General Motors and the Road to Energy Independence

Last week, at the 2006 L.A. Auto Show, General Motors took a small but important step toward the goal of fuel diversification and energy independence. It wasn't the debut of a slick concept car or a hybrid or fuel-cell-powered vehicle -- the grist of most modern auto shows. Rather, it was an initiative to provide new fueling opportunities for the millions of vehicles already on the road that can run seamlessly on either conventional gasoline or plant-based ethanol.

These so-called flex-fuel vehicles, or FFVs, represent a largely ignored solution to reducing America's oil dependency, and GM has made them a cornerstone of its environmental strategy. (Full disclosure: GreenOrder, the consultancy with which I am affiliated, has provided strategic counsel to GM on its FFV initiatives.) In its most recent announcement, GM said it would lead a joint demonstration project along with the state of California, Chevron Technology Ventures, and Pacific Ethanol "to learn more about consumer awareness and acceptance of E85 as a motor vehicle fuel by demonstrating its use in GM's flexible-fuel vehicles."

GM currently has 1.5 million vehicles on U.S. roads capable of using a blend of gasoline that contains up to 85% ethanol (referred to as E85), which is mostly derived from corn. (Its principal U.S. competitor, Ford, also has a significant number of FFVs on the road.) E85 vehicles can run on either conventional gas or E85 without any additional modifications, aftermarket conversions, or cumbersome switches for vehicle users. The cars automatically sense the current fuel mix and adjust accordingly.

Why push FFVs and E85? GM has several strategic reasons. First and foremost, the company has been under tremendous pressure from environmental groups and others to improve the fuel-efficiency of its vehicles. GM has been slow to market with hybrids, having invested untold millions in next-gen hydrogen fuel cell technology. GM views that strategy as forward-thinking, though many of its critics see it as a dodge to avoid improving the fuel efficiency of its current crop of cars and trucks.

So, FFVs offer a way for GM to demonstrate its environmental leadership and generate sales -- and to help jump-start a much-needed flexible-fuel infrastructure along the way.

Just as with hydrogen-powered vehicles, simply putting FFVs on the road isn't enough. You've got to have in place the filling stations that allow motorists to fuel up on E85 and other alternative fuels. And you've got to have an adequate and cost-competitive supply of the fuels themselves. Therein lies the chicken-and-egg dilemma that's led some researchers to predict that a robust hydrogen infrastructure -- and, thus, a robust fuel-cell vehicle marketplace -- could be as much as two decades off.

But that's not the case with E85, which is available today, at least in a few outlets. The number of E85 stations in the U.S. doubled last year to about 600 and is expected to continue to grow as the new Energy Security Act of 2005 is implemented. That law provides a lucrative federal tax credit to stations that install E85 fueling tanks. But even a tenfold increase in ethanol availability would be a drop in the bucket compared to the nation's 176,000 gas stations.

GM's recent announcement is designed to help grow that infrastructure. Under its partnership, GM flex-fuel vehicles will be used by the California Department of Transportation (CalTrans) at various operations in the state. Chevron Technology Ventures will work with CalTrans to provide E85 fuel and install the necessary refueling pumps in these locations. Pacific Ethanol, a California-based ethanol production and marketing company, will provide the ethanol to Chevron Technology Ventures for the project. All told, it's the kind of systemic, cooperative approach we need to see more of.

Brazil already has shown that an ethanol infrastructure is both possible and profitable. Today, half of all new cars sold there are FFVs, and that will rise to 100% within four years. Brazil's reliance on oil imports has plummeted from 85 percent of its energy consumption in 1978 to nearly zero, Brazilian officials say. Brazil’s sugar and ethanol factories not only produce fuel for cars, they generate their own thermal and electric energy using bagasse (the residue of sugar cane crushing) as a fuel in co-generation systems, selling excess electricity to the public grid. Largely as a result of such savvy infrastructure investments, the country is becoming a net exporter of ethanol made from sugar cane, and is "scrambling to invest in port infrastructure to keep ahead of expected growth in world demand for the biofuel," according to Reuters.

Infrastrucutre issues aside, E85 is far from perfect and, like practically everything else, has trade-offs. For example, E85 holds less energy per gallon than gasoline, reducing one's fuel economy slightly. But E85 ethanol has higher octane, providing increased horsepower, thereby improving vehicle performance somewhat. E85 use also reduces tailpipe emissions of greenhouse gases and some smog-forming exhaust. It's usually price-competitive with conventional gas.

