Oh, and stop feeding cows grain.

There it is.

As rising food prices continue to threaten food security around the world, Brazilian ethanol is one obvious solution being largely ignored. Brazil started to create its efficient fuel alternative since the first oil crisis hit the world in the 70s. Now Brazilian drive cars moved by ethanol or gasoline mixed in any proportion and internal consumption of ethanol in the country is already superior to gasoline's.

Brazilian ethanol is produced from sugarcane without any governmental subsidies and the fuel has a very competitive price. Researchers are increasing the productivity (more fuel extracted per sq.km. of crops) by adapting sugar canes species to each type of land and topography. The productivity now is more than 3 times the records of 30 years ago and it keeps on raising, being expected to soar very soon when the technology to extract ethanol from cellulosic materials (crop waste) will be available for large scale production.

Ethanol production in Brazil uses just one percent of  total arable land, and the country can expand its sugarcane fields without disturbing sensitive land areas, just by tapping land such as depleted pastures. Just raising intensity of cattle production from the current 0.8 animals per hectare to 1.2 animals (a target already far exceeded in many parts of the country) would release about 80m hectares of land for crops. There remains plenty of room for expansion: the country has 355 million hectares of farmable land, of which 7 million hectares under sugarcane of which the amount used to make ethanol fills 3.4 million hectares (compared to 200m hectares of pasture, about 21m hectares of soya and 14m hectares of maize). Another 105.8 million hectares remained available, which allows Brazil to increase ethanol production without affecting the environment or food. Meanwhile, the country's food production had doubled in the past decade.

Another persuasive fact for incentiving ethanol production in Brazil is the electric energy that is generated as a by-product of ethanol processing: taking into consideration the energetic balance, the electricity generated in sugar cane processing in Brazil is almost as large as its ethanol equivalence. It's like a two large scale hydroelectric plants generating electricity exactly when it's more necessary: in the Brazilian dry season! So the producers of ethanol are also having increasing revenues by selling electricity to the country's national electric system, which has become an strategic and reliable source of electricity. For all these reasons, ethanol in Brazil is a win-win game for the country, the farmers, the consumers and the environment.

Off course Brazilian ethanol does not intend to concur with petroleum, but it could ease the current oil crisis by supplying a small part of the world energy demand. The problem is that much of Brazil's ethanol exports continues to face prohibitive tariffs and other barriers to developed markets in the US and Europe. The developed world appears purposely myopic in relation to the opportunities Brazil presents, maybe it's because that would upset wealthy US and European farmers - a price apparently not worth paying.

Like this:

One hears slogans about how much corn and water are required to produce a gallon of ethanol -- a 16oz steak takes about the same amount of corn and more water. Are opponents of corn ethanol also calling for a ban on steaks, especially since chicken is a healthier food and takes less corn to produce?

Okay, so demanding that the government stop making this absurd intervention on behalf of ethanol -- the tax credits, the mandates, the protective tariffs, the grants to investors who build facilities -- is tantamount to calling for a ban on biofuel? If I want the government to stop allowing beef packers to torture animals, abuse workers, and create vast cesspools of toxic waste, is that the same as calling for a ban on beef?

Then we get this bit:

Add winter cover crops grown on current agricultural crop lands during the winter months when the land sits idle and is subject to nitrogen runoff and topsoil loss and we could, even after excluding up to 50 percent of our annual crop lands, replace most of our gasoline imports.

Fine, awesome. But guess what? If you harvest cover crops, they're not cover crops. They're just crops. Farmers put in cover crops between growing seasons to let them die and decay in the field. They keep in nitrogen and add carbon (organic matter). When you harvest them, you're leaching those things from the soil, and you need to replace them -- which in industrial agriculture means synthetic nitrogen, based on fossil fuel and a major source of atmospheric nitrous oxide, a greenhouse gas more potent than carbon by a factor of 297.

In his most stunning contradiction, Khosla states that "I have not advocated subsidies for food-based ethanol"; and then, a few gusts of hot wind later, adds:

It is clear that corn ethanol has served as a stepping stone for cellulosic ethanol and other biofuels, mitigating risk and establishing a market. As a venture capitalist, I would not have invested in cellulosic without corn ethanol's partial alleviation of the risks of creating a market, creating distribution terminals, E85 pumps and starting our flex-fuel fleet.

What the wily investor is saying here is that, I have not advocated subsidies for corn ethanol, but I have made investments that hinge on their existence.

Ok, what about this corn-as-stepping-stone-to-cellulsic business? I addressed it in a recent post on an absurd BusinessWeek piece praising ethanol: http://gristmill.grist.org/story/2008/5/6/61340/51422

Let me reprise it quicly. If we're going to convert existing conventional ethanol infrastructure to cellulosic, then we're talking about harvesting cellulose in the midwest, where the existing plants are concentrated. Cellulose is bulky, and it isn't practical to move it around long distances. And concentrating production in the corn belt means displacing food crops to grow switchgrass -- pushing up food prices and financing the leveling of the rain forest.

The Business Week writer mentioned in the above-linked post proposes to get around this problem by suggesting we harvest biomass in the South. He envisions a "new commercial strain" of switchgrass sprouting up in "on former tobacco, cotton, and rice fields across the Southern U.S." (Hmmm -- won't moving from rice to switchgrass cause rice prices to spike?)

But guess what? There are few ethanol plants in the south. Building out the needed infrastructure will cost tens or hundreds of billions. This is the bridge, the stepping stone? Looks more like an industry paw reaching into the public purse, demanding that costs be socialized while profits be private.

Vinod, if you want to be constructive, I direct you to a recent piece on Grist by Ryan Avent on how our feeble, ill-funded public transit system is buckling under new demand sparked by high gas prices: http://www.grist.org/feature/2008/06/06/avent/

Demand is rising but structural impediments keep supply from meeting the challenge. It's a market failure. The government is too strapped from propping up biofuel production ($13 billion a year) and fighting an oil war to make the needed investments. We need an enterprising, charismatic venture capitalist with cash, connections, a propensity to write op-eds, and a zeal for fighting climate change to step into the breach. Know anyone like that?

Victual Reality

The developed world appears purposely myopic in relation to the opportunities Brazil presents, maybe it's because that would upset wealthy US and European farmers ...

