Technology is Magic

I am freshly arrived back on the U.S. mainland, with a couple of stops before I head back to Hawaii. I have been reading about energy developments during my travels, and finally wrote something on the flight from Europe yesterday. What has prompted me to write was a report that was recently issued by The President’s Biofuels Interagency Working Group:

Growing America’s Fuel

As I read through this report on the status of advanced biofuels, I couldn’t help but think that this appeared to have been written by an optimistic cheerleader rather than by someone conducting a sober assessment of the situation. It contains very little of “Here is why we have fallen more than 90% short of our targets.”

Bear in mind that the advanced biofuel mandate for 2010 was 100 million gallons. The report admits that the shortfall will almost certain exceed 90% (as I have been saying it would for at least a couple of years).

Where the report does get into specifics, it makes excuses, suggesting that the technologies themselves aren’t the problem, lack of funding is. To that I say that I can make all sorts of things work “commercially” if I am willing to throw enough money at them. But they will only continue to remain “commercial” so long as I am supplementing them with outside funding.

This report would seem to have been written by people who believe that technological progress is inevitable. All barriers can be broken down by throwing enough money at them. While I am definitely a technology buff, I have a different view on technology. Generally, technological successes are built upon a great many resolved technical problems. Yet it may require only a single unresolved problem to lead to technological stagnation, or failure.

For example, consider the scale-up of a process from the laboratory. I have run laboratory reactors and distillation columns – and scaled those up – so I am familiar with some of the things that can go wrong. The scale of a laboratory process may be on the order of a few pounds a day. At that scale, things behave differently for a number of reasons. When scaling up a lab process to something like demonstration scale – say a factor of 100 times greater than the lab process – many things can go wrong. In fact, I think it is safe to say that most good ideas die in the lab when practical realities intrude upon theoretical considerations.

One of the most important aspects to manage is the heat inputs and outputs. In the laboratory, the size of the equipment is such that the heat losses from surface areas is a much greater percentage of the total than when the equipment is scaled up. What does this mean? It can mean that it is difficult to replicate the temperatures achieved in the lab. It can mean that the temperatures at scale are much hotter than desired, or it can mean that there are undesirable temperature variations within the process. In my experience, this is a frequent cause of failure when scaling up from the lab.

Each successive scale-up filters out more seemingly good ideas, and in a world in which commercial success hinges on actually being able to earn money from a project, this filter works well. In a world in which technological failures are met by optimistically throwing more money at the problem, then end result will be a massive amount of spending, and later congressional inquiries into why we wasted so much taxpayer money with so little to show for it.

So success for these projects is far from assured. Even success at one level of scale-up doesn’t assure success at full commercial scale. I can rattle off a dozen things that have gone wrong and been apparent only as projects progressed to full commercial scale. Trace contaminants that can easily be disposed of in the lab can become big headaches at scale. Corrosion is often a killer once some of these projects begin to operate at bigger volumes.

But for the technological cornucopians, these are not real problems: They just require more money and they will be solved. But then why do cancer and heart disease still kill so many people each year, or why does my laptop battery only lasts a few hours instead of a week? Why don’t we commercially fly people from London to New York in an hour? The reason is that not all problems are solved by throwing more money at them, and many solutions are only advanced an incremental step at a time.

As I have pointed out, cellulosic ethanol technology is more than 100 years old. You heard it here, and you can hold me to it: There will be no breakthrough that suddenly makes it cost-competitive to produce. On the other hand, press releases that announce big breakthroughs for small incremental steps? No end to those I am afraid, nor any retraction when they can’t replicate this outside the lab.  The impression this leaves is a steady upward march in the commercialization of cellulosic ethanol – and no setbacks that weren’t simply related to lack of funding.

Cellulosic ethanol will never be produced in large volumes for less money than corn ethanol can be produced for – and keep in mind that we are still subsidizing that after 30 years. What may happen is that it eventually can be mildly successful in certain very specific instances. But to think that a billion tons of U.S. biomass will contribute a major portion of the U.S. fuel supply via cellulosic ethanol? Hogwash from many people who have never scaled up anything. The reasons are not from lack of funding, they are fundamental based on physics, chemistry, and the nature of biomass.

Had I written the report, you can bet that I would have written it differently. It would have been a sober technical assessment, and while the conclusion would have probably been to continue funding, there would also have been a lot of planning for scenarios in which things didn’t pan out as expected. I like to have a Plan B that wasn’t cobbled together only after Plan A fell apart.

77 thoughts on “Technology is Magic”

  1. Industrial processes for scaling output from microbial production have been improving in the pharmaceutical sector. Molecular biological techniques for modifying microbes has been growing by leaps and bounds.

    Methanol is a simpler target and may overtake ethanol quite early. Butanol is a better gasoline substitute than either ethanol or methanol, so it may win in the middle term.

  2. İ was working on a iron ore pellet project in Argentina in '78 and when things went wrong İ remember the boss saying 'but it worked on the 14 inch muffle furnace at the university'.

