Shifting Economic Winds

We are heading into the last four months of the year, a time which usually sees an increase in investment activity and generally improving economic strength. That means we can expect a rebirth in investor optimism to offset the barrage of negative press we have been subjected to this past year. It is truly necessary this time around.

The subprime disaster has shrunk the capital base of our banking system both here and globally. The huge amount of excess liquidity pumped into the economy has been sponged up through direct losses. We now have a chastened financial sector that has perhaps caught the religion of financial prudence.

That leaves one pending problem. A massive wave of bad paper has worked its way through the system almost choking it. Various newsletters have reported that a much greater wave of refinance paper will be coming due over the next eighteen months. Accepting this as true, we face the most serious financial crisis since the Great Depression that could handily reduce the value of assets to dimes on the dollar and collapse the money supply. If true, the only escape will be my prescription of refinancing by a mark to market strategy. And I doubt if anyone is listening.

The true question is how true is this? I am skeptical. The fact is that Cleveland and those developer paradises in the west were the sweet spot for debt promotion. They loaded up fast and rather quickly ran out of participants. Those chickens came home to roost and have now been handled the hard way.

A lot of asset debt was then put out to folks who had a creditable plan for paying it back as is still happening. That is actually business as usual. The only difficulty is that their assets are now priced at a level that forces them to pay of those loans the old fashioned way and most will.

The equity markets have been reduced by twenty percent over the past year while this scary news was absorbed. It is now absorbing the impact of expensive energy which will take most of the next twelve months. This may squeeze another ten percent out of the market.

That will then be followed by an explosive bull market in equities driven by the rapid conversion of industry to low cost alternative energy regimes. The solutions already exist and the tooling up has begun.

For those who like predictions, I expect static power to soon drop below $1.00 per watt and I expect us to vacate the oil trade causing that price regime to drop well below $50.00 a barrel. In ten years I expect oil to be under $10.00 a barrel because we will have quit using it as a fuel and static power to be at the price equivalent of pennies per watt. That is were we are going.

We just have a little turmoil to go through in lieu of good planning. The conversion is totally feasible now and direct action can make it all very quick. The problem, if any, is the efforts of special interests to push their doubtful solution into the regulatory environment. This is the history of the corn ethanol mess. It never made any sense, but that never stopped anyone.

As I have discovered, wetland cattail starch production can bury us in ethanol at a rate that is likely ten times more productive than any dry land crop. And we have unlimited wetlands to work with that actually need the attention. Then we can enter the boreal forest if we ever need more land. If ethanol can be produced from corn at $1.00 to $2.00 per liter from corn, it is a cinch to produce it a lot cheaper from cattail starch while producing unlimited supplies of cattle fodder from the non starch component.

And then we have our modified alga that just cranks out sugar and easily convertible cellulose.

The point is that we can already bury the world in ethanol without using any food production land and do it at a low cost with modern farm technology and equipment.

The global conversion to the use of ethanol can soon be in full swing.

Developing Oil Fright

The past few weeks have made the developing supply crisis in oil crystal clear to everyone. The fact that I was able to predict this scenario a few months past did not require any prescience on my part. I only had to overcome everyone else’s state of denial. And now, the consumers are beginning to change their consumption habits.

The $130 price for a barrel of oil is quite sufficient to encourage a maximum effort to expand production and to expand replacement sources. A jump to $300 per barrel is unnecessary or that but will likely happen briefly if we have a surprise. By that I mean an unexpected drop of two million barrels per day. Such an event may not happen this year or even next year, and if we can get past that, other patches can kick in.

Right now a lot of folks are actually sitting down and doing the supply analysis and all you see are glum faces. The fact is that this crisis will not be magically fixed by turning on a well somewhere. That option has evaporated and with pending declines everywhere, supply has to be found by emergency replacement from non oil sources.

Even with the advent of THAI oil production and a number of important new fields, the industry can only hope to keep pace with the developing decline. To put it more succinctly, we are on the verge of losing roughly around 10,000,000 barrels per day of production over the next several years and I am likely still sugar coating the story. I think that we can bring on around this much new production with the aforementioned resources, after which the THAI technology could well be able to keep pace with further declines for some time.

The good news for us is that most of this will be focused in North America, permitting us the luxury of sort of controlling our destiny. So although we are going through an uncomfortable readjustment, the transition will be long and drawn out

The new emergency reserve supply is coming from the conversion of the transportation fleet over to LNG engines. This will easily release 15,000,000 barrels of oil per day globally and can be done almost overnight. In fact California is well on way to doing this and has begun to force the infrastructure. It is good to see that at least one group of politicians are not in denial. The point that I am making is that the USA can release millions of barrels of daily oil back into the market in probably less than two years by the simple expedient of a slight engine modification and a few tanks and tankers. The recent rise of diesel prices will force the truckers to make the switch as fast as they can.

I should mention that globally there are massive supplies of LNG for the asking. This is a direct result of a market that has been limited to pipeline distribution to meet the low end market of home heating. Transportation fuel readily can justify the economics of hauling it around in cryogenic tanks. I observe that LNG produces a steady supply of boil-off gas that needs to be shoved into a local pipeline if it is not immediately burned. We can live with all that with a lot of common sense applied.

The other big fix that is been suggested is the simple expedient of making all new automobile engines able to switch on demand to ethanol. That industry is still shy of a few solutions, but establishing capability is the first step to driving demand and supply. I have little doubt that ethanol supplies will begin to climb. I will be posting tomorrow on a discovery that I have recently made for a huge new ethanol feedstock that is likely capable of replacing all our gasoline.

