Green Energy

compact flourescent

Toyota Prius


Hybrids run on gas but are extra efficient because their engines run at the perfect speed all the time. This trick is done with batteries and an electric motor. This gives them great gas mileage.  Plug-in Hybrids will be here soon.

Corn ethanol—No.   Cellulose ethanol—Yes. corn-ethanol

Just grow our own oil! In 2006 it cost $8 billion extra for 1.1% energy independence and 0.06% reduction in GHGs. Was that real cost or just excess profits? If you care about climate change, don't fall for this ADM-Bush-corn-subsidy shenanigan.


Wind—competition for nuclear

Every other year Congress reinstates the 2¢/kWh subsidy and wind power takes off. Every other year Congress lets the subsidy die and wind-power stagnates. But there are a lot of other wind subsidies, and it's difficult to find the true cost. My best guess is $70 to $100/MWh, and for comparison, the average wholesale cost of power in California is $30/MWh. That means it costs around $80 to $140 per ton of carbon saved. That's much more than we need to pay, but wind turbines or oh so cool.

BrightSource: 400 MW

Solar—The Best Bet at Present

 Solyndra has just given solar technology a black eye, but unfortunately, it's well-meaning environmentalist who deserve it. Huge subsidies for half-baked solar production is not what solar needs. BrightSource's almost-complete, 400 MW Ivanpah project probably made some sense as a real-world test of stat-of-the-art solar thermal. But what solar really needs is more research. That's the only way to pull ahead of China, and the only way solar can come of age.


I'm hoping to look into this pretty soon. It just might be better than wind.

3-Mile Island

Nuclear—Ugly but it might work?

Nuclear power generation produces no CO2, but some claim it takes a nuke 30 years to pay back the CO2 from building it. Nonsense. Three months is more like it. But the waste-disposal problem is unsolved and nukes are expensive. Why subsidize them more than wind? Why not a bit less?



How Economists Proved Car Companies Are Lying about Better Mileage

November 22, 2011.  Nothing's perfect, but at present, but conservation sure beats whatever's in second place. And if you don't like paying taxes to our Uncle Sam, stop for a moment to consider what we pay to Iran and Saudi Arabia (yes, I know we mainly buy from Canada, but that just means someone else pays Iran for us). I'm not getting off track here, our best conservation opportunity is aimed squarely at the world oil market.

The American Economic Review (look) just estimated what it cost to improve a car's mileage by 1 mile per gallon. Between $9 and $27 on the price of a new car. And how did they figure this. They took a very careful look at how car companies use and don't use loopholes in CAFE standards. When they make only partial use of a very cheap loophole that proves they are not up against any high-cost barier. And that's what we see.

This completely gives the lie to car company's moaning and groaning over how much it would cost them (and by implication, us) to give us better gas mileage. It also confirms what Amory Lovin's has said for years (and I'm not fan of Lovin's) and what I explained in my book Carbonomics. By fighting car companies on their own turff -- engineering -- they set themselves up for failure. And fail they did. This is all because environmentalists love command and control, which gets them right into the engineering -- what's practical and how much will it cost.

The right way to solve this problem is economics. That's how to put real pressure on car companies. Use a fee-bate. Charge a fee for cars with low mileage and give a rebate for cars with high mileage. Then the car companies can never argue, "Oh we can't possibly meet that standard." With a fee-bate there is no standard. And that's what makes environmentalist nervous. But they need to curb their control-freak habits and learn some economics. After all, it's greed that drives corporations. Learn how that works and you can weild some power. So would your rather get the job done, or try to get some satisfaction out of telling car companies what they can and cannot do. Given that the companies win anyway, I'd have to call that a no-brainer.




Cheap Gas Savings

Using Loopholes to Reveal the Marginal Cost of
Regulation: The Case of Fuel-Economy Standards

By Soren T. Anderson and James M. Sallee*

American Economic Review 101 (June 2011): 1375–1409


Estimating the cost of regulation is difficult. Firms sometimes reveal costs indirectly, however, when they exploit loopholes to avoid regulation.
We apply this insight to fuel economy standards for automobiles. These standards feature a loophole that gives automakers a bonus when they equip a vehicle with flexible-fuel capacity. Profitmaximizing
automakers will equate the marginal cost of compliance using the loophole, which is observable, with the unobservable costs of strategies that genuinely improve fuel economy. Based on this
insight, we estimate that tightening standards by one mile per gallon would have cost automakers just $9–$27 per vehicle in recent years. (JEL L51, L62, Q48)


VI. Conclusion

We analyze the market for flexible-fuel vehicles that burn ethanol. While interesting in its own right, this market is especially important because it indirectly provides information about the cost of tightening the fuel-economy standards that apply to all automobiles. Efforts to reduce gasoline consumption in the United States have historically focused on mandating vehicle efficiency through CAFE standards. The merits of these standards are not always clear, in part because it is difficult to measure the cost of regulation in the absence of market prices and because automakers have an incentive to overstate the costs of compliance. Domestic automakers claim that aggressive increases in CAFE standards would cost them tens of billions of dollars in profit, force them to close plants and cut tens of thousands of jobs, increase car prices by thousands of dollars, and “cripple” the domestic auto industry. 

We estimate that the marginal compliance cost of the CAFE standard, as revealed by profit-maximizing behavior in the auto industry, was relatively low during much of the last decade. To do so, we demonstrate that automakers exploit an incentive or “loophole” in CAFE regulation that allows them to relax CAFE standards up to a point by producing flexible-fuel vehicles. We show theoretically that constrained automakers will equate the marginal cost of improving fuel economy using flexible-fuel vehicles with the marginal cost of improving fuel economy through other means. Thus, because we can observe the cost of producing a flexible-fuel vehicle, automakers that produce flexible-fuel vehicles without exhausting the loophole indirectly reveal their marginal compliance costs. Based on this approach, we estimate that tightening CAFE standards by one mile per gallon would have cost domestic automakers only $9–$27 in profit per vehicle in many recent years. Our estimates are substantially lower than estimates in other recent studies, which use different methodologies and require a broader set of assumptions. Our estimates are also well below the $55 statutory fine, a plausible upper bound, which has been used as a cost estimate in previous research.



