At this point, serious greens still promoting biofuels are in a tight corner.
Global grain stocks are at all-time lows and prices at all-time highs. That means heavy incentives to clear new land to plant crops -- in precious rainforest regions in South America and Southeast Asia that sustain indigenous peoples and store titanic amounts of carbon. These lands are also concentrated centers of biodiversity. Sacrificing them for car fuel is a heinous crime.
Anyone who wants to argue that such efforts amount to "economic development in the Third World" will have to account for a stark fact: transnational agribusiness interests, prominently Cargill and Archer Daniels Midland, siphon off the bulk of profits for Brazilian soy and Asian palm. Their environmental and social record is dismal.
That's why it's monumentally depressing to see reports like this one, from the Atlanta Journal Constitution, about what's become of the U.S. biodiesel industry.
Biodistillers nationwide now realize that their industry's survival depends on the vagaries of world trade. Cheaper soy and palm oil from Asia, Africa, and Latin America increasingly replace domestically grown soy oil. Environmentally conscious Europe takes most of the U.S.-produced fuel.
So to produce this "homegrown renewable fuel," we've resorted to importing the feedstock from environmentally sensitive areas and sending the fuel to Europe. What's more, the U.S. taxpayer is underwriting the whole thing: biodiesel producers get a $1 excise tax credit on each gallon of alternative fuel that is mixed with regular diesel -- even when it's shipped overseas, the newspaper reports.
Even someone from the USDA -- that tireless booster of biofuel -- is cocking an eyebrow at the arrangement. "And we're not really lessening our dependence on foreign fuel supplies," a USDA economist gushed to the newspaper, presumably with a sense of wonder.
Evidently, the economics around biodiesel as a domestic fuel have collapsed, even accounting for the $1/gallon subsidy:
It takes 7.7 pounds of soy oil -- or $4.34 -- to produce a gallon of biodiesel, according to the Food and Agricultural Policy Research Institute. Add overhead and other processing costs (about 70 cents per gallon), federal and state taxes (54 cents), and subtract the dollar tax credit, and a gallon of biodiesel could sell for $4.58 at the pump. Regular diesel sold for $3.86 a gallon Wednesday in Atlanta.
So how can these companies profitably sell the stuff to Europe? For that, thank the ever-sinking dollar. Adjusted for the abysmal dollar/euro exchange rate, U.S. producers are competitive with their European rivals.
As long as the dollar stays in the dumps, pushed down by the crisis on Wall Street and voracious oil use (unmitigated by biofuel), U.S.-made biodiesel, feedstock sourced from the global south, will continue to flow to Europe.
The question becomes this: to what ecological end?
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anotherID Posted 7:48 am
21 Mar 2008
After all it worked so well for Enron and the mortgage markets.
The endgame of biofuels is price parity between food BTUs and energy BTUs.
Do we really want to ration food by price?
Hello starving children in India and food riots.
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Sam Wells Posted 10:32 am
21 Mar 2008
Let's not make fun of it or belittle it, since bio-diesel does hold some promise and ethanol isn't a bad oxygenate for gasoline. Many enviros have a dim view of any bio-fuels - I guess this article is just sticking the knife in deeper?
May I end by switching the subject to gasoline and ethanol. You all know that MTBE was phased-out because of concerns about groundwater toxicity (I hope). Other compounds such as TAME, ETBE, and so forth were so expensive they could not be marketed (check out Ethyl Corporation). So ethanol became the de facto required oxygenate for gasoline motor fuels, usually blended up to 10%.
Folks, we need to lower gasoline and ethanol oxygenate usage, plain and simple. If we can figure out some other synthetic oxygenate (which reduces carbon monoxide) that would be wonderful.
Onward through the fog
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bigTom Posted 11:29 am
21 Mar 2008
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SeaPort Biofuels Posted 11:30 am
21 Mar 2008
Our company is a marketer of biodiesel in the Seattle area which is now selling a Washington produced product with local feedstock, and is able to do so buying, and in turn selling it, for substantially less than Imperium Renewables who supplies Propel, or our midwest supplier - REG (Renewable Energy Group)who may or may not have to depend upon non-North American feedstock. REG is apart of West Central Soy Co-op, and has a relationship with Bunge, the largest seed oil supplier in the United States.
Smaller local producers do not have to depend upon foreign feedstock and are quite competitive with conventional diesel.
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Ron Steenblik Posted 5:12 pm
21 Mar 2008
The Atlanta Constitution does not get it exactly right, however, when they say that "cheaper soy and palm oil from Asia, Africa, and Latin America increasingly replace domestically grown soy oil."
Soy and palm oil may be less expensive to produce in Asia, Africa, and Latin America than in the United States, but all producers are selling into a global market, at global-market prices. If foreign-produced vegetable oil is cheaper, it is only marginally cheaper. That means that it may be more profitable for investors to establish farms producing soybeans outside the USA, but it does not mean that imported vegetable oils are likely to prove to be a huge bargain for biodiesel producers.
