[yeahbut]

$this->bbcode_second_pass_quote('MrBill', ' ')we were all a little surprised at how quickly we started up the right hand side of that J-curve.

[MrBill]

No, not at all. All serious questions. I saw some elephant grass (or maybe bamboo grass) growing today. It is the beginning of July and it must already be 60 feet (20 meters) high? Those are perrennial grasses, so they pretty much grow wherever they take root. We need to unlock the secret of making cellulosic ethanol out of such fast growing, hardy plants.

When I think of the boreal forests of N. Canada and N. Europe, including Russia, there are tens of thousands of acres (hectares) of forests that are commercially useless now that could be turned into renewable energy through sustainable harvesting. But also forests in Africa, Asia and S. America. Much of this land is not suitable for traditional agriculture. So-called non-arable land. But some of the most marginal farmland is indeed productive forest land.

The key is to respect bio-diversity, and grow and harvest those forests in a sustainable manner. The total allowable cut per year cannot exceed the average age of a mature forest. So if it takes 40 years to grow a tree the land can only be harvested sustainably at 1/40th per year. If its 70 years then 1/70th. Also, water sheds and fragile ecosystems have to be protected. No use gaining energy at the expense of clean water or soil erosion. Germany is by law one-third forested and they have been sustainably harvesting those forests for hundreds of years.

The only number that I have seen so far (and I do not know if it is accurate) is that we currently use about 3-percent of our landmass for agriculture. That number seems really low, but, for example, France has as much arable farmland as Canada even though Canada is so many times larger. And young forests can sustain more wildlife than mature forests. So there is a trade-off between protecting the environment and economic growth, but steps can be taken to mitigate the effects.

I talked about solar panels in Freiberg, Germany. They made a good point about such experiments. Yes, they work, but they also require scarce resources to manufacture those panels. So does it make sense to install such panels in cloudy Germany or does it make more sense to build solar in areas of the world that get more days of sunlight per year. Like Cyprus. Of course, we have to do both, so there is always a trade-off.

This is why I feel we will have to abandon those parts of our existing infrastructure that are energy high maintenance and do not make economic sense with expensive energy. Instead we may see clusters of manufacturing located close to such sources of reliable, renewable energy as we have versus trying to transmit that energy over great distances to where it is now currently needed. Here in Cyprus we hope to run desalination plants using a combination of offshore wind and solar energy to alleviate our acute water shortages. But they should have started 10-years ago to be honest!

Rockman in another post in Trader's Corner just wrote about the dilemma of what to do with empty shipping containers. It is too expensive to ship them back to Asia empty, but they are made of steel that is also expensive, and gets more so as energy prices climb, so otherwise recycling them is a waste of energy. I know they make excellent garages and storage sheds, but that is also a waste of their productive life-cycle. So it is a tough question to answer? Waste energy shipping them back empty or waste energy by recycling the steel in Europe or the USA?

I do not think there are any easy answers. We cannot simply substitute fuel for food on productive agricultural land. We need to expand fuel production onto currently non-productive land. I hate to say this, but that means more (not less) research into GMOs, so that we can get plants to grow in colder, hotter, dryer climates and in wetter or saltier soils. As well as improving the cellulosic ethanol (and bio-diesel) making process itself. Improving the EROEI, reducing the amount of water used, recycling water, and finding alternatives to fertilizers made primarily using natural gas.

All huge challenges and some companies and their investors will get rich finding those answers, along with many dead ends along the way as well. But these are really rich world solutions to our energy problem, and the developing world (also diverse so I hate to throw them all under one umbrella) will either have to find its own solutions to the food or fuel dilemma or work with the rich world to find joint solutions. That alone may be the biggest challenge. Hopefully, peak oil does not mean peak international cooperation!

UPDATE: In Chicago, spot corn hit a record high of $6.43 a bushel and corn for delivery next year – by which time the US forecasts that about 33 per cent of its corn crop will be consumed by the biofuels industry – hit a high of $6.97 a bushel.

