We Do Not Have a Simple Solution

Those were the words of Helena Chum, a research fellow at NREL on the topic of advanced biofuels. Forbes just published an article on this:

Biofuels Battle: Chemistry Versus Biology

A lot of the subject matter and the companies discussed will be familiar to regular readers.

There are 1,865 biofuels companies out there, and sometimes it seems that there are at least 1,865 different ways of turning every manner of biological material into fuel for a car, truck, train or plane.

The problem is finding a way of doing this alchemy on the scale of millions of gallons a year at a cost that comes somewhere near the price of gasoline without leveling the world’s forests, sucking the world’s fresh water supply dry or starving the world’s humans.

I wouldn’t have guessed there were that many companies working on this problem. I have harped on the difficulties in scaling these lab experiments up, and Dr. Chum tried to put a price to it:

Despite all the hope, the finish line is not close. Helena Chum, a research fellow at the National Renewable Energy Laboratory, estimates that next-generation biofuels now cost anywhere between $5 and $1,000 a gallon, with a median of about $25.

“The finish line is not close.” “A median of about $25.” Of course that’s based on a certain energy price. If the cost is high because the energy inputs are high, you have a loser no matter the price of a barrel of oil. Which approaches might come in around $5/gal? (You may be surprised that this was the low end, given the claims of so many of making ethanol for $1 or $2 a gallon).

My guess is that lipid hydrocracking to give renewable diesel and propane – so called ‘green diesel – would be on the lower end of the price range. (I explained the difference in green diesel and biodesel here, and then gave a much more extensive explanation in my Renewable Diesel Primer). At the upper end, I have no idea which approach would cost $1000 a gallon, but I might reconsider that approach.

As the article concludes, having 1,865 companies in the game does not ensure success:

So who’s going to win? Certainly not all 1,865 companies. And maybe none will. Maybe the science will be too hard to scale up cheaply. “There has never been as much science and engineering done,” Chum says. “We do not have a simple solution. But the conditions for making it work are there.”

I think ‘winning’ here is going to be on a sliding scale – from marginally economical to moderately economical. My prediction is that the companies that win – and there are probably a dozen or so that have staying power – will still produce a product that is significantly more expensive to produce than gasoline. But the real winners must get their fossil fuel inputs down to a low level, otherwise rising fuel prices may make them less competitive, not more.

I will have Part III of the Vinod Khosla interview posted in a day or so.

26 thoughts on “We Do Not Have a Simple Solution”

  1. This research is trying to find the best way to make liquid fuels in temperate climates because that is where most of the arable land we control is located.

    Cane and palm can hardly be improved upon. If biofuels are to become a major source of energy, producers in tropical climates will dominate the market. They have the land and water and capturing solar energy via photosynthesis will always have an advantage in the tropics.

    And once the cheapest way to “crack” biomass has been found, that technology will be used to make cane and palm even more competitive.

    For countries in temperate climes, this is a dead end. The race will eventually be won by who can grow the most biomass per unit time.

    Biofuels will be the last straw on the biosphere’s back if humanity can’t find ways to thrive by consuming far less energy–efficiency.

  2. The fact is we have a little time. The U.S. can cut its oil consumption by 20%, or so, fairly easily (unfortunately, China, Russia, and, some other nations) are increasing their consumption about a million bpd.)

    All of your 1st gen ethanol works pretty good (w/o subsidies) at $2.25/gal gasoline.

    2nd gen (cellulosic) might be okay at $2.75 – $3.00 gasoline.

    NOTHING is very exciting when gasoline is $2.00/gal.

  3. “… if humanity can’t find ways to thrive by consuming far less energy–efficiency …”

    It has been said that each generation thinks it is the first to discover sex. Maybe after that, each generation thinks it is the first to discover efficiency — as if the cavemen collecting wood for the fire did not have an overwhelming incentive to maximize their own efficiency.

    There is always a driver to increase the efficient use of any resource. What confuses the teenagers who just discovered sex is that most modern activities involve multiple inputs — energy of course, but also time, capital, land, and a whole lot more. Higher energy efficiency generally means lower efficiency in some the ue of some other input, which humans believe is more important.

    Turning to the topic of the post, maybe the reason the question of biofuels is proving so taxing (in every sense of the word) is that it is the WRONG QUESTION.

    An efficient alternative approach would be to ask — what very large scale energy sources do we have that are competitive with fossil fuels today? The only answer with today’s technology is — nuclear fusion. Then the Proper Question becomes — how do we use power derived from nuclear fuel for transportation?