Beyond that is the issue of corn, the source of nearly all ethanol in the U.S. Modern corn farming is energy and chemical intensive. Early ethanol plants were also energy intensive, raising concerns as to whether the transportation fuel being produced was worth the energy going into making it. Ethanol production currently consumes about 11% of the total U.S. corn crop.

But producing today's ethanol is more efficient. According to the U.S. Energy Department:

The most official study of the issue, which also reviews other studies, concludes that the "net energy balance" of making fuel ethanol from corn grain is 1.34; that is, for every unit of energy that goes into growing corn and turning it into ethanol, we get back about one-third more energy as automotive fuel. That may not sound impressive, but bear in mind that while the gasoline that ethanol displaces is largely imported and a high-level pollution source, the mix of energy inputs for producing bioethanol includes much domestic and relatively cleaner energy.

Still, there are better, more energy- and environmentally friendly ways to make ethanol. Energy Department studies show that producing ethanol from some types of plants or crop waste -- known as "cellulosic ethanol" -- instead of from corn or other crops has an impressive net energy ratio of more than 5:1. It's at that level that E85 becomes a true environmentally friendly fuel. Researchers are making strides in bringing affordable cellulosic ethanol to market.

There's clearly an E85-powered bandwagon taking shape. In his state-of-the-state address last week, New York Gov. George Pataki promoted a plan to "provide for the establishment of refineries that make ethanol out of agricultural products from our farms and wood products from our northern forests" and to make such fuel "tax-free throughout the entire state."

But one step at a time. For now, GM seems to be moving the needle on flexible fuels, slowly but surely helping to grow the amount of non-petroleum, American-grown energy we put in our tanks. FFVs aren't a substitute for highly efficient vehicles, of course, but they represent an important strategy for GM to burnish its environmental credentials and build markets for greener vehicles -- and to create benefits for American farmers and drivers, too.

Comments

[Charlie Peters]

Star Tribune

Water supply can't meet thirst for new industry

Greg Gordon, Star Tribune, December 26, 2005

WASHINGTON - Cargill Inc. made the approach quietly about a year ago -- the kind of inquiry from an agribusiness giant that could set a sleepy southwestern Minnesota town buzzing.

Seizing on soaring demand for alternative fuels, Cargill was exploring prospects for building a plant near Pipestone that could produce 100 million gallons of corn-based ethanol annually. Such a plant would be a boon to farmers and create badly needed jobs.

But Dennis Healy, chief executive officer of the Lincoln-Pipestone Rural Water System, said he had to squelch it: His utility couldn't come close to meeting Cargill's need for more than 350 million gallons of water each year.

It might be hard to imagine a water shortage in the Land of 10,000 Lakes. But in arid southwestern Minnesota, a scarcity of water has forced utilities to distribute water from well fields via thousands of miles of pipelines and to turn away more than a dozen coveted factories that could make fuel and food from local farm products.

"People can see they're running out of water," said Tim Cowdery, a Minnesota-based hydrologist with the U.S. Geological Survey. "They'd like to build more industry. They'd like to build more ethanol plants. They just don't have the water to do it."

Cowdery and other water resource experts said the region's predicament offers an early glimpse of the sorts of water shortage issues expected to be commonplace across the country in decades to come as demand rises. A farming region such as southwestern Minnesota faces a triple whammy:

• Farms need a lot of water for irrigation and livestock.

• Farm pesticide runoff has polluted groundwater, shrinking the available supply.

• Ethanol plants, soybean processing plants and slaughterhouses use hundreds of millions of gallons more water.

The area relies, not on one large underground aquifer, but on many smaller ones, and more than a century of well-drilling has pretty much found what seems to be available. Healy said his water system and three others have "searched for water throughout a fairly large portion of the area. We haven't found anything in large enough quantity to be of any real value."

The thirst of ethanol

Nowhere is the growing clash between economic development and water conservation more evident than in the push to build ethanol plants that typically guzzle 3½ to 6 gallons of water for every gallon of fuel produced. Minnesota's 15 ethanol plants together consume about 2 billion gallons of water per year, and plants in Winthrop, Windom, Marshall and Granite Falls are straining available water resources.

