Key Questions on Energy Options

A question was recently posed to me: What is the most important question concerning ethanol production? That got me to thinking about important questions regarding not only ethanol, but all of our energy sources. There are a number of issues that we must carefully consider for any of our potential energy sources.

In my opinion, they are:

1. Is the energy source sustainable?

2. What are the potential negative externalities of producing/using this energy source?

3. What is the EROEI?

4. Is it affordable?

5. Are there better alternatives?

6. Are there other special considerations?

7. In summary, are the advantages of the source large enough to justify any negative consequences?

For the purposes of this essay, I want to focus on energy sources for transportation. Let’s look at some of our options, and get a better handle on why we have opted for the energy sources we presently use. I will not cover all of the options. In fact, nuclear, which is likely to play a bigger part in the future, is not discussed simply because I don’t know enough about it (I don’t know the EROEI, for instance).

A few comments here, as some of the questions warrant additional comment. With respect to sustainability, just because a fuel is not sustainable does not immediately disqualify it from consideration. It just means that there must eventually be something else to take its place. This could even be another unsustainable option, but these unsustainable options are unsustainable for a reason. It would be preferable to move to something sustainable.

Likewise on the negative externalities. There are negative externalities that we can tolerate, and some we can’t, but most fall in between. Is increased pollution a tolerable negative externality? It obviously depends on the level and type of pollution. If the pollution level for a relatively benign substance goes from undetectable to barely detectable, that is probably an externality that we can live with. Others aren’t so clear cut, but all need to be weighed against the perceived benefits.

The question of affordability is a really loaded question, as this will mean different things to different people. Does affordability mean that I can commute in a Hummer 40 miles one way to work with minimal economic impact? Or does it mean that I can continue to drive my subcompact a few miles per week while still being able to afford food? These are issues that we can discuss.

Liquid Fossil Fuels

1. Clearly not sustainable.

2. The potential negative externalities are many. Among them are Global Warming, increased pollution, using our military to keep supply options open, and potentially enabling the earth to be populated beyond its carrying capacity.

3. The energy return on fossil fuels is quite high. Despite publications that have suggested that the energy return on fossil fuels is less than 1.0, the actual energy return (from oil in the ground to fuel in the tank) is in the range of 6.0 – 7.0. That is, for 1 BTU of energy expended, at least 6 BTUs of fossil fuel can be extracted from the ground and processed into liquid fuels for a net of 5 BTUs.

4. Yes, this is our most “affordable” energy option with respect to the price we pay at the pump.

5. It depends on the definition of “better.” If better means a cheap option that supplies the U.S. with the current level of energy consumption, then “No.” But I would define better such that the source is sustainable and negative externalities are minimized. In that case, there are better alternatives, which will be covered.

6. One special consideration here is the relying on fossil fuels puts our energy security squarely in the hands of the Middle East, an intolerable situation in my opinion.

7. No.

I did not break out GTL and CTL via Fischer-Tropsch separately, although perhaps I should have. I have voiced my concerns about those in a previous essay – XTL: Promise and Peril.

Grain Ethanol

1. Not sustainable.

2. Again, many potential negative externalities. Among them are loss of topsoil, increased pollution from pesticide and herbicide runoff, aquifer depletion, and an increase in food prices due to increased grain demand (a positive externality to those who farm).

3. The energy return on grain ethanol is very low. Published studies put this number at around 1.3, but the return for fossil fuels in and ethanol out averages less than 1.1. Animal feed byproduct that is given a BTU value pushes the EROEI up to 1.3. Therefore, for 1 BTU of energy expended, less than 1.1 BTUs of ethanol can be produced, along with an additional 0.2 BTUs of animal feed. The net is then 0.3 BTUs with the byproduct credit, or about 1/17th of the fossil fuel net.

4. It is affordable, due to direct subsidies. But based on the current spot price of ethanol, it is slightly over twice the cost of regular unleaded gasoline on a BTU equivalent basis.

5. Yes. Even staying within the ethanol category, there are better choices.

6. The business of grain ethanol has revitalized many rural communities, and has made farming much more profitable. However, it also encourages farmers to preferentially plant corn instead of less environmentally harmful crops. The fossil fuel inputs into ethanol production are also largely non-liquid (natural gas and coal). In the case of natural gas, this makes a fine transportation fuel. But some ethanol supporters correctly point out that we have lots of coal, and we could use that as our primary energy source for ethanol production. Just don’t tell me it’s renewable in that case!

