The Anthropocene and Other Topics

For the first four years of this blog I published nearly every weekday, and as time went on occasionally struggled to find suitable topics. Lately, I've been running across more good blog topics than I could conceivably cover. I think more is at work in that than my having scaled back the blog's frequency; energy has become an integral part of so many crucial conversations in the meantime. So instead of my customary single topic, today's post includes three essentially unrelated ones, all of which I thought merited sharing with my readers.

The first item concerns compact fluorescent lighting, those "CFL" bulbs people seem to either love or hate, and upon which many base unrealistic expectations of energy and emissions reductions. According to the tracking of NEMA, the Association of Electrical and Medical Imaging Manufacturers, US demand for CFL bulbs has declined for four straight quarters, while demand for the incandescent bulbs that are being phased out by law has revived to 79% of the market. This shift begs for deeper analysis. Is it the result of consumers stocking up on 100 Watt incandescents before they disappear from store shelves next January 1 and become a new kind of black market commodity, or is it more along the lines of what happened to tire sales after steel belted radials were introduced? Like the latter, CFLs last a lot longer than the traditional product they're replacing, and at some point one would expect sales to plateau at a much lower level than incandescents previously held. Or is it the case, as in my household, that CFLs are simply not viewed as a satisfactory replacement in all the fixtures where they could be placed, because of a combination of lighting quality, cost effectiveness, and concern about potential mercury contamination?

Now let's turn to plastics. Two stories, both involving Dow Chemical, caught my eye. In the first, Dow is investing in a facility to make polyethylene, a very common plastic, from ethanol in Brazil. As the article in Technology Review notes, Brazil is one of the few places that would make sense. The process of producing ethanol from sugar cane is so energy-efficient and cost-competitive that ethanol can sensibly be substituted for the petroleum products from which it might otherwise be produced there. In the other story, Dow recently announced a process for extracting most of the available energy from non-recycled plastic waste. Taken together, these two items challenge our traditional view of the relationship between oil and plastics: not only does oil no longer have a lock on the feedstock market, but it could face competition from waste plastics in end-use energy applications, or possibly even as a potential source of synthetic oil, as I noted a couple of years ago.

Finally, I'd be remiss if I didn't recommend an article from the May 28, 2011 issue of The Economist, which had been in my reading pile for weeks. It suggests that we are living in a new epoch of the earth called the Anthropocene, signifying humanity's having become the equivalent of a force of nature in our effect on the earth and its systems. I'm intrigued by this not just because it dovetails with my view that essentially everything we do on a civilization-wide scale, including energy production and consumption, agriculture, transportation and public works, has consequences for the entire planet, but also because of its implications for what sustainability is likely to mean going forward. If the cited scientists are correct, we influence the earth's systems as much as the climate does, with climate change only one example of our impact.

The corollary to that is that an earth restored to the conditions that prevailed in the Holocene epoch from which we emerged--before we started messing with the nitrogen cycle, the carbon cycle, and other key processes--could not support the population expected by mid-century. There's just no going back to our bucolic roots, but neither is that a justification for the large-scale destruction of the environment needed to sustain humanity. The other interesting twist to this is that it's possible we will need the energy from the large-scale harnessing of solar power to conduct the intentional geoengineering that might be necessary to get the global climate back on an even keel. It's the sort of thing that gives environmentalists nightmares but makes believers in an approaching Technological Singularity nod sagely.

Arguing With the Numbers

Over the weekend I read a remark in one of the Wall St. Journal's political columns that resonated with an implicit theme of this blog since its inception in early 2004. In her discussion of the budget crises facing various states and the debates concerning how to resolve them, Peggy Noonan highlighted the benefits of focusing on the numbers involved. "It doesn't matter if you're a liberal or a conservative, it's all about the numbers, and numbers are sobering things." Our national debate on energy would be much more productive if that same rationale were applied to it. That's happening more than it used to, perhaps because blogs are making some of the numbers more accessible, but an example in Monday's Journal reminded me just how far we still have to go in this regard.