    Later İ was involved with scaling up of iron ore direct reduction furnaces up from 200,000 mtpy to 2,000,000 mtpy – every bit of the way worrisome with many surprises – some good but many bad.

    All the time you read comments by non-technical types about 'don't be negative' – when they have no idea at all.

  3. "Technology is Magic"

    But as so many people neglect to consider (not you though Robert) technology must always be tempered by the Laws of Thermodynamics and Scale.

    Unfortunately, the Laws of Thermodynamics are immutable.

  4. Gunther~

    You are correct, both methanol and butanol would be better courses of action for an alcohol fuel made from organic matter. Unfortunately, Big Corn, Big Ethanol, and Corn Belt politicians are too myopic to see that, and that will continue to be the case as long as corn ethanol is the beneficiary of subsidies, mandates, tax credits, and protective tariffs.

  5. Interesting, a California perspective on corn ethanol: Old, Dirty Ethanol must Innovate not Litigate

    Though disappointed, I’m hardly surprised that some in the ethanol industry have chosen litigation over innovation. While not all ethanol is created equal, this lawsuit is about old, dirty ethanol’s attempt to stifle competition from newer, cleaner sources of fuels that can be produced right here in the U.S. By choosing lawyers over engineers, old, dirty ethanol is headed down the same disastrous road Detroit took when it sued California over its seminal Clean Car Law (sometimes known as the Pavley Program).

  6. Biofuels, did we meet our goals?

    Let me check!

    From the report,

    “The U.S. is producing 12 billion gallons per year of biofuels,

    From Energy Policy Act of 2005

    “Increases the amount of biofuel (usually ethanol) that must be mixed with gasoline sold in the United States to 4 billion gallons by 2006, 6.1 billion gallons by 2009 and 7.5 billion gallons by 2012” SEC. 1501. RENEWABLE CONTENT OF GASOLINE.
    The requirement in billions of gallons are:
    2006 ……………………………………………………………. 4.0
    2007 ……………………………………………………………. 4.7
    2008 ……………………………………………………………. 5.4
    2009 ……………………………………………………………. 6.1

    Sure looks to me like we doubled the goal. More from the report.

    “American farmers know how to efficiently produce corn, and the technology for producing corn-based ethanol is well established. This helps account for the remarkable growth in the agricultural-based ethanol biofuels industry that grew from 1% of the U.S. fuel supply in 2000 to 7% in 2008.”

    RR has chosen to put on blinders and look at one aspect of biofuels. When it come to goals, Bush set modest achievable goals. Dem like to set goals that can not be achieved in the set time frame (maybe never).

    If you asked me to 10 years ago, if we would have 30+ nukes plants in development and be producing 10 % of liquid fuels from biomass, I would have said no way. Wow, talk about exceeding goals.

  7. …the technology for producing corn-based ethanol is well established.

    It certainly is. The technology for making alcohol from grains has been around for hundreds of years, with little improvement ~ it's still simple distillation to separate the alcohol and water after fermentation. That distillation is energy intensive, and is the chief reason the EROEI on corn ethanol is still just barely better than 1:1.

  8. “California perspective”

    Wendell do you ever check your sources before linking them? The author works for the NRDC.

    Unless you have lived in California, you do not understand that the “California perspective” is really the Berkeley perspective.

    These folks make a living pointing fingers at productive people. The do not have a clue about 'the old, dirty ethanol industry' or 'dirty coal' plants'. It is interesting that the NRDC would be disappointed when industry uses the courts because they make this claim'

    “with the courtroom clout and expertise of more than 350 lawyers, scientists and other professionals.”

    So Wendell, have you ever seen the 'the old, dirty ethanol industry' where you live?

  9. KitP,

    I didn't say his blog was right, only that it was "interesting." It's important to understand all points of view.

    As Sun Tzu said, "Know the enemy and know yourself; in a hundred battles you will never be in peril. When you are ignorant of the enemy, but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and yourself, you are certain in every battle to be in peril."

  10. “Laws of Thermodynamics”

    Wark was the author of my thermo text in College, so who authored your's Wendell? The reason I ask is that you keep say things like 'EROEI on corn ethanol is'.

    I will say it again EROEI is not an engineering criteria. It was not in my test, it was not in RR's text (I could be wrong about that because he was educated in Texas).

    The purpose of LCA is to reduce the environmental impact of human activities. The environmental impact of producing energy is insignificant when following US regulations. Most of the environmental impact of transportation results on the consumer end.

    “with little improvement”

    I think that there has been huge improvement in how we produce and use energy including ethanol. Hardly a day goes by without hearing some amazing improvement.

  11. I think that there has been huge improvement in how we produce and use energy including ethanol.

    That may be true as a generalization for ethanol, but not a specific characteristic of corn ethanol.

    I will say it again EROEI is not an engineering criteria.

