Ethanol in the News

And the news is bad. First up, an issue that is shaping up to be a major battleground between states. Nate Hagens brought this issue up on yesterday’s API call, but it was part of the lost transcript:

Ethanol Boom Saps Water

Mike Adamson remembers when water wasn’t such a problem. As a kid growing up on his family’s cattle feedlot along the Colorado-Kansas border, “you could dig a post hole and see water runnin’ in the bottom,” he recalls. Today, Adamson is 48 and in charge of the family business, Adamson Brothers and Sons Feedlot, a holding ranch for cattle as they go to market. And the water, he says, is disappearing. “The lakes are gone. The wetlands are gone.” In fact, Adamson adds, entire stretches of the nearby Republican River are gone.

Growing corn demands lots of water, and, in eastern Colorado, this means intensive irrigation from an already stressed water table, the great Ogallala Aquifer. One sign of trouble: in just the past two decades, farmers tapping into the local aquifers have helped to shorten the North Fork of the Republican River, which starts in Yuma County, by 10 miles. The ethanol boom will only hasten the drop further, say scientist and engineers studying the aquifers.

The region’s water shortage has pitted water-hungry farmers against one another. And lurking in the cornrows: lawsuits and interstate water squabbles could shut down eastern Colorado’s estimated $500 million annual ethanol bonanza with the swing of a judge’s gavel. Collectively, “[ethanol] is clearly not sustainable,” says Jerald Schnoor, a professor of engineering at the University of Iowa and co-chairman of an October 2007 National Research Council study for Congress that was critical of ethanol. “Production will have serious impacts in water-stressed regions.” And in eastern Colorado, there’s lots of water stress.

And the money quote:

“Trying to solve problems by using the same old techniques doesn’t solve the problem,” Adamson says. “We’re going to make the area a desert. It’s going to be uninhabitable.” And that would be a high price to pay.

Check out the article. It’s a good one, and concerns an issue that is only going to grow more urgent.

Next up, last year’s crop report (published in December, but I just saw it yesterday):

CAN THE U.S. PLANT MORE CORN, MORE SOYBEANS, AND MORE WHEAT?

U.S. crop producers made dramatic shifts in acreage in 2007. The shifts were motivated by rising corn-based ethanol production and high corn prices, rising wheat prices, and a surplus of soybeans.

The acreage shift was led by a 17 million acre increase in feed grains, including 15.3 million more acres of corn. Winter wheat acreage increased by about 3.1 million and harvested acreage of hay was up by nearly one million acres. These increases were accommodated by an 11.9 million acre decline in soybean plantings, 1.3 million fewer acres of spring wheat, 4.4 million fewer acres of cotton, and about 900,000 fewer acres devoted to other oilseeds; edible beans, peas, and lentils; and sugar beets. In addition to the acreage shifts, total planted acreage (harvested acreage of oats and hay) increased by four million acres. The large increase in total acreage likely includes some pasture acreage converted to row crops and perhaps an increase in re-planted acreage stemming from the spring freeze that damaged the winter wheat crop.

The next bit connected the dots:

Prices of corn, soybeans, and wheat remain at very high levels. World and U.S. inventories of wheat and soybeans are expected to decline sharply during the current marketing year.

Another bit suggests to me that supplies will tighten further, and I should be buying corn futures:

The USDA projects the consumption of U.S. corn during the current marketing year at 12.69 billion bushels.

Why is that a problem? Because the mandate in the new energy bill is such that it will require an additional 1.5 billion bushels in 2008 and 800 million bushels on top of that in 2009 – just to meet the higher ethanol mandates. By 2012, we will have mandated an additional demand on corn supplies of 3.8 billion bushels a year as the ethanol mandate moves from 5 billion to 15 billion gallons per year. (Throw a Midwestern drought in the mix, and we will see chaos).

This is as I predicted when ethanol producers were overbuilding capacity. This wasn’t the first time I said it, but here was a comment from over a year ago:

…never underestimate the power of the corn/ethanol lobby. If producers start to lose money, the mandate will go up. The other thing I would point out is that the demand for corn will continue to increase over present values. Demand from ethanol producers will continue to grow, and this is driving high prices now. Unless farmers can bring a lot of new production online, then corn prices will remain high even if ethanol prices start to drop.

That’s exactly the way it has played out so far, so you can expect the overbuilding cycle to continue – which means continuous high pressure on corn prices. Ethanol producers are getting the message loud and clear that the government will protect them as much as possible from the inherent cyclicality (often caused by overcapacity which crashes prices). If you overbuild, the government will increase the mandates to protect you. They have set up a vicious cycle, and a very undesirable (at least for me) experiment with our food supplies.

I wonder if my neighbors will object to me growing corn in my front yard when I move back to the U.S.

