Alternative fuels or fools
Discussion
Listening to Radio NZ this afternoon while steaming back from the ranch in the bus (my excuse is my Ruts Babylons Burning CD turned out to be various tossers doing remixs of the classic. Bastards) and the last slot featured Alan Dick of NZ Driver commenting on how NZ should shift immediately to Ethanol. It's been a while since I've heard such uninformed piffle. We apparently could use pine trees to make ethanol because it's made from sugar. Right so the lignun and cellulose that a pine tree is mostly can be sprinkled with magic pixie dust to make it into sugar. Well for about 50 years no one has come up with any economically viable way to break down cellulose to sugars. Strike one.
He had driven a Saab in Australia running on pure ethanol, so apparently every car after the Model T can run on pure ethanol. As ethanol has half the fuel value per litre petrol has you MUST rejet carburated cars and hope like hell your injectors and exhaust gas sensor has enough capacity and tunability in your modern fuel injected car to get the poor engine to even idle. It requires more intake heat as well as it has a greater heat of vapourization. Strike two.
Apparently there is a bit more danger handling ethanol as it's not as safe as petrol. IT'S BLOODY VODKA YOU IDIOT. I assume he got methanol and ethanol confused. Strike three
We then got on to biodiesel and that has problems with solidifing. NO that why you take fats and oils, remove the trriglicerides and make biodiesel so it won't clog the fuel lines. Yes if you live in Alaska it will solidify so will diesel unless you use "winter blend"
Strike 47 you're out.
Ex Industrial chemist rant over.
Serious question how on earth does someone so ill informed survive in such a small country as NZ??
Cheers
Mark Stacey
He had driven a Saab in Australia running on pure ethanol, so apparently every car after the Model T can run on pure ethanol. As ethanol has half the fuel value per litre petrol has you MUST rejet carburated cars and hope like hell your injectors and exhaust gas sensor has enough capacity and tunability in your modern fuel injected car to get the poor engine to even idle. It requires more intake heat as well as it has a greater heat of vapourization. Strike two.
Apparently there is a bit more danger handling ethanol as it's not as safe as petrol. IT'S BLOODY VODKA YOU IDIOT. I assume he got methanol and ethanol confused. Strike three
We then got on to biodiesel and that has problems with solidifing. NO that why you take fats and oils, remove the trriglicerides and make biodiesel so it won't clog the fuel lines. Yes if you live in Alaska it will solidify so will diesel unless you use "winter blend"
Strike 47 you're out.
Ex Industrial chemist rant over.
Serious question how on earth does someone so ill informed survive in such a small country as NZ??
Cheers
Mark Stacey
This is an [abridged] interesting article re corn-based ethanol (which our govt has said is part of the solution):
It's promoted as the answer to energy independence.
It's touted as the solution to global warming. It's hyped as a way to actually clean our air. It's a bird... It's a plane...
It's corn-based ethanol. And unfortunately, it's a scam.
Okay, "scam" might be a little harsh. Let's just say ethanol is an inefficient alternative fuel that can't possibly live up to the hype.
The hype climaxed this past summer as the shares of every company even remotely involved in the production, transportation, or marketing of ethanol surged to all-time highs. The shares have since fallen back down to Earth. In fact, most of the stocks have given back as much as 60%-70% of their gains.
I was wrong.
The economics of the ethanol industry are simply not suitable for longer-term investing, say, five years or more. But first, let me tell you why the general furor over ethanol will be short-lived.
You see, creating ethanol involves taking feedstock – typically corn or grain – and heating it so that the sugar in the feedstock separates from the starch. Yeast is added to ferment the sugar to ethanol. Then the ethanol is distilled and the water is separated from the mixture through dehydration. It's a relatively simple process. But there are two main elements that make it inefficient from a cost/benefit perspective...
1. Using corn as feedstock is expensive: Corn is limited in supply, and there are other demands for it, such as a food source for humans and cattle. As the price of corn increases – and it's currently trading at record highs in the spot market – the cost of producing ethanol increases.
2. Natural gas is used to heat the feedstock to separate the sugars from the starch: This process uses about two-thirds of the amount of energy that ethanol generates. Many studies suggest that if you add to this the energy that it takes to grow and transport the grain, then ethanol just barely generates a bit more energy than it consumes.
Like I said, it's an inefficient alternative fuel. But don't bother telling that to the folks in Washington. They love the idea of ethanol. After all, in Washington, D.C., no bad idea goes unfunded.
When it comes to investing, politics do matter. The party that controls the legislature gets to decide which pet projects to invite indoors to lie down by the fire and which pets to kick to the curb. And, under the new regime in Washington, no pet is more spoiled than renewable energy – aka, ethanol.
Not that Republicans abused the creature. In fact, the ethanol industry benefited quite well from the Energy Policy Act of 2005. But under Democratic leadership, Congress likely will expand many of the act's mandates, such as the increased use of ethanol as a fuel additive. And that means it's boom time for the ethanol industry.
Already, companies including VeraSun, Pacific Ethanol, and Aventine Renewable Energy are announcing record revenues and record profits. But it won't last.
