Thursday, May 1, 2008

What Is Happening To Those Ethanol Subsidies Anyway

What Is Happening To Those Ethanol Subsidies Anyway
Three days ago I reported that an effort in the U.S. Senate to end ethanol subsidies was beaten back by an overwhelming vote. I mentioned that the Farm Lobby was too strong, and it was no surprise that these tax credits would be continued for several more years.

Well, the following day, this same Senate voted to end the 45 cent/gallon ethanol subsidy by a vote of 73-27. Also to be eliminated is the 54 cent tariff on imported ethanol. What happened? First, the bill related to this action will not become law anyway. Apparently, while this reversal is a surprising sign of the beginning of the end of ethanol, this is nevertheless just another congressional maneuver with very little meaning. Second, the Renewable Fuels Standard will be maintained to protect for a while the existing bioethanol facilities. Thus, apparently, the Farm Lobby is taking a calculated risk as a compromise to insure that those manufacturing plants can recoup investments. They may have, I guess, given up on building ethanol-from-cellulose factories.

So what is the future of biofuels? First, good sense is finally beginning to prevail. Ethanol from any food source (like corn) was dumb to begin with, and, while grain prices jumped to help farmers, the stupendousness of this stupidity became too much to protect.

As an alumnus of Stanford University, I've long been tracking Vinod Khosla, a Silicon Valley entrepreneur (one of the founders of Sun Microsystems--the SUN stands for Stanford University Network--now part of Oracle). Unfortunately, my allegiance convinced me to purchase both stocks. I thought Khosla's initial ventures were pathetic, for he, with good intent, jumped into ethanol, then ethanol from cellulose. More recently, he has seen the light, and has just about abandoned fermented ethanol, now largely heading down a more sensible biofuels pathway. Read a statement he made earlier this year and you can only be impressed by his attitude and new found smarts (here is just part of his current attitude):

"HOWEVER, I CONSIDER CORN (AND SUGARCANE IN THE LONGER RUN) ETHANOL TO BE TRANSITIONAL TECHNOLOGIES. TO ACHIEVE THE US RENEWABLE FUELS TARGET OF 36 BILLION GALLONS IN 2022 AND BEYOND, BIOFUELS WILL NEED TO BE PRODUCED LARGELY FROM HIGH YIELD NON-FOOD BIOMASS SOURCES. I ALSO ENVISION ADVANCED BIOFUELS MOVING WELL BEYOND ETHANOL AND DIESEL TO HYDROCARBON FUELS: RENEWABLE CRUDE OIL, DROP-IN DIESEL, GASOLINE, JET FUEL AND OTHER PETROCHEMICALS. THROUGH A COMBINATION OF DIVERSE FEEDSTOCK AND DIVERSE END PRODUCTS, BIO-DERIVED HYDROCARBONS AND ALCOHOLS HAVE THE POTENTIAL TO REPLACE AN ENTIRE INDUSTRY."

What then? Well, there is still a lot of cellulose from corn (stalk, stover, etc.) and other energy crops. The question now is, what to do with them. Initially, as ethanol (right) was the fuel with a tax break, the early movement was to hydrolyze and ferment this biomass into ethanol. For the longest time I have railed that this would only create a second herd of white elephants because a much more economical pathway was to gasify and catalyze biomass into methanol (left--a simpler molecule). It also so happens that methanol is the ONLY BIOLIQUID capable of being reasonably efficiently and directly utilized by a fuel cell without undergoing reformation.

Why is this important? First, the internal combustion engine will be around for a very long time, but electric and fuel cell vehicles show greater long term promise. The problem is that the lithium battery will be the last battery to be invented, and, for a typical car, a fuel cell vehicle will take it five times further than one powered by batteries. So why not immediately convert to hydrogen powered fuel cell automobiles? Hydrogen is too expensive to produce and store, plus there is no existing infrastructure.

This is almost beyond comprehension, but one gallon of methanol has 140% more hydrogen than one gallon of liquid hydrogen. Why not then use the direct methanol fuel cell (DMFC) to power cars? The almost criminal aspect of all this is that the Farm Lobby has prevented the U.S. Department of Energy to do much research on the DMFC. There has been some Department of Defense R and D, but for only for portable applications. Toshiba is already marketing a DMFC for computers and other electronic commodities, so the concept is real.

Khosla and various oil companies, though, seem to be headed towards higher order hydrocarbons, applying "to be invented" yeasts and other means to ferment cellulose, while in parallel "trying to find the best possible catalyst" to convert gasified fiber into a biofuel. Both of these directions are worthy, and will thus produce the transport biofuels (including jet fuel) we need for the future. I thus can only encourage these activities.

Butanol and isobutanol (left--note that it's getting more complicated) seem especially attractive, as they have 4 carbons. You link two of these four chain alcohols and you have a gasoline substitute. Add another 4 (up to twelve carbons in the chain) and you get jet fuel. Add yet another 4 carbons, giving diesel. But, I suspect these higher order biofuels will just be too expensive to compete with oil at less than 150/barrel. Many of these entrepreneurs (and major oil companies), though, expect to be able to produce these fuels at half that price and less.

Me? I still think the simplest solutions are best. For now, the direct methanol fuel cell for vehicles and, later, hydrogen for aviation. It's lonely being the Man from La Mancha for the biomethanol economy and next generation hydrogen aircraft. Even George Olah expects to get his methanol from fossil fuels and the atmosphere.

Mind you, in all the above, we are only discussing biofuels from terrestrial biomass crops. Competition for food, water and a whole host of other issues occur on land. There is a mostly neglected different world of marine biomass from which a much higher efficiency fuel can be produced...in theory.

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