7. No.

Grain ethanol is not sustainable for primarily 2 reasons. First, it involves a loss of topsoil, and in many areas a depletion of fossil aquifers. The amount of topsoil loss has been subject to much debate, but it will vary based on many factors. Some areas are certainly more sustainable than others. The other concern is the high degree of embedded (and unsustainable) fossil fuels required for grain ethanol production. This means that in addition to the direct negative externalities, you can add secondary negative externalities caused by the usage of the fossil fuels.

The pollution issue, in my opinion, is quite serious but is typically ignored by ethanol boosters. This issue was discussed last year in an article in CorpWatch. After discussing the “carbon monoxide, methanol, toluene, and volatile organic compounds” emitted by ethanol plants, the article addressed the issue of pollution caused by corn farming:

Modern corn hybrids require more nitrogen fertilizer, herbicides, and insecticides than any other crop, while causing the most extensive erosion of top soil. Pesticide and fertilizer runoff from the vast expanses of corn in the U.S. prairies bleed into groundwater and rivers as far as the Gulf of Mexico.

The nitrogen runoff flowing into the Mississippi River has fostered a vast bloom of dead algae in the Gulf that starves fish and other aquatic life of oxygen.

To understand the hidden costs of corn-based ethanol requires factoring in “the huge, monstrous costs of cleaning up polluted water in the Mississippi River drainage basin and also trying to remedy the negative effects of poisoning the Gulf of Mexico,” says Tad Patzek of the University of California’s Civil and Environmental Engineering department.

“These are not abstract environmental effects,” Patzek asserts, “these are effects that impact the drinking water all over the Corn Belt, that impact also the poison that people ingest when they eat their food, from the various pesticides and herbicides.” Corn farming substantially tops all crops in total application of pesticides, according to the US Department of Agriculture, and is the crop most likely to leach pesticides into drinking water.

While banned by the European Union, atrazine is the most heavily used herbicide in the United States – primarily applied to cornfields – and the EPA rates it as the second most common pesticide in drinking wells. The EPA has set maximum safe levels of atrazine in drinking water at 3 parts per billion, but scientists with the U.S. Geological Survey have found up to 224 parts per billion in Midwestern streams and 2,300 parts per billion in Corn Belt irrigation reservoirs.

In my opinion, these are negative externalities just as serious as those posed by fossil fuel usage. Yet this is the alternative that we are scaling up just as fast as we possibly can. The real problem is that the negative externalities don’t directly and immediately impact most people’s lives, so they pay no heed to them. Sure, increased ethanol production might cause atrazine levels in drinking wells to increase, but it’s in someone else’s water. “It’s not my problem if it’s not in my water” is the attitude of most people. But I doubt anyone personally affected by this is going to consider it an acceptable externality.

Sugarcane Ethanol

1. Sustainable, for reasons I outlined in this article.

2. Few potential negative externalities to my knowledge. I have heard mention that expanded sugarcane production will be at the expense of rain forest, but the sugarcane plantations in Brazil are not near the rain forests. I do not know if rainforests in other tropical countries may be put in danger by expanded sugarcane production.

3. The energy return on sugarcane ethanol appears to be in the 8/1 range, which would make it better than gasoline. More on that below.

4. It is affordable, but in the U.S. we punish Brazilian ethanol with a $0.54/gallon tariff to protect our unsustainable corn ethanol production.

5. For a liquid fuel that will fit in the current transportation infrastructure, I don’t think sugarcane ethanol can be beaten with existing technology. But it can’t provide our current level of energy usage.

6. The industry can provide an economic boost to tropical countries, where it is sorely needed.

7. In my opinion, the advantages of sugarcane ethanol justify the costs, provided habitat is not being destroyed to grow more sugarcane.

I find it shameful that the U.S. subsidizes an unsustainable and polluting industry like grain ethanol, and punishes a sustainable industry like sugarcane ethanol. Yet even with those tariffs in place, Brazil can still ship their ethanol to the U.S. and compete with homegrown corn ethanol prices.

The energy return on sugarcane ethanol as it has been calculated does appear to be in the 8/1 range, which would make it better than gasoline. On the face of it, this seems absurd. Nature has already done the major processing for fossil fuels, and turned ancient plant material into long-chain, energy dense compounds. In the case of sugarcane ethanol, a lot of energy inputs are required, especially for purifying the ethanol, but those inputs are being satisfied by burning the sugarcane ethanol residues to produce process heat. Therefore, they are not being counted against the energy output.

