The Biodiesel Lobby Cries Foul

Let me be clear that I strongly support biodiesel. It has a better energy return than does corn ethanol, and diesel engines are far more efficient than gasoline engines. Each gallon of biodiesel displaces far more fossil fuel than a gallon of ethanol. Therefore, I am much more in favor of biodiesel production than I am of corn ethanol production. I am also not opposed to subsidies directed at giving alternative fuels a boost. (However, in order to avoid picking technology winners, I think a better system would be to boost carbon taxes on fossil fuels. That would mean all alternatives competed on equal footing).

So, I was quite pleased to read the announcement yesterday of the collaboration between Tyson Foods and ConocoPhillips to produce biodiesel from animal fats (technically, the term used is “green diesel” to differentiate it from the product made from reacting vegetable oil with methanol and caustic. This is defined as biodiesel).

ConocoPhillips, Tyson Team on Diesel Fuel Project From Animal Fat

Source: Associated Press

HOUSTON–Oil major ConocoPhillips and Tyson Foods Inc., the world’s largest meat producer, said they are teaming up to produce and market diesel fuel for U.S. vehicles using beef, pork and poultry fat.

The companies said Monday they have collaborated over the past year on ways to combine Tyson’s expertise in protein chemistry and production with ConocoPhillips’ processing and marketing knowledge to introduce a renewable diesel fuel with lower carbon emissions than conventional fuels.

ConocoPhillips said it planned to spend about $100 million over several years to produce the fuel, Chairman and Chief Executive Jim Mulva said at a news conference. It hopes to introduce the fuel at gas stations in the U.S. Midwest in the fourth quarter of this year.

The oil company and Tyson, based in Springdale, Arkansas, said the finished product will be renewable diesel fuel mixtures that meet all federal standards for ultra-low-sulfur diesel. They expect to ramp up production over the next couple of years to as much as 175 million gallons (662.4 million liters) a year – which Mulva said would amount to about 3 percent of ConocoPhillips’ total U.S. diesel production.

But the biodiesel lobby has cried foul, saying that it isn’t fair that an oil company is going to receive the $1/gallon tax credit that was designed to help the biodiesel industry. This raises the question: Is the credit designed to promote alternative fuels, or is it designed to only help certain biodiesel producers? The National Biodiesel Board seems to take the latter position. In a press release issued yesterday, they bemoaned the fact that an oil company could get the same credit that they have enjoyed:

IRS Ruling Could Leave Promising Biodiesel Industry on a “Bridge to Nowhere”

It was with an extreme sense of irony that I read this press release, because it brought to mind many of the arguments people have used against alternative energy subsidies in general. Let’s look at some excerpts from the press release:

JEFFERSON CITY, Mo. – When he first decided to open a biodiesel plant, Delaware farmer Marty Ross knew that it wouldn’t be easy. But he believed in biodiesel’s potential for both providing energy security and adding value to the Delaware soybean crop. Seven years later, his Clayton, Del. plant is in production, and beginning to enjoy some hard-earned success. The plant has the capacity to produce 5.5 million gallons of biodiesel a year, and Ross has plans to expand that as demand increases.

So, at a $1/gallon subsidy, Delaware farmer Marty Ross stands to pull in $5.5 million a year in just subsidies. But competition is on the horizon:

However, a dark cloud now hangs over his business and threatens to dampen the benefits that the biodiesel industry brings to all Americans. “There’s no question that the government has encouraged our plant and others like us through grant programs and a federal tax incentive for biodiesel,” said Ross, president and founder of Mid-Atlantic Biodiesel. “Now, we feel like we are about to be stranded on a bridge to nowhere.”

Yes, in fact it did not escape the attention of certain oil producers that there was a credit available for biofuels production. This credit, in my opinion, is designed to promote the use of biofuels, not to favor certain producers. Mr. Ross also has received (as he notes) funds from grant programs and probably low-interest small business loans designed to help the small producers.

Ross and many others in the biodiesel industry are under threat by some large integrated oil companies, who have aggressively pursued access to a federal tax incentive that was designed to stimulate an emerging technology. Special interests have successfully lobbied the U.S. Department of Treasury to exploit a loophole in a renewable diesel tax credit law for their own benefit.

This is where my irony meter pegged out. The biodiesel and ethanol lobbies successfully lobbied for these tax credits in the first place. If your interest is truly in promoting biofuels, then why shouldn’t anyone willing to invest in the necessary infrastructure be eligible for the credit? Again, there are plenty of other incentives that the small producer receives on top of this credit.

“Certain powerful oil companies have managed to get the government to expand the definition of a separate provision that was added into the biodiesel tax credit law late in the legislative process,” said Joe Jobe, CEO of the National Biodiesel Board (NBB). “It’s our belief that this credit was developed to help a specific emerging technology, and not to further subsidize existing petroleum refineries.”

The provision in question allows fuel made from a specific process called thermal de-polymerization (TDP) to qualify for the same dollar-per-gallon incentive that was created for biodiesel produced from agricultural resources. The TDP process is a new technology to turn hazardous wastes, plastics, and food wastes like poultry offal and carcasses into a boiler fuel. Congress never had a chance to debate the provision, but it passed, along with the biodiesel tax incentive extension, in the 2005 Energy Policy Act.

This provision was inserted by Missouri congressman Roy Blunt to help the CWT plant in his state. This was in fact an emerging technology to turn waste animal fats into “green diesel.” Now that an oil company plans to do the same thing, it is interesting to see the special interests line up in opposition. That really tells me that they aren’t so much interested in promoting biofuels, as they are in promoting a certain flavor of biodiesel. They are interested in protecting their special interests.

Here is a bit more on the Roy Blunt angle from a Bloomberg article.

ConocoPhillips, Tyson Lobbied White House on Tax Rule

ConocoPhillips and Tyson Foods Inc. successfully lobbied the White House and other Bush administration officials to expand a tax break originally intended to help a plant in a top House Republican’s district.

The provision’s sponsor, Missouri Representative Roy Blunt, said he had wanted to provide a credit for diesel fuel produced with new technologies using animal carcasses and other food waste. Under rules issued by the Internal Revenue Service on April 2, the credit can now also be claimed by companies that use existing methods involving vegetable oil and animal fats.

The tax credit was “hijacked,” said Brian Appel, chief executive officer of West Hempstead, New York-based Changing World Technologies, the privately held company that owns the plant in Carthage, Missouri, that Blunt was attempting to help when he inserted the provision into an energy bill in 2005.

Jumping now back to the National Biodiesel Board press release:

Now the Internal Revenue Service (IRS) has ruled in the oil companies’ favor to expand the TDP definition to include the conventional petroleum refining process. Those companies want to add raw vegetable oils and fats at their existing oil refineries and qualify for the credit.

