Saturday, January 27, 2007

A case for biofuels

Guest post by Sir Henry Casingbroke

The Howard government's winner-picking is clearly bad for the environment, dishonest, smacks of crony capitalism and in the case I am about to quote, inimical to the long-term aim of turning down the flow of petrodollars to islamofascists of the Wahhabi kind.

A budding biodiesel industry is being nipped in the bud in Australia because the Howard government has decided not to extend the diesel subsidy to biodiesel.


Yet, biodiesel is a brilliant interim tech and makes sense in Australia for the following reasons:

1. It requires very little energy to process it, unlike petroleum-based fuels

2. Diesel engines run on it without any modificationso we could in theory start using an alternative fuel in current technology cars and trucks, and trains and power stations.

3. It is comparatively easy to make, indeed you could make it at home, see link

4. It has relatively low carbon emissions, not as low as burning natural gas or LPG but lower than petro-diesel, petrol and of course coal, which is a real nightmare in this respect

5. Exhaust is clean: it is particulate (soot) free eliminating the black smoke of worn diesel engines

6. The oil for making biodiesel can be grown from plants. Australia's climate is ideal for such large-scale agronomy. Oil plants are many and various, and yields vary too. Candlenut and coconut are among the highest but have a long lead time. But best of all are oil-producing algae, which can reach a yield of around 95,000 L/ha (Compared to flax/linseed of 478L/ha!). See wiki article with a table link

7. Algae will grow very well on salinised land, or better still, brackish water. Especially genetically modified algae - hey wouldn't that put the tree huggers in a spin! This could be a great boost to the farmers in the WA eastern wheatbelts who have lost much of their acreage to salt. (For more on extent of the salinity problem see my article in Australian Geographic issue 72).

8. To grow, algae needs, yes! carbon dioxide, lots of it. Geosequestration is useless, diverting carbon dioxide to algal fields situated on land around coal fired power stations would make sense and allow the coal users to obtain carbon-tax credits and then use the resultant biodiesel in adjunct diesel generators running them into the grid without any need to create new infrastructure.

9. It would improve Australia's balance of payments situation by lessening the need for imported petroleum products.

10. Finally, the main criticism levelled against biodiesel is that it would require too much real estate and would thus "eat" into the land available for food production. This of course is total self-serving bullshit. Apart from the fact that oil can be grown on land too damaged even for crudest fodder for sheep (saltbush), there has been some good, serious work done on this, see link and link


hc said...

Its an interesting post Sir Henry.

From the wiki you cite:

‘More recent studies using a species of algae with up to 50% oil content have concluded that only 28,000 km² or 0.3% of the land area of the US could be utilized to produce enough biodiesel to replace all transportation fuel the country currently utilizes’.

That's still one helluva lot of land!

I am also interested in your claim:

‘To grow, algae needs, yes! carbon dioxide, lots of it. Geosequestration is useless, diverting carbon dioxide to algