the first time I've heard it.

    The difference between local farming and most modern food is transport of the food and just what kind of food is eaten (meat vs veggies, food from 5000 miles away or food from 100 miles away), but modern trains and trucks seem fairly efficient at what they do.

  46. Maury/Benny,

    By any rational argument, the war money would have been much better used to just buy oil on the open market, or, invest in energy conservation measures, why this hasn't happened is beyond me.

    I absolutely agree on the oil import tariff, but the US is hysterical about gasoline prices. John Mcain was advocating a gas tax holiday in his campaign. All this to keep consumer gasoline prices low is like King Canute trying to hold back the tide..

    Jens,

    While those numbers may be the worst case scenario, there is no question the the food "industry" (not just farming, but processing, distribution supermarkets etc) are is a large user of energy. We will still be better off if everyone cycled more, but the key point is how dependent everything is upon energy usage, it's just a matter of degree.

    A disproportionate share of that energy is from refridgerated produce, so that we can have fresh produce, out of local season, from Mexico, Chile, etc. The cold storage and transport industry is a huge, but largely unseen one, and all food related. It is energy efficient, but these are verging on "luxury" food, as opposed to essential food. Would be the first thing to go in a war situtaion.

  47. Maury,

    I'll see your tariff on OPEC oil, and raise you further.
    To go along with the "OPEC Avoidance Tax" of $3/gallon, we then add a requirement for mandatory place of origin labeling for petroleum.

    So when you fill up at the pump, the pump has to say what % came from where. We have this with almost every other product we buy (food, lumber, cars, any manufactured good) but not oil.

    The labeling could be as simple as N.American – Imported, or continent of origin, or country. I would go for continent system, and label middle east as a "continent" for this purpose.

    Once this labeling is in place, along with the tax, the consumers will gravitate to domestic production, to keep their money in the country, and avoid paying the tax, and buying imported oil.

    It is the ultimate "buy American" program, and for once, one that would actually work, and produce real benefit. Every person could feel they are doing their part to stick it to the middle east and Venezuela, by refusing to buy their oil when they fill up.

    And I think that right now, Americans would embrace such a scheme (though they might be less excited about the tax). But the two together would create more impact than either alone

    Country of origin labeling drives clear preferences in all other goods, I think it would for oil too, and would cost almost nothing, and take no time, to implement.

  48. Hope you get a steady gig at Forbes!

    One of the things they told me was that the content does not have to be exclusive. So my plans are to use the occasional essay here, take comments into consideration (peer review), and then post a better essay there. This essay, for instance, will be much stronger as a result of the constructive criticism and feedback received. So thanks to all for that.

    Cheers, Robert

  49. BTU is a useful metric, but when dealing with liquid fuels Octane must be taken into account, also.

    For ex. My impala gives up about 20% mileage when running E85. Many of the newer engines coming on the market will do even better.

    So, with ethanol selling on CBOT at $1.76/gal, today, and adding another $0.75 for taxes, shipping, and blenders'/retailers' profit, and blending 15% gasoline it could sell for $2.50 gal (in an E85 mixture) at the pump. Without ANY subsidies up or down the line.

    This would require a gasoline price of about $3.12 to be a break-even proposition. So, with gasoline at $2.74 we're not quite there, Yet.

    However, how are we looking for Next Year, and the Year, thereafter?

    And, what would the price of a gallon of gas be if there weren't about 1.5 Million Barrels of Ethanol produced Every Day? "Static Analysis" can be deceiving.

    Kit: I guess they started using PRB because it was the cheapest way to distill alcohol.

  50. “Still, if we get an EV, it will be to make the spouse happy, not to save money.”

    That I understand Clee. My wife thinks her Corolla is a luxury car. If you want to be green the first thing you need is a compost pile. As a practical matter time spent turning a compost pile is time not spent driving to Nordstums.

    So if your wife wants to be green get her a dairy cow and cart to get around. You never hear the Amish whining about energy costs. The efficiency of dairy cow is supported Paul's link.

    It may be heresy at this blog but energy is not important. Freedom and safety are important. A small amount of energy provides a huge amount of freedom from being beast of burden with mush lower risk. While the ICE is wildly criticized, the BEV ZEV is only marginally cleaner than my 1989 PU. My LEV Corolla is very close to the BEV ZEV.

    If California would ban single occupancy commuting in jacked up 4wd monsters. The air would get clean over night. Why wait to solve a problem when a low cost solution exists. Hauling hundred of pounds of batteries around make the same amount of sense as hauling around a few extra tons of sheet metal.

  51. Rufus,

    I think the BTU (or GJ) is still king, rather than octane rating. The reason why you get 20% less mileage on E85 is simply that it has less BTU's/gal. E85 actually has an octane rating of about 95, compared to 87 for regular and 91-93 for premium gasoline.

    The octane rating is a measure of the fuel's ability to handle higher compression, but higher octane gasoline actually has (marginally) less btu/gal than regular.

    If you had E100, you could run a much higher compression engine (16:1) than your E85, and you would get same mpg for E100 as gasoline, but 20% more miles/BTU. So in this case, it's not the fuel, it's your engine that is holding back the potential of ethanol fuel. You have traded a potential 20% increase in ethanol mileage for the ability to run on part or all gasoline. Of course, you weren't given a choice, but that's another story..

    Perhaps the best way to even out the pricing, for vehicle fuels, would be to do what they do for CNG, where it is sold by Gasoline Gallon Equivalent, GGE, which is based on the number of BTU's in a gallon. That way a CNG car driver has a direct comparison, as would a diesel or propane car driver.

    Better yet, go metric and sell by the GJ, or kWh, it would let people directly compare electric car performance, but I won't hold my breath for it to happen…

  52. Actually, E85 is about 113 Octane, and can handle compression ratios up to 16:1 very easily. 19:1, actually.

    The reason my chevy has such a low CR is so it can burn gasoline (E85 is still not available, everywhere.)

    Eventually, we'll have engines that can adjust Compression Ratios, as well as Displacement. Then, we'll have a TRUE Flexfuel engine. Such an engine would attain, virtually, the same mileage on E85, Or gasoline. That engine is still several years down the road, however.

  53. “Kit: I guess they started using PRB because it was the cheapest way to distill alcohol.”

    I think you are right Rufus. I did a back of the envelop calculation for the cost of producing heat with a nuke plant and got $1.20/MMBTU. The cost of nuke includes the cost of fuel transportation. PRB coal at $0.56 can beat nukes for a lot of rail miles.

    It should be pointed out that all energy is free. It is the cost of digging it up, pumping it out and so forth.

    “I sometimes hear people ask "Why are we still using dirty coal?" You will see why in this post.”

    The environmental impact of making electricity with PBR coal is the same as Clee's PV, which is insignificant.

  54. Sorry to join this party late but as the author of the above-quoted piece on the "$65 trillion a year" true cost of oil, I obviously need to clarify some things.

    First, that piece originally went to press at Energy and Capital with a spreadsheet error. It's regrettable and I try to get my numbers right, but it happened. (Hey, I was an English major, not engineering. I can get lost in those big numbers sometimes.) I tried unsuccessfully to get that post corrected. However I did correct those numbers when I reposted it to my blog.

    Second (do I even need to say this?) those numbers are not mine, they are from the sources identified. I take responsibility for the math error.

    Third, the entire point of that piece (if you actually read it and didn't just pick out a headline number) was to highlight the externalized costs of oil. It was not intended to be a true calculation, but as a sort of felicitous thought experiment in pursuit of a worst-case estimate.

    As I said in the summation: "To be honest, I have no idea how one could sum up these estimates. There are too many different boundaries for the costs that are counted and a lot of troublesome math that wouldn’t yield a terribly significant number anyway. and "undoubtedly some of the costs are being counted more than once."

    Anyone who thinks I was trying to calculate a real number clearly didn't read the piece or get the point. Comparing the (corrected) $12.5 trillion figure to the $13 trillion GDP (in 2007, when that was written) was simply a way to illustrate the possible magnitude of all the externalized costs.

    I'm confident Robert will have no issue with my objective. He does his own yeoman's work at counting the uncounted. However I can see why he might reject the idea of venturing into cost accounting for climate change, health costs, economic knock-on effects and so forth, as I did in this piece, because he is a most rigorous sort of gentleman not normally inclined to some of the flights of imagination I take in my work on energy.

    The true cost of oil probably can't be counted, and the boundary problem is always up for debate. The point is to realize that there are uncounted costs. I am willing to debate Robert for as long as it takes to demonstrate that the military costs we bear to protect our oil interests abroad are not "reflected in the price" of oil–not even close. As I explained in the piece, the military costs are only one component of Milton Copulus' "$480 a barrel," which also included the direct and indirect costs of oil and the economic costs of oil supply disruption. Those who are interested in learning more about that calculation are encouraged to explore Copulus' work.

    Robert's numbers here are explicitly prices for the internalized costs–the prices actually seen on the market–not the externalized costs, which was the point of my post.

    –C

  55. Welcome to the debate Chris. A few of us get pounded on regularly for supporting ethanol. The 45 cent blenders credit takes a lot of heat. I feel that a subsidy of less than a nickle for a gallon of E10 is a hellified bargain. If we ever pay the true cost of gasoline at the pump,these guys will turn their anger in the right direction imo.

    Like I told Robert earlier,if we spent $300 billion annually guarding corn fields,he'd certainly include that in the cost of ethanol. Unfortunately,it's hard to break down exactly how much we spend guarding those oil fields. I do know we had five battle carrier groups in the Persian Gulf at one point last year. That ain't chump change.

  56. Don't get me wrong, Maury. I support full cost accounting. But changing context can get you in trouble.

    Robert's work on the full cost accounting and energy return on ethanol specifically has been very valuable to me and many others. It has been part of what's convinced me that biofuels are a short term bridge solution for certain applications, at best.

    The real question is whether the boundaries of full cost accounting for ethanol and oil have been equally well drawn. Only after answering that question can you move on to cost comparison. We're still a long way from that I think.

    If we spent $300 billion annually guarding corn fields, I don't think it would be included in the cost of ethanol any more than it's included in the cost of oil.

    The externality problem applies to nearly every move we make in energy, food, and water. We're only beginning to appreciate the environmental impact of all we do. Will we eventually internalize a price for the death of a species? For all carbon emissions? For asthma and cancer? For the loss of ecosystem services (like rain) due to climate change?

    For now it's safe to say that the true costs are not reflected in the prices, but I would not say that ethanol was by this calculation a bargain substitute for gasoline. The boundaries for ethanol can be drawn a lot wider as well. Shall we price in the economic impact on Mexico when tortilla prices skyrocketed, due to the American corn ethanol boom? The loss of economic benefit for America had those same acres used to grow corn been used for more high value, organic crops? The consequent health benefits of that food? And of course, some cost assigned for the military support for the fossil fuels that were used in the production of the corn?

    These are important questions, and they're not easily answered. I'd like to see a whole lot more academic work in the area.

  57. I am willing to debate Robert for as long as it takes to demonstrate that the military costs we bear to protect our oil interests abroad are not "reflected in the price" of oil–not even close.

    I agree with that Chris. There are lots of costs related to oil that the person at the pump does not pay except in the form of taxes. There are other costs that are being shoved onto future generations. I am well aware of that. I just know that a lot of these analyses like the one you quoted get completely carried away, and a little sanity check should show that the true cost of oil can't be many times the size of the entire federal budget.

    On the other hand, Maury has a blind eye on the subject of corn ethanol. He can't see any down sides, and he can't believe that it is anything other than a great thing – even when the evidence shows that it isn't backing out oil imports.

    RR

  58. @Robert Well, I think Copulus himself intended his studies as thought experiments. His team worked through a lot of data to even attempt those calculations. It's a shame that he's gone because I don't see nearly enough work in this area in academia or military planning (that I'm aware of as a regular citizen with no special access).

  59. "For now it's safe to say that the true costs are not reflected in the prices, "

    Couldn't agree more, but are ANY of the costs really reflected in the prices?

    It seems to me that oil prices, and energy prices in general, are pretty much demand driven, regardless of costs, internal or external.

    In fact, looking at RR's list, I'd say the prices are pretty much a reflection of the "convenience" factor for the various fuels.

    In two years, oil prices have gone from $90 to $150 to $30 to $90. Production costs will have barely changed in that period (though marginal production cost may have).

    So the only way to "force" inclusion of the costs is by imposing significant oil taxes, something the Europeans have no trouble doing (though I think it was to raise revenue, rather than include external costs).

    But I can't see the US government imposing such taxes anytime soon – though they would make a big dent in imports, and, by extension, the costs of securing them.

  60. If we spent $300 billion annually guarding corn fields, I don't think it would be included in the cost of ethanol any more than it's included in the cost of oil.

    I think it would not be included if the government did the guarding and passed the cost onto taxpayers. But if corn farmers hired the guards and passed on the cost to the ethanol producers, who passed it on to ethanol consumers, then it would be included in the cost of ethanol. But that's the difference between internalized costs and externalized costs. So the Ethanol Subsidy that RR lists is an externalized cost broken out separately and the Ethanol item on the list includes only the internalized costs.

  61. You're wrong about my not seeing a downside to ethanol Robert. Like Chris,I see ethanol as a bridge solution. Without it,POET wouldn't be bringing corn cob ethanol to market. Cellulol would never get off the ground. We have to start somewhere. Eventually,corn ethanol will be priced out of the market by better solutions. But,sitting around waiting on those solutions will just compound the effects of peak oil.

    I felt I did a good job of showing the 750,000 bpd of corn ethanol had cut our products supplied total by at least 500,000 bpd. Maybe we should just ask the EIA straight up.

  62. “On the other hand, Maury has a blind eye on the subject of corn ethanol.”

    Not the only one who post here who has that problem. People like to take data, forgetting that association is not causation, to use to support their position forgetting the why? For example,

    “I do know we had five battle carrier groups in the Persian Gulf at one point last year.”

    The doctrine of right of passage goes back to wooded ships and iron men. Those ships were powered with sails not nuke reactors.

  63. @Paul – if the US gov added a 5 dollar a gallon tax on gas (petrol) do you think they might reduce some other tax burden? Personally İ doubt it – they would just find a new way to piss away a lot more bucks.

    @Kit P – you must be the only guy in the world who seems to think coal fired plants have nothing to do with air pollution!

    The first list makes quite a case for CNG as an automotive fuel!

  64. Paul suggested; "… the consumers will gravitate to domestic production, to keep their money in the country …"

    Now there's a hypothesis! Why not stop one of those rich liberals driving around US streets in a gas-guzzling Mercedes Benz and ask him what he thinks about the idea of using his income to support US jobs?

  65. A general observation on this thread — Beware TOD-Doomer Syndrome!

    The Oil Drum was once an essential resource. Then it became dominated by anti-human depressive Doomers, making it a sad shadow of its former self.

    Yes, there are a lot of challenges in the energy sphere — challenges which could even be existential for Japan, the EU, and China.

    But there are opportunities too, simply using existing technologies and known resources. And there is a never-ending supply of the greatest resource of all — human ingenuity.

    In essence, the human race has a supply side challenge on energy. We need to expand available power supplies several times over, and we need to reduce the cost of those power supplies. The good news is — It can be done.

    It is a waste of time & effort to focus on increasing taxes and reducing supplies. That's for losers.

  66. I felt I did a good job of showing the 750,000 bpd of corn ethanol had cut our products supplied total by at least 500,000 bpd. Maybe we should just ask the EIA straight up.

    Show me where you did this.

    As far as bridge solutions, the funny thing about those is that it requires something on the other side of the bridge. If we don't end up with commercial cellulosic production, it was a bridge to nowhere and monumental waste of taxpayer money.

    RR

  67. As far as bridge solutions, the funny thing about those is that it requires something on the other side of the bridge. …a bridge to nowhere and monumental waste of taxpayer money.

    Correct Robert.

    The corn ethanol crowd only started saying corn ethanol was a "bridge" to cellulosic as part of a clever marketing scheme to help maintain political support and subsidies for Big Corn and Big Ethanol.

    Who knows if cellulose ethanol will ever be economically viable? It might, it might not, but if it does, it won't be because of any bridge building the corn ethanol crowd did.

    There is very little correlation between corn and cellulosic ethanol. They use different science, different processes, and different feedstocks, and nothing that happened with the centuries old process of fermenting and distilling grain into alcohol, was crucial to the development of cellulosic ethanol.

  68. “@Kit P – you must be the only guy in the world who seems to think coal fired plants have nothing to do with air pollution!”

    Actually Russ I think coal has a lot to do with air pollution in China.

    Somebody please tell Russ where PRB coal comes from and who is buried in Grant's tomb.

    Here is a link Russ

    http://airnow.gov/

    I suspect that Russ is one of those people who think that the coal plant in my back yard that makes his electricity should be replaced by 4000 wind turbines in my back yard.

    I read an amusing article from California where some fool wanted to put up a small wind turbine that would 'spoil' the ocean view. California has great coastal wind resources but no wind turbines.

    So Russ, where do you live and which 'dirty' coal plant is polluting your air?

    I live places where the air is clean and electricity is produced with non-dirty coal.

  69. Well, answer me this, RR. If the "marginal" gallon of gas is imported (actually, I guess that'd be closer to the "marginal" 80 Billion Gallons of Gas,)

    and, I'm only using 1/3 as much gas as I was (to go the same amount of miles,) whose butt is that coming out of if it's not coming out of the Imports?

  70. Oh, and Chris, you need to look into those "tortilla" riots a little more closely. They didn't have "Anything" to do with "Yellow Field" Corn production in the U.S.

    1) Mexican Tortillas are made with "White Sweet" Corn, and

    2) They (the protests, there were no riots) came about at a time when there were Heavy Tariffs on Corn imported from the U.S.

    3) Corn Tortillas were being exported to the American market, putting a crimp in supplies in the less-profitable Mexican market.

  71. And, no, Mexicans weren't taking production away from white sweet corn, and raising yellow field corn for shipment to the States. Corn was selling for a much higher price in Mexico than it was in the States.

    Plus, it is two entirely different types of crops. Different farming, and harvesting methods. I used to raise sweet corn. No way, Jose. Completely different deal.

  72. @Rufus Be that as it may, you haven't proved that there was absolutely zero relationship between those things. When it comes to corn, nearly everything is related, but tracing the causality can be difficult.

  73. "Show me where you did this."

    Okay,but you're going to forget what I showed you in a few weeks. I know,because this will be the third time I've done this.

    There's no rocket science involved. No secret decoder rings or hidden knowledge. Simply compare crude inputs then and now with product supplied then and now.

    Refineries used 5,434,383,000 barrels of crude oil in 1998 to make 6,216,008,000 barrels of finished product.

    They used 5,361,287,000 barrels of crude to make 6,641,293,000 barrels of product in 2008.

    That's 145,000,000 more barrels of product from 73,000,000 fewer barrels of crude.

  74. My bad. Here's the links.

    http://tinyurl.com/yk53n82
    http://tinyurl.com/yzb2smg

    It's also possible to compare various months using the same links. In Oct. of '99 crude inputs were 452,260,000 barrels,and output was 525,180,000 barrels. This Oct.,they used 435,654,000 barrels of crude to make 543,158,000 barrels of product.

    That's 17M fewer barrels of oil to make 18M more barrels of fuel. Refineries have no doubt made improvement in the last ten years. But,they aren't magicians. They can't squeeze another million bpd from the same supplies. The only explanation possible is the ethanol inputs,which went from near zero ten years ago to 750,000 bpd recently.

  75. Chris, I'm not writing articles for publication. You are. The Onus is on you. I have given some excellent reasons why there was no causal relationship.

    You have given NONE as to why there was.

    Scholarship is supposed to be about more than repeating hearsay, rumors, and gossip.

  76. Okay,but you're going to forget what I showed you in a few weeks. I know,because this will be the third time I've done this.

    No, you asserted it. I haven't forgotten about your assertions. But you have forgotten about my explanation of why those assertions are incorrect. It is a fact that refiners have added a lot of coking capacity over the past 10 years. That will increase the clean product yield from crude. You, being totally uninterested in those sorts of details, are happy to give ethanol the credit.

    RR

  77. I'm only using 1/3 as much gas as I was (to go the same amount of miles,) whose butt is that coming out of if it's not coming out of the Imports?

    You will have to explain this one.

    As I said, at the end of the day you can spin all you want. The data is what it is.

    RR

  78. Some data (and interpretations, thereof) are better than other data.

    The Best data I know of is when I go to the "Filling Station."

    I KNOW that data is correct.

  79. "That will increase the clean product yield from crude."

    And it will increase the yield in almost exact proportion to the amount of ethanol added. What a coincidence. I guess I was wrong. They apparently ARE magicians.

  80. RR, I didn't parse that eia/iea data. It wasn't worth it. The hypothesis didn't pass the "silliness" test. I had direct evidence that it was false.

    I say this, only, to warn you; don't publish this thesis in Forbes. Some people with the time, knowledge, and wherewithal will, I'm sure, give you a very hard couple of days. It's not worth it.