That is simply a false claim. You don’t just dump vegetable oil into the refinery. This is a hydrogenation process. It will require the installation of new equipment. Hydrotreaters are not cheap, and you also have to have a source of hydrogen. That may require investing in incremental hydrogen capacity, also not cheap. This will almost certainly be more expensive to produce than biodiesel produced conventionally, and this is not something that would make economic sense without the credit. So, do you favor biofuels or not? If so, you should have no problem with someone taking advantage of the incentive when without it the project would not have made economic sense.

They then list a number of reasons that oil companies should not be allowed to receive the credit. Listed among the reasons are these gems:

It will be an unanticipated drain on the U.S. Treasury.

It will be a fraction of the current amount paid to biodiesel producers, and an order of magnitude (or two) lower than the amount paid in ethanol subsidies.

It sends dangerous signals to other countries to engage in unsustainable agriculture practices to quickly meet the rising demand for raw vegetable oil.

I am not even sure what that is supposed to mean. How is a credit for animal-fat derived diesel sending dangerous signals? Wouldn’t the current biodiesel subsidy – based on vegetable oil – be more likely to send those signals?

Rather than helping our country achieve energy independence, this rule goes in the exact opposite direction…discouraging development of the renewable fuels industry.

Wow, talk about your hyperbole. Here we have an incentive for a company producing diesel from a renewable alternative source via an alternative method, and this is going to discourage the development of the renewable fuels industry? Give me a break! Nothing has been taken away from the current renewable fuels industry. They still get their subsidy. On top of that, they qualify for all kinds of small business tax breaks and grants. Yet they are worried about a company that is going to produce a fraction of the biofuel in the U.S. This is about nothing more than protectionism of special interests. It isn’t at all about the renewable fuels industry. They just don’t want the competition.

“This country has not built a new petroleum refinery in more than 30 years, and large oil companies use that to defend their prices and profits,” Jobe said. “Meanwhile, the biodiesel industry has been investing in the nation’s refining capacity with every plant that goes up.

Good grief, man. If your goal was to destroy your credibility, you are doing a great job. While there have been no new refineries built in the past 30 years, refining capacity has increased enormously. The increase in just the past 10 years has been 1.8 million barrels per day. This is around 28 billion gallons per year, as compared to the total biodiesel production of less than 1 billion gallons. So, I wonder if Mr. Jobe might like to rethink his argument that biodiesel production is expanding while oil companies are sitting around on their hands.

The petroleum industry as a whole has worked in partnership with the biodiesel industry. Many segments of the petroleum industry, especially on the distribution side, have embraced biodiesel and supported its growth,” he said.

Translation: Oil companies that buy our biodiesel for blending into conventional diesel are working with us. Those who have decided to produce their own biodiesel don’t embrace it, and don’t support its growth.

Public opinion research shows 82% of Americans support a federal tax incentive for biodiesel. They view energy security as the number one reason to support the growth of biodiesel, but also cite health, environmental and economic benefits. “I strongly doubt the American public would feel the same sentiment for another oil company subsidy,” said Mid-Atlantic Biodiesel’s Marty Ross.

Ah, who would have guessed they would try to fan the flames of hatred against oil companies? I never saw that coming. Again, it is the competition they fear. This is not an “oil company subsidy.” It is a subsidy that anyone can get. It is a biofuels subsidy. If you favor promotion of biofuels by tax incentives, then what difference does it make who is getting the credit? Unless of course the real issue isn’t promotion of biofuels.

I have said it before, and I will say it again: Oil companies are not just going to sit around and die while alternative energy companies take over. As it makes economic sense, they will start to produce biofuels. Here is a case – with the credit factored in – that did make sense. I think the reaction of the biodiesel lobby is probably not the last time you will see them (or the ethanol lobby) react negatively as oil companies continue to produce biofuels.

72 thoughts on “The Biodiesel Lobby Cries Foul”

  1. The inference from CWT and others is that because energy companies make billions elsewhere they have the money to lose on biofuels. One could say the same about Vinod Khosla and the venture capitalists.

    Why are stand alone biodisel and ethanol producers “pure” and energy companies wanting to get into the same business somehow wrong?

    In the end CWT and others don’t really want the competition.

    The particulars of the ethanol subsidy killed my research in integrating the refinery and ethanol processes.

  2. I am not sure that the general public understands that the product ConocoPhillips will be making is not Biodiesel, it is actually as bad or worse than petroleum diesel in terms of environmental impact and toxicity. Yet, thew will hitch their wagon to the green train as much as possible to tidy up their image.

    The shame really is in the fact that unless Congress does something to over rule this interpretation, the 77+ BIODIESEL plants will have nothing to use as feedstocks. Oil companies can just buy them all up and throw them in with the rest of crude. No new jobs, no distributed refining capacity, no customer choice.

    Perhaps Steve Jobs should lobby to be eligible for welfare since his “salary” is only $1 per year. We must think about the intent of such programs. Do you think the oil companies want the biodiesel guys to get depletion credits and be able to write off all costs that go into looking for (read: growing) biodiesel feedstocks? At this point, oil exploration is a writeoff against their records profits.

    And so on…

  3. anon –

    Everybody knows that energy companies get all these huge tax breaks and don’t pay their fair share. Here are the numbers from their 2006 income statements:

    Company, Income B4 tax, Inc. tax, %taxes paid (in billions $)

    ExxonMobil, 67.4, 27.9, 41.4%
    ConocoPhillips, 28.3, 12.8, 45.2%
    Chevron, 32.0, 14.8, 45.2%

    for comparison, here are a couple of other companies:

    Microsoft, 18.3, 5.7, 31.1%
    Bank of America, 8.8, 2.6, 29.5%

    Oh, nevermind.

  4. Chevron’s rate should have been 46.2. One more comparison:

    Apple Computer, 1.448, 0.444, 30.7%

    I guess Steve Jobs doesn’t need those tax credits.

  5. I am not sure that the general public understands that the product ConocoPhillips will be making is not Biodiesel, it is actually as bad or worse than petroleum diesel in terms of environmental impact and toxicity.

    Do you have any sources to back up your environmental/toxicity claims?

    As far as not being biodiesel, it is diesel produced from a biological source – animal fats. Those fats have various uses today; this will be a new use for them. But the same process can use vegetable oils instead. But the biodiesel lobby does not want any competition. It is hilarious to me to see someone who has lobbied for subsidies complain about someone else getting subsidies for making a very similar product.

    Conventional biodiesel production uses methanol and a strong caustic. So why is that a better process?

  6. Perhaps Steve Jobs should lobby to be eligible for welfare since his “salary” is only $1 per year.

    Incidentally, perhaps you should look at the profit margins in the computer industry and compare them to the oil industry. Then let me know what you find. The Fortune 500 list was released yesterday. Compare Microsoft’s profit on sales to that of any major oil company’s.