However, gasoline accounting is not done in this manner. When oil is refined to liquid fuels, a lot of fuel gas is produced. That fuel gas tends to be burned in the refinery to produce process heat, but I have still charged that against the energy balance I calculated above. If I had done the energy accounting as is done with sugarcane ethanol, one could state that the energy return of gasoline is actually only the initial energy required to get the oil out of the ground, which averages about 17/1 worldwide. The refining step would get a free pass, since the energy in the oil is ultimately used to refine the oil. So no, the energy balance of sugarcane ethanol is not in fact better than that for gasoline.

Despite that, I believe sugarcane ethanol is a good option for mitigating a portion of our fossil fuel usage because it is renewable, and it lacks the negative externalities of fossil fuels. However, our present usage is much too great to be offset with sugarcane ethanol alone.

Cellulosic Ethanol

1. Sustainable.

2. Few potential negative externalities depending on the biomass source.

3. Unknown.

4. Presently, despite frequently optimistic claims, it costs significantly more to produce cellulosic ethanol than to produce corn ethanol.

5. Yes.

6. There are numerous sources of biomass that could be used to produce cellulosic ethanol.

7. Time will tell, but cellulosic ethanol did not just come onto the scene. Researchers have been trying to commercialize it for many years without much success. It will require several breakthroughs, none of which are certain to occur, before cellulosic ethanol contributes to our energy requirements.

Due to the lack of commercial cellulosic ethanol plants, the energy return is largely unknown. On the one hand, fossil fuel inputs for growing the biomass will likely be much lower than for corn. However, the ethanol concentration yielded from a cellulosic ethanol process tends to be significantly lower than the concentration obtained in a conventional ethanol production. A presentation at last year’s St. Louis Renewable Energy Conference from Keith Collins, Chief Economist at the USDA, showed that corn ethanol yields 14-20% ethanol, while cellulosic is a paltry 4%. That means a lot more energy for purification.

In addition, more processing steps are required. I have seen EROEI estimates for cellulosic ethanol that range from less than 1 to greater than 8. Based on the factors mentioned here, the true estimate is likely to be closer to 1. But the truth is we just won’t know until some commercial facilities are up and running.

I don’t discount that technical improvements will occur with cellulosic ethanol. But many people who don’t understand the nature of the challenges (or who have a vested interest not to) have presumed technical breakthroughs of a practically magical nature. If I announced that we would be making regular trips to Mars within 1o years, most people would reject this because they have some understanding of both the technical difficulty involved, and they understand that the costs would be enormous. Yet those same people may have no problem believing that we are going to transition our fossil fuel infrastructure to a cellulosic ethanol infrastructure. Yet the technical challenges involved are of the magnitude of ferrying us all back and forth to Mars.


1. It depends on the source.

2. Biodiesel in general suffers from far fewer negative externalities than most biofuels, but palm oil gets mixed reviews. On the one hand, it is a tropical crop like sugarcane ethanol, and the EROEI appears to be very good. On the other, rainforest is being destroyed to grow new palm oil plantations.

3. By most accounts, the EROEI is greater than 3, which is respectable for a biofuel.

4. It is more expensive than conventional diesel. Current subsidies make it affordable.

5. Biodiesel can be a sustainable contributor toward energy security.

6. Diesel engines are much more efficient than gasoline engines, which reduces the overall fuel requirement.

7. Again, it depends on the source. If we are going to chop down rainforest to plant palm oil plantations, then no. If we are going to use waste oils and existing high oil-yielding crops (grown sustainably), then yes.

I think the U.S. made a mistake by not favoring the diesel engine over the gasoline engine as has been done in many other countries. Diesels are much more efficient than gasoline engines, so a diesel fleet would stretch the fuel supply.

Biodiesel can be produced sustainably, but caution is warranted. We first need to make sure that absolutely all of the waste vegetable oil in the country gets collected and turned into biodiesel. But even growing crops for biodiesel may be done sustainably. Biodiesel derived from soybeans, while expensive to produce, comes at a much lower environmental price and a much better EROEI than corn ethanol. Then there is the added benefit of 1). A higher BTU value per gallon; and 2). The higher efficiency of the diesel engine. These factors combined mean that we would need less than half the biodiesel to drive the same amount of miles we could if using ethanol.