In a supplement providing highlights from the Journal's annual "ECO-nomics" session in Santa Barbara, I saw a reference to a discussion of Brazil's sugarcane ethanol model and the merits of trying to apply something like that here, either on a domestic basis or by importing more cane ethanol. Brazil is widely credited for its vision of fueling its cars from domestic renewable sources, largely in response to the oil shocks of the 1970s. As hard as those were on the developed world, they were even more disruptive for developing economies. Today, Brazil consumes more ethanol than gasoline, because so many cars in Brazil run on either pure ethanol or a blend with a much higher proportion of alcohol than the standard US 10% blend. Who could fail to find this attractive, conceptually?

When we look at the actual numbers involved, however, we see Brazil's cane ethanol and its flexible fuel vehicle fleet in a somewhat different light, in terms of providing a model for the US. Start with the number of cars in the country, comprising around 26 million in a nation of 194 million, or 2/3rds the population of the US. By contrast, the US has more cars and light trucks than there are Brazilians. Next compare Brazil's total ethanol output to US gasoline consumption. With Brazil's annual ethanol yield approaching 7 billion gallons, and factoring in ethanol's lower energy content, the US would need roughly 27 Brazils worth of cane ethanol to fuel our car fleet, after subtracting the 13 billion gallons of corn ethanol we produce domestically, and ignoring logistical and fleet modification issues.

So without trivializing the important question of whether to continue to impose a tariff on Brazilian ethanol imported into the US, or taking anything away from the tremendous biomass conversion inherent in sugar cane grown in the tropics and processed in efficient facilities that make use of essentially every part of the cane plant to produce ethanol, sugar and a modest surplus of electric power, it's hard to see that we could encourage Brazil to ramp up its output enough to displace all the gasoline attributable to imported oil, or gear up US cropland in Florida and Louisiana to produce the equivalent. That conclusion couldn't be gleaned from purely conceptual arguments without the numbers.

This isn't intended as a slam on the Journal's conference or other high-concept confabs--I have attended many, myself, and found them very stimulating--or on Brazil's sugar/ethanol industry. It just seems that if our fiscal problems have finally reached the level of concern at which serious conversations must be grounded in the numbers, then energy deserves no less. And while I recognize that many of the numbers involved are daunting, there are many resources available to make them more accessible. That includes the recently revamped public website of the Energy Information Agency of the US Department of Energy. Although the update to EIA.gov has unfortunately blown up numerous embedded links in my past postings, the result seems to be more user-friendly.

Tomorrow I'll be participating in a webinar examining the energy implications of the unfolding revolutions in North Africa and the Middle East at The Energy Collective. Click here for more information and to register.

The Regulatory-Ethanol Complex

The US Environmental Protection Agency has a problem, and that problem is ethanol. Last Friday the EPA expanded its previous waiver on ethanol in gasoline to allow blends of up to 15% to be used in cars built in model year 2001 and later, compared to the earlier threshold of model year 2007. Because it did this just three months after granting the initial waiver, it's not clear how much additional testing was actually done, despite the agency's obligatory reference to "sound science". This step is a further indication that EPA is presiding over a failed biofuel mandate created by Congress in the expectation that a massive cellulosic biofuel industry would spring forth at their command, in parallel with a massive upsurge in sales of the 85% ethanol/15% gasoline blend, E85. None of that has happened, and for now the corn ethanol industry is the only horse that EPA has left to ride in this race. Until these waivers were issued, that horse was rapidly running out of track on which to run.

It's not that EPA loves corn ethanol. In fact, the first draft of its RFS2 renewable fuel standard incorporated an emissions-measurement basis that was distinctly unfavorable to older conventional ethanol facilities. That was subsequently toned down, after reinterpreting the science relating to "indirect land use impacts". Unfortunately for EPA, however, corn ethanol is the only avenue for continuing to comply with the annually escalating biofuel mandate set in the Energy Independence and Security Act of 2007, unless they want to flood the US with Brazilian cane ethanol. Oilseed-based biodiesel remains a niche product, and the US biodiesel industry is half-dead after the EU imposed anti-dumping tariffs as punishment for biodiesel exports to Europe that were subsidized by a $1.00 per gallon US biodiesel tax credit--a credit that lapsed at the end of 2009 but was reinstated retroactively as part of the Lame Duck Congress's tax deal.