    Also further to the Steve Job’s salary issue, this from his Wikipedia biography:

    His current salary at Apple officially remains US$1 per year, although he has traditionally been the recipient of a number of lucrative “executive gifts” from the board, including a US$46 million jet in 1999 and just under 30 million shares of restricted stock in 2000-2002. As such, Jobs is well compensated for his efforts at Apple despite the nominal one-dollar salary. This approach reduces his personal tax liability because, under current U.S. tax law, salary income is taxed at a significantly higher rate (currently up to 35%) than the capital gains tax (currently a maximum of 15%) applied to profits arising from the sale of stock grants.

    Cheers, RR

  7. OA! The ugly realities of the so-called “alternative fuel” industry is showing! Nice job exposing it, Robert! In the end, these guys want another agricultural subsidy, on top of all the other subsidies. One can only ask: Have you no shame?

    Their real intentions have been obvious for a long time. Why would anybody oppose importing ethanol from Brazil? It would diversivy the country’s energy supply, making us less dependent on all those crazy authoratarian regimes that own so much of the remaining oil reserves.

    In much the same vein, the National Biodiesel Board is opposed to plans to import palm oil from countries where it can be produced cheaply. Again, if you are in favor of renewable fuel, what does it matter where the feedstocks are produced? On the other hand, if it is protection you seek, you do have an interest in where the feedstock comes from. One has to wonder, what is the NBB affraid of?

    This process will produce fuel from waste products. Traditional biodiesel plants usually produce fuel from food. Based on that fact alone I know which process is more sustainable. For any environmentalist the choice should be easy.

    When you listen to this kind of hogwash, it is easy to come to the conclusion that the USA is screwed. There seems to be so many opiniated people who understand so little, even of the very basics. Ah well, best keep educating ’em, Robert!

  8. Why would anybody oppose importing ethanol from Brazil?

    I almost drew that parallel in the essay. For all the talk about getting off of Mideast oil, the tone suddenly changes when someone else is competing with your product. It always amazed me that we penalize Brazil, when they are producing ethanol that is far more sustainable than our corn variety. It just goes to show that this debate really isn’t about the benefits of biofuels. It is about making money for whatever special interest one happens to be affiliated with.

    Cheers, Robert

  9. Robert,
    I think you should make a clear distinction between biodiesel (methyl esters) and renewable diesel, i.e. hydrocarbons like fossil diesel, but produced from renewable feedstock. Renewable diesel has many advantages compared to biodiesel:
    1. Can be blended at any ratio into existing diesel fuel supplies.
    2. Better cold temperature properties.
    3. Can be used in existing engines in any blend with fossil diesel, without making any changes to the engine.

    Related to this: I am not sure that the general public understands that the product ConocoPhillips will be making is not Biodiesel, it is actually as bad or worse than petroleum diesel in terms of environmental impact and toxicity.
    Excuse me, Anonymous, but that is utter hogwash. Unlike fossil diesel, renewable diesel contains no sulfur and no aromatics. It is also carbon neutral: it only returns CO2 to the atmosphere that was there before it was incorporated in a plant via photosynthesis. Unlike biodiesel, renewable diesel is produced from waste products, so no resources have been set aside specifically to produce the feedstock, the feedstock is a byproduct from something that is already being done. In a nutshell: renewable diesel is win-win-win…

  10. Optimist,

    Could you (or Robert) expand a little bit on the chemical differences between biodiesel and “renewable diesel”? How different are they, really?

  11. I think you should make a clear distinction between biodiesel (methyl esters) and renewable diesel,

    I have gone back and updated the essay, and I tried to make that distinction. That may be worthy of a stand alone essay. For now, I am working on something else that I will post shortly (regarding the API conference call).

    Cheers, Robert

  12. I still think its hilarious how the Energy Policy Act of 2005 defines renewable diesel (section 1346 starting on page 1445): “Renewable diesel defined – The term ‘renewable diesel’ means diesel derived from biomass (as defined in section 45K(c)(3)) using a thermal depolymerization process which…”

    No wonder these guys are tying themselves up in knots to make sure they call their process a thermal depolymerization process.

    Perhaps we should lobby Congress to get real and come up with a sensible definition of renewable diesel, such as: “Renewable diesel defined – The term ‘renewable diesel’ means diesel derived from biomass or any other renewable source. The term ‘diesel’ means a liquid fuel completely miscible in conventional diesel…

    They should also differentiate between food and waste-based fuels, preferably by paying a $1/gal subsidy for waste-based fuels and only $0.50/gal for food-based fuels. That would really get the NBB going!

  13. Could you (or Robert) expand a little bit on the chemical differences between biodiesel and “renewable diesel”? How different are they, really?

    Here is a discussion on biodiesel, including some of the problems, such as gelling and contamination by water. See this link for the biodiesel chemistry.

    Here is a description of diesel, aka petroleum diesel. (This page also talks a bit about biodiesel.) Basically, diesel is made up of hydrocarbons.

  14. Perhaps we should lobby Congress to get real and come up with a sensible definition of renewable diesel

    I agree – the same with ethanol. It shouldn’t matter what the source of the biomass is or what process is used to convert it to diesel or gasoline, nor who does it.

  15. Something I forgot to mention yesterday. At the press conference, Lew Burke of ConocoPhillips was explaining that the Tyson deal was a small first step. He talked about proving and improving the technology and learning how to apply it to soybeans, palm oil, and other biological sources.

    He also mentioned algae as a potential feedstock. That would be exciting. Someplace like the Texas Panhandle might be ideal for algae prodccuction. There is plenty of land available – relatively cheap with abundant sunshine. However, the requiremnts are staggering. At 10,000 gal/acre/year of algae, the Borger Refinery would need 588 acres of algae production to replace one day of crude oil. That is approximately 335 square miles to replace all the crude.

  16. King,
    I used to be all gung-ho about algal biomass (use wastewater which is free and contains all the …uh fertilizer/nutrients you need, produce clean effluent as a byproduct, etc.), until I factored something in: evaporation. In a desert region that is easily 5 mm/d, or about 1/5 of an inch. Multiply that by your 335 square miles, and you have 3,570 acre-feet of water per day or 1.2 billion gallons per day. That is a huge amount of water – I think Chicago produces that much wastewater in day.

    But hey, we can still harvest the Dead Zone in the Gulf of Mexico…

  17. I am not worried about the existing biodiesel plants. They are using vegetable oil. This deal involves animal fat.

    Yes, in principle they could convert vegetable oil into this other stuff too. The costs of making biodiesel are really quite small though, so they would have tough competition.

    The main problem I have with biodiesel is the cold-weather properties. We all end up having to mix it with either Kerosene or dilute it with regular diesel. I still have fuel with 30% kero in the tank of the car, in fact, but this weekend I will probably be able to switch to 100% BD for the first time this year. I am guessing that this kind of fuel will not have the same cold-weather problems. Yes, it is more toxic, but at least you can use it in the wintertime.