At this stage, I would put algal biodiesel in the same category as cellulosic ethanol: Technical feasible, sustainable, but it may not be commercial feasible. Also as in the case of cellulosic ethanol, there is much hype but much of it is without merit at this time. Magical technical breakthroughs are again being presumed as a given by many people. I have even been guilty of this to some extent.

Biomass Gasification

1. Sustainable.

2. Care has to be taken with respect to the source used for gasification. There are also potential air quality issues from a large-scale gasification program.

3. I have not seen an EROEI calculation, but I expect it to be much higher than for cellulosic ethanol. I would estimate an EROEI in the 6-10 range (based on the method I use for calculating a fossil fuel EROEI).

4. Currently capital costs are too high to enable biomass gasification to compete.

5. Biomass gasification has a chance to be a highly sustainable contributor toward our energy demands.

6. Biomass gasification could be used either to produce electricity (e.g., use biomass instead of coal in a power plant application) or as the first step in a liquid-fuels program. More below.

7. Yes.

I have described what I believe are the advantages of biomass gasification over cellulosic ethanol previously in Cellulosic Ethanol vs. Biomass Gasification. Briefly, cellulosic ethanol converts a small portion of the available biomass. Gasification converts all of it into syngas, which can then be used to make a wide variety of chemicals, including methanol, ethanol, or diesel.

The main problem with implementing a large scale biomass gasification is that it is presently just too expensive. The capital costs associated with processing the biomass are very high. Current estimates, which I documented in the afore-mentioned article, put the cost of a biomass gasification plant at about 7 times the per barrel cost of a conventional oil refinery or grain ethanol plant, and double the costs of a coal-to-liquids plant. At some point we may be willing to pay these costs for our fuel, but it won’t be until other options are largely exhausted.

Wind and Solar

1. Sustainable.

2. Few potential negative externalities to my knowledge. Wind turbines have been implicated in the deaths of some bats and birds, and there may be some increased pollution as a result of solar panel manufacture.

3. The energy returns have been calculated in a number of different ways, but most sources show an energy balance more favorable than that of most liquid fuels.

4. Wind-generated electricity is affordable, but solar is still out of reach for the average person.

5. For electricity generation, I think these are the best, most sustainable options.

6. There are a number of special considerations for this option. First, wide-spread electric transport – an absolute must in my opinion – is not yet a reality. Battery technology still doesn’t quite have the cost/benefit ratio that many consumers desire. Also, if the U.S. moves toward more electric transportation a lot of infrastructure will need to be upgraded. There are also currently issues with a shortage of silicon for making solar cells, which is keeping prices elevated. Finally, there is the issue of intermittency for both of these sources. Improvements in storage technology (such as compressed air energy storage) are needed.

7. I believe that we need to move toward transportation electrification, which in my opinion would make wind and solar power more attractive options than any of the liquid fuel options (with the possible exceptions of sugarcane ethanol and waste-derived biodiesel).

The potential advantages of a solar and wind-powered transport system are so great that our current infatuation with grain ethanol is a tremendous misallocation of resources. My vision for the future would involve some solar panels on the vast majority of houses around the world providing the electricity to run our small PHEVs. I truly believe this is the model that we will eventually implement.


This essay wouldn’t be complete without a discussion on conservation. Consider that we could save more fuel, while stretching our budgets, by choosing to embrace conservation. If we chose more fuel-efficient cars, slowed down, took fewer trips, and walked or rode a bike instead of driving, just think about the fuel we could save. We would immediately reduce our dependence on the Middle East, because we just wouldn’t need as much oil. We would increase the chance that some combination of alternatives could supply a level of energy that would allow us to maintain a decent standard of living.

Yet in this rush to alternatives, conservation is typically given just a bit of lip service. Our politicians will say “Ethanol, ethanol, ethanol, and yeah, we should conserve.” But money is not being thrown at conservation. Imagine if instead of spending over $2 billion a year in direct ethanol subsidies, we directed that money into conservation measures. We could offer everyone in the country direct tax breaks for purchasing fuel efficient vehicles. To me, such a policy would make a much greater contribution toward our energy independence than the policies we currently have in place. I believe we have to demand that our political leaders put more emphasis on conservation as a piece of our energy puzzle.