    You have a lot of "insider" knowledge on some stuff that's important. Emphasize that. Only a handful of people, I think (I certainly know I'm not one of them) have any sort of coherent idea about what is, and isn't, doable with managed forestry, and/or forestry waste.

    And, that's bad because it looks at first, and second glance that this could be an important cog in the energy supply machine. We'll need all the knowledge/information we can get.

    Just a suggestion.

  81. And it will increase the yield in almost exact proportion to the amount of ethanol added. What a coincidence. I guess I was wrong. They apparently ARE magicians.

    You are simply showing your ignorance here. I stated a fact. Whether you wish to believe the fact is up to you. But it doesn't change the fact. Cokers will increase clean product yield. Many cokers have been installed in recent years. I suppose you wish to believe that this was done, yet there was no actual increase in product yield? Or you don't believe cokers have been installed? Your position is simply "I can't believe it" without addressing any of the evidence. Of course this was the same tactic you used the last time this came up.

    Rufus, your position is something like this. I look on a map, and estimate that a drive should take me half an hour. When I make the drive, it takes me an hour. But since I calculated that it should take half an hour, I continue to assert that it is a half hour drive and ignore the data.

    RR

  82. If 100,000 barrels of ethanol is added to 900,000 barrels of gasoline,do we have less,more,or the same volume of fuel Robert?

    If I add water to a full glass it's going to spill over. It matters little how efficiently I pour.

  83. If 100,000 barrels of ethanol is added to 900,000 barrels of gasoline,do we have less,more,or the same volume of fuel Robert?

    We covered all of this ground already, and you never addressed any of it the first time. The problem is that the 900,000 isn't static. It takes portions of that to derive the 100,000. That's just one example of where your example fails. Your system is not a closed system.

    Rufus, I can imagine that you wouldn't want me to publish that on Forbes. That would be a bit of a PR nightmare for you, wouldn't it?

    RR

  84. Those 750,000 barrels of ethanol just go down a black hole Robert? Get used up in the refining process somehow? Man,I'm not as smart as most of you guys. But,I'm not retarded either. You asked me to show you the proof. I did that. Numbers don't lie. If God came down and told you ethanol was helping you'd tell him he was wrong. Nothing can change your mind here.

  85. Those 750,000 barrels of ethanol just go down a black hole Robert?

    You aren't hearing a word I am saying. Same as last time. The problem is you don't really want to understand this, so I waste my time explaining it.

    This isn't like 1+1 = 2. I will explain it with a hypothetical example. You have a system here in which it takes some petroleum to make ethanol. So let's say hypothetically it took the energy equivalent of 750,000 barrels of petroleum inputs to produce the 750,000 barrels of ethanol. Then you could add 750,000 barrels of ethanol to the system and see no impact at all.

    Now, setting aside the issue that I am sure you don't believe that the inputs into ethanol production are as high as the output, do you understand the concept? If not, there is no point in continuing because you are just ridiculing something you don't understand.

    RR

  86. @rufus I'll pass on this picayune argument. If you wish to believe that the corn ethanol boom, spiking corn futures prices, and the tortilla riots were completely and absolutely unrelated, then that is your right. I don't need to prove that causality to demonstrate that there are externalized costs to corn ethanol production.

  87. "You have a system here in which it takes some petroleum to make ethanol."

    That argument just muddies the water Robert. We're talking inputs at the refinery. The ethanol has already been made. There's nothing left to do but blend it with gasoline. Comparing apples to apples,we're getting more apples from fewer trees today. If I could find a link that said coking processes weren't responsible for the improvement,you'd attribute it to something else. Anything but ethanol…..LOL.

  88. In other words: Sure I framed him, but it's alright. Everybody is guilty of something.

    You published a slur on ethanol that you can't "back up," and when called on it you say, "I don't need to prove that causality to demonstrate that there are externalized costs to corn ethanol production."

    Really? Then, Prove It. Don't just "Throw a Rock and Run."

  89. Well, goodness gracious, Robert. Publish it. Knock yourself out.

    You know danged well I'm not any more than what I say I am. A retired, old fart with a lot of time on my hands.

    Heck, If you run the price of ethanol down some it'll be cheaper for me to drive. I was just offering some advice.

  90. If I could find a link that said coking processes weren't responsible for the improvement

    The problem is that you won't find a link because there can be no such link. You are confusing the difference between a fact and an opinion. It is a fact that pure water freezes at 32 degrees F. If you look for a link that tries to prove that it freezes at 40 degrees F, then you are really wasting your time. That's what you are doing here.

    RR

  91. Maury, RR could be right if he could show where it was possible that the corn farmers used 11.8 Billion gallons of diesel (minus the diesel used to move the corn to the refinery, and the diesel used to ship the ethanol to the filling station.

    However, I sure as heck wouldn't want to publish such a claim until I'd contacted a couple of corn farmers, and asked them how much diesel they used to grow, and harvest an acre of corn (165 Bushels – approx 460 gal of ethanol.)

    BTW, the corn farmers I know say it takes a little less than 5 gallons, or if you're one of the dwindling few that deep-plow, a little less than 8.

  92. "Maury, RR could be right if he could show where it was possible that the corn farmers used 11.8 Billion gallons of diesel "

    No Rufus. How much petroleum to do this or that has NOTHING to do with it. We're only talking inputs and outputs at the refinery. X amount goes in,and Z comes out. We only need to know the Y.

  93. X amount goes in,and Z comes out. We only need to know the Y.

    Which is why you keep coming up with faulty conclusions. What happens between X and Z has changed over time. You have no allowance for that; you just choose to ignore it.

    RR

  94. Maury, I may be wrong, but I believe that "product supplied" number is the actual amount sold by the end retailer.

    Anyway, We're burning 11.8 Billion Gallons of Ethanol. Either we're getting essentially zero mileage from it, or it's affecting imports.

    OR, it takes almost that much petroleum to produce it. Number One is silly. Number Three, also, can't be right. So, it's gotta be Number TWO.

    Excuse me now. I should have my "Big Ethanol" check in the mailbox. Gotta Go Party.

  95. I don't ignore it Robert. We're getting another million bpd of fuel from the same amount of oil. We're only adding 750,000 bpd of ethanol,so it obviously isn't responsible for the entire improvement. To claim refineries are able to squeeze another million bpd from the same oil in just ten years of refinery improvements is ridiculous. Insanely ridiculous.

  96. Don't forget the MTBE.

    MTBE is manufactured via the chemical reaction of methanol and isobutylene. Methanol is derived from natural gas, and isobutylene is derived from butane obtained from crude oil or natural gas, thus MTBE is a fossil fuel. In the United States, it was produced in very large quantities (more than 200,000 barrels per day in 1999)

    That Butane that was going to make isobutylene had to go somewhere. I've got a hunch it might be going to make Propane. That's why I kept say, "What about the Propane?"

    Propane is a good money-maker, and it's in short supply. When you cut back on refining crude you run short on propane (it's well below the bottom of the average range, now.)

  97. Probably not, Chris. Poor Mexicans don't eat Field Corn. And, neither do You, or I.

    Poor Mexicans eat the same kind of corn we eat. Sweet Corn.

    However, Yellow Field Corn was selling for $3.69 bu, yesterday. That's about Six and a Half Cents/lb.

    And, since we just had the biggest harvest, and Yield (13.2 Billion Bushels, and 165 bu/acre) in the History of the World there's plenty of it to go around.

    How many pounds of that $0.06/lb corn do you think one of those poor people could eat in a day?

    I'll tell you who will eat that corn: Poor Cattle will eat that corn. And then, rich guys like you and Robert will eat the poor cattle.

    You're just engaging in Non Sequiter, after non sequiter, Chris. There are hungry people in the world, and we used some Field corn for ethanol; but the two facts are unrelated.

  98. BTW, out of that 107 million tons that would have gone to feed cattle, we got back, according to even the staunchest ethanol critics, the equiv. of 64 Million Tons throug the co-product DDGS.

    I get the feeling you really haven't researched this very much, Chris.

  99. Chris,we use feed corn to make ethanol. Mexico uses white corn to make tortillas. We could have fed more chickens if not for ethanol. I've yet to hear of chikens facing mass starvation though.

  100. “but tracing the causality can be difficult.”

    No it is not. Cris is confusing root blame with root cause.

    It takes very little effort to repeat a falsehood such as,

    “Shall we price in the economic impact on Mexico when tortilla prices skyrocketed, due to the American corn ethanol boom?”

    To his credit, Rufus showed how it only takes a little more effort to identify the casual factors. Rufus is also correct that he does not need to prove 'absolutely zero' truth to falsehood. The art of propaganda is starting with an element of truth. A little cortical thinking and fact checking would help journalists be more productive members of society.

    When causality exists, research will find it.

  101. Cris we crossed post so I will cut you some slack but the grist and Lester Brown are not what I call credible sources.

  102. Anyway, We're burning 11.8 Billion Gallons of Ethanol. Either we're getting essentially zero mileage from it, or it's affecting imports.

    You know that’s not true, and are therefore just posturing. As I have pointed out, it could just be that the embedded petroleum inputs that are supporting the ethanol industry are higher than you think they are.

    That Butane that was going to make isobutylene had to go somewhere. I've got a hunch it might be going to make Propane.

    You don’t make propane from butane. We import butane from Canada, so if the demand for butane goes down, we will import less butane.

    RR

  103. Yes, Kit, tracing the causality is difficult. Very difficult. A simple example: the many years it took to prove the linkage between lung cancer and cigarettes enough to warrant legislation.

    In fact I have spent a little time looking for aggregate data on U.S. field corn plantings vs sweet. It's not my area of expertise but it was surprisingly difficult to find. Even more difficult would be to then correlate the plantings data (plus factor in the use of residuals etc.) with incentives, because of the time lag.

    Even then, you'd have all sorts of other complications to sort out, like changes in imports/exports, tarrifs, and so on. Perhaps some sweet corn acreage wasn't converted to field corn directly, but to something else, say soybeans, in response to other soybean acreage having been switched to field corn. I can think of dozens of other scenarios.

    The point is: We simply don't have all the data we would need to prove those causalities beyond all doubt-or, as I've said, it would take a team of academic researchers to do the job. Unfortunately, I don't have such a team working for me.

    Proving that land-use changes due to corn ethanol incentives had absolutely zero impact on sweet corn pricing would be equally difficult, as would proving that the causation of the Mexican tortilla riots could be exclusively tied to sweet corn prices.

    Look, you can whittle away at any particular example of externalized (or potentially externalized) costs I throw out there; that's what people typically do when they don't want to internalize a cost. It surprises me not at all that there might be a few people here with skin in the corn ethanol game. "You tell me whar a man gits his corn pone, en I'll tell you what his 'pinions is."