... and venture capitalists.

These are only my personal opinions.

As I've concluded after thinking about Biodiversivist's warnings long ago, biofuels are even more environmentally destructive as petroleum, because at least the latter comes from under the Earth and does not require vast amounts of land for growing.  There's nothing environmentally positive about ethanol or any other biofuel, despite the feel-good nature of them.  I was a strong biofuels supporter years ago till Biod opened my eyes to the immense destruction they cause.  The only solution to the ecological and environmental problems caused by energy consumption is to consume a lot less energy.  We need to first drive a lot less or, much better, not at all, and also drive much more fuel efficient vehicles.  There will be no magical fuel that will allow driving without causing serious environmental harm.

Discussing biofuels is like discussing drugs: Society recognizes the difference between aspirin and cocaine; we should also be cognizant of differences amongst biofuels. Biofuels vary dramatically in their environmental impact and their effects on food prices. For instance, biodiesel from food oils like soybean or palm oil have traditionally created environmental negatives, they are unscalable and likely to be fundamentally uneconomic. On the other hand, corn ethanol has served as a useful stepping stone to cellulosic ethanol but has recently come under criticism -- some of it fair, some absurd.

Biofuels made from waste being aspirin and those grown on arable land being cocaine. 98% of biofuels being produced today are cocain. Corn ethanol has not acted in any way as a stepping stone to cellulosic, as I clearly pointed out in my previous post. This entire argument is built on a house of cards. Above he criticizes biodiesel made from soy and palm. This of course enrages biodiesel missionaries who spend half of their time attacking corn ethanol for giving their fantasy a bad reputation, but it is an improvement over his first post where he dissed only palm. Missing from the list this time is rapeseed-based biodiesel, which can be up to 70% worse for global warming on a lifecycle basis than fossil diesel due to nitrous oxide release and even more when accounting for crop displacement effects (converting grasslands and rainforests into cropland).

Currently we are faced with an energy crisis, an environmental crisis, a food crisis, and a terrorism crisis, and all are related to oil. High cost options like hybrids and electric cars may sound good, but are unlikely to materially reduce carbon emissions. To make a meaningful impact, we have to ensure that at least 500-800 million of the next billion cars we produce on this planet in the next 15 years be low carbon cars. The only cost-effective option likely to get broad market acceptance is cellulosic fuel cars in the next decade or two.

Everything is related to oil, making the first sentence a very short list. 911 was primarily the result of religious extremism, not oil. The food crisis has been caused by five leading factors, discussed in my previous post, oil being only one of them. Note the use of the words "likely" and "unlikely." Essentially they mean that the probability is greater than 50%. There is no guarantee that cellulosic will be cheaper than oil. High mileage cars are rapidly replacing the existing car fleet.

Americans are flocking to buy high mileage cars. They don't have to be hybrids to get 2.5 times better gas mileage, as my Yaris does over my Cherokee. If cellulosic ever makes it to market it will have to prove to be as environmentally benign as its proponents hope and cost less than oil. The price of biofuels grown on arable land today is keeping pace with oil , which was not predicted by proponents, although it was by a number of critics.

Doing nothing is not an option. Instead, it comes down to a fundamental question -- given our economic and energy constraints and framework, we must find the best option that can meet our needs, taking care not to let the perfect be the enemy of the good. A crisis is a terrible thing to waste and if pursued intelligently, this crisis may help us to permanently solve our dependence on oil.

"Doing nothing" is a strawman argument. The list of things being done is long and growing. Our dependence on oil will shortly be solved even if we do nothing because we are going to run out of it. How best to replace it is the question. Efficiency and environmentally benign renewables are the answers. According to George Monbiot, "Jeffrey Dukes calculated that the fossil fuels we burn in one year were made from organic matter "containing 44 x 10 to the 18 grams of carbon, which is more than 400 times the net primary productivity of the planet's current biota." In plain English, this means that every year we use four centuries' worth of plants and animals." Put another way, we use just over a year's worth of the planet's entire biota every day.

Much of public opinion is influenced by paid-for campaigns of interested parties. Recently the Grocery Manufacturers Association has started a multi-million dollar campaign against corn ethanol; meanwhile, the American Petroleum Institute is far more concerned about food prices than oil prices.

True that, like the USDA, the National Corn growers association and the Renewable Fuels Institute. Why do you suppose the Grocery Manufacturers Association is against corn ethanol? Could it be because they have (mistakenly according to corn ethanol proponents) perceived that it is driving the cost of food up? The contention that the oil industry is far more concerned about food prices than oil prices is totally spurious. In short, this post is attempting to spread rumors.

One hears slogans about how much corn and water are required to produce a gallon of ethanol -- a 16oz steak takes about the same amount of corn and more water. Are opponents of corn ethanol also calling for a ban on steaks, especially since chicken is a healthier food and takes less corn to produce?

First, environmentally minded people agree that eating less animal products, or substituting less resource intensive ones for others, is a good idea. Next, nobody is calling for a ban on biofuels. They are calling for an end to government support of them. If this is suggesting that a ban on mandates is tantamount to ban on corn ethanol, then so be it. The steak analogy really falls flat when you consider that the average American would burn through the equivalent of 1.5 16oz steaks in their gas tank every day if they used corn ethanol.

Similarly, we're told that hybrid cars are a great solution, but we seldom hear that they reduce carbon emissions about as much as corn ethanol and at a cost that is a hundred fold more per car compared to a flex-fuel car. A recent McKinsey study rated them among the most expensive ways to reduce a ton of carbon emissions.

I'm forced to call BS on that one. A Prius doubles the American mileage average. That cuts carbon emissions in half. Corn ethanol is estimated to cut carbon emissions 15% at best. Accounting for nitrous oxide release, it is up to 50% worse than gasoline not even counting crop displacement effects that turn grassland and forest carbon sinks into smoke. That hundred fold increase in cost is also bullshit. It compares the cost of adding ethanol resistant tubing to a car to the cost of a hybrid drive train, which is completely misleading. A Prius costs half as much as a flex fuel Hummer, which people would still be driving if E-85 cost half as much as gasoline.

We must not let the clever PR campaigns distract us from a broader societal goal of producing environmentally sound cellulosic biofuels; thanks to the market that corn ethanol has established, they are getting significant.

