Ethanol, Shmethanol, get used to riding a bike

Thomas Jeffers & Co., LLC
November 9, 2006

Transportation fuels, for the most part, must be in liquid form. We don’t have a shortage of coal, shale, or bitumen, but we cannot run our transportation infrastructure on them. We need LIQUID fuels to run our cars, trucks, buses, most trains…

Europe, which to it’s credit has gotten out in front on this issue, is not making the cut on using biofuels such as ethanol for its transportation needs.

“The European Union will probably miss a 2010 target to use more alternative fuels, the second time it will fall short in five years, said Hans van Steen, an EU official in charge of promoting renewable energy.
The EU wants biofuels to account for an average of 5.75 percent of transport fuel by 2010, Van Steen told the F.O. Licht World Ethanol Conference in Amsterdam today. The EU set a target of 2 percent for 2005, and member states averaged 1 percent, he said. Biofuels are made from corn, sugar or vegetable oils. The European Union will probably miss a 2010 target to use more alternative fuels, the second time it will fall short in five years, said Hans van Steen, an EU official in charge of promoting renewable energy.
The EU wants biofuels to account for an average of 5.75 percent of transport fuel by 2010, Van Steen told the F.O. Licht World Ethanol Conference in Amsterdam today. The EU set a target of 2 percent for 2005, and member states averaged 1 percent, he said. Biofuels are made from corn, sugar or vegetable oils.” Bloomberg.com “EU Expects to miss a second date for using biofuels”.

(If there is no pressing problem with future oil supplies, why the push into biofuel liquids?)

It is not that they are not using ethanol, they are, for 1% of their current fuel needs. A big problem is getting the ethanol system to scale. A bigger problem is the amount of fossil fuels used as inputs into the ethanol process contains nearly the same amount of energy as the final ethanol product.

Think about it. How do we grow corn? First we bring in big equipment to clear a field – and what does that equipment run on? Fossil fuels, not ethanol. What energy input was used in manufacturing the equipment? Fossil fuels. What about fertilizing, pesticides, sowing, harvesting, irrigating, processing, and then transporting said corn to the ethanol plant. At each stage of the process fossil fuels were consumed, and the energy from these fossil fuel inputs must be added up and compared to the total energy of the finished ethanol product. Why on earth would anybody do all that work if 1000 units of fossil fuel energy are consumed in order to generate ethanol containing 1000 units energy? Especially when corn prices are at 20-year highs on declining supply and increasing demand? This problem is called the Energy Returned on Energy Invested model, (“ERoEI”)

“Chicago Board of Trade December corn prices hit a new contract high Wednesday at $3.67 a bushel. At 2:00 p.m. EST, December corn was trading at $3.60, representing a gain of nearly 50% since mid-September.” Cattle Network 11.8.06

Let me repeat – a 50% increase in the price of corn in 2 months. Wheat is up 55% this year, and rice is not far behind. These three foodstuffs contribute, directly and indirectly, the majority of the world’s caloric intake. The potential impact on inflation should food prices start competing directly with fuel prices for product is problematic, if I may risk the use of understatment.

There are no easy answers to our energy dilemma. Perhaps one day we will solve the ethanol ERoEI problem, but not today. As I have said many times in previous posts, people will prefer eating to driving. The next time you see some “happy story” on ethanol in the media remember the ERoEI equation – and then wonder who is trying to BS you.

Greg Jeffers

Mentatt (at) yahoo (dot) com