    But the fact that there are externalized costs, and that we don't track them enough to even count them, which makes them extremely hard to prove, is I think inarguable. Sometimes you have to use your imagination a little.

    In any case, I have better things to do now than worry whether I should have used Mexico's tortilla riots as an example in a 2007 article or not.

  104. The "ethanol is our salvation" crowd seem about as determined to believe what they want to believe as the "alleged anthropogenic global warming"crowd!

    A quick plea here — Remember "Scale". We humans use power on a very large scale indeed. Even if ethanol were the best thing since sliced bread, there still would not be enough of it to make much difference globally.

    Niche fuels are great, in their own niches. But the human race needs very large scale 24/7 reliable power. Non-niche power. That's the challenge.

  105. Chris Nelder mentioned" "the many years it took to prove the linkage between lung cancer and cigarettes enough to warrant legislation."

    Another controversial example there, Chris. For your next long flight, get a copy of David Salsburg's book "The Lady Tasting Tea – How statistics revolutionized science in the 20th Century".

    One of the most important figures in statistics was the Englishman R. A. Fisher — who went to his grave in 1962 arguing that, statistically, no-one had proved a causal relationship between smoking and cancer.

    Causality turns out to be a difficult concept. And political correctness is a powerful (albeit unscientific) force.

  106. it could just be that the embedded petroleum inputs that are supporting the ethanol industry are higher than you think they are.

    And, I "Might" be heir to the throne of Monaco," but I doubt it.

    I've given the real number, and you don't offer any evidence in dispute; you just say "I might be wrong."

    Well, yeah, and YOU might be wrong. The difference is, I've given numbers. If you think it takes more than 5 gallons of diesel to produce an acre of corn, find some Proof.

  107. "Perhaps some sweet corn acreage wasn't converted to field corn directly, but to something else, say soybeans,"

    Sweet corn only makes up 1% of US corn production Chris. That hasn't changed since ethanol came along. People want to blame the doubling of corn prices on ethanol,as well as the quadrupling of rice prices,and tripling of wheat prices. Fact is,2007 saw commodities of all kinds do price somersaults. Didn't matter whether it was energy,metals,or grains.

    Much of the corn used for ethanol also feeds chickens and cows,like Rufus pointed out. Throw in the fact that yields are steadily increasing,and we haven't taken much field corn from animals mouths either. Monsanto claims corn yields will double again in the next 20 years. Chicken populations likely won't.

    There is no perfect fossil fuel substitute. Never will be. If we do nothing while waiting for such a substitute,peak oil will bite us on the ass.

  108. MTBE

    MTBE is derived from methanol, and isobutylene. Isobutylene is derived from butane, which is derived from Crude Oil, or nat gas.

    Why wouldn't we use our own butane from refinery operations? You're going to get some when you refine crude, right?

    Isobutylene can be used to produce propane, and we're short on propane, right? The price is good, right?

  109. It surprises me not at all that there might be a few people here with skin in the corn ethanol game. "You tell me whar a man gits his corn pone, en I'll tell you what his 'pinions is."

    So, we've gone from non sequiters to ad hominems.

    And, false ones, at that.

    I'm a retired insurance salesman that gets 100% of his Pone(?) from Renewals on his policies.

    Perhaps you should just write about things with which you have at least a passing acquaintance.

  110. In 2007 we planted 91 million acres in field corn, and produced 13.1 billion bushels.

    In 2009 we planted 86 million acres, and harvested 13.2 Billion Bushels.

    A 10% increase in Yield.

    We're raising all the "sweet" corn, and soybeans we can sell, and we're paying farmers Not to plant a little over 30 Million acres.

  111. When we start getting substantial quantities of fuel from wood and wood by-products,we're going to hear how it's driving up home prices,along with furniture and anything else made from wood. Wood-derived fuel will catch the blame when an animal goes on the endangered list. Robert and his associates will catch the blame for making people homeless and killing off adorable little creatures around the world.

    I'll do my best not to get caught up in the hysteria. Scouts honor.

  112. The short discussion about a "bridge to nowwhere" got me thinking. The engines burning ethanol today, "Flexfuel", engines do not take advantage of ethanol's fuel properties in order to burn it with highest efficiency. We're effectively wasting 10 billion gallons by burning it in flexfuel engines or as a 10% blend in conventional gasoline engines (air quality improvement aside).

    But we're in a pickle, because although it is possible to design a more efficient E85 engine, E85's poor availability means there's no market for a purpose built engine. (and no I'm not building an E85 engine just for Minn. where E85 is widely avaiable).

    Ethanol supporters had better forget about a 20% blend limit and focus on how to make producing a purpose built E85 engine attractive for manufacturers. People might actually want an optimized E85 vehicle. That could be a driving market pull for "alternative" ethanol… instead of a legislative push.

    If we use corn based ethanol to build that purpose built E85 engine market and cellulosic never comes…oops. Conundrum.

  113. And, I'm not sure that biofuels have to be such a "niche" deal. Somewhere between 2%, and 5% of our land will set us free from oil imports. And, it doesn't have to be our "best" land, either.

    When ol' Col. Drake drilled that first (or, actually, 2nd) well I doubt that everyone was convinced that it would have the impact that it did.

  114. Sam, we need Two things to get an E85-optimized engine.

    $3.50/gal gasoline,

    and a real, live "Profitable, Commercial-size" Cellulosic Ethanol Refinery.

    Those two things will bring on enough retail outlets to get Detroit to pull the trigger (at least, once.)

  115. Kit P wrote: California has great coastal wind resources but no wind turbines.

    Why do you keep telling lies? You know full well that California has wind turbines. California has 2787 MW of wind turbines and was the state with the most MW of turbines until 2006 when Texas surpassed it.

    Back in 2005, it was estimated that CA had a wind energy potential of 6770 MW, of which CA had already built out 30% of that potential.
    http://web.archive.org/web/20060101093929/www.awea.org/projects/california.html
    Meanwhile, TX's wind energy potential was estimated at 136,000 MW, or 20x CA potential.
    http://web.archive.org/web/20060102175029/www.awea.org/projects/texas.html

    Sure, TX has more MW of wind turbines than CA. TX has more MW of wind turbines than CA has estimated wind energy potential. CA has built out 40% of its estimated potential, while TX has built out 6%. Call me when TX has built out 30% of its potential.

    If for some reason you're talking about offshore turbines only, then I'll retract the "liar" bit and point out that no one else in the US has offshore wind farms either.

  116. Chris as Kinu said there is not a causal factor between smoking and lung cancer. I can not cause you to get cancer from smoking or radiation or ethanol. I can cause you to die from an overdose of nicotine, radiation, or ethanol. The toxic properties of of these substances are well know. Like RR says about the freezing point of water. We can look it up in tables based on research that has been replicated.

    It is a technical thing, journalist often technical words incorrectly. Causing something is different than increasing the risk of something happening.

    There is a very moderate (statistically significant) increase risk even with large doses. There is a huge number of cases of near fatal exposure where those exposed died of old age without getting cancer.

    There is no correlation (statistically significant) with small doses for risk of cancer.

    “I have better things to do now ..”

    Do mean like fact checking before you write things?

    So Chris are you anti-ethanol or anti-hunger? I have a problem with people like Chris and Lester Brown who use the misfortune of others to support some cause of the loony rich. What is the root cause of malnutrition, no electricity, or clean water for the billion or so people that face those things every day?

    To solve problems you address the root cause not blame the people who are working on solutions because they are not politically correct enough for you.

  117. I just heard Scott Brown say he Voted For the Mass Healthcare Plan.

    He worked to put it together, and it insures 98% of the people in Ma. He sounded Very proud of it.

    Surprise!!!

  118. One last thing about "Hunger."

    The UN outfit that does this stuff put up that 70% of the chronically malnourised are "subsistence farmers."

    They raise a little Cassava, or somesuch, but they don't have a "Money Crop." For years, they couldn't grow, and sell corn because the U.S. subsidized the American corn farmers to the tune of approx. $1.00 to $1.50 bu.

    The "subsistence farmer" couldn't compete. Corn is, now, selling for just a little bit more than it takes to grow, and harvest it. A few more years of this, and a lot of those subsistence farmers might be able to do a little better.

    Not to mention, it just might be their road to Affordable fuel.

  119. “If for some reason you're talking about offshore turbines only, then I'll retract the "liar" bit..”

    Yes! I wrote, “I read an amusing article from California where some fool wanted to put up a small wind turbine that would 'spoil' the ocean view.”

    In the context of where the best place to erect the limited supply of wind turbines, I think putting them on mono culture farm land is better that a scenic area. If the folks in California want to transfer tax base and jobs to the PNW that fine with me too.

    In the context of my reply to Russ, I do not like the hypocrisy of the 'dirty coal' crowd.

  120. Tarring the entire "dirty coal" crowd with the broad brush of "hypocrisy"? Many of them, like the poor "fool" think off shore wind is a good thing. Some even think wind farms are beautiful tourist attractions. Hypocrisy can be found in just about any group. It's annoying when a handful can stop a project that many more want and would benefit from.

  121. The "subsistence farmer" couldn't compete. Corn is, now, selling for just a little bit more than it takes to grow, and harvest it.

    Rufus~

    You realize I hope that it is only a short linguistic step from "subsistence" farmers to "subsidized" farmers.

  122. MTBE is derived from methanol, and isobutylene. Isobutylene is derived from butane, which is derived from Crude Oil, or nat gas.

    Why wouldn't we use our own butane from refinery operations? You're going to get some when you refine crude, right?

    Of course. But we don't have as much as we need, so we import some. Lower demand for butane means lower imports. It does not mean you turn the butane into propane.

    I've given the real number, and you don't offer any evidence in dispute; you just say "I might be wrong."

    That's not remotely accurate. You have tried to account for some of the inputs. But you know you aren't accounting for all of them. When the USDA did their energy balances, they admitted they didn't account for all of them because they simply didn't know how to account for some of them. You, you are content to ignore them. You wish to "calculate" how much embedded petroleum is in ethanol, happily ignoring some of the inputs and pretending they don't exist.

    In fact, we really don't know exactly to what extent this whole ethanol infrastructure is enabled by petroleum. Various people/organizations have tried to account for some of them, but the system is pretty complex. But if those inputs are higher than you are estimating them to be, that can very easily explain the import puzzle.

    RR

  123. “Some even think wind farms are beautiful tourist attractions.”

    I agree with most of what you said but wind farms are built to make electricity. The first rule of siting a wind farm is avoid scenic areas. The "hypocrisy" is that the people would drive to see wind turbines because they are an interesting novelty would not live near them. However, the novelty soon gets old. Altamont pass is an example of this kind ugly.

