Ethanol and the Quest for Energy Independence

Recently, the United States has pushed for new energy sources to fuel our transportation sector and the overall economy. Ever since the oil crisis of the 1970s, the country’s dependence on foreign petroleum has been evident. Since then, a growing portion of our energy sector has come from corn ethanol. This growth has mostly been due to policies the US government has implemented over the past 10 years in order to achieve energy independence in a way that is sustainable and environmentally friendly. While the US has only recently started implementing these policies, Brazil has already achieved energy independence through their use of sugar cane ethanol.

With the passage of the Energy Policy Act in 2005, all gasoline retailers were mandated to blend 7.5 billion gallons of ethanol made from corn annually by 2012. This was called the Renewable Fuel Standard. Its main purpose was to reduce greenhouse gas emissions, decrease reliance on foreign oil supplies, and create jobs (mostly in the agricultural sector). Two years later, the Energy Independence and Security Act of 2007 was passed which ratcheted up the ethanol mandate to blending 13.2 billion gallons of corn-based ethanol by 2012 and rising to 36 billion gallons by the year 2022.

Congress sensed the challenge this mandate would pose and proposed the Domestic Alternative Fuels Act in January 2012 which had bipartisan support. This act would allow sources other than corn to be used in ethanol production. This bill received a huge amount of backlash from corn farmers, agribusiness and its stakeholders because the legislation would loosen their foothold in the biofuel industry.

Brazil has come a long way on its journey to energy independence, however it can be seen as somewhat of an anomaly. The US has had some success in using ethanol and biofuels but hasn’t achieved the level of independence Brazil has. This can be attributed to more favorable conditions in Brazil such as vast amounts of fertile land, government policies, and heavy investment in infrastructure.

The main push for Brazil’s energy independence came back in the 1970s when oil prices increased at an unprecedented rate and countries realized how susceptible they were to the swings in the global oil market. Following the crisis, the Brazilian government looked towards other solutions to help the country be less susceptible to the unpredictability of the global oil market. The answer came in the form of a crop that they had already been producing and exporting for decades: sugarcane. In 1975, ProAlcool (Programa Nacional do Álcool) was created by presidential decree. The purpose of this program was to utilize Brazil’s robust sugarcane industry to produce ethanol for the purpose of fueling automobiles.

The first part of this strategy was a mandate that by the year 1980, 3.5 billion liters of ethanol be produced annually. Along with this mandate came a large amount of subsidies to aid farmers in adding ethanol distilleries. This strategy would increase the ethanol supply so it would be widely available across the country. The second piece of their strategy was to forge an agreement with automakers in 1979 to start producing more cars that ran on ethanol. The government in turn launched a robust media campaign to inform the public on the benefits of these new flex-fuel cars.

While the US set some policies in reaction to the global oil crisis, the problem seemed to fade once oil prices stabilized and the American public turned their attention elsewhere. Brazil on the other hand maintained its resolve and implemented policies long after oil prices dropped. From what critics saw as just a short-term boost to Brazil’s sugarcane industry, emerged a comprehensive plan to reach the country’s energy independence goal.

Many parallels can be drawn between the US and Brazil on their quests to achieve energy independence. Even though these two countries are different on many economic, social, and geographical levels, we might be able to gain some insight from their policies and implementation methods in order to reach our goal here in the US.

Sources:

1. http://www.economist.com/node/21542431
2. http://www.nytimes.com/2004/12/18/business/worldbusiness/18iht-menergy_ed3_.html?_r=0
3. http://www.afdc.energy.gov/fuels/ethanol_fuel_basics.html
4. http://www.theecologist.org/News/news_analysis/1077685/our_sugarcane_is_greener_than_your_corn_brazil_takes_on_us_biofuel_industry.html
5. http://www.ibtimes.com/how-brazil-turned-ethanol-unique-success-1064308

Pictures:

1. http://www.planetforward.ca
2. http://www.usda.gov
3. Agence France-Presse – Getty Images

Gasohol, Take Two (the other white aliphatic-alcohol)

On January 5, 1981, President Jimmy Carter signed Executive Order 12261 – Gasohol in Federal Motor Vehicles. This was intended to increase the use of “gasohol,” which is roughly defined as a gasoline blend with 10% anhydrous ethyl alcohol “derived from biomass.”

