[Vision2020] Re: Earth Policy News - The Coming Decline of
Oil
Jeff Harkins
jeffh at moscow.com
Sun May 14 09:05:58 PDT 2006
Ted:
The premise to your argument needs revision:
The advent of the modern shopping center was
founded on the "one-stop shopping" model. That
is, make it possible for a shopper to go to one
site to acquire goods and services - save time
and money by not having the shopper drive all
over to acquire goods. This model preceded WalMart by some 40 years.
The WalMart model was designed to capitalize on
the shopping center model. By having one store
provide a wide array of goods usually found in a
shopping center, shoppers would stop at one store
to satiate most of their purchase
demands. Walmart could offer lower prices
because they eliminated much of the overhead
associated with a shopping center - one manager
instead of several (one for each store in the
center); one accounting system instead of
several; one inventory acquisition system instead
of several; one promotion program instead of several etc.
And several enterprises preceded WalMart in this
model - Fred Meyer, Sears, JC Penney, Montgomery Wards, K-Mart.
Furthermore, WalMart's model has actually reduced
the cost of moving goods from the producer to the
end-retailer. Their centralized inventory
distribution model is the envy of most large scale mass merchandisers.
One can make the argument that by having a
WalMart in both Moscow and Pullman, both
communities benefit by reducing the cost of travel to a central location.
Now - as to biofuel, you bring some interesting
issues to the forum. I agree with you that a lot
of research needs to be done to validate the
economic merits of a bio-fuel program. A bright
side to the current energy "crisis" is that
energy alternatives will finally receive scrutiny.
At 05:19 PM 5/13/2006, you wrote:
>Nils et. al.
>
>I was discussing the proposed Wal-Mart Super
>Center in Moscow with a Vision2020 list serve
>member, and I told them that the main reason I
>thought the Supercenter a bad idea was not poor
>wages and benefits, traffic problems, commercial
>blight, Wal-Mart dominating the local economy,
>the cultural homogenization of society, etc.,
>but that Wal-Mart's economic model is premised
>on the continuation of abundant cheap fossil
>fuels, to bring shoppers to their huge parking
>lots in fossil fuel powered vehicles, ship all
>their goods from the cheap labor factories
>overseas, and to maintain their huge fleet of
>diesel semis running 24/7 all over the USA.
>
>Of course, if biofuels can be produced in large
>enough quantities cheaply enough to run the
>whole production/distribution system with the
>fuel from biofuels as well as supply numerous
>other needs, without hurting the necessary
>agricultural production needed to feed the 10
>billion people that will inhabit the Earth in
>just a few years, or without other serious
>negative environmental impacts, optimists will
>declare we can grow our way out of the oil
>crisis. However, sober number crunching from
>some energy experts sheds serious doubt that we
>can grow ourselves via biofuels out of the oil
>crisis without major negative impacts.
>
>Brazil is situated rather well in regards to
>this crisis, with their limited energy demands
>and much lower population (compared to the USA),
>year long growing climate and large potential
>agricultural land mass resulting in the
>possibility they could replace most if not all
>of their oil consumption with biofuels from
>sugarcane. Sugarcane, as far as I have
>gathered, is one of the best crops for biofuel
>production, though technology is developing to
>make biofuels from other kinds of biomass that
>are now not practical or possible for this purpose:
>
><http://www.earth-policy.org/Updates/2005/Update49.htm>http://www.earth-policy.org/Updates/2005/Update49.htm
>
> From site above:
>
>Ethanol could quickly take off in
>sugarcane-producing tropical countries, which
>have the advantage of year-round growing
>seasons, large labor supplies, and low
>production costs. As fuel demand rises in these
>developing nations, biofuel production could
>check oil imports while bolstering rural
>economies. Brazil, for example, could produce
>enough ethanol to meet total domestic fuel
>demand by increasing the area used to grow
>sugarcane for alcohol from 6.6 million acres to
>13.8 million acres (5.6 million hectares) or by
>shifting all current sugarcane acreage to
>ethanol production. Unfortunately, new fields
>may cut further into already shrinking
>rainforests, making them a serious environmental liability.