Clever PR campaigns by NGO food organizations and environmental groups, or the ones put out by the USDA, Corn Growers association and Renewable Fuels Institute? And as I have pointed out numerous times now, corn ethanol has not paved the way for cellulosic, which still does not exist in an commercially or environmentally viable format.

Congress wisely established a Renewable Fuel Standard that requires oil refiners and fuel blenders to use up to 36 billion gallons of renewable fuels produced in America. This standard caps corn ethanol at 15 billion gallons and provides an incentive to produce next generation cellulosic fuels.

That was an embarrassingly unwise decision. If corn ethanol does not significantly impact the cost of food, why cap it? There is already an incentive to come up with ways to reduce reliance on oil for transportation, it is called high oil prices and the market is responding rapidly with over a million Priuses sold and demand having outstripped supply for the most fuel efficient cars. Detroit's flex fuel fleet is rusting on the lots.

Sufficient biomass exists as waste from forestry operations alone to meet all of the 21 billion gallons of cellulosic fuels mandate established in the 2007 energy bill. All 36 billion gallons of the mandate could be produced, at prices approaching $1.00 per gallon within ten years, if we include agricultural crop waste, municipal organic waste, and sewage.

I reiterate, humanity uses just over a year's worth of the planet's entire biota (plants and animals) every day. The above figures are estimates. Estimates are always wrong, varying only in how wrong. Until cellulosic fuel actually hits the market without government support and sells for a dollar a gallon these figures are absolutely meaningless. Continued support of crop based biofuels remains unconscionable.

Add winter cover crops grown on current agricultural crop lands during the winter months when the land sits idle and is subject to nitrogen runoff and topsoil loss and we could, even after excluding up to 50 percent of our annual crop lands, replace most of our gasoline imports. By some agronomists' estimates winter cover crops could produce 450 million tons of biomass within ten years and over 750 million tons of biomass by 2030 on 150 million acres of winter crop land. That is sufficient biomass to replace much of our imported gasoline. All this could be accomplished without an additional acre of land used for biofuels production. At the same time, winter cover crops will improve the ecology of traditional annual food crops during their summer growth period.

Until the above pipe dream becomes a reality, it remains a pipe dream and in no way condones continued support of today's crop based biofuels.

Food prices have been a concern recently -- but it is little understood that oil prices affect the food Consumer Price Index in the U.S. two to three times as much as corn prices, according to a study by LECG. And oil prices have risen 1,000 percent in the last ten years while corn prices have risen 200-300 percent. Elsewhere, an Informa economic report notes that "just four percent of the change in the food CPI could be attributed to fluctuations in the price of corn." If biofuels were taken off the market, Merrill Lynch estimates oil prices would be 15 percent higher, which in turn would put further upward pressure on food prices; meanwhile the increased supply of corn would put downward pressure on food prices.

Food prices have been a concern recently -- but it is little understood that oil prices affect the food Consumer Price Index in the U.S. two to three times as much as corn prices, according to a study by LECG.

This will be the third time I've pointed out the deceptive framing of the LEGG report.

And oil prices have risen 1,000 percent in the last ten years while corn prices have risen 200-300 percent.

More deceptive framing. Oil prices have risen 62 percent since 2006. Whereas corn prices, coincidentally coinciding with the biofuel mandates, have increased well over 100 percent in that same time frame.

Elsewhere, an Informa economic report notes that "just four percent of the change in the food CPI could be attributed to fluctuations in the price of corn."

Again, the above has been rebutted over and over again. It is yet another deception. Raising the cost of corn has almost no impact on a box of Cornflakes because it uses, literally, about a handful of corn. Americans can afford to eat a box of Cornflakes The poor in the world who get much of their daily calories from grinding corn and using it in various foods like tortillas, are devastated by these higher prices.

If biofuels were taken off the market, Merrill Lynch estimates oil prices would be 15 percent higher, which in turn would put further upward pressure on food prices; meanwhile the increased supply of corn would put downward pressure on food prices.

Estimates are always wrong, varying only in how wrong. Estimates by definition depend on estimated inputs. Give us a link to the study or stop alluding to it. Putting an area of cropland the size of Indiana into our gas tanks to  increase our fuel supply roughly 2% defies all common sense.

The net effect on food prices is hard to estimate accurately. For the developing-world rural poor, which comprise about 67 percent of those living below a dollar a day, food price increases often increase income as their subsistence farms become economic, while for the urban poor food price increases are disastrous. No wonder developing countries like India and Brazil have been pressing the WTO to increase food prices by reducing western food subsidies so their farmers can generate income form farming.

Interesting schizophrenic argument. In support of corn ethanol, it is claimed that it has no significant impact on food prices. Yet, in support of corn ethanol, it is acknowledged that it increases food prices and that this is good news for the rural poor. And let me put into perspective this quote, "for the urban poor food price increases are disastrous." If all of those people being driven into starvation in large part by corn ethanol held hands along the equator, they would wrap completely around the planet.

According to Sachs in his book "The End of Poverty," ending supplies of cheap food from America is most often a net loss for subsistence farmers, who can't readily sell meager surpluses to world markets.

And charities like Oxfam have historically been reluctant to export cheap American corn to Africa for this reason. On the other hand, can you imagine the human benefits of hundreds of billions of dollars going into biomass refineries in Africa every year? It may be the single most important tool we have for poverty reduction in Africa!

I see in the above comment that Khosla has been lurking on the blog and has picked up some of Jonas' talking points, all of which have also been rebutted repeatedly. Oxfam has historically bought the cheapest corn it could get to stretch its limited budget. It was more recently convinced to pay more in order to support farmers in third world nations, which is a double-edged sword. It can't buy as much food for the poor.

Typically when the argument is made that converting biomass to liquid fuels will end poverty in Africa, it is pointed out that:

a) The biomass grown will displace existing carbon sinks and cropland
b) Mechanization will eventually eliminate most employment
c) Industrial agrofuel farming will continue to crush small land holders and displace indigenous groups
d) The crop grown in the tropics will be cane, which is cheaper and more energy efficient than cellulosic is even predicted to be.
e) Cane workers in the tropics have lifespans similar to the slaves they replaced.
f) Buying cane ethanol from foreign countries does not contribute to America's energy independence.