    There are a number of approaches — ranging from 19th Century electric trains to 21st Century use of nuclear heat to extract oil from tar sands and oil shales. Would it not be more efficient to concentrate on refining those kinds of approaches — and may the best approach win!

    That would be the smart approach which would be being followed — if ignorant egotistical politicians were not screwing things up with senseless mandates, tax incentives, and directed research grants paid for from Other People’s Money.

  4. Major boo-boo! Sorry —
    My reference to nuclear fusion should of course be nuclear fission.

    “The only answer with today’s technology is — nuclear fission.”

  5. Here is the simple solution.

    A Natural Gas Centric Strategic Long-Term Comprehensive Energy PolicyThe article reiterates many of the arguments you have made, such as…

    Natural gas vehicles appear to be the best alternative available today. The technology is proven, mature, and can be readily available. The Honda Civic GX has a range of over 200 miles and is currently being refueled in Utah for $0.88/gallon equivalent. That said, the best solution is the electric/natural gas hybrid vehicle Toyota ( TM ) introduced last year at the LA Auto Show.

    This vehicle has the following advantages:

    * A hybrid that runs on electric batteries and natural gas
    * Over 20% lower CO2 emissions than gasoline vehicles
    * Zero particulate emissions
    * 33 mpg
    * Reduces foreign oil imports
    * 250+ mile range

    It is clear that NGVs and CNG/electric hybrids are the best vehicles of choice to reduce foreign oil imports.

    Fortunately the US is blessed with an abundant domestic supply of clean, cheap, and readily available natural gas. Recent discoveries of natural gas in the Marcellus, Barnett, Fayetteville, and Bakken shale formations led to a 9-10% increase in US 2008 natural gas production – the largest rate of increase since 1984. The Haynesville shale alone could well turn out to be one of the largest gas fields in the world.

  6. It seems quite likely that nat gas will be cheaper than biofuels for the immediate future. Whether it will be “cheap enough” to cause people to want to change over? We’ll see. Maybe.

  7. It seems all the commetors are concerned about fueling their cars.That is fine and dandy but how about our future mode of transpotation. No one is buying new cars.(Do I see a sea change?) Even Mr. Rapier is hesitent on putting out a huge sum of money on a vehicle that may be too expensive to run in the near future.
    Effeciency means good, convenient mass tranportation coupled with small electric battery powered cars to get you to the station and home. JC Sr

  8. Ya see, that’s the One thing about biofuels. If gas gets “Too” expensive, I’ll just brew my own.

    My ancestors did it; I’m sure I can.

    BTW, I DON’T think this attitude gives Exxon/Duke/Chesapeake the warm fuzzies; do you?

  9. Look, the average county has about 100,000 people. They consume about 50 Million gallons of gasoline.

    Average county would be in the neighborhood of 1,000 to 1,200 sq. miles. Say, 700,000 acres.

    It, also, produces 100,000 Tons of Municipal solid waste.

    Figure a fleet of vehicles that are 20% more efficient (iminently, doable,) and I’d wager the average county could use between 5, and 10% of it’s land (forestry waste, energy crops, some corn, etc.,) plus MSW and Be Home Free.

    Caveat: Absolutely, NO ONE in the power structure will like it.

    That means: WE should Love It.

  10. I’ll say it again. Palm oil is competitive right now, no ifs, ands or buts or subsidies. There is a tree known as the honge (pongamia pinatta) tree that is very promising also.
    Tree oil competes. You plant once, till the soil once. But tilling and planting and fertilizing corn or other biofuels will just have to be (unwisely) subsidized.
    I think the game has changted in the last three years as well. The Peak Oilers like to talk about biofuels, as they seem to suggest the impossibility of coming up with an alternative to oil.
    Meanwhile, new drilling techniques have resulted in what appears to be a multi-decade glut of natural gas. The largest NG field in al history is being developed now (Haynesfield). We are entering the age of supergiant gas fields, and LNG tankers.
    More than half of US NG will be shale gas by 2020. We only discovered how to exploit shale gas recently. That is a major change.
    We already run busses and fleet vehicles on NG in the US. Thailand uses NG quite a bit for trucks and taxis. Fiat is moving ahead with NG in Italy.
    I don’t know if a PHEV-NG car makes sense, as the tanks and batteries are both large. But a PHEV-diesel car can effectively get hundreds of mpgs per gallon. We really don’t need biofuels.
    A good question is why Peak Oil sites religiously avoid the topic of a NG glut.
    There is no dispute whatsoever, that we have not reached Peak Gas.
    I’ll tell what is peak: Gas of out the rear end about Peak Oil Doom. It should become evident in a few years that NG is everywhere and lots of it. NG cars, trucks and busses are proven,and running today.
    So where is the doom scenario?