And don’t give me Jevon’s Paradox. If as a result of increased conservation in the U.S., China happens to consume the energy we saved, that’s ultimately too bad for China. We will have still reduced our energy dependence and taken a step toward sustainability. When the full force of Peak Oil hits, those who have thrown out Jevon’s Paradox as a reason not to conserve will finally understand the foolishness of such reasoning. What is going to matter is that we have a small energy footprint and are as sustainable as we can possibly be. Throwing out Jevon’s Paradox as an excuse not to conserve will never allow us to prepare for a post-peak world.

30 thoughts on “Key Questions on Energy Options”

  1. Nice work. I’d observe that even though the energy gain of ethanol is pretty minimal, it does change the mix among energy sources..that is, some of the energy is used in the processing and comes from either natural gas or coal–so it does leverage a fixed amount of oil by a higher ratio than the pure energy gain would suggest.

  2. it does leverage a fixed amount of oil by a higher ratio than the pure energy gain would suggest.

    This is true, and I had actually meant to add that under “special considerations.” I will do that tomorrow. Thanks for bringing it up.

    Cheers, Robert

  3. Very fair assessment – thank you for your analysis.

    Relating to nuclear… I attended a Peak Oil lecture by Matthew “Twilight in the Desert” Simmons this week in Santa Barbara and one of the most interesting comments was made by an octagenarian in the audience during Q&A.

    By his calculations it would take about 25,000 nuclear power plants to replace all the energy (including liquid fuels) in demand worldwide.

    Then he pointed out how much trouble building TWO (one in North Korea and one in Iran) is creating!

    Clearly, the energy required to build the plants and the dangers of disposing uranium wastes are not the only drawbacks.

  4. One general concern I have about “switchgrass” ethanol.

    First year, great. Cut down the grass, harvest it, burn it and get the energy.

    Year two. Grass not so green. No Biomass cycled into the ground, was shaved and distilled.

    Year three. Things looking a bit sandy.

    If we require artificial fertilizers, the whole conceptual ediface starts to look shaky.

  5. Also–since you are specifically addressing transportation fuels–wind & solar are dependent on storage technology (battery, ultracap, whatever) and this should be noted in the summary.

  6. Very nice piece.

    I would add two questions to your list, however. The first would be something about scale. Confining myself to the US alone, is it likely that it will meet a significant portion of the fuel needs of 300M Americans? And at current growth and immigration rates, 350M Americans in another 20 years?

    The second one would have something to do with risk management. The risk in question is the availability of fuel a few years after making a purchase. I know electricity is going to be available; I’m much less sure about any one of ethanol or methanol or biodiesel, and I can’t buy flex-fuel engines capable of burning all of those, or arbitrary mixes.

  7. For electricity generation, I think these are the best, most sustainable options.

    Given the current state of these technologies, I can’t completely agree with this assessment. Absent an efficient and scalable way to store excess electricity from these sources, the bulk of grid power still has to come from baseload and dispatchable sources. You should spend some time and take a serious look at nuclear power.

  8. Also–since you are specifically addressing transportation fuels–wind & solar are dependent on storage technology (battery, ultracap, whatever) and this should be noted in the summary.

    Agree with that, and updated to reflect this in “special considerations.”

    Absent an efficient and scalable way to store excess electricity from these sources, the bulk of grid power still has to come from baseload and dispatchable sources. You should spend some time and take a serious look at nuclear power.

    Updated the essay to reflect the need for better storage technologies. Also, I agree with you on nuclear power, and may write an essay devoted solely to that option in the near future.

    Cheers, RR

  9. Aside: Sorry to see you leave Billings (our loss) but Godspeed on your travels toward your next step.

    Thanks for the kind words. It will be a tough transition. This was a difficult weekend for me, looking out at the snow-covered mountains and thinking of how much I will miss the area. My daughter is taking the move really hard. She made some really great friends here.

    But alas, on Friday I fly across the pond. As much as I love Montana, the opportunity in Scotland was one that I couldn’t pass up.

    Cheers, Robert

  10. Agree with previous posts that a key future technology will be energy storage to make electricity generation (traditional, solar and wind) and electricity distribution both efficient and intelligent. It will also be the key technology for making the (all) electric vehicle a ubiquitous reality.

    My 2c are that once the energy storage problem is solved than we can burn as much coal as we want to generate electricity as capital will be available to use for sequestering carbon from coal-fired power stations.