    Over the years I have lived in some tourist areas.

    If people are visiting SF I tell them not to miss the stands of coastal redwoods. If people are visiting Portland, I tell them to not miss the gorge areas but I do not recommend driving another 100 miles so they can see 4000 wind turbines.

    I have lived some place where I can see wind turbines every day from the industrial area where I worked. Driving to my sail boat in Washington State I would see about 500 MWe of wind turbines but also rail yards, chemical plants, pulp mills, and 100,000 head feed lot. However, some of the other sailors drive from more pristine areas and they all hate the wind turbines.

    Except for a few small projects, the 2000 + MWe if wind farms were built to sell electricity to California.

    So Clee come visit in June. I will take you sailing. I will show how great the wind is in the cool of the morning but there is not enough wind to make electricity on a hot summer day when you need it. I can also show you the train that bring PRB coal to the Boardman plant. You can decide for your self if I am wrong when I say that it is not 'dirty coal'.

  124. Tip O'Neil said, "All Politics is Local." I think, somewhat, the same thing can be said for Energy.

    It probably wouldn't make much sense to build an ethanol-fueled "Power Station" in Iowa, or Illinois; however, it's a different situation in a remote area of S. America, or Africa.

    Ethanol-Fueled Power Plant in Brazil.

    A lot of the time we average Americans lose sight of just how vast the world is. Most of us, instinctively, think of Brazil as being, oh I don't know, probably about the size of a large state, maybe Tx. It's the size of the contiguous 48, and it doesn't have much infrastructure in most of it.

    And, Africa is so vast that you could drop the U.S., Europe, and China into it and have Plenty of room left over.

    Brazil has as many acres lying fallow, just in the Cerrado, as the U.S. plants in Corn, and Beans, together.

  125. Rufus

    The renewable energy part of my company recently won turnkey contracts for 11 biomass plants (about $300M) mostly in Brazil and have 12 planned for the US. Brazil has also restarted construction on an unfinished nuke.

    Brazil is like another country.

  126. RR-www.courant.com at the very bottom of the page has some awesome weather pictures from Oklahoma 1/22/10
    JC SR.

  127. Grew up in Central Oregon and have traveled most of the lower 48 plus Hawaii and the world. İ have retired now in Turkey where coal fired power is still very dirty.

    İ worked on the first (2 numbers) stacker/reclaimers for the original Boardman installation- They were built by American Steel in Portland, OR.

    Has coal gotten a lot cleaner in the US the past 50 years – yes it has!

    İ remember the power plant at Centralia burning local lignite – horrible place that created it's own permanent rain cloud.

    Am İ against coal? Not at all! Without it we are in deep stuff. İs it clean per mWh generated compared to nuclear? Hardly.

  128. Re: the Brazilian Ethanol Power plant.

    I find it hard to believe that this is in any way cost effective, but it appears to be a "demonstration" project.

    From that link "The company has "great expectations" to demonstrate the viability and economy of generating electricity from an alternative to fossil fuels."

    I think this was actually demonstrated a century ago when steam plants burned wood. It is no less "viable" today, as some coal plants are co-firing with wood, and there are stand alone wood fired plants.

    So why use a high value liquid transport fuel for stationary power generation – much better to burn the feedstock biomass directly. Unless Brazil now has so much ethanol they don't know what else to do with it – and I find that hard to believe.

  129. Paul, Brazil is, actually, short on ethanol right now. That "efficient" Brazilian cane ethanol was selling at Their port for $3.26/gal a couple of weeks back (the last price I've seen.)

    It has more to do with Brazil being a "Huge" Country, with very little Transportation infrastructure. Most of their ethanol is, I think, shipped, not by rail, but by Truck. This can get pretty expensive over a couple of thousand miles (esp. when many of the roads are dirt, and gravel.)

    On the other hand, Coal would have to be shipped "In" the same way.

    The point I'm trying to make is, sometimes, we unconsciously project misinformed biases into our thinking about Third World Countries/Areas. It doesn't automatically dawn on us that we might be talking about loading a truck and driving two thousand miles over a dirt road. But, many times in S. America, and Africa that's exactly what we're looking at.

  130. One thing a lot of Norte Americanos miss is that we can store our corn for a couple of years before we process it for ethanol.

    Cane has to be processed within two, or three weeks of Harvest. While our ethanol refineries are running 24/7/365 the Brazilian refinery might only be running five, or six Weeks out of the year.

  131. Rufus, good points all. I still think it would be better to dry the cane and store it, but if it needs to be transported over any distance, then ethanol may be the way go, but so could torrefying and pellet/briquetting the cane.

    As for Abengoa, they have not yet got a cellulosic plant operating – even though ethanol producer mag describes them as a "cellulosic ethanol" company.

    This looks like a case of an "integrated" plant, to use all the byproducts along the way, but I'll bet the fraction of ethanol that is actually produced from cellulose rather than starch is fairly small. Still, it is a step ahead of NG burning ethanol plants.

  132. RR, a couple of suggestions for you about the original table of energy prices (I had almost forgotten that that was the original topic of discussion!)

    I would suggest grouping the "fuels" by their usage, such as these categories;
    – Electricity
    – Transport fuels (incl CNG)
    -Heating fuels (incl wood pellets and corn)
    -Industrial/electrical generation (Coal, uranium,NG)

    Some fuels, like NG/CNG will appear in multiple groups, but that is good as it illustrates that these fuels have multiple uses, and the price varies accordingly (use the CNG GGE price for the transport category). It will also highlight that solid fuels (currently) have no application in transport.

    For pricing, I would also suggest two columns, wholesale/industrial, and retail. Clearly there are big differences in what different customers pay for the same energy sources.

    CNG for the driver is more than NG for heating, which is more than NG for an electric utility, etc.
    The retail price should include the taxes, as that is what the homeowner/vehicle driver has to pay, and they can make their fuel switching decisions accordingly. The retail price for corn, for stove fuel, is not the CBOT futures price.

    Another couple of "fuels" you could add in, which would spark some interesting discussion would be recycled (or really, recollected) cardboard, and plastic. I have seen some studies that show the best economic return for these is to use them for power generation, as the re-processed products are often of very low value.

    Another fuel of interest is Municipal Solid Waste (MSW), which also has an energy value, current estimate is 11.7 MBTU/ton, according to the EIA. Interestingly, this has steadily increased from 10 MBTU/ton in 1989, attributed mainly to ever increasing plastic content. It is the only energy source I can think of that has been "naturally" increasing in energy density.

    MSW, of course, has a negative price, as people and cities pay to get rid of it, so, officially, it is a cheaper fuel than coal. In 2005, some 14%, or about 300 trillion BTU of MSW was burned for energy! That would produce about $3bn worth of electricity, so it clearly deserves to be included in industrial fuel sources. These numbers are for actual solid waste burned, and don't include methane from landfill gas collection.

    And, if you want to provoke some really heated discussion, suggest that MSW as fuel is "cleaner" than coal and watch what happens…

  133. “İ remember the power plant at Centralia burning local lignite – “

    Russ, I have not observed Centralia in operation. TransAlta (a Canadian Company) bought the plant and installed pollution controls. This plant also now used about a million tons of PRB coal which is cleaner than lignite.

    “The Centralia Coal Fired Power Plant signed a contract for construction of sulfur dioxide and nitrogen
    oxide emission control systems in May of 1999, and began physical construction in August of 1999.”
    http://www.swcleanair.org/pdf/anrpt99.pdf

  134. Kit P – a couple of weeks back İ searched for complaints about the Centralia plant and found nothing – İ saw the new company took over and has apparently made great improvements in equipment as well as fuel source.

    İn the 70's you always knew when you were passing Centralia driving on İ5 – the emissions created a perpetual mist over the place – you would have to turn on the wipers to clear the moisture from the windshield.

    İf it was not a lot cleaner today İ expect there would have been a long list of complaints so must be in the OK range.

  135. Russ

    I am very impressed with http://www.transalta.com/ .

    The heavy lifting of ghg reduction is done by the companies that improve operation of coal and nuke plants. Getting more MWh from coal and uraniums is an environmental no brainer. AEP, Duke, PP&L (among others) have made a business of taking poorly operated generating facilitates and managing them better.

    I first got interested in Centralia at the beginning of the Bush administration with the debate over tougher regulations for older coal plants. It was a battle of red versus blue states. The first shot over the bow of American jobs came from the Washington State Department of Ecology (watermelon central). A warning was issued to pregnant women about eating fishing from all of wasting state water. This was picked up by the national anti-coal campaign.

    Since I was active both environmental and boating activities, I thought this was odd since Washington State only has one coal plant. I found the study that was the basis of the warning. The mercury was from legacy waste from smelting (in Canada) and a pulp mill. The past practices that produced mercury had stopped and trending down. Furthermore, I do not think it was credible that the few fish high in mercury could have been caught and eaten in sufficient numbers to cause a problem.

    The mercury warning was political.

    A second shot was when the director called Washington State Department of Ecology Bush a liar. The Bush administration made claims that new regulation would reduce pollution based on actual data and projected data. Washington State has already reached an agreement with TransAlta to meet stricter standards. I found two other states (before I stopped looking) making Bush is a liar claims.

    I think the reason many Americans are fed up is because there is such bickering. Every reasonable person including CEO of companies that make electricity with coal agree that older coal plants should be brought up todays standards or shut down. When you look at the difference of both position, it is incredible the amount of money spent on political campaigns rather than just reaching a compromise.

  136. "Every reasonable person including CEO of companies that make electricity with coal agree that older coal plants should be brought up todays standards or shut down."

    And the biggest obstacle to doing so is usually — government regulations!

    Upgrading an old coal plant may make great economic sense and reduce pollution (real pollution — not the granola's foolish "CO2 is pollution"). But doing so would trigger a whole lot of additional uneconomic bureaucratic nonsense required by the anti-humanists in the extremist "environmental" movement.

    So old plants struggle on. Unintended consequences.

  137. The Brazilian power plant with the ethanol turbine is clearly a demonstration, but a large one (45 MW). The turbine is a GE 'flex-fuel' unit that can burn either Nat Gas or Ethanol. It will be very interesting to see those results, but I have a hard time seeing how even <$2 Brazilian ethanol wins that comparison, much less at current prices down there.

    Abengoa: Given their past track record trying to get the Hugoton project off the ground (nothing happened in last 3 yrs after an $80 mil gift from DoE and still no financing, recently turned down my DoE for more $$), I find it hard to be very encouraged by Abengoa's announcement to co-locate a biomass power plant. But I hope they do make it work out because that too would be a fascinating evaluation of relative benefits and merits of using biomass for power versus ethanol.

