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US Ethanol Industry Has a 4.9 Billion Gallon Year; Consumption Beats RFS Standard by 1 Billion Gallons

29 December 2006

Iowaetoh
Iowa’s ethanol output, 1978-2006. Click to enlarge.

US ethanol production in October tied the all-time high set in September 2006 of 333,000 barrels per day (bpd), according to data released by the Energy Information Administration (EIA).

The US ethanol industry was averaging 310,000 bpd of production through October, an annualized volume of 4.75 billion gallons. Industry estimates show ethanol production reaching 4.9 billion gallons for the year, an increase of more than 25% from 2005, according to the Renewable Fuels Association.

Demand for ethanol also soared in 2006. October demand was 391,000 bpd, up from 278,000 bpd in 2005. For the year, demand has averaged 339,000 bpd or more than 4.3 billion gallons. Total demand for 2006 will greatly exceed 5 billion gallons, more than one billion gallons over the requirement of the Renewable Fuels Standard (RFS).

The state of Iowa alone accounted for almost 31% of that output, with a record 1.5 billion gallon produced in 2006, according to the Iowa Renewable Fuels Association. That level of output represents a 36% increase from the prior record of 1.1 billion gallons, set in 2005.

Since 2002, Iowa’s ethanol output has grown an average 36% per year, increasing 3.4 times from 440 million gallons.

Iowa ethanol plants consumed more than 550 million bushels of corn in 2006—about 25% of the state’s total corn harvest.

Iowa has more ethanol plants than any other state, including 16 new ethanol plants and five major expansions under construction.

December 29, 2006 in Ethanol | Permalink | Comments (35) | TrackBack (0)

Comments

To underscore gr's point, I think the algae company who recently tested their tanks in Arizona was reporting oil yield's up to twice as high as the maximum in the DOE report. According to their website info, their low yield was the DOE maximum.

I find it interesting that biofuel competing with food is automatically assumed to be bad for the poor by many on this site. It is ironic when the most recent WTO trade round reportedly broke round because developing countries wanted an end to developed country subsidies that act to artificially depress world food prices. These poor countries seem to believe that higher food prices are in their interest.

Posted by: Andy | January 03, 2007 at 08:07 PM

gr,
The cost of water is only part of the problem. The sheer quantity is a challenge by itself. That amount of water is not going to be available in a remote desert location.

And I don't think covered ponds are practical on a scale that is going to make a difference. GMO: no thanks, I would rather just allow the fastest growing wild type to dominate.

BTW, Gasification/Fischer-Tropsch (as proposed by the German company Choren) does not mean burning waste - it means converting organic waste (any organic waste) into liquid fuels (and not just any liquid fuel, the same hydrocarbon fuels we all use today, minus a few nasties like aromatics and sulfur).

Also note that biodegrable material left in a landfill slowly decomposes into CO2 and CH4 (20x worse GHG than CO2). Although some landfills collect the gas and burn it, a better way would be to convert the waste to liuid fuels, thus replacing OIL.

Posted by: An Engineer | January 04, 2007 at 10:38 AM

Andy,
Did the test you refer to include adding CO2 from an exhaust stack? That would explain the high growth rates. While this would be a great way to scrub CO2 (and NOx) from exhaust gases, I doubt there is enough power plants in the desert to make this a large scale solution.

Also: you misinterpret the third world's position on agricultural subsidies. Look at this from the third world's perspective. Farmers in the third world are going out of business, because they cannot compete with cheap, subsidised food getting dumped on their home countries. Hence first world agriculural subsidies are killing third world economies, particularly those dependent on agriculture. How are you going to grow a country to a first world economy if you can't even get an agricultural economy going.

I guess an argument can be made that the third world consumer is better off, receiving cheap imported food from the first world. Only the third world consumer is last on the supplier's list of priorities. Tomorrow the supplier may find a different customer, or a different product. This leaves the third world consumer without the cheap food. And with local production gone out of business, there is no alternative.

The first world is also a study in contradictions when it comes to the subject of subsidies and tariffs. They basically force the third world (usually via the IMF or the World Bank) to give up all such ideas (this medicine is good for you!). But when it suits the first world, well excuse us, we'll just use a subsidy (like all those agricultural subsidies) or a tariff (like Pres. Bush did with steel). Fair trade? Only when it suits the first world...

