Assuming the price of oil will drop to $80 a barrel due to a weak US economy, recurring production costs are $30 a barrel and, ignoring net present value considerations, the ROI horizon on this massive investment comes to around 5.5 years.

There is still nothing as valuable as a hole in the ground, environment be damned.

Canada has one of the worst environmental records in some regards. For the first time I can remember, I am embarassed to be Canadian by the policies of my PM Stephen Harper. Is Canada using its oil wealth to make changes for reducing future oil demand? Nope. No surprise there.

Not that Harper had much to do with this decision, just venting.

The tar sands projects' costs (environmental and financial) have been enormous and notoriously underestimated.

And yet they continue to get ever greater momentum.

OTOH, here are companies that convert syngas (carbon monoxide and hydrogen from partial combustion) into ethanol due to specialized bacterial metabolism:

http://www.brienergy.com

http://www.coskataenergy.com

Apparently BRI was the first in this business, although Khosla Ventures & GM have bet on Coskata (at the Detroit Auto Show, Vinod Khosla claimed such ethanol could be produced for a buck a gallon).

And for a small fraction of the estimated cost of this one gross tar sands expansion, we could quickly prove that we could have sustainable ethanol from a process like that from BRI/Coskata.

Apparently though, such a technical transition to cheap sustainable ethanol (or to even cheaper electrical energy for plug-in cars) may be much much easier than to break the chokehold that Big Oil has over all financial markets and crooked politics.

All the biomass-ethanol schemes suffer from a lack of feedstock, and the conversion losses make this worse.  The hypothetical 1.3 billion tons/yr of US biomass supply postulated in The Billion-Ton Vision would have about 21 quads of energy; conversion to ethanol would probably yield about 10-11 quads.  The US burns about 16 quads/year of gasoline alone.

I've seen solutions which scale.  This isn't one.

There is so much greenwashing in this announcement I don't know where to start. Tar sands (don't swallow the oil sands line) are just a wholesale looting of Canada's amazing natural heritage.Why aren't Canadians out in the streets over this or at least exerting some very strong electoral pressure to stop it?

Why aren't Canadians out in the streets? Because natural resources are a provincial matter so being out in the streets in Vancouver does no more good than being out in the street in Seattle. 2) the Alberta economy is so highly dependent on oil they won't bite the hand that feeds it. 3) Our PM and a large part of the federal Conservative caucus comes from Alberta and 4) the area in question has very few other (human) uses and is far from highly populated centers other than Fort McMurray, and that's an oil town. As usual, tax payers will be on the hook for clean-up after the oil companies leave/go broke and the local residents will be left with the health effects.

Biomass in not a complete answer, but it as an augmented answer: combine biomass with EVs and increased efficiency and it could be done. Waste Biomass could replace 15% of Oil use, Energy crops another 15%, heck that covers all industrial oil uses (plastics, asphalt, pharma, etc) things electricty or hydrogen can't replace.

Engineer-Poet:

Until you mentioned it, I didn't recall any sort of "Billion-Ton Vision" thing.

Here's what I envision:

Simply ASAP lay out the economics of an optimized BRI/Coskata process, and then we might prevent many more extremely damaging and wasteful tarsand, oil shale, and corn-ethanol boondoggles.

Even your own "Billion-Ton Vision" figures would about eliminate US oil imports, and other countries (China, India, etc.) could do likewise.

World living (and hence environmental) standards could thus rise significantly, and remaining World trade in ethanol would largely bury the petro-threats by Muslim fanatics like Iran's, Putin's Russia, Chavez' Venezuela, etc. And by the way, just a random thought, but do you think US troops today patrolling bomb-laden Iraqi streets might like replacing US oil imports with BRI/Coskata ethanol ??

But anyway, I'd agree with you that the "Billion-Ton Vision" still wouldn't be enough to fuel all the SUVs that marketing departments are panting to sell. So then we'd need more than the essentially painless BRI/Coskata technology. Depending on economic and environmental factors, much more biomass could be obtained from algae, or cars could become increasingly electric (with renewable generation possibly from wind turbines, photovoltaics, and/or geothermal).