>
>-------
>However, in the USA, the picture is not as
>promising for biofuels, according to this analysis::
>
><http://www.i-sis.org.uk/BFOA.php>http://www.i-sis.org.uk/BFOA.php
>
>
>ISIS Press Release 28/02/06
>
>
>
>Biofuels for Oil Addicts
>
>
>
>
>
>
>
>
>Cure Worse than The Addiction
>
>
>
>
>
>Bioethanol and biodiesel from energy crops
>compete for land that grows food and return less
>energy than the fossil fuel energy squandered in
>producing them; they are also damaging to the
>environment and disastrous for the economy.
><mailto:.m.w.ho at i-sis.org.uk>Dr. Mae-Wan Ho
>
>A longer,
><http://www.i-sis.org.uk/full/BFOAFull.php>fully
>referenced version of this article is posted on
>ISIS members' website. Details <http://www.i-sis.org.uk/membership.php>here.
>
>"We must break our addiction to oil", President
>George W. Bush said in his State of the Union
>address; but he wasn't advising people to give
>up their cars or to use less oil, say by
>improving the gas mileage of cars. Instead, he
>launched the "Advanced Energy Initiative" that
>would increase federal budget by 22 percent for
>research into clean fuel technologies; including
>biofuels derived from plants as substitutes for
>oil (see Box) to power the country's cars.
>
>Successive US presidents have promoted ethanol
>from corn as a subsidised fuel additive.
>President Bush said US scientists are now
>working out how to make ethanol from wood chips,
>stalks, or switch grass "practical and
>competitive within six years", which would
>replace more than 70 percent of oil imports from
>"unstable parts of the world" - the Middle East
>- by 2025. Currently 60 percent of the oil
>consumed in the US is imported, up from 53
>percent since George W. Bush came to power.
>
>
>
>What are biofuels?
>
>
>
>
>
>Biofuels are fuels derived from crop plants, and
>include biomass that's directly burned,
>biodiesel from plant seed-oil, and ethanol (or
>methanol) from fermenting grain, grass, straw or
>wood. Biofuels have gained favour with
>environmental groups as renewable energy sources
>that are "carbon neutral", in that they do not
>add any greenhouse gas into the atmosphere;
>burning them simply returns to the atmosphere
>the carbon dioxide that the plants take out when
>they were growing in the field.
>
>However, they take up valuable land that should
>be used for growing food, especially in poor
>Third World countries. Realistic estimates show
>that making biofuels from energy crops require
>more fossil fuel energy than they yield, and do
>not substantially reduce greenhouse gas
>emissions when all the inputs are accounted for.
>Furthermore, they cause irreparable damages to
>the soil and the environment (see main text).
>
>Biofuels can also be produced from wood chips,
>crop residues and other agricultural and
>industrial wastes, which do not compete for land
>with food crops, but the environmental impacts are still substantial.
>
>
>
>Biofuels cannot substitute for current fossil fuel use
>
>
>
>
>
>Biofuels from energy crops cannot substitute for
>current fossil fuel use. The major constraints
>are land surface available for growing the
>crops, crop yield, and energy conversion
>efficiency, although economics also plays a large role.
>
>Growing crops for burning – biomass - should be
>the cheapest kind of biofuel both in energy and
>financial terms, as it requires minimum processing after harvest.
>
>Crop scientists at Virginia Tech, David Parrish
>and John Fike, reviewed the biology and agronomy
>of switchgrass, the most researched and favoured
>biofuel crop. Switchgrass is a perennial native
>to the USA, and has been extensively grown for
>fodder soon after the Europeans arrived. It is
>prolific, does not require much nitrogen
>fertilizer, and is considered the most
>sustainable, or the least environmentally
>damaging biofuel crop. But the review concluded
>that, "even at maximum output, such systems
>could not provide the energy currently being derived from fossil fuels."
>
>Substituting switchgrass for coal is estimated
>to reduce greenhouse gas emissions by about 1.7
>t CO2 per t switchgrass. The prices that growers
>must receive for biomass, however, must be
>sufficiently favourable. Thus, about 8 m ha
>would be available if the price reached $ 33 per
>t at the farm gate, increasing to about 17 m ha
>at $44 per t. The market price paid for
>woodchip biomass in Virginia in 2004 averaged
>about $33 per t delivered, and the price for hay
>(all kinds) is about $95 per t.