    One reason I'm skeptical of this is the articles say they will purchase about 900,000 tons of biomass together, but that it will only cost $13 million? Do they really think local farmers can provide biomass (stover, straw etc) to them for <$20 ton? Get real. Abengoa truly is a 'real' company, multinational, very large, and it's informative that even they have had huge problems trying to get Hugoton project off the ground. Think how hard it is for start-ups.

    Also, Brazilian ethanol production clearly uses a lot of trucking, but think way more moves by railcar, and most production is easily within 500 miles of ports for export, much of it even closer. http://tinyurl.com/ycjgya3

    It's also interesting that they still haven't built the big pipeline down there yet that everybody was bragging about 3 years ago.

  138. Yeah, Oxy, it's hard to get "Anything" built right now. It's probably Quadruply hard to get something "New" built.

    Petrobras was to be a big partner in the Brazilian pipelines. There seems to be some infighting between the ethanol folks, and Petrobras.

    Politics may be "local," but, they're also "Universal." 🙂

    Granted, that article on the Hugoton plalnt had some very strange numbers. I just marked it down to, possibly, a phone conversation between a media person that knew a little, and a reporter that knew Nothing.

    I think it's almost always safe to take numbers for "cost of biomass" and double (maybe even triple) them. The easiest biomass to get out will be corncobs, and I think Poet's going to have a heck of a time getting them to the plant for less than $70.00/ton.

  139. Quoting Kit P – 'I think the reason many Americans are fed up is because there is such bickering. Every reasonable person including CEO of companies that make electricity with coal agree that older coal plants should be brought up todays standards or shut down. When you look at the difference of both position, it is incredible the amount of money spent on political campaigns rather than just reaching a compromise.'

    When İ read comments on blogs – both green and otherwise – İ come to believe there are very few 'reasonable' people out there.

    Just today İ got scolded for saying that heat transfer from a liquid is more efficient than from a gas – the gas in question being very low pressure, ambient temperature air. Told İ was stifling inventions!

  140. “So old plants struggle on. Unintended consequences.”

    Kinu, you are missing the big picture if you are not following the trade journals. Many new coal plants are under construction and will replace old coal plants. Many older coal plants are fitting pollution controls at about $300m for a large plant. Some utilities have announced that they will close old plants.

    In one interesting turn of events, one of my favorite utilities announced plants a few years to add pollution controls. Then the CEO retired and next thing you know they are building a new nuke. RR may have identified the why.

    “Northern Appalachia Coal – $2.08

    The reason Kinu might be confused is “anti-humanists in the extremist "environmental" movement” is mostly effective at getting their press releases into the NYT and LAT.

    I think one of the traits of good management at a utility is keeping a low profile. Speak softly and keep the lights on. You can not build a new power plant if the first thing you do is get the local community PO'ed. Spend a couple of years finding out what the community wants. Start hiring a few kids as the graduate from high school to train them to run the plant and the word will get out that you are creating jobs and will be paying taxes. Start by building a park on part of the land you need for the power plant. Make available conceptional drawings that show the neighbors that you are not creating an eye sore. I have seen the same design of power plant with million dollar homes around it or just the something no one want to look at. Take the local environmental activist to your other plants and show them how you do business while protecting the environment.

    When it comes times for public hearings, the watermelon loons from DC will come. If local people counter their arguments it really impresses the regulators. During construction the DC loons will be back to chain themselves to the fence. Makes for good pictures in the loon's fund raising letter.

    The bottom line is that most projects never make it to commercial operation. Some were a bad idea to start with. Hey, go ahead a try to build the first off shore wind farm off of Cape Cod and see what happens. Why not off of Golden Gate Park? You can always blame burdensome regulation on bad project management. Project management what that?

  141. "Many new coal plants are under construction and will replace old coal plants."

    Kit – indeed! The inconvenient truth that, despite all the tears of extremist granolas, global coal use continues to grow. Good thing that anthropgenic CO2 is a positive contribution to the planet!

    Kit, you describe the long process that smart utilities adopt to get the many political approvals necessary to allow them to fulfill their basic political mandate to supply reliable power. Very true. And a utility in the US has no choice but to do something like that — however long it takes.

    Now consider a company thinking about starting up a new factory, which will create lots of jobs & generate lots of tax revenue. Should the company build the plant in the US at some uncertain distant time in the future once all the regulatory processes have run their course? Or should the company instead build the plant in China, where they can start building as soon as they are ready?

    We both know the answer. It is obvious from the giant trade deficit that the US runs with China, and from the near 20% real un/under-employment rate in Obama's America.

    Appropriate regulation makes the world a better place. Excessive regulation leads to unemployment, trade deficits, and government budget deficits. Excessive regulation is an unsustainable burden which no economy can bear.

  142. Russ

    I would not look in a blog to find reasonable people. Some are in the business of being unreasonable. A young engineer I work with thought he could reason with someone from Greenpeace.

    “that heat transfer from a liquid is more efficient than from a gas -”

    The most 'effective' heat transfer fluid for large generators is hydrogen. Air cooling is the first choice in many applications.

    The point I am trying to make is that 'efficient' is not the right concept for heat transfer. If I can transfer heat through radiation or natural circulation with air, that would waste less energy. Forced air circulation will use more energy. If the amount of heat to be transfered can not be accomplished with air, the next choice would be water cooled. That requires pumps that use energy and secondary heat exchangers. So it depends on what you are doing and where you are doing it.

    The most efficient and economical way to cool a steam power plant is with ocean water (if you have an ocean). Watermelons think air cooling is better. The purpose of course is to make the power plant uneconomical.

    Watermelons claim that if we make things like hope appliances more efficient we will not need new power plants. We can take any old steam plants and make it more efficient just my simple thing like a more efficient turbine blade design during refurbishment. The Clinton EPA response to coal utilities that requested to improved efficiency was see you in court. Go figure.

    The NRC responds to the same request was not problems.

  143. Remember the guy in the 1967 movie The Graduate who says, "I want to say one word to you. Just one word. Plastics."

    If they were remaking that movie today he would say, ""I want to say two words to you. Just two words. Methane Clathrates."

  144. Hi Kit P – İ mentioned low temp and low pressure – İ should have also said low flow – Try comparing gas and water for heat transfer rates under those conditions.

    İ am well aware of how many reasonable people you find on blogs – many of Roberts readers certainly tend toward the fringes. İ like to know what many people are thinking – not just a group that İ tend to agree with.

    The CEO as an example of what is good? Some are but many are just greedy types with little imagination. The last American CEO İ worked for İ voted against and went to find greener pastures!

  145. "Hey, go ahead [and] try to build the first off shore wind farm off of … Golden Gate Park"

    'Cos wind turbines are sooo much uglier than that giant orange rustbucket in the bay?

  146. “Try comparing gas and water for heat transfer rates under those conditions.”

    Yes, but you used the word 'efficiency'. Two reasonable people can both be wrong. A long tine ago almost all reasonable people thought the earth was flat. Now that we know 'why' (Clee, that is called gravity) people do not fall off earth . Suggesting that it is flat would not be reasonable.

    At my first commercial power plant, we had a problem with my system not meeting a requirement. A team of reasonable people were gather to figure out why. None of us has been to problem solving school. Us engineers were putting lots of equation on the blackboard (does that age me) and after a few minutes the tech told us we were wrong and left. He has better things to do but I suspect he was frustrated because he could not explain why. Meanwhile we decided on a test program. I was collecting data at 2 am when a light turned on in my head. What if the training about it how it worked was wrong. Putting new assumptions into the equations, I soon validated the assumptions.

    We were measuring mass flow rate and our gages read volumetric flow rate. Our training told us that electronics compensated for temperature which was not true.

    Now if that sounds stupid, there were the pilots that ran out of fuel half way across Canada. They used the wrong units to calculate the amount of fuel to load.

  147. “many are just greedy types with little imagination.”

    When I hear stuff like this I an prepared to have an unreasonable conversation and not very civil conversation. First off, I must say that has not been my experience. Second, it sounds more like populous class warfare and I doubt Russ know very many. Third, when it comes to the very cheap commodity, those who complain about greedy companies are the very people who use a lot more energy than they need. What would you call someone Russ who wants more than they need?

  148. What İ said is 100% true and none of the class warfare garbage either!

    Look at the rather large number of startups in the new tech sectors that are nothing more than scams to siphon money off before the investors smarten up. Good CEO's there? There are all too many company presidents that are one step past their capability.

    İt was very difficult to understand your post –

    What would İ call someone who wants more than they need? Normal İ suppose – smart – not a loser – certainly not anything bad!

    Nothing wrong with wanting more whatsoever!

  149. “'Cos wind turbines are sooo much uglier than that giant orange rustbucket in the bay?”

    No because you will fail. If you want to make electricity with wind, the first step get a map of where there are good wind resources. Then you eliminate places of breathtaking natural beauty and places where rich people have summer homes.

    This leaves a vast area where of wind resources in the US. I suspect PeteS can not imagine how vast the Powder River Basin region is. Not only is there huge coal resources there is huge wind resoruces.

    Golden Gate Park is surrounded on on three sides by city but the forth side opens to the Pacific Ocean. From Santa Barbra north to Alaska is Pacific coastline with breathtaking natural beauty with on a few miles of urbanization here and there. SF on the other three sides is the center of huge urban/industrial area from Gilroy to Sacramento separated from the ocean by the coastal range.

    Clee can explain how Redwood City got its name. Lived there in 1960, I do not remember any Redwood trees.

    California is the icon for failing to make electricity with the wind. Clee and all Californians will tell you how many wind turbines they have erected but are reticent to discuss how mush electricity is made with them. If you look at states building new wind farms California is at the bottom of the list. Out of about 8000 MWe of new capacity in the US, 20 MWe was erected in California.

    Maybe the map of wind resources should also include population density for those in the legal profession.

  150. Russ asserted: :"There are all too many company presidents that are one step past their capability."

    Indeed! Elected Presidents, too.

    Incompetent CEOs in start-ups are a self-correcting problem. Let the investor beware!

    Incompetent elected Presidents — now that is a different problem. What can be done about an Ahmadinejad or a Chavez? What can the Brits realistically do about Gordon Brown, or the Americans about Obama?

    The root of our energy challenges is political, not technical. Study history to see how serious political problems have traditionally been resolved. It's not pretty.

  151. In other news, Maine is working towards an ammonia plan. I have only seem Matt Simmons mention using ammonia as a liquid fuel. Does it have any merit?

    OD

  152. “Incompetent elected Presidents”

    The downfall of Obama will be that he ran on a Bush is an idiot platform. All those problems that Bush did not solve, all we need to do is get rid of Bush.