 On Sunday January 8th, the 30-year old ethanol subsidy will expire. Given the price of gas, and the escalating federal alternative-fuel mandate, there will likely be little or no drop in production. Tax payers will pay less by 45¢/gallon of ethanol or 4.545¢/gallon of the gasoline-blend most of us buy. But that does not mean we will pay more at the pump.

The reason the ethanol industry has lobbied hard for this in the past is because they get the money. And that means that without the subsidy they would lose the money. And that means they don't think they could just pass the cost on to us. This makes sense economically, because in the long-run, the price of ethanol sticks very close to the price of gasoline. So I think this is a win for taxpayer/drivers, and a loss for the ethanol factories.

But it won't help the environment. Ethanol will still increase CO2 emissions a bit because it requires significant fossil inputs and because producing a barrel of ethanol will not force Saudi Arabia or Exxon to [#pump a barrel less of oil].  Besides the CO2 emissions, the increased production of corn requires huge amounts of nitrogen fertilizer, much of which which ends up in the Gulf of Mexico, and it raise the price of corn for the worlds poor. Subsidies, even environmental ones, are usually poisonous (research is the main exception.) 


We use only data from pro-corn-ethanol researchers, & the National Academy of Sciences —no data from anti-ethanol researchers. We love cellulose ethanol.

Energy Independence?   2.8%
According to the pro-corn-ethanol US Dept. of Agriculture, 2006 ethanol production was enough for 1.5% oil independence, and by 2017, we will max out at 3.7%.  But this ignores the foreign fossil energy input to ethanol production, shown at the right. (see Driving)

Greenhouse gas reduction?  0.2% max
Less than 0.2% in 2017. These global warming emissions calculations based on data from the National Academy of Sciences (NAS), which is more optimistic than data from UC Berkeley's Renewable and Appropriate Energy Lab. Corn's heavy use of nitrogen fertilizer is contributing to the dead zone in the Gulf of Mexico — the NAS again. 

How did we get into corn ethanol anyway?
Follow the money. Huge subsidies, huge profits, lots of votes. The politicians are for it. They're doing the math, but not the global warming emissions math. Who started it?

How big are the subsides?
In 2006, the feds paid ethanol blenders $2.5 billion and ethanol corn farmers $0.9 billion. We paid an extra $3.6 billion at the pump. Total was $2.21 extra per gallon of gasoline replaced. Of all that, $5.4 billion went for windfall profits, creating what USDA's chief economist called "ethanol euphoria."



[=pump a barrel less of oil] Producing more ethanol cause oil producers to pump less, and oil users to use more. There is no direct effect—nothing forces any producer or consumer to change behavior—so the effects work only through the world price of oil. The net result is that ethanol displaces roughly 70% of what environmentalists expect. So its carbon reduction is 30% less and that ends up meaning that the ethanol production actually increases carbon emissions. So Why does the Environmental Protection Agency mandate it? Because environmentalists are not good economists. Here's the paper I wrote on this for the Clean Air Task Force, to help them sue the EPA to stop the ethanol mandate.
[=PopNotes] Just hover over green-underline links above to see the "pop" notes.



Many who want to slow global warming support corn-ethanol subsidies. It seems to make sense because corn takes CO2 out of the atmosphere so using corn-ethanol is carbon neutral. The problem is that making corn ethanol makes lots of GHGs.
ADM, a big multinational corporation, was the first big lobbyist for corn ethanol, but once it got going the farm states got behind them. It's not just the ethanol makers who make money, all corn farmers make money, even the ones who sell their corn for chicken feed, or corn syrup. The demand for ethanol corn drives up the price of every bushel of corn, and corn is the biggest crop in the US.
In 2006, over $8 billion in subsidies (some direct and some from artificially high ethanol prices) went into the ethanol market. This doesn't even count the extra money made on the 80% of corn that is not used for ethanol. Any politician that tries to cutting off that much money will lose a lot of votes. Here's the ADM story.

How ADM makes a killing on ethanol
Excerpts from the NY Times, June 25, 2006 
Farmers are seeing little of the huge profits ethanol refiners like Archer Daniels Midland (ADM) are banking. ... The ethanol explosion began in the 1970's and 1980's, when ADM's chief executive, Dwayne O. Andreas, was a generous campaign contributor and well-known figure in the halls of Congress who helped push the idea of transforming corn into fuel.
Given the glut in corn, the early strategy of Mr. Andreas was to drum up interest in ethanol on the state level among corn farmers and persuade Washington to provide generous tax incentives. But in 1990, when Congress mandated the use of a supplement in gasoline to help limit emissions, ADM lost out to the oil industry, which won the right to use the cheaper methyl tertiary butyl ether, or MTBE, derived from natural gas, to fill the 10 percent fuel requirement.
Past Scandal
Adding to its woes, ADM was marred by scandal in 1996 when several company executives, including one of the sons of Mr. Andreas, were convicted of conspiracy to fix lysine markets. The company was fined $100 million. Since then, ADM's direct political clout in Washington may have waned a bit but it still pursues its policy preferences through a series of trade organizations, notably the Renewable Fuels Association. ...
But ADM has not lost interest in promoting ethanol among farm organizations, politicians and the news media. It is by far the biggest beneficiary of more than $2 billion in government subsidies the ethanol industry receives each year, via a 51-cent-a-gallon tax credit given to refiners and blenders that mix ethanol into their gasoline. ADM will earn an estimated $1.3 billion from ethanol alone in the 2007 fiscal year, up from $556 million this year, said David Driscoll, a food manufacturing analyst at Citigroup. ...
ADM has huge production facilities that dwarf those of its competitors. With seven big plants, the company controls 1.1 billion gallons of ethanol production, or about 24 percent of the country's capacity. ADM can make more than four times what VeraSun, ADM's closest ethanol rival, can produce.
Last year, spurred by soaring energy prices, the ethanol lobby broke through in its long campaign to win acceptance outside the corn belt, inserting a provision in the Energy Policy Act of 2005 that calls for the use of 5 billion gallons a year of ethanol by 2007, growing to at least 7.5 billion gallons in 2012. The industry is now expected to produce about 6 billion gallons next year. ...
Now, government officials are also pushing for increasing use of an 85-percent ethanol blend, called E85, which requires automakers to modify their engines and fuel injection systems.
In the ultimate nod to ADM's successful efforts, Mr. Bodman [Energy Secretary] announced the new initiatives in February at the company's headquarters in Illinois.
"It's been 30 years since we got a call from the White House asking for the agriculture industry, ADM in particular, to take a serious look at the possibilities of building facilities to produce alternative sources of energy for our fuel supply in the United States," said G. Allen Andreas, ADM's chairman and Dwayne Andreas' nephew. ...
Boom in Ethanol Reshapes Economy of Heartland
By ALEXEI BARRIONUEVO, June 25, 2006, New York Times

