Why Biofuels Tend to be Costly

Catching Up

I have gotten some inquiries about my status, as I don’t typically go two weeks between posts. I am fine, but it’s been a very busy two weeks. There was lots of travel, lots of deadlines, and in between I worked in a trip to Hawaii to spend a few days with my family. I got to be there for my oldest son’s 18th birthday, and then helped chaperone an overnight camping trip for my son’s 5th grade class on the beach in Hawaii. I must say I never got a school field trip like that in elementary school in Oklahoma!

This week I am back in Arizona, where I continue to work on a project. Next week I will be in Washington, DC to sit on a panel at the 2014 Methanol Policy Forum. My panel is called “Unlocking Our Vehicles to Methanol.” I just cleared my last pressing writing deadline, and there are two topics I want to write about. One is the situation with natural gas inventories. The next Weekly Natural Gas Storage Report will be released tomorrow (March 13th), and I will put up a short post following that. So today I will address the other topic that’s been on my mind.

The 60 Minutes’ Edits

During my interview with Lesley Stahl, we discussed a lot of things that I wish had been aired. In fact, I told one of the producers that I think they could have avoided a lot of the fallout if they had aired more of my interview, because I presented a more balanced view than was presented by the overall story. As I said during my interview, the issue of cleantech isn’t black and white, or good versus evil. It is a complex story with many angles, and an attempt to reduce it to black and white was certain to create controversy.

As I mentioned in a previous article, Lesley’s questions to me were balanced. At one point she posed the following question about biofuels. Paraphrased, it was essentially “Doesn’t it make sense that we should power our transportation system with renewable fuel?”

I explained that we can rationalize that this is true in concept, but isn’t achievable in reality. She asked why, and I said “The first thing is that we can’t possibly grow and process enough biomass to replace 90 million barrels per day of oil. Theoretically we might be able to do it with algae, but we start to run into some big practical problems there as well. We ARE displacing a small fraction of our oil consumption with biofuels like ethanol, but the goal of displacing a large fraction starts to run into issues with cost.”

Why Biofuels are Costly

So she asked why biofuels have a hard time competing with oil on price, and I gave her the following basic explanation, which is what I wish they had aired.

Photosynthesis is a very inefficient process. Solar energy is converted into biomass at a rate of only 1 percent or so, which is a fraction of the energy conversion that can be achieved with a solar panel. But a big advantage of photosynthesis is that the biomass that is produced is built-in energy storage. It’s just that it has to be processed if that biomass is to be used as transportation fuel.

The creation of fossil fuels was also accomplished via biomass that was produced inefficiently from photosynthesis. However, in that case nobody had to plant the biomass. Nobody watered or fertilized the plants. Nobody had to harvest biomass and transport it to a facility for processing. Instead, Mother Nature grew and accumulated it year after year after year, and then the internal heat and pressure of the earth cooked the biomass into coal, oil, and natural gas. Left behind were these huge deposits of high energy-density hydrocarbons. In the case of oil, we harvest an easily transportable liquid with high energy density, and then refine it into the specific products we desire.

In the case of the vast majority of biomass to fuel schemes, we have to live with the inefficiency of photosynthesis in real time. We can boost that efficiency by adding fertilizer, but that of course adds to the cost and generally increases the fossil fuel inputs into the eventual biofuel that is produced.

That very low efficiency that wasn’t a problem when Mother Nature had lots of time suddenly becomes a very real and costly problem. Each year we have human inputs just to grow the biomass, harvest it, and transport it for processing. The resulting biomass has very low energy density compared to oil, and thus transportation costs are higher.

This isn’t a knock on biofuels, it is the simple reality of why biofuels have a difficult time competing on cost. Whenever I hear someone claim “Renewable energy creates more jobs”, I know that they are right, because with biofuels you have to replace many of Mother Nature’s free inputs with human labor. In other words, renewable energy creates jobs because it takes more people to make a unit of energy. That ultimately translates into higher cost.

Of course one way to address this is to use waste biomass. The challenge with waste is that it still usually isn’t free, and it is often of inconsistent quality and mixed with undesirable components. One of the best sources of waste biomass in the world is the residual biomass from sugarcane processing. This bagasse is already washed, pulverized, and at a factory as a result of the extraction of the sugar. (See my article Why Sugarcane Bagasse is the Most Promising Pathway for Cellulosic Ethanol). Waste biomass is the lowest hanging fruit, and should be utilized to the fullest extent before growing crops to produce advanced biofuels.

Conclusion

I explained all of this to Lesley in a more concise manner than I have here, and I could tell that my explanation resonated with her. I hoped they would air this exchange, because I felt it would help people to really understand one of the basic challenges in trying to displace oil with biofuels. Alas, they went a different direction with the story, so I share my thoughts with readers here.

In closing, note that I am not suggesting that we should abandon attempts to produce fuel from biomass. I am working on a project related to that myself. I just want to help people grasp the challenge in doing so at a cost point competitive with oil.

You can find me on TwitterLinkedIn, or Facebook.