The environmental effect of corn and cellulosic ethanol depends upon what one assumes about their source. If ethanol is produced on lands that displace food production into the rain forest, the net environmental effect will be negative.

If? According to the latest research, virtually all crop based biofuels today are already doing that and it is getting worse with every increase in production.

But if we keep burning oil and coal, the environmental consequences will be bad too.

The goal is to stop the destruction of the biosphere, which green house gasses are exacerbating. Not only are crop-based biofuels increasing GHG, they are doing so by scraping the biota off the face of the biosphere. They are making a bad matter much worse.

A simple national and international policy that incentivizes countries like Brazil and Malaysia to preserve their rain forest through carbon credits while banning biofuels (and maybe all agricultural exports) from countries that do not meet rain forest deforestation reduction targets could dramatically change the environmental benefits of biofuels.

When you put arable cropland into gas tanks, humanity has no choice but to convert grasslands and forests into more cropland. Humanity has to eat. There are 3 billion more souls on the way. Attempts to simply replace fossil fuels with biofuels in today's cars is a hopeless, dead end strategy that is slowing progress towards sustainable, feasible solutions.

Thermochemical conversion approaches to cellulosic ethanol production reduce water use by 75 percent compared to corn ethanol and below the water use of gasoline refining. Furthermore, they reduce carbon emissions by 75 percent while producing ethanol at production costs well below that of corn ethanol and gasoline.

The problem being, of course, is that thermochemical conversion processes for cellulosic ethanol, like fusion power, hydrogen power, and carbon capture, don't exist in economically or environmentally viable formats. We can just burn cellulose to displace coal in power plants.

To incentivize the production of biofuels that are environmentally beneficial, I have suggested a "CLAW" -- or carbon, land, air quality, and water -- impact rating for all biofuels, much like LEED ratings for buildings. If we reduce the RFS mandates in the energy bill (as some have called for) we are likely to reduce the investment in next generation cellulosic fuels with disastrous consequences for our energy security and the environment. As one of the larger investors in cellulosic and waste based biofuels research, I should know.

CLAW = STAR. There we have the word "likely" again. There is no evidence for it, unless that last sentence is taken as a threat. Personally, I suspect Khosla is "likely" wasting not only his money, but mine as well.

It is clear that corn ethanol has served as a stepping stone for cellulosic ethanol and other biofuels, mitigating risk and establishing a market. As a venture capitalist, I would not have invested in cellulosic without corn ethanol's partial alleviation of the risks of creating a market, creating distribution terminals, E85 pumps and starting our flex-fuel fleet.

No it isn't. The above comment, as most of the rest of this post, has simply been copied from the previous post. If Khosla can cut and paste previously rebutted arguments, so can I. My apologies to readers for all the repetition:

1) There is no market for ethanol as a car fuel. Forcing consumers to subsidize cellulosic ethanol and then forcing them buy it back by blending it into their gas tanks is really twisting the definition of a "market." A true market is created by consumer demand being met by entrepreneurs competing amongst themselves to attract buyers with the best product. This is what Consumer Reports thinks about Flex Fuel Vehicles:

The fuel economy of the Tahoe dropped 27 percent when running on E85 compared with gasoline, from an already low 14 mpg overall to 10 mpg (rounded to the nearest mpg). This is the lowest fuel mileage we've gotten from any vehicle in recent years.

The FFV surge is being motivated by generous fuel-economy credits that auto-makers get for every FFV they build, even if it never runs on E85. This allows them to pump out more gas-guzzling large SUVs and pickups, which is resulting in the consumption of many times more gallons of gasoline than E85 now replaces.

2) The installation of E85 pumps is wholly unnecessary and would be a horrendous waste of capital. We could simply increase the percent of ethanol that we already blend into our fuel supply.

In fact, I believe that the cellulosic fuel mandates are too low. It would be smarter to change the RFS such that the RFS can be adjusted for five to seven years, both up or down every year, based on the availability of cellulosic fuels at a fair price above a floor price but related to the price of gasoline.

Consumers would be protected by such a "price capped cellulosic RFS" approach and it would offer investors and producers assurance that all cellulosic fuels that are produced at these reasonable prices will be mandated until cellulosic gets to scale by 2015. We will not have to worry about too ambitious a schedule for biofuels production. Yet it will prevent manipulation of cellulosic ethanol by interested opponents of clean fuels while increasing investment in cellulosic research and production facilities. And lest we forget, ethanol is just a starting point. Cellulosic jet-fuel and cellulosic diesel, and even renewable gasoline, are also under aggressive development by many startups, eliminating the need for food-based biodiesel at cheaper prices.

Who exactly are these ghostly opponents of clean fuels (today's biofuels are anything but clean)? Let me guess, the evil Oil Empire, who is already making huge  profits, is investing heavily in biofuel refineries and  making money on blending tax credits. Those research programs are the result of rising liquid fuel prices. They would exist without biofuel mandates.

All biofuels are not equal; as with anything, we can do it poorly or we can do it right. I believe that cellulosic biofuels offer scalable, economic, and environmentally meaningful impact on reducing our petroleum usage with benefits to farmers, entrepreneurs, and American consumers. I have many investments in biofuels companies, and some say I believe in biofuels because I have invested in them. I suggest that I have invested because I believe. I believe we can help the environment, our economy, and our national security by remaining committed to our current course.

American farmers, representing less than 0.1 percent of world population don't deserve or need our welfare, entrepreneurs an even small percentage than that. I believe that our government has made many extremely unwise decisions in the last eight years. The RFS was one of them and the current course is clearly leading to economical and ecological ruin. They must stop listening to special interest lobbyists and start listening to science and reason. The mandates for biofuels must end. If cellulosic investments can't survive without them they deserve to wither on the vine. It does not matter that a man "believes" what he says. Go back through history and look at what can happen when powerful interests have foisted their "beliefs" upon the masses. Biofuels are slowing innovation by creating the illusion that we will simply be able to replace what is in our gas tanks.


In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

He calls the WSJ editorial laughable. What is laughable are lines like this:

Much of public opinion is influenced by paid-for campaigns of interested parties.