The central problem relates to the so-called blend wall, the annual quantity of ethanol that can be accommodated in gasoline under the previous 10% blending limit. With US gasoline sales having dropped in 2008, rather than continuing on their path of 1-2% annual increases, and still not recovered to their former level, the entire US gasoline pool can only absorb 13.9 billion gallons per year of ethanol. As a practical matter, the blend wall is probably a billion gallons lower than that, given the challenges of getting ethanol to the remotest corners of the country. By coincidence, the RFS target for 2011 after backing out the renewable diesel requirement is roughly 13 billion gallons. The production capacity of the US corn ethanol industry already stands at 14 billion gallons per year, with more ethanol plants under construction or expansion.

Accommodating all that extra ethanol would have been easy if E85 had taken off as planned. However, if Minnesota's E85 statistics are any indication, E85 sales appear to have declined since 2008. In the absence of E85 demand, the EPA's waivers have the effect of moving the blend wall and giving the ethanol industry more headroom to grow. In theory, this would also have been needed to make room for cellulosic ethanol, but so little of that is being produced that EPA has had to scale back its quota for that category two years in a row, with a further adjustment in 2012 a virtual certainty.

Expanding the waiver to cover earlier car model years was crucial to making it useful. The first round didn't encompass enough cars--and thus enough annual fuel volume-to make it likely that refiners, distributors and retailers would incur the cost and risks of introducing it into the market. Going back to 2001 adds roughly another 90 million cars and light trucks and includes some of the highest car-sales years in US history. As a result, the broader waiver now probably covers about half of the 240 million light-duty vehicles on the road in the US.

The consequence for consumers will be higher taxes, in several forms. First, there's the tax associated with paying for fuel that has less value, due to ethanol's lower energy content, yet carries the same pump price. At current gasoline prices a gallon of E15 is worth about 5.5 ¢ less than the E10 blend most of us are buying today. Then there's the indirect tax associated with the higher maintenance and repair expenses that some motorists are likely to experience. Despite the EPA's reassurances about having tested E15, the focus of their testing was explicitly on emissions, not on performance and longevity. And finally there's the tax or debt we'll incur for the ethanol blenders credit that will be paid out on the incremental ethanol volumes facilitated by the waiver. That could eventually amount to an extra $3.2 billion per year, unless the current Congress finally ends this redundant subsidy that has been in place for more than thirty years.

Although it is probably best viewed as a marriage of convenience, for now the EPA and the corn ethanol industry are joined at the hip, forming a sort of regulatory-industrial complex. For political reasons EPA can't afford to abandon its partner, because the administration is fully committed to the RFS2 biofuel targets as part of its broader approach to energy security and emissions--even though corn ethanol does little or nothing to reduce the latter. Until and unless E85 takes off, the only real alternative to the E15 waivers would be to admit that the 2007 biofuel standards were unrealistically ambitious and must be suspended pending the arrival of so-called drop-in fuels--synthetic hydrocarbons derived from biomass sources such as algae, cellulose or sugar cane. Drop-ins could provide the same renewables energy benefits as ethanol, but without the latter's blending, fuel economy and logistical disadvantages. In the meantime, I will not knowingly fuel either of my family's 2004 model cars with E15, as long as I have a choice.

Turning Biomass into Power or Fuel

This morning I ran across a news item indicating that Dow Chemical was installing a biomass cogeneration unit at its facility in Aratu, Brazil to provide process steam with minimal greenhouse gas emissions. It's a good example of another way to convert biomass into energy that hasn't attracted nearly as much interest as advanced biofuels have. That's somewhat surprising, since biomass power shares most of the logistical limitations but few of the technical challenges that have made the production of biofuel from non-food biomass so difficult. Perhaps the relative neglect of biomass power results more from motivation than outcomes.

