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dan45mcc

IOwa The Saudi Arabia of Ethanol

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So, are you expecting evidence from scientific research, or are you wanting me to provide evidence about my opinions of your articles and your motivations?

Let's try to keep it simple. Please provide support for your statement that you believe I would like to see ethanol companies go bankrupt. Or provide statements from me that show me to be anti-ethanol. What I think you are going to find is that I am neither pro nor anti ethanol. I am pro-sustainability, and sometimes that means I support certain positions and oppose others. You view my opposition of certain positions as anti-ethanol, when in fact the issue I am opposing isn't ethanol per se.

 

You have suggested again and again that I have ulterior motives. I am just looking for some specific statements that you can quote from me that lead you to this conclusion. I want to know what it is that you are reading that is causing you to form your opinions.

 

RR

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Not having extra time this week (out of town, work, family) to reply, I have had some road time to put some thoughts together.  I have not had time to read posts after that last one to you.

 

Robert, I apologize for using the term “two-faced.”  When I realized that I had typed that, I was surprised as my point was about “speaking out of both sides of his mouth.”  That was what I meant, and the “two-faced” comment was typed as a mistaken substitution.  I retract that remark, which was meant as “speaking out of both sides of his mouth.”  Most of my remarks were posted to this forum, and not to your own—I will look for that one and edit it with my apology as well.

As a reader of a few of your (Robert’s) articles, it has become my opinion that you speak out of both sides of your mouth.  However, with some of your replies here I have gained some perspective as to why I have this opinion, most of it positive, though still troubling.

 

Robert, I find it now less likely that you would be purposefully trying to subvert the transition to alternative fuels, especially that of ethanol.  It seems more likely now that you write in support, in theory, of alternative fuels.  As well, that you have made some highly intelligent remarks in your theories.  It is similar to college professors or medical researchers who know that there is a problem, and write out complex mathematical formulas and pathways in order to reach a positive outcome.

However, the common problem with these professors and researchers is that they are positing theories with complex formulas, which too often neglect the real-world variables, realistic timelines, and human imperfections that show their well-intended theories to be nearly worthless if closely adhered to when applied in real life situations.

 

It is possible your theories could have been helpful if they were implemented decades ago.  That is the sad part of all of this—that it has taken so long and so much damage has been done, that we are left with slowly and inefficiently implementing what can be done.  Yes in a perfect vacuum with real free markets and no oil company control over fuel stations, it would make sense to use every drop possible of biofuels nearest their production sources.  But I do believe both of us know that when this latest push to biofuels years ago began, there was no possibility for this to occur in states such as Iowa.  All the pumps were gasoline pumps (and diesel, kerosene, etc.).  The cost to add blending and pumping infrastructure was (is) immense.  Back then, oil companies had contracts with many of the fuel stations that did not allow sale of fuels other than their own, especially under their canopy.  The automobile companies warranted only their vehicles designed to run on E85, and too few of these vehicles were on the roads.  Consumers were poorly educated.  Through regulation we are limited to 85% ethanol, though E100 vehicles in Brazil have an extra small fuel tank with gasoline to start the vehicles on cold winter days.  The list goes on and on.  Which came first, the chicken or the egg?

Do you know that many of the blenders are not the major oil companies?  The statement has been made that the blenders credit is going to the oil companies, but this is one aspect that interestingly has much more to the story—if you have not, you should research this.  I believe that Dan posted a link to a document in the last couple of weeks with the list of blenders—very many are not major oil companies, and quite a few appear to be small businesses that have nothing to do with pumping oil out of the ground.

 

So I expect that if you are not trying to subvert alternative fuels, instead you are greatly underestimating the negative impact that all of these factors combined do to negate the utopian theories and pathways that you write about.  As it is, all of the FFV’s are spread around the United States.  Even if they were sold new in only one area, through the used vehicle market, they would spread over time to all the other states.  It would not be possible except through some extreme (and probably unconstitutional) measure to limit them to just one region.  Would 7 million FFV’s in the Midwest region help, in theory, to move to mostly E85 being used there?  It was never a question of that—but if there are in the future 50 million FFV’s across the United States, it would seem more likely for such a scenario to occur in the Midwest that they would use a much greater proportion of ethanol as E85 than they do now.

 

As well, the fuel market is not a free market, nor has it been for a very long time.  The oil companies are very much entrenched in lobbying and politics, regulation, and the military.  Yes, we have much less expensive petroleum fuels at the pump, because the taxpayer pays out of their tax withholdings for the foreign oil wells and petroleum shipping lanes to be protected by the U.S. military (an expense the oil company should be paying, which would increase the price of petroleum fuels).  There is also the immense social cost of health issues and deaths due to petroleum fuel use, which the taxpayer again does not see at the pump, but pays out of insurance premiums and various government health program subsidies, which again comes out of their paycheck as tax withholding.  The various hidden costs of petroleum fuels runs into the Trillions of dollars in recent history.  Petroleum has only been sustainable to this point economically due to the blind robbing of the taxpayer, while the taxpayer thinks that they are only paying $3.00 at the pump for gasoline.  According to some researchers, it is likely that we are paying $10.00 per gallon of gasoline or more, when all of the costs are considered.  And yet, if gasoline was to increase to $5.00 or $6.00 per gallon, one would expect a quick dash for E85 pumps where available.  It is the false “low” pump price of gasoline that is doing the most to limit the consumer adoption of high level ethanol blends.  Links to this information have been posted in this forum and you may search for them if interested.