Even your own "Billion-Ton Vision" figures would about eliminate US oil imports

What do you mean, my own Billion-Ton Vision?  It's a product of the US government, and more than 2 years old already.  You have few excuses for being ignorant of its existence, and not many more for not having skimmed the contents.

You have no excuses for not realizing that US oil imports are far larger than could be displaced by all the ethanol we could make from a billion tons of biomass.  US oil imports are more than 2/3 of consumption.  Gasoline is only about 45% of total US petroleum product consumption, and that much ethanol wouldn't even replace all of it.

Simply ASAP lay out the economics of an optimized BRI/Coskata process

You. Just. Don't. Get. It.  Liquid fuels are a dead end.  Producing them from RE is too lossy, and they saddle us with the noise, pollution and other problems we're trying to get rid of.  We can get rid of all of those problems by going electric.

Yes, even the efficiency problem.  Cook biomass to make gas and charcoal, yielding about 50% of the energy in each.  Run the gas through a solid-oxide fuel cell (50-60% efficient), run the charcoal through a Direct Carbon Fuel Cell (70-80% efficient), use the waste heat to cook the biomass.  This gives you on the order of 65% efficiency from field to wires, maybe 50% field to wheels through batteries.  You'd be lucky to get 50% conversion of biomass to ethanol, and then you have the lossy engine and transmission; you'd get maybe 7.5% end-to-end.  That end is a DEAD end.

A 20 billion investment for 200,000 b/day increased production means $100,000 for 1 barrel/day, not to mention production costs. We should be able to decrease consumption much more than 1 barrel/day for a $100,000 investment in more efficient vehicles, mass transit, electrifying railroads etc., and the environment would profit from the latter while only suffering from more tar sands development. This is an extreme example of private profit trumping societal and environmental welfare.

Here's Canada, a dear small nation of a mere 30M people with vast resources that enjoys bashing all but themselves for consumption and excess. Odd, but it turns out that nearly every nationality and all people love their money when it arrives.

EP, not to defend the DOE/DOA study but the billion (1.3B dry tons) is meant only to replace 30% US transportation fuels. Under that assumption, their estimates seem reasonable.

Sulleny

I don't recall Canadians bashing everyone else when it comes to consumption. Sure we'll bash on stuff like invading other countries and human rights abuses (everyone enjoys the chance to feel righteous from time to time, but when it comes to consumption, we know that we consume (or would like to) just as much as our neighbours to the south. You are otherwise correct that Humans are basically the same the world over (for good and evil).

Don't recall writing "Humans," Neil.

You did use the word "people". These people aren't human?

Engineer-poet, have you thought about the economic viability of your proposals?

Eric, I'm not an economic analyst (no cost data for too many things) but I did take a stab at some of that back in 2006.

(Damn, it's over a year already.)

Engineer-Poet:

So I guess my low-life dirt did some good: You've given us your "Mission Accomplished" pearls of wisdom !!!

Why didn't I think of solid-oxide and direct carbon fuel cells ??? Maybe because low-lifes like myself see them as just another impractical, uneconomic illusion in favor of Big Oil - at least for a long, long time.

But obviously I'm wrong to think that we're not going to replace ICEs for decades. You also generously set this record straight: "The Billion-Ton Vision would have about 21 quads of energy; conversion to ethanol would probably yield about 10-11 quads. The US burns about 16 quads/year of gasoline alone." So again using your figures as the gold standard of merit, I get 10.5 / 16 = 0.656 (65.6%). In my own rough consciousness, that's pretty near the 2/3 of the gasoline that's made from imported oil. And then the BRI/Coskata process can also make electricity during syngas production - but again that's negligible in your world where we've replaced all ICEs with solid-oxide/carbon fuel cells.

