A Challenge for Alternative Energy

Brazil is the world leader in biofuels. The country started switching its cars from gasoline to ethanol nearly forty years ago. Most of the cars sold in Brazil today are “flex fuel” and when they say flex, they mean it, none of this E-85 stuff. Brazilian cars can run ENTIRELY on ethanol. Beyond that, Brazilian ethanol production is the most efficient in the world. They use sugar cane as a feedstock, with is several times more efficient than corn. Brazil has been hailed as the first large country with a sustainable biofuel system more or less in place. So what’s the problem?

Cheap oil, or shall we say more expensive sugar, is the challenge. A gallon of ethanol is only worth about 80% of a gallon of gas in terms of energy delivered. Put another way, you will only go about 80% as far on a tank of ethanol as you would on a tank of gasoline, so if/when the price of ethanol creeps up beyond 80% that of gasoline, a person with a flex-fuel car flex fuels over to gasoline, providing he/she can do simple math. This is happening in Brazil now.

In most Brazilian cities, a liter of ethanol currently costs around 85% as much as a liter of gasoline. People can do the math, and the consumption of gasoline has risen by 23% since February. link.

Brazil has everything it needs for a successful biofuel program. Most of its electricity comes from renewable hydro-power. It has the ideal biofuel crop in its sugar cane. The government favored and subsidized the biofuels industry. Brazil has a complete network of stations equipped to sell ethanol, along with a fleet of cars that run on ethanol and consumers with the habit of using it. It even has a uniformly warm climate, which makes a difference, since ethanol can gum up an engine when temperatures go down near freezing. But price still matters.

Analysts worry that it will get worse for the biofuel industry. The price of sugar is high on world markets and so it makes a lot more sense for Brazilian farmers to sell sugar for Frosted Flakes, Hershey bars or sweet tea than it does to turn it into fuel for cars. Beyond that, with the price of other agricultural products rising, maybe it makes more sense to plant soy or corn instead of cane. And if that was not enough, Brazil has recently discovered vast new oil reserves. Experts predict that there could be 80-110 billion barrels of oil in the so-called “pre-sal” deposits. This would give Brazil oil reserves about the size of Kuwait’s or Iraq’s. That’s a lot of oil. The Brazilians initially developed the ethanol program because they didn’t have enough oil of their own. How does this bonanza of the bubbling crude (black gold, Texas tea) affect the equation?

This demonstrates the fundamental weakness of all alternative fuels. Just when we think we reached "peak oil" we find we were just going up one of the foothills. We keep on finding new sources of oil and gas and fossil fuels stay cheap. I know it doesn’t seem like it just now, with gasoline prices hitting record levels (at least in nominal dollars) but the world is awash with fossil fuels. In the medium run (10-20 years), prices for gas and oil fuels will be relatively low (i.e. lower than alternatives) and alternative fuels will have a tough time competing.

The world should watch what happens in Brazil and take notes. For the past thirty years, we have had a laboratory for biofuels. The Brazilians have done everything advocates say should be done to encourage biofuels, as I mentioned above. And when the price of oil was high & the country did not have access to domestic oil supplies, we can called the program a success. What do we say if those conditions change?

Posted by Christine & John at April 12, 2011 11:02 PM
Comments
Comment #321542

This is the exact reason why I say that market forces can’t be what we use to change things around- they’re too variable, especially where the volatile fuel market is concerned. Let’s say they abandon the renewable fuel program, and then American abandons the corn ethanol program up here. Well, when your gas contains 10% ethanol, and then it contains none, gas is going to replace that ingredient, as far as I can tell.

Well, those oil wells aren’t going to be ready for years, and production isn’t going to be all at once. So what might be uneconomical now, might be economical later.

But is this just a question of what’s economical on a strict price comparison basis?

For one thing, we have the challenges to our nation if the oil suddenly becomes scarce for some reason. For another, we have to deal with the potential costs of intensifying global warming.

I know some treat it as an eventuality, but the eventuality in this case is only for the part of the carbon emissions that we’ve already put in the pipeline, so to speak. But we really have to get started now, because whatever choices we make in terms of changing our infrastructure have to start as soon as possible to give us time to ween ourselves off of fossil fuels

Also, if we are to make the transition, I think we should make it before our supply runs out and starts imposing economic constraints on our ability to do research and development of the new technologies.