$this->bbcode_second_pass_quote('', 'S')A — thanks for the comment. I agree that the core source of demand for corn is animals — ergo, rising demand for chickens and pork and beef as a growing group of consumers reaches an income level that allows more consumption of meat. that said, I am a bit surprised that the resevoir of spare agricultural capacity — which seemed large in the 80s, in much the same way that the saudis had spare pumping capacity — has been depleted so fast. But many important things happen when you aren’t watching closely.

[yeahbut]

$this->bbcode_second_pass_quote('MrBill', 'N')o, not at all. All serious questions. I saw some elephant grass (or maybe bamboo grass) growing today. It is the beginning of July and it must already be 60 feet (20 meters) high? Those are perrennial grasses, so they pretty much grow wherever they take root. We need to unlock the secret of making cellulosic ethanol out of such fast growing, hardy plants.

...I do not think there are any easy answers. We cannot simply substitute fuel for food on productive agricultural land. We need to expand fuel production onto currently non-productive land.

[MrBill]

I feel like such a parrot sometimes, but I always come back to this example:

Physical Reality > Economic Consequences > Social Reaction > Political Response > Feedback Loop > New Reality > Etcetera

The US imposes import duties on sugar cane, and ethanol made from sugar cane, as a price subsidy to US farmers not because it makes economic sense.

We (collectively) chose corn because, like those mythical mountains of butter and rivers of subsidized milk in Europe, we thought we had too much, so there was no harm in diverting some of that production towards fuel production. It is a sop to the farm lobby.

And the armchair liberals wanted us to stop subsidizing food production because that was hurting farmers in the developing world that could not compete. Notice how we are no longer producing enough for their needs, but a) they are not producing more because they cannot afford the cost of fuel and fertilizer, and b) our higher priced food is still cheaper than they can afford to compete with.

Sometimes you cannot win for trying. Maybe there are deeper problems in the developing world to deal with, eh? Na, it is always the rich world's fault! First food is too cheap. Now it is too expensive. We have to pay the world's market price for oil, but we should not charge the going market price for the food we produce because that might create hardship. Its always our fault!!

So what are the solutions? On the cellulosic ethanol/bio-fuel side it is little more than research and development. That takes money and it takes time. And we're by definition unsure of the results. But we suspect (know) that supply is not our only problem, so we need to focus on reducing demand as well. Jevon's Paradox be damned we need to conserve energy like never before.

High prices are the best method to cure high prices. We should absolutely resist the temptation to subsidize conventional fuels. At any level. Give tax credits to those least able to afford higher energy prices. We do not want Granny freezing to death in the dark. But we need to send an unambiguous message to consumers that high energy prices are here to stay, so they had better change their consumptive habits. Hit 'em in the wallet where it hurts the most!

The price of crude has doubled in the past year, but the IEA believes that three-fifths of the price increase in petroleum has been absorbed by governments through subsidies to shield consumers from the higher price of gasoline and diesel, so they have, yet, to receive the message to consume less. Specifically in the developing world. Further those subsidies have not been targeted, so they do not help the poor per se, but rather the middle classes that can already afford to drive. That is just poor public policy. And removing those comfy subsidies now that prices have already doubled will be even more painful to consumers, and will probably cause social unrest for their governments. Give the market a chance to work.

And it would be a huge help if the next 3 billion additional babies that will be born over the next 30-years are never born. Over population is and always will be the root cause of all our problems. Yes, over consumption is just as bad, but over population just adds additional pressures to our environment. If you cannot grab that tiger by the tail then you're really just treating symptoms rather than addressing the big, fundamental, underlying problem.

I am as selfish as the next person. I want to live in a comfortable home and enjoy the fruits of my labor. I like electricity and toilets that flush. I want to do that in an environmentally sustainable manner, but I am rue to give that quality of living up just so we can cram 10, 15 or 20 billion people onto this planet. And I have to also accept that whatever changes I make to my own living arrangements they will be offset by some 6.7 billion people doing their own thing.

[MrBill]

The World Bank has estimated that higher food and fuel prices are a daily struggle for more than 2 billion people and threaten to push some 100 million people into poverty.

$this->bbcode_second_pass_quote('', 'I')n impoverished Haiti, the government and aid groups hand out lunches at schools in slums. In Brazil, mothers who regularly take their children to medical check-ups qualify for small cash payments.