Ahh, but your superior objections must naturally override all others: What, for example, about diesel and fuel oils - ethanol can't replace those !!! Again, I must confess that the BRI/Coskata process doesn't make diesel, but it could be replaced by algae oil combined with synthetic Fischer-Tropsch diesel and refined pyrolysis oil made from algae. Again, economics would decide - limited by regulations and tariffs of course.

So after you've set me straight, maybe you can also provide us some learned interpretation about the gigantic Exxon profits, in light of the worsening recession and the fact that Exxon vociferously rejects liquid biofuels (coincidentally like Engineer-Poet). Or maybe enlighten us about how the tar sand developments aren't poisoning Alberta's water (and our air), or how Canada won't be severely damaged by a recession combined with the excessively high Canadian dollar and enormous tar sands investments turned into boondoggles by cheap ethanol ???

...Wait a minute...can the Poet's poetry. I'm pretty sure that ethanol can be made a *lot* cheaper, both environmentally and economically, than the current corn scam. Brazil has proved that (and the US even prevents importation of Brazil's ethanol through tariffs). It may be possible to tune the BRI/Coskata process - to significantly beat Brazil's cane ethanol and wholesale gasoline prices. This is what the public and investors should know - and ASAP. And as we rapidly decline into recession, most people want to knock Exxon and its bought politicians (and maybe some disinformation poets) off their perches.

So again using your figures as the gold standard of merit, I get 10.5 / 16 = 0.656 (65.6%). In my own rough consciousness, that's pretty near the 2/3 of the gasoline that's made from imported oil.

Let's try it without the shady accounting, okay?

10.5 out of 39.76 quads of petroleum is about 26%.  This is hair over a third of petroleum imports (29.03 quads).  This doesn't come close to removing oil from its throne, nor fix the dependence of the US economy on unfriendly suppliers.

And then the BRI/Coskata process can also make electricity during syngas production

How much?  Gimme numbers here.  The USA uses about 4000 billion kWh/year, roughly half of it from coal; how much of that could the Coskata process replace?

Exxon vociferously rejects liquid biofuels (coincidentally like Engineer-Poet).

I don't reject liquid biofuels entirely, just as a primary solution to petroleum dependence.

XOM also rejects electric vehicles and PHEVs, while I support them.  This is not a coincidence, for those of you who are keeping track. ;-)

enormous tar sands investments turned into boondoggles by cheap ethanol ???

That sure would be nice.  How are you going to make ethanol scale well enough to do that?

ethanol can be made a *lot* cheaper, both environmentally and economically, than the current corn scam. Brazil has proved that

In your dreams.  Brazil only makes 0.85 barrels of ethanol per person per year (out of 4.2 bbl/capita total consumption).  The USA consumes 27 barrels of oil per person per year, and can't even grow sugar cane without large amounts of fertilizer and subsidies.  Last, even Brazil's miracle appears to depend upon cane-cutters working at third-world wages.  Even if we could do it here, I doubt that we'd want to pay the human cost.

Poet:

>>So again using your figures as the gold standard of merit, I get 10.5 / 16 = 0.656 (65.6%). In my own rough consciousness, that's pretty near the 2/3 of the gasoline that's made from imported oil.

>Let's try it without the shady accounting, okay?

>10.5 out of 39.76 quads of petroleum is about 26%. This is hair over a third of petroleum imports (29.03 quads). This doesn't come close to removing oil from its throne, nor fix the dependence of the US economy on unfriendly suppliers.

But I quoted YOU (as follows) when you were talking about gasoline (before the above when you switched to oil): "The Billion-Ton Vision would have about 21 quads of energy; conversion to ethanol would probably yield about 10-11 quads. The US burns about 16 quads/year of gasoline alone." You also said that 2/3 of oil is imported, hence 2/3 of gasoline is from imported oil. Now if 10.5 quads of gasoline is replaced by BRI/Coskata ethanol, that's pretty close to replacing the gasoline from imported oil. But you continue to remain fixated on the obscure "Billion-Ton Vision" thing while ignoring the significance of the claims for the BRI/Coskata process. I'll try to explain further below (although I doubt I'd get any sort of deflating admission from a puffed-up self-declared Engineer-Poet).