Posted by: An Engineer | January 04, 2007 at 11:02 AM

A E,

Logistical positioning of farms near to water sources, e.g. southern Colorado, east of Rockies, would allow spring snow melt to feed water storage tanks. Also, recycling water should not be too difficult if the growth process is essentially non-toxic, organic.

Gasification/Fischer-Tropsch process noted.

Good points about third world pummeling to conform to first world whimsy. If there were a healthy independent agra/biofuel industry those IMF loans would be on far more equitable terms (for third worlders).

Posted by: gr | January 04, 2007 at 11:59 AM

An Engineer,

Yes, they were capturing CO2 emissions. Neither this fact nor the question of whether or not there is water in the desert has anything to do with the fact that the DOE report would no longer be accurate if their maximum yields are 50 percent too low.

No, I didn't misinterpret the third world's position on agricultural subsidies. I stated, "These poor countries seem to believe that higher food prices are in their interest." I provided no value judgements and offered no opinion on why they feel that way. I did not need to. Regardless of why you or I think they are seeking an end to developed world subsidies, the fact that they are seeking an end to food subsidies stands directly in contrast with the idea that raising food prices will hurt the poor generally. Poor countries around the globe want food prices to increase.

I'm at a loss for both of your responses.

Posted by: Andy | January 04, 2007 at 07:37 PM

Andy,
I dare suggest the third world governments seem to be ahead of you on this one. Rather than just say "why do they want expensive food?", I suggest you think it through. We are effectively killing the most basic industry (agriculture) in the third world through unfair subsidised competition. Why buy subsidised food from the first world, if you can buy it from your local producer (and keep the money in the third world)?

Think about it - it's not hard...

Posted by: An Engineer | January 05, 2007 at 10:45 AM

Logistical positioning of farms near to water sources, e.g. southern Colorado, east of Rockies, would allow spring snow melt to feed water storage tanks. Also, recycling water should not be too difficult if the growth process is essentially non-toxic, organic.
These resources (land and water) are available (i.e. not used for something more profitable, such as producing food)? Think not. The US has to keep a certain flow in the Colorado to Mexico, by agreement, as far as I know. Doubt whether the land is available, too. As I said, food production would be (and should be) more profitable.

Yes, they were capturing CO2 emissions. Neither this fact nor the question of whether or not there is water in the desert has anything to do with the fact that the DOE report would no longer be accurate if their maximum yields are 50 percent too low.
The CO2 issue makes the world of difference! The DOE numbers are too optimistic for a large scale application (without CO2). For the more limited application (at a powerplant, with CO2) perhaps it is not applicable. Makes sense, as CO2 is usually the rate-limiting nutrient for photosynthesis, even at the present elevated levels.

Point is: to make a dent in oil consumption/import, you have to do this at large scale, i.e. without CO2 and the water issue comes into play...

Posted by: An Engineer | January 05, 2007 at 10:57 AM

An Engineer,

You sure make a lot of assumptions for an engineer. I'm quite familiar with the reasons behind the developing world's opposition to agricultural subsidies. In your incredibly simplistic explanations for why they are ahead of me on this subject, you continue to point out that they want the price of food to increase. That is the only point I care to make on the subject.

Regarding the GreenFuel test in Arizona, you are assuming that their results are limited to the desert. You also assume that their process leads necessarily to significant water losses. You seem to assume that the only place that carbon capture with algae might matter or make sense is in the U.S. You further assume that there isn't enough carbon available for significant implementation of this project. I had only one point that I was making on the subject; the DOE report's maximum yield no longer appears to be accurate. You can assume that the GreenFuel results aren't applicable all you wish.

Posted by: Andy | January 05, 2007 at 07:08 PM

You sure make a lot of assumptions for an engineer.
I make reasonable assumptions, as all engineers do. More about that later.

I'm quite familiar with the reasons behind the developing world's opposition to agricultural subsidies.
Possibly true, but you gave no indication of that in this discussion...

