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Wednesday, December 28, 2011

BIOFUEL TRENDS

I write about biofuels regularly, and earlier this month posted on algal fuels.  In short, not enough government investment has gone into this field and I think realistic commercial markets are still in the future.  Everything, of course, depends on Peak Oil and Global Warming.  If nothing significant happens, biofuels will continue to waffle around for another decade.  Keep in mind that the Chicago Mercantile Exchange has petroleum at $93/barrel in December of 2020.  But the Feds and pioneering companies will hopefully pick up the progress with more R&D because the only sure thing about the price of oil is that oil economists are always wrong and they continue to get surprised by politics and crises.

Someone who should know, Jim Lane, editor and publisher of the Biofuels Digest, provided eleven hottest trends in 2011.  I'll only list a few here (you can click on the article):

  1.  Aviation biofuels begin take-off.  Lane is hopeful; I'm dubious about any early commercialization (read my posting indicated above)...but applaud any long-term research.

  2.  Biogas deserves more consideration.  Not sure what he would do with the methane or any higher order hydrocarbon gas, for natural gas remains relatively "cheap."

  3.  Australia is perking up with Solazyme and Quantas (renewable jet fuel using Danaliella salina), SARDI with nannochloropsis and chaetoceros, etc.  I continue to be perplexed, though, why all the focus is on terrestrial applications, where water is a problem, land is expensive and an environmental backlash will be inevitable.

  4.  Warburg Pincus will invest "up to" $355 million on green-black technologies.  Go ahead click on this.

  5.  Brazil and sugar cane.  I've always been negative on converting any food product into energy, and I have had qualms about Brazilian ethanol for a long time.  I would not be surprised if Brazil begins to shift from bioenergy to bioplastics, simply for economic reasons.

  6.  Finally, D.C., the military and bio jet fuel come together.  This all makes sense.  I'm ecstatic, except for one problem.  Any bio jet fuel today is far too expensive to even pretend that this is the quick answer.  Yes, someday, I hope.  But we need a whole lot of developmental work, across the board, to get close to $3/gallon ($126/barrel--which means oil at $150+ to compete, because free enterprise is not free).  A few billion dollars a year will be required over the next decade to insure for success.  Unfortunately, most the early hype has not come with billion dollar investments.  I'm not optimistic unless there is a dramatic adjustment in funding priorities.

The August issue of Scientific American reported on biofuels, mostly produced from terrestrial feedstocks.  The title?  The False Promise of Biofuels.   Just two details provided:

1.  In the U.S. the biofuel ethanol used 40% of the corn produced, jacking up food prices.

2.  If corn ethanol were to provide all the transport requirements, required would be a farm three times the size of the continental USA.

Ethanol is finally being recognized as a dumb decision, but, guess what, the next stage would be to dissociate and ferment cellulose to produce more ethanol, a time consuming, and, therefore, costly process.  Nowhere in the article is it even hinted that the more efficient gasification and catalysis of biomass into methanol should be considered, where this alcohol would be directly used in a fuel cell, a technology that can take a car five times further than one powered by a lithium battery system.  Methanol is the only liquid capable of being directly fed into a fuel cell without a reformer.  Well, in the response section, the first question asked was why don't they ferment the biomass into methanol.  Crazy!

But, you say, there is no direct methanol fuel cell for vehicles.  Correct!  Why?  The Farm Lobby has effectively prevented the U.S. Department of Energy from developing this pathway for fear of affecting their ethanol boondoggle.  I have a half dozen HuffPo's (articles in the Huffington Post) on just this issue.  Here is the first one.

What a country!  And we are the only supreme power on Planet Earth.  Can you imagine where we would be if government was not broken, people worked together for the good of the whole and we had more sensible spending priorities?

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The Dow Jones Industrials fell 140 to 12,151, but are still plus 5% for the year.  Shanghai (China), in comparison, is minus 23%, Japan - 19% and Germany -16%.  Gold is crashing, down an additional $36/toz to $1553.  The WTI oil dropped below $100/barrel, while the Brent Spot is at $108/barrel.

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