>>And then the BRI/Coskata process can also make electricity during syngas production

>How much? Gimme numbers here. The USA uses about 4000 billion kWh/year, roughly half of it from coal; how much of that could the Coskata process replace?

This is the entire point of my postings here - to try to get interest in high-quality cost estimates for BRI/Coskata ethanol - which would need to include the estimated value of electricity co-generated during ethanol processing. The only overall cost information that's been made public so far was from Vinod Khosla at the Detroit Auto Show to the effect that Coskata ethanol could cost a buck a gallon to produce. Now Khosla is a co-investor along with GM in Coskata. For such an extraordinary claim, the public should be very interested (I know I am) in thorough evidence - in particular because GM wants to subvert fuel-economy standards - so there's no way we can yield any sort of concession on fuel-economy standards to GM due to this flimsy claim about buck-a-gallon ethanol. HOWEVER, this claim should not be dismissed or credited as yet. It does merit serious investigation - and much more seriously than this single extremely costly tar sands boondoggle.

>>Exxon vociferously rejects liquid biofuels (coincidentally like Engineer-Poet).

>I don't reject liquid biofuels entirely, just as a primary solution to petroleum dependence.

>XOM also rejects electric vehicles and PHEVs, while I support them. This is not a coincidence, for those of you who are keeping track. ;-)

And yet in previous posts you were stuck on "The Billion-Ton Vision" and "scalability" things. The point is that the tar sands are about the most expensive and environmentally costly oil production on the planet (sort of like addicts desperately seeking veins between their toes). With BRI/Coskata ethanol, expansion of tar sands projects would likely cease. Visitors like myself to Green Car Congress would agree that would be a GOOD thing (despite Engineer-Poet's opinions). Because such enormous sums have been sunk already, extant tar sands operations would likely continue until environmental regulations or operational costs stop them (for example, North American natural gas reserves are 9 years so if you want to heat your home longer than that you likely want the tar sands projects to terminate).

>>enormous tar sands investments turned into boondoggles by cheap ethanol ???

>That sure would be nice. How are you going to make ethanol scale well enough to do that?

Again, you are obsessed with "scale". The point here is to wrap up the tar sands expansions - which are about the most expensive and environmentally costly oil production on the planet.

>>ethanol can be made a *lot* cheaper, both environmentally and economically, than the current corn scam. Brazil has proved that

>In your dreams. Brazil only makes 0.85 barrels of ethanol per person per year (out of 4.2 bbl/capita total consumption). The USA consumes 27 barrels of oil per person per year, and can't even grow sugar cane without large amounts of fertilizer and subsidies. Last, even Brazil's miracle appears to depend upon cane-cutters working at third-world wages. Even if we could do it here, I doubt that we'd want to pay the human cost.

I have lots against despots propped up by oil. Cane-cutters in Brazil do so because it provides them with better incomes than alternatives. In my view, up with cane-cutters, and down with oil despots (GW Bush and yourself are free to think otherwise, but that attitude has "lost" Latin America to US influence). But this is still Green Car Congress, and monocultures of specialized crops for biofuels are both very expensive and very environmentally degrading (and is inhumane because of constrictions of food supplies according to the UN, if that means anything to you). The BRI/Coskata process only needs carbon, so any type of crop residues, or carbonaceous garbage, or algae could be used. I agree electric drives are the future, but BRI/Coskata ethanol (IF the claims are PROVEN TRUE) could be a great boon (for example, to fuel any ICE car, or electric cars with range-extending gensets).

@Jay Dee

You have to consider the investment that would have to be sunk into the Coskata process. the U.S. consumes ~24mbpd, ~2/3 of which are imported. In order to displace imported oil, the Coskata process would have to be scaled to ~16mbpd. That would be an enormous investment:

Assume:
-Coskata scales immediately to replace foreign oil
-Coskata expects a 10% ROI, meaning that they have a 10 year period to recover their initial investment.
-Assume that $1/gallon sale price allows them to recover their investment over 10 years.