  11. Here is the simple solution.”

    Maybe Dave, NGV have been around a long but American consumers have not been very accepting even when NG was $1.50 MMBTU.

    I said yesterday is would provide a summer energy saving tip. Radiant Barriers. Aluminum faced insulation board and aluminum fabric.

    Without cool desert night of the PNW, hot humid nights makes AC a godsend. When we moved to our present house, we found out our heat pump could not keep up. In the bedrooms of the split level it was like a sauna. You could feel the heat radiating from the walls. Turns out the vertical walls has no insulation and the attic was not properly ventilated.

    The aluminum faced insulation board went on the vertical surfaces. The aluminum fabric goes over the top of the insulation. It took a few hours and about $200 to solve this problem.

  12. Benjamin, you are correct. Palm Oil does work right now. It does, however, put us at the mercy of importing from Tropical countries, and the negative balance of payments, and political ramifications, that go with it.

    I’m not against palm oil; but, I would like to see our country come up, eventually, with an “oil” solution of our own (or go strictly to ethanol, etc.)

    We have a couple of possibilities. They’re doing some gene-work with Jatropha (looking to develop a cooler-weather variant, and Chinese Tallow Trees, etc.

    Then, there’s always a possibility Algae might work out.

    As for Nat Gas. There Are conflicting stories on shale gas. There’s no doubt the wells do decline rapidly. Also, it seems it might get quite a bit more expensive as you move away from the “core” of the field.

    Remember, the “Bakken” was going to make us “Energy Independent,” too. Turns out, instead of being a “massive lake of oil” it was a million little puddles of oil spread out over five or six states. Are the shale plays similar?

    We’ll know more in a year, or two. Meanwhile, it IS true that Fed Ex. and other localized fleets are going that way. That’s a good sign.

    And, Kit, YOU are correct, also. We have a kazillion very well-built older houses that have NO insulation. That’s the MOST cost-efficient money you’ll Ever spend.

    BUT, our Immediate problem (maybe) is that as we come out of recession we’ll see the price of gasoline head for the moon (probably long about next Spring, but, possibly, sooner.)

    The Only thing that can make a dent in the next 5 years, or less, is what we have right now. Ethanol.

  13. Benjamin said,,,,,,,,

    But a PHEV-diesel car can effectively get hundreds of mpgs per gallon. We really don’t need biofuels.

    Ford, Chrysler and GM all had diesel hybrids in 1998 that could get 80 mpg. These were all prototypes that “somehow never made it to production.”

    One of the major car companies had a series hybrid (like the Chey Volt) way back in 1968. It employed a Stirling heat-exchange engine as a “range extender”.

    If you are interested, here’s a link to the article on the 1998 diesel hybrids.

    These were standard hybrids not PHEV hybrids as you mentioned, which should get even better mileage, perhaps even 200 mpg as you suggest.



  14. @rufus

    “We have a kazillion very well-built older houses that have NO insulation.”

    My house was properly insulated for winter heating. Insulation reduces heat loss by reducing conduction heat transfer.

    The radiant barrier reduces radiative heat transfer to the top of the insulation. It is only a 10% solution.

  15. “Yeah, but 10% in a house in Minnesota is pretty big bucks.”

    You are not listening rufus. Heating and air conditioning are two different engineering problems.

    For example, when you double the differential temperature for conduction, you double the heat loss. If it 30 degrees F and drops to -10 degrees F, your heat loss doubles.

    In the summer, the differential temperature might only be 30 degrees F on a very hot day. The radiant barrier prevents the fiberglass insulation from ‘seeing’ the very hot roof.

  16. Hi RR,
    Wanted to get your take on this–from the economist:

    Electric evangelist

    Apr 30th 2009
    From The Economist print edition
    Can Shai Agassi of Better Place, an electric-car company, honour his grand promises?