 

Methanol has been playing a part in the alternative fuels market, and will continue to do so.  There may be some regions of the world where methanol may make more sense as an alternative fuel.  But it does not make sense in much of the world.  Methanol’s lower energy density is a large limiting factor.  And ethanol-optimized technology will be removing its somewhat lower energy density, such as with the new Buick Regal.  You would be welcome to have your own methanol FFV to use, but I hope that you would in kind support the rest of us using ethanol vehicles.

 

Those involved in the biofuels transition seem to be making the best with what they have to work with.  Over the years, they have installed over 2,300 E85 pumps and are working towards consumer acceptance.  The infrastructure to transport, blend, and pump the ethanol fuel is much more in place (though I expect there will be concerned by the need to install far more of this infrastructure, as we move from 13 billion gallons to perhaps 25, 50, or 100 billion gallons as advanced technologies occur).  If one considers the possibility of producing this much domestic ethanol fuel in the future, sustainability becomes a nonissue.  Even the oil companies are warming up to E85, as one can witness their large investments and even installation of E85 pumps.  Would it be more efficient or “sustainable” to concentrate this on one area alone?  That can be debated in theory, but in reality it is a non-argument.  If one is concerned with sustainability, one should concentrate one’s effort on the non-sustainability of our situation of dependence on foreign oil, and fossil fuels in general, and do what can be done to move to the alternative fuels, as imperfect as they are.  Imperfect, but far better.  There is no sense in making the “perfect” (which does not exist) the enemy of the good—which is here and growing in availability today.

 

Focusing on sustainability alone is a dangerous academic activity, when one considers the reality of the situation and what is at stake.  I ask that you consider writing articles that deal with fixing the roadblocks (like the Fueling Freedom plan contribution you made), rather than putting forward utopian ideas that in reality cause consumers to be left with a negative viewpoint on biofuels.  One cannot say that one is not anti-ethanol, if one’s writings continue to instill a negative viewpoint of ethanol in one’s articles, considering the real-world factors being what they are.

 

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Robert Rapier may pick gasoline over ethanol.  Or, RR may pick his company's (Merica) biomass biofuels over corn ethanol.  I hope it's the latter, because I can respect him competing against corn ethanol for another biofuel, rather than trying to kill off corn ethanol to benefit Big Oil.

 

In the end though, those who know that RR is ex-Conoco and is now trying to gain support for his company's own version of biofuels, it does seem a bit petty for him to be out there trying to kill off corn ethanol. 

 

And Growth Energy should be very wary about RR's input for the Fueling Freedom Plan, since RR is trying to kill off corn ethanol in favor of his own company's biofuels (if they eventually come to market, which won't be in any significant volume for many years down the road).  If the Blenders Credit is actually going to the consumer by keeping ethanol prices lower, then a removal of the credit will drive up the price of ethanol and make all of those thousands of new ethanol blender pumps useless anyway--the consumer won't buy ethanol priced near the price of gasoline.  This very likely is RR's ultimate goal--watch out.

 

http://gigaom.com/cleantech/where-in-the-world-is-robert-rapier-hawaii-working-on-merica/

 

"For anyone searching for a smart critical analysis of the biofuel industry, Robert Rapier’s blog R-Squared has been like a breath of fresh air. The engineer, who has led teams creating biofuel technology at Accsys Technologies, Conoco Phillips and Celanese, has spent years crunching the numbers on the economics of various biofuels on his blog and used the medium to take startups and investors  to task for some audacious claims. Well, now the avid blogger has a lead role in a new biofuel entrepreneurial venture that has its own bold vision of how biofuels will fit into the world."

 

"Rapier told us in an exclusive interview last week that he has taken a position as the chief technology officer of Merica International, a company that is building out a vertically integrated approach to sustainable and localized biofuels. Merica, headquartered on the Big Island of Hawaii, will act as a holding company for a variety of companies, Rapier told us, including Forest Solutions, a forest management group, SunFuels Hawaii, a synthetic biodiesel provider, a yet-to-be-named company that will develop a biomass trading platform, and a company that will concentrate on acquiring and developing biomass conversion technologies. In addition, Merica owns parts of several other clean energy companies that will contribute to the company’s vision, like Choren Industries, a German company that makes waste to fuel gasification technology."

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