I'm sure I paid more attention to this story because of Dow's choice of eucalyptus as the biomass source. I grew up under the spreading limbs of a giant eucalyptus tree in California--limbs that periodically fell off in storms, including a 9-ton monster that practically cut our house in half. In the years before that tree was finally cut down I raked up enormous quantities of the eucalyptus leaves and nuts that bombarded our yard. It would be fair to say that I developed a strong distaste for the species, at least for the ornamental and wind-break purposes for which many Californians had chosen this Australian import. However, many of these same features, including its fast growth and dense, oily wood, seem to be good attributes for biomass supply.

As noted in a recent Wall St. Journal article, the Achilles heel of biomass power is logistics. The lower the energy density of the biomass, relative to the fossil fuels it is intended to replace, the closer the source must be to the facility where it will be used, before transportation erodes any cost benefits, even after considering emissions reductions. Wood chips provide about 2/3 as much energy per pound as bituminous coal, but they can take up more than six times as much volume, unless they are first dried and turned into pellets. As is the case for cellulosic biofuels, these supply-chain considerations limit the scale of biomass power application and impose an additional constraint of sustainability: It doesn't pay to build a biomass power plant (or a cellulosic biofuel plant) unless you can be sure of a long-term supply of the raw material. The Journal article included examples of projects that paid a high price for miscalculations in this regard. One strategy for mitigating this limitation is co-firing, which relies on biomass for only a portion of a power plant's fuel needs.

The lower energy density of biomass also makes it essential to extract as much energy as possible from each pound or cubic foot. One of the reasons for the high efficiency of the Brazilian ethanol industry is that many of its mills turn the bagasse, the waste left over after extracting the juice from sugar cane, into process heat and power and need little or no fossil energy. Burning biomass in a high-efficiency combined heat and power application, as the Dow project appears to do--based on the scant information I could find--provides another way to get the most bang for the biomass buck.

That brings us back to motivation. One of the main justifications for the pursuit of cellulosic biofuels is that we have relatively few practical, cost-effective alternative fuels that could replace more than a small fraction of our petroleum use. On the other hand, we have many ways to generate electricity, including more than a few that emit little or no greenhouse gas, one of the main benefits of biomass power--though this point is not without controversy. However, I can't help wondering whether in the long run the best way to turn non-food biomass into energy for vehicles is to turn it into electricity first, rather than working so hard to break down plant structures that have evolved over millions of years to resist easy conversion into chemical energy. Resolving that dilemma depends on a lot more than engineering considerations, however, since we still don't know much about how consumer preferences will play into it. In the meantime, projects like Dow's provide another option for reducing emissions from facilities that must meet increasingly stringent sustainability criteria.

Energy Lessons from Brazil

I was surprised by a headline I saw this morning: "Brazilians Call for Cut to 20% Ethanol Import Tax." At first I thought this referred to the US duty and tariff on ethanol imports, the repeal of which Brazil's President Lula has suggested to his US counterpart on more than one occasion. Instead, it seems that Brazil has had an ethanol import tariff of its own all along--who knew?--and today's call from Brazilian sugar trade association Unica stems from the recent weather-related shortfall in cane production that reduced ethanol inventories in Brazil and led to the government's temporary cut in the required ethanol content of gasoline from 25% to 20%. This situation illustrates a couple of energy lessons that don't quite square with the usual, overly-simplistic interpretation of Brazil's success at displacing oil with biofuel.