The implication is that critics of biofuel policies are all part of some secret ninja force recruited by the oil industry. By contrast, we are supposed to believe that organizations like the Renewable Fuels Association are simply public-service organizations that happen to be located in Washington, D.C. because their employees like the smell of its springtime cherry blossoms.

No, it is not "clear that corn ethanol has served as a stepping stone for cellulosic ethanol and other biofuels" (what other biofuels?), "mitigating risk and establishing a market". Any risk for cellulosic ethanol produces that has been mitigated has not been mitgated by the existence of corn-ethanol, but by policies that shift the risk onto taxpayers and other consumers of corn.

The gamble that the country is taking, betting on ethanol, is a huge one. Mr. Khosla, understandably, would appreciate as much as possible of all the infrastructure for using ethanol paid for by taxpayers. But why should we satisfy his request?

Mr. Khosla talks frequently about imminent breakthroughs in the technology for producing ethnol from cellulosic biomass. But there could equally be breakthroughs in technologies for making fuels other than ethanol (like butanol) from biomass, which would not require (to a large extent public) investment in special pipelines, special pumps, specially designed automobile engines, etc.

Notice that Mr. Khosla puts biodiesel in the "bad drug" category, saying that "biodiesel from food oils like soybean or palm oil have traditionally created environmental negatives, they are unscalable and likely to be fundamentally uneconomic." Is ethanol from grains so different? And there are plenty of companies out there saying that biodiesel (or other diesel substitutes) from biomass is "just around the corner". Why doesn't biodiesel also count as a bridge fuel, by Mr. Khosla's logic? (Not that I am arguing that either it or grain-based-ethanol should be regarded as such.)

Finally, it would be nice if Mr. Khosla could actually provide a link to the Informa study on food prices that he cites. But, in any case, the U.S. consumer price index for food is a nice index if you are in a business that puts upward pressure on commodity prices. Some 45% of its weight is household expenditure on meals eaten outside the home. As any child knows, the commodity cost of meals eaten out is a fraction of the price that appears on the check the waitress hands you.

Accordingly, the sum that lies behind the CPI for food is enormous: total household expenditure on food is $1,100,000,000,000 (that's $1.1 trillion) per year. So even 1% of that is $11 billion.

These are only my personal opinions.

This whole ethanmol thing, wherever you get the freedstock, it's just going downhill.

Oh you can keep trying to rationalize, but that's not going to make it work.  The whole idea that energy coming from plants is inherently GHG free is just not so.  Not plants grown on land space that would normally be a part of the natural carbon cycle.

Maybe algae farms floating at sea or on really sterile desert land would actually be GHG free.  I vote for sea bourne with salt water algae species, that way no fresh water is used.  Extract biodiesel first, then turn the rest of the biomass into ethanol.

Wave, solar, and wind power could provide the energy for refining and processing.  Collectors that concentrate sunlight and penetrate the water surface could increase the sunlight/algae boundary layer and boost production as well as illuminate a strip of  solar PV/heat collector for process energy.

How much area would be needed to replace current gas guzzling?  100 by 100 miles of sea surface?  The cogenerated electricty would power everything else through power cables underwater.  Desalinated water could be another byproduct.  put a few square miles or 10 offshore of every big city on the coasts.  A sound plan.  

Everyone will hate this idea, go for it Vinod!  Hehey.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

"University of Illinois Extension farm economist Darrel Good said some form of crop rationing appears inevitable this fall as demand for corn as both food and fuel remains strong even as flood damage promises lower yields.

"The government can and has acted in the past. The most direct way is to restrict exports, though I don't think there's any support for that kind of action," said Good.
"The other tool is easing mandates and subsidies for ethanol production." "

But, I fear, even the democrats in Washington like my senators, Durbin and Obama, won't be paying any heed to the economists on this one.  No gas tax holiday but no ethanol subsidy holiday either.    

Ironically, the high price of petroleum coupled with the rapidly escalating cost of corn production  will be the nail in the coffin on corn ethanol.  But, this could stimulate Washington to add further bail outs and subsidies to our "driving on corn forever" national security policy.  Doing dumb often entails doing dumber.  

Candidates who endorse the stupidest energy/ag policy might win?  At least in the confederate states.

More drilling and fuel farming, more ultra-expensive imported energy.  More ultra-expensive chemical fertilizer turned into GHG spewing farmed fuel.

Is McBush already pandering to this faction?  It seems like it.  Will Barack have to do it too?  He did in the primaries, endorsing all the wrong stuff.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

You should be aware of a few things regarding land productivity in third world countries. In a country like India well benifited from the green revolution, the productivity is still 1/2 of what it is in the US.

Even with this limited productivity, India is able to be self sufficient in food and became a major exporter of food.

You should remember that India has 15% of the world population and a tiny pittance of the world's land.

Then, why do you think several African countries still rely on American grains for food ? Lack of investment. Terrible depletion of soil.

If only a portion of the farm subsidies that rich countries such as USA provide to their farmers be diverted towards investment in third world land, the results will be miraculous. A green revolution is just waiting to happen.

Whether we grow biofuels or not, this investment is badly needed by the 3rd world countries, and is necessary to reach the Millenium Development Goals of the UN. What Mr. Khosla says is that biofuels could be a tool in making this happen. It need not be the only tool.

It is true that there is the danger of rainforest depletion, with or without biofuel usage. Population growth is the most important factor in destroying forests. But strict controls on forest preservation can mitigate this risk. India achieved substantial targets in preservation of wildlife and forestry by imposing strict laws. The same can be done throughout the world.

What is needed is a change in people's mindset. Too many do-gooder environmentalists think that the world's population is beyond hope. The fact is that the world's resources (land, water and sunshine) are more than surplus for catering to all our food and energy needs.

I am not advocating any population increase. But I say no human being on this planet should be abandoned. Doing so would be an enormous crime.

Improving the productivity of third world land, and providing market access to poor farmers is the most basic thing that we can do. If we can do it with biofuels, that's good. If we can do that without biofuels, that's better.

What's needed is a drastic reduction in human population and a truly organic revolution, not a phony "green" one.

Although Khosla is giving lip service to African poverty to support his investments, note that he is not investing his money in African sugarcane, killing two birds with one stone (African poverty and liquid fuel shortages).