    Thus what is of greater concern to me is that these plants will be able to suck up all the palm oil from the tropics and convert it to something that remains a liquid year round.

  18. Optimist –

    I thought about evaporation. Check out the satellite picture on Google Earth or Google Maps for the following coordinates:

    35.3496,-101.3809

    That is Panhandle, TX and those green circles weren’t made by aliens. The area around Panhandle is about 20 x 20 miles mostly producing corn and soy beans. Panhandle is 20 miles due south of the Borger refinery.

    Or check out:

    36.0649, -102.5490

    That is Dalhart, TX. There are tens of thousands of acres of farmland under irrigation. Overhead irrigation has to deal with massive evaporation problems. It may be that algae production uses less water than corn.

  19. I am guessing that this kind of fuel will not have the same cold-weather problems.
    Guessing? Look up the links Robert and I posted on the issue.

    Yes, it is more toxic, but at least you can use it in the wintertime.
    How is renewable diesel toxic? Sure, it is not as biodegradable as biodiesel, but as the Exxon-Valdez experience shows, add enough fertilizer and hydrocarbons can be degraded.

    I am not worried about the existing biodiesel plants. They are using vegetable oil. This deal involves animal fat.
    Hence my concern: biodiesel uses FOOD as a feedstock, renewable diesel uses WASTE. Big plus for renewable diesel.

    Thus what is of greater concern to me is that these plants will be able to suck up all the palm oil from the tropics and convert it to something that remains a liquid year round.
    So, you are begining understand that renewable diesel is superior to biodiesel. And that Big Oil will be using its considerable infrastucture to distribute a biofuel to America. So, where is the problem?

  20. Anytime a waste product can be turned into another energy source, I think we’re winning. However, I’m curious about the relative carbon benefits of animal fat-derived biodiesel versus vegetable or oilseed-derived biodiesel. Animals don’t absorb carbon when we “grow” them (in fact, they tend to produce greenhouse gases), so couldn’t an argument be made that vegetable-based biodiesel is a better carbon mitigator?

  21. It may be that algae production uses less water than corn.
    That’s a joke, right?

    Algae are suspended in water. Corn needs a bit of water in the root zone. There is much that can be done to minimize evaporation (drip irrigation, nighttime irrigation, etc.) Sure, some water will evaporate from the plant’s surface, but nothing like 5 mm/d (based on the total surface area).

    In fact, according to these guys, corn needs about 30 inches per year (2.1 mm/d). And you can subtract precipitation from that.

    With algae you will always have an open water surface – set for maximum evaporation. And the land area required for algae (to make a significant contribution, is HUGE, as you calculated.

  22. Animals don’t absorb carbon when we “grow” them (in fact, they tend to produce greenhouse gases), so couldn’t an argument be made that vegetable-based biodiesel is a better carbon mitigator?
    True, but we are breeding the cattle anyway, because we like steak. So the GHG emissions will be there, whether the fuel is made or not.

    Not so when we use foodgrade plant oil.

  23. Optimist, you wrote:
    It is also carbon neutral: it only returns CO2 to the atmosphere that was there before it was incorporated in a plant via photosynthesis

    Is that strictly accurate? The feedstock needs to be hydrogenated. The hydrogen has to come from somewhere, right? What’s the most likely source for hydrogen in an oil refinery situation?

    Perhaps it’s not a big issue since it could be produced, I assume, by decomposition of the biological feedsock as well, but I’m very sensitive to thinking through any solution that involves magic hydrogen.

  24. Eas,
    Being suspicious of any magic bullet, including hydrogen, is a healthy way of thinking.

    As you infer, the hydrogen required for this can be produced from biomass. However, we are probably several years away from that. Right now, we are just talking about adding a small amount of biomass feedstock to a large amount of crude feedstock.

    But then you have to start somewhere. The fact that a big oil company is doing this, is a big clue as to its feasibility and profitability. Hopefully this will lead to something bigger…

  25. I’ve got an idea — how about we just cut to the chase and discontinue ALL mode/method-specific subsidies and simply award subsidies to renewables but ONLY on the basis of net renewable energy (hat is, NET of fossil fuel inputs)? After all, isn’t it the result that we’re after, not making certain people rich(er) or helping certain others launder even more fossil fuels in the guise of making faux “renewables.”

    It makes me sick to see that essentially everyone in the biofuels biz is essentially a rent-seeking subsidy-wannabe, and their big fallback argument is that “Well, you’ve been subsidizing fossil fuels, so we should get some too.”

    See
    http://blog.onwardoregon.org/but-johnny-got-subsidies/

    http://blog.onwardoregon.org/a-bad-idea-whose-time-has-come/

  26. Whether or not RENEWABLE DIESEL should qualify for the same tax credits as BIODIESEL is an important debate. But many of you here are burning up a lot of energy on a wrong perception. Renewable Diesel is NOT made from WASTE anything. On Monday Tyson and ConocoPhillips announced they would use animal fats for their Renewable Diesel plans. You should all get your arms around this point: animal fats are NOT waste materials. They are commodities that are widely bought and sold and have a real market value. AND they are indirectly related to the FOOD supply. The principal animal fats are Poultry Fat (primarily used as a component for poultry feed, (Yes, that’s right, true recycling.), Hog Fat, better known as Lard, some of which is used for human food, and Beef Tallow which is what McDonalds french fries USED TO BE fried in. The other important commodity oil is Used Vegatable Oil that many folks in the homebrew biodiesel field call WASTE Vegetable Oil even though it too is no more waste anything than the others. Used vegetable oil starts off as fresh soy bean oil and after the fries are fried it may be called WASTE by some but it too becomes a suitable component for chicken feed and is known in the trade as Yellow Grease.

    So there is nothing WASTE about the several different animal fat feedstocks that Tyson – ConocoPhillips propose to use.

    AND you can also come at this same point from the other side. Yes, the most commonly known feedstock for biodiesel certainly is soy bean oil that could have been made into food. But it is well know in the biodiesel industry that you can also make perfectly good BIODIESEL (that is, standard Fatty Acid Methyl Esters that meet ASTM specs) from the various animal fats just mentioned above.

    So, many of you here are clinging to an incorrect point. The debate is NOT between using a food substitute for feedstock or a waste material for feedstock. BOTH Biodiesel and Renewable Diesel can be made from BOTH food grade vegetable oil and animal food grade (and to a certain extent human food grade, i.e., Lard) animal fat. And that animal fat is not WASTE in any way, shape or form. It is simply another industrial commodity.

    It is simply incorrect to debate the relative merits of these two biofuels on the basis that one is made from a food substitute and the other is made from a WASTE material. That is just not true.

    -Biobanker

  27. I’ve got an idea — how about we just cut to the chase and discontinue ALL mode/method-specific subsidies and simply award subsidies to renewables but ONLY on the basis of net renewable energy (hat is, NET of fossil fuel inputs)?