Here are some figures from the FAO: two years ago palm oil was selling for $450 per ton, versus $540 per ton for soya oil (both prices north-west Europe). Today the two are selling for, respectively, around $1160 and $1400 per ton. That makes palm-oil methyl ester (POME) look cheaper on paper, but palm-oil makes a biodiesel that is inferior (because it tends to become more viscous at cold temperatures) to soy-oil methyl ester.
Rapeseed (i.e., canola) oil -- the main feedstock for European producers, and the highest-grade oil for cooking -- was selling at $720/ton two years ago; today the price is almost exactly double: $1434. In short: the relative price gaps of palm oil and soya oil have narrowed considerably vis-a-vis that of rapeseed oil, and soya oil is now selling at almost the same price as rapeseed oil.
I don't know where the Atlanta Constitution gets the idea that it is an "environmentally conscious Europe" that takes most of the U.S.-produced fuel. Demand for biodiesel here in Europe is as artificial as it is in the USA, increasingly driven by government blending requirements and generous tax exemptions. It is the combination of blenders' tax credits in the USA, and the much higher price for biodiesel in Europe (because petroleum diesel is taxed at rates that are so much higher than those applied in the United States), as well as the weakening of the U.S. dollar against the euro, that is driving this crazy and costly trade.
Finally, don't forget that the $1.00 per gallon federal excise tax credit for biodiesel is only one of several forms of support given to U.S. producers. Most producers using virgin oils or tallow as feedstock also benefit from the $0.10 per gallon Small Agri-Biodiesel Producer Credit, as well as state-level subsidies (an additional $1.00 per gallon in Kentucky, for example), and various ad-hoc investment incentives provided by local and state governments. It all totals up, according to Doug Koplow ("Biofuels -- At What Cost? 2007 Update on the United States"), to between $2.10 and $2.60 per gallon.
These are only my personal opinions.
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racc Posted 2:17 am
22 Mar 2008
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JMG Posted 4:09 am
22 Mar 2008
Save the world: Reduce greenhouse gas emissions 5% annually.
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human power Posted 8:58 am
22 Mar 2008
What shall we write as our epitaph? Driving to the mall was more important than future lives? No matter, no one will be there to read it.
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AndrewS Posted 9:15 am
22 Mar 2008
Biodiesel and ethanol from corn, soy, palm oil ... may only be temporary solutions for learning how to implement something more sophisticated and diverse. What about biodiesel to fuel a more comprehensive mass transit system and high-mileage personal vehicles -- where the biodiesel is made from localized renewable resources like tall grasses grown beside highways and waste vegetable oil from restaurants? Or areas with abundant solar and wind potential could fuel plug-in electric mass transit and personal vehicles. I think the possibilities are only limited by our creativity.
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socialscientist Posted 9:58 am
22 Mar 2008
We need free public transit.
http://frepubtra.blogspot.com
.
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Present Posted 4:48 am
23 Mar 2008
There are indeed serious issues regarding the environmental consequences associated with some of the feedstocks mentioned in the article, but to make a blanket statement about the pitfalls of "biofuels" is irresponsible..at best.
Biodiesel is PART of the solution to reducing greenhouse gases and developing a petroleum free transportation sector. It provides an immediate solution to an immediate problem. The fueling infastrucure already exists (at every fuel station)and it doesn't require expensive engine conversions in most diesel vehicles. The entirety of US petroleum diesel consumption (which is nearly half of all petroleum use)could be replaced with biodiesel within a few years with the proper legislative and market support.
Fossil fuels represent the most heavily polluting and subsidized products on the planet. It's important to tell the full story when addressing the flaws of any alternative to petroleum. To do otherwise only helps to maintain the status quo.
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Delay And Deny Posted 11:17 am
23 Mar 2008
Of all the fuels in the world, it still seems to me like the most ecologically viable one is...oil!
Oil has the least environmental impact...it comes from deep within the ground...so there is no other energy intensive process needed to "make it". The energy content is there already.
Oil drilling requires a relatively small land foot print (compared to coal).
Oil has residues, but none nearly so hazardous as nuclear radiation.
Oil can be refined into a variety of helpful products and those products can be recycled more easily than metals and heavier things.
The only argument about oil seems to be that there isn't enough of it; however, we abiotics disagree and look forward to new plentiful supplies being available with deep well drilling.
"In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual." -- Galileo
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Ron Steenblik Posted 8:17 pm
23 Mar 2008
What this and most articles about biofuels fail to mention is the potential of algae crops to provide an environmentally benign and economically feasible alternative to other oil sources. The information is readily available (e.g., here)for anyone seriously interested in learning more about actual solutions to these problems and not perpetuating misconceptions about an industry in relative infancy.
First of all, Tom is writing about the here and now: the actual effects of actual policies. It is churlish to call a short article focusing on those very concrete issues as "irresponsible ... at best".