Most economists agree that agriculture alone cannot raise a country's standard of living very high. Crop prices and farm labor wages are kept low by competition to provide consumers with minimal food cost and mechanization quickly displaces even those few physically demanding low paying farm jobs.

The limit to agricultural expansion is that people can only eat so much. Of course, with 3 billion more people on the way, that is a not going to be a problem for long.

What profit takers want to do is increase how fast they can get wealthy by using food to feed cars as well as people. This is a dead end strategy for environmental and humanitarian reasons because agriculture by its very nature annihilates biodiversity and consumes resources and will also be needed to feed 3 billion more people.

The truth is that agriculture is one of the most environmentally destructive activities ever invented by mankind. The less we can do and still remain fed, the better.  

Note that agriculture has played a minor role in growing China's and India's economies.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

- Brazilian Ethanol: I tend to agree that Brazilian, sugar-based ethanol
has significant advantages over corn ethanol, and I support eliminating
the tariff on it. However, I don't believe its a solution by itself. It
is a starting point but we need more land efficiency or more gallons of
fuel produced per acre (ideally more miles driven per acre with fuels
beyond ethanol) and cellulosic can do that much better than food crops.

- Cover Crops: One can leave enough of a cover to avoid top soil loss,
and one leaves the root system in the soil where the microbial
communities are. One also prevents nitrogen runoff into our streams and
leaves it in the soil for the next summer food crop. This approach
leaves some of the extra carbon captured as CO2 by the cover crop in the
soil and takes some for fuel as biomass, still far better than what is
done today - which leaves the soil barren and results in nitrogen and
top soil loss. One can mix in legumes to fix additional nitrogen in the
soil as biomass crops for fuel don't need a "pure" crop so polyculture
cover crops would do just fine. One can in this scheme reduce the amount
of nitrogen during the summer crop cycle (and reduce nitrous oxide)
while harvesting biomass.

- Transporting Biomass / Effect on Food Prices, If you look at our
papers, we've consistently advocated for local plants - in fact, I've
specifically noted that feedstock transportation beyond a 50-100 mile
range is not economically realistic. Infrastructure means a lot more
than old ethanol plants. Its pumping stations, storage facilities all
over the country for distribution and blending of ethanol which now
exist, and most of all flex-fuel cars. The cellulosic ethanol produced
in Georgia or Florida or Washington or New England or Canada will share
much of this. Winter cover crops in places like Texas , Maryland,
Alabama, and North Caroline will be part of the mix along with waste
wood form forest operations in Washington or the North east.

As for the idea that displacing corn is going to increase food prices
significantly,  we've had many different versions of this complaint;
firstly, the argument was that corn ethanol is responsible for high food
prices (USDA Chief Economist Joe Glauber noted that "On the
international level, the President's Council of Economic Advisors
estimates that only 3 percent of the more than 40 percent increase we
have seen in world food prices this year is due to the increased demand
on corn for ethanol."  The USDA also noted previously: "Given that foods
using corn as an ingredient make up less than a third of retail food
spending, overall retail food prices would rise less than 1 percentage
point per year above the normal rate of food price inflation when corn
prices increase by 50 percent."), and now you're suggesting that
removing this corn is going to raise food prices? Moreover, look at the
impact biofuels have had on our energy costs already - "According to the
International Energy Agency, the biofuels production that has been
available to the United States and European markets over the last three
years has cut the consumption of crude oil by one million barrels a day.
At today's prices, that's a savings of more than $120 million per day."

- All biofuels are bad:  Some biofuels are awful, yes but painting them
all with a broad brush is just illogical. Study after study has shown
the environmental benefits of cellulosic biofuels, from NREL to the DOE
to multiple university studies. As to the idea of consuming less energy
- sure, but are we magically going to get people to stop driving, or
turn off their cars? There is a difference between blue sky, achieve
nothing idealist and pragmentalists (I consider myself one). Efficiency
is certainly a part of the solution (and we have over 15 investments in
efficiency of every type form lighting to engines to appliances), but
its not the solution by itself. We can't change consumer preferences by
lecturing at them - you have to provide people with alternatives they
want while trying to influence their "wants" by education (not rants!).

- Other fuels: butanol, other cellulosic fuels, and biodiesel: For what
its worth, we have invested in companies that are attempting to jump
start ethanol, and go to butanol or other future fuels (Gevo, Amyris,
LS9, Kior, to name a few). I've also said before that  RFS shouldn't
designate a winner (ie, one particular cellulosic fuels)- rather, it
ought to suggest that fuels that can meet the required "full life cycle"
environmental thresholds be eligible. That leaves the job of picking the
best technology to the market. We also have many investments (Transonic,
Ecomotors, Tula for engines and Seeo, Firefly and others in batteries)
attempting to cut oil consumption in half through better efficiency.
Biodiesel is a great idea made from cellulosic feedstocks but food crop
based biodiesel is the wrong thing and will not achieve either cost
effectiveness (ability to compete without subsides) or land efficiency
(gallons of gasoline equivalent per acre). Jatropha and algae may go
part way their but unlikely they will be as cheap as cellulosic fuels.

Criticism of biofuels is certainly fair game, and I think its important
to have these debates, but I see biofuels (done right) as the best and
only realistic, scalable solution in the near future.

regards,
Vinod

Would not wood be more competitive displacing petrol chemicals used directly in burners, like pellet stoves displacing natural gas.  Such gas can then be used for transportation.  Pellet stoves are becoming a roaring market success.

Would not solar Ausra used for industrial process heat displace more natural gas than capital invested in cellulosic fuels.

I would think in a devastated consumer economy that the margins of biofuels will become slim, demand destruction of oil a real possibility, and lower cost direct energy technologies more favored by marginalized consumers.

None-the-less, good luck with cellulose.

Brazilian Ethanol: I tend to agree that Brazilian, sugar-based ethanol has significant advantages over corn ethanol, and I support eliminating the tariff on it.

Nobody to my knowledge compared corn ethanol to cane ethanol in the above posts. The comparisons were between cane ethanol and cellulosic. Nobody disputes that cane ethanol produces far more net energy than corn ethanol. The bars shown below for cellulosic are rough estimates because commercial production of cellulosic is nonexistent:

The point, and this must be about the fifth time I've made it to you, is that

A) Sugarcane expansion will have to occur at the expense of carbon sinks.