    GERMAN audiences are not always easy to warm up, especially when they are composed of conservative businessmen in dark suits. But the laws of cultural physics were repealed in Berlin last June when Shai Agassi addressed the annual conference of the CDU-Wirtschaftsrat, a business association. By the end of his speech, the mood was that of a religious gathering, with enthusiastic faces, loud cheers and a standing ovation. If Mr Agassi had asked, many would probably have written him a cheque on the spot to finance his start-up, called Better Place. Its goal is to build a global network of charging points and battery-exchange stations to make electric cars a mass-market proposition.

    Mr Agassi is the best salesman in the technology industry after Steve Jobs of Apple. Like the charismatic Mr Jobs, he seems to possess a “reality-distortion field” that enables him to convince listeners to believe whatever he says. Yet in contrast to Mr Jobs, who has a string of successful products to his name, Mr Agassi has not yet fully proved that he can deliver the goods. The test will come in the next few months, as Mr Agassi’s ambitious scheme begins in earnest. Even as he prepares to unveil his firm’s first battery-swapping station in Japan this month, sceptics have started to speak up, casting doubt on Better Place’s elaborate business model after months of adulatory media coverage.

    Mr Agassi is an unlikely champion for electric cars. Until early 2007 the 41-year-old Israeli was a rising star in the software industry. In the 1990s he founded several software firms, one of which, TopTier, was bought in 2001 for $400m by SAP, a German software giant. Once at SAP Mr Agassi rose quickly, not least because he had the support of Hasso Plattner, one of SAP’s founders and its chairman. Within a year he had been appointed to the executive board, and he went on to lead the firm’s product development. Widely seen as the heir-apparent at SAP, he started to have second thoughts. Did he really want to spend the next ten years running a lumbering software giant, with its complicated internal politics? His doubts intensified when he took part in a workshop organised by the World Economic Forum. The participants were asked to devise a scheme to make the world a better place, prompting Mr Agassi to cook up his electric-car plan. When Shimon Peres, Israel’s president, personally implored him to put it into action, and SAP said he would have to wait two years before taking the helm, Mr Agassi departed and set up Better Place.

    Surprisingly, Mr Agassi’s firm does not make cars. Instead, his novel approach is to look at electric transport as a system in which cars, batteries, recharging points, electrical utilities and billing systems must all work together. It is, in other words, a systems-integration problem of the kind he used to deal with at SAP.

    Better Place’s business model involves selling electric cars (provided by its partner, Renault-Nissan) using a scheme borrowed from the mobile-telecoms industry—charging not by the minute, but by the kilometre. Customers will be able to pay as they go or sign up for a contract that includes a certain number of kilometres. They will even get a subsidised car if they subscribe to big enough packages, just as mobile operators subsidise handsets for their highest-paying customers. Better Place will build networks of recharging points, plus battery-swapping stations along motorways that will, in effect, enable customers to recharge their cars in minutes in order to travel further than the 160km (100-mile) range of their cars’ battery packs.

    All this will be a highly profitable business, says Mr Agassi: the low cost of electricity compared with fossil fuels will leave Better Place plenty of room for arbitrage, and customers will still end up paying less per kilometre. Clever software will enable utilities to use the batteries in Better Place’s fleet of cars to cope with fluctuations in supply and demand, recharging them at night when demand is low and feeding power back into the grid at peak times.
    The rubber hits the road

    It all sounds excellent on paper, but can Mr Agassi make it work? Even during his time at SAP, critics said his grand visions were not always realised. Some sceptics say consumers will prefer to buy electric cars that plug into ordinary electric sockets than to be “locked in” to an operator of recharging points. Even if Better Place can build its networks, say others, it will not be profitable for years because the infrastructure is so expensive (its battery-swapping stations cost $500,000 each). The latest electric-car designs distribute batteries around the body to improve handling—an approach that is incompatible with Better Place’s battery-swapping stations. And won’t customers want to own, rather than borrow, the batteries in their cars?

    Mr Agassi says such arguments come from those with vested interests in cars powered by fossil fuels—and are “the best proof that we are succeeding”. When it comes to his ability to make things happen, he points out that since launching Better Place 18 months ago he has raised more than $300m from investors, despite the financial crisis. He has also signed deals with national and local governments in Israel, Denmark, Canada, Australia, Hawaii and California to build networks of recharging points. The company has developed a robot that can swap a car battery in 40 seconds. It is already installing recharging points in Israel, where it hopes to have 100,000 in place by 2010 and 500,000 by 2011, along with 100 battery-swapping stations.