    Obama gets elected and wins the Nobel Peace Prize. Did Obama bring peace to Israel and surrounding countries?

    No!

    Did Obama bring peace to anyplace?

    No!

    The same evil loons (minus Saddam Hussein) still are around refusing to play nice. It does not matter who is POTUS or the tone of his speeches. This does not show that Obama is incompetent but it will take a lot of more competence than we have seen so far to overcome the unrealistic expectations.

  153. “Does it have any merit?”

    No, ammonia is extremely hazardous to handle. Very few serious accidents occur from mishandling gasoline. A typical farm state might have several hundred hospitalizations a year. I have witnessed two industrial accidents. Kind of, does coming to in the lunch room with some one asking my how many fingers do you see count? Lucky too for a fellow sailor. On the job training for first aid for an ammonia spill. These events occurred before OSHA regulations.

    Ammonia would be just an energy for natural gas which is just hazardous to handle.

  154. In other news, Maine is working towards an ammonia plan. I have only seem Matt Simmons mention using ammonia as a liquid fuel. Does it have any merit?

    OD

    If your interest goes beyond liquid fuels, then take a look at Stranded Wind.

    RBM

  155. The average cost per BTU of one critical energy form is missing. What is the average cost of the chemical energy BTU in the form of food?

  156. Hmmm. (Considering all the red beans and rice, bread pudding and so on consumed at today's event, the following is likely a little low)

    Food cost per BTU:

    Assuming ~2,000 food calories consumed per day

    USDA average food cost in home of $61.90 for 19-50 yr old male
    http://www.cnpp.usda.gov/usdafoodcost-home.htm

    1 food calorie = 3.964 BTU

    If the assumptions and this non-engineer's calculations are right, that works out to about $1115 per million food BTU.

  157. The cost of a nutritional diet for a 19-50 year old male is $38.30 per week or $5.47 a day. The consumer is buying nutrition packaged nicely at location near you not the commodity price of field corn. ANON used a higher value from the tables.

    “Assuming ~2,000 food calories consumed per day”

    $5.47/2000 calorie x 1 calorie/ 3.964 BTU x BTU /MMBTU = $690 / MMBTU

    I am not sure what point ANON is trying to make here but the flaw in looking at the cost of energy is ignoring how it is used. That PRB coal makes electricity to run a pump to treat waste water for a society ignorant of cholera. Anyone here want to become an experienced cholera epidemics?

    Not all energy is created equal. As a beast of burden, I can get on a exercise bike with a generator bike. If I peddle fast enough, I might be able to light a 100 watt light bulb.

    Or I could take that nutritional diet and use my brain to work at a nuke plant. Assuming 500 workers per 1000 MWe nuke plant supplying electricity to about a million homes or:

    1,000,000/ 500 = 2000 homes per worker. At a $1/day per person for energy cost for my all electric home, that is $6.47 cost for food and energy for shelter. The worker has to drive to the nuke plant so we will make it an even $10. What is the value for that energy investment?

    1000 MWe/500 x 24 hours x $34.03/MWh = $ 1633 per day per or $1470 with a 90% capacity factor.

    What the availability of low cost food and energy allows is time for parents to read to their children every night. If children enter a free public school system with a love of reading, there is unlimited opportunity in a country with the rule of law.

    It is that simple.

  158. OT, but worth pondering:

    "The Orinoco oil sands belt in Venezuela may yield 513 billion barrels of oil, or more than twice as much as was previously reckoned. Although this appears as around twice as much oil as Saudi Arabia has, the Orinoco bestowal is "heavy oil" and needs a whole new swathe of refining capacity to turn it into useful fuel. We are still on the way to a re-localised society as supplies of cheap, light oil (e.g. from Saudi) begin to wane.'

    Let's see.
    First we hve Brazil developing the Tupi, and saying it has 500 billion barrels, double Saudi Arabia.
    Now we have Venezuela saying it has 500 billion barrel of heavy oil
    Then we have Iraq and they say they can go to 12 mbd.
    Then we have 100 years supply of natural shale gas, recently discovered and developed.

    So why are the koo-koo birds at The Oil Drum obsessed with the Ghawar?

    We should be obsessed with getting these countries to develop their lodes.

  159. Some more fuel to Kit's fire;

    I calculated the cost per MBTU for some food types, based on supermarket prices, to further this seemingly pointless discussion:

    White flour, $0.50/lb = $71/MBTU
    White Bread, $2/1lb loaf = $412/MBTU
    Lean Ground beef, $4/lb = $700/MBTU
    Sirloin Steak, $ 7/lb = $2625/MBTU
    Cheese $4/lb = $750MBTU
    Potatoes $0.50/lb = 184/MBTU
    Canola oil $1/lb= $61/MBTU
    Big Mac Value Meal $5 = $1075/MBTU

    So I would say Kit's average of $690/MBTU is probably close to reality.

    What does this mean?
    1) The more desirable the food, the more expensive
    2) The more perishable, and more processed the food, the more expensive it is.
    3)f you want to save money, buy the ingredients and do the cooking yourself
    4) It is pointless using (finished) food for heat energy.
    5) these calculations would be far simpler, and more widely understood, if everyone used the metric system!

    As with energy, there is a certain amount of "demand pricing" in food, such as the difference between steak and ground beef. Or bread and flour. We are prepared to pay quite a premium for "convenience" for both food and energy, irrespective of their relative costs of production.

    It is interesting that governments force utilities to pay large premiums for wind and solar electricity, which is definitely less convenient than predictable, controllable coal/NG/hydro etc.

  160. Benny, closer to home we have 200 billion barrels in the Canadian oilsands, but I would hardly say that the US gov't is "obssessed" with developing them (supportive, sort of, but not obssesed).

    I agree that there's no point obsessing about Ghawar, but should the real obsession be with reducing oil dependence, rather than remaining dependent upon other countries to supply it?
    If Venezuela becomes the dominant world supplier of oil, we are little better off than we are today. I have no problem with them, and Brazil, and Canada going ahead, if they can make it worthwhile.

    But the US should be trying to minimise, or eliminate, its dependence on all of them.

    We should be obsessed with finding petroleum alternatives, not alternative petroleum.

  161. Paul-
    In many ways, I agree with you. I like PHEVs and nuke power plants.

    What I am pointing out is that the idea of Peak Oil and doom is just nuts, at least for another couple generations.

    The doom part is nuts period (unless man decides to have another big global war).

  162. I debated putting this comment up, in as much, as it's badly Off Topic. If it's too much so, I apologize.

    But, this goofy Hindu article has been much discussed over at the Oil Drum, where I'm not allowed to post, and I hate to see some of our readers being so grossly uninformed, So:

    We DID NOT use 25% of our GRAIN CROP for ethanol last year, or any year. Again, I suppose there's a language problem, and a problem with telephone communications; but, here are the Real Numbers. Note: These numbers are approximations (but, fairly reasonable approximations. You'll realize when you see them that exact numbers are in no way necessary.

    We will harvest about 13.2 Billion bushels of Corn this year.

    We used in the area of 11 Billion Gallons of ethanol.

    Figuring 2.8 gallons of ethanol from a bushel of corn, we processed approx. 3.9 Billion bushels of corn for ethanol.

    We recovered at least 60% of our livestock feeding ability in the form of DDGS, which means we used the equiv. of 1.56 Billion Bu. of Corn for Ethanol.

    In addition to the 13.2 BBu of corn we raised about 3.3 BBu of Soybeans, and probably about 3 BBu of Wheat. Throw in some Rice, Sorghum, and Barley and we're well over 20 Billion Bushels of "Grain."

    So 1.56 BBue/20 BBu = 0.078

    We used about 8% of our "Grain" Crop for ethanol.

    I imagine, Globally, we're probably talking in the neighborhood of Two percent.

  163. Benny,

    As has been said by many others, we are not running out of oil, just cheap oil.

    I guess at some point we will technically reach a "peak" in world oil production, if we haven't already. But from what the doomers say, I think they are confusing "peak oil" with "no oil", and they are very, very different scenarios.

    As the Saudi oil minister said a year or two ago, "the stone age did not end because they ran out of stone, and the oil age will not end from a lack of oil"

  164. Paul suggests: "If you want to save money, buy the ingredients and do the cooking yourself"

    Then there are those (taxpayer-supported) scientists who rake through modern garbage. I don't have a link to this, since the study was reported some time ago, but what they found was that much of the food that ends up in landfills was "fresh" food. Not much processed food in landfills.

    It might be cheaper to live on fresh food (beans & potatoes, actually), but it may not be more 'efficient' — depending on how one chooses to define 'efficiency' in a process with multiple inputs and multiple outputs. Which is why claims about 'efficiency' should always be inspected carefully.

  165. As the Saudi oil minister said a year or two ago, "the stone age did not end because they ran out of stone, and the oil age will not end from a lack of oil"

    Sheik Yamani — more than a year or two ago; more like the 1970s around the time of the Oil Shocks.

    The Stone Age ended because human ingenuity discovered something better than stone tools — metal tools, using metals extracted from stone. The Oil Age will end because human ingenuity comes up with an energy source that is better, cheaper, more convenient than oil.

    The Doomers on The Oil Drum have it backwards. They want to cut energy supplies and increase energy prices instead of developing Better Cheaper technologies which out-compete oil in the market-place. They want to go back to the Middle Ages. Useless tossers!

  166. As the Saudi oil minister said a year or two ago, "the stone age did not end because they ran out of stone, and the oil age will not end from a lack of oil"

    With all respect to the Saudi oil minister, that was a dumb thing to say.

    First, we could never run out of stone.

    Second, the Stone Age ended not for lack of stone, but because innovative people realized something better was at hand that could work in its place.

  167. Kinu/Wendell

    Didn't realise this had first been said so long ago, but it is equally true now as then. I think we are all on the same page that we will innovate to find something else to (largely) replace oil, if not because it is better, then simply because oil becomes too expensive.

    The standard interpretation of Saudi oil policy seems to be to keep the price as high as possible, to maximise their income, but not so high that the alternatives become viable. They may have succeeded in the past, but their power to control world prices is shrinking as fast as their domestic oil consumption is rising.

    As for all that fresh food, a lot of it is restaurant and supermarket spoilage, from our desire to have "fresh" food all year round, a lot of refridgerated lettuce, fruit etc just doesn't keep that well. I don't regard frozen, or even canned food as "processed", more "preserved", and I am fine with that.

    BUt a loaf of bread is "processed" and the stores are not allowed to sell it after 2 days, and typically 13% of it gets tossed, ends up as animal feed (we use to buy it at $0.05/loaf to feed our chickens).