    Hi George,

    That is what my proposal to raise fossil fuel taxes would do. It would level the playing field for all renewables, without choosing a winner. They would be allowed to compete in the marketplace.

    However, the ones with the highest fossil fuel inputs will suffer, because they will be paying higher prices for the inputs as a result of the higher taxes.

    Cheers, Robert

  28. It is simply incorrect to debate the relative merits of these two biofuels on the basis that one is made from a food substitute and the other is made from a WASTE material.

    The debate for me boils down to what we are trying to accomplish with these subsidies. Are we trying to stimulate the development of various biofuels technologies? Are we trying to diversify our energy supply? Does biodiesel, or green diesel make sense as a fuel option? Is there a strong reason to favor one over the other? (On this point, green diesel clearly has superior fuel characteristics).

    The bottom line for me is that this deal did not make commercial sense without the subsidies. It simply would not have happened. Here is what COP CEO Jim Mulva said about it: “Without the tax credit, it wouldn’t be commercial. With the tax credit, it’s just barely commercial.”

    So those points frame the debate from my point of view. If the subsidy – which biodiesel producers receive – stimulate the commercialization of green diesel, is that in effect a good thing? Personally, I think it is.

    Cheers, RR

  29. Optimist – A couple of things. Most of the corn irrigation is overhead traveling sprinklers, so you need to account for summer evaporation losses during sprinkling, not just the water needed by the plant. The Texas panhandle is not exactly the dessert. The evaporation rates are probably not as high as you estimated. There are other inputs to corn production that you need to factor in, like fertilizer, pesticides, and herbicides. Similar inputs may or may not be needed for algae production.

    There are ways to control evaporation loss for algae production too. Strawberry production uses polyethylene film to control evaporation loss and protect the plants from freezing.

    I think it is more likely that algae will grown on the outside of pipes or between sheets of plastic where you can control both evaporation losses and expose the algae to CO2 rich air.

    I was pointing out that a refinery in the Panhandle of Texas would be a good place to start to work out these commercial issues since all the infrastructure is there.

    If you don’t like there, what about Galveston Bay?

  30. The Biodiesel board misses another key point. If companies like ConocoPhillips begin buying renewable feedstocks instead of crude oil, higher prices combined with a secure market may entice farmers to start growing new crops like sunflowers, rapeseed, or even micro algae.

    ConocoPhillips has just taken the first step in that direction.

  31. I think it is more likely that algae will grown on the outside of pipes or between sheets of plastic where you can control both evaporation losses and expose the algae to CO2 rich air.
    King,
    I tend to think not. What is the capital cost going to be to build several hundreds of square miles of sheet of plastic? How do you maintain all that? I know they have great looking pilot plants, but for the scale that is needed I don’t see sheets of plastic or pipe getting much use.

  32. The debate is NOT between using a food substitute for feedstock or a waste material for feedstock. BOTH Biodiesel and Renewable Diesel can be made from BOTH food grade vegetable oil and animal food grade (and to a certain extent human food grade, i.e., Lard) animal fat. And that animal fat is not WASTE in any way, shape or form. It is simply another industrial commodity.
    ANONY,
    I know biodiesel CAN be made from WASTE…uh USED oil. However, usually it is NOT. Every large biodiesel plant I have ever read about use virgin oil. Perhaps I am missing some data, feel free to fill me in. So in the real world all the inputs used for the plant oil production must be subtracted from the end product.

    The fat that Tyson/Connoco-Phillips will be using as feedstock is a BYPRODUCT, in other words, the fat is not mainly produced for fuel production, it results from normal food production. The inputs are going to be used regardless. I guess the question you raise is whether a kg of fat is better used as animal feed or diesel fuel. That said, it’s a bit scary that animal fat gets fed to animals. I’d much rather have it converted to diesel…

    BTW, you make a great point about WASTE. In an ideal world IMHO there would be no waste, just BYPRODUCTS that get used as FEEDSTOCK elsewhere (like in nature).

  33. I read the NREL PDF on biodiesel vs. hydrothermal vs. hydroprocessing vs. FT.

    It commented that “An analysis by B. Arena and others indicates that capital and operating costs are substantially lower than those for transesterification.”

    If this is true, why is transesterification such a popular process, given that it produces an inferior fuel (more sensitive to low temperatures)? Is it just for the sake of the subsidies? Or is the study cited above less conclusive than the NREL article implies?

  34. Robert

    Tangential, but an interesting paper I picked up on.

    Valuethinker

    Creating Markets for Green Biofuels: Measuring and improving environmental performance
    Brian T. Turner, Energy and Resources Group, Richard and Rhoda Goldman School of Public Policy, UC Berkeley
    Richard J. Plevin, Energy and Resources Group, UC Berkeley
    Michael O’Hare, Richard and Rhoda Goldman School of Public Policy, UC Berkeley
    Alexander E. Farrell, Energy and Resources Group, UC Berkeley Transportation Sustainability Research Center

    ABSTRACT:

    This study describes how some biofuels are produced, emphasizing agricultural production systems, and considers what is needed in order to measure and communicate environmental performance, and gives examples of how this might be done. We describe a set of seven uses of a Green Biofuels Index, from a wholly market-driven implementation through a set of increasingly intrusive regulatory approaches. We then present several case studies of specific biofuel production pathways using a lifecycle analysis of the inputs to feedstock production and processing, but excluding market-mediated effects.

    We recommend four steps to create markets for green biofuels: 1. Measure the global warming intensity of biofuels. 2. Measure the overall environmental performance of biomass feedstock production. 3. Develop and implement a combined Green Biofuels Index. 4. Research better practices, assessment tools, and assurance methods.

    SUGGESTED CITATION:
    Brian T. Turner, Richard J. Plevin, Michael O’Hare, and Alexander E. Farrell, “Creating Markets for Green Biofuels: Measuring and improving environmental performance” (April 13, 2007). UC Berkeley Transportation Sustainability Research Center. Paper UCB-ITS-TSRC-RR-2007-1.
    http://repositories.cdlib.org/its/tsrc/UCB-ITS-TSRC-RR-2007-1

    http://repositories.cdlib.org/its/tsrc/UCB-ITS-TSRC-RR-2007-1/

    see also

    http://www.samefacts.com/archives/energy_and_environment_/2007/04/biofuels_and_global_warming.php

  35. sorry that whole URL didn’t come out:

    repositories.cdlib.org/its/tsrc/UCB-ITS-TSRC-RR-2007-1/

  36. 2 Comments:

    First the energy policies devised by the US government would qualify as a satire, if they did not constitute the rape and robbery of the taxpayers to enrich tiny interest groups, who are not helping any definable trade or environmental interest of the United States.

    This is not a partisan criticism. Both parties come up with the same ideas (subsidies and mandates).