Green Fungi

I am posting here an article that generated media interest the last two days with the headline ‘Green algae’

When I first reviewed what work was been reported on regarding the processing of cellulose I came away rather pessimistic. What makes it so enticing is the fact that cellulose is a string of glucose molecules tightly tied together. In other words, all the wood in a tree is on one level, pure glucose. What is also wonderfully obvious is that Mother Nature did a great job keeping it all together. It was not going to be solved by something easy.

Since then I reported that a research group was studying how termites pulled it off with the idea of isolating the right enzymes. It was nice to see this promising work started. It will surely take years to produce a viable protocol out of this form of basic research.

Now we have work commenced on a well known fungus with a previous history of converting cellulose into simple sugars. This appears most promising of all since a lot of prior work has gone into this particular fungus.

It is suddenly no longer far fetched to envisage grinders chewing up corn stover and the like to be fed into a continuous process vat in which the sweetened fluids are drawn off to the fermenter. This technology surely lends itself to small scale processing operations.

This is a potential protocol that can be adapted to the farm gate with very little fresh labor input and would add a useful new revenue stream beside internalizing the energy needs.



In a paper published today in Nature Biotechnology, researchers led by Los Alamos National Laboratory and the U.S. Department of Energy Joint Genome Institute announced that the genetic sequence of the fungus Tricoderma reesei has uncovered important clues about how the organism breaks down plant fibers into simple sugars. The finding could unlock possibilities for industrial processes that can more efficiently and cost effectively convert corn, switchgrass and even cellulose-based municipal waste into ethanol. Ethanol from waste products is a more-carbon-neutral alternative to gasoline.

The fungus T. reesei rose to dubious fame during World War II when military leaders discovered it was responsible for rapid deterioration of clothing and tents in the South Pacific. Named after Dr. Elwyn T. Reese, who, with colleagues, originally isolated the hungry fungus, T. reesei was later identified as a source of industrial enzymes and a role model for the conversion of cellulose and hemicellulose—plant fibers--into simple sugars.
The organism uses enzymes it creates to break down human-indigestible fibers of plants into the simplest form of sugar, known as a monosaccharide. The fungus then digests the sugars as food. Researchers decoded the genetic sequence of T. reesei in an attemptto discover why the deep green fungus was so darned good at digesting plant cells. The sequence results were somewhat surprising. Contrary to what one might predict about the gene content of a fungus that can eat holes in tents, T. reesei had fewer genes dedicated to the production of cellulose-eating enzymes than its counterparts.

"We were aware of T. reesei's reputation as producer of massive quantities of degrading enzymes, however we were surprised by how few enzyme types it produces, which suggested to us that its protein secretion system is exceptionally efficient," said Los Alamos bioscientist Diego Martinez (also at the University of New Mexico), the study's lead author. The researchers believe that T. reesei's genome includes "clusters" of enzyme-producing genes, a strategy that may account for the organism's efficiency at breaking down cellulose. On an industrial scale, T. reesei could be employed to secrete enzymes that can be purified and added into an aqueous mixture of cellulose pulp and other materials to produce sugar. The sugar can then be fermented by yeast to produce ethanol.

"The sequencing of the Trichoderma reesei genome is a major step towards using renewable feedstocks for the production of fuels and chemicals," said Joel Cherry, director of research activities in second-generation biofuels for Novozymes, a collaborating institution in the study. "The information contained in its genome will allow us to better understand how this organism degrades cellulose so efficiently and to understand how it produces the required enzymes so prodigiously. Using this information, it may be possible to improve both of these properties, decreasing the cost of converting cellulosic biomass to fuels and chemicals."

Ethanol Dreaming

Chris Calder says in this posting a few things that needed to be said very loudly, particularly when we are been forcibly reminded that out agricultural output has never been designed to accept massive diversion of food ever into non food applications Total human total consumption is very inelastic as common sense will tell you. It is inconvenient to either halve consumption or to double it. It is much more elastic horizontally as usage changes. In any event, the naive diversion of corn into ethanol has apparently unbalanced the global food market sufficiently to cause the first major price run up in decades.

The good news is that every farmer will now press every resource into an increase in next season’s production, so we may now expect a major surplus in six months ending the supply threat. Which is why fertilizer is now expensive.

My interjections are in bold.

Why ethanol from cellulose is a hoax!

The biofuel zealots falsely claim that our current disastrous use of corn for ethanol production is only temporary, and is somehow a building block or stepping stone for future ethanol production from switchgrass, crop waste, wood chips, and other sources of cellulose. The problem is that the equipment (manufacturing plants) used to make corn vodka (ethanol) are of no use in making ethanol from cellulose, which is a complex and expensive two stage process requiring new plant construction and costing millions upon millions of dollars. The current cost of making ethanol from cellulose is the same as making gasoline from crude oil that costs $305. a barrel. As ethanol has 30% less energy than gasoline and thus delivers poor gas mileage, this product is currently economically dead. If we can improve our methods and cut the cost in half, that still brings us to an oil equivalent price of gasoline made from crude oil at about $150 a barrel, plus we still have the 30% loss in energy per gallon compared to gasoline. Even if they got the cost down to an oil equivalent of $100 a barrel, it is still not a good deal because of the 30% energy loss inherent to ethanol, which cannot be changed unless you make another fuel product altogether.