What's in the 2005 Energy Bill? 
On the gasoline front, the big ticket item is subsidies for ethanol—as usual. Archer Daniels Midlands (ADM) owns 7 ethanol plants xlnk.gif with a production capacity of 1,103,000,000 gallons per year. The ethanol tax subsidy is 51¢/gallon, so that comes to $562,000,000/year. (Now there's a lobbying effort that paid off.) But we need energy independence, right? Unfortunately, reducing fossil imports by the energy in 1 gallon of gasoline costs us a couple dollars in subsidies.  (There is hope for better ethanol.)



Why we like cellulosic ethanol
Only a small part of most plants is sugar or starch, the part that can be digested by humans and fermented by yeast into ethanol. Most of the rest is cellulose. Naturally, using the bulk of the plant is more efficient. Better yet, we need not use our food plants. Some grasses store more energy in cellulose than does corn, and require far less nitrogen fertilizer, far fewer pesticides, and less process heat (energy).
The main drawback now is expense. Of course cellulose ethanol could be overdone like anything else, but much more could be produced with much less ecological damage. And with some plausible advances, it could be cheaper than gasoline.
Shown below is a table from the Chief Economist, USDA, March 2007 cellulosic ethanol. It's the best snapshot you'll find of the current state of cellulosic ethanol production.

  Corn Based Cellulosic
DOE target
Feedstock $1.17
By-Product –$0.38 –$0.10 –$0.09
Enzymes $0.04 $0.40 $0.10
Other Costs** $0.62 $0.80 $0.22
Capital Cost $0.20 $0.55 $0.54
Total $1.65 $2.65 $1.10
g = gallon, dt = dry ton.
** (includes preprocessing, fermentation, labor)

The first demonstration plant making cellulose ethanol
Currently, Iogen Corporation in Ottawa, Canada produces just over a million gallons annually of cellulose ethanol from wheat, oat and barley straw in their demonstration facility.

Best summary of Cellulose Ethanol —DOE's 2006 Annual Energy Outlook
The underutilization of crop residue has driven decades of research into ethanol production from cellulose; however, several obstacles continue to prevent commercialization of the process, including how to accelerate the hydrolysis reaction that breaks down cellulose fibers and what to do with the lignin byproduct. Research on acid hydrolysis and enzymatic hydrolysis is ongoing. The favored proposal for dealing with the lignin is to use it as a fuel for CHP plants, which could provide both thermal energy and electricity for cellulose ethanol plants, as well as electricity for the grid; however, CHP plants are expensive.

eco ethanol plant
Inside the first cellulose-ethonal plant

Currently, Canada’s Iogen Corporation is trying to commercialize an enzymatic hydrolysis technology for ethanol production. The company estimates that a plant with ethanol capacity of 50 million gallons per year and lignin-fired CHP will cost about $300 million to build. By comparison, a corn ethanol plant with a capacity of 50 million gallons per year could be built for about $65 million, and the owners would not bear the risk associated with a new technology. Co-location of cellulose ethanol plants with existing coal-fired electric power plants could reduce the capital cost of the ethanol plants but would also limit siting possibilities.


A commercial cellulose-ethanol plant is on its way
Vinod Khosla, a co-founder of Sun Microsystems and a venture capitalist who bet big and early on Google and Amazon, is now betting on Celunol Corp. Celunol is developing a 55-million gallon ethanol production facility in Jennings, Louisiana [Which seems to have gone bust -- 11/2011]. That's 55 times bigger than the Canadian demonstration plant—this is a full-blown commercial plant.

In 1995 Celunol bought rights and patents from the University of Florida to commercialize their cellusose technology and has since acquired and developed more cellulose technology.

The sugar in cellulosic biomass is locked up in cellulose, which contains normal C6 sugar, and hemicellulose, which contains Xylose (C5) sugar. Since normal yeast can't ferment Xylose, Celunol has acquired genetically engineered E. coli bacteria which can turn almost all of it into ethanol.

The diagram explained. First the hemicellulose in the biomass is broken into Xylose sugar (gray bar). Then the Xylose is separated from the remaining cellulose (blue bar). The Xylose is fermented with E. coli (top yellow), and the cellulose is broken down into normal glucose (red) which is fermented the normal way (bottom yellow). Finally all the ethanol is distilled (the water and lignin byproducts removed). The lignin is burned in the the still's boilers.


A Report from Fortun "Brainstorm" During a discussion on energy resources this afternoon (June 29, 2006) Vinod Khosla offered a deal to Royal Dutch Shell CEO Jeroen van der Veer. Khosla said he'd be willing to sign a long-term fixed-price contract guaranteeing to supply Shell with ethanol. The price would be set to allow Shell to retail the stuff for $1.99 a gallon at the pump and make a profit. Or something like that--Afterwards I saw Van der Veer and Khosla sitting in the shade of a tree on the Aspen Institute grounds, deep in discussion.

Iogen's Milestone: It's Selling Ethanol Made of Farm Waste 
Staff Reporter of THE WALL STREET JOURNAL. April 21, 2004

MONTREAL -- Iogen Corp., a Canadian firm at the forefront of efforts to turn agricultural waste into ethanol, has become the first supplier of such biofuel to the commercial fuel market.

The moderate initial shipment marks a milestone in the development of so-called cellulose ethanol, made from farm refuse such as wheat straw and corn stalks, instead of the corn or other grains used for the ethanol now commonly blended with gasoline. Turning farm waste into fuel for automobiles has long been an alluring, but technically tricky, prospect.

Iogen officials have said they hope to begin work on a full-scale commercial plant next year, but significant hurdles remain.

Iogen is ahead of other firms seeking to commercialize ethanol from farm waste, said John Ashworth, an official of the Department of Energy's National Renewable Energy Laboratory in Golden, Colo., which has a pilot plant where companies test cellulose-ethanol concepts. Iogen's much-larger plant in Ottawa is the only demonstration plant for the technology, he said.