>
>One estimate placed the delivery costs of
>switchgrass at $63 per t. Adding the costs of
>processing, such as pressing into pellets or
>cubes for handling within a power plant, would
>bring the user's costs to about $83 per t. One t
>of switchgrass produces 17-18 GJ of energy when
>burned, compared with 27-30 GJ for coal; and coal prices are $55 per t.
>
>Switchgrass for energy is not at all
>economically competitive, unless substantial
>subsidy is available. The same applies, perforce, to other energy crops.
>
>David Pimentel, a professor of crops science at
>Cornell University New York and Tad Patzek, a
>professor of chemical engineering at University
>of California Berkeley, reviewed the energy
>balance and economics of producing biomass,
>ethanol or biodiesel from corn, switchgrass,
>wood, soybeans and sunflower using the now
>generally accepted life-cycle analysis. Although
>there is much controversy over the energy
>balance of ethanol and biodiesel, the energy
>balance of biomass yield is generally less
>subject to dispute, and is therefore a useful starting point.
>
>It turns out that switchgrass has the most
>favourable output/input energy ratio of 14.52,
>followed by wheat at 12.88, and oilseed rape at
>9.21, if the straw is included. Switchgrass is
>hence the most promising energy crop, whether as
>biomass for burning or to make other fuels downstream, such as ethanol.
>
>A quick calculation showed that even if all the
>farmland in the United States were converted to
>growing switchgrass, it would not produce enough
>ethanol for the country's fossil fuel use.
>Switchgrass takes several years to mature. The
>yield ranges from 0 for complete failure of the
>crop to take hold to 20 t or more per ha, a lot
>depending on the rainfall. A yield of 15 t /ha
>is optimistic; and would provide some 250 GJ/ha
>of raw chemical energy a year. If that energy
>could be converted with 70 percent efficiency
>into electricity, ethanol, methanol etc., it
>would take about 460 m ha to produce the 80EJ
>(ExaJoule = 10 18J) fossil fuel energy used in
>the USA each year. The total farmland in the USA
>is 380 m ha, of which 175 m ha is harvested cropland.
>
>Clearly, energy crops are a bad option, and may
>become obsolete as ethanol can now be made from
>wood chips, crop residues and other agricultural
>wastes, and industrial wastes, though even that
>is not sustainable ("Ethanol from wood biomass not sustainable", this series).
>
>
>
>Do you get more energy out of biofuel than the fossil fuel energy you put in?
>
>
>
>
>
>There is a huge debate over the energy balance
>of making ethanol or biodiesel out of energy
>crops, with David Pimentel and Tad Patzek
>presenting negative energy balance for all crops
>based on current processing methods, i.e., it
>takes more fossil energy input to produce the
>equivalent energy in biofuel. Thus for each unit
>of energy spent in fossil fuel, the return is
>0.778 unit of energy in maize ethanol, 0.688
>unit in switchgrass ethanol, 0.636 unit in wood
>ethanol, and worst of all, 0.534 unit in soybean biodiesel.
>
>Their paper has provoked a strong riposte from
>several US government departments, accusing
>Pimentel and Patzek of using obsolete figures,
>of not counting the energy content of
>by-products such as the seedcake (residue left
>after oil is extracted) that can be used as
>animal feed, and of including energy used for
>building processing plants, farm machinery, and
>labour, not usually included in such assessments.
>
>For their part, Pimentel and Patzek, along with
>many other scientists like me, are critical of
>estimates that produce positive energy balance
>precisely because they leave out necessary
>energy investments. In fact, neither Pimentel
>and Patzek nor their critics have included the
>costs of waste treatment and disposal or the
>environmental impacts of intensive bioenergy
>crop cultivation such as depletion of soil and
>environmental pollution from fertilizers and pesticides.
>
>To apportion processing-energy to coproducts
>according to their bulk composition in the seed
>may appear unexceptionable. Only 18 percent of
>the soybean is oil that makes biodiesel, while
>the rest is soybean cake used as animal feed.