    It's certainly a sustainability and economic viability criteria.

  12. "As I have pointed out, cellulosic ethanol technology is more than 100 years old. You heard it here, and you can hold me to it: There will be no breakthrough that suddenly makes it cost-competitive to produce."

    Bioethanol produced from agricultural waste can now be produced at a price that makes it competitive with gasoline, reports national daily newspaper Jyllands-Posten. The world's largest manufacturer of bioethanol, US group Poet, which is collaborating with Denmark's Novozymes, has reduced production costs of bioethanol to USD 2.35 per gallon and expects to further reduce the costs over the next 12 months, bringing the price down to less than USD 2 per gallon. Production costs of gasoline are currently around USD 2.18 per gallon.

    http://tinyurl.com/yznogvo

  13. No problem Maury – we will see it at the pump then.

    Of course if the numbers are a bit cooked then we probably will not see it which seems to be the more likely!

  14. I don't think POET is lying about the numbers Russ. In this case,fudging numbers could send them to prison for fraud,because the State and Federal governments provided grant money for the demo plant. It's unforunate we didn't have $2.35 per gallon cellulosic fuel available when gasoline was $4 a gallon at the pump. We will next time.

  15. The world's largest manufacturer of bioethanol, US group Poet, which is collaborating with Denmark's Novozymes, has reduced production costs of bioethanol to USD 2.35 per gallon and expects to further reduce the costs over the next 12 months, bringing the price down to less than USD 2 per gallon.

    If this is true — and I have no reason to believe it's not — then why aren't investment bankers, private equity companies, speculators, and fund managers jumping into the market? It sounds like a license to print money.

  16. The post is about advanced biofuels, which are expected to deliver 21 billion of 36 gallons by 2022. Cattle Network says 34% of corn crop is dedicated to ethanol.

    From the report:

    Also, significant parts of the needed supply chain have received little attention, including varieties of dedicated biomass crops suited to different growing environments across the country, sustainable production systems to produce the needed biomass, production of biofuels compatible with the existing transportation fuels infrastructure, and support for development and demonstration projects that bridge the gap between promising research and commercial deployment.

    This bit referring to transportation would refer to pipelines, I'd warrant. There are plenty of stories about KM's ethanol pipeline in the news; supposedly they sent some through an existing line successfully – using some proprietary process. Wonder what that's all about.

  17. The "Real" technology story is in gene splicing/genetics. Patzek said, and he was correct at the time, that it was impossible to get more than 2.7 gallons of ethanol from a bushel (56 lbs) of corn.

    Then came Monsanto. Poet gets 3.0 gallons of ethanol/bu of corn, today.

    Oh, and they're using less water, and less nat gas.

  18. I think this is just a plain old hybrid, but, man, it grows like crazy.

    Kudzu also grows like crazy.

  19. In the end, of course, it's all about the price of gasoline. If gasoline is $4.00/gal next year, that $2.35, wholesale, for a gallon of cellulosic ethanol will look good. If gasoline is $2.70/gal there will be a lot of screaming about the "subsidy."

  20. Maury, please cite instances in which executives went to jail for optimistic calculations showing a gov't program was a wonderful success. LOL.

    POET calls Emmetsburg a cellulosic plant but the vast majority of ethanol output comes from conventional corn kernel fermentation and distillation. The big win is they use cob as fuel for distillation, virtually eliminating fossil fuel consumption. But "cellulosic" is a lot more newsworthy, not to mention government grant-worthy.

  21. This hybrid can't be spread by "seeds."

    I'm not saying this particular tree is the "deal." I just put it up as an example of something that might be accomplished with even simple biotechnology. Maybe not a "great" example. But, an example.

    The new sorghum strains that resist aluminum toxicity, and grow in acidic soils might be better examples, or the new Monsanto seeds that achieved 165 bu/acre in one of the worst growing years in memory.

    BTW, you have to be careful with comparisons over, say, a decadal scale. Ex. More and more corn farmers are going to no till/low till cultivation. I think more than half by now. You give up twenty, or thirty bu/acre when you first go low till. So those guys that were doing mouldboard plowing ten years ago, and getting 140 bu/acre, and are now getting 165 Would, quite likely, be getting somewhere above 185 if they had continued with their traditional farming methods.

  22. DD, Emmetsburg will utilize the lignin from the cobs, and from the "kernel" in the Energy process. IIRC, they think they will power all of the cellulosic, and about 70, or 80% of the Corn plant's energy needs with lignin.

  23. Personally, I think everyone is looking in the wrong direction. I'm much more interested in what happens at Vonore, Tn.

    IF their numbers "pan out," they could be creating the model that will work in virtually every county in the country. And, get the "Political" support, necessary for success.

    The "Vonore" Model is probably the model that the "Big Boys" fear the most.

  24. "Maury, please cite instances in which executives went to jail for optimistic calculations showing a gov't program was a wonderful success. LOL."