The plant, which has an annual production capacity of 260,000 gallons, began about two weeks ago to turn wheat straw into ethanol that meets Canadian fuel specifications, according to people familiar with the situation. Petro-Canada will take delivery today of Iogen's initial 1,300 gallon shipment.

Proponents of cellulose ethanol argue that it has great potential to help reduce greenhouse-gas emissions, since the feedstock is readily available as a byproduct of farm crops. But wheat straw or corn stalks must be broken down into sugars that can be fermented, making the production process for cellulose ethanol more complex and costly than for conventional ethanol. Iogen and others have been developing techniques to reduce those costs.

Within the next year or so, Iogen hopes to begin construction of the full-scale plant, which would cost around US$250 million, and have annual production capacity of about 52 million gallons. But company officials have acknowledged that the risks involved in scaling up production will make it difficult to secure conventional financing for the project.


Gas prices are soaring, pipelines are burning. 
Here are four ways to fix the mess before the well runs dry.

Fortune Magazine, 23 August 2004
Nicholas Varchaver

One biomass fuel offers tremendous promise, though it will take time to put into wide-scale use, is cellulosic ethanol-- which shouldn't be confused with corn-based alcohol best known for the size of its subsidies. Cellulosic ethanol is made from switchgrass, poplar trees, and straw. And it yields more energy than the corn version, says Carnegie Mellon University economist Lester Lave.

One group of supporters, the Energy Future Coalition, a bipartisan group that includes ex-Senator Wirth and Republican former White House counsel Boyden Gray, has put forth its own modest proposal. The World Trade Organization has issued rulings against farm subsidies for cotton and sugar. If the rulings stand, the US will need to either end the subsidies or pay billions in fines. As Wirth puts it, "No politician I know wants to take something away from a lot of constituents." He proposes shifting subsidies from cotton and sugar to switchgrass and trees. It would cost the government nothing, but would provide benefits for consumers, farmers, and even the environment (grass and trees take a lesser toll on land than cotton). Even without the subsidy swap, a $500- million-a-year investment in ethanol could pay off bigtime, allowing for gas spiked with 20% cellulosic ethanol within 20 years. All of a sudden--if you assume that hybrids and other measures hold the line on usage--you can actually reduce gasoline consumption by that same 20%.

Reality check: Like most alternative fuels, cellulosic ethanol is expensive (though subsidies will reduce the cost), and significant production remains at least five years away. As of now only one plant--run by a company called Iogen in Canada (with the support of Shell)--is producing it. Moreover, as economist Lave acknowledges, many tens of millions of acres would be required to grow the biomass. Still, it is promising enough that it earned the endorsement of a Pentagon-commissioned study last year, which looked at how the US can prepare for a post-oil world. 


Make ethanol from cellulose, not corn starch 
John D. Podesta speaking to the Appolo Alliance
Detroit, Michigan, February 9, 2004

Instead of using the starch from the corn kernel, using cellulose will increase the amount of ethanol from a crop because more of the plant will be used. This also avoids the consumption of food crops for industrial applications.

Starch-based ethanol has limited benefits in terms of oil displacement and greenhouse gas emissions, due to the substantial fossil fuel inputs required to grow grain and convert it to alcohol.

The benefits of cellulose conversion are dramatically larger; indeed, a conventional internal combustion engine operating on cellulosic ethanol produces fewer greenhouse gas emissions on a life-cycle basis than a fuel cell operating on hydrogen derived from fossil fuels.



The energy of ethanol relative to gasoline
 A.  76,000  = BTU of energy in a gallon of ethanol
 B.  116,090 = BTU of energy in a gallon of gasoline
 C.  .655 = 2/3 = GGE of energy in a gallon of ethanol.  A / B. (GGE =energy in a gal. of gas)
 D.  1.53 = Gallons of ethanol with the energy of 1 gallon of gasoline.  D = B / A.

The basic story on ethanol mileage and cost

Some Ethanol proponents claim it doesn't hurt their mileage, but this goes against physics, and you will not find the ethanol lobby making such fraudulent claims--they could be sued. But just to be sure, zFacts analyzed all of EPA's ethanol mileage tests for one year and, big surprise, ethanol gave exactly 2/3 the mileage of gasoline.
Now there is one possible loophole and it is used by a Swedish sports car, the SABA 9-5 Bio-power. Here's the trick. Higher compression ratios make engines more efficient, and because of its high octane, ethanol can take a higher compression ratio. The Bio-power is turbo charged and when it uses E85 it switches to a higher compression ratio. It still gets fewer mpg on ethanol, but it does a little better. Unfortunately it's very expensive. An easier approach is to use diesel, which also gives you a high compression ratio and mileage as good as a hybrid at less cost. That's why all big trucks are diesel.
The USDA tells us that ethanol cost 57¢ more per gallon on average over the last 25 years (and it still does). Put that together with the fact that it takes 1.53 gallons to equal a gallon of gasoline.

23% extra fuel cost of using E85 with 2006 models
The EPA has measured the gas mileage of 2006 flexible fuel models. For the 31 models they tested the average reduction is 26% fewer miles per gallon. For example a car that gets 30 mpg on regular would typically get 22.2 mpg with E85. This is exactly what is predicted from the fact that E85 has less energy per gallon than gasoline.

For these calculations, the EPA assumes that E85 costs $2.00 and regular $2.20/gallon. Obviously they are on the low side, especially for ethanol, but this proportion is similar to what DOE predict for the next few years. The loss in mileage more than makes up for the cost savings, and on average the EPA predicts driving on E85 will cost 23% more than driving on regular.


Here's a letter from someone using only E85.
He's getting slightly worse mileage than predicted by ethanol's low energy: 2/3 the energy of gasoline. But Sam has been fooled by the deceptive (but true) claim that Ethanol has high octane and thinks he should actually get better mileage.


I have a 2003 Chevrolet Suburban. The ONLY fuel I have used on this vehicle is the Ethanol 85, and I am not happy.
1.)   I have seen that in other states the price of Ethanol is LOWER than regular gas.  I go to the gas station in Annapolis, Maryland on West Street.  The price for this fuel is $1.95 per gallon.  The regular gas price is $1.43 per gallon in my area.
2.)  This fuel is rated at 100 Octane and SHOULD result in better fuel mileage.  My vehicle is rated from 16-22 MPG.  Since I have gotten this vehicle and using this fuel I cannot get ANY better than 13.2 MPG.
I believe in this program and want to continue to support it. I am a retired police officer and not made of money. My friends laugh at me and call me a fool.  They say my intentions are great, but NOT at that cost.