    There is lots of scope for reducing food wastage, and presently it all gets priced into the food we actually eat.

  168. But a loaf of bread is "processed" and the stores are not allowed to sell it after 2 days, and typically 13% of it gets tossed, ends up as animal feed…

    Paul~

    Somewhat surprised no one is making ethanol out of that bread so they can claim value added, that they are freeing us from the clutches of Big Oil, and collect a subsidy. 😉

  169. And an ex-Sooner was the hero of the game.

    Are you talking about the Saints kicker or Adrian Peterson? ;( He certianly gave the ball away at some crucial times.

    As a life long Viking fan that one is going to hurt for a while. I should complain about 3 or 4 horrible calls and reviews in overtime, but I can't. My Vikes had many many chances to put that game away. Then to get called for 12 in the huddle when you are on the edge of field goal range. Unbelievable. And an interception when there was room to run and a reciever open on the sideline. I can't take it.

  170. Wendell, it has occurred to me that you could do an ethanol operation using this sort of food waste as your feedstock. There is also lots of spoiled fruit (high in sugar) that could be thrown in. Yield would be low, but if the feedstock is free that's fine. The residual may still be OK for animal feed, otherwise can be burnt.
    If I owned the farm I could then collect the manure, do anaerobic digestion and use that biogas to heat the distillation process

    I see no reason why it shouldn't qualify for the subsidy, unless it is corn specific.

    I wouldn't make the claim about big oil, of course, I'd rather focus on running a nice little business than hyping it.

    But there sure is a lot of feedstock available…

  171. Do you have a way to also compare the cost of wind, solar, and nuclear withe the other energy sources you already sited? I have looked high and low on the internet for such a comparison and cannot find one.

  172. That is because there is not a simple comparison.

    All of the alternatives you listed produce electricity, and use virtually no "fuel"

    So the "cost" is dependent upon the capital cost, financing rates, and with solar and wind, the local geography and climate.

    To further confuse the picture, there are highly variable government subsidies around the world.

    But you can get an idea of the relative costs by looking at the subsidies or "feed in tariffs" for the renewables. For example, the feed in tariff for solar in Ontario, Canada is $0.80/kWh, for offshore wind it is $0.20, and the average electricity price to residential and commercial customers is $0.05.

    The solar feed in tariff has been raised to $0.80 from $0.44, so presumably this was not enough to entice many people to do.

    If we take the feed in tariff (the "price") as being roughly equal to the "cost" (i.e. what the solar/wind owner needs to have a profitable business) then we can see that solar is 16x more expensive than retail, and offshore wind is 4x more expensive. Onshore wind is probably 2x more expensive.

    From the original post, you can see that even with the most expensive coal, and allowing a 70% energy loss in generation, it only costs $7 to produce $34 of electricity. With solar it is about $270, and offshore wind about $70 to produce $34 worth of electricity. That's why they don't get built unless someone (the taxpayer, not the electricity customer) is subsidising them.

    Even if a carbon tax were to double the price of coal, it would still be the cheapest way to produce energy.

  173. I stopped reading the comments to this blog a few weeks ago. I've had other responsibilities. It's difficult to keep up with 100+ comments, so I will not be reading the comments on future posts, as enlightening as they may be. I'll just stick with the main articles.

    But before I disappear, I feel compelled to respond to some mentions of my name.

    Kit P wrote: A long tine ago almost all reasonable people thought the earth was flat. Now that we know 'why' (Clee, that is called gravity) people do not fall off earth . Suggesting that it is flat would not be reasonable.

    Huh? What? Why bring my name up? What do I have to do with any of this? More gratuitous insults by implying that I don't understand gravity?

    Kit P wrote: Clee can explain how Redwood City got its name. Lived there in 1960, I do not remember any Redwood trees.

    Why me again? But yes, I can explain how Redwood City got its name. It's not from the Redwood trees that were there when it got its name. Redwood City and Redwood Creek were named after the redwood trees that were cut down in the Santa Cruz Mountains in the 19th century. They were floated down Redwood Creek, and shipped out to San Francisco at the creek's deepwater channel on the bay. Note that Redwood City is on the bay and is not in the Santa Cruz Mountains where the logging was done. Redwood City was cattle ranch land before the logging era.
    http://www.ci.redwood-city.ca.us/phed/econdev/redevelopment/downtown/history/index.html

    If you don't remember any redwood trees, maybe you weren't looking. Here's a photo of a large redwood tree at the new City Hall.
    http://en.wikipedia.org/wiki/File:Redwoodcitycityhall.jpg

    Kit P wrote: California is the icon for failing to make electricity with the wind. Clee and all Californians will tell you how many wind turbines they have erected but are reticent to discuss how mush electricity is made with them. If you look at states building new wind farms California is at the bottom of the list. Out of about 8000 MWe of new capacity in the US, 20 MWe was erected in California.

    Hey, finally a post that brings up my name on a topic that I've actually commented on before! Wow!
    Check out page 3 of
    http://www.awea.org/publications/reports/4Q09.pdf
    Wind Project Installations by State
    Added in 2009 (MW)
    California 277

    That places California 12th in a list of 28 states that added wind power in 2009. Not spectacular, but that's above the half way mark which means it's not "at the bottom of the list." In cumulative wind power installed, California has fallen to 3rd place, behind Texas and Iowa. Not at the bottom at all.

    How much electricity is made by wind turbines in California? I'm having trouble finding recent data. According to
    http://apps1.eere.energy.gov/states/electricity.cfm/state=CA
    "California electricity generation from wind in 2006 (million kWh): 4,994
    Percent of U.S. generation from wind: 19.37%
    State rank: 2
    "

    No reticence here. In 2006 California's state rank was 1 in
    electricity generation from non-hydro renewable energy resources
    electricity generation from biomass
    electricity generation from geothermal
    electricity generation from solar

    Of course in getting top rankings, being a large state helps. Still, CA accounted for 25.4% of US renewable power generation but only 6.9% of US electricity consumption.

  174. paul wrote: Wendell, it has occurred to me that you could do an ethanol operation using this sort of food waste as your feedstock. There is also lots of spoiled fruit (high in sugar) that could be thrown in. Yield would be low, but if the feedstock is free that's fine.

    Here's an example of USDA study on that idea.
    http://www.biotechnologyforbiofuels.com/content/pdf/1754-6834-2-18.pdf
    Watermelon juice: a promising feedstock supplement, diluent, and nitrogen supplement for ethanol biofuel production
    …about 20% of each annual watermelon crop is left in the field because of surface blemishes or because they are misshapen; currently these are lost to growers as a source of revenue. Second, the neutraceutical value of lycopene and L-citrulline obtained from watermelon is at a threshold whereby watermelon could serve as starting material to extract and manufacture these products. Processing of watermelons to produce lycopene and L-citrulline, yields a waste stream of watermelon juice at the rate of over 500 L/t of watermelons. Since watermelon juice contains 7 to 10% (w/v) directly fermentable sugars and 15 to 35 μmol/ml of free amino acids, its potential as feedstock, diluent, and nitrogen supplement was investigated in fermentations to produce bioethanol…
    Conclusion: Although watermelon juice would have to be concentrated 2.5- to 3-fold to serve as the sole feedstock for ethanol biofuel production, the results of this investigation indicate that watermelon juice, either as whole juice fermented on-site or as a waste stream from neutraceutical production, could easily integrate with other more concentrated feedstocks where it could serve as diluent, supplemental feedstock, and nitrogen supplement.

  175. And back on topic…

    RR wrote: Show me where I can purchase solar and wind for prices cheaper than this.

    For very brief periods of time in limited locales, one could purchase wind-powered electricity for cheaper than fossil-fuel electricity.

    http://apps3.eere.energy.gov/greenpower/markets/pricing.shtml?page=2&companyid=277
    "August 2008 – Minnesota customers that are signed up for Xcel Energy’s Windsource voluntary renewable energy program found a pleasant surprise in their utility bills for July 2008. Windsource customers in the state actually paid less for wind energy than customers paid for fossil-fuel generated electricity. Windsource customers are exempted from paying a separate fuel cost (known as the energy cost adjustment) because wind energy does not use the fossil fuel paid for by the charge. When the fuel cost to conventional customers exceeds the Windsource premium, savings result for Windsource customers. "

    "November 2005 – Utility customers participating in green pricing programs that offer some form of protection from fossil-fuel price changes are finding that their green power premiums are shrinking or even turning negative. For example, as of November 1, Colorado customers participating in Xcel Energy's Windsource program are paying 0.66¢/kWh less for wind energy than for "regular" electricity because of an increase in the utility's energy cost adjustment (ECA). Since the ECA announcement, Xcel has sold out of its remaining available wind energy supply and has established a waiting list for new program signups.

    In Oklahoma, OG&E Electric Services customers purchasing the OG&E Wind Power product now pay 0.13¢/kWh less for wind energy than for traditional electricity and customers of Edmond Electric's pure&simple wind power program now pay 0.33¢/kWh less. Both utilities adjust their fuel charge monthly. Finally, in September, Austin Energy announced an increase in its fuel charge, which will bring the rate for its most recent GreenChoice product offering to near parity with the standard electric rate. "

  176. With the blog moving, it's time to get my last responses in, even though PG&E hasn't published their 2009 power mix numbers yet.

    Kit P wrote: When I lived in the PNW, PRB supplied a large part of my electricity. Clee's too.

    Kit P keeps bringing up my name for reasons that elude me. I have never lived in the Pacific Northwest and Powder River Basin coal does not supply a large part of my electricity. The solar panels on my roof supply a large part of my electricity. Being in PG&E territory, PG&E supplies a large part of my electricity.

    Roughly 40% of PG&E's electricity comes from natural gas. Roughly 20% comes from nuclear power. Roughly another 20% comes from large hydro. Of the remaining roughly 20%, more of it comes from "Eligible Renewables" such as geothermal, biomass, small hydroelectric, wind and solar than comes from coal. Maybe Kit P thinks 2%-4% of my electricity coming from Powder River Basin coal is a "large part", but then a much larger part of my electricity comes from eligible renewables.

    I'm okay with Kit P's coal plant if it meets EPA emission standards, OSHA, etc. I don't believe in shutting down perfectly-working plants. The fact that coal (from the Powder RIver Basin or elsewhere) supplies very little of the electricity provided by my power utility has nothing to do with any views I have on coal.

    As for redwood trees in Redwood City, the last time I passed by the city hall, I noticed a half dozen or so redwood trees around it. I bet if I took the effort to look for redwood trees in other parts of Redwood City, I'd find a lot more. Though, as I mentioned above, Redwood City was not named that because it ever had lots of redwood trees.

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