    It's a crime to lie on grant applications doggy. A number of people are in jail for doing exactly that with Katrina aid. I can't imagine why POET would feel the need to lie about it anyway. They have the needed funds to open their plant already.

  25. Rufus, Trifolia is a trade name for the Paulownia tree. Companies with big plans for Paulownia plantations in the southeastern US or South America have been around for years, but I don't know of any in actual operation. It remains popular in Asia.

  26. I didn't realize that, DD; Thanks.

    Like I said, I have no idea if this is a potential "winner," or not. The trees do require a lot of fertilizer, and, honestly, that bush in the back of my house looks like it puts on about as much biomass in a year as those trees (with no fertilizer.)

    Actually, I just thought the little slide-show was kind of neat. 🙂

  27. What specifically excites you about Vonore? What makes it better than the dozens of other sub-scale cellulosic pilot plants? A $50m plant (mostly tax dollars) to produce a meager 0.25m gallons/year is scary. What gives you a good feeling that this technology will scale up better than the others?

  28. Had never heard of Paulonia, but a rudimentary search shows this:

    Paulownia Plantations that are not cared for properly FAIL. The cost to maintain a Paulownia Plantation is substantial, if you are not prepared to follow explicit growing requirements and fund the annual costs associated DON’T PLANT.

    World Paulownia Institute

    Of course corn fields that are not cared for properly also fail.

  29. Even if the rough spots are smoothed over in the program, it still provides little incentive to lenders to put their money at risk on new cellulosic ethanol technologies.

    Hmmm. That doesn't jibe with Maury's statement that: "They have jumped into the market Wendell, with billions of dollars. Where have you been man?"

  30. DD, the more I look at it (and, as most here know, I've been "looking at it" for quite awhile,) the more I'm convinced that the future of "cellulosic" is in SMALL refineries, scattered around the countryside with (And this is Important) Local Financing.

    One: Cellulose needs to be grown within a couple of miles of the Refinery, and

    Two: Local "Buy-In" is going to be Very Important.

    I'm thinking a 10 mgpy operation in each county, to start. Followed by a second 10 mgpy on the other end of the county.

    I think marketing mid to higher blends to the locals will be an extremely important part of the process. Like I said, "Local Buyin." People are Parochial. They will, always, tend to support the Local enterprise, all else being somewhat equal.

    The smaller refineries are, also, within the financing abilities of the local areas. Thus, it can be done quicker, with less muss, and fuss.

    My proposal is to start with an authorization for a federal loan guarantee for a small refinery somewhere within each Congressional District. Let all of the Leaches take home a little "Bacon" for the folks.

    First, though, we need th "cookie cutter." The small plant that's proven to work.

    BTW, the plant is, in some cases, the Easy Part. You've got to get the farmers to grow the product. The State of Tn is doing a little "bribing," and hand-holding at Vonore. This will be, abosolutely, essential in the early stages.

  31. Here's a question on scalability that has occurred to me lately: 2 major players are currently trying to demonstrate viability of corn cob ethanol. POET spent about $4 mil building a 25,000 gal/yr pilot scale plant in IA that has been in operation since Nov2008. A couple of weeks back the U. TN and Genera just started up their 250,000 gal/yr pilot scale in TN, and that cost almost $50 million to build. Which of these has the better business plan in terms of being able to scale up? Can POET really scale 1000x from 25,000 gal/yr to 25 MGY as their plans indicate, or did Genera waste $40 mil of TN state funds building a pilot that is 10x bigger than necessary? Why such different approaches to the same problem by these two groups?

  32. VCs poured $680.2 million into US biofuels during 2008, including $437 million for cellulosic ethanol, $175.9 million in microalgae, $42 million in butanol and 25.3 million into systems and infrastructure providers.

    http://tinyurl.com/yhavp2j

    That's just in the US for 2008 Wendell. These guys aren't pissing money away,or at least they don't THINK they are. A lot of smart people think there's money in them thar hills.

  33. Oxy, the first thing that crossed my mind was, Poet already had most of their "infrastructure" in place.

    Vonore is starting from scratch.

    Also, cobs are kind of a special case. The Combine is already running through the field. They just collect the cobs while they're at it. Makes for a lot easier situation than "Growing," and the "Picking" a crop entirely for the cellulose.

  34. VCs poured $680.2 million into US biofuels during 2008, including $437 million for cellulosic ethanol, $175.9 million in microalgae, $42 million in butanol and 25.3 million into systems and infrastructure providers.

    Thanks Maury, but I thought you said "billions."

  35. RR has chosen to put on blinders and look at one aspect of biofuels.

    As did you. You picked one that is heavily subsidized (and mandated), and we were able to scale that up. Of course it is technology that has been known for hundreds of years, so of course it can be scaled up if you throw the money at it. Cellulosic ethanol can be scaled up if we throw enough money at it. The question is whether either can be economical if they aren’t subsidized and mandated. The answer to that is no, which in my mind isn’t really a success.

