BIOFUELS COST LESS AND GIVE US MORE THAN COAL-DERIVED SYNFUELS

 

By Wilbur Wood

For The Billings Outpost, August 24, 2006

 

Cliff Bradley calculates that every 10-cent rise in the price of gasoline or diesel fuel represents $87 million flowing out of the pockets of Montanans.

 

Bradley, a Missoula-based energy and agriculture consultant, points out that in 2005, price increases in gasoline and diesel drained more than $375 million out of the state's economy.

 

So far in 2006, price increases have been even more dramatic. This summer, average fuel prices, nationwide, bloated up to well over $3 per gallon, and Montana followed this upward trend. (Recently as average nationwide fuel prices slipped back into the $2.90 range, Montanans were still kept paying more than $3.)

 

This is a kind of tax, paid not to government -- where it has some chance of being invested in roads or other public services -- but straight into the bank accounts of Big Oil corporations. From this "tax" we gain no benefits except, perhaps, a few added jobs in our stateÕs dwindling oil fields.

 

Is it feasible to embark on a serious program to grow our own fuel here in Montana -- produce ethanol and bio-diesel -- and thus keep more of our money at home?

 

Cliff Bradley is one person who believes this is not only feasible but highly desirable.  Bradley is a microbiologist and also a small businessman whose company, Montana Microbial Products, does things like produce enzymes which more efficiently break down organic matter into ethanol fuel.

 

At this point I have to disclose that both Cliff Bradley and I are part of a group of people -- all members of AERO, MontanaÕs Alternative Energy Resources Organization --  who are writing a ÒBlueprintÓ which points the way for Montanans to tap into our abundant, clean, renewable energy sources to produce all the fuels -- as well as all the electricity -- we need in this state.

 

There is, of course, another competing energy ÒblueprintÓ: coal.  Coal to generate electricity and coal to synthesize into liquid fuels. This scenario, backed by large and prosperous fossil fuel energy corporations, continually grabs big headlines.  It's time to look closely at these competing scenarios.

 

In this article, we'll focus on fuels, and compare the economic and ecological costs and benefits of coal-derived ÒsynfuelsÓ versus biofuels.  Please examine the accompanying chart, which is based on the work of Cliff Bradley.

 

 

 

 

Biofuels vs. Coal-Derived Synfuel

 

                                          Biofuels                                                     Synfuel

                                Ethanol and Biodiesel                                   Coal to Liquid Fuel

 

Capital cost per

gallon of annual

production                Ethanol $1.50 to $2.00                                      $6.00 or more

                                 Biodiesel less than $1.00

 

Time to construct     Ethanol 6 to 24 months                                       5 to 10 years

                                 Biodiesel 3 to 12 months

 

Economies of scale  Ethanol, cost effective at                                     Pilot plant $1 billion

                                 1 million gallons per year,                                  plus

                                 $1.5 to $2 million in capital

                                 Biodiesel cost effective on farm

 

Return on Investment   To local economy                                          To oil companies, big

                                                                                                             financial companies

 

Water consumption    Minimal, mostly recycled                               At least 1 gallon water per

                                                                                                            1.5 gallon fuel, perhaps more

 

Land use                      Farms                                                               Mines

 

Global warming          Minimal                                                          3 pounds fossil CO2

Pollution                     Current, recycled CO2                                     per pound of fuel

 

 

This chart actually understates the full cost of coal-derived synfuels.  The capital cost, construction time and water consumption figures are estimated from presentations at the October 2005 Governor's Energy Symposium in Bozeman, Montana, but the speakers there did not mention the cost of coal mines (not only to produce coal but also to reclaim the land and mitigate damage to underground water). Nor did they mention building the infrastructure to transport coal and water; nor to capture and "sequester" carbon.

 

Gasifying and then liquifying coalis a complex process that emits enormous amounts of carbon dioxide, as well as other pollutants, and even if technology is developed to capture then "sequester" these gases successfully and safely underground, the fact remains that burning synfuels in vehicles means emitting gases from tailpipes. These cannot be sequestered.

 

By contrast, global warming from biofuels is "minimal" because carbon emitted from tailpipes comes not from fossil carbon sources (oil or coal) but from carbon extracted from the atmosphere by plants. Burning biofuels does return carbon to the atmosphere, but more carbon then is extracted by next year's "energy crop" in a continuing cycle.

 

(The capital cost, construction time and water consumption figures for biofuels come from standard industry estimates based on operating plants.  Time to construct and other costs can vary widely with scale and other factors like how far "feedstock" must be transported)

 

Biofuels compete economically with gasoline and diesel at retail prices above $2.50 per gallon (including taxes).  Well designed ethanol projects using low value or waste carbohydrates are competitive at even lower retail prices, as is biodiesel derived from waste vegetable oil (collected from restaurants and other food processors).

 

What' about jobs? Biofuel facilities employ more people, per unit of capital investment, than do fossil energy facilities.  Ands integrating biofuels with Montana agriculture can strengthen suffering rural economy by adding value to crops and keeping this added value circulating locally.

 

Biodiesel is the immediately promising path. This spring, many farmers around the state planted a variety of oilseed crops with an eye to cutting costs by producing enough vegetable-based fuel to power their tractors and trucks.

 

As far as the economics of growing "feedstock" to produce ethanol, a look at one of Montana's chief dryland crops is instructive. A bushel of barley sold for feed brings about $2. Converted to ethanol and its valuable byproduct, high protein livestock feed, that same bushel is worth over $5.

 

Sugar beets are another major Montana crop. Bradley says that when ethanol is priced at just $1.70 per gallon, the per acre return on sugar beets used for ethanol is about the same as the current value of beets manufactured into sugar.

 

Then there are non-standard ethanol "crops" -- so called "cellulosic" sources ranging from perennial grasses grown as energy crops to pulp and paper mill waste, forest residues, agricultural residues (sugar beet pulp, etc), and wheat and barley straw.

 

Bradley calculates that one-half of the wheat and barley straw in Montana could produce 280 million gallons of ethanol per year. (On most grain farms, half of the straw is now removed from fields for disease management.) Twice as much "feedstock" could come from perennial grasses grown on Conservation Reserve Program (CRP) land with minimal inputs and potentially improved soil fertility and erosion control.

 

(The chief limiting factor for "cellulosic" sources is the cost of collecting them; many may not pencil out economically if retail gasoline prices fall below $2.00 per gallon.)

 

Ultimately Montana theoretically could produce enough biofuels to replace all petroleum fuels consumed in this state. In the short term, Bradley concludes, biofuels could replace a significant fraction of petroleum -- and certainly do much faster than "synfuels".  Biofuel technologies are proven and immediately available, less capital intensive, and they can be brought on line in manageable increments.

 

Biofuel production can be decentralized, scaled to match locally available feedstocks and capital resources, so that farmers and people in local communities can actually own their own "refineries".

 

Contrast this vision with various coal synfuel schemes advanced at the Governor's Energy Syposium in October 2005. The chart in this article suggests a capital cost of "$1 billion plus" to convert Montana coal to liquid fuel, but proposals ranged from demonstration projects with a pricetag of $2 to $3.5 billion all the way up to a plants that would supply about 5% of U.S. transportation fuel, about 1 million barrels per day, for a capital cost of $60 to $80 billion. Symposium speakers talked of the need for government-funded research and "public-private partnerships" to enable this huge investment.

 

Why not, instead, use public-private partnerships to fuel Montana with homegrown ethanol and biodiesel?  The benefits would be immediate and tangible: a reliable fuel supply at a predictable cost, cleaner land, air and water, re-invigorated rural economies, local jobs, and not only dollars but people staying at home.