>However, as the seedcake is produced as soon as
>the oil is extracted, it is simply creative
>accounting to attribute 82 percent of the
>downstream processing energy for biodiesel -
>which is quite substantial - to the animal feed.
>
>
>
>Energy balance of ethanol from corn
>
>
>
>
>
>Sure enough, a new study comparing six estimates
>of energy balance of corn ethanol did find that
>"net energy calculations are most sensitive to
>assumptions about coproduct allocation".
>
>The new study, carried out by researchers at the
>University of California Berkeley, published in
>the journal Science, evaluated six analyses of
>corn-ethanol production, including those of
>Pimentel and Patzek. The researchers developed a
>'model' to allow them to compare the data and
>assumptions across the analyses. Pimentel and
>Patzek's negative energy balance stood out in
>including energy used for building processing
>plants, farm machinery, and labour, and for not
>giving credit for co-products. Removing those
>"incommensurate" factors nevertheless resulted
>in only a modest positive energy balance of just
>over 3 MJ/litre to 8 MJ/litre ethanol in the
>analyses that gave positive energy balance,
>which translates to 1.13 to 1.34 for energy
>output/energy input (there being 23.4MJ in one
>litre of ethanol), while the reduction in
>greenhouse gas emissions averaged about 13 percent.
>
>The researchers have devised a way of presenting
>energy balance in terms of "petroleum input" -
>expressed as MJ petrol/MJ ethanol – that puts a
>very positive gloss on the figures and is very
>misleading. It essentially adds one hundred
>percent energy credit to the ethanol because it
>assumes that the ethanol substitutes 100 percent for fossil fuel use.
>
>The researchers then used the "best data" from
>the six analyses to "create" three cases with
>their model (hence all hypothetical): Ethanol
>Today, that claims to include typical values for
>the current US corn ethanol industry; CO2
>Intensive, based on plans to ship Nebraska corn
>to a lignite-powered ethanol plant in North
>Dakota, and Cellulosic, which assumes that
>production of ethanol from switchgrass cellulose
>becomes economic, an admitted "preliminary
>estimate of a rapidly evolving technology".
>he three cases, the researchers found a positive
>energy balance: a whopping 23 MJ/litre ethanol
>for Cellulosic, 5 MJ/litre for Ethanol Today,
>and 1.2 MJ/litre for CO2 Intensive ; the
>corresponding output/input energy ratios are
>1.98, 1.21, and 1.05 respectively. Cellulosic is
>the clear winner in terms of energy balance, and
>also by a long shot in net greenhouse gas
>emission saved, which is 89 percent; the
>corresponding values for Ethanol Today and CO2
>Intensive are 17 percent and about 2 percent respectively.
>
>These analyses show that current production
>methods, represented by Ethanol Today and CO2
>Intensive, offer but a small positive energy
>balance and little if any savings in greenhouse
>gas emissions, even with the most favourable assumptions built in.
>
>
>
>Bad economics of ethanol from corn
>
>
>
>
>
>Ethanol constitute 99 percent of all biofuels in
>the United States; 3.4 billion gallons of
>ethanol were produced in 2004 and blended into
>gasoline, amounting to about 2 percent of all
>gasoline sold by volume and 1.3 percent of its energy content.
>
>Ethanol use is set to expand as the federal
>government has introduced a 0.51 tax credit per
>gallon of ethanol and issued a new mandate for
>7.5 billion gallons of "renewable fuel" to be
>used in gasoline by 2012, which is included in
>the recently passed Energy Policy Act (EPACT 2005).
>
>Pimentel and Patzek have shown not only that the
>energy return is substantially negative, the
>economics is worse. About 50 percent of the cost
>of producing ethanol is for the corn feedstock
>itself ($0.28/litre). Ethanol costs a lot more
>to produce than it is worth on the market, and
>without federal and state subsidies amounting to
>some $3 billion per year, corn ethanol
>production in the US would cease. Senator McCain
>reports that total ethanol subsidies amount to
>$0.79/ litre; adding the production costs would
>bring the cost to $1.24/litre. Ethanol has only
>66 percent as much energy per litre as gasoline;
>so corn ethanol costs $1.88 per litre- or $7.12
>per gallon- equivalent of gasoline, compared to
>the current cost of producing gasoline, which is $.33/litre.