In Mexico and Bangladesh, governments give millions of poor families cash or wheat and rice for sending their children to school and health clinics.

For more than a decade programs like these have been helping millions of the world's poor by ensuring children are educated and women have access to basic medical care.

Targeted social programs like these have been around for more than a decade but are particularly valuable now when millions of the world's poor are struggling to cope with soaring food and fuel prices.

[yeahbut]

$this->bbcode_second_pass_quote('MrBill', 'S')ometimes you cannot win for trying. Maybe there are deeper problems in the developing world to deal with, eh? Na, it is always the rich world's fault! First food is too cheap. Now it is too expensive. We have to pay the world's market price for oil, but we should not charge the going market price for the food we produce because that might create hardship. Its always our fault!!

[MrBill]

No, my comments were just general and not targeted at you personally. There is enough blame to go around for everyone. No need to blame anyone in particular. We all have positive consumption and leave a carbon footprint. So we are all part of the problem.

RE the marginal land issue. There are, of course, no guarantees that prime land cannot and will not be used for fuel production as opposed to food and feed production. Just like there are no guarantees that when I buy a tree in the developing world to offset my carbon footprint that someone, at sometime, now or in the future, might come along and cut that tree down. They might even loudy proclaim it is their right to cut it down.

$this->bbcode_second_pass_quote('', 'I')t's not anyone's fault, and I agree that food subsidies are a bad idea, and the fuel subsidy policies of China et al are an unhealthy artificial measure that won't help anyone.

[timmac]

yeahbut wtote :

biofuels are having a major impact on food prices, and in the short-medium term that impact will surely only get worse.



I don't agree with that at all,, I think that biofuels are about 10% of the problem,, bad weather, lack of water and bad farm management about 35% of the problem,, high price oil about 30% of the problem and the rest on a very fast growing world population...

[HKFarmboy]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('timmac', 'p')istar wrote :
So timmac biofuels are a good thing, huh?



So you you would rather we keep buying the black oil from our enemies and keep poluting the earth,, Bio-Fuels are not the answer but they are a better fuel than your black oil,, if you think the high price of fuel is not increasing the price of food then you are just stupid and blind,, Yea lets kill the Bio-Fuel program and slave our selves to just buy fuel from our enemies and make multi billionares out of all of them and drive our country broke,, good idea from a idiot....

[timmac]

DuPont (DD) and Genencor, a unit of Denmark's Danisco, said Wednesday that they will break ground this fall on a 250,000 gallon cellulosic ethanol pilot plant in Tennessee.
Ethanol should be available from the pilot plant by December 2009, with commercial-scale production by 2012, the companies said.

Also Wednesday, Los Angeles County officials approved a commercial ethanol production plant that would make ethanol from wood chips, paper and other biowaste. BlueFire Ethanol plans to begin construction on the $30 million facility in Lancaster this fall.

In Tennesee, DuPont Danisco Cellulosic Ethanol is aligning with the University of Tennessee Research Foundation, through its Genera Energy, and making use of state funds to construct the pilot-scale biorefinery and a research and development facility for cellulosic ethanol in Vonore, Tennessee.

The moves come amid growing criticism of corn-based ethanol at a time of record prices for corn, and food shortages seen around the globe.

FIND MORE STORIES IN: Denmark | Los Angeles County | Lancaster | Tennesee
Tennessee Gov. Phil Bredesen said Wednesday he thought "the nicest thing you can possibly say" about corn-based ethanol is that it is "transitional" technology.

"It really is much more about political eye wash ... trying to do something about the energy crisis. It has very little to recommend it over the long term," Bredesen said. "I think that cellulosic ethanol in contrast has a great deal to recommend it over the long term. That is where I am trying to emphasize us putting our weight and our money."

The companies said the pilot plant will initially process western Tennessee corn cobs into ethanol but plans to shift to switchgrass for conversion to ethanol, working with Tennessee farmers as dedicated switchgrass suppliers. The university has also invested state research dollars toward the development of switchgrass.

"The high cellulosic content of switchgrass makes it an optimal feedstock for ethanol production," said DuPont Danisco Technology Leader John Pierce in a statement. "Its yields today make it more than competitive with other biomass sources, and it has the potential to produce over 1,000 gallons of ethanol per acre in the future."

