Corn ethanol GHG emissions w Biomass for Process Energy - 119% reduction w Biomass Combined Cycle.

http://www.biomasschpethanol.umn.edu/papers/Kaliyan%20et%20al_Biomass%20&%20Bioenergy%20Manuscript_Nov%202010_Revised.pdf">Reducing Life Cycle Greenhouse Gas Emissions of Corn Ethanol by Integrating Biomass to Produce Heat and Power at Ethanol Plants - University of Minnesota .... Nalladurai Kaliyan, R. Vance Morey, Department of Bioproducts and Biosystems Engineering, University of Minnesota, Douglas G. Tiffany, Department of Applied Economics, University of Minnesota

http://www.biomasschpethanol.umn.edu/papers/Kaliyan%20et%20al_Biomass%20&%20Bioenergy%20Manuscript_Nov%202010_Revised.pdf#page=31">summary table


"A life-cycle assessment (LCA) of corn ethanol was conducted to determine the
reduction in the life-cycle greenhouse gas (GHG) emissions for corn ethanol compared to
gasoline by integrating biomass fuels to replace fossil fuels (natural gas and grid
electricity) in a U.S. Midwest dry-grind corn ethanol plant producing 0.19 hm3 y-1 of
denatured ethanol. ..."

..
..

"The biomass conversion technologies/systems considered are

Process Heat (PH) only systems,

Combined Heat and Power (CHP) systems,

and Biomass Integrated Gasification Combined Cycle (BIGCC) systems.

The life-cycle GHG emission reduction for corn ethanol compared to gasoline is 38.9% for PH with natural gas,

57.7% for PH with corn stover,

79.1% for CHP with corn stover,

78.2% for IGCC with natural gas,

119.0% for BIGCC with corn stover, and

111.4% for BIGCC with syrup and stover."



THis is what is possible. CHP and BIGCC are not 'rocket science', technologically speaking. They do require additional efforts to balance and optimize the systems. This represents more of an industrial engineering challenge than a technological challenge. But these results are within the reach of all ethanol producers.

But CHP and BIGCC do require additional investments and in a new industry (fuel ethanol) with regulatory and competitive uncertainties (gasoline prices fluctuate as much as 20+% up and down over the course of twelve months) businessmen/investors are reluctant to expose themselves to additional risk which additional investment would introduce. When the price of gasoline is on the down side ethanol producers can find themselves struggling to make a profit (since most ethanol facilities are quite new, there are still very large write-offs of investments and significant interest payments on loans). Over the last couple of years (2009, 2010) a number of ethanol producers went into bankruptcy when gas prices dipped (remember speculators can exaggerate prices BOTH ways not just on the up-side) and they couldn't make the payments on loans. So businessmen are reluctant in this environment to expose themselves to the additional risk investments in CHP and BIGCC would lead to.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=115&topic_id=292826&mesg_id=293326">Still don't accept that 18.4 is LESS than 21.2? ...LOL

using corn residue or corn creates more problems that are not included into these figures. the only reason to use ethanol is for the on site production of grains, fruits,and vegetables. it will never be cost effective for automoblies or trucks.

BTW: You can take about 10%-15% of the crop residue without any problems, agriculturally speaking.

Ethanol wholesale sells for about 17.7% cheaper than gas (this is before the excise tax credit).

of course you have heard that ethanol gets 35% less mpg. That's a pretty good rule of thumb for high blends of ethanol (e.g.85%) used in engines not set up to take advantage of ethanol's high octane (compared to gasoline) property.

But at low blends (e.g. 10%-15%) which almost all the ethanol used in cars in the U.S. is.. the mileage decrement is only about half that (NOTE: going by Heating Value, you should get about 3.5% less mpg with 10% Ethanol. Empirical tests with cars, done by the Coordinating Research Council, show the mileage loss for 10% ethanol in the real world is more like 1.6%). That's because mileage isn't just a simple matter of the heating value of the fuels. The octane of the fuel makes a difference. So, the adjustment for miles per gallon is roughly about the same as the difference in prices. Which means when adjusting for miles per gallon you come out breaking even - i.e. you are not losing money.

But also, since ethanol is bringing down the price of gas at least 15% you are saving much more on gas than any mileage decrement would cost you (if it cost you anything, which for 10% ethanol it isn't). You would be paying at least 17.5% {(1/(1-.15))-1} MORE for gas if ethanol wasn't supplying almost 10% of the fuel supply so you save more that way than any mileage decrement for 10% would have cost you ...IF...mileage was just a function of the Heating Value of the fuel.

That number is based on a 2008 NREL commissioned study done by McKinsey. It gathers savings in different areas and sums them up for a total, the $0.17 you point to.

1) It assumes that refiners pass through savings to customers. Are they doing that?

2) The $0.17 savings you are claiming is very sensitive to the price of oil and the price of corn. They modeled corn at between $2-7/bushel and petroleum at $60/bbl. Today corn closed at $7.07 and petroleum at about $100. Your number is therefore inaccurate.