Annapolis, MD.

This letter was posted by National Ethanol Vehicle Coalition. They answered, but did not tell him why he was getting low mileage—they don't want people to know.

This is what the Iowa Dept. of Agriculture tells us:

"E85 is priced to be competitive with 87-octane gasoline. In Iowa, prices typically range about 8-10 cents more than regular unleaded."

Even at the same price, E85 would be 41% more expensive than regular gasoline.


Ethanol has only about 2/3 the energy of gasoline

The lower heating value (LHV) of conventional gasoline = 115,500 Btu/gallon
The lower heating value (LHV) of ethanol = 76,000 Btu/gallon

Hence it takes 115.5/76 = 1.52 gallons of Ethanol to replace the energy in one gallon of gasoline.

Every fuel has two energy values, sometimes called lower and high heating values. The lower value is the energy you can get without condensing the water out of the exhaust. "Condensing furnaces" for your home do just that and can almost recover the higher heating value. Cars cannot use steam in their exhaust; it just goes out the tailpipe.

For cars, and all internal combustion engines, the lower heating value is the relevant value, yet DOE almost always publishes the higher heating value.


How much should you pay for E10 and E85?
If regular gas is $3.00/gallon you should pay
      $2.90 / gallon for E10 (10% ethanol).
      $2.13 / gallon for E85 (85% ethanol).
If regular gas is $2.00/gallon you should pay
      $1.93 / gallon for E10 (10% ethanol).
      $1.42 / gallon for E85 (85% ethanol).
Then you will be paying the same amount per mile driven.

The formula is this: For EX, where X is the percent ethanol

     Ethanol price should = Gasoline price times (100 – X + X/1.52)/100

Notice that 100 – X is the percent of gas and X/1.52 is the percent of ethanol adjusted down by about 2/3 because it has less energy.


New Recipe For Gasoline [Ehanol] Helped Drive Up the Price
NY Times, May 6, 2006, By MATTHEW L. WALD

WASHINGTON, May 5 — Nine months after Congress passed major energy legislation, one provision affecting gasoline formulas is helping to drive the price of gas up much faster than the rising price of crude oil.

Ethanol is pricey and energy-poor. Its price is up by about $1.30 a gallon in the last year, in part because of heavy demand for something to replace MTBE. But ethanol has only about two-thirds as much energy. 

And because the new gasoline recipe contains less energy, mileage per gallon is declining. 

On Friday, ... the Energy Policy Act of 2005 ended the requirement that gasoline sold in areas prone to air pollution include an "oxygenate." ... Refiners over most of the country's big gasoline markets, anticipating the rule, have already dropped the chemical MTBE.

The refiners were not explicitly required to drop MTBE, but virtually all have done so because it has polluted groundwater and exposed them to liability suits. ... But now refiners must replace that ingredient. And they need a substitute that is also high octane, as MTBE is. Refiners have turned in part to ethanol, which is also an oxygenate but not a pollution worry.

Ethanol costs more than gasoline, and shipping it from the Midwest, is cumbersome and expensive, because it has to go by barge, railroad tank car or tanker truck, rather than pipeline.

West Texas Intermediate, the American benchmark oil, was up only about 39 cents a gallon last month compared with April 2005, while the wholesale price of gasoline rose about 64 cents over the same period. ... Experts at the Energy Department, the refiners' trade association and elsewhere agree that the changeover from MTBE was a factor, although they differ about the amount. ...

The oxygenate requirement has been obsolete for years. It was intended to make the fuel mix leaner, reducing air pollution. But that works only on older cars, with carburetors, not in modern vehicles with oxygen sensors and fuel injectors.

NY Times


Does the SAAB 9-5 beat the ethanol mileage problem?

Autobog gives these values.
Gas 25.7mpg@30mph, 22.9mpg@50mph, 16.0mpg@70mph
E85 17.4mpg@30mph, 15.8mpg@50mph, 11.4mpg@70mph.
That averages to a 31% reduction in mileage, which is more than other cars.



More ethanol subsidy xlnk.gif info from the heart of ethanol country. June 2, 2009

Corn ethanol subsidies totaled $7.0 billion in 2006 for 4.9 billion gallons of ethanol. That's $1.45 per gallon of ethanol (and $2.21 per gal of gas replaced).
Even with high gas prices in 2006, producing a gallon of ethanol cost 38¢ more than making gasoline with the same energy, so ethanol did need part of that subsidy. But what about the other $1.12. Not needed! So all of that became, $5.4 billion windfall of profits paid to real farmers, corporate farmers, and ethanol makers like multinational ADM. Why is it the farm states put up with this?!

Where did those subsidies come from:
1.  51¢ per gallon federal blenders credit for $2.5 billion = your tax dollars.
2.  $0.9 billion in corn subsidies for ethanol corn = your tax dollars.
3.  $3.6 billion extra paid at the pump.

That's quite a bit when you figure it only made us 1.1% more energy independent and only reduced US greenhouse gases by 1/19 of 1%.


Who should get the subsidy?
In 2006 ethanol blenders were handed $2,500 million in subsidies while the Department of Energy awarded $385 million spread over four to six years to help build cellulose ethanol plants. That's about 32 times less per year. But celluse gets a bit of subsidy from the USDA. Altogether it may get 10% as much as corn-ethanol. The problem is the lobby for cellulose is much weaker than the corn-ethanol lobby.
Corn ethanol does not need subsidies. Cellulose ethanol research does--it would actually do some good. But's what's needed is research, and very small-scale plants, not the big ones that are being built on pretense.

Oil get's big subsidies, not ethanol.  Wrong by 54 times!
"Ethanol Today," (8/'05) states "Five years ago, a US General Accounting Office report showed that ethanol had received $11.6 billion in tax incentives since 1968, while the oil industry had received over $150 billion in tax benefit over the same period.
Probably true. But the oil industry produced 1068 times more energy so the subsidy rate per unit energy was 54 times higher for ethanol. That's like ethanol gets 54¢ and oil gets 1¢. Now if we had oil subsidies, and we do, and ADM is making more profit than ...