Yet "Present" criticizes Tom for not mentioning a possible fuel source that is still very much in the R&D stage, and so far has not produced one drop for commercial sale. Whether it ever will remains to be seen. Such second-generation biofuels have long been "the fuels of the fuels of the future", and many sober scientists think they will remain so.
"Present's" subsequent remarks suggest that he or she needs to become more familiar with the economics of biofuels:
Biodiesel is PART of the solution to reducing greenhouse gases and developing a petroleum-free transportation sector. It provides an immediate solution to an immediate problem. The fueling infrastructure already exists (at every fuel station)and it doesn't require expensive engine conversions in most diesel vehicles. The entirety of US petroleum diesel consumption (which is nearly half of all petroleum use)could be replaced with biodiesel within a few years with the proper legislative and market support.
OK, I'll concede that biodiesel -- especially made from used cooking oil, and perhaps some animal fats that didn't already have a use in other sectors, like soap-making -- can contribute to displacing some petroleum diesel, and reducing GHG emissions. But the potential of that source is at most 1 percent.
Currently, biodiesel production, from all feedstocks, contributes to about 1 percent of consumption. If all the soybean oil, corn oil, peanut oil, canola oil and tallow produced in the USA were turned into biodiesel, it would still displace less than 10% of US consumption. And the oil previously used for cooking and for export would have to be produced elsewhere -- probably in Latin America and south-east Asia. Those countries could, of course, supply additional vegetable oils or biodiesel to the USA, but only through either displacing other agricultural production or ploughing up former savannah or forest land. Doing that, as I hope everyone now appreciates, would negate, and then some, any GHG advantages of biodiesel.
So, what are we left with? Heroic assumptions about algal-based biodiesel, and possibly biodiesel produced from cellulosic sources by the Fischer-Tropsch process? The former is still experimental and the latter is very, very expensive.
But, of course, if one invokes "the proper legislative and market support" -- code for government market intervention backed by HUGE subsidies -- than I guess almost anything is possible ... within the limits of biology and physics.
Or, we could look to improvements in vehicle fuel-economy, improved logistics and mode-switching (i.e., moving more freight by rail, barge and ship) and, in the longer run, new methods of propulsion.
These are only my personal opinions.
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Tom Philpott Posted 12:02 am
24 Mar 2008
Fossil fuels represent the most heavily polluting and subsidized products on the planet. It's important to tell the full story when addressing the flaws of any alternative to petroleum. To do otherwise only helps to maintain the status quo.
Actually, to siphon public resources -- at a time of fiscal austerity, created by an oil war -- to what's looking more and more like a false alternative to fossil fuel: that "helps to maintain the status quo."
Let me ask you this: If biodiesel had Big Oil shaking in its boots, would Bush be subsidizing ot at a buck a gallon, or trying to squash it?
Victual Reality
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Erik Hoffner Posted 12:22 am
24 Mar 2008
Erik
The Orion Grassroots Network: 1,200+ grassroots groups working for conservation & more
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Disenfranchised Enviro Posted 3:33 am
24 Mar 2008
Just because biofuels are not the do-all, end-all solution Right Now is no reason to throw them in the dumpster. It takes a long time to get an industry that produces 200 billion gallons per year built up. 1st generation feedstocks helped get things started, and when the 2nd gen feedstocks - cellulosic ethanol, gasification, F-T, algal biodiesel - finish R&D (with money from the success of the 1st gen feedstocks, remember) then the industry will really take off.
By the way, for those fawning over your Pious's as the holy grail of 'green' - check out how it got womped in gas mileage by a diesel: (lets hear some bitter complaining over the fact that the Prius mileage numbers are inflated 10-15mpg...)
http://driving.timesonline.co.uk/tol/life_and_style/drivi ...
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Ron Steenblik Posted 4:46 am
24 Mar 2008
It takes a long time to get an industry that produces 200 billion gallons per year built up. 1st generation feedstocks helped get things started, and when the 2nd gen feedstocks - cellulosic ethanol, gasification, F-T, algal biodiesel - finish R&D (with money from the success of the 1st gen feedstocks, remember) then the industry will really take off.
Well, his first sentence is right: the corn-ethanol industry has been subsidized for the last 30 years, and still can't stand on its feet. Producing more will drive up the cost even higher, as land for producing fuel competes more and more with land for producing food, feed and fibre. At around $1.00 per gallon in subsidies for ethanol (counting state as well as federal subsidies), and even more for biodiesel, the country would go broke trying to displace 200 billion gallons a year with biofuels.
R&D for 2nd-generation biofuels being funded by "money from the success of the 1st gen feedstocks". If you call biodiesel plants going broke, and ethanol plants soon to follow them, that is a bit far-fetched. In any case, a good chunk of the money is coming from Uncle Sam.
These are only my personal opinions.
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Ron Steenblik Posted 4:48 am
24 Mar 2008
R&D for 2nd-generation biofuels being funded by "money from the success of the 1st gen feedstocks"? If you call biodiesel plants going broke, and ethanol plants soon to follow them, "success", then the notion that one is begetting the other is a bit of a stretch.
These are only my personal opinions.
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