    Electric cars’ inherent drawbacks, says Mr Agassi, will not vanish soon: batteries are expensive, and they cannot be charged in the time it takes to fill a tank unless there is a power station next to each charging point. Only when the battery is physically and economically separate from the vehicle, he insists, will electric cars be cheap and convenient enough for the mass market. “Better Place will succeed”, says Mr Agassi, “because I have seen no other viable plan for getting the world off its dependency on oil.” All he needs to do now is prove he is right.

  17. “Then, in Mn we’ll just pour some DDGS in the attic. How’s that?”

    Oh sure, can I watch the cattle climb the fold down attic stairs?

  18. “Can Shai Agassi of Better Place, an electric-car company, honour his grand promises?”

    This is actually discussed in Part III of Vinod Khosla’s interview. I transcribed this portion yesterday, and hope to finish it today.

    VK didn’t invest; said he didn’t have the courage. It is really a revolutionary concept. But I don’t think battery technology is far enough along yet. Can it work? Yes, but I am not sure it can work today.


  19. Better Place is not a ‘revolutionary concept’ it is a scam.

    “he points out that since launching Better Place 18 months ago he has raised more than $300m from investors”

    The problem with computer nerds is the do not understand the basic concepts of energy. The first one is that when you coil a spring in a box you do not want to be around when it gets out. Potential energy is a killer and a lot of energy needs to be stored in a POV to go very far.

    The good news for those who provide energy for POV is that the number of loons being killed in operating POV is very significant while death by energy release is insignificant by comparison.

    “The company has developed a robot that can swap a car battery in 40 seconds.”

    Wow a 40 second baby crusher, what a great invention.

    To prevent killing children, a number of barriers can be put in place to ensure this does not happen. Robotics are used all the time to perform dangerous task.

    Preventing a death is the opposite of making ‘revolutionary concept’ work. The reason I often state that BEV are MIA and PHEV are DOA is because there are too many barriers to their success.

    This what RR is saying with, “Can it work? Yes, but I am not sure it can work today.”

    However, why bother?

    ““Better Place will succeed”, says Mr Agassi, “because I have seen no other viable plan for getting the world off its dependency on oil.” All he needs to do now is prove he is right.”

    I have a 20 year old PU running on 10% ethanol that says Mr Agassi is running a scam. I was right about the Picken’s Scam. It had nothing to do with building wind generation replacing NG electricity generation in 10 years, it was all about finding a new market for tight NG.

    So we have ethanol, NGV, soybeans, palm oil, GTL, CTL and so forth. All of these amount to a viable plan, it is just a matter of economics since drilling is cheaper.

  20. “There are 1,865 biofuels companies out there, and sometimes it seems that there are at least 1,865 different ways of turning every manner of biological material into fuel for a car, truck, train or plane.”And they are all trying to find a way to replicate the original way of making bio-fuels ~ i.e. to bury organic matter for millions of years and subject it to enormous heat and pressure.

    Unfortunately, there is no easy or cheap way to “crack” biomass, i.e. replace the energy Mother Nature used to make the original bio-fuels — coal and oil.

  21. “there is no easy or cheap way to “crack” biomass”

    Not exactly Wendell, gasifiers work fine and are cheap. I now the guy who won a cross country race do just that 35 years. Gasification wood boilers have been around a long time too. They are clean, more efficient and a lot cheaper than a heat pump.

    However, even though I know how to produce my own energy I prefer to let others do it because it is easier or cheaper to let others do it for me. This is called division of labor.

    I would suspect American farmers might be less productive if they had to run their tractors and trcuks with a gasifier which is why they do not do it.

  22. “I know how to produce my own energy…”Please let the rest of the world in on that secret.

    The rest of us know only how to transform energy from one form into another according to the Laws of Thermodynamics, or on an atomic scale, how to release the binding energy holding together atoms such as U-235 and Pu-239.

  23. “The rest of us know ..”

    So Wendell, tell me about experience producing energy. So you have any practical applying Laws of Thermodynamics, or maybe operating nuclear reactors.

    It would appear that operating a oil refinery is very complex and expensive. Now just a couple of years ago, I bought a 100% of my transportation fuel from them. Now I buy 90% from the vested interests who tell me that it can not be done economically.

  24. Sorry Kit P. my point flew over your head.

    The point is that no one can create energy, which you were in effect saying when you said, “I know how to produce my own energy.”

    We can’t produce (create) energy. All we can do is transform energy from one mode to another.

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