Two other ethanol plants under construction near Heron Lake and Atwater "had to move from their original sites because there wasn't an adequate supply of water," said Jay Trusty, executive director of the Southwest Regional Development Commission.

While Gov. Tim Pawlenty's two-year-old JOBZone initiative offers tax breaks to encourage businesses to locate in depressed areas, some state officials privately question the wisdom of granting further subsidies to ethanol plants that use so much precious water.

Matt Hartwig, a spokesman for the Washington-based Renewable Fuel Association representing the nation's ethanol producers, said they all are "constantly looking at ways to improve their efficiency," and some are installing water treatment facilities so they can "recycle more of the water that they use."

Help also is coming from a $400 million public works project in South Dakota -- the Lewis & Clark Rural Water System -- that eventually will pipe 3.78 million gallons of Missouri River water each day to southwestern Minnesota and northwestern Iowa. But with shortfalls in congressional funding, the system might not bring water to Minnesota for another 10 to 20 years, and Healy cautions that it won't be enough to support many new water-intensive factories.

The region is dry because of the whim of glaciers -- colossal masses of ice that melted 10,000 years ago, creating lakes and riverbeds in much of the rest of what is now Minnesota.

Because the glaciers didn't reach far to the southwest, that region was left with much smaller sand and gravel deposits that formed underground water basins, or aquifers. Lower-than-average rainfall and higher temperatures have aggravated the problem.

Minnesota's western arid region extends all the way to the Canadian border, but the geological survey's Cowdery said the southwestern corner faces the worst "stress situation." A complicating factor is the state's policy discouraging transfer of water from one major basin, such as the Mississippi River watershed, to another. That limits southwestern counties to water from the Missouri River basin.

Hydrogeologists from the Minnesota Department of Natural Resources (DNR) closely monitor the rates at which water is pumped from area wells to ensure that aquifers can recharge. They run tests on withdrawal rates before approving proposed plants.

Jay Frischman, a DNR hydrogeologist, describes himself as "the grim reaper" who delivers bad news to local communities trying to add industry.

He recalled advising managers of a farmer-owned soybean processing plant under construction in Brewster in 2003 that the wells they planned to use would not provide a long-term water source.

The owners escaped "what could have been a really big bind," he said, because neighboring Heron Lake had drilled a highly productive well for its yet-to-be-built ethanol plant. Constructing 10 miles of pipeline to Heron Lake, the soybean plant bought enough water to expand into biodiesel manufacturing.

Healy, the head of the Lincoln-Pipestone system that provides water to all or parts of nine southwestern Minnesota counties, said that utility is "getting by just barely today," approving few new hookups. It pumps 1.3 billion gallons of water each year from three sets of underground aquifers, distributing treated drinking water through 3,400 miles of underground pipelines to 3,000 farms and rural homeowners and more than two dozen communities.

Healy said he has told 10 to 12 industrial applicants over the past six years -- three in the past year -- that the system cannot fully meet their water needs. He said Minnetonka-based Cargill requested 1 million gallons of water each day, but he could offer only 100,000 to 200,000 gallons.

Don Habicht, general manager of Worthington's water utilities, said he's turned away about two dozen projects over the past 25 years.

Water got so tight in Marshall that its public utilities system drilled a well field 20 miles to the east and plans to pipe in 700,000 gallons of water each year. Marshall is home to the Minnesota Corn Processors plant owned by Archer Daniels Midland -- a plant that makes corn sweeteners and 40 million gallons of ethanol each year, and that bought 469 million gallons of water supplied by the city and Lincoln-Pipestone last year, said Brad Roos, general manager of Marshall's public utilities system.

Star Tribune staff writer Robert Franklin contributed to this report. Greg Gordon is a correspondent in the Star Tribune Washington Bureau.

Copyright 2005 Star Tribune. All rights reserved

http://www.startribune.com/stories/484/5801665.html

(CAPP contact: Charlie Peters / (510) 537-1796 / [email protected])

[Ron Durgin]

The bottom line for me on this issue is that Americans need to rethink how they deploy themselves. No matter how you fuel it an automobile is one of the most inefficient machines in existence. For example, an average pedalcyclist can travel 10 miles on 350 calories while a gasoline powered car will travel only 100 feet on the same energy. OK, so a hybrid can travel maybe 300 feet with the wind at its back on 350 calories - it still doesn't compete.

