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Thursday, May 28, 2015

HOW IS THE BIOFUEL INDUSTRY DOING?

How is the fledgling biofuel industry doing?  In a word, terribly.  I was once chief cheerleader for this field.  I still hold long-term hope.

The price of petroleum is about half of what it was for the past few years:


Further, the Chicago Mercantile Exchange has petroleum at $68.62/barrel in December of 2023.

When oil was at more than $100/barrel, biofuels could not compete.  But corn ethanol was the exception because the Farm Lobby cleverly lobbied our  U.S. Congress, succeeding with a tax credit for ethanol in 1978.  To quote Wikipedia:

Historically most U.S. ethanol has come from corn and the required electricity for many distilleries came mainly from coal. Debate ensued about ethanol's sustainability. The primary issues related to the large amount of arable land required for crops and ethanol production's impact on grain supplyindirect land use change (ILUC) effects, as well as issues regarding its energy balance and carbon intensity considering its full life cycle.[20][21][22][23][24][25]

Two decades ago when MTBE (causes cancer) became a problem, ethanol was offered as the solution.  Corn then cost $2/bushel.  In 2013 40% of all corn harvested was used to produce ethanol fuel. In 2015, the expected average for corn is $4.15/bushel.  The problem is that the supply of corn now utilized for fuel would have fed 500 million people around the world.  World grain supplies are down to the lowest level in 30 years.

Congress finally in 2012 let expire the tax credit for ethanol, a subsidy that provided $20 billion for this product.  From highs exceeding $7/bushel, the price settled more recently to $4/bushel:

Mind you, numerous farm-related subsidies for corn ethanol still exist, but cleverly concealed in assorted bits of legislation.  In Hawaii, we attempted ethanol from sugar cane, failed, and are abandoning ethanol for transport use.  This alcohol remains cautiously acceptable for imbibition.  

So back to the matter of biofuels from biomass, how goes this development under the specter of "low" oil prices?  According to Jim Lane, editor and publisher of Biofuels Digest (my comments in parentheses):
  • First-gen ethanol producers:  only doing so-so, but still okay.
  • Biodiesel:  also so-so, with a "let's produce as little as possible and hang on."
  • Industrial sugars:  pretty good, but for human consumption, not cars.
  • Renewable diesel:  looks pretty good thanks to lowered production costs achieved through feedstock diversification (frankly, this is a rather piddling to middling product).
  • Butanol:  surprisingly strong--while BP shed all kinds of assets, it retained Betamax, and Green Biologics is now converting "plant #1" to n-butanol (but for paints and other higher value products, not auto fuel).
  • Oil major support:  Shell, Total and Reliance, with Chevron quietly engaged, so too, China.   BP and Petrobras have disappeared.
  • Aviation biofuels:  moving strongly (of course, still costs several times more times two, but if this is "moving strongly," then you can totally discount anything above).
  • Synthetic biology and algae:  forget fuel, only dabbling in chemicals and nutraceuticals.
  • Gasification:  methane is strengthening (hooray...next stop, methanol).
  • Cellulosic developers:  delayed commercialization for most, into stealth mode for others.  INEOS Bio, Abengoa, POET-DSM GranBio in extended shakedown.  (All terrible signs.)
Really, an excellent review, pardon my sarcasms, but what else can the editor of Biofuels Digest say?  For the full scoop, read the Lux report on How Alternative Fuel Companies Will Compete with $50 Oil:

As oil price dropped from $100 per barrel to $50 per barrel in the last year, the ability of alternative fuel producers to compete has taken a major hit. In this report, we examine 25 companies claiming cost competitiveness with $50 per barrel oil, digging into their technologies, feedstocks, and commercial plans to determine whether they are likely or unlikely to compete with cheap oil.

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Ah, the first ocean storm 2015 has appeared in the East Pacific.  Tropical Storm Andre is at 40 MPH and will become a hurricane, but will move further north and dissipate:


The next few will be Blanca, Carlos, Dolores, Enrique and Felicia (alphabetical).  Wait a minute, I remember Felicia in 2009.  She almost caused me to return home from a Big Island trip.  The storms I fear are the ones which form near us in the Central Pacific.  In 2006 Ioke popped up just southeast of the Big Island, but thankfully just went east for a while and eventually reached 155 MPH.


If one forms just south of the Big Island and comes up north, we are in quick and deep trouble.  Not really sure what will be the name of the first Central Pacific storm, for this is not alphabetical, but I think it will be Ela.  However, Ela follows Ana in our region, and the first Atlantic storm of this year three weeks ago was Tropical Storm Ana.

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