-16mbpd @ 42gal/b = 472,000,000 gallons/day
-472,000,000 gallons/day @365days = 172,280,000,000 gallons per year
-for ten years= 1,722,800,000 gallons
-@ $365/gal....

or

Assume:
-Half the Suncor cost per barrel of capacity (very realistic IMO, as the infrastructure isn't dramatically different)

-16,000,000bpd x $50,000/bpd = $800,000,000,000

My (tired) calculations yields between $625 and $800 trillion investment to displace foreign oil, never mind declining domestic production, and never mind building infrastructure to transport and dispense the ethanol. That much money could put us a long way down the electric highway by buying/building batteries:

Assume:
-100,000,000 private vehicles in U.S.
-A 10kw/h battery per vehicle
-Battery cost of $0.50/W

-10,000w @ $0.50/W = $5,000 per battery
-$5,000/battery @100,000,000 batteries = $500 Trillion
-With that sort of volume, we could expect $0.25/W or $250 Trillion

Those are some sobering numbers (assuming there in the ballpark) That should tell us:
-The subsidy cheap oil has provided our lives (A $50,000 well in Ghawar in the 50s would have flowed nearly 50,000bpd)
-The cost of replacing cheap oil will be substantial

IMO, ethanol seems like a dead end.

An immediate claim against the battery scenario would be that we would have to build new (electric) cars, adding substantially to the cost. This would be a correct observation, however we usually replace cars here in the U.S. every 7-13 years.

Also, consider that, except for batteries, electric cars are much cheaper than their ICE counterparts. This is because they do away with many ancillary components such as:

-Exhaust headers
-Catalytic converters
-Exhaust pipes
-Muffler
-Friction brakes (and associated hardware)
-Radiator
-Fuel tank, pump etc.
-Transmission
-Differential

Electric motors are considerably simpler than their ICE counterparts. I won't even begin to list the components as I'd run out of space.

Another strike against electric would be building a charging infrastructure. While this is legitimate, I say this:

-Substantial use of ethanol would require a complete rebuild of all existing pipelines and filling stations.
-Switching to electric would simply require refitting existing fuel stations with fast chargers and utility scale batteries. Trust me, that's way cheaper than rebuilding pipelines and digging up fuel tanks.

GreenPlease:

You said (at 6:50 am, Feb 4, 2008):

>Assume:
>-Half the Suncor cost per barrel of capacity (very realistic IMO, as the infrastructure isn't dramatically different)

>-16,000,000bpd x $50,000/bpd = $800,000,000,000

>My (tired) calculations yields between $625 and $800 trillion investment to displace foreign oil, never mind declining domestic production, and never mind building infrastructure to transport and dispense the ethanol.

Unless inflation gets a lot worse, $800,000,000,000 in today's dollars is $800 billion (not trillion), which could be quite affordable for Americans to replace foreign oil - if your assumptions are close to reality. According to the following article, the US spent about $400 billion on imported oil in 2007 alone:

http://www.tomdispatch.com/post/174888

(Or do your own calculation such as 16,000,000bpd x 365 days x $80?? per bbl = $467.2 billion)

Moreover, the BRI/Coskata process could initially be introduced into local economies using local feedstock (local garbage and crop residues), without any need for pipelines or supertankers. This is the natural route for small business: New investment will naturally choose technologies with larger profit margins (after the BRI/Coskata process has been shown to be very cheap, such as a buck or 2 per gallon) compared to competitive technologies (such as the corn ethanol scam).

I won't disagree with you about the prospects for electric cars (electric energy costs are cheaper than ethanol, and electric drives are more efficient) - but they aren't competitive yet (on range, initial cost, battery wear-and-tear costs, etc.)

We have had more than 100 years of investment accumulation in oil. It is not realistic to think that we can change that over night. We have had more than 30 years since the last oil shock to get going. But much like health care, if there are a few people making tons of money, they will not let that go easily.