28 thoughts on “Ethanol in the News”

  1. The water thing is serious. It’s also going to be compounded by across-the-board grain price increases allowing for profitability in irrigating crops that traditionally have been dry-land farmed.

    Where our farm is, corn is not grown because the growing season is slightly too short. There is very little irrigation and you can grow a 40-60bu/acre spring wheat crop or a 30-40bu/acre Canola crop many years without it. With wheat at $4-5/bu for the last few decades, irrigation and extremely high nitrogen fertilizer inputs haven’t made economic sense. If wheat levels off at $15/bu and Canola at $20/bu, it is going to be a sound business decision to pound in nitrogen and install irrigation to try and hit a steady 80 bu/acre potential yield.

    It’s not only going to be corn land causing a stress on aquifers, it will happen across the North American agricultural land base.

    Just so I don’t look like I actually agree with you twice in one week….

    You are against ethanol as a motor fuel because it is causing a food shortage. What about alcohol for consumption? I need to research the numbers, but considering that Canada has a $6b/year beer industry, I am going to bet that a much larger amount of food is converted to beer, wine and spirits than motor fuel. In my opinion, alcohol for consumption is a much larger waste of food than using it for transportation.

  2. Corn, soybeans, wheat . . . not good for biofuels.

    Cellulosic alcohols, pyrolytic biocrudes from biomass, algal bio-petroleum, etc.

    I hope we can put the brakes on corn, soybean, and wheat biofuels, and shift the production where it belongs.

  3. What about alcohol for consumption?

    You would say that just as I get home from a long week, grab a nice ale, and start to surf the Internet.

    In my opinion, alcohol for consumption is a much larger waste of food than using it for transportation.

    I would say it depends highly on how much you are netting from the transportation experiment. We essentially convert a certain amount of BTUs of natural gas – a fine transportation fuel – into the same amount of BTUs of ethanol. I think that’s a very large waste.

  4. Potable water supply is certainly a growing issue — worldwide, not just North America.

    Interesting thing is that energy can substitute for fresh water.

    In Soviet days, the Russians built a nuclear power plant on the Caspian Sea which was designed to produce a combination of desalinated water & electric power. Using that concept, the US could even contemplate recharging the Oglalla aquifer.

    Of course, if people did not fall prey to false assertions (like ethanol is green & sustainable), we would not have to contemplate technological fixes such as nuclear-powered water desalination.

  5. This idiotic, immoral, and environmentally destructive policy must be scaled back drastically by the next president and congress. A lot of the concerns raised here are probably too “technical” for the average Joe or Jane, but some pictures of soon-to-starving Africans might make the point. Where is the hard-hitting expose on this looming humanitarian disaster?

  6. In my opinion, alcohol for consumption is a much larger waste of food than using it for transportation.

    And meat is an even bigger waste, so please start there and leave my ale alone! Plus much alcohol for consumption (like ale and wine) doesn’t require energy-intensive distillation to purify it.

  7. If you drink a beer, how many miles can you bicycle?
    It is unfortunate biofuels are getting off to such a bad start.
    I think there is real hope in cellulosics and jatropha.
    Of course, if we go to PHEVs, then simply burning biomass and turning steam turbines is a fine form of cellulosics.
    RR has pummeled corn ethanol into submission. Actually, he dealt a few death blows. Now, he is just kicking the dead body around.
    I would like to see RR turn his sites on jatropha, and cellulosic ethanol. Will they work?
    I hope so,
    Also, we need to think about PHEVs more.

  8. I think I mentioned before that I did the Rosarito-Ensenada ride last September. I usually wait for the end to grab a beer but we decided to stop at mile 30 this time. I thought I’d take a hit from it, dehydration and all … but the beer to motion metabolism actually seemed pretty efficient.

    I just shouldn’t have been induced to keep up with others later that night …

  9. I would like to see RR turn his sites on jatropha, and cellulosic ethanol. Will they work?

    I got an e-mail yesterday from someone from Turkey. They were looking for a substitute for vegetable oil in their biodiesel plant. They asked for suggestions. I suggested jatropha. They asked if I could help find them a supplier, and I have one of my friends from India looking into it. I should find out relatively quickly what the issues are with sourcing jatropha.

    Cellulosic…. That’s a story I am anxious to tell.

    RR

  10. RR has pummeled corn ethanol into submission. Actually, he dealt a few death blows. Now, he is just kicking the dead body around.

    If only that were true. The dead body won’t be kicked around until the results are tragic, I am afraid.

  11. Amazing. Endless yakking about ethanol fuel being a waste of food, but mess with a social concept that consumption of a lethal drug is somehow okey-dokey.