  11. I’d have to agree with Michael Cain: Scale (or even potential scale) is a huge issue. Waste vegetable oil is all good, but the scale is so small, it really makes no difference. Cane ethanol is slightly better, but not much. Corn ethanol gets another F-, with 14% of the 2005 US harvest producing enough ethanol to replace < 1% of the US oil consumption.

    That is where I believe biomass gasification gets the inside track. The USDA/DOE estimates we can produce 1.3 billion tons/year of agricultural and forest waste. They are probably optimistic. Even so, that’s miles ahead of anything else.

    My simple guideline is this:

  12. Thanks RR. It’s too easy to forget about the intermittency issue when discussing renewables. A review of the power storage options might also be useful to do in a future blog. My list: batteries, flywheels, ultracapacitors, pumped hydro, compressed air, electrolysis, thermal mass. If we are lucky a breakthrough in one or more of these areas might enable us to reduce the number of nukes we’ll need or even phase them out someday. I guess I just prefer to do something now and change course later, rather than continue to wait for some sort of perfect solution that may never arrive.

  13. My list: batteries, flywheels, ultracapacitors, pumped hydro, compressed air, electrolysis, thermal mass

    I didn’t see you mention flow batteries. While technically batteries, they have attributes that make them particularly better suited to large-scale fixed storage than standard fixed-electrolyte batteries.

    I’d like to the Wikipedia article, but blogger likes to eat my links. But I encourage you to check it out.

  14. I did some calculations once on using very cheap hydroelectric power to make petroleum from water and CO2. First use the power to electrolyze water, then run reverse WGS on the hydrogen and CO2 to make syngas for Fisher-Tropsh. I concluded that pure octane would cost about USD 42 a barrel providing you could get electrical power at about USD 0,15/kWh and CO2 and water for free. Capital costs excluded.

    Electrical power at that price is availiable in Iceland and in other places where hydroelectric and geothermal power is cheap, abundant and impossible to export. Unfortunately CO2 is not free, unless someone comes up with a very clever way to capture CO2 from the air or sea.

    It would of course be a lot cheaper to use coal in place of CO2. My goal was to make CO2-neutral gasoline without taking up lots of valuable agricultural land.

  15. Interesting idea, Sturle!
    Electricity at $0.15/kWh is not rare, you should be able to get it at $0.10/kWh, without too much trouble.

    As for CO2, you need to set up your plant next to a big power plant. Legislation that puts a cap on GHG emissions would put a cost on dumping that CO2 into the atmosphere, so your CO2 could potentially have a negative cost.

    Not sure I trust the $42/bbl, though. Gasification/Fischer-Tropsch produces liquid fuels from coal at $35-40/bbl, i.e. about the same cost. And coal has a lot more energy than CO2 and water.

  16. Check this article out Isn’t it time you cover hydrogen somewhere other than the comments?

    I wrote an essay on hydrogen a long time ago, before I started blogging. It has just seemed that most people have come to realize that this is a pretty remote, long-term option at best. If we were betting our energy security on cheap hydrogen vehicles for everyone in 10 years, I would be all over it.

    Cheers, Robert

  17. J.S.
    Hydrogen is mostly hot air. Next time you listen to/read an article by a hydrogen promoter, look for these tell-tale signs:
    1. Hydrogen is assumed to be the only renewable fuel out there.
    2. Pro-hydrogen statements are actually arguments in favor of renewable energy. There is little or nothing that is unique to hygrogen.
    3. Anyone who dares question hydrogen’s feasibility is accused of being a stooge for Big Oil/status quo.

    For a complete discussion on the limitations of hydrogen as a fuel, see Robert Zubrin’s article in The New Atlantis, The Hydrogen Hoax.

  18. Robert,

    I know hydrogen is hot air and you know it. However, a lot of people believe hydrogen has a viable future. Honda, Mazda, and BMW have all developed street legal hydrogen cars. I’ve had several Ph.D’s and lawyers ask me “Well then why are they spending all this money developing this technology? There has to be a reason. Surely all of these highly paid CEO’s wouldn’t waste their money if they didn’t have good reason to.”. The main person I point to is Ulf Bossel. But finding other voices to back him up isn’t easy.

    I know a lot of people that accept the concept of peak oil but aren’t worried because they know we have plenty of coal and hydrogen cars are “just around the corner”.

    You might be correct when it comes to policy makers view on hydrogen. But in my experience you are making a major miscalculation on the public’s view of hydrogen.