Mother Nature had to make cellulose incredibly resistant to biological reduction in order to do its job. The enzymes used by the termite appear promising in overcoming this barrier. Again work on this avenue has barely begun and I certainly do not think that it will bear much fruit for years. What makes cellulose totally maddening is that it is constructed from chains of glucose itself. In other words, it is practically pure sugar. And there is certainly no lack of raw material whose conversion could be nicely integrated into our agricultural and silviculture management systems. However, to think it is a near term solution to energy production is at best baseless.

As expected, many money hungry companies are making big claims about having bacteria that can make ethanol from cellulose work, but ask yourself how and at what price? If they had a bacteria that could do the job instantly it would be the ultimate anti-human life weapon, because if it got loose it would eat up the earth's biosphere and we would have nothing left but bacteria. Obviously, you can make ethanol from lots of substances given enough time and money, and "time is money." It takes time and specific conditions (usually higher temperatures) to make these bugs work, and the time it takes to rot or dissolve wood chips and switchgrass into something that can then be fermented into alcohol is a complex, time consuming, and expensive process.

A new study from three agricultural economists at Iowa State University with insider information on the latest biofuel technology says ethanol made from cellulose will likely NEVER be affordable The Federal tax credits for ethanol made from cellulose would have to be raised from the current $.51 to $1.55 per gallon, which will be unacceptable to Congress and the American public. Switchgrass, crop waste, and wood chip biofuel schemes are too expensive to ever work!

The newspaper article can be found here

http://gristmill.grist.org/story/2008/3/3/125745/7746

The full study can be found here - pdf 180kb at:

http://www.card.iastate.edu/publications/DBS/PDFFiles/08wp460.pdf

Coming soon after the Princeton study published in SCIENCE showing that all biofuels are far worse for the environment and global warming than gasoline leaves the biofuel zealots little cover to hide behind.

Of course, the only problem with gasoline is that it is converting sequestered carbon into atmospheric carbon at a faster rate than it can be returned in some other form. Even without the panic over global warming this is an unwise and clearly unsustainable option and must be solved, which is the principal problem this blog addresses.

SEE - http://www.sciencemag.org/cgi/content/abstract/1151861

Another problem with our current corn vodka infrastructure is that it is located in the wrong areas, and not near the "marginal" prairie lands" that Bush wants to grow switchgrass on. So the idea that corn ethanol is a stepping stone to anything but more corn ethanol is a BIG LIE!

Welcome to public relations or ‘American know-how’

Quoted from my web page.

"The outlook for biofuels is dismal - Growing massive amounts of switchgrass to produce ethanol from lignocellulose has most of the same drawbacks as making ethanol from corn. We will use land, water, fertilizer, farm equipment, and labor to grow switchgrass that will be diverted from food production, with soaring food prices a result. If we grow switchgrass on land currently used to graze cattle, we will reduce beef and milk production. If we grow switchgrass on unused "marginal" prairie lands, we will soon turn those marginal lands into a new dust bowl, which they may turn into anyway due to global warming. Computer models for the progression of global warming show the America Midwest and Southwest getting hotter and dryer, with much of our farm and grazing land turning into desert. We know that biofuel production will speed up global warming, so why are we pinning so much hope on an environmental battle plan that any fool can see will blow up in our face over time? We won't be able to produce enough biofuels to run our cars, or enough food to fill our bellies.

The very process of making ethanol from lignocellulose has not been proven to be economically viable (cellulosic ethanol not affordable, pdf 180kb), and the Bush energy bill assumes new scientific breakthroughs that have not occurred. Some new biofuel crops are toxic weeds which will have a destructive impact on wildlife and biodiversity around the world. In practical terms, there is not enough usable land area to grow a sufficient quantity of biofuel plants to meet the world's energy demands. Even if the USA dedicated 100% of our corn and soybean production to biofuels, we would only satisfy 12% of gasoline demand and 6% of diesel demand. To quote Stuart Staniford, "The biofuel potential of the entire human food supply is quite a small amount of energy compared to the global oil supply - somewhere between 15 to 20% on a volumetric basis, so 10 to 15% on an energy basis." Every year the human race burns up the equivalent of 400 years worth of planetary vegetation in the condensed form of fossil fuels. How are we going to replace all that concentrated energy by growing biofuel crops on our desperately overpopulated, pure water starved little planet?

Growing algae to make biodiesel is being touted as a cure-all for all our biofuel problems, but we are still stuck with the fact that algae need solar energy to turn carbon dioxide into fuel. To make biodiesel, algae are used as organic solar panels which output oil instead of electricity. Research reports brag that algae can produce 15 times more fuel per acre of land than growing corn for ethanol, but that still means we would need approximately 30 million acres of concrete or plastic lined algae ponds to meet 100% of projected US automotive fuel usage by the year 2022.

It is shaping up to be a lot better than that and the use of rack suspended sleeves provides a high degree of process control also. Thirty million acres sounds like a lot, but is orders of magnitude different from the five hundred million acres needed for plant oil. In fact the non agricultural lands of the west are more than suitable and sufficient to supply all the fuel oil we need.

A greenhouse closed system also allows recycling of the water. I also suspect that we produce a fifty-fifty oil/ solids product stream, and if we are really smart the solids can be used even as cattle feed or even indirectly as a source of sugar.

We are not too far away and right now our best ally is algae itself. The short life span allows a rapid cycle of experimentation. Thus a new protocol can be shaken out in months once undertaken. Therefore, I am very optimistic and with the greenhouses already built and operated, we are already into second generation production methodology.

Those algae schemes that use less land invariably call for feeding algae sugar. Sugar must be made from corn, beets, or other crop, so you are simply trading ethanol potential to make oil instead of vodka. If you grow genetically engineered super-algae in open-air ponds, the genetically modified algae will be immediately carried to lakes, reservoirs, and oceans all over the world in the feathers of migrating birds, with unknown and possibly catastrophic consequences. Using agricultural waste water for algae production is a good idea, but algae may be more logically used for making modest amounts of animal feed, as algae is very costly to turn into fuel.