    Second the Anonymous Dude who keeps trying to differentiate between animal fats and vegetable oils as fuel sources is wasting his breath. There is no difference that is worth worrying about. It is a bad idea to divert food into fuel. But once you have crossed that barrier. Animal vs vegetable is not a meaningful difference.

    Mr. Rapier: If I were you, I would ban anonymous comments.

  37. If this is true, why is transesterification such a popular process, given that it produces an inferior fuel (more sensitive to low temperatures)? Is it just for the sake of the subsidies?
    Hey, if the government offered you a huge subsidy to do something, would you turn them down?

  38. Optimist – I feel the same way about solar panels – too expensive for too little energy.

    You may have changed my mind on algae.

    Depending on how I calculate it, I’m getting between $0.25 and $1.00 per square foot of equivalent capital costs for algae production compared to crude oil production. I just recarpeted a room in my house for $1.75/sf. I probably couldn’t build and install a bioreactor for half the cost on a square foot basis of polypropylene carpet.

  39. It commented that “An analysis by B. Arena and others indicates that capital and operating costs are substantially lower than those for transesterification.”

    I saw that as well. I can promise you that claim isn’t true. You have guys making biodiesel in their garage. Nobody is hydrogenating animal fats or vegetable oil in their garage. Capital costs for that are very high.

    Cheers, Robert

  40. I have have a question about natural algae for biodiesel that maybe someone can clue me in.

    In Western Canada, the lakes and rivers in the farmbelt have a very high algae content due to nitrogen fertilizer leaching and general nutrient leaching from cultivation. It’s severe in any lakes and slow moving rivers where the source water is mostly runoff.

    It would be difficult to do in lakes, but in one particular river that was dammed as part of a flood prevention project it would be simple to “harvest” the algae at the dam output. The reservoir is about a mile wide and 50 miles long and is so green you can walk on it.

    It’s “Lake of the Prairies”(google)

    The dam is at the south end. My farm is a few miles west of the middle.

    I would think dealing with fish wouldn’t be that difficult and it might not be that difficult to get environmental approval to do it. The algae level is disgusting (boat wake is pure green).

    Would there be any biomass energy value in whatever type it is in this uncontrolled environment? Has anyone heard of anyone attempting something like this?

  41. Robert,
    This was excellent reporting on the subject, which I had read a few bits on, but had not pieced together in such a comprehensive manner. I appreciate your blog as an information source and your efforts on TOD to bring rational and scientific methods to the analysis.
    Thanks, SolonC

  42. Would there be any biomass energy value in whatever type it is in this uncontrolled environment?

    In reading through the close-out report that NREL did when they closed the algal-biodiesel project down, one of the problems they noted was that the high oil-yielding varieties were not as hardy as the native low oil-yielding species. So they were constantly out-competed in the natural environment. As an analogy, think of breeding something very specialized, like a Chihuahua, and then turning it out to compete with wolves. It can’t compete in the native environment.

    I don’t know how you get around this problem. Once you introduce controlled systems to only raise the high-oil species, costs go through the roof.

    Cheers, Robert

  43. Chihuahuas? I think of my yard. I am in a constant battle with the native species (weeds).

    This past week I’ve been running numbers on the back of the envelope for producing biofuels to compete with crude oil production. At the current prices of crude oil and farm commodities, I can’t find a viable replacement for crude.

    Either the price of crude has to go higher, or we need to find better crops – perhaps through genetic engineering, that produce substantially more liquid biomass per acre. A CO2 tax on fossil fuel that subsidizes CO2 reducing biomass (like algae) would help, but it would need to be somewhere above $50/ton to make much of a difference.

  44. I don’t know how you get around this problem. Once you introduce controlled systems to only raise the high-oil species, costs go through the roof.
    Well, perhaps you step away from biodiesel production and look at something that can use all kinds of feedstock and convert it into fuel. Gasification/Fischer-Tropsch comes to mind. Sure, the efficiency takes a hit, but at least the system is viable…

  45. I for one am glad to see the oil companies get into alternative fuels. Who else has the capital? Plus a lot of us are shareholders one way or another, I’d rather not see the industry disappear in 40 years. Let’s end all the subsidies; if we want a level playing field for alternative fuels, put a tax on fossil fuels.

  46. Well, perhaps you step away from biodiesel production and look at something that can use all kinds of feedstock and convert it into fuel. Gasification/Fischer-Tropsch comes to mind.

    Agree 100%. I firmly believe that this is what we will see in the long run.

    Let’s end all the subsidies; if we want a level playing field for alternative fuels, put a tax on fossil fuels.

    Again, agree 100%. But that makes just too much sense, doesn’t it? I was on a conference call last night with the API, and they indicated that they might not oppose a tax on fossil fuels, but the politicians certainly would.

    Cheers, Robert

  47. Gasification/Fischer-Tropsch comes to mind.

    Then you run into the EROEI problem, depending on where you get the feedstock. As you pointed out, the efficiency for FT isn’t very good, which means it also produces more CO2.

    Fast pyrolysis of biomass to synthetic gas which fuels combined cycle gas turbines might work. But if you are interested in solving the power problem why mess around with biomass – just build nuclear.

  48. KingofKaty, silicon solar panels at $6-8/Wp are indeed too expensive. But some thin film companies are making $1/Wp claims, which is cheaper than coal powerplants. Also, some solar thermal and concentrating PV outfits are making $2/Wp claims. Solar becomes pretty competitive at these prices.

    The only cost-competitive biofuel I know of is Brazilian cane ethanol. It’s seasonal, but typically cheaper than gasoline on a BTU basis. Of course the US can’t import it — might crimp corn farmer profits.

    Speaking of ethanol, can you tell me why the US price is only 13 cents higher than gasoline? It seems it should trade at a 52 cent premium due to the subsidy. At current prices refiners should blend E10. Why aren’t they?

    –doggydogworld

  49. Speaking of ethanol, can you tell me why the US price is only 13 cents higher than gasoline?

    I read that, and thought “That can’t be right.” But I just logged in and checked spot prices, and that is correct. Gasoline has been creeping higher, and ethanol prices haven’t been keeping pace. My guess (and I have been predicting this) is that we are starting to see some oversupply in the ethanol market. Capacity right now has gotten pretty far ahead of the mandated value.

    But, even with that, you would think at that price (and with the subsidy) blenders would be all over that deal. It will be interesting to see if this trend holds.

    Cheers, Robert

  50. My guess (and I have been predicting this) is that we are starting to see some oversupply in the ethanol market.
    This could get ugly, as I predicted: ethanol prices staying (or even going) down, while corn prices go up. All those new corn ethanol refiners struggling to make money…

    Oh well, a helpfull Congress is always just a phone call away. I bet we’ll see calls for an increased subsidy soon.

  51. Fast pyrolysis of biomass to synthetic gas which fuels combined cycle gas turbines might work. But if you are interested in solving the power problem why mess around with biomass – just build nuclear.