How much fuel could this country save if Americans pedaled or walked when making local trips. In short, we have to curb our dependence on automobiles and get off our lazy asses by using human powered mobility once in awhile. Perhaps this could also help turn around the obesity epidemic that plagues many of our citizens.

Also taking into consideration the previous comments on water issues I am further convinced that using crop based sources for fueling mobile emission devices is idiotic. Maybe auto manufacturers like GM could produce more bicycles to improve its corporate image.

[Charlie Peters]

Corn squeezins


Whenever somebody mentions "ethanol" as a solution to our national energy problems, I have to consider him addled -- or trolling for votes in Iowa. Ethanol is more expensive than gasoline made from petroleum and less efficient. It reduces the efficiency of engines and some believe it actually shortens their lives. It doesn't result in less air pollution but in air pollution of different kinds. How you become energy-independent by committing taxpayers to energy that is more expensive and less efficient, that takes more energy to create --fertilizer, tractors, personpower, etc. -- that it produces at the end, I just can't see.

The dirty little secret is that while environmentalists proclaim their allegiance to ethanol, huge coporate welfare queens like Archer Daniels Midland are the ones who profit, and the oil companies are licking their chops over a possible ethanol mandate in California and elsewhere because they know they will increase their profits even more if ethanol is mandated.

For Bush to push down this blind alley is despicable

Posted by Alan Bock ([email protected]) at 7:32 PM

http://occommentary.blogspot.com/

[Antonio]

hi everybody
I think that this site's feed could be quite interesting for you:
www.gommunity.tv
there is an interview and some podcast and xml feeds about the hydrogen olympics in Turin and what is happening in Italy now in the alternative energy field.
regards

[Charlie Peters]

Ethanol Eco nomics…

Tom McClintock’s Citizens for the California Republic, 06-18-2007

The public policy farce that the “Green Governor” unleashed with AB 32 (the so-called “greenhouse gas” law) continues. Using their newly granted power to slash carbon dioxide emissions, the California Air Resources Board (all Schwarzenegger appointees) has mandated that every gallon of gasoline sold in California must contain at least 10 percent ethanol by 2010.

First, a few basic facts. Californians use about 15 billion gallons of gasoline a year, meaning that the new ten percent CARB edict will require about 1.5 billion gallons of ethanol. Corn is the most common ethanol-producing crop in the country, yielding about 350 gallons of ethanol fuel per acre. That means converting about 4.3 million acres of farmland to ethanol production, just to meet the California requirement. But according to the USDA, California currently has only 11 million acres devoted to growing crops of all kinds. Get the picture?

The entire purpose of this exercise is to reduce the carbon dioxide emissions from California automobiles (although Californians already have the 8th lowest per capita gasoline consumption in the country). And that’s where the public policy discussion becomes farce.

As more acres are brought into agricultural production, the demand for nitrogen fertilizer will grow accordingly, which is itself produced through the use of fossil fuels. And the most likely source of new agricultural land will be converting rain forests to agriculture, although deforestation is already the second biggest man-made contributor of carbon dioxide emissions, ranking just behind internal combustion. And here’s the clincher: ethanol is produced through fermentation, by which glucose is broken down into equal parts of ethanol and – you guessed it – carbon dioxide.

Obviously, this edict will hit gasoline consumers hard: ethanol is less efficient than gasoline and it’s more expensive – meaning you’ll have to buy more gallons at the pump and pay more per gallon.

The bigger impact, though, will be at the grocery store. By radically and artificially increasing the demand for ethanol, the cost pressure on all agricultural products (including meat and dairy products that rely on grain feed) will be devastating. Earlier this year, spiraling corn prices forced up by artificially increased demand for ethanol produced riots throughout Mexico.

The CARB regulations will undoubtedly hit Californians hard – but they will hit starving third world populations even harder. Basic foodstuffs are a small portion of the family incomes in affluent nations, but they consume more than half of family earnings in third world countries.