Using agricultural "waste" to make biofuels has its own problems. Removing unused portions of plants that are normally plowed under increases the need for nitrogen fertilizers, which release the most potent greenhouse gas of all; nitrous oxide. Much of the residual crop biomass must be returned to the soil to maintain topsoil integrity, otherwise the rate of topsoil erosion will increase dramatically. If we mine our topsoil for energy, we will end up committing slow agricultural suicide like the Mayan Empire. Without topsoil, the world starves! Using wood chips to make ethanol sounds like a good idea until you remember that we currently use wood to make pellet fuel for stoves, paper, particle board, and a thousand and one building products. Every part of the trees we cut down for lumber are used for something, including the bark which is used for garden mulch. The idea of sending teams of manual laborers into forests to salvage underbrush for fuel would be prohibitively expensive. Our forests are already stressed just producing lumber without tasking them with producing liquid biofuels for automobiles, a scheme which will inevitably drive up the price of everything made from wood, creating yet another resource crisis."

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Please visit my page on biofuels, "The biofuel hoax is causing a world food crisis!" at:

http://home.att.net/~meditation/bio-fuel-hoax.html

You can find the latest biofuel disaster news at

http://home.att.net/~meditation/biofuel-news.html

Christopher Calder

Searchinger and Fargione on Biofuels

I am posting this review article from World Changing Team by Patrick Mazza because it fully covers current efforts surrounding biofuels. This is an area that I have largely avoided because the strategy of converting food crops into transportation fuels is a case of too little and too late to actually do a lot of good.

My reservations regarding the conversion of cellulose to usable sugars and thus on to ethanol are centered on the sheer difficulty of doing this successfully in an industrial setting anytime soon. However, termites do it somehow, so perhaps it will eventually work.

I am much more encouraged with the rapid progress seen in early work on algae. This appears capable of hugely surpassing any other method in terms of deliverable fuel on a per acre basis and can even be simply deployed in the deserts.

And I would really like to see all that corn stover turned into biochar directly netting 1 to 2 tons into the soil while preserving the nutrient profile and creating terra preta soil.

What I find most difficult with current corn culture practice is the utter necessity to feed both energy and large amounts of nutrients to that particular monkey as compared to almost any other crop. Integrating terra preta promises to resolve this problem by simply converting the waste into a non-degrading soil additive that preserves most of the nutrients in the top soil. This is genius that made the rainforest soils of the Amazon sustainable to this day, while surrounded by untreated soils that could not be farmed for more than three or four years.

Growing Sustainable Biofuels: Common Sense on Biofuels

WorldChanging Team

March 3, 2008 3:53 PM

By Patrick Mazza

Biofuels received a fresh surge of bad publicity with recent publication of two studies in Science that looked at the greenhouse gas releases caused by land use changes connected to biofuels production.

The studies make complex and nuanced statements that were predictably mangled by the press, with headlines easily interpreted as a general condemnation of biofuels. Typical was the New York Times, “Biofuels Deemed a Greenhouse Threat,” The studies were creating new uncertainties even among biofuels supporters and tipping others toward a skeptical position. At very least the studies add to substantial public perception problems facing biofuels.

So it is crucial to line out exactly what the studies say, what they do not say, and what the critics are saying about the studies.

THE SEARCHINGER STUDY

The two studies appeared in the Feb. 7, 2008 of Sciencexpress. The first is by Timothy Searchinger et al, “Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land Use Change.” Here is what it says:

• Prior studies “have failed to count the carbon emissions that occur as farmers worldwide respond to higher prices and convert forest and grassland to new cropland to replace the grain (or cropland) diverted to biofuels.”

• The study models an increase in U.S. corn ethanol of 56 billion liters above projected 2016 production levels. This would divert 12.8 million hectares of U.S. corn production to ethanol, bringing 10.8 million hectares of new cropland into cultivation, primarily in Brazil, China, India and the U.S.

• The study assumes that land converted to farming will release 25 percent of its soil carbon, an average of 351 metric tones per hectare.

• Employing a standard GREET model lifecycle analysis which assigns a 20 percent greenhouse gas reduction to corn ethanol compared to gasoline before indirect land use changes, researchers calculated that it would take 167 years to pay back soil carbon losses. Based on this researchers calculate that corn-ethanol would emit double the greenhouse gases of gasoline over the first 30 years after 2016.

• Cellulosic ethanol has far lower net emissions of greenhouse gases. But if switchgrass feedstock crops replace corn, the displacement effect would still require a 52-year carbon payback period.

• The study assumes average corn yields will stay the same. Researchers constructed a more positive scenario in which corn yields increase 20 percent, soil carbon emissions are only half of their estimates, and corn ethanol before land use changes reduces emissions 40 percent compared to gasoline. That scenario would reduce carbon payback time to 34 years.

It is important to specify that the Searchinger study does not say that current corn ethanol production increases greenhouse gases (GHGs). Its findings reflect land use changes tied to an increase in U.S. corn ethanol production approximately six times that of today.

THE FARGIONE STUDY

The second study, “Land Clearing and Biofuel Carbon Debt,” by Joseph Fargione et al examines direct impacts of land clearing for biofuels crops. In other words, this is not about displacing food production, but about opening entirely new lands for biofuels feedstock growing. It gives carbon payback times for the following land conversions:

• Southeast Asian tropical rainforest to palm biodiesel – 86 years.