While I am most definitely not a social Darwinist, I do believe that selective pressures exist in society and in the world that can decide our fate as a people. Supplies of a fuel or other limited, non-renewable resource can put an upper bound on an economy’s ability to grow, and a society’s ability to prosper. Changes in the environment due to human activity can render fertile lands barren, gushing aquifers dry, subject improperly placed building and structures liable to disasters.

It’s not that we each have an inherent superiority or inferiority, but we don’t just suffer at the hands of forces we don’t control, we suffer at the hands of our own decisions, and the consequences they provoke.

All too often, it seems, some decide to keep their heads down and ignore those kinds of consequences. While it’s true that much of the time we’re lucky enough not to suffer from the disasters that occur, sooner or later luck runs out. Sooner or later, a 9.0 Earthquake hits your reactor, or the Middle East seizes up in political turmoil (the cause of two of the major recessions of the last forty years, and arguably the phenomenon of stagflation)

Sooner or later, the disaster you blew off as too unlikely, or too distant in the future happens, and you pay the price.

Policy-wise, I’m sick of waiting to pay the price, knowing that I’m going to pay the price, because some special interest needs to keep the current strained state of affairs in place in order to profit. If it’s a choice between making the Oil industry obsolete, and making my nation obsolete as a world economic power, I’m not going to let my country be the one to fade away into history, like so many nations that were right over the trapdoor when their favorite natural resource fell out from under them.

Posted by: Stephen Daugherty at April 13, 2011 7:44 AM
Comment #321545

SD said:

“This is the exact reason why I say that market forces can’t be what we use to change things around-“

So I gather from this statement; what we need is bigger government to take over the market forces. Didn’t Carter try that in the 70’s? Guess what….shortages.

C&C

The United States is not Brazil. The use of bio-fuel is driving up the cost of food. And it’s a shame Obama cannot support American production of oil the same way he supports Brazil. Obama even said he looked forward to being a partner and the US buying oil produced in Brazil.

Yes, there are oil deposites being found all over the world, but the only one that doesn’t count are those found in America. They are bogus finds…

Posted by: 1776 at April 13, 2011 9:41 AM
Comment #321546

The warning:

http://www.earth-policy.org/index.php?/plan_b_updates/2008/update69

The results:

“Corn stockpiles in the U.S., the world’s largest grower, are plunging to a 15-year low and may be smaller than the government forecast last month as rising demand from makers of feed and ethanol drive prices higher.

Stockpiles on Sept. 1, before the harvest, will drop 66 percent from a year earlier to 589 million bushels, a Bloomberg survey of 30 analysts showed. That’s 13 percent less than a March 10 estimate by the U.S. Department of Agriculture, which will update its forecast today. Tightening supply led Goldman Sachs Group Inc. to raise its corn-price forecast last week.

About 40 percent of the crop is used to make ethanol as the government subsidizes the fuel additive and retail gasoline nears $4 a gallon. Corn futures have more than doubled in the past year to the highest since July 2008, as rising pork and beef prices encouraged demand from livestock producers and as U.S. export-sales expanded at the fastest pace in three years.”

http://www.bloomberg.com/news/2011-04-08/u-s-corn-supply-shrinking-as-meat-ethanol-demand-send-crop-price-higher.html

Posted by: 1776 at April 13, 2011 9:49 AM
Comment #321564


Just another red herring on behalf of market stall.

Brazil’s biofuels industry will gradually decline, but not fade away, as more and more electric cars hit the road. Electric car owners will have the option of creating their own fuel. The market can not stall on behalf of oil and gas any longer because the demand for alternative is growing fast.

The U.S. military is leading the way as it plans to convert many of it’s aircraft and vehicles to biofuels and ships to nuclear and electric. In some parts of Afghanistan, the military is paying up to $400 per gallon to have fuel delivered to the troops. The military is using more solar power in the field and the pace is increasing. It is becoming a world leader in reducing it’s carbon footprint.

The military considers itself a leader in breaking through cultural resistance to change.

Have you fellas read that great story about the Pa. gas and oil regulators and the rubber stamped permits?

Lindsey Graham (R-SC.)— Don’t cut government spending for South Carolina because government spending creates jobs.

Posted by: jlw at April 13, 2011 2:21 PM
Comment #321568

Link please on Lindsey Graham.