There are about 1.5 million acres in Tennessee seen as unsuitable for growing food crops but good for switchgrass, officials said.

The cost of producing cellulosic ethanol is still much higher than making corn-based ethanol, and several U.S. companies are in a race to drive down the costs making the fuel for what is estimated to be a $75 billion global market opportunity.

DuPont Danisco Cellulosic Ethanol will link DuPont's cellulosic pre-treatment and fermentation technologies with Genencor's enzymes to develop the ethanol production process.

The project will make use of about $40 million in Tennessee state funding. The companies said they planned an initial three-year investment of $140 million.

Cellulosic ethanol has the same properties as corn-based ethanol but can be derived from the nonedible parts of a corn plant, rather than the corn kernels. Sugar cane bagasse, wood shavings, switchgrass and other such materials can also be harnessed to produce ethanol.

DuPont's Pierce said Wednesday in a news conference that corn ethanol had paved the way for rapid growth of cellulosic ethanol.

"It (corn ethanol) has formed the basis for investment and a whole infrastructure that we are going to move into with cellulosic based ethanol," Pierce said.

Contributing: The Associated Press

Copyright 2008 Reuters Limited.
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[timmac]

Switchgrass yeilds 4-5 times that of corn per acre and you only plant it once every 10 years..

[yesplease]

BTL is where biofuels will be at in the future, if they're present.

[bruce2288]

As stated earlier the use of a surplus of corn to produce ethano was given little concern and seemed like a win win situation. We see now there are ramifications that were not wholly considered. It will be the same with cellulosic ethanol. There be unseen effects some good some not so much. Removing large % of organic matter from the land years in succession has a detrimental effect. Soil organic matter goes down, decreasing water infiltration, fertility decreases,soils get hard. Much marginal land is in pasture, usually a diverse habitat. Less pasture less cattle and sheep and goats. Meat prices? Switch grass is also not good wildlife habitat. It grow so thick and high it is virtually impossible to walk through. Light penetration is very low not understory of forbs can grow. Harvesting marginal forests will also have an effect instead of the natural death and decay of the forest community if this is harvested and removed the nutrient cycle is reduced. I am not against biomass ethanol only stateing as with all decisions made there are often times unexpected side effects.

[timmac]

Those that don't understand Bio-Fuels wont change like pstarr,, he thinks we should keep making our enemies rich and driving our country broke on fossil fuels............


I vote for change, ETHANOL...........

[MrBill]

Bruce I agree 100% with your reservations about large scale adoption of cellulosic production on marginal land and the potential problems that may cause. As pstarr points out it is the scale needed. There is no doubt in my mind that this is absolutely doable from the supply side, but we still need to address run away demand. We cannot and should not look to bio-fuels to support our current energy-inefficient infrastructure in a business as usual manner.

Cellulosic ethanol will be a lower EROEI alternative to petroluem products, and therefore it will also be more expensive in real terms. We need to ration demand as well as address supply issues. Part of that rationing via price and carbon taxes, for example, have to address the externalities of bio-fuel production and their effect on the environment as well.

Currently we only use about three percent of our landmass for agriculture. We can expand that. Northern Canada, Russia, northern Skandivavia as well as parts of Africa, Asia and S. America could help us produce the commercial quantities of cellulosic ethanol and bio-fuels that we need, and provide economic development for those regions as well. However, we need to collectively address the issues you raise such as preservation of wildlife habitat, soil erosion, nutrient depletion, indigenous peoples, etc.

As I understand it though cellulosic ethanol does produce a byproduct that is edible by animals, so can be used as animal feed, and/or can be used as compost. Actually, young forests that are harvested in a sustainable manner can support more wildlife than mature forests. But we still need to preserve some old growth forests and protect our most vulnerable ecosystems.

So although there are trade-offs they can and will be managed. The alternative is to convince a lot of people to starve to death in the dark and that is a non-starter. So we either address the serious issues surrounding cellulosic ethanol and bio-fuel production or we keep using coal and other fossil fuels until they too are depleted. We literally have to start somewhere. The debate should be how not if.

[yesplease]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('yesplease', 'B')TL is where biofuels will be at in the future, if they're present.