• Southeast Asian peatland rainforest to palm biodiesel – 423 years.

• Brazilian tropical rainforest to soy biodiesel – 319 years.

• Brazilian wooded Cerrado to sugarcane ethanol – 17 years.

• Brazilian grassland Cerrado to soy biodiesel – 37 years.

• US Midwest grassland to corn ethanol – 93 years.

• US Midwest conservation reserve lands to corn ethanol – 48 years.

• US Midwest conservation reserves to cellulosic ethanol – 1 year.

• US marginal croplands to cellulosic ethanol – no carbon payback time.

WHAT THE CRITICS SAY ABOUT THE STUDIES

Key U.S. biofuels lifecycle researchers weighed in with a series of critiques of Searchinger et al. Michael Wang of Argonne National Laboratory, developer of the GREET model, and Zia Haq of the US Department of Energy Biomass Program, gave these responses:

• Searchinger et al “correctly stated that the GREET model includes GHG emissions from direct land use changes associated with corn ethanol production.”

• Argonne and other organizations are already updating their models to reflect indirect land use conversions.

• The corn ethanol growth figures used by Searchinger correlate to 30 billion gallons a year of production by 2015. However, the new federal renewable fuel standard caps corn ethanol production at 15 billion annual gallons. The Searchinger study “examined a corn production case that is not relevant to U.S. corn ethanol production in the next seven years.”

• It is incorrect to assume no growth in corn yields. Yields have increased 800 percent over the past 100 years, and 1.6 percent annually since 1980. They could well gain two percent annually through 2020 and beyond.

• Searchinger does recognize that corn ethanol production also yields produces Distillers Grain and Solubles (DGS) animal feed byproducts but underestimates its protein value. Thus the study lowballs the contribution of coproducts by at least 23 percent, which drives up their estimates of farmland needed to replace feed corn.

• “There has also been no indication that U.S. corn ethanol production has so far caused indirect land use changes in other countries because U.S. corn exports have been maintained at around two billion bushels a year and because U.S. DGS exports have steadily increased in the past 10 years… It remains to be seen whether and how much direct and indirect land use changes will occur as a result of U.S. corn ethanol production.”

• Wang and Haq cite a 2005 Oak Ridge National Laboratory on cellulosic potentials. “With no conversion for cropland in the United States, the study concludes that more than one billion tons of biomass resources are available each year from forest growth an byproducts, crop residues and perennial energy crops on marginal land. In fact, in the same issue of Sciencexpress as the Searchinger at al study is published, Fargione et al show beneficial GHG results for cellulosic ethanol.”

Another critique comes from David Morris of the Institute for Local Self-Reliance:

• “The vast majority of corn that will be grown in 2008 will be on land that has been in corn production for many years, perhaps for generations.”

• Future corn ethanol plants will achieve 2-4 times greater GHG emissions reductions than the GREET model estimates by converting to renewable energy, while future gasoline from unconventional sources such as tar sands will produce 30-70 percent more GHGs.

• No-till cultivation of corn adds 0.4-0.6 tons of soil carbon annually, which “would offset at least part of the carbon losses from bringing new land into production.”

• Of 14 million new acres of U.S. corn cultivation in 2008, 60 percent came from soybeans, 97 percent of which goes into animal feed. Because of the DGS coproduct, only a fraction of an acre of soybeans are needed to replace an acre of corn.

• Even with 14 million acres of increased U.S. corn production in 2008, “the likely overall conclusion is that as of early 2008, ethanol production continues to reduce greenhouse gases.”

• Most land conversion is due to urban and suburban development, are 2.2 million acres per year.

SYNTHESIS: TOWARD LOW CARBON FUELS

Searchinger et al is a scenario of future ethanol growth rather than an assessment of biofuels use today. The researchers base their scenarios on an assumption virtually all observers believe is unlikely, 30 billion gallons per year of corn ethanol – 15 billion annual gallons is generally regarded as the peak, and that is why it is embodied in the federal fuels standard. The Searchinger study does seem to tend toward more pessimistic conclusions about ethanol efficiency and farm productivity, and is built on modeling assumptions about land use conversion for biofuels rather than observed real world experience. Nonetheless, both Searchinger and Fargione send a strong signal that we must take into account of the whole system by which a new economic sector is created – bioenergy. That has to account for indirect as well as direct land use impacts.

This understanding is already being developed. In fact, while the new studies came as a shock to many, they were no surprise to people who have been working in the sustainable biofuels arena. As a result of advocacy by Natural Resources Defense Council and other green groups, the new federal Renewable Fuels Standard contains greenhouse gas criteria. Corn ethanol must yield a 20 percent reduction. Cellulosic ethanol must reduce emissions 60 percent and other advanced biofuels 50 percent. The latter two represent 21 billion of the annual 36 billion gallon by 2022 standard. The lifecycle studies that measure emissions are mandated by law to include both direct and indirect land use impacts. The Environmental Protection Agency is now conducting those studies, which will be used in rulemaking to adopt the standard. (EPA can reduce goals 10 percent, for instance, corn ethanol to a net 10 percent GHG reduction.)

BOTH STUDIES POINT TO SUSTAINABLE BIOFUELS PATHWAYS

Contrary to the tone of much of the media coverage, neither of the studies counts out the potential environmental value of biofuels. Fargione’s results for cellulosic ethanol points to highly sustainable biofuels production pathways, though other considerations such as wildlife and water use must be taken into account.