Here's why the spike in earnings is temporary: Markets work. It doesn't take long for a spike in demand to quickly be met by a spike in supply.
Record profits and revenues attract competition. Currently, 102 ethanol plants are in operation, 32 are under construction, and another 127 are in early planning stages, according to a recent Dow Jones article.
If all those proposed plants come online, they'll soon be producing about 16 billion gallons of ethanol per year. That's four times the 2005 level and more than twice the amount required by 2012.
It'll take about 5.7 billion bushels of corn – roughly three times the amount used in 2005 – to create that amount of ethanol. No wonder corn prices are at record highs.
And with corn prices at record highs, ethanol production is much less profitable.
So we're rapidly moving from a situation where oil companies were scrambling to buy ethanol at any price in order to comply with the MTBE replacement mandate to one where producers are flooding the market with about twice the supply to meet the required demand six years from now.
(c)2007 stansberryresearch.com
It's promoted as the answer to energy independence.
It's touted as the solution to global warming. It's hyped as a way to actually clean our air. It's a bird... It's a plane...
It's corn-based ethanol. And unfortunately, it's a scam.
Okay, "scam" might be a little harsh. Let's just say ethanol is an inefficient alternative fuel that can't possibly live up to the hype.
The hype climaxed this past summer as the shares of every company even remotely involved in the production, transportation, or marketing of ethanol surged to all-time highs. The shares have since fallen back down to Earth. In fact, most of the stocks have given back as much as 60%-70% of their gains.
I was wrong.
The economics of the ethanol industry are simply not suitable for longer-term investing, say, five years or more. But first, let me tell you why the general furor over ethanol will be short-lived.
You see, creating ethanol involves taking feedstock – typically corn or grain – and heating it so that the sugar in the feedstock separates from the starch. Yeast is added to ferment the sugar to ethanol. Then the ethanol is distilled and the water is separated from the mixture through dehydration. It's a relatively simple process. But there are two main elements that make it inefficient from a cost/benefit perspective...
1. Using corn as feedstock is expensive: Corn is limited in supply, and there are other demands for it, such as a food source for humans and cattle. As the price of corn increases – and it's currently trading at record highs in the spot market – the cost of producing ethanol increases.
2. Natural gas is used to heat the feedstock to separate the sugars from the starch: This process uses about two-thirds of the amount of energy that ethanol generates. Many studies suggest that if you add to this the energy that it takes to grow and transport the grain, then ethanol just barely generates a bit more energy than it consumes.
Like I said, it's an inefficient alternative fuel. But don't bother telling that to the folks in Washington. They love the idea of ethanol. After all, in Washington, D.C., no bad idea goes unfunded.
When it comes to investing, politics do matter. The party that controls the legislature gets to decide which pet projects to invite indoors to lie down by the fire and which pets to kick to the curb. And, under the new regime in Washington, no pet is more spoiled than renewable energy – aka, ethanol.
Not that Republicans abused the creature. In fact, the ethanol industry benefited quite well from the Energy Policy Act of 2005. But under Democratic leadership, Congress likely will expand many of the act's mandates, such as the increased use of ethanol as a fuel additive. And that means it's boom time for the ethanol industry.
Already, companies including VeraSun, Pacific Ethanol, and Aventine Renewable Energy are announcing record revenues and record profits. But it won't last.
Here's why the spike in earnings is temporary: Markets work. It doesn't take long for a spike in demand to quickly be met by a spike in supply.
Record profits and revenues attract competition. Currently, 102 ethanol plants are in operation, 32 are under construction, and another 127 are in early planning stages, according to a recent Dow Jones article.
If all those proposed plants come online, they'll soon be producing about 16 billion gallons of ethanol per year. That's four times the 2005 level and more than twice the amount required by 2012.
It'll take about 5.7 billion bushels of corn – roughly three times the amount used in 2005 – to create that amount of ethanol. No wonder corn prices are at record highs.
And with corn prices at record highs, ethanol production is much less profitable.
So we're rapidly moving from a situation where oil companies were scrambling to buy ethanol at any price in order to comply with the MTBE replacement mandate to one where producers are flooding the market with about twice the supply to meet the required demand six years from now.
(c)2007 stansberryresearch.com
Edited by darren on Wednesday 14th February 08:29
There was a documentary on the tv a while ago about a community in the USA whose farms were all going broke because they couldn't make enough money from their land no matter what they grew be it livestock or crops. They came up with the idea of growing corn to turn into Ethanol which is used in the states as a mixer with petrol. Their company was very successful and since the documentary was filmed they have shifted from corn to some other plants (can't remember what but I think it was some sort of grass or flax) that is cheaper to grow, easier to process and produces almost the same amount of ethanol.
The vast majority of people in positions of power in NZ are clueless when it comes to these sorts of issues so why are you suprised?
I think there is obviously a lot of hype about this but in terms of a short-term reduction in polution it's got some merit. I think the idea of getting some 85% petrol/ethanol at the service stations is a good idea and realistically it could be done within a year or two to make it viable.