Posted by: 1776 at April 13, 2011 3:27 PM
Comment #321572


1776, try googling Lindsey Graham says government spending creates jobs.

I bet you can google that Pa. story as well.

You can watch Earth: The Operator’s Manual on PBS to find out how the military sees it’s role in breaking through cultural resistance to change.

Posted by: jlw at April 13, 2011 3:50 PM
Comment #321574

1776-
Like my brother said to me, you can’t use the same resource twice. If we want corn for food, and corn for fuel, we generate more scarcity for both purposes.

I don’t think it pays to ignore economic considerations when dealing with energy issues. Renewables are good, but not at the expense of the renewable resource of food.

Posted by: Stephen Daugherty at April 13, 2011 3:57 PM
Comment #321577

jlw

I am simply reporting on something most Americans know little about. We have a country that has been working on biofuels, a country that has all the advantages anybody could ask for, using all the tools advocates say should work. It has been doing this since the 1970s.

My reasoning by analogy is that if the U.S. wants to do the same thing, with even fewer advantages of climate and crops, it might not be the right way to go.

The problem with government “experiments” or “pilot programs” is that is they don’t work out, government piles in even more money, as in our own ethanol programs.

If the demand for alternatives grows, of course we will use alternatives. It is a tautology. I am just advocating letting conditions decide.

The problem is the abundance of gas and oil. Please see below re.

Stephen & JLW & 1776

Consider the original reasons they started on biofuels. In 1975 it looked like we could run out of oil in a couple years & the Brazilians had few domestic sources. Today, we know there is enough oil and gas for many years and Brazil has discovered its own very large reserves.

Today, the only argument against oil is ecological impact. Back in 1975, nobody worried about CO2, so that was not an issue. So we have to compare the ecological impact of oil v biofuels or other things. Biofuels are not w/o ecological costs, as 1776 points out.

We don’t have to choose one or the other. We will have biofuels AND we can have oil.It is physically impossible to replace oil with biofuels. Even if we planted the whole U.S. with biofuels crops,it would not be enough.

Re the general problem.

The problem is that they have been subsidizing and protecting this industry for more than 30 years. They have conditions almost ideal, or at least better than anywhere else, to make it work.

The protection and subsidies are not free. You are asking people to pay much more for energy, whether they pay directly as individuals or pay through their taxes, or pay through simple inefficiencies. What is more,if you pay through subsidies and inefficiencies, people do not have the information or incentives to make choices.

Remember too that “costs” are not just money. Producing biofuels or anything else, means that you are not producing other things and that there is an environmental cost. The cost of producing biofuels in the U.S. is higher – from an ecological perspective – than the cost of using gas or oil. Brazil is much more efficient and maybe will be able to do it.

Posted by: C&J at April 13, 2011 4:39 PM
Comment #321581


C&J, I agree that Brazil will always have an advantage over us in biofuels production because of sugar cane vs corn. I personally think it is ridiculous for us to produce biofuel from corn for personal transportation. If we are going to do it, I think that biofuels should be restricted to farming energy needs and possibly commercial transportation.

I hardly think we need a lesson on environmental costs from someone who advocates drilling, fracking, nuclear, etc. Besides, GMOs will more than compensate for crop lands devoted to biofuels, right?

Biofuels are small potatoes compare to oil incentives aren’t they?

Sure we will continue to use oil, biofuels, wind, solar, etc. Chinese electric cars are going to corner the market.

Speaking of underground, there are enough hot rocks under the U.S. to supply all our energy needs for well more than 100,000 years.

Water lines, gas lines, the electrical grid, damns, highways, bridges, our infrastructure is worn out and no one can figure out how to stimulate the economy.

What is the markets solution for that?

In the 70’s, the greater concern was addiction to foreign oil, leading to foreign wars and the bleeding of our economy, rather than running out of oil. The reason we became addicted to foreign oil was because we were running out of easily accessible sources and the industry could make big profits off of the foreign oil, even with OPEC and the end of $2 per barrel oil.

Posted by: jlw at April 13, 2011 5:43 PM
Comment #321585

jlw

You may indeed need a lesson in environmentalism from someone who advocates the responsible use of fracking, nuclear etc. Many environmentalists are simple minded. They really believe that there is sometime “natural” that is somehow safer and better for the environment. Environmentalists often talk about how the world is interconnected, but fail to use this analysis in their actual decisions.

re running out of oil - Do you remember the 1970s? If not, please look up all the literature from the period that told us we were going to run out of almost everything. That is where I learned to be skeptical of the hysterical claims.