    The most relevant rebuttal to this point was that riding a bicycle drunk is a highly efficient transportation method. I agree. Scrap the automobile, quit de-naturalizing corn ethanol and lets all get pie-eyed drunk on corn whiskey and ride around on bikes.

    Do you think I should run for POTUS with that platform?

  12. Actually Robert number 2, Rosarito-Ensenada is (a) in Mexico, and (b) on a closed course.

    And of course, I doubt one beer metabolized that quick would have made me DUI by American law.

  13. They were looking for a substitute for vegetable oil in their biodiesel plant. They asked for suggestions. I suggested jatropha.
    Ah, the realities of food-based fuel beginning to set in. Jatropha as a non-food crop would be better, but it is still a dedicated crop. How much jatropha will be grown on land that could be supporting food production?

    Biofuels need to be waste-based. Period. Does your friends in Turkey have access to waste cooking oil? Are there any large cooking oil plants in the area? Occasionally these guys have to dump oil that would still be perfect in terms of fuel production.

    If you drink a beer, how many miles can you bicycle?
    Not sure about one. But drink enough and you can go forever – at least you feel that way.

    Note to Bob Rohatensky: Internal consumption of alcohol is still using it as FOOD, in spite of all the negative side effects you point to. Also, internal consumption increases at a moderate rate. Much of the problems RR is pointing out, is related to the huge growth in fuel ethanol. And though internal concumption may now exceed E85 sales, it wouldn’t stay that way for long if the elected corruptials had their way.

  14. “Growing corn demands lots of water, and, in eastern Colorado, this means intensive irrigation from an already stressed water table, the great Ogallala Aquifer. One sign of trouble: in just the past two decades, farmers tapping into the local aquifers have helped to shorten the North Fork of the Republican River, which starts in Yuma County, by 10 miles. The ethanol boom will only hasten the drop further, say scientist and engineers studying the aquifers.”

    Can they say Dust Bowl?

    What corn farmers are doing in the eight states that draw from the Ogallala is suspiciously like what happened in the late 1920’s.

    They are even doing things as dumb as plowing up windbreaks so they can plant more corn, which of course they then plan to irrigate with more water from the ever-diminishing Ogallala.

    They are “soil-mining” and “water-mining” to grow corn for what they mistakenly call a “renewable” fuel.

    They all need to read “The Worst Hard Time: The Untold Story of Those Who Survived the Great American Dust Bowl” by Timothy Egan.

  15. “Note to Bob Rohatensky: Internal [and moderate] consumption of alcohol is still using it as FOOD”

    In a real energy crunch I could see the argument to further tax or limit distilled liquors, but maybe that’s just not my ox being gored.

  16. Biofuels need to be waste-based. Period. Does your friends in Turkey have access to waste cooking oil?

    Yes, that was actually the first suggestion. But they already have all of that they can find. So, I made the jatropha suggestion.

    This will be a good exercise to get to the bottom of the jatropha hype. It can supposedly grow in marginal soils. It is supposed to make a nice renewable diesel. So, I will find out what the bumps in the road are as I try to help them get jatropha oil to Turkey.

  17. Biofuels need to be waste-based. Period.

    One of life’s Universal Truths — the less we know about something, the easier it looks.

    Where is all this agricultural “waste”? Most “waste” is simply under-used resource — and the human race has been very good at recognizing opportunities in under-used resources. Think of farmers recycling their “waste” products as essential soil amendments, or forest “waste” products being used as boiler fuels.

    There are obviously a few small opportunities left here & there in under-utilized wastes — but nothing like enough to replace fossil fuels.

    Any realistic look at the scale of human energy needs & the state of technology brings us back to the great under-utilized resource of our time — nuclear fission.

  18. RR:

    There are bulk oil buyers and sellers of jatropha set up, I think even a webpage…….

  19. One of life’s Universal Truths — the less we know about something, the easier it looks.
    Or, in your case, the more impossible it looks.

    Where is all this agricultural “waste”?
    According to USDA and DoE we have the potential to produce 1.3 billion tons a year of it. As I said before, they were probably being a bit positive. But they should be in the right ballpark. You have any real information to contradict this figure?

    Ever been to a landfill? Did you know that landfill waste is ~57% renewable and ~83% organic, after allowing for recycle? Or that there is about 138 million tons a year of it, looking for a landfill space to occupy?
    Read my discussion with RR on the topic, complete with references.

    Or how about the 200 million tons a year of manure that is available? The 6.9 million [dry] tons a year of sewage sludge?

    And then there is my personal favorite: The tiny Council School District used to pour thousands of dollars into outmoded oil and electric heaters. Nearby, the Forest Service burned brush piles on the mountainsides to keep the brush from fueling forest fires in dry summers.

    Atkins said thinning a forest of ponderosa pine and Douglas fir generates about 10 tons of waste per acre every 20 to 30 years.
    0.3 to 0.5 tons/acre a year of slash, readily available in many cold areas in the country.