My main concern is if ethanol becomes THE fuel what do you think will happen to the rain forests etc? People will cut them down to grow corn/beet/cane/flax to feed the demand. OK, so it may make a bit of a different in carbon emmissions but it's not really helping the environment long-term is it?
I do like the idea of being able to grow some corn on my 5 acres and swapping it for fuel vouchers - that could be a good scheme. There's a lot of land in NZ not being used for much that could be put to good use!
The vast majority of people in positions of power in NZ are clueless when it comes to these sorts of issues so why are you suprised?
I think there is obviously a lot of hype about this but in terms of a short-term reduction in polution it's got some merit. I think the idea of getting some 85% petrol/ethanol at the service stations is a good idea and realistically it could be done within a year or two to make it viable.
My main concern is if ethanol becomes THE fuel what do you think will happen to the rain forests etc? People will cut them down to grow corn/beet/cane/flax to feed the demand. OK, so it may make a bit of a different in carbon emmissions but it's not really helping the environment long-term is it?
I do like the idea of being able to grow some corn on my 5 acres and swapping it for fuel vouchers - that could be a good scheme. There's a lot of land in NZ not being used for much that could be put to good use!
Aye, Well, Hmm.
Ethanol as a fuel, even with the current high cost of petrol, requires subsidies . Some of the problems are you need big areas of land and the processing eats a lot of the energy content. Converting corn into ethanol in the USA is basically a farm subsidy program for corporate or large scale farmers.
Biodiesel has less energy used in it's conversion from plant oil to liqid fuel.
My rant's point was not so much the practicality just that the so called National Radio expert didn't have a clue about the basics involved.
Cheers
Mark Stacey
Ethanol as a fuel, even with the current high cost of petrol, requires subsidies . Some of the problems are you need big areas of land and the processing eats a lot of the energy content. Converting corn into ethanol in the USA is basically a farm subsidy program for corporate or large scale farmers.
Biodiesel has less energy used in it's conversion from plant oil to liqid fuel.
My rant's point was not so much the practicality just that the so called National Radio expert didn't have a clue about the basics involved.
Cheers
Mark Stacey
Mark, agree with the processing side of things, people dont actually know how much it costs to set up such plants esp to be effective and big enough to cope with supply. It would be hard to succeed in a small country like NZ. I would certainly support alternative fuels if it were available at the pumps. The thought of converting black beauty having a smell of greasy fish and chips and a trail a flies dosent sound that pleasing though 
I think the government should be pushing Biodiesel though at service stations. This fuel can be used in diesel engines without conversions? And is it added at 5% (premixed) ? Or is it more.
BTW ...Mark I tell the hubby off for listening to that dribble on that station.
I think the government should be pushing Biodiesel though at service stations. This fuel can be used in diesel engines without conversions? And is it added at 5% (premixed) ? Or is it more.
BTW ...Mark I tell the hubby off for listening to that dribble on that station.
Edited by kylie on Thursday 15th February 20:06
I think one big benefit with ethanol or biodiesel is the fact it's sustainable.
Oh yeah, and ethanol is higher octane and produces more HP!
If a local community in the USA can set up a small processing plant to supply ethanol, I'm pretty sure NZ could manage it. At the end of the day there are thousands of Kiwis doing just this, only they drink the end product!
One litre for you........one litttlerelf for mersef.....
Oh yeah, and ethanol is higher octane and produces more HP!
If a local community in the USA can set up a small processing plant to supply ethanol, I'm pretty sure NZ could manage it. At the end of the day there are thousands of Kiwis doing just this, only they drink the end product!
One litre for you........one litttlerelf for mersef.....
Fonterra currently produce ethanol by fermenting whey, which they otherwise have to dump. So you don't necessarily have to plant and grow crops to find a feedstock. You can use sugar cane waste as well, as they do in Queensland, but thats normally sold under the 'Bundaberg' label... a bit of imagination goes a long way in reducing costs.
htsd said:
Fonterra currently produce ethanol by fermenting whey, which they otherwise have to dump. So you don't necessarily have to plant and grow crops to find a feedstock. You can use sugar cane waste as well, as they do in Queensland, but thats normally sold under the 'Bundaberg' label... a bit of imagination goes a long way in reducing costs.
You still have the same problem. The ethanol made at Reparoa from milk whey is sold to make gin vodka etc and the price it is sold at is higher than what petrol sells for. Bunderberg is not made from sugar cane waste it's made from suger extraction residues ie molasses. The sugar cane stems (bagasse) after the sugar is extracted is OK as a low grade fuel for the boilers to concentrate the sugar cane juice. Once again the alchol produced costs more per litre than petrol.
So yes you can run a car on ehtanol / moonshine / white lightening / hooch etc but it will require subsidies to be competitive to petrol. Often these sudsidies are hidden such as the per unit of energy price is the same but less tax is taken from the ethanol so the petrol tax take subsidizes the biofuel.
Waaay back I built a still for a friend who had cracked it as he had access to unlimited over ripe kiwi fruit. So we processed 20kg of fruit and got about 2 teaspoons of shine. I sat down did the numbers as obviously something was wrong. Nope. That was exactly the yeild you'd get from 20 kg of ripe kiwi fruit
Cheers
Mark Stacey
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