    I started down the pyrolysis road last fall. see Energy Harvester

    There are a lot more calories in the seed over the straw, so my idea was just to kill the cereal crop standing with Roundup and then make wood gas out of it on the stump. I’ve sprayed ~75,000 acres of cereals and oilseeds with Roundup (glyphosate) and unless the fall is really poor, it will dry out completely.

    …and although I think that if the logistics of biomass transport to a central plant were corrected it would stand a better chance, it still won’t realistically scale. The EROEI of growing a crop with 5kWh/m2 for 100 days makes the output efficiency of any ethanol, biodiesel or biomass scheme less than 1% efficient (not counting the energy to seed and harvest).

    I realized that solar thermal built with common materials and efficiency improvements over current systems has a potential of converting 10% or more of the solar isolation and biomass is a great idea for recycling and limited fuel production, but biomass (except for maybe sugarcane harvested by hand) can’t come anywhere close to 10% of the solar over the growing period.

  52. … we are starting to see some oversupply in the ethanol market.

    But we’re only at E4. I don’t see how oversupply can happen until E10. A blender making E4 today can cut his costs 2.3 cents/gallon by switching to E10. Since E10 sells for the same price as E4, that 2+ cents is pure profit. What blender would not jump on this?

    I suspect blenders did not anticipate ethanol production growing so much faster than the RFS requirement, and only upgraded some of their equipment. So they’re not really making E4, instead they’re making E10 at 40% of their locations. But an extra 2 cents/gallon should motivate them to upgrade their equipment post haste, and quickly drive the spread back to 52 cents. At least until we approach E10 (17b gal/year). Agree?

    –doggydogworld

  53. But an extra 2 cents/gallon should motivate them to upgrade their equipment post haste, and quickly drive the spread back to 52 cents.

    Yeah, the current price spread doesn’t make good sense to me. Although at various times in the past, this has happened over a short time frame. If this looks like a longer-term trend, I will have to dig a bit deeper. But I am not going to spend much time thinking about it until I know it isn’t a short-term anomaly.

    Cheers, Robert

  54. doggy – not so fast. You can’t just compare prices of unleaded to ethanol and conclude that it makes sense to blend more ethanol. You’d need a blend program and the prices of all the blend components to make sense of it. I’ve never made an ethanol blend, we used MTBE instead, but the idea is the same. Sometimes we made MTBE blends for non-reformulated markets that didn’t require oxygen.

    Summer gasoline is bumping up against its RVP limit. Adding more ethanol will displace lighter components like butanes and pentanes from the gasoline blend. May NYMEX propane is selling for $1.10/gallon with gasoline. In the summer a lot of butane gets dumped into the propane market, so I’d bet the butane price is pretty close to $1.10.

    At these prices I think I would lower the price for E85 to get more flex fuel vehicles to switch over – driving demand back up. The E85 economics have to look pretty good with the subsidy right now.

  55. Meant to say:

    May NYMEX propane is selling for $1.10/gallon with gasoline at $2.09/gallon and CBoT EtOH at $2.16.

    Rohar1 – I love Stirling and Rankine heat engines! Certainly your solution should work technically – but the capital costs are likely too high even at today’s energy prices. I develop very large energy projects and have looked at Rankine cycle energy recovery projects in the past. Compared to combined cycle gas turbines approaching 60% efficiency or combined heat and power plants, rankine engines don’t make economic sense even when the energy is “free”.

  56. Fast pyrolysis of biomass to synthetic gas which fuels combined cycle gas turbines might work. But if you are interested in solving the power problem why mess around with biomass – just build nuclear.
    You mean “nucular”, right?

    2 things:
    1. We are addicted to oil, or liquid fuels. Not sure nuclear helps much with that.
    2. Nuclear is “clean” as long as you ignore radio-active waste. Go Yukka Mountain!

  57. KingofKaty, I appreciate the feedback. If RVP limits force ethanol to merely displace something cheaper like butane then the pricing makes sense. But the EPA has a 1.0 RVP allowance for E9-E10, so how much butane would you really drive out? And why does the 13 cent spread persist into the December futures price if this is just a summer RVP issue?

    Robert is only interested in this if it proves to be a long term trend, but as an investor I’m MUCH MORE interested if it’s just a short term blip!

    BTW, the problem with E85 is it tends to be priced on a BTU basis instead of a gallon basis. That’s a 30%-ish price hit.

    –doggydogworld

  58. Now you see how subsidies tend to distort markets. It appears that the 1 RVP waiver applies only to E10.

    It may also be a capacity issue. You can’t send E10 down a products pipeline. So blenders create a blendstock specifically for reformulated gasoline called RBOB (Reformulated gasoline Blendstock for Oxygenate Blending). The ethanol is added at the terminal just before shipping to the service station. You are talking about making something called CBOB (Conventional gasoline).

    It could be that the refineries and terminals don’t have a lot of excess capacity for handling additional CBOB above their RBOB commitments. If so, the additional EtOH coming on the market has no home, and you would expect prices to drop. It would make most sense to me to dispose of excess EtOH into the E85 market, a very limited market.

  59. The “nucular” waste problem is a political and educational problem, not a technical one. I favor recycling the fuel.

    The nuclear problems at least have technical solutions. Cellulosic ethanol, biomass from algae, and other possible solution to the transportation fuel problem depend on technical breakthroughs.

  60. KingofKaty, thanks again. Now I know what RBOB stands for!

    I agree it sounds like a temporary infrastructure issue. I expect the spread will widen back toward 52 cents before long. I may even put my money where my mouth is and take a position in the futures market. Thanks again.

    –doggydogworld

  61. kingofkaty “..don’t make economic sense even when the energy is “free”.”

    In SK, Canada, we are doing ethanol from wheat now and there are 3 new plants being built this year and more being planned. Every weekend there is a big add the the paper from the Canola Growers association pushing Canola Biodiesel, and 2 new crushing plants being built in my home town.

    Dryland wheat farming on good land averages 1-2 tonne of wheat/acre and 370L/tonne is the published ethanol yield from wheat. Canola would run around 1 tonne/acre, I don’t know the oil output. (sorry I live 1/2way in the metric system) To grow wheat on 1000 acres you need 1/2 million for the land and a barely serviceable used line of equipment is more than 1 million, plus storage bins, etc. Your diesel bill is going to approach $50k/year. NH3 is $600/tonne at 40-80kg/acre of Nitrogen plus other nutrients, $20-50/acre of herbicide, etc.

    How is this supposed to be feasible with a less than 1% solar conversion? I think that an efficient solar thermal system that is a little more thought out than just replacing the heat source in a Rankine power plant with solar stands a way better chance of having both a positive EROEI and economic feasibility.

    Here’s a plan: If we are going down the food to fuel path, keep going past plants or bi-products.