3) There is a real and consistent value related to the anti-knock property of ethanol, but that only justifies about a 2% contribution of ethanol to the fuel mix. The number derived by McKinsey doesn't look to be based on that, but instead to be oriented around a backward looking comparison based on ethanol's current contribution. In other words, technically we need 2% for antiknock purposes. The ethanol incentives result in ethanol making a 10% contribution to the mix - a contribution that eliminates the need for alternative antiknock ingredients. However, when calculating the savings they have based it on comparing ethanol prices to the price of the alternative antiknock ingredients (at their "there is no demand" level) for the full 10% of ethanol's share; thus APPARENTLY inflating the savings offered by ethanol in this sector of the total by about 5 times.

for oil.

I will quote and provide a link to the Merrill Lynch report published in June of 2008:

http://rcr.ml.com/Archive/10728832.pdf?q=1cyqC4wejFOCyimR!c9J6g__&__gda__=1305068338_d267c0b09e063653ca3bbbc07a6d6528">Biofuels driving global oil supply growth

"On a global scale, biofuels are now the single largest contributor to world oil supply growth. We estimate that retail gasoline prices would be $21/bbl higher, on average, without the incremental biofuel supply."

Now, if you use Qtr IV of 2007 for the price of oil ($87.62) ML is saying the cost for a barrell of oil WOULD have been $108.62 WITHOUT Ethanol supplying some of the fuel needs. So how much of a reduction percentage-wise is that? it's 19.3% reduction FROM $108.62. But how much would the price of oil/gas be from where we were (Qtr IV 2007) if ethanol went away.. it would go up 24% to reach $108.62 ($21 is 24% of $87.62).

Now we are making considerably more ethanol today than we were in 2007-2008 time frame when ML analysts made that estimate...so I am being quite conservative saying ethanol has reduced the price of gas 15% (which I often quote). THere are other studies of the elasticity of demand for oil that show a smaller elasticity of demand (which means the price fluctuates to a greater degree).

I do not base the number I quote on the NREL study. And I am actually being pretty conservative using a 15% reduction in the price of gas due to ethanol.

I hope this clears this matter up for you. (and I mean that)

is 'not clear' (page 7).

on page 2 of the Merrill Lynch report they state:

"In particular, the surging ethanol output has contributed to temper prices
in the Midwest (by $32/bbl) and in the East Coast (by $24/bbl) due to the greater
availability of ethanol and the lower price elasticity of demand in these regions." (note lower elasticity means greater price flexibility or volatility. see how the prices in midwest and East coast were 'tempered', that is lowered, by a larger amount than the $21 they used for U.S. in general - of course they also stated there was a 'greater availability' of ethanol there too. But there again they are recognizing the supply relative to demand.).


The conventional way to predict the impact on the price of a commodity due to a change in supply or demand for that commodity is to use elasticity of demand or supply (as appropriate). This is the required methodology in any economic analaysis of demand andor supply and prices. IF you DON'T use elasticity of demand/supply in your analysis, you better have an explanation as to why you DIDN'T. (...usual excuse is insufficient sample data for a reliable estimate.)

And ML probably does.

McKinsey takes ML into consideration and as you say, and if they say the methodology isn't clear I'd suggest to you that it is missing details that are needed to assure its validity.

As for McKinsey's NREL study, it's substantially less than ML on its face and it that face, as I said, looks to be inflated quite a bit by an assumption that isn't justified. It would need to be based on the actual amount of alternative antiknock that would be displaced by ethanol rather than what it would cost to replace the current level of ethanol with the alternative antiknock.

It is a serious error.

ETA: Points from previous post
That number is based on a 2008 NREL commissioned study done by McKinsey. It gathers savings in different areas and sums them up for a total, the $0.17 you point to.

1) It assumes that refiners pass through savings to customers. Are they doing that?

2) The $0.17 savings you are claiming is very sensitive to the price of oil and the price of corn. They modeled corn at between $2-7/bushel and petroleum at $60/bbl. Today corn closed at $7.07 and petroleum at about $100. Your number is therefore inaccurate.

3) There is a real and consistent value related to the anti-knock property of ethanol, but that only justifies about a 2% contribution of ethanol to the fuel mix. The number derived by McKinsey doesn't look to be based on that, but instead to be oriented around a backward looking comparison based on ethanol's current contribution. In other words, technically we need 2% for antiknock purposes. The ethanol incentives result in ethanol making a 10% contribution to the mix - a contribution that eliminates the need for alternative antiknock ingredients. However, when calculating the savings they have based it on comparing ethanol prices to the price of the alternative antiknock ingredients (at their "there is no demand" level) for the full 10% of ethanol's share; thus APPARENTLY inflating the savings offered by ethanol in this sector of the total by about 5 times.

take 20 years to realize these results!

recommended.

I whish they had done biogas as well.

Great post!!!