Brazil deserves recognition for its consistent approach to supporting the expansion of ethanol production from its normally-abundant sugar cane crop. The country has benefited from its government's deliberate efforts to promote the use of domestically-produced ethanol in a car fleet that increasingly consists of "flexible fuel vehicles" capable of running on widely-varying proportions of ethanol and gasoline. With an ethanol surplus and climate and geography well-suited to producing more--and much more efficiently than from corn and the other principal ethanol crops in northern latitudes--it's no surprise that Brazilians now consume more ethanol than petroleum gasoline. Yet as we see in today's news, Brazil's extraordinary reliance on biofuel creates a different kind of energy-security vulnerability, one related to crop yields rather than geopolitics. While Brazil's dual-fuel capability gives it ample flexibility to prevent a 5% drop in ethanol production for a few months from causing a crisis, just imagine the economic consequences of a comparable drop in oil production from the Middle East. Anyone advocating a complete switch to biofuels ought to ponder the potential unintended consequences carefully.

Another lesson hiding behind these ethanol statistics is that contrary to popular opinion, Brazil hasn't become energy independent because of its ethanol policies, though these have certainly helped. Rather, it is chiefly the surging output of Brazil's oil fields, which nearly doubled to 2.6 million barrels per day in the last 10 years and is not done growing, that has made Brazil self-sufficient in fuels. To put that in perspective, Brazil's oil platforms produce the energy-equivalent of 72 billion gallons of ethanol per year, or ten times its cane ethanol output. Although this was only possible because of the discovery of world-class resources off the country's coast, their development depended on consistent policies providing attractive access for the international firms that partnered with the state oil company, Petrobras, in exploring them. I wish more people in Washington, DC paid attention to the crucial contribution of offshore drilling to Brazil's appealing energy story.

As for the import tariff, I confess amusement at the inconsistency inherent in Brazilian politicians and business leaders criticizing a US tariff that exists mainly to prevent a US ethanol blending subsidy from leaking abroad, when they have their own tariff protection in place. I'd be happy to see both of these tariffs reduced or dropped entirely, but only if we finally ended our three decades of generous taxpayer support for ethanol blending. It's bad enough to subsidize domestic ethanol production from corn, but subsidizing Brazilian sugar companies to produce ethanol in their country would be a travesty, yet that's exactly what we'd do if we eliminated the tariffs without eliminating the Volumetric Excise Tax Credit, too.

The Ethanol Tariff and Subsidy Reform

Brazilian ethanol producers have long sought a level playing field on which to compete with their US counterparts, and this week they are launching a campaign to publicize their message that ethanol derived from sugar cane could be imported from Brazil at a lower cost than ethanol can be produced from corn in the US, if only the import tariff were reduced or eliminated. Legislation to reduce the tariff has been introduced in both the House and Senate. But while the modest step of cutting the tariff to match the domestic ethanol subsidy makes sense, eliminating it entirely would require substantial changes in the mechanism by which the federal government supports the use of domestic ethanol, to prevent taxpayer dollars directly subsidizing Brazilian cane growers and distillers. It is hard to imagine legislators wanting to open such a can of worms this year.

With the exception of imports under the Caribbean Basin Initiative, all ethanol imported into the US is subject to an import tariff and "secondary duty" worth about $0.60 per gallon. Although its original purpose may have been to protect domestic producers from foreign competition, it serves an important practical function, because of the way the US subsidizes domestic ethanol. Along with direct support to corn farmers and loan guarantees and other benefits for ethanol distillers, the government provides a credit of $0.51/gal. to companies that blend ethanol into gasoline, as a reduction to the fuel tax they would otherwise owe--though no longer at the expense of funding for road maintenance. The Farm Bill recently enacted over President Bush's veto reduced this "blenders' credit" to $0.45/gal, starting next year, but it will still amount to over $3 billion per year, based on 2007 volumes, which are slated to double by 2012.

Due to surging US ethanol production in 2007, imports from Brazil fell last year, compared to 2006. However, in the wake of the flooding that has devastated crops and paralyzed rail and barge transport in a large section of the Midwest, more imports might be necessary in order to meet the mandated volume of 9 billion gallons of ethanol for this year, under the Renewable Fuel Standard provisions of the Energy Independence and Security Act of 2007. If the tariff were repealed without changing the way the blenders' credit is paid, and if Brazilian imports merely matched their 2006 level, taxpayers could end up subsidizing Brazilian ethanol producers to the tune of $220 million this year.