  19. Sturle, I don’t know where you went wrong, but you did it in a BIG way.

    1 mole H2 = 70600 cal = 295.4 kJ
    1 kg H2 = 147.7 MJ

    $0.15/kWh = $0.0417/MJ
    Converted to hydrogen at 70% efficiency, this yields $8.79/kg H2 just for the electricity.

    Now consider F-T synthesis of alkanes from CO2 and H2.
    General reaction: CO2 + 3 H2 -> 2 H2O + CH2
    To get 14 grams of hydrocarbon, you need 6 grams of hydrogen.

    A barrel of octane, at ~6.17 lb/gallon, is 118 kg of product.  Making it by F-T from CO2 and H2 would require 50.4 kg of hydrogen.  Your energy cost would be $443/bbl, assuming no capital or maintenance costs.

    Rule of thumb:  If it looks too good to be true, it probably is!

  20. The cheapest RE available in most of the US is wind, which runs about 4.5¢/kWh.  This is roughly 3 times your figure and would yield a price of about $126/bbl by your figures.

    I notice that you assume that CO2 capture is free, in both energy and capital.  In the real world, it will not be.

    I expect that over the next 50 years, if we need to synthesize octane we will do it from biomass.  Most transport energy will be shipped to vehicles as electricity and stored in batteries or ultracapacitors; if liquid fuels are required, they will be something cheaper to make and cleaner to use.

  21. The USD 0,015/kWh is about the average price of industrial power on Iceland. Production cost of hydropower can be less than half of that. Geothermal power is a bit more expensive, but the production cost is dropping as the technology matures.

    Price of electricity in Iceland is from the graph on page 31 in this brocure (PDF):

    In my country, Norway, electricity is sold to consumers for 4,7¢/kWh (price this week) + various fees. All electricity produced is hydropower, and it has been wet lately. Export is limited by cables and lines to neighbouring countries, and of course transportation loss. Power demanding industry get lower rates, of course. The power companies still make *huge* profits.

    I believe that in 50 years Iceland will still not export power in ultracapacitors or batteries, that most aeroplanes will still run on kerosene and that most ships run on natural gas. Traffic on the road will mostly be electric. Biomass to fuel was mostly abandoned after the world wide hunger of 2024-2028.

  22. Biomass to fuel was mostly abandoned after the world wide hunger of 2024-2028.
    I agree, food->fuel is a dumb idea. However, waste->fuel is win-win! We also have much more waste than food, and it is free of charge.

    And you won’t have to wait for 2024 to see food->fuel bomb: it will happen 2007-08. Hint: corn prices are already up ~50% thanks to corn ethanol. With ethanol refineries rising like mushrooms in the midwest, that is only going to get worse.

    Until the big bang: Consumers will be asking some pointed questions this summer, when food (notably meat) prices start showing the effect of higher corn prices. More to the point, though, will be the complete implosion of fuel ethanol sales due to high production costs. Especially with oil in the $50 – 65/bbl range, and gas at $2.00 – 3.00/gal.

  23. 14 February 2007


    Allow me to share a piece of my ‘research’ work spread over the last 6-7 years. It is not a dead end thesis which has been peer reviewed and accepted. I have considerably modified my research work findings,and consequently the presentations.

    Some of it are truly cutting edge technologies, amongst which some have been tried on lab scale, some on pilot scale and some are

    already commercialised, albeit in bits and pieces.

    On the Holistic approach, I have outlined my presentations in a UN spnsored discussion forum as above and earlier in some

    European web sites.

    Dr David Pimental of Cornell Univ appreciated one of my earlier versions, (Dr.David Pimentel, when I e
    mailed my approach paper.

    Similarly, others who liked it were Dr. Dr Dickson Despommier, who is working on a revolutionary model,

    Dr. M.S Swaminathan, who successfully introduced the Dr. Norman Borlaug model of agriculture in India and is considered as the “Father of India’s first Green revolution”. No doubt this is true, as otherwise India had to beg Uncle Sam for PL 480 hand outs, whenever the food production dropped. He has ensured India’s food security at the national level. This has political dimensions too, since historically, all nation states have tended to ensure food security by internal production at whatever cost, since in many wars, the war blockade affected food supplies. (example Berlin Blockade, Iraqi blockade by the U.S.)