“Degraded and abandoned agricultural lands could be used to grow native perennials for biofuel production which could spare the destruction of native ecosystems and reduce GHG emissions,” they write. “Diverse mixtures of native grasslands perennials growing on degraded soils, particularly mixtures containing both warm season grasses and legumes, have yield advantages over monocultures, provide GHG advantages from high rates of carbon storage in degraded soils, and offer wildlife benefits.”

One of the coauthors, David Tilman of the University of Minnesota, was lead author on a previous Science study (“Carbon-Negative Biofuels from Low-Input High-Diversity Grassland Biomass,” Dec. 8, 2006) which documented the environmental and productivity advantages of diverse perennials. They found that the gain in soil carbon as grasses sink deep roots more than makes up for all greenhouse gas releases in the full bioenergy lifecycle.

Fargione et al found other sustainable feedstock options: “Monocultures of perennial grass and woody species monocultures also offer GHG advantages over food-based crops, especially if sufficiently productive on degraded soils, as can slash and thinnings from sustainable forestry, animal and municipal wastes, and corn stover.”

The Searchinger study also points to sustainable options: “This study highlights the value of biofuels from waste products because they can avoid land use change and its emissions. To avoid land use change altogether, biofuels must use carbon that would reenter the atmosphere without doing useful work that needs to be replaced, for example, municipal waste, crop wastes and fall grass harvests from reserve lands. Algae grown in the desert or feedstock produced on lands that generate little carbon today might also keep land us change emissions low, but the ability to produce biofuels feedstocks abundantly on unproductive lands remains questionable.”

That last point does raise a prospective dilemma – Marginal farmland is marginal typically because it sustains lower productivity, and whether such lands can produce enough biomass per acre to be economically feasible is indeed questionable. But if farmers are financially rewarded for growing soil carbon as well as bioenergy feedstocks, biomass production could be lower. This combined growing of bioenergy and biocarbon might well be what it takes to provide incentives for both.

Today U.S. biofuel production centers on the Midwest, where well above 90 percent of all U.S. biofuels feedstocks are grown in corn fields. The Searchinger study focuses on the impacts of corn ethanol. It would be ironic if the new studies were taken as a signal to shut down biofuels development, since biofuels feedstocks in other U.S. regions will primarily come from sustainable feedstocks identified in the Searchinger and Fargione studies – waste streams, cellulose crops and algaes. For areas that have limited corn production capacity, such as the Northwest, these represent the prime biofuels opportunities. If anything, the new studies indicate a need for accelerated development of these new feedstocks and production technologies to take advantage of them.

Part 2 of “Common Sense on Biofuels” will cover the larger contexts of oil, food, carbon and politics that are shaping biofuels growth.

This is part of a series of articles on Growing Sustainable Biofuels by Climate Solutions Research Director Patrick Mazza, . Send comments to patrick@climatesolutions.org.

Termite Cellulose Conversion Research

Picked up another bit of encouraging news in the press today. A group of scientists have begun the process of determining how termites digest wood. So far they have separated out a potpourri of enzymes from the insects gut that must be responsible for the breakdown of wood cellulose. This is work that I can support whole heartedly even though it is a very beginning.

As I have already posted, the best method currently available to upgrade a wood based feedstock is to use slow pyrolysis to produce a black acidic liquid at a 70% yield. It looks like oil but it is not. For it to be usable, additional reforming would be needed, and the silence on that subject is not promising. The only positive benefit that I can see using that method is ease of transportation. All this reforming and chemical processing begs the question of actual process energy efficiency.

Yet wood chips are the one biological feedstock that is sufficient to our needs, actually need to be collected in order to properly maintain the health and vigor of our woodlands and forests, and also collects nutrients from deep down that can then be put into our croplands.

And the really frustrating aspect of this feed stock is that cellulose is a molecule produced chemically from long chains of tied together glucose molecules. The fact is that our forests are arguably forests of almost one hundred percent sugar and water that we cannot touch at the moment. Anything that successfully releases that sugar immediately allows the conversion of those sugars into alcohol and thus into ethanol fuel. This can be a wonderful fix to our pending loss of fossil fuel as a transportation energy source.

Simply allowing the material to rot releases the bulk of the material back into the atmosphere as CO2 without any serious gain to ourselves. The soil gain is actually comparatively negligible although this seems to go against common sense. That is why we would like to at least convert a lot of it into charcoal in order to use it as a near surface nutrient sponge.

Now we have a biological research strategy that could actually take us to an industrial production protocol that is capable of converting the global wood chip feed stock that can be readily produced through simple good forest management into a feed stock for ethanol.

Of course, the first painful step is to discover what path ways are been utilized by the digestive processes of a termite. Their extraordinary high efficiency is very compelling and that suggests that the reaction pathway will turn out to be super efficient when we actually can replicate it in a bottle. My only comment is to wonder that no one has tried this already or even done some of the basic research. Of course, there may be an extensive literature out there and we are actually seeing ongoing work been trumpeted as a new idea.

Back in the middle of the twentieth century, it was not uncommon for scientists chasing a new idea to first quietly go to the various scientific journals produced in the late nineteenth century in German to make absolutely sure it was not a new idea. Those boys had a head start on everybody when it came to chemistry and the depth to explore a lot of avenues.

I will be looking for more literature on this subject because it is very important to the future of agriculture and fuel production.

Fuel and Algae

We are now coming to grips with the reality of the end of cheap oil and the ultimate rationing and reallocation of oil resources to highest and best usage. If transportation could be shifted onto another protocol, then we will gain hugely by the simple diversion of oil to the petrochemical business. There would be enough supply to last a fully developed global economy a very long time.