In your incredibly simplistic explanations for why they are ahead of me on this subject, you continue to point out that they want the price of food to increase. That is the only point I care to make on the subject.
I have to insist that you are the one using incredibly simplistic explanations. For example: you seem to assume that the price of food only includes what the consumer pays for it. In this case it would be fair to add the cost of a non-functional agricultural industry and all the hardship that entails, for the third world. For the first world: subtract from your savings at Wal-mart the taxes you pay to subsidize agriculture.

Regarding the GreenFuel test in Arizona, you are assuming that their results are limited to the desert.
Please take time to read the references attached to the thread. The UNH research specifically refers to doing this in the desert. With good reason: you need a lot of land to make a dent (if you want to do this on small scale, why bother?). A reasonable assumption, then.

You also assume that their process leads necessarily to significant water losses.
I stated rather clearly that that was for an open system in the desert. Another reasonable assumption, then.

You seem to assume that the only place that carbon capture with algae might matter or make sense is in the U.S.
No, I did not. There is a reason for using US data in this type of calculation: it is readily available. Show me the data for Marocco, or any other place, and we can run the same analysis.

You further assume that there isn't enough carbon available for significant implementation of this project.
This assumption can be viewed from two different angles:
1. There is not enough power plants in the desert.
2. There is not enough land for algal ponds around existing power plants.
In both cases it is another reasonable assumption, then.

I had only one point that I was making on the subject; the DOE report's maximum yield no longer appears to be accurate.
Your only point being incorrect, since you are comparing apples with oranges. Apples: algal production with added CO2. Oranges: DOE results without CO2.

You can assume that the GreenFuel results aren't applicable all you wish.
As explained above, the results are applicable to a different situation. Another reasonable assumption, then.

Posted by: An Engineer | January 08, 2007 at 11:04 AM

You sure make a lot of assumptions for an engineer.
I make reasonable assumptions, as all engineers do.

There was nothing reasonable about any of your assumptions. For instance, you assumed ignorance on my part because I didn't elaborate on WHY the developing countries want prices to increase when WHY they want them to increase has no bearing on the issue.

I'm quite familiar with the reasons behind the developing world's opposition to agricultural subsidies.
Possibly true, but you gave no indication of that in this discussion...

I had no need to: they want an end to export subsidies which means they want an increase in food prices. WHY they want food prices to increase is not pertinent to the question of WHETHER they want them to increase unless WHY somehow shows they really want prices to decrease in some round about way. You aren't trying to show that at all and you would be patently wrong if you did. They want food prices to increase so that their farmers can make a profit. Therefore, WHETHER they want food prices to increase or not is the only relevant question when trying to determine if there is weight to the argument that using "food" crops for fuel is in their interest or not. Using “food” crops for fuel will achieve the same result they are seeking. They want food prices to increase.

Regarding the GreenFuel test in Arizona, you are assuming that their results are limited to the desert.
Please take time to read the references attached to the thread. The UNH research specifically refers to doing this in the desert. Please take time to read the references attached to the thread. The UNH research specifically refers to doing this in the desert. With good reason: you need a lot of land to make a dent (if you want to do this on small scale, why bother?). A reasonable assumption, then.

It isn't reasonable to assume that production can only be done in the desert. If you actually read the NREL report you said you were relying on you would know that DOE tested their stuff in Hawaii and California initially and the original site proposal for the facility that wound up in New Mexico was Southern California. Per the NREL report:

“The various ASP resources analyses indicated significant potential land, water, and CO2 resources, even within the limited geographic area (the southwestern United States) that was the focus of the ASP. Several quads (1015 Btu) of fuels were projected for the various available resources. Other areas, from Florida to California, could also be considered. Microalgae systems actually use fairly little water, compared to irrigated crop plants. In addition, many waste and saline water resources may be available and suitable for microalgae production. Many CO2 sources are available, and algal ponds could be purposefully co-located with CO2 sources, or even vice versa. This is already being done at a commercial microalgae facility in Hawaii. Finally, land is hardly a major limitation: two hundred thousand hectares, less than 0.1% of climatically suitable land areas in the United States, could, with maximal productivities, produce about 1 quad of fuels. Thus, although there are many practical limitations, which may make some earlier predictions optimistic, resource limitations should not be an argument against microalgae biodiesel systems." (http://www.nrel.gov/docs/legosti/fy98/24190.pdf Pg. 219)

And this is using open ponds.

