Cheaper oil, financial meltdown toast ethanol industry

From an article by Mike Ivey posted on The Capital Times:

Well, one thing about the global recession – it sure brought oil prices down.

Just a few months ago it seemed certain that gasoline was headed toward $5 a gallon. Now, it’s back below $2.50. If it falls much lower, maybe GM will consider reopening its monster truck factory in Janesville.

In all seriousness, however, you hope that cheaper gasoline doesn’t distract Americans from the challenge at hand of reducing dependence on foreign oil while curbing air pollution.

But if history shows us anything, consumers have short memories when it comes to anything related to their automobiles.

What the financial meltdown has done though is deal yet another blow to the beleaguered ethanol industry which was just starting to get a real toehold in Wisconsin before the bottom fell out.

Man, this state has got bad timing.

First it completely missed the IT revolution of the 1980s.

Then it largely missed out on the ethanol boom of the 1990s as neighboring states like Iowa and Minnesota jumped in big time.

Now, with Wall Street in turmoil, dollars for new biofuel ventures are even harder to come by.

In June, North Prairie Productions abandoned plans to build a $42 million biodiesel plant near Evansville in Rock County. It would have been the largest in the state, producing an estimated 45 million gallons of fuel annually.

And the story is being repeated across the Heartland.

In Missouri alone, more than a dozen ethanol and biodiesel companies sought state regulatory approval in 2006 to recruit investors for projects in South Dakota, Nebraska, Minnesota, Illinois, Indiana and Iowa. Two years later, as many companies have failed or stalled as have finished their projects, according to a recent Associated Press report.

But I’m not crying over the biofuel bust.

From the beginning, it was little more than a government subsidized boondoggle that only put money in the pockets of huge corn growers like Archer Daniels while diverting attention from producing more efficient vehicles or encouraging transportation alternatives.

Moreover, from an air pollution standpoint, corn-based ethanol now appears to be a serious net loser when it comes to carbon dioxide (CO2) emissions, a major contributor to global warming.

Wind-powered cars

From an article by Jeff Anthony, American Wind Energy Association and RENEW Wisconsin board member:

. . . While wind energy is becoming a mainstream source of electricity in the U.S., with a realistic potential of powering 20% of our electric needs by 2030, its ability to play a key role in powering PHEVs [plug-in hybrid electric vehicle] makes for an even brighter future for the clean, renewable energy source. . . .

With widespread deployment, the impact of PHEVs on the transportation sector and the nation would be massive. A study by the Pacific Northwest National Laboratory found that replacing 73% of the U.S. light-duty vehicle fleet with PHEVs would result in a reduction in oil consumption of 6.2 million barrels a day, cutting the need for imported oil by about 50%.

But what would such a heavy reliance on electricity generation for transportation purposes do to aggregate power plant emissions? A joint study by the Electric Power Research Institute (EPRI) and the Natural Resources Defense Council found that if 60% of light vehicles in the U.S. were replaced by plug-in vehicles by 2050, electricity consumption would rise only about 8%. The net gain from significantly reducing oil use for transportation—while only marginally increasing the use of fossil fuels to produce electricity—would translate into net carbon dioxide reductions of 450 million metric tons annually—equivalent to taking 82 million cars off the road. And when you bring wind power into the equation, the news gets even better: if the renewable energy resource contributes a greater share to the electricity supply mix that ultimately would recharge the PHEV fleet, any increase in emissions from greater electricity usage can be cut dramatically, making the net emissions reduction even lower.

The primary reason PHEVs result in significant net emissions reductions is that electric motors are several times more efficient than gasoline internal combustion engines. EPRI estimates that while charging, PHEVs will draw only 1.4 kW-2 kW—about the same as a dishwasher. Moreover, in a transportation world that includes many PHEVs, electric rates are likely to be designed to ensure that vehicle charging occurs almost exclusively at night, guaranteeing that PHEVs will use low-cost electricity—while not imposing additional strain on the electric grid during daytime hours of peak electricity usage. And wind energy fits ideally into that part of the equation for another reason as well: wind power output is typically highest at night in many parts of the country. . . .

Driving Away from the Oil Economy

A presentation by Michael Vickerman at the Green Vehicles Workshop sponsored by the Milwaukee Area Technical College.

Vickerman poses the question, “[C]an we change our current habits and attitudes to transition into a less mobile but more sustainable future relying on renewable energy flows and low-EROEI energy stores?”

Complete presentation here.