Solyndra Panels click

The Solyndra Disaster

House Speaker Jonh Boehner (R-Ohio) is backing a $2 billion Energy Department loan guarantee (Boomberg News) sought by a uranium enrichment plant in Piketon, Ohio. He's also backing a "relentless" investigation of the $0.5 billion Energy Department loan guarantee for Solyndra. What's the difference? The nuke plant is stimulus for Ohio, Boehner's, home state, but Soyndra is in California. 

The Solyndra fiasco cost a hair less than President Bush wasted ever day for 2,134 days on Iraq.

There have also been ridiculous charges of corruption, as if the Administration was intentionally give Solyndra money to line its pockets. This would mean DOE did not care about success, but only about payoffs. It's just the opposite. The were desperately looking for a big success for solar. But, I still blame the environmentalists. Why? Because solar subsidies are no way to stop global warming, and they are a great way to give a black eye to those of us who care about America's energy problems and the environment.

Am I just being a Monday morning quaterback? No, I've been upsetting my environmentalist friends for years by railing against solar subsidies. You could save five to twenty times as much carbon for the same money, and sooner or later, you will be found out. I predicted this would someday be a real setback for clean energy, but I had no idea how bad it would actually be. Sure the Republicans are misleading, but don't tell me you're surprised.

solar thermal in Spain
400 ft tower + 2,650 mirrors
Click -- it's awesome.

Why Solar Needs Research Money, Not Production Subsidies

I've been a solar-power fan since the late 1950's. By the late '60's an old college friend was telling me solar was almost here and needed government support. No flip-flopper, he's still telling me the same thing forty years later. Now Krugman's saying it too. He's a great economist, but he's been snookered on solar.

But I'm still a big fan of solar. I think it's made great progress and is our best green-energy hope (except for one of those unknown unknowns). But now is the time for an intense research push, and not a time for big production subsidies. Here's why.

  • We want the US to lead in this technology—its the future.

    • We are not going beat China on cheap production of old technology.
    • Our strength lies in scientific research
  • Solyndra blew three years of federal solar research budgets !

    • The 2012 budget is $166 million (8 hours of the Iraq war) and Solyndra lost $535 million.
  • Scaling up today's solar plants is a waste of money.

    • We will get more solar breakthroughs and they will radically change how solar panels are manufactured.
    • Read MIT's Tech Review. It's full of brilliant new solar ideas—all radically different from today's technology.
  • Today's solar installations will be out-of-date in 10 years.

    • That's OK for disposable cell phones and lap tops, but not for hardware designed to last 30 year.
  • Markets are great at manufacturing, but not a advance research

    • Venture capital has been eager to jump into green tech.
    • But, economists and businessmen agree, markets are not good at advanced research.
    • This is where the government has role and where it's shown in the past:  jets, radar, nuclear, the internet, etc.


What does it cost to save a ton of CO2 with wind?

In 1888, the first large wind generator began producing power. It had 144 blades and powered the home of Charles Brush, an inventor who drew a crowd of thousands by illuminating a park in Cleveland with electric light shortly before Edison "invented" the light bulb. Today's wind turbines produce 100 times more power with only three blades.

How important is wind generation?
Can wind power make much of a difference? The short answers are "No" for energy independence and "some but not much" for global warming. Wind generation mainly replaces coal-fired generation and the US has its own coal. That's bad news for independence but good news for CO2 reduction, as coal is the worst source of CO2. Thirty years from now, wind power might be cutting global GHG emissions by 10%. But that cut in emissions is not from today's level, it's a cut from the future level, which would be much higher.

In 2006, wind power supplied 0.6% of US electricity but reduced CO2 emission from electricity production by a full 1%. This amounted to a 0.4% reduction in CO2 emissions from all fossil energy use, and a 0.36% reduction in total US GHG emissions. The wind industry is hoping to produce 20% of US electricity by 2030, which would result in a 13% reduction in CO2 relative to 2030 levels without wind. This would not be enough to hold CO2 emissions constant.

Wind generation grew 27% in 2006, but that is from a very low level. Its future growth rate will depend largely on the level of subsidies, since these are the primary drivers of wind investment.

Is wind power too expensive?
What really matters is the cost to society. With current subsidy methods, it costs around 3¢/kWh of subsidy to get wind turbines built [2011 update, I'm now hearing from insiders that more like a 5¢/kWh subsidy may be required]. This is because the up-front costs of wind turbines are huge and the payback takes twenty years. Investors require fast paybacks and this "costs" extra. But this is not a social cost. Much of that money is just a transfer to stock-holders. By evaluating a different subsidy method, a more accurate social cost can be found and it is only 1.2¢/kWh.

Although the amount of wind that could be installed this cheaply is limited, it is interesting to ask how much it would cost to solve the global warming problem if all GHG reductions could be accomplished so cheaply. The answer is they could be eliminated for a cost of $81 billion per year. That is 0.63% of GDP, and considerably cheaper than the Iraq war.

Subsidies for wind power
The most obvious subsidy is the production tax credit (PTC) which began at 1.5¢/kWh in 1992 and which increases at the rate of inflation. It is now about 2¢/kWh. Almost all wind generators have qualified for this and will receive it for 10 years.

The second subsidy is double declining 5-year depreciation. This allows investors to take a 40% tax deduction the first year and a 24% deduction the second year. At the end of five years the deduction is complete. Assuming the investor can use this against a 43% combined federal-state tax rate, it is worth about and additional half a cent/kWh.

The third subsidy is the most obscure and most unpredictable. About 20 states have adopted renewable portfolio standards (RPS), and it is no surprise that searching this term in Google brings up the Wind Energy Association first. An RPS requires retail electric providers to purchase a certain percentage of their power from "renewable" resources, and wind is often the cheapest alternative. To the extent wind power costs more than is covered by the first two subsidies, an RPS requirement will force the retailer to provide the necessary remaining subsidy.