This means that it is time to revisit the promise of algae production. First off, certain stains of algae produce a huge amount of biological oil and can be easily stimulated to do even better. It has been calculated that while the best oil seed can produce around 1000 liters per hectare, algae can produce 10,000 liters per hectare. This is both huge and extremely compelling. Obviously a major investment in product development is called for.

It also appears likely that the by product dry or wet can be fairly easily made into a feedstock for ethanol production. And the combination of ethanol and the biological oil is a viable diesel fuel in its own right without even further processing. of course, it will be better to do some form of fractionation to split out higher valued components. It is just not necessary.

At the present, the cheerleaders of this technology are thinking of placing this technology out in the deserts were a few thousand square miles will readily supply all our fuel needs. I doubt that would be a good idea.

The practical solution will be to develop the economic model around a farm gate. After all you require the hands on maintenance and growing expertise that an experienced farmer can provide.

If we imagine a 2 hectare algae growing facility, perhaps using inexpensive vinyl tubes with a three foot diameter to hold the working medium as I have seen demonstrated, then we can model the necessary handling equipment and resources. Fertilizer and nutrients need to be continuously introduced and product will need to be removed at the rate of perhaps 2 tons per month.

That is still quite a little facility. The two tons will need to be squeezed for oils and the byproduct will have to be placed into a fermenting vat for several days. However that two tons is very transportable using the equipment every farmer has available.

The important thing is that this can be completely within the parameters of any working farm and particularly those farms that are under utilizing the land resource because their principal business is growing a chickens (for example). This would interfere very little with the demands of such an operation.

And the gross revenue will be ten times that experienced with any other oil crop. That is very attractive. Even at ten cents a liter earned that is still still double the return on any other oilseed crop.

100 miles per gallon

The only short term fix available to us in the face of that $500 fill up is to convert to a automotive system that gets 100 miles to the gallon as a minimum. a huge effort is now underway to achieve just that. I am even getting feedback off the street that is even more optimistic.

A three to four times improvement in mileage in the face of a three to four times improvement in fuel prices is consumer neutral in terms of economic impact. And our current supplies are then easily extended for decades since we can then shift over to an ethanol blend over the next two decades. The ethanol can be produced as a derivative of algae production so that agriculture is not disrupted.

This is an apparently viable strategy and certainly the least disruptive. If however, we get a rapid shift to the high end in price, then I expect that we will see a forced conversion of the global automotive fleet over a very short time period. First downsizing to better mileage vehicles followed by a slow increase as general efficiency rises. Amazingly enough, that suggests that the automotive industry will enter boom times as everyone shortens their trade in cycle. I never though that I would be saying that about the most mature industry we have.

Buy Gm?

Revealing report on Algae project

This provides an excellent review of the promise of algae. The protocol used is also easily removing the other combustion products, which if true is very happy news.

Without question, we need an easier way to generate ethanol than using food or fighting with cellulose. This has the huge additional advantage of been very suitable for power plants and the desert. Converting algae into the three usable streams of oil, ethanol and complex organic waste is an extremely promising first step and is likely very forgiving.




Click here to read this story online:
http://www.csmonitor.com/2006/0111/p01s03-sten.html

Headline: Algae - like a breath mint for smokestacks
Byline: Mark Clayton Staff writer of The Christian Science Monitor
Date: 01/11/2006

BOSTON - Isaac Berzin is a big fan of algae. The tiny, single-celled plant, he says, could transform the world's energy needs and cut global warming.

Overshadowed by a multibillion-dollar push into other "clean-coal" technologies, a handful of tiny companies are racing to create an even cleaner, greener process using the same slimy stuff that thrives in the world's oceans.

Enter Dr. Berzin, a rocket scientist at Massachusetts Institute of Technology. About three years ago, while working on an experiment for growing algae on the International Space Station, he came up with the idea for using it to clean up power-plant exhaust.

If he could find the right strain of algae, he figured he could turn the nation's greenhouse-gas-belching power plants into clean-green generators with an attached algae farm next door.

"This is a big idea," Berzin says, "a really powerful idea."

And one that's taken him to the top - a rooftop. Bolted onto the exhaust stacks of a brick-and-glass 20-megawatt power plant behind MIT's campus are rows of fat, clear tubes, each with green algae soup simmering inside.

Fed a generous helping of CO2-laden emissions, courtesy of the power plant's exhaust stack, the algae grow quickly even in the wan rays of a New England sun. The cleansed exhaust bubbles skyward, but with 40 percent less CO2 (a larger cut than the Kyoto treaty mandates) and another bonus: 86 percent less nitrous oxide.

After the CO2 is soaked up like a sponge, the algae is harvested daily. From that harvest, a combustible vegetable oil is squeezed out: biodiesel for automobiles. Berzin hands a visitor two vials - one with algal biodiesel, a clear, slightly yellowish liquid, the other with the dried green flakes that remained. Even that dried remnant can be further reprocessed to create ethanol, also used for transportation.

Being a good Samaritan on air quality usually costs a bundle. But Berzin's pitch is one hard-nosed utility executives and climate-change skeptics might like: It can make a tidy profit.

"You want to do good for the environment, of course, but we're not forcing people to do it for that reason - and that's the key," says the founder of GreenFuel Technologies, in Cambridge, Mass. "We're showing them how they can help the environment and make money at the same time."

GreenFuel has already garnered $11 million in venture capital funding and is conducting a field trial at a 1,000 megawatt power plant owned by a major southwestern power company. Next year, GreenFuel expects two to seven more such demo projects scaling up to a full pro- duction
system by 2009.