    What the report lacked was any sort of real understanding of why a 100 million gallon mandate had to be reduced to 6.5 million gallons. It was cheerleading, plain and simple.

    RR

  36. Bioethanol produced from agricultural waste can now be produced at a price that makes it competitive with gasoline, reports national daily newspaper Jyllands-Posten.

    Sorry, but that’s just hogwash. Further, what you (and you aren’t the only one) don’t understand is that even if POET’s claimed cost is correct, it isn’t static. If oil prices go back up to $150/bbl, POET’s costs will increase. But I personally don’t actually think they can produce for that price at scale. I am sure they think they can, but the proof is in the pudding. When they are producing cellulosic ethanol that wasn’t enabled by a steady supply of government grants, subsidies, and mandates – then we can talk about what is and isn’t competitive.

    RR

  37. It's unforunate we didn't have $2.35 per gallon cellulosic fuel available when gasoline was $4 a gallon at the pump. We will next time.

    You want to make a bet?

    VCs poured $680.2 million into US biofuels during 2008, including $437 million for cellulosic ethanol, $175.9 million in microalgae, $42 million in butanol and 25.3 million into systems and infrastructure providers.

    Show me a commercial success from all of that funding.

    RR

  38. Rufus/Wendell, that Trifolia plant is indeed a variation of Paulownia or Powton. If you believe everything you read on their site, this tree is the answer to everything, but some of their claims just don't stack up.

    Most importantly, the claim for a (projected) yield of 80t/ac/yr. If they are actually talking about dry matter, then they have achieved a yield of 5x better than the best biomass yields for the most intensive plantations in Brazil, etc.

    Their stocking rate of 680/trees/ac means you need each tree to have a dry mass of 120kg. That would be a wood volume of about 250L, or 9 cu.ft, per tree, after one year. And their photos of one year old trees aren't even close. The 5 yo tree might be getting there, but you don't get to grow those at 680/ac (8ft grid), they would be stunting each other.

    In fact, to produce this much biomass requires a photosynthesis efficiency of 10%, and real plants get 2-3%.

    I think they might be talking wet mass, and that tree, when green, would be 2/3 water.

    They claim their ethanol is competitive with $24/barrel oil, and if so, then they should be just out there doing it, instead of producing their flashy website.

    And they should check what they say, with things like this;
    "Cellulosic ethanol is mainly composed of cellulose, hemicelluloses and lignin."

    I am sick of all these companies making exaggerated claims, instead of just doing it and fully disclosing the results, like an oil or mining company has to.

    It always looks like it is angled to maximise leverage of govt and/or VC funding, but if their process was as good as they say, they wouldn't need it.

  39. "Thanks Maury, but I thought you said "billions."

    I did Wendell. The 680 million was just for 2008. They also invested 75 cents last year.

  40. "Show me a commercial success from all of that funding."

    So you'll throw in the towel if your company doesn't make money hand over fist this year Robert?

  41. Like I said, Paul, the video was interesting. The stuff does grow pretty fast. I have no opinion on the company, or whether it's a viable product in the long run.

  42. Rufus,

    It does grow fast, that is not in doubt – in fact, it is just as good a candidate for biomass farming as hybrid poplar, eucalyptus, etc.
    It's just their order of magnitude exaggeration that grates me.

    Interestingly, many people in Australia who have grown that tree in the gardens find that they can't get rid of it. After 10yrs, it starts to send out suckers, that appear everywhere, crack sidewalks, etc.

    Getting rid of the tree is near impossible, even with tree herbicides, so if you plant it, you are stuck with it!

  43. Let's use Range Fuels as the poster child for return on investment for cellulosic wannabees. Fascinating news this week about this pick of V. Khosla's. Range has been kicked around on this blog a few times in the past, and some would consider it THE leading cellulosic company (if you want to call thermochem transformations 'cellulosic') since they are supposed to have the 1st ever 'commercial scale' biorefinery on line in 2nd qtr serving up 10 MGY of ethanol / methanol. New EPA final rule on biofuels last Wednesday says not only will the Soperton GA facility not be 10 MGY, but it will be all MeOH, and only 4 MGY! Does 4 MGY qualify as 'commercial scale', and why have Range's projections continuously declined (originally 40 MGY, then 20, then 10 . . )?? This is what we get for a $76 million DoE grant, and $80 mil USDA loan guarantee, and >$100 mil in private investment – 4 MGY methanol??

  44. Oxymaven, I think there's a lesson, here. Poet had twenty-plus years experience in the business, and an idea they thought would work.

    Range had 0 years experience in the business, and an idea they thought would work.

    Range got some govmint money, and jumped in. Poet kept working on the "bench," and planned for a modest pilot facility.

    I've, always, wished I had a little money in Poet. I've never had the slightest twinge of interest in having a dollar invested in Range. I wish them well, but I'm having my doubts.