Since then, use of ethanol in fuel consumption has risen dramatically:

EIA: US Fuel Ethanol Consumption since 1981

The reasons for increasing US use of ethanol in motor fuels range from energy independence and national security to reducing the Nation’s CO2 footprint. However, ethanol is not a direct substitute for gasoline, and there are technical challenges that restrict its use. High concentrations of ethanol can be corrosive and volatile, making it impractical to transport via pipeline and limited to use in vehicles that are made with corrosion resistant fuel systems. Further, ethanol contains only about two thirds of the energy content of gasoline.[1]

However, ethanol is not the only aliphatic alcohol we can burn. Butanol is a 4 carbon alcohol (C4H9OH vs ethanol’s C2H6O) that can be made from the same materials currently being used to produce ethanol in the US. BP and Dupont have formed a 50/50 venture to produce butanol (marketed as Butamax) and sell it as the preferred biofuel alternative.[2] Butamax expects to begin commercial production in 2014.

Unlike ethanol, butanol can be transported using existing fuel pipelines.[3] Also, the current stock of vehicular internal combustion engines could potentially run entirely on butanol, without the need to blend gasoline at all.[3]

Further, while ethanol has around 84K BTUs per gallon, butanol has 105K BTUs per gallon (which is much closer to the ~114K in a gallon of gasoline).[3],[4]

At present, it costs around 25% more to produce a gallon of butanol vs a gallon of ethanol, according to the Butamax CEO.[2] This should not be a cause of concern, because butanol yields 25% more BTUs per gallon. So, butanol currently costs around 2.96 cents per thousand BTU (same as ethanol), and gasoline (at $3.76/gal) is 3.3 cents per thousand BTU.[5],[6]

If Butamax and other producers are able to reduce that cost spread over the cost of ethanol as production scales up, then the price per BTU advantage over gasoline will continue to increase, and as a “drop-in” alternative – butanol may soon be every politician’s darling biofuel of choice.

[1] http://www.eia.gov/energyexplained/index.cfm?page=biofuel_ethanol_use#tab2

[2] http://energy.aol.com/2012/05/01/biofuels-producer-launching-ethanol-replacement

[3] http://peswiki.com/index.php/Directory:Butanol

[4] Gasoline Gallon Equivalent: http://en.wikipedia.org/wiki/Gasoline_gallon_equivalent

[5] AEO2012 EARLY RELEASE OVERVIEW. Table 12. Petroleum Product Prices. http://205.254.135.7/forecasts/aeo/er/tables_ref.cfm

[6] Daily National Average Gasoline Prices Regular Unleaded. http://www.bloomberg.com/quote/3AGSREG:IND

Food for thought. Or is it food for fuel?

The US and Brazil are the leading producers of ethanol fuel in the world.  In 2006, Brazil produced 52% of the world’s ethanol.   Both countries use their surplus food supply as fuel, however where the US relies on corn, Brazil relies in sugar cane.  Sugar cane is a much more efficient producer of ethanol than corn, and the left over cellulosic material can be also used to create power.  This makes it sustainable for them to continue to produce ethanol without drastically affecting the environment.

Brazil uses renewable fuels for 46% of their transportation needs.  Also, 90% of Brazil’s electricity comes from renewable sources (mainly hydroelectricity).  So, how were they able to do it and the US is lagging far behind on renewable production?  In 1975 during the energy crisis, Brazil was importing 80% of their fuel from foreign sources.  This caused the government to pass the National Alcohol Program which (1) required petrobras to purchase a required amount of ethanol, (2) provided $5 billion of low-interest loans to stimulate ethanol production, (3) provides subsidies that ensured ethanol price was 41% less than the price of gasoline, (4) required that all fuels must be E22 or higher.  In the 1980’s, when petroleum prices decreased, the Brazilian government still kept up with the ethanol project.  So now, over 30 years later, 70% of the new cars purchased are either flex fuel or pure ethanol prices.  Also, in 2006, Brazil became net energy independent.