I see two possible ways to avoid this outcome, while still taking advantage of lower-cost, higher-efficiency Brazilian ethanol: First, the law governing the ethanol credit could be modified to restrict its application to volumes produced in the US. Even if that passed muster under World Trade Organization rules, it would require the creation of a two-tier ethanol subsidy system and the means of monitoring it. In the process, it would increase the incentives for ethanol smuggling. That might sound like a relic of Prohibition, but given their established involvement in evading gasoline taxes, organized crime might find it a lucrative new line of business.

The other, more drastic alternative would be to shift the point of subsidy payment from the blender to the ethanol producer. This would impose its own regulatory and accounting burden and create other opportunities for abuse. However, it would also raise a more awkward question for ethanol producers. The original choice to subsidize blenders was hardly accidental; it was designed to encourage greater use of a domestic fuel during the previous energy crisis, and it has certainly achieved that goal. But with refiners and other blenders of gasoline now required by law to blend specified quantities of ethanol into gasoline, and with wholesale ethanol now generally selling for less at the distillery gate than wholesale gasoline, the justification for providing blenders with additional financial incentives to use this fuel has been greatly diminished.

Considering all these factors, ending the tariff and duty applied to imports of ethanol from Brazil and elsewhere would hardly be the simple matter suggested by the supporters of this idea. It would force a choice between extending ethanol subsidies to foreign producers--imagine that coming up in a presidential debate--and confronting the larger question of continuing ethanol subsidies at a time when our ethanol use is widely perceived to contribute to higher food prices. Unless the logistical problems caused by the Midwest flooding result in a severe enough shortage of domestic ethanol to drive up gasoline prices, I would be surprised if this idea got any traction this year.

Vertical Integration

Vertical integration is a time-honored strategy in the oil and gas industry, though for the last couple of decades it has operated in more of a virtual, rather than physical mode. Oil producers sell mainly into the open market, and the refineries of integrated companies buy as much or more from third-party suppliers as from their own affiliates, and then ship their products in fungible pipelines, with brand identity deriving from the additives with which the fuel is dosed at the distribution terminal, rather than any notion of continuous custody of molecules from well to pump. Various factors have prevented alternative fuels such as ethanol from attaining this highly-evolved state, and that makes the acquisition of Exxon Mobil's Esso marketing network in Brazil by Cosan Ltd., a large Brazilian ethanol producer, all the more interesting. Call it convergence or an example of parallel evolution; this is a notable signpost of the growth of biofuels and the diversification of the global liquid fuel system.

There are many reasons why a producer might want to integrate into the distribution and marketing of its products, and they vary with the conditions of the market in which it operates. The relatively recent integration of the leading US refiner Valero into branded marketing probably had more to do with gaining access to a less cyclical and non-correlated source of profit margins than with any concern that it would be unable to sell its output into the market. From the account of the Cosan/Esso Brasileira transaction in this morning's Wall St. Journal, however, the impetus for this deal seems to be one that would have been well understood by the founders of today's major oil companies, who operated in a similar period of rapid market growth, product oversupply, and cut-throat competition in this country.

Despite frequent and sometimes breathless comparisons to the success of ethanol in Brazil, the US produces more ethanol from corn than Brazil does from cane: 6.5 billion gallons last year, compared to around 5 billion. But the critical difference is that, while ethanol in Brazil enjoys a much higher share of the domestic motor fuels market, there is also a surplus, leading to substantial exports to the US and other countries. Producing ethanol from sugar cane in the tropics is so efficient that Brazilian ethanol can, without any government subsidy, overcome the $0.54/gal US ethanol import tariff--a necessary element of our domestic ethanol subsidy structure. That means that ethanol producers in Brazil must compete aggressively to supply the domestic retail fuel market controlled by Petrobras, Ipiranga, Shell, Chevron's Texaco brand, and Esso.