Even though it's early yet, and may be a long shot, "the technology is quite fascinating," says Barry Worthington, executive director of US Energy Association in Washington, which represents electric utilities, government agencies, and the oil and gas industry.

One key is selecting an algae with a high oil density - about 50 percent of its weight. Because this kind of algae also grows so fast, it can produce 15,000 gallons of biodiesel per acre. Just 60 gallons are produced from soybeans, which along with corn are the major
biodiesel crops today.

Greenfuel isn't alone in the algae-to-oil race. Last month, Greenshift Corporation, a Mount Arlington, N.J., technology incubator company, licensed CO2-gobbling algae technology that uses a screen-like algal filter. It was developed by David Bayless, a researcher at Ohio
University.

A prototype is capable of handling 140 cubic meters of flue gas per minute, an amount equal to the exhaust from 50 cars or a 3-megawatt power plant, Greenshift said in a statement.

For his part, Berzin calculates that just one 1,000 megawatt power plant using his system could produce more than 40 million gallons of biodiesel and 50 million gallons of ethanol a year. That would require a 2,000-acre "farm" of algae-filled tubes near the power plant. There are nearly 1,000 power plants nationwide with enough space nearby for a few hundred to a few thousand acres to grow algae and make a good profit, he says.

Energy security advocates like the idea because algae can reduce US dependence on foreign oil. "There's a lot of interest in algae right now," says John Sheehan, who helped lead the National Renewable Energy Laboratory (NREL) research project into using algae on smokestack
emissions until budget cuts ended the program in 1996.

In 1990, Sheehan's NREL program calculated that just 15,000 square miles of desert (the Sonoran desert in California and Arizona is more than eight times that size) could grow enough algae to replace nearly all of the nation's current diesel requirements.

"I've had quite a few phone calls recently about it," says Mr. Sheehan. "This is not an outlandish idea at all."

Celluose conversion

The fundamental roadblock that we face in the conversion to an ethanol based fuel economy is the economic conversion of cellulose feed stocks into firstly glucose and then ethanol. We actually understand how this is done - see the link for a quick explanation.

There is no lack of various feed stocks even if once again we lean on corn stalks. Every individual feedstock will present their own individual conversion issues which will obviously impact on the cost. On average though, fifty percent of the feed stock will be separable as cellulose, leaving lignins and other byproducts. This feed stock can then in theory be converted to glucose. After all, a cow does just that.

There exists a great deal of current optimism that this is achievable. I am personally very cautious in this regard. We have not lacked major research on this problem over the past century. It has been a valuable option from the beginning of organic chemistry. And the results have been unsatisfactory.

The difficulty is that we now need to economically solve this problem for a wide range of feed stocks. We can sort of do it at a high cost. Can we bring this cost down?

We already know that half of any feedstock is not cellulose. We can also expect that the recoverable portion after a chemical soak will be perhaps eighty percent of the available cellulose. Thus a first major cost will be the neutralization of the chemical soak, dehydration of the waste and its carbonization. And the volumes exceed that of the produced cellulose. We are looking at a sixty - forty split of waste and product.

Then, with our current knowledge we treat this cellulose with expensive enzymes to produce glucose. At that juncture, we are then able to do classic fermentation and alcohol production. This all promises to be a ghastly technical headache and has been to date.

What we obviously require is a handy microbe that loves dead plant material and does all this for us, including the production of alcohol. It still promises to be an incredibly slow production system. One envisages large vats of wood chips with a sprinkler recycling fluids for months on end. Not an attractive plan and the need for profitability ensures a catastrophic price for the end product.

So yes, we can see how it could work. Right now, the likely cost base means it will be anything but cellulose first.

Transportation Energy.

One thing that I have not addressed is the looming reconfiguration of the global transportation energy regime. This is something that we are all now feeling at the pumps.

First, however, the global demand for non-transportation energy is also huge. Suppling it is not technically difficult. Our failsafe and most reliable source will be simply tapping the heat of the earth and pumping that energy to the surface and putting it through a converter. It has not been cheap enough as yet, or more precisely, there have been plenty of cheaper sources to use such as dams, coal fired power plants and the like. Accessing that energy is simply a matter of drilling deep enough almost anywhere which the oil industry has plenty of experience doing.

In other words., as long as we are not demanding portability, we have absolutely nothing to worry about.

That is not true for the petroleum regime.We have burned one trillion barrels of oil and we may have three to four times that ultimately recoverable at great expense. In other words. unlike geothermal energy, the resource is truly finite and finite inside a human lifespan, now that all the human race is modernizing as fast as possible.

One third the global population is comfortably middle class, another third will be there in the next twenty years and the rest can be there in the next twenty depending on their political masters. And they all need some access to personal transportation at some level.

A huge amount of effort has gone into developing other energy storage technology with marginal success to date. We cannot today depend on a breakthrough to help us.

The best available energy storage device is still the hydrocarbon molecule. It is compact, fairly safe and very portable. That is why we use it. The next best alternative is the ethanol molecule which is alcohol from fermented sugar. And the cheapest source of that sugar is corn.

The point that I am making is that a global corn culture combined with carbon sequestration of the waste is capable of supplying the maximum bio available fuel. I do not know if that could be enough to exactly satisfy our actual needs.

On the other hand, it is trivial to re engineer our life ways to minimize the demand on transportation fuels. Simply ensure that personal use of a car is not the first or only option. Over time, price alone will largely do that with the application of a little common sense by the planners.

It would not be surprising to discover that we can easily live within our ethanol fuel budget even with a global population over ten billion.