You also assume that their process leads necessarily to significant water losses.
I stated rather clearly that that was for an open system in the desert. Another reasonable assumption, then.

Per the above quote the algae can grow in saline water and even open ponds use little water. The GreenFuel system isn't open and it isn't subject to significant amounts of water loss. No, it isn't a reasonable assumption.

You seem to assume that the only place that carbon capture with algae might matter or make sense is in the U.S.
No, I did not. There is a reason for using US data in this type of calculation: it is readily available. Show me the data for Marocco [SIC], or any other place, and we can run the same analysis.

You said: "I doubt there is [SIC]enough power plants in the desert to make this a large scale solution." That has nothing to do with data or calculations. You are assuming the only potential site locations are in the mainland U.S. This is clear by your follow up: "These resources (land and water) are available (i.e. not used for something more profitable, such as producing food)? Think not. The US has to keep a certain flow in the Colorado to Mexico, by agreement, as far as I know."

You further assume that there isn't enough carbon available for significant implementation of this project.
This assumption can be viewed from two different angles:
1. There is not enough power plants in the desert.
2. There is not enough land for algal ponds around existing power plants.
In both cases it is another reasonable assumption, then.

It isn't reasonable in either case. Just looking at the numbers I posted on GreenFuel’s claimed yields should tell you that this isn't going to be a problem.

I had only one point that I was making on the subject; the DOE report's maximum yield no longer appears to be accurate.
Your only point being incorrect, since you are comparing apples with oranges. Apples: algal production with added CO2. Oranges: DOE results without CO2.

The DOE report looked at algae production for fuel. DOE considered and tossed out this type of production as too costly hence the focus on open ponds. Per the NREL report:

“A major conclusion from the cost analyses is that there is little prospect for any alternative designs for microalgae production systems that would be able to meet the requirements of microalgae production for fuels. This is particularly true of closed photobioreactors, in which the culture is entirely enclosed, in greenhouses, plastic tubes or bags, or other transparent enclosures. The costs of even the simplest such system would likely be well above what is affordable for fuel production processes. Even the simplest plastic sheeting cover over the ponds would much more than double total systems capital and operating costs.” (Pgs. 245-246)

But even they acknowledged that:

“…it would be theoretically possible to grow algal strains not able to dominate in open ponds, at higher productivities and reduced harvesting costs, thereby making up for the higher costs of closed photobioreactors (which proponents assume to be only marginally higher than open pond systems). (Pg. 246)

If the yields are twice as high as DOE thought possible, the capital to output costs would be cut in half. The whole system may therefore undermine the main tenets of the DOE report.

You can assume that the GreenFuel results aren't applicable all you wish.
As explained above, the results are applicable to a different situation. Another reasonable assumption, then.

There aren't any results. You've missed the point on both issues entirely. Heck, you’ve missed the point of the materials you say you are relying on. Per the UNH website:

“While the work on algae for fuel production done in the 1980s and 1990s focused almost entirely on the simple open pond approach, most groups now working in this field (including our collaboration) have shifted to focusing on the use of proprietary photobioreactors. The primary reason being that most of the problems encountered by prior work (takeover by low oil strains, vulnerability to temperature fluctuations, high evaporation losses, etc.) are primarily a result of using open ponds. Going with enclosed photobioreactors can immediately solve the bulk of the problems encountered by prior research. The obvious drawback though is cost – any photobioreactor design is going to be have a higher capital cost than a simple, open pond. At this point, a key factor in making algal biodiesel a commercial reality is the development of photobioreactors that can offer high yields (optimization of light path, etc.), but be built inexpensively enough to offer a reasonable payback rate (otherwise no company would be interested in building them). Improving processing technologies, and designing an integrated system to tie the algae production into other processes (i.e. wastestream treatment, power plant emissions reduction, etc.), can further improve the economics and payback rate. UNH and our collaborators are currently focusing on these issues, with the goal of making algal biodiesel a commercial reality." (http://www.unh.edu/p2/biodiesel/article_alge.html)


Posted by: APosterFormerlyKnownAsAndy | January 11, 2007 at 07:53 PM

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