Buying Esso's marketing and distribution network should provide Cosan with a dedicated outlet for its entire 330 million gallon per year ethanol output. However, the world has changed since the days when energy companies regarded their marketing arms as a mechanism for locking in upstream profits--a means of "disposal". Cosan is effectively buying an option that it will choose how to exercise every day, pushing its product into its own stations or buying from other producers and continuing to export to other markets. Whether local marketing margins are low or high, it will be able to optimize around its new value chain and enhance the profitability of its core sugar cane business.

Some will wonder whether this deal foreshadows a future move by a US ethanol producer to build or buy its own retail network, to push E85 into this market. It's possible, but while corn and cane are similar in each having other uses besides fuel production, cane ethanol's much larger energy surplus makes it a valuable energy source, like crude oil, rather than just an energy extender. Corn ethanol is a margin business that hinges on the "crush spread" between a lively commodity market for corn and the mandated, subsidized use of ethanol by gasoline blenders. Efficiency and scale are its key drivers, and that's reflected in the merger of VeraSun and US Biofuels. For now, at least, horizontal integration and consolidation, rather than vertical integration, looks like the trend to watch here.

Note: I have a financial interest in one of the companies mentioned today, Chevron, and none of my comments should be construed as investment advice.

Our Energy Omelet

Today's Washington Post cast some serious doubts on the environmental sustainability of producing ethanol from Brazilian sugar cane, demonstrating yet again that when it comes to energy, the temporary resemblance of any option to a silver bullet usually only reflects our poor understanding of its consequences. The cost in this case is the potential deforestation of the Cerrado, Brazil's non-rainforest plateau. While Brazilian cane ethanol clearly has a role to play in the world's future energy balance, this prospect should remind us that meeting the world's daily energy demand entails breaking eggs on a vast scale. Despite the growing sophistication of the public and our leaders on energy matters, the discussion is still not being framed in terms of the hard trade-offs involved.

Since ethanol has become the cornerstone of US energy policy, let's look at the size of the problem relative to the ethanol volumes we hear bandied about in the news and on the floor of Congress. The US currently produces about 6 billion gallons of ethanol, mostly from corn. The administration and Senate want to expand this volume six-fold. It's not clear that we can do that without a large contribution from cellulosic ethanol technology that is not yet commercial, but let's assume it could all come from corn. At a yield of about 2.7 gallons per bushel, this would consume 13 billion bushels annually, roughly equal to at least one estimate for the entire 2007 corn crop, planted on 90 million acres, or about 20% of total US cropland. So if it were all planted in corn for ethanol, our current agricultural land would yield something less than 200 billion gallons per year. That's a big number, but put it in perspective. The US uses 100 quadrillion BTUs per year of energy. That equates to 1.25 trillion gallons of ethanol on volume alone. Replacing the actual net BTUs from fossil fuels would require roughly 3.5 trillion gallons of ethanol, based on its current energy yield of 1.3:1 (energy return on energy invested.)

Of course, this is an absurd comparison, because we're not going to grow corn to make ethanol to feed power plants, home furnaces, or factories. The point here is to emphasize just how large the implied equivalent agricultural footprint of our energy consumption is. If we want an appreciable fraction of those needs to be met with biofuels, even if the actual crops involved are not corn, but Brazilian cane or US switchgrass--both of which are much more efficient net energy producers than corn--it's still a big footprint. And make no mistake, as long as oil prices remain high and federal incentives are in place, the market will deliver it, even if it has to overcome an import tariff to do it.

For all of our new-found environmental concern relating to climate change, I have yet to hear any politician debate how the total environmental impact of greatly increased biofuels output--including all land, water, and air impacts--compares to the environmental footprint of getting the same quantity of energy from natural gas drilling in protected areas, from large offshore wind farms, or new nuclear power plants, among our other choices. None of those options are silver bullets, either, but they could all be part of the mix, along with biofuels. Unless we talk about it in these terms, how can we be sure that the mix of broken eggs we're implicitly choosing is really the one we want? We ought to discuss this now, rather than after the Cerrado has all been planted in cane to power our cars.