A post by Maynard
Did you see that Drudge-linked NYT article, A Fine for Not Using a Biofuel That Doesn’t Exist? It’s a tiny fragment of a huge problem.
When the companies that supply motor fuel close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.
But there was none to be had. Outside a handful of laboratories and workshops, the ingredient, cellulosic biofuel, does not exist.
Let’s talk about ethanol, and why we’re pursuing it.
For the last century we’ve been burning oil, which is a non-renewable resource. Most of the world’s oil reserves are in unfriendly hands. There are strong reasons — economic, strategic, ecological, practical — for us to shift away from a heavy dependence upon traditional pump-and-drill oil. Therefore I strongly support the rational pursuit of alternative fuels.
Unfortunately, governments often act irrationally, and end up doing great harm rather than good. That’s what we see happening here.
The $6.8 million in penalties noted in this article isn’t a big deal in itself. If that were all there was to the story, it wouldn’t matter. Sadly, this is only the tip of the iceberg.
We got to this point because the concept of ethanol sounds great on paper. We can burn ethanol like oil. And, unlike oil, we can make more ethanol. Therefore, if we just switch from oil to ethanol, our problem is solved. (By the way, ethanol is also the active ingredient in adult beverages, so you know it’s good stuff.)
But the devil is in the details. Turning biological matter into ethanol requires a process and an infrastructure. And the key point — and this is what is lost on government bureaucrats — is that this process and infrastructure must produce more energy than it consumes. It’s worse than useless if our ethanol plant burns two gallons of gasoline to produce one gallon of ethanol.
Broadly speaking, there are two pathways to ethanol. There’s starch ethanol — meaning we’re turning food such as corn into ethanol — and cellulosic ethanol — which converts wood chips and corn husks and the like into ethanol. The current working processes are all to produce starch ethanol.
A year ago, Al Gore admitted that starch ethanol was a bad idea.
Former U.S. vice-president Al Gore said support for corn-based ethanol in the United States was “not a good policy”, weeks before tax credits are up for renewal.
U.S. blending tax breaks for ethanol make it profitable for refiners to use the fuel even when it is more expensive than gasoline. The credits are up for renewal on Dec. 31.
Total U.S. ethanol subsidies reached $7.7 billion last year according to the International Energy Industry, which said biofuels worldwide received more subsidies than any other form of renewable energy.
“It is not a good policy to have these massive subsidies for (U.S.) first generation ethanol,” said Gore, speaking at a green energy business conference in Athens sponsored by Marfin Popular Bank.
“First generation ethanol I think was a mistake. The energy conversion ratios are at best very small.
“One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for president.”
When Gore said, “The energy conversion ratios are at best very small,” he meant that it takes about as much energy to make the ethanol as you get out of it. So the starch ethanol path is good for the people that get the government subsidies, but useless or worse than useless in terms of making the nation greener or energy-independent.
But never mind the facts; the starch ethanol subsidies continue. That’s the way it works in Washington. The politicians give away your children’s money to their cronies, and then call you a racist and a Nazi for pointing out what they’ve done.
Okay, so even Al Gore now admits that ethanol has been a huge boondoggle. But what about a second generation of ethanol, where we get it right and justify the initial fumbling?
That’s where cellulosic ethanol comes in. And I would really like to see that happen. Because if cellulosic ethanol could be made practical, then we could actually get some mileage out of this green energy thing.
Wikipedia: Cellulosic Ethanol: “Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible parts of plants.”
You know what happens next. Uncle Sam starts writing checks to the various scamsters of the nation and the world. Grandiose promises are made, the money vanishes away, and that’s that.
You’ll remember Solyndra, because this is recently on our minds. But the same thing has been happening with cellulosic ethanol. For example, here’s an article from the Atlanta Business Journal, Plant closure bursts Ga.’s biomass bubble.
The premise, and the promise, were brilliant in their simplicity: Turn tree waste into fuel, help break the Middle Eastern choke hold on America’s economy and bring hundreds of jobs to rural Georgia.
What wasn’t there to like?
Plenty, starting with the closing last month of the Range Fuels cellulosic ethanol factory that promised to help make Georgia a national leader in alternative energy production. Then there’s the money — more than $162 million in local, state and federal grants, loans and other subsidies committed to the venture…
That’s just one plant. There have been a lot of these. And the result…well, getting back to that NYT article I started with…
Refiners were required to blend 6.6 million gallons into gasoline and diesel in 2011 and face a quota of 8.65 million gallons this year.
For all the money poured down this rathole, the nation couldn’t produce 6.6 million gallons of cellulosic ethanol. 6.6 million gallons is nothing. And the thieves that took Uncle Sam’s money can’t even meet that miniscule quota.
Therefore we punish the oil companies. This policy only makes sense when you think of it in terms of political misdirection. Because our elected officials need to blame somebody other than themselves and their cronies. Damn you, you rotten oil companies, for not supplying us with unicorn snot!
Meanwhile we continue to squander the national treasure by diverting our dwindling resources into expensive projects that produce nothing. And we scratch our heads and wonder why America is broke.