    There are obviously a few small opportunities left here & there in under-utilized wastes — but nothing like enough to replace fossil fuels.
    Read the numbers above and weep.

    More to the point, let’s run some numbers: America uses about 20 million bbl/d of oil, or about 1,010 million metric ton per year, or ~44.43 EJ/y, @ 44 GJ/t (E = exa = 10^18; G = giga = 10^9).

    The USDA/DoE number of 1.3 billion tons (not metric) a year converts to about 21.82 EJ/y @ 18.5 GJ/t. Assuming we lose a full 40% in the collection, transportation and conversion process, that still leaves us with 13.1 EJ/y or about 30% of America’s oil consumption. Enough to make a serious difference.

    Think of farmers recycling their “waste” products as essential soil amendments, or forest “waste” products being used as boiler fuels.
    Most of the nutrients you are so concerned about would end up in the char, that could be returned to the land as renewable fertilizer. Forest waste feeding boilers is a fine way to reduce fossil fuel consumption, as my favorite story illustrates.

    Did you have any questions, Mr. Know-it-all?

  20. ROBERT–
    your comment,

    ‘cellulosic, that’s a story i’m anxious to tell’

    you’re baiting us? when do we hear?

    fran

  21. optimist asked, very optimistically —
    Or how about the 200 million tons a year of manure that is available?

    What happens to that manure today? Does it just pile up in some farmer’s yard? Or do farmers spread it on their fields & plow it in to improve the soil?

    Go to a rural area in springtime. Breathe the air. You will get your answer!

    Have you ever worked out how much energy it would take to thin forests by hand & carry the forest thinnings to a central location for use as fuel? The Boy Scouts have done this in a few locations — it is feasible, with free labor. There is a good reason why the US Forest Service does controlled burns in the forests rather than fuel collection.

    Look, “optimist”, your snarky tone is unnecessary & unbecoming. We agree that there are of course additional opportunities for making productive use of “waste”. But the low-hanging fruit on that tree has been well picked-over by prior generations of smart, creative, hard-working people. You are misleading yourself if you think there is enough unused “waste” to support a large-scale biofuel industry.

  22. Have you ever worked out how much energy it would take to thin forests by hand & carry the forest thinnings to a central location for use as fuel?
    If you read the MSNBC article I referenced it is already being done. So much for ALL objections.

    Why don’t you call the Fuels for Schools program and explain to them that according to your calculations this cannot be done?

    Look, “optimist”, your snarky tone is unnecessary & unbecoming.
    Oh, I see. This comment (One of life’s Universal Truths — the less we know about something, the easier it looks.) was not snarky tone? Read your own comments for a definition of snarky tone and unbecoming, Mr. Coulter.

    But the low-hanging fruit on that tree has been well picked-over by prior generations of smart, creative, hard-working people.
    What? Are you channeling Jared Diamond now? This is brand new territory, in case you haven’t noticed. The oil industry is not even a hundred year old. So explain how many generations of smart, creative, hard-working people have been working on alternatives to oil? And, in case you haven’t noticed, we are producing more waste than ever.

    You are misleading yourself if you think there is enough unused “waste” to support a large-scale biofuel industry.
    There you go again. Look at the numbers. Explain to us how potentially replacing 30% of US oil consumption is insignificant. If the low hanging fruit has been picked, why is the bulk of landfill waste organic (i.e. potential fuel)?

    You are misleading yourself if you think there is enough unused “waste” to support a large-scale biofuel industry.
    I see. The entire landfill industry must also be a figment of my imagination.

  23. Robert,

    First, I find your work very interesting.

    I work for a small energy company in Oklahoma City (In your home state apparently!). We are currently researching biofuels, and in my opinion (with the help of yours) corn based ethanol is not going to be the answer. However, there is one piece of evidence that I’m having a difficult time verifying. When looking at EROEI, there is lots of data on the btu inputs and outputs for ethanol. However, for gasoline the only hard data readily available is the heat content of most gasoline ~125,000 Btus (EIA). In your blog, you note that gasoline has a 5:1 EROEI, but in order to know that the inputs to produce/refine the gasoline have to be known with a certain level of confidence. My question is, where did you get this data and how reliable is it?

    Thanks

  24. Adam, the gasoline numbers are very accurate. I used to work in a refinery, so I always knew exactly how many BTUs it takes to refine a barrel of oil. I also know the approximate EROEI of crude extraction. Put them together, and you have the overall gasoline EROEI.

    I have cited a publicly available source at times, but it would take me too long to dig it up. It is cited somewhere in this blog, but I can’t recall in which post. It was from a refereed paper, and it confirmed my numbers.

Comments are closed.