How Expensive is Wind-Generated Electricity?
Once a wind-turbine is built and paid for, it generates electricity almost for free. Once your house is built and paid for, it provides housing almost for free. In each case the cost of the service is mainly a financing cost, but it is real nonetheless. Comparing wind generation cost with other generation costs will put the matter in perspective.

per kW
Capacity (usage) Factor Fixed
per kWh
per kWh
per kWh
Gas Turbine $439 15% 5.2¢ 8.7¢ 13.9¢
Coal $1,338 90% 2.7¢ 1.9¢ 4.5¢
Nuclear $2,180 90% 4.3¢ 0.3¢ 4.6¢
Wind $1,254* 30% 7.5¢ 0.0¢ 7.5¢

The one-time, installed cost of wind seems to be up closer to $1,900 in 2011, compare with these estimates from about 2006.

Notice that wind power has the the lowest (zero) variable cost. Variable cost refers to fuel cost and maintenance costs that depend on power output. Unfortunately wind has the highest fixed costs in spite of costing less per MW of capacity than nuclear. This is because the same capacity nuclear plant generates three times more power than a wind turbine. Spreading the capital cost over one third the output results makes it very expensive per kWh generated.

Is wind power cheaper than gas-turbine power?
The cheapest power plant to build, per unit of output capacity, is a gas-turbine, a GT. This is basically a low-quality jet engine hooked to a generator. But power from GTs is expensive because gas is expensive and it's expensive to let a plant sit idle 85% of the time. This results in wholesale power that typically costs more than retail power. How do they stay in business? They produce the most valuable power. They run during the 15% of the hours (or sometimes many fewer) when they are most needed and when the electricity price is highest.

Unfortunately, the wind blows when it wants to, and wind power is at most worth the average price of power. This is about the price paid to coal and nuclear units, which run almost all the time. Coal is wind's real competition, and wind power costs about 3¢/kWh more than coal power. This cost difference is not terribly accurate, but it is base on the Department of Energy's cost data and on financing assumptions used in major regulatory cases by two major electricity markets. Depending on where a project is located and proce fluctuations in the turbine market, the price difference might range from 2¢/kWh to 5¢/kWw.

Business Cost vs. Social Cost
The above calculation asks how much it would cost to induce investors to build wind turbines by subsidizing their electricity revenues. Because of taxes and investor risk premiums, this is an expensive method of inducing investment. 

Costs vs. transfer payments. Economics distinguishes between payments that are used up and payments that simply transfer money from one person (usually the tax payer) to another. The first is type of payment is a cost, and the second type is a transfer payment. If the government spends $100 billion building fighter planes that don't work, the country is poorer by $100 billion, but if it simply gives the money to Halliburton or to the unemployed, then some are poorer and some richer, but the country as a whole is no poorer.

Economists have a theory of the social discount rate which helps them find the true social cost in situations such as wind subsidies, but it is not especially accurate, and is completely opaque to the uninitiated. A market-based approach will somewhat over-estimate costs, but is more transparent, and still provides a far more accurate evaluation than the standard calculation shown above.

A lower-cost subsidy. Another approach to subsidizing wind will show that subsidies need not be so expensive. To get investors to build wind turbines instead of coal plants, a wind project could be subsidized and charged just enough to make its costs identical to those of coal. First, to replace 1 kW of coal generation, almost 3 kW of wind generation will be needed, because wind turbines run at 30% output on average as compared with about 88% for a new coal plant. This raises the initial cost to $4,013/kW compared with $1,338/kW for coal, which requires a subsidy of $2,676 to make up the difference. Next, the wind investor is required to pay the government exactly as much per kWh generated as the coal plant would pay for coal. This makes their "fuel costs" equal.

With this financial matching approach, the investor has the same capital costs and the same fuel costs whether building a coal plant or a wind turbine, and because the wind turbine has been scaled up, the investor will sell the same amount of power. The only difference is when the power is sold, but this is a very small difference becuase both projects spread their power production over peak and off-peak hours quite uniformly. Since the projects have the same costs and revenues, wind can be push ahead of coal with only a tiny extra payment.

The final step is to find what this subsidy has cost the government. As before, a 20-year project life is assumed. Suppose the government has financed the initial subsidy with 20-year Treasuries. The cost of paying off such a loan can be computed using a spreadsheet's mortgage-payment formula and that cost is $203 per year for 20 years. This comes to 2.7¢/kWh of electricity generated, but the investor pays 1.9¢/kWh in "as if" coal payments. This leaves the government holding the bag for just 0.9¢/kWh, and that is the cost of this form of subsidy.

Why is this so much cheaper? Essentially, the government has borrowed the money for the subsidy from the public instead of from the investor. This transfers less money to investors, but it still covers all real costs. Also the money is borrowed at a market rate that reflects scociety's valuation of future cost and savings. This caluclation values the future cost savings of wind power properly.

The bottom line on wind costs. Although turbine costs and financing costs are difficult to pin down, the initial calculation of 3¢/kWh is consistent with the fact that wind projects get 2¢/kWh in PTC subsidy, 0.5¢/kWh in accelerated depreciation, and often but not always, a bit more from RPS requirements. In fact, discussion with those close to the industry suggest, that wind turbines are actually being built with less than 3¢/kWh of subsidy. That indicates the DOE cost numbers presented above are realistic.

If a wind turbine costs $1,254/kW and has a 30% capacity factor, it will generate power for about 2.4¢/kWh--not counting future generation as less valuable. The only reason wind power seems expensive is because investors severely discount the value of future generation. Society also discounts future values, but its willingness to lend money at 5% to the Treasury proves that they discount its value much less. Using this  more far-sighted social rate of return, shows that the cost to society of wind power is only about 1¢/kWh more than conventional power costs.


Wind energy policy
Current wind energy policy is not far off the mark on average. But some states subsidize is much more than others. This means we will buy expensive wind power in one state while passing up cheap wind power in another. But the larger problem is that other energy policies are far out of line with wind. To see this requirese a close look a wind subsidies and than at other energy subsidies.

Current wind energy policy is so murky that when asked for help on evaluating wind subsidies, they throw up there hands and say it's impossible. A simple and transparent policy would work better and save money. Since coal is the direct competitor of wind and many other CO2 reducing alternatives, an unTax on coal, a charge refunded on a per-person basis, would be ideal. Until that becomes politically feasible, the federal production tax credit should be the sole subsidy and it should be stabilized.


India and China are expanding their use of wind power.  The demand for wind turbines has particularly accelerated in India, where installations rose nearly 48
percent last year, and in China, where they rose 65 percent, although from a lower base.