However, this fuel may not be the end all answer.  It is still coming from a food source.  In the US, the increased production of ethanol based fuels has increased corn food prices.  Similarly, sugar prices have reached a 29 year high in 2009.  Since Brazil exports 41% of the world’s sugar needs, this price increase is likely based on a shortage of sugar supplies caused by increased ethanol production.   Also, is Brazil using slave labor to keep their rates low?  In 2007 the Brazilian government stepped in to save over 1000 slave laborers from a sugarcane plantation in the Amazon.   Finally, the increased production of sugar could have a negative impact on local ecosystems.

Overall, I’m not saying that ethanol is worse for the environment than gasoline, but it definitely has its drawbacks.  Brazil should be a role model to the US in terms of renewable energy, but they may also be the first to show the world the negative effects of farming fuel.

Sources:

http://news.bbc.co.uk/2/hi/science/nature/7420770.stm

http://www.ren21.net/globalstatusreport/gsr4d.asp

http://www.agmrc.org/renewable_energy/agmrc_renewable_energy_newsletter.cfm/brazils_ethanol_industry__part_two?show=article&articleID=19

http://www.ers.usda.gov/Briefing/Sugar/sugarpdf/EthanolDemandSSS249.pdf

Corn Ethanol and Ham Sandwiches

In recent years, there has been much discussion about the energy balance of certain biofuels, particularly corn ethanol, cellulosic ethanol, and biodiesel.  Scientists have attempted to establish, using life cycle analyses (LCA), the merits of these fuels–most importantly, their “energy balance” or “energy return on investment” and lifecycle greenhouse gas emissions reduction.

The energy balance of a product is defined as the energy content of the product minus the sum of all energy inputs required to produce the product.  For example, the process to convert one bushel of corn into ethanol requires direct inputs of heat and electricity.  However, it also requires secondary inputs such as diesel fuel to drive the tractor to harvest the corn, as well as energy to build the tractor.  These analyses get very complicated, and it is not clear where the “system boundary” should lie. Does the fuel for the tractor count as an input? Most definitely.  What about the energy content in the ham sandwich the hapless farmer ate for lunch? Maybe–but he has to eat whether or not he is harvesting corn.  Should we count the energy for the tractor to harvest the wheat to make the sandwich? Should we be doing energy balances on ham sandwiches? And if the energy in a ham sandwich is less than the sum of the energy inputs, should we stop making ham sandwiches?

Obviously the answer is no.  Ham sandwiches are delicious, and I like eating them.  I also like putting mayonnaise and mustard on my sandwiches, condiments with abysmally low energy content.  And, of course, drive to the grocery store to buy these things.

The upshot of all this is that people do not use energy–they use heat, light, mobility, and consumable products (like food and toilet paper), all of which require energy inputs.  Thus the energy balance is useful for determining how some goods compare with others, just like price.  It would be useful to compare the price of two supplementary goods (such as gasoline and ethanol) in deciding which one to purchase.  But it would be strange to arbitrarily decide that if a fuel costs more than $1/mile, then it is not an efficient option.

Critics of certain biofuels will often point to the energy balance calculation as the “smoking gun” that these fuels are inefficient and a waste of energy–or indeed, an evil plot perpetrated by the farm lobby, big business, or big government.  What they instead should do is compare the energy balance of ethanol with that of gasoline, a common substitute.  These same critics might be surprised to find out that it requires 1.19MJ of fossil energy to produce 1MJ of gasoline [1], resulting in a negative energy balance.  Corn ethanol, in comparison requires only .77MJ of fossil energy for 1MJ of corn ethanol [1], an improvement of 54%.  The energy balance calculation is therefore best viewed in a relative, rather than absolute sense to avoid confusion.

[1] Farrell, A. E.; Plevin, R. J.; Turner, B. T.; Jones, A. D.; O’Hare, M.; Kammen, D. M. Ethanol can contribute to energy and environmental goals. Science. 2006, 311, 506–508.