B) It will expand because it will be cheaper than cellulosic.

C) Thanks to competition with cane, massive government support will be needed to prop up the cellulosic industry, along with the corn ethanol industry. Like the Soviet arms race, it is unsustainable, but like a any pyramid scheme, the fist people in will also be the first people out and the only ones to make money.

You are betting that the elimination of the tariff will pave the way for more flexfuel cars and therefore grease the skids for cellulosic (which will be able to  compete with cane only because it will have huge government subsidization). However, doing so will create a surge in the release of global warming gases as the Brazilians convert biodiverse carbon sinks into cane fields (land use change being the second leading cause of GHG emissions) in a gold rush frenzy to profit from an insatiable American thirst for car fuel. If biofuels decrease gas costs as you claim, they will also increase consumption, making this a tail chasing exercise, replacing oil with an even more environmentally destructive fuel.

A flood of cane ethanol might also resuscitate the lagging sales of low mileage flexfuel SUVs and pickup trucks as the Live Green Go Yellow campaign did.

As for the idea that displacing corn is going to increase food prices significantly, we've had many different versions of this complaint; firstly, the argument was that corn ethanol is responsible for high food prices (USDA Chief Economist Joe Glauber noted that "On the international level, the President's Council of Economic Advisors estimates that only 3 percent of the more than 40 percent increase we have seen in world food prices this year is due to the increased demandon corn for ethanol."

Explain to us why the limit on corn ethanol was put into the energy bill if it wasn't anticipated that it would impact food supplies. That "estimate" has in all likelihood been biased to reflect a politically astute pro corn ethanol position. Even so, that would still make corn ethanol responsible for a third of the 10 percent increase in global prices that biofuels are responsible for, which is significant.

The USDA also noted previously: "Given that foods using corn as an ingredient make up less than a third of retail food spending, overall retail food prices would rise less than 1 percentage point per year above the normal rate of food price inflation when corn prices increase by 50 percent."), and now you're suggesting that removing this corn is going to raise food prices?

"There are three kinds of lies: lies, damned lies, and statistics."--Mark Twain

It's a simple logical chain. There is no doubt that demand for corn by ethanol has raised the price of corn. There is no doubt the high price of corn has raised food prices. Ground corn (cornmeal) is food (for hundreds of millions). The price of a box of Cornflakes barely changes when you double the price of corn because it only has a handful of corn in it. That isn't true for cornmeal, which hundreds of millions of poor people subsist on. You said yourself, "for the urban poor food price increases are disastrous." If all of those people being driven into starvation in large part by corn ethanol held hands along the equator, they would wrap completely around the planet. How's that for a statistic?

From the USDA:

While the United States dominates world corn trade, exports only account for a relatively small portion of demand for U.S. corn--about 20 percent. This means that corn prices are largely determined by supply-and-demand relationships in the U.S. market, and the rest of the world must adjust to prevailing U.S. prices.

...and back to you:

Moreover, look at the impact biofuels have had on our energy costs already - "According to the International Energy Agency, the biofuels production that has been available to the United States and European markets over the last three years has cut the consumption of crude oil by one million barrels a day. At today's prices, that's a savings of more than $120 million per day."

This is the third time you have repeated what is looking more and more like an internet urban legend because you have for the third time failed to provide a link to the purported study after being asked for one. E85 and biodiesel "at today's prices" are both more expensive than gasoline and diesel respectively. In light of that fact, the above claim appears nonsensical.

Study after study has shown the environmental benefits of cellulosic biofuels, from NREL to the DOE to multiple university studies.

The fly in the ointment being that cellulosic biofuel does not exist in commercial quantities. You are confusing studies based on various best-guess assumptions, with real world results. It was a DOE study promoting soybeans for biodiesel, claiming it was 78% carbon neutral, that helped mightily to kick the biodiesel craze off. This hasn't been a debate about the potentials of an experimental fuel. I'm not sure it can be called a debate at all. It has been me talking to broken record. If there has been a debate, it has been about your support of mandates for crop based biofuels, which you consistently downplay both the environmental and humanitarian impacts of.

There is a difference between blue sky, achieve nothing idealist and pragmentalists (I consider myself one).

Who you calling me a blue sky, achieve nothing idealist? Why I oughta....

I've laid out the evidence that your support of crop based biofuels is an environmental and financial disaster but all you do is repeat  previous talking points, first defending existing biofuels and then praising the benefits of a non-existent fuel. Somebody go back and count how many times these same talking points have been repeated, often times verbatim.

Efficiency is certainly a part of the solution (and we have over 15 investments in efficiency of every type form lighting to engines to appliances), but its not the solution by itself.

No one ever said it was but you have it backwards. Efficiency is 90% of the solution.

As to the idea of consuming less energy - sure, but are we magically going to get people to stop driving, or turn off their cars? We can't change consumer preferences by lecturing at them - you have to provide people with alternatives they want while trying to influence their "wants" by education (not rants!).

I have nothing against magic, but Americans are already reducing oil use via mass transit, purchases of higher mileage cars, and on and on as a market response to high gas prices along with a growing awareness of global warming. The SUV fad is thankfully, finally growing to a close, in large part because biofuels have not and never will lower the price of gas. Prius sales have smashed through a million. Supply still can't keep up with demand and this is just the tip of the iceberg. GM's flex fuel fleet is rusting on the lots.

In your original post you tried to use Oxfam to defend biofuels:

And charities like Oxfam have historically been reluctant to export cheap American corn to Africa for this reason. On the other hand, can you imagine the human benefits of hundreds of billions of dollars going into biomass refineries in Africa every year?

But here is what Oxfam actually thinks about biofuels:

Oxfam says so-called green policies in developed countries are contributing to the world's soaring food prices, which hit the poor hardest.

The group also says biofuels will do nothing to combat climate change.

Its report urges the EU to scrap a target of making 10% of all transport run on renewable resources by 2020.

Oxfam estimates the EU's target could multiply carbon emissions 70-fold by 2020 by changing the use of land.

The report's author, Oxfam's biofuel policy adviser Rob Bailey, criticised rich countries for using subsidies and tax breaks to encourage the use of food crops for alternative sources of energy like ethanol.