    That whole thingie about "Large" waste wood gassification plants is starting to look pretty problematic to me.

    On the other hand, if we didn't have risk-takers like Khosla shaking it up it would take us longer to figure out what "won't work."

  45. In other news, it doesn't look like all that new wind capacity is doing much of anything in this freezing weather..

    The refurbished, 115-foot towers had operated on a California wind farm, where they didn't have to worry about cold hydraulic fluid turning to gel and oil lubricants getting too sluggish.

    link

    OD

  46. On a sad note, a tragedy occurred yesterday when an explosion occurred at a power plant construction site killing five workers. I thought it was a little odd that so many was working on Sunday. What is more disturbing is that a lesson was not learned from other fatal evens.

    http://www.csb.gov/newsroom/detail.aspx?nid=305

    “The CSB issued a safety bulletin on gas purging in October 2009, because of the occurrence of multiple serious accidents during purging operations.  Key safety lessons described in the bulletin included purging gases to a safe location outdoors away from ignition sources, evacuating non-essential workers during purging, using combustible gas monitors to detect any hazardous gas accumulations, and effective training for personnel involved in purging,”

  47. So you'll throw in the towel if your company doesn't make money hand over fist this year Robert?

    I do actually understand the challenges involved, Maury. But if you are bragging about billions being thrown at a problem – and that money was spread around a great deal – I would think that there might be one possible commercial success. But there is not, and yet I don't think you understand why that is.

    RR

  48. Getting rid of the tree is near impossible, even with tree herbicides, so if you plant it, you are stuck with it!

    Sounds a bit like kudzu, doesn't it Rufus?

  49. Kind of difficult to understand how those guys messed up purging a gas line so bad – if that was the problem. That is as basic as you can get in gas safety.

    There are probably a thousand possible successes out there Rufus. Now when one of those possibles can become a real success we will have something – until then there is far more smoke than anything else.

  50. A lot like kudzu, Mercantile.

    Yep, we can agree on that, Russ. A LOTTA smoke. Must be a little *spark* in there somewhere, though.

  51. "I would think that there might be one possible commercial success. But there is not, and yet I don't think you understand why that is."

    Khosla isn't a stupid man Robert. You don't get that rich being stupid. He knew full well most attempts at making cellulosic profitably would be futile. But,he spread his bets among dozens of different technologies. Amyris,LS9,Range Fuels…the guy bet on everything. He only needs ONE commercial success. If just one of his investments strikes gold,he's got a company that'll make Exxon Mobil look puny.

    Imagine if LS9 is able to scale,and can sell their fuel profitably at today's prices. The world would pretty much be their oyster,wouldn't it?

  52. “Kind of difficult to understand how those guys messed up purging a gas line so bad “

    It is very easy to understand. There are a lot of very smart stupid people. It is called arrogance. Young males of our species think they are invincible and find near death experiences funny rather than a learning experience.

    Maintaining a strong safety culture is contrary to the human nature of power plant engineers who like to demonstrate how good they are at getting the job done. It takes much less time to prevent accidents than it does to attend a funeral. This is obvious in hindsight but not so obvious when you are trying to meet some arbitrary schedule.

    It has been a long time since I have read the results of a fatal industrial accident that was not avoidable or some new previously unidentified hazard. The hazards of producing energy are well known. There are folks who think nuclear power is dangerous but think cooking biodiesel on the kitchen stove with kids in the house is 'green'.

    And yes there is a reason I do not have explosive gases or liquids in my house.

  53. Be careful, Robert. The entire field of bioenergy is in a high state of flux. Do not throw down your gauntlets too early or too cheaply. It's fine to express skepticism — skeptics are the brightest ones in climate science, peak oil, and biofuels. Be skeptical, but don't become entrenched. That only turns your mind into a fossil. They'll be drilling your skull for oil in a million years if you take that route.

  54. A bit late but @ Maury

    Regarding the investment money you are quoting; if I take the closest research center to me they have a budget of about 100 million. The 700 million is not that much when you consider how many of such centres exist.

  55. Like İ said before about purging – it is very – very basic gas handling.

    İf the people involved don't have a proper gas handling understanding and culture then they have no business playing with it and should be charged.

    Methane, hydrogen & carbon monoxide are all perfectly safe if handled properly. İ do have gas in my house for the cooking stove and it does not worry me one little bit because it is done right.

    The owner, general contractor and consultant (at a minimum) all have a duty to see the correct culture for gas handling is in place – before the accident – not afterwards.

  56. Russ you seem to be confused between the way the world 'should be' and the way the world is.

    Did you bother to follow the link to the CSB I provided?

    Russ wrote,

    “perfectly safe”

    Nothing is perfectly safe and I would not want to work with anyone in a hazardous environment who uses “perfectly safe” as a term.

    “worry me one little bit because it is done right”

    How do you know Russ? Did you inspect their work, did you review their training records, did you take into account human error, and has anything changed to undo what was done right?