Global wind energy council
DOE's Wind Information
Organizations with Semi-Sensible Energy Proposals 
   The Apollo Alliance
   NRDC's Re-Energize America


  NASA's Solar & Wind Data  


Just the Facts: The wind industry has set a target of 100 GW of installed capacity by 2020. This is about 100 nuclear plants worth of capacity. But, unlike nuclear plants, wind turbines don't run full tilt all the time. The wind is not so steady. This much wind capacity will produce about as much electricity as 30 nuclear plants, and that will be a bit less than 5% of the country's electricity. Compared to all fossil-fuel energy it will be just over 1%.
So wind is no panacea. But neither are other options. Corn ethanol could supply a bit more, but only at much greater cost. While it costs us over $7 extra to save the fossil energy in a gallon of gas by subsidizing ethanol, we can save the same amount of energy at a cost of only 25¢ by subsidizing wind generation. That’s over 28 times cheaper.
Ethanol from corn is quite expensive and not very ecological, so we probably do not want it to increase to the 1% level. That would require more corn acreage for cars than for feed and food.
That’s where eco-ethanol comes in. That’s ethanol made from cellulose, which is all the unused parts of plants. This is far more energy efficient and ecological because that is now wasted—well not quite. The unused parts of crop plants are usually returned to the soil to enrich it, or more accurately, to avoid impoverishing it. There is still a cost to using plant cellulose, but much less than from growing corn just to make gas for our cars.
 * A Quad is a quadrillion (15 zeros) Btu.



Introduction: Coal mining accidents have killed 10s of thousands, and in China coal pollution kills 100s of thousands per year. The world is almost out of hydro power and that too has done a lot of damage. Like it or not, nuclear power has killed very few people, and emits almost no carbon.

Thorium reactors are vastly safer but were apparently rejected because they were of no use to for making nuclear weapons. This needs more documentation, but you must admit, it's plausible. Given that global warming may well prove serious, we should take another look at what Dr. Strangelove rejected.

A Thorium Reactor Lesson by: Karl Denninger, Friday, April 01, 2011.  (edited by Steven Stoft)

Consider this: There is 13 times as much energy in coal in the form of Thorium as there is in the form of Carbon!

What is Thorium?  It's a an element like Uranium, but it's not capable of fission. Instead, it can be turned into to fissile Uranium (U-233) by the neutrons that come from nuclear fission. So once you get that started, it can self perpetuate.

Unlike traditional nuclear reactors which uses water a moderator and coolant Thorium reactors use a liquid salt, and they need some help getting started. 

The US ran one for nearly four years in the 1960s at the Oak Ridge National Laboratory.  It was scrapped in favor of the traditional uranium fuel cycle we use today because the fuel it produces is very difficult to exploit for nuclear weapons, and it breeds fuel at a slow rate.  The natural process of the nuclear reactions in the core of such a unit produces a byproduct that is a very strong gamma emitter that is difficult to separate from the other reaction products.  For this reason - and because we wanted both nuclear power and nuclear weapons - we built the infrastructure for uranium and plutonium rather than thorium.

Thorium-based reactors have several significant advantages and a few disadvantages.  We have much less experience with them, simply because we stopped working with them for political and war-fighting reasons.  They use a fluoride salt which is quite reactive when in contact with water, but the reactivity is a bonus in all other respects, because it tends to encapsulate the reaction products (the nasty fission products that you don't want in the environment) through that same chemical process.  It runs at a much higher temperature (typically 650C) than a traditional reactor and unlike a traditional reactor the fuel and the working fluid is the same - there are no fuel rods that can melt and release their nasty fission product elements, as the fuel is dispersed in the coolant.

Finally, the unit is intrinsically safe.  It does not require high pressure; the working fluid and coolant is a liquid at ordinary atmospheric pressure.  This gets rid of the need for high-pressure pumps, pipes and similar materials.  Without the moderator the reactivity is insufficient to sustain a chain reaction, and the moderator is in the reactor vessel itself through which the fuel/coolant is pumped, so criticality is impossible outside of the reactor vessel and inside the vessel the fuel and coolant are the same, and a liquid.  The working fluid is contained in the reactor loop by an actively-cooled plug.  If power is lost cooling ceases and the plug melts; then the working fluid drains into tanks by gravity under the reactor and cools into a solid, as it cannot maintain criticality outside of the reactor itself (there's no moderator in the tank or the plumbing.)  As the fuel is in the fluid, there is no core to melt as occurred in Japan and being dispersed over a much larger area the working fluid naturally cools from liquid to solid without forced pumping and cooling.  This safety feature was regularly tested in the unit at Oak Ridge - they literally turned off the power on the weekends and simply went home!

There are some downsides.  The working fluid requires special metals made out of Hastelloy.  But these are no longer particularly-special materials, being used in other chemical plants where highly-corrosive material is commonly handled.  They are expensive, but then again so are traditional reactor pressure vessels which require high-pressure integrity and thus special welding and inspection techniques. [End of Denninger excerpt.]

Some notes from Wikipedia

Some benefits of thorium fuel when compared with uranium were summarized as follows:

  • Weapons-grade fissionable material (233U) is harder to retrieve safely and clandestinely from a thorium reactor;
  • Thorium produces 10 to 10,000 times less long-lived radioactive waste;
  • Thorium comes out of the ground as a 100% pure, usable isotope, which does not require enrichment, whereas natural uranium contains only 0.7% fissionable U-235;
  • Thorium cannot sustain a nuclear chain reaction without priming, so fission stops by default.

However, unlike uranium-based breeder reactors, thorium requires irradiation and reprocessing before the above-noted advantages of thorium-232 can be realized, which makes thorium fuels initially more expensive than uranium fuels. But experts note that "the second thorium reactor may activate a third thorium reactor. This could continue in a chain of reactors for a millennium if we so choose." They add that because of thorium's abundance, it will not be exhausted in 1,000 years.

The Thorium Energy Alliance (TEA), an educational advocacy organization, emphasizes that "there is enough thorium in the United States alone to power the country at its current energy level for over 1,000 years.

The German THTR-300 was the first commercial power station powered almost entirely with Thorium. India's 300 MWe AHWR CANDU type reactor will begin construction in 2011. The design envisages a start up with reactor grade plutonium which will breed U-233 from Th-232.After that the input will only be thorium for the rest of the reactor's design life.