    U.K. based Institute of Science in Society,
    Director Dr. Mae Wan Ho, E Mail: talks of Carbon Miles. She gives an analysis of U.K. which both imports and exports, say butter,based on consumer preference and the resultant demand driven economies of Europe. Food is transported over long distances to satisfy tastes and consumer preferences rather than the simple notion of satisfying hunger and nutritional needs. All nations and their hedonistic consumers are guilty of this!

    This includes India as well, where farmers are committing suicides in thousands since 2005 over the falure of Cotton crops and other issues mostly related to indebtedness and the hopelessness of the economic outlook.

    But the Undian economy is booming with 9% growth in its GDP. Now economists talk of inclusivesness of its growth pattern – to touch
    society at all levels.

    Economic growth – I would like to define it as: that which is the extra addition to output and productivity when holistic
    approach is applied, whose doctraine can be defined as summation of the parts of holistic approach, arithmetically being
    greater than the simple arthmetic summation of the output of its parts.

    The holistic approach outlined as above makes use of the Biosanitiser technology developed by Dr Uday Bhawalkar, himself a
    B.Tech Chem Engg and further Doctrate from one of India’a most prestigious establishments – Indian Institute(s) of
    Technology. He is from IIT Powai, Mumbai. Dr M.S.Swaminathan has a open mind and has invited him to lecture at his prestigious M.S.S.R.
    Foundation in Chennai. Dr Uday Bhawalkar’s web site can be accessed at
    Cellulosic ethanol and good quality paper with say 70% of short fibres from agrowwastes

    A discovery was made almost two decades back by a team of Indian scientists in a research project in a rice, wheat straw
    pulping mill in Punjab. It is technically named as Modified Kraft Chemical Recovery Process (MKCR). MKCR enables recovery of
    caustic soda from alkali pulping black liquor effluent, established as up to 85% in pilot plant trials.Alkali (Caustic Soda)
    cooking completely seperates cellulose from lignin. Nothing great. This is routine in paper industry. What is of interest is
    that MKCR has modified the process to enable use of the high silica waste biomass like rice, wheat straws and even bagasse,
    in that order. MKCR enables the waste lignin in the black liquor to be burnt in a Cogen furnace, without the silica sticking
    to the condensor tubes. It also makes use of additional quantities of high silica biomass like rice straw or rice husk, which is found even better. Some surplus electricity is produced, which can be wheeled into nearby grids. So much so – the whole process is Clean technology, does not depend upon fossil fuels and and is a Zero net emitter of carbon.

    Another unique feature of this technology is that the seperated cellulose is very clean compared to the enzymatic process being used in the U.S. Since process and inputs are simple and low cost and MKCR enables mopping up all effluents, the overall process efficiency imporoves economically and ecologically without leaving behind any undesirable ecological foot prints.

    The technology is now awiting commercialisation in a unique project. Rice straw will be pulped and paper made. Some portion will be converted into paper of Map Litho quality, which has a good demand such as in office stationaery – copier paper.The
    paper may use up to 70% of such soft fibres derived from agro waste bio mass like rice, wheat straws. By acid hydrolysis
    some of the cellulose will be converted into C5 sugars. This is then converted into ethanol. Lab scale trials on this are
    completed and test reports available for the clean cellulose derived through alkali cooking route to C5 sugar to ethanol
    conversion. Project cost is in the region of USD 25 million. Detailed feasibility report and Busines Plan ready.

    Contact person: Mr Dinesh Khaitan Mr Dinesh and Mr Mahesh Khaitan are the pioneers who have developed
    and conceptlualised the MKCR technology, which has an Indian patent.

    R. Santhanam
    The views expresed are mine and not of those to whom I am connected professionally.

  24. Great article Robert. There is one part that is still puzzling me though and that is in regards to biomass-to-liquids. From what you’ve written, is capital cost the ONLY reason why we don’t use more of it? And how much biomass is needed to feed one of these plants? I can see using one of these as a way of getting rid of waste from large cities. Just build one outside a large city and send their organic waste there. They have to truck the stuff somewhere already.

  25. Terry,

    Yes, the problem is mostly capital costs, but there is also the factor that nobody is really experienced at this, and everyone is hesitant about being the first to jump into this in a big way. Choren may be the first, and I have had some discussions with them about what they are doing.

    As far as how much biomass is needed – figure that roughly 50% of the contained carbon in the biomass can end up as liquid fuels. The rest is consumed in the process.

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