    I read an interesting case study of human error (that was not the intent of the study). Something like 100,000 gas meters were relocated from basements of houses to outside. Not one house experienced an explosion. However, about 9000 houses were contaminated with mercury that spilled from the meters even though technicians were trained in the hazard. This was discovered after two teenagers showed up at the energy room mercury poisoning.

    You can learn as much about improving safety from a near miss as a fatal accident. However, judging from the evidence of occupied body bags; the lessons have not been learned.

  57. BTW, RR made a very important point, and we kind of skipped right past it. He was, almost, without a doubt, correct when he said that corn ethanol (you could just say "starch" ethanol) would always be Cheaper to produce than "Cellulosic" ethanol.

    That is not only a Correct statement, but a very Important statement. If you choose to lend to, or invest in, a cellulosic facility you are investing in an operation that will, almost certainly, Never have the "Low-Cost" Product. That is a very dicey place to be in a "Capitalist" system.

    You are, to a large extent, betting that the government will continue into perpetuity holding back the supply of corn ethanol. That may be a pretty good bet over the "short haul," but, it seems to me, lose some of its attractiveness if viewed over the life of a 20 year loan.

    It's something "I" would certainly consider before bellying up to the bar.

  58. You are, to a large extent, betting that the government will continue into perpetuity holding back the supply of corn ethanol.

    Huh? The government is "holding back" corn ethanol?

    I'm sure you have a rationalization for that statement, but I strongly suspect there would not even be any corn ethanol if not for the government's support programs of mandates, subsidies, tax credits, and protective tariffs.

    There is no government program to "hold back" an ethanol company and stop them from contracting with a farmer to grow corn for them, and then using that corn to make as much ethanol as they can, and then trying to sell it on the open market.

  59. Wendell, come on man; catch up. The Ethanol market is driven by "Mandates." Exxon would never sell the first drop of ethanol if it wasn't mandated that they do so. It doesn't make them "bad guys." It's just not in their interest to promote an "alternate" technology.

    They are "Mandated" to use an increasing % of ethanol every year. BTW, I'm using Exxon as a generic term for the Transportation fuels industry. They are mandated to use 36 Billion Gallons of ethanol by 2022. However, they will NOT, at present law, be mandated to use 36 Billion Gallons of ethanol if 21 Billion Gallons of Advanced/cellulosic ethanol isn't available. The most corn ethanol they will ever be "required" to use is 15 Billion Gallons/Yr.

    Now, truly, it get a little fuzzy, and convoluted as to exactly how that might impact a small local corn biorefinery, But you'll notice that within a couple of months of the law being passed there had been a mad scramble to "start" construction on 14.6 Billion gpy of corn ethanol capacity, and Nothing got started after that. No one wanted to be left holding the "old maid."

    Admittedly, this is a strange, and inefficient way to "run a railroad," but that's how we do it in America.

    So, in a direct way we support corn ethanol up to 15 Bgpy, and discourage it over that amount.

    The first rule of investing, however, is be really, really careful about letting your investment money be tied to the whims of the U.S. Congress (and/or, President.)

  60. However, they will NOT, at present law, be mandated to use 36 Billion Gallons of ethanol if 21 Billion Gallons of Advanced/cellulosic ethanol isn't available.

    I get your drift–I think. You're saying lack of a sufficient mandate holds back the corn ethanol industry. Did I read that right?

    Let me guess, you were you reading George Orwell's "1984" over the weekend and you are practicing "Newspeak."

  61. No to worry Kit P – there is no way we would ever work together – by my choice!

    Human error doesn't count when handling gas. You have to design works to be officer proof. You can be positive people will do things wrong if allowed so procedures are designed to cross check and continue checking.

    At my house – İ checked the work prior to opening up the gas valve. Review training records? That is double talk for creating office jobs.

    What in the world were they doing with mercury in a gas meter?

  62. Rufus, While Exxon may not have done it unless mandated, it seems this outfit has jumped on board in a big way way:

    "HOUSTON, Dec 14 (Reuters) – Valero Energy Corp (VLO.N) agreed on Monday to buy three more ethanol plants that will boost its ethanol production capacity to 1.1 billion gallons per year."

    The plants they have bought had gone into bankruptcy, and this in a market with a mandate for their product!

    I suspect that the oil company is indeed the primary beneficiary of the ethanol credit.

    If the corn plants are going under, after 30 yrs of subsidy, one way or another, then RR is right in questioning what hope the cellulosics have, without even more subsidy support.

    The only advantage they can have is to get their feedstock for free, and even then I am not sure they will come out ahead – certainly they haven't so far.

  63. Paul, two years ago there were large Spring floods in Iowa, S. Dakota, and other important corn-producing states. That, along with the run-up in Oil prices led a lot of speculators to jump on board in running the price of corn up to in excess of $8.00/bu.

    I warned on several sites at the time (including the Oil Drum) that many times Spring floods were followed by good crops. And, that's just what happened in 2008.

