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Study: Biofuel Potential in Oregon May be Costly and Limited; Results More Widely Applicable
30 July 2007
The adoption of biofuels in Oregon could reduce the state’s fossil fuel use by less than one percent, but at a much higher cost to society than more direct approaches such as a gasoline tax or raising fuel economy standards, according to a study by the Oregon State University (OSU) Extension Service.
The study by OSU economists Robin Cross and Thorsten Egelkraut compared three types of biofuels: corn ethanol, canola biodiesel, and wood-based (cellulosic) ethanol. The authors examined the fuels’ commercial viability, potential production scale, and cost-effectiveness for achieving energy independence and reducing greenhouse gases.
The researchers estimate that to achieve a given improvement in energy independence, biofuels could be 6 to 15 times more costly than other policy approaches such as raising fuel economy standards for vehicles.
Compared to a gasoline tax, all three options are estimated to be more than 10 times more costly for a given reduction in fossil fuel use. Compared to raising fuel economy standards, biofuels are estimated to be 6 to 15 times as costly.
When looking exclusively at reducing emissions of greenhouse gases, however, their analysis suggests that both canola biodiesel and wood-based ethanol may be cost-effective ways to achieve that goal.
The results are also mixed in terms of commercial competitiveness. The study finds that corn ethanol and canola biodiesel are currently commercially viable in Oregon, thanks in part to government subsidies and regulations that have increased demand and lowered the cost of production. However, current production costs are still too high to make wood-based ethanol commercially attractive.
The OSU study looked only at large-scale commercial production of these three biofuels. The authors acknowledge that local or on-farm production may offer other advantages in some cases. They also caution that their estimates are subject to future changes in prices, technologies, or other developments.
The researchers also note that the applicability of the study is not limited to Oregon.
The main results of our analysis do not depend on our regional focus.
—William Jaeger
Although the scale of production of Midwest corn ethanol and soybean-based biodiesel is much larger than Oregon biofuels, the cost and cost-effectiveness of their production is not much different, according to the researchers.
(A hat-tip to Marty!)
Resources:
July 30, 2007 in Biodiesel, Cellulosic ethanol, Ethanol, Policy | Permalink | Comments (11) | TrackBack (0)
Comments
Posted by: mahonj | July 30, 2007 at 05:58 AM
It might be costly and limited right now and the next few years, but in the future the market will work itself out as oil prices rise and biofuels become more economical.
Posted by: word | July 30, 2007 at 08:49 AM
I am skeptical. The last GCC report by a bunch of economists tried to foist off a $400 billion dollar a year carbon cap and trade scheme - clearly a ruse to keep energy controlled by the same old boys currently running it into the ground.
What this report does not acknowledge is the cumulative value of 100 years of petroleum subsidies against the real costs of biofuels. Nor does it account for the massive environmental damage caused by the petroleum monopolies in the same time frame.
Were these accountants charged with adding the cost per refined gallon of air pollution, land depletion, health care costs, destructive-development, petroleum subsidies and toxic cleanup - we would see that gasoline cost over the last hundred years is a large multiple of the apparent current cost per gallon.
The report summary notes that the study focused on a non-commercial cellulosic process - meaning that one third of the study is antiquated already. And the references nearly all come from DOE or DOA giving further pause due to the lack of non-US data sources.
Posted by: gr | July 30, 2007 at 11:14 AM
Mike -
the PDF file you provide as a resource appears to be password-protected.
Posted by: Rafael Seidl | July 30, 2007 at 12:03 PM
Rafael - The open source Acrobat clone 'Foxit Reader' opens the file just fine. However, any copy of this document saved cannot be altered or copied (text or graphics) from.
Posted by: Bob | July 30, 2007 at 12:57 PM
This article is accurate in its assessment that biofuel's potential will remain very limited, due to the energy intensive, land used and water used and labor and processing costs associated with biofuels, not to mention escalating food prices due to food used for fuel.
The most viable large-scale renewable fuel approach is waste biomass gasification for H2 to be used for electrical generation for BEV and PHEV, while the CO2 remaining can be used to combined with H2 generated from wind or solar energy by high-temp electrolytic process to produce transportation liquid fuels via F-T synthesis, or H2 to power the vehicles directly. Still, the future synthetic fuel supply will be severly limited, so future cars must be significantly downsized, enlightened (physically!), and having the most efficient ICE-HEV, or hybrid FCV layout capable of over 100 mpg combined driving, or PHEV or BEV. All these are doable or soon-to-be, what is needed is the will to do it.
Alas, "the spirit is willing, but the flesh is weak!"
Posted by: Roger Pham | July 30, 2007 at 03:52 PM
I think that "GR" has it right when he talks about the real cost of gasoline not being accounted for. It has had literally over 100 years of subsidies, and even today, the oil industry is getting subsidized to "find more oil". Has anyone done a search on the 25 most profitable and/or highest revenue companies on the planet? Wanna guess who covers most of the top 5 in both categories, ESPECIALLY profits? LOL Yes, it's very important that we continue to subisdize those poor oil companies so they can go find oil. They're starving their children to make ends meet. What a joke.
You know, my company sells software to make the planet a better place. I need to contact my congressman to help get subsidies to help us write more software. Yea, that's a great idea. We can all do that.
OK, stupid sarcasm off: What everyone fails to realize when they make statements about the "market eventually fixing things" is that we don't live in a market economy. We live in a lobbying system dominated by special interests. Things that should "fix themselves" in 2-3 years takes 2-3 decades because we do NOT live in a market economy. We simply don't.
Posted by: Dave D | July 30, 2007 at 04:03 PM
The commenters that assume that criticism of biofuels comes from apologists for petroleum companies must not read very much. Criticism of biofuels is coming from analysts who look at their energy balance (need for mostly fossil energy inputs for not much more energy yielded), their displacement of cropland and raising of food crop prices, and their endangerment of forest and peat land.
Biofuels may have a sustainable role in certain niche applications but need eco-certification to ensure that they are in fact green.
The primary competition for all of these fuels, including hydrogen, is electricity. Electric vehicles and PHEVs are the way to go, especially as the grid becomes greener.
Posted by: michael | July 30, 2007 at 08:17 PM
Biofuels are a SOP done by politicians to reward potential voters. They exist to make it appear something is being done, even if nothing of significance is.
It is harmleess boodling. The "invisible hand" is working as we speak, driving to a substitution for a significant portion of chemical trnsport fuels. Price not coersion or exhortation, will provide the impetus for the change.
Posted by: Stan Peterson | July 30, 2007 at 08:23 PM
The "invisible hand" is working as we speak, driving to a substitution for a significant portion of chemical trnsport fuels.
The Invisible Hand? LOL. That's one of those canards made up to keep useful idiots in line.
Posted by: jack | July 30, 2007 at 10:08 PM
For latest stories and news on ethanol, biofuels and climate, please visit:
www.ethanol-news.de
Posted by: Marian | August 20, 2007 at 09:56 PM
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If all they are gong to get is a 1% improvement, you could probably get this by telling people to pump their tyres, remove roof racks and drive less aggressively.
It is really a marketing problem.
If you want a 10 or 20% improvement it becomes a legislative and engineering problem, but you could get 1% any time, if people were willing to drive more easily.
I am sure the good folk of this website could provide reams of ways to drive more economically.