"If the fuel value for a crop exceeds its food value, then it will be used for fuel instead," he said.

"Rich countries... are making climate change worse, not better, they are stealing crops and land away from food production, and they are destroying millions of livelihoods in the process."

Hybrids get 50 mpg.  Hypercar hybrids get 100 mpg.  Plugin hybrid hypercars?  They hardly ever need fuel and can run on renewable electricity, that means 10% of GHG of a gasoline car.

Corn ethanol doubles GHG emissions compared to gasoline, several recent studies have agreed.

Only the conversion parts for the flex fuel gas guzzler compared to the entire system in the plugin hybrid?  Doesn't seem like a fair comparison Vinod.

Instead lets compare a flex fuel gas guzzler to a plugin hybrid with a backup generator.  The gas guzzler has on the order of thousands of parts, including a lot of electronic chips.

The electric plugin hybrid has on the order of hundreds of parts.  Which would be cheaper in mass production?

Try manure, garbage, and biomass to biogas instead, and flex fuel long haul trucks, tractors, and trains.  That is a better area to invest in.  The huge GHG reduction from methane curtailed and organic fertilizer byproduct that eliminates nitrous oxide from chemical fetrtilizer, provide real GHG reduction.  Maybe 25 times the CO2 emitted when burning the biogas.  

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

If I may try and play devils advocate for the moment on why biofuels may have economical obstacles (as compared to competing technologies):

1) Exxon is going to be selling all their service stations nationwide over the next few years. Why don't they just convert these to biofuels or E85 ethanol and help convince automakers to help make more E85 vehicles? Is there a scalability issue?
If cellulosic biofuels were reasonable to mass produce to make a large dent in the US energy picture, then why would a company with thousands of smart petrochemists shy away from such an investmentin existing infrastructure on every streetcorner in America? Afterall, even in the corn belt of the US there is a dire need for more E85 service stations with willing customers.

2. Can mass distribution of a "fluid" (take your pick (gasoline, diesel, hydrogen, ethanol, biofuel) by 20th century standards, compete (in the next few years) economically with home plug-in hybrid automobiles and what already exists in every home, namely electricity from the electric grid? I was going to also ad water, but water already also exists in every US home (food for later nano thoughts).

3. Many people see the Brazilian model of widespread ethanol use, but as Wolverine has pointed out in an earlier comment, there is a tremendous price to pay on the rain forests of Brazil. Brazil is a country mind you, where they monitor forests via satellite (a concern for the Brazilian gov), but even then trading millions of acres of ethanol producing sugar cane for a lush dense rain forest and all the dependent animal and plant species may ultimately be a huge price to pay for energy independence down the road. As ethanol becomes more expensive and treasured by Brazilian consumer markets (compared to the price of oil) this will only cause more farmers to clear cut forests and try to become a grower. They may appear to be managing this on the surface, but eventually with growing cities this model may become environmentally unsustainable in the years ahead.

Also, your comments about ethanol and the Brazilian rainforest is exactly the kind that frustrates the Brazilians and enables the industry to claim that the skeptics, or "devil's advocates", don't know what they are talking about. Although there is a little bit of cane production occurring on the edge of the Amazon, the vast bulk of production takes place far from there. The land that is likely to be converted to cane production as the industry expands is the Cerrado, Brazil's vast savanna, not the Amazon.

Some people contend that the conversion of pastures will ultimately displace cattle raising to the Amazon, but that is a different argument.

These are only my personal opinions.

As for your first question, if corn ethanol production were to increase four times (which would consume 100% of our corn crop), we could still safely blend it all into our existing gas supply without installing a single pump or building a single flex fuel car because existing rubber tubing can tolerate a 10% blend. I have to wonder. If we were to put 100% of our corn crop into our gas tanks instead of a mere 25%, would ethanol proponents still claim that it would not raise the cost of food or starve the poor?

All gas station owners would install an ethanol pump and tank if they thought they would actually profit from doing so, regardless of who owns that station. Oil companies are after profit, regardless of which liquid fuel brings it, gasoline, diesel, ethanol, or biodiesel. If biofuels ever become profitable, oil companies or companies that look and act just like them will eventually own all production and sell it at all stations. War for oil would be shifted to war for biofuels.


In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Yes, indeed Brazil has enough Amazon ecosystem issues to contend with, regardless of where sugar cane supporting the ethanol industry is grown.  I can see how it can get confusing from 4000 miles way. Thanks for the clarification.

I was merely trying to point out that Brazil is indeed unique with respect to the ethanol industry. I doubt anyone else could duplicate their model..

-JChan

Biofuels, just getting started in many ways perhaps deserves some slack with regard to time to prove concepts and bring them to market to help replace oil.

Here's another article from the UK:

BioFuels Drive Up Food Prices

-JChan

Biofuels, just getting started in many ways, perhaps deserves some slack with regard to time to prove concepts and bring them to market to help replace oil.

Just getting started? Of course, ethyl alcohol -- ethanol -- has been produced (as beer or wine) since the time of the Pharos. People started distilling higher-proof ethanol during this millennium. The main new development during the last century was dehydration to eliminate all but a fraction of the original water.

Peanut oil ran the first diesel engine. Ethanol has been produced for automobile fuel since the time of Henry Ford. The modern U.S. and Brazilian fuel-ethanol industries date back to the 1970s, and in the case of the United States has been subsidized since 1978 and protected by an import tariff since 1980. (See the complete history of government intervention to support the ethanol industry here.)

The problem with fuels produced from corn, wheat and oilseeds is that its production cannot scale up without either raising food prices or leading to increased pressure on the environment.

These are only my personal opinions.

But if you consider corn's role as a major feed source for cattle, hogs, poultry, eggs, and milk, then the impact grows substantially.  

And the impact has affected the prices of other commodities, mainly soybeans, by competing for acres and resulting in reduced production.  Soybean prices have almost tripled in the past year, partially due to increased corn acreage.  

And although I have not seen any numbers regarding the impact of the increased production of corn on fertilizer prices which have easily doubled or tripled over the past year, this has added significantly to the cost of crop production worldwide.  The high commodity prices in the US have opened the floodgate on the prices of many crop production inputs.  

Worldwide, it is estimated that biofuel production has been responsible for at least 20 % of food price inflation.