So when the global warming alarmists predict worldwide starvation, they’re right. They’re creating it.

http://www.carepublic.com/blog.html?domain=tom_mcclintock&blog_id=136&category_id=&start=0&arcyear=&arcmonth=&curyear=&curmonth=&curday=

[Juno888]

..like practically everything else, has trade-offs. For example, E85 holds less energy per gallon than gasoline, reducing one's fuel economy slightly.

[Charlie Peters]

Saturday, July 14, 2007

NO on AB118

* Currently $0.51 per gallon goes to oil refiners for adding 5.6% ethanol to California gasoline. That is about $500,000,000.00 per year corporate welfare.

* AB118 may add over $1.00 per gallon to additional gasoline profits in California

* This is about the money from your pocket

* The corn ethanol waiver in the 2005 federal energy bill will lower gasoline prices, improve miles per gallon, lower oil use and improve the air.

* NO on AB118. Contact your elected officials and share your opinion

(make copies and give to your friends)

Clean Air Performance Professionals

[Charlie Peters]

The Farce About Ethanol...

By State Senator Tom McClintock, Free Republic, 06/28/2007

In response to my blog, "Ethanol Economics," Former Secretary of State Bill Jones (now Chairman of Pacific Ethanol), made five key points in his piece, "The Facts About Ethanol." Just for fun, let's run "The Facts About Ethanol" through the old fact-checker:

"Today, ethanol is about 65 cents per gallon cheaper than gasoline in the California market." That's only after taxpayers and consumers have kicked in a subsidy of $1.50 per gallon - or $7 billion a year paid into the pockets of ethanol producers to hide the staggering price of ethanol production. And even with the subsidy, the California Energy Commission estimates that the new CARB edict will INCREASE the price per gallon by between 4.2 and 6.5 cents - on top of the tax subsidies. Ouch.

"Allowing a 10 percent blend of ethanol into gasoline provides a 4 percent supply increase to the marketplace at a price far below current gasoline prices." Not only is the price far ABOVE current gasoline prices (see above) but Bill ignores the fact that ethanol produces less energy than gasoline - meaning you'll have to buy more gallons for the same mileage.

"CARB's recent vote reduces our reliance on oil from overseas..." Let's walk through the numbers again. One acre of corn produces 350 gallons of ethanol; the CARB edict will require 1.5 billion gallons of ethanol, in turn requiring 4.3 million acres of corn for ethanol production. Yet California only has 11 million acres devoted to growing crops of any kind. And that, in turn, means an increasing reliance on foreign agricultural produce, shifting our energy dependence from King Abdullah to Hu Jintao.

"Further, it sends a signal to companies like ours to continue to invest in California production to help make this state energy independent." Yes, you can sell a lot more ethanol with a kind word and a gun than with a kind word alone. You got me there. But it also sends a signal to the market to raise prices on every product that relies upon corn for both food and grain feed - meaning skyrocketing prices for everything from corn meal to milk. Remember the tortilla riots in Mexico in January?

"Pacific Ethanol uses state-of-the-art production practices that reduce carbon dioxide emissions by up to 40 percent compared to conventional gasoline." Unless Pacific Ethanol has re-written the laws of chemistry, ethanol is produced by converting glucose into two parts ethanol and two parts carbon dioxide. The chemical equation is C6H12O6 = 2C2H5OH + 2CO2. (Memo to Bill: If you're not using this formula, you're not producing ethanol. And if you are, you're also producing lots of carbon dioxide. Better check.)

http://www.freerepublic.com/focus/f-news/1858095/posts

* NO on “car tax” AB118 (Nunez)

* Clean Air Performance Professionals (CAPP) supports a Smog Check inspection & repair audit, gasoline oxygen cap and elimination of dual fuel CAFÉ credit to cut car impact over 50% in 1 year.

* Some folks believe corn ethanol in gasoline increases oil use and oil profit

* Ethanol uses lots of water

* A Smog Check audit would cut toxic car impact in ½ in 1 year. Chief Sherry Mehl, DCA/BAR, has never found out if what is broken on a Smog Check failed car gets fixed, never

* A corn ethanol waiver would stop a $1 billion California oil refinery welfare program coming from the federal government @ $0.51 per gallon of ethanol used

* About 60,000 barrels per day of the oil used by cars is allowed by the "renewable fuel" CAFE credit

[Charlie Peters]

A Background Research Paper on Corn Ethanol

http://www.indybay.org/newsitems/2007/08/14/18440750.php