Posted by: C&J at April 13, 2011 6:00 PM
Comment #321591


C&J, are you referring to the Club of Rome? Pulled the wool over our eyes, did they?

Posted by: jlw at April 13, 2011 6:54 PM
Comment #321597

Re the 70’s…

The question:

“What happened to the predicted ice age in the 70’s?
I remember and have since been reminded that during the mid to late 70’s the world was in panic about the coming ice age. What happened there? How did the environmental scientists get it so wrong?

Also, through out the 80’s and 90’s the big panic was about the whole in the Ozone layer, but now it’s never mentioned. Is it still there? Has it closed itself?

Finally, since CO2 and Global Warming is the big panic for this decade. What will be the huge issue and panic in the next 20 years when CO2 and Global Warming is just a distant memory?”

The answer:

“This is not just a good question; it’s a GREAT question. The predicted “Ice Age” turned out to be a joke, the Ozone “Hole” was never in danger as the politicians had us believe and Al Gore’s Global Warming is a fiasco. (Just learned last week that Gore was with the Nobel Committee plugging his Global Warming crap and promoting himself for the Nobel Peace Prize. Talk about low! What does GW have to do with Peace?)
There is one you left out, JB. Remember before the century flipped, big business’ were concerned about all their computers not being able to handle the (1999) to 2000 flip over? I laughed every time I heard them talk about it. I didn’t do a thing and my computer went from 1999 to 2000 and didn’t blow up. Have always wondered how much money big business lost on that deal. (Probably nothing. Passed it on to the consumers.)
Again, GREAT question”

http://answers.yahoo.com/question/index?qid=20070429162555AAzpHyd

Posted by: 1776 at April 13, 2011 9:44 PM
Comment #321598


The big panic of this decade are taxes, they will destroy our country and the world.

Posted by: jlw at April 13, 2011 9:58 PM
Comment #321601

C&J,
Excellent piece. Brazil is definitely a case study for us to look at regarding biofuels. Sugar is much more efficient for biofuel production, which is why Brazil has been able to get their program to work (unlike ours). Fortunately, the government doesn’t have to make the tough decisions regarding how we get our energy. All it needs to do is establish rules whereby each source can compete on equal ground and the markets will sort everything out. This will mean taxing carbon (or a cap&trade program) in order to remove the external costs of fossil fuels that are currently borne by the government.

1776,

No one here supports those corn-ethanol subsidies so there’s no need for you to remind us of the problems associated with them.

Yahoo Answers is no source; never mind the fact that the answer written by “Jay9ball” is “top” because it has 2 votes and the answer written by “Pete” has one vote. Instead of citing a fellow conservative’s sourceless diatribe, I dare you to cite a single peer-reviewed article from the 1970s predicting global cooling if you wish to make such a point. Meanwhile, chew on this. Your claim is just a right-wing talking point, so it deserves no more of my attention.

And while I’m at it, I’d like to mention that CFCs continue to destroy the stratospheric ozone that protects the biosphere from harmful shortwave UV radiation. Every October, a massive hole in the layer forms over Antarctica and people living in Southern New Zealand, Southern Patagonia and Southern Australia take extreme measures to minimize their sun exposure during those weeks. This spring, an unprecedented ozone hole formed over the Arctic. Fortunately, the world community has successfully eliminated almost all new sources of CFC pollution; so things will turn around and get better soon. Unfortunately, CFCs are exceptionally long-lived compounds; the ozone layer will not return to its pre-1980 state until the end of the 21st century.

Posted by: Warped Reality at April 13, 2011 11:24 PM
Comment #322075

You’ve just taken a forcast and run with it. Yes the use of biofuels will drive up the price of corn, surgar, and other commodity crop, but that does not mean an “end to biofules.” And neither does rich oil reserves. Brazil may well hold on to the existing biofuel infrastrure and export its oil rather consume it. You cannot expect Brazilian oil companies to sell oil for three dollars a gallon to it’s citizens if they’re going to get five dollars a gallon in the US.
In addition, I’m sure converting back to oil as a major source of energy would cost the citizens of the country money.
In the end what will actually occur will be mediated by the price of oil and biofules, public sentiment, and political incentive. But I really dont think you can make the claim you are trying to.

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