>
>Federal and state subsidies for ethanol
>production that total $0.79/litre mainly end up
>in the pocket of large corporations, with a
>maximum of $0.02 per bushel, or 0.2 cent/litre ethanol going to the farmer.
>
>The total costs to the consumer in subsidizing
>ethanol and corn production is estimated at $8.4
>billion/yr, because producing the required corn
>feedstock increases corn prices. One estimate is
>that ethanol production adds more than $1
>billion to the cost of beef production.
>
>Clearly ethanol from corn is neither sustainable
>nor economical, and a lot of effort has been
>devoted to finding alternative feedstock.
>
>
>
>Worse energy yields as accounting gets more realistic
>
>
>
>
>
>In a detailed rebuttal to the Science paper
>showing a positive energy balance in ethanol
>production from corn, Patzek exposed the major
>flaws in energy accounting used, which greatly
>inflated the energy return. These include:
> * Failure to account for the energy in corn grains as energy input
> * Assuming an impossibly high yield of corn
> ethanol at variance with real data available
> * Assigning away undue energy costs in
> ethanol production, in particular,
> distillation, to coproducts such as
> fermentation residues that have nothing to do with ethanol production.
>
>In addition, the ethanol industry routinely
>inflates the ethanol yield by counting as
>ethanol the 5 percent of gasoline added to corn
>ethanol as denaturant; by taking the amount of
>fermentable starch to be the total extractable
>starch, although not all of the latter is
>fermentable; and by taking the weight of wet
>corn (average 18 percent moisture) as dry corn.
>
>When the energy accounting done by different
>authors is reanalysed on the same set of
>realistic data, energy yields come out
>remarkably uniform. The output/input ratio
>varies between 0.245 and 0.310. In other words,
>the energy balance is strongly negative: for
>every unit used in making corn ethanol, one gets
>at most 0.3 unit of energy back. It takes at
>least 9 times more fossil fuel energy to produce
>ethanol from corn at the refinery gate than
>gasoline or diesel fuel from crude oil .
>
>As Patzek points out, the 7.5 billion gallons of
>ethanol mandated by the 2005 Energy Bill by 2012
>could be compensated by an increase of car
>mileage by just one mile per gallon, excluding
>gas-guzzling SUVs and light trucks.
>
>The economic consequences of excessive corn
>production have been devastating. The price of
>corn in Iowa, the largest corn producer,
>declined 10-fold between 1949 and 2005 as corn
>yields have tripled. Today, Iowa farmers earn a
>third for the corn they sell compared to 1949,
>while their production costs increased manifold,
>because they burn methane and diesel to produce
>corn. The price of methane has increased
>several-fold in the last three years. "Corn crop
>subsidies supplemented the market corn price by
>up to 50 percent between 1995 and 2004." Patzek
>writes, predicting more concentration of
>industrial corn production in gigantic farms
>operated by large agribusiness corporations, and
>real farmers will only rent the land.
>
>An industrial raw material at rock-bottom price
>can now be processed into ethanol at a
>significant profit, further enhanced by a
>federal subsidy of 50 cents per gallon ethanol,
>plus state and local community subsidies.
>Patzek concludes: "the United States has already
>wasted a lot of time, money, and natural
>resources
..pursuing a mirage of an energy
>scheme that cannot possibly replace fossil
>fuels
The only real solution is to limit the
>rate of use of these fossil fuels. Everything
>else will lead to an eventual national disaster."
>
>---------
>
>Vision2020 Post by Ted Moffett
>
>On 5/13/06, Nils Peterson
><<mailto:nils_peterson at wsu.edu>nils_peterson at wsu.edu > wrote:
>On 5/12/06 12:44 PM, "tom trail> wrote:
> > As it becomes clear that even a
> >> moderate cut in production may double world oil prices, the long-term
> >> value of their oil will become much clearer.
>
>
>Wouldn't it be nice to have the distinction of having the last WalMart Super
>Center built before they recognized that peak oil changed their business
>model. When it became a dark stork, it would be a tourist attraction
>bringing us great revenue (oh I forgot, tourism will change too).
>
>_____________________________________________________
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