    Rather than make ethanol, feed the grain to pigs, run the manure into an anaerobic digester and then TDP the entire pig or render the fat and throw the rest of the pig in the digester.

    My dad had 500 feeder hogs when I was a little kid. They upgrade feed grain starch/protein to fat very efficiently.

  62. If you want to go straight to animals pigs may not be the way to go. How about catfish? If you aren’t raising them for food you can feed them almost anything. Cold blooded animals don’t expend as much energy keeping warm.

  63. How about catfish?
    Good idea, I would think the oil content is pretty high in catfish. Do you think the TDP plant neighbors would complain about the smell? 🙂

    I would actually have a moral problem with raising animals for the sole purpose of powering someone’s SUV. It’s different with recycling animal bi-products, but I would consider it wrong. I was just making a point about how unsustainable and ridiculous making fuel out of food is. Just because it’s plants not animals doesn’t make it any smarter, and if someone is starving because of the high price of food due to fuel production, it’s not any better morally to be using plants.

    The realistic scalability of biofuels globally could be made up with minor conservation in the USA alone.

  64. Animals do a good job of converting starch -> glucose -> fat. But you are probably right, the overall EROEI is not too good. Morally I would also agree, raising animals strictly as fuel seems a bit creepy. However, algae, diatoms, plankton, or other lower order forms of life are also animals. So where does one draw the line?

  65. So where does one draw the line?

    If you have the time to look at the SHPEGS system in more detail, there is a lot more to it than a simple solar Rankine or even a Kalina cycle. I believe that by extracting heat from the ambient air efficiently and creating a local geothermal source, it can become much more feasible, efficient and clean base-load system than nuclear or coal. If the construction EROEI can be made positive, it can produce enough energy to “reproduce” and the common materials and solar input means that there isn’t a hard limit on “reproduction”.

    Ammonia absorption heat upgraders and cycles aren’t very well understood and I worked out a step-by-step pdf and a flow animation to try and explain it a bit clearer.

    Some of the recent SHPEGS enhancements of steam injecting the ammonia vapor and utilizing the liquid ammonia pressure to compress the ambient air, have made it potentially scalable from the tabletop to the mega-project.

    The SHPEGS project is a work-in-progress and input and constructive critism from experienced power generation engineers would be greatly appreciated.

  66. I have to be a bit careful here, because I like your ideas.

    In theory, rankine cycle engines (or modified rankine engines), should be able to extract energy from hot and cold sinks. The questions are always around installed costs and overal thermal efficiency.

    My experience with the rankine cycle is that capital costs are usually underestimated and efficiencies overestimated. Often people tend to underestimate the costs for site preparation, utility systems, offsites, process control, and other components needed to make the system work.

    In an attempt to maximize efficiency, inventors needlessly complicate the process by adding additional steps. Usually the incremental savings don’t justify the costs of the additional equipment.

    Using ammonia as a refrigerant presents some challenges. It is not widely used in refineries any more because of safety an metallurgical concerns.

    In the process industries we have many sources of low quality hot and cold energy, yet you almost never see rankine cycle energy systems.

    To resolve these isssues would require constructing a bench scale and then a pilot plant scale test facility. You would need something like 1/100 and 1/10th scales to prove the concepts. I’d be concerned about the performance of the air tower and the power recovery turbine.

  67. kingofkaty:

    Thanks for looking at it, and that’s a very fair assessment and I would agree with your points. This is a great document of the history of solar steam over the last 100 years, and as with OTEC, the under-estimate of costs and over-estimate of performance have been the obstacles.

    The seasonal thermal storage has a very high value in Canada, and even if I’m severely off on the electical output calculations, the thermal storage alone could make it feasible if integrated with greenhouses, processing plants, anaerobic digestion or water-slide parks.

    It’s not going to take much to surpass the true biofuels-from-farming-burned-in-an-ICE solar conversion efficiency and EROEI when those ideas are taken past recycling bi-products. NH3 went to $600/tonne because of the converted US corn acres and it’s starting to affect NG prices. Large scale biofuels currently are based on subsidies and relatively cheap fossil fuels. Agriculture and transport logistics have to be moved to truly renewable energy to have biofuels make sense.

    As far as nuclear, I live in Saskatchewan, with all the uranium in Canada and we are neck-in-neck with Australia for the worlds largest producer. It’s boom time here for uranium and the price has shot up from $20 to $113 over two years and 40% last month alone. CNN Money uranium article. Don’t count on nuclear being a solution.

    Although we have a long way to go with the SHPEGS project, I think that for the northern US and Canada, it’s about the only game in town.
    Farming is much easier to convert to electricity than passenger vehicles. A 200HP farm tractor weighs 20 tonnes travels slow and costs $150k. Even without renewable electricity the cost/kW is 1/3 of diesel now and that gap is going to increase even more.

    Thanks again for looking at it.

  68. Robert – Fuel The price of fuel for nuclear is less than $0.005/kWh – pretty insignificant. I knew the hedge funds were getting into the market – great, they have screwed up the oil and gas paper markets for the last few years. There are hedge fund traders who know next to nothing about our business trading futures with their Black-Scholes models.

    Best of luck to you on the solar. As you pointed out, you are part of the long list of inventors that have tried to make it work. When I started in this business nearly 30 years ago, solar power was maybe 10 times the cost of conventional power. Now we are down to maybe 1.5 to 2 times. Some day we might see solar farmers producing either electricity to the grid or biofuels.

  69. The price of fuel for nuclear… – pretty insignificant.

    That’s sort of my point. What is the cost for nuclear power? Mine development and power plant construction. What’s most of that cost?

    Fossil fuels for construction, transportation and equipment manufacture.

    Uranium was a pretty dead industry in SK since the 1960’s boom. They grabbed the easy to mine ore a long time ago. As the price goes up, it becomes feasible to develop lower grade ore mines. Mines that would have taken too much “cost” to develop and operate under a lower price.

    This is the same problem as biofuels. The fossil fuel inputs are hidden and the “no-problem-just-build-nukes” isn’t thought all the way through. How much oil does it take during the 10 years to develop a uranium mine? To mine and process the ore? To build a nuclear power plant? Does anyone realize that the uranium mines in SK are several hundred miles north of where anyone would live with a family and the workers all commute by plane?

    Nuclear has a lot in common with food-for-biofuels: it’s based on cheap petroleum and the petroleum is hidden far enough down that it isn’t easy to see. Solar PV is based on cheap electricity and has much the same problem.

    I know this whole comment on nuclear could be “find-and-replaced” with solar thermal. It has much the same problem in that the cost of the output is mostly construction energy.

    The difference is this: I would much rather have Homer Simpson or a bunch of Ukrainians running my local solar thermal plant. 🙂

    disclaimer: I’m of Ukrainian descent and I work in supposedly high availability redundant systems for the government.D’oh!

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