    Anyhoo, the head of Verasun was, I guess, a city-slicker, and he "screwed the pooch." He shorted corn all the way to the top, and then "locked in" at the Top. He blew about $400 Million. Sayonara, Verasun.

    Valero's first Seven plants were gifts from the CEO of Verasun. Several other Ethanol newbies made the same mistake. The ones from a farm background mostly didn't. They just bought their corn, and made their "shine."

    Corn ethanol is a pretty good business. It's pretty hard to screw up. However, if you throw 200 brand new CEOs into the game, many not the least bit familiar with the core business, I guess it's not surprising that a major disaster will knock a sizable group of them to the curb. At least, temporarily.

  64. Regarding RR's original assessment of Obama's BIWG report – when I read it, it seemed to be written by some MBA type – full of grand visions and buzzwords, but not much substance. What I really don't get is that this is the sum total of what this powerful high level group has produced since it was formed last May? I was expecting a whole lot more. Maybe that will be revealed soon?

    The Bush administration got a late start in finally understanding the complexity of both bringing biofuels to commercial viability while ensuring the related environmental goals were also met. But to their credit they did produce the federal "Biofuels Action Plan" in October 2008, and that was at least as good or better than what this Obama crew came up last week for their 'roadmap'. Just does not seem like very much progress made on this important topic. Biggest difference is that Obama gets to throw about $2+ billion at biofuels in 2009-2010 between stimulus money and other DoE / USDA 'incentive' programs. That is way more than Bush had for his whole effort. Maybe that kind of 'kick-start' is needed, hopefully it will be allocated wisely, and it will be interesting to see what it yields.

  65. …many times Spring floods were followed by good crops. And, that's just what happened in 2008.

    Rufus~

    Wasn't that the experience in the Nile Valley for thousands of years until the Rooskies built the Aswan Dam?

    In fact, those Egyptians along the Nile used to depend on the yearly floods to rejuvenate the soil.

  66. “What in the world were they doing with mercury in a gas meter?”

    Seem like you are not all knowing and that there might be hazards you are not aware of. Here is the deal. Since I do not have explosive gases and liquids in my house, I do not need to worry about their properties.

    The question Russ should have asked was why the expected failure rate of well trained technicians demonstrated but no fatal explosions occurred?

    Since natural gas is not perfectly safe and fatalities occur if there is a leak, an additional barrier is provided. A leak of NG can be detected by a strong odor and we are trained from childhood to leave a building.

    Around 1964, I was a poorly supervised teen age boy making cookies after school. For whatever reason the pilot light went out and when I cam back to the kitchen the problem was obvious. Turned off the oven open the windows and left. When I cam back the smell was gone. Opened the oven door and to light the pilot light, then some time later I found my self in the kitchen sink with no eyebrows.

    Like Russ I continued to think NG was 'perfectly safe' despite all the evidence to the contrary. Houses business, public places, blowing up was just normal. No mystery in 1964 and no process safety standards.

    So Russ, a systematic approach to process safety or environmental protection is not 'double talk' for office jobs.

    One step in process safety is to eliminate the hazard if possible. When we did a post 9/11 review of hazards, one facility I worked at was able to eliminate all but one off site hazard which I will not mention. Unless you worked there, the new triple truck barriers were not noticeable. I do not think the hazard would would have survived a stinger missile but if you had one of those why not directly attack the school less than two miles away.

    Just read an announcement that a design change at this facility reduced electricity use by $900,000 per year and the government with the local electric utility provided a $175,000 grant towards the capital cost. The best thing was that it eliminated the hazard.

    So Russ, using NG is not 'perfectly safe' but can be used safely when there is a reason to use it. Electricity is not an additional hazard for home heating and cooking.

  67. “The Bush administration got a late start ..”

    Maybe you should read the NATIONAL ENERGY POLICY, May 2001. If observed the energy hearing in congress, you would also know that the Bush administration was pushing hard even then with biofuels. Even with merger funding, some projects were coming on like by 2003.

    One of the provisions of the 2005 Energy Bill was requirements to report progress and evaluate the benefit of the program. If something turned out to be a bad idea of an out clause was provided.

    I am advocate of making wise investments in renewable energy when it will create long lasting jobs and increase productivity.

    It evident that some of the stimulus money is going to good project but it is too early to tell how many are good projects. We should expect many to fail which is okay if we learn something.

  68. Sure, Mercantile; that "river bottom" land has always been the most lusted after.

    The "specs" just didn't think Iowa would have enough time to get their crop in, grown, and harvested.

    The main problem was, probably, that they don't raise much corn on "Wall Street."

  69. Thanks Rufus. So, the ethanol guys stopped trying to make money from their core business, and tried to make money betting on future trends – sounds just like the Wall St banks.

    Somehow, I don't think Valero will let that happen – they seem make enough money actually selling the product – a radical concept, these days.

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