Some people talk about proactivity, but we are basically a reactive people. We do very little until it hits the fan and then people ask "why didn't somebody do something about this before hand?". The conservatives will tell you that if it is not broke, do not fix it. That statement illustrates the point. It is as if they are staying do not mess with things, you might screw them up. (or at least put risk into the profit picture for our friends)

@Jay Dee

My bad. I still think the numbers look good though.

You are right about it being relatively affordable and the scale up process. But if we are going to spend the money, let's do it the right way and go electric, no?

Or perhaps we need a Marshall Plan that aggresively goes after both techs at the same time. Say 50 billion on ethanol and 50 billion on batteries. Spend the battery money on 1kw/h units and mandate that everything on the road be an ethanol powered HEV.

One ca dream....

Quoth Jay Dee:

But I quoted YOU (as follows) when you were talking about gasoline (before the above when you switched to oil): "The Billion-Ton Vision would have about 21 quads of energy; conversion to ethanol would probably yield about 10-11 quads. The US burns about 16 quads/year of gasoline alone."You also said that 2/3 of oil is imported, hence 2/3 of gasoline is from imported oil. Now if 10.5 quads of gasoline is replaced by BRI/Coskata ethanol, that's pretty close to replacing the gasoline from imported oil. But you continue to remain fixated on the obscure "Billion-Ton Vision" thing while ignoring the significance of the claims for the BRI/Coskata process.

I'm willing to bet that "Jay Dee" is short for "juris doctor", because this is the kind of sleaze I have learned to expect from someone whose mission is to say anything (and I mean anything) which serves the interest of their client, honesty be damned.

When someone writes "16 quads/year of gasoline alone", there is no valid interpretation except that the full quantity/problem at issue is considerably larger than that.  And it is.  Your attempt to narrow the issue by ignoring diesel, jet fuel, heating oil and all the other petroleum products on which the US economy depends (and without which it would collapse even if we replaced gasoline) is simple sleaze.

I also asked you a direct question:  "How are you going to make ethanol scale well enough to do that?"  You failed to respond in any substance.  Why?  Because it can't, and anything you said on the issue would prove the emptiness of your case?  If not, go ahead; show me the data which proves that it can.  While you're dealing with the backlog of unanswered questions, tell me how much electricity we'd get out of those ethanol processes too.

And yet in previous posts you were stuck on "The Billion-Ton Vision" and "scalability" things.

You're the one touting ethanol from biomass; the amount of feedstock should be of enormous interest to you, yet you're sneering at the one document which ought to your best support.  So far I have seen no support for your case, and the history of Khosla's attempts to obtain subsidies and mandates which would advance the business case for his technology shows that he's not about solving the energy or liquid fuels problem, his goal is to have the taxpayer guarantee his profits.  He's no different from the farm lobby, which is why we have ethanol mandates in the first place.

I could make an engine which runs on whale oil or Chanel No. 5 perfume.  There are not enough of either of these in the world to make a significant difference in our energy situation; solutions must scale.  Any solution for the USA must be able to supply on the order of 5.5 quads of work to the wheels of road vehicles, or make it up with greater efficiency.  You cannot make this go away with bluster or by ignoring it.  Your handwaving is just bull puckey.

I have lots against despots propped up by oil.

Which is exactly why a person seriously concerned about the problem will denounce anyone pushing a non-solution which would extend the reign of those despots.

Like I'm denouncing you.

the BRI/Coskata process could initially be introduced into local economies using local feedstock (local garbage and crop residues), without any need for pipelines or supertankers.

This is precisely why I argue for conversion of crop residues to charcoal and gas for fuel cells:

• The processing technology is simple.
• The fuel cells do not require large scale to achieve top efficiency.
• The rural electric infrastructure can carry electricity out as well as in.
• This eliminates the need to transport crop materials (and the embodied nutrients) any great distance.

In addition, the net efficiency of the electric system will be 5-7 times as great as conversion to liquid fuels for combustion engines.  This makes the difference between solving a fraction of the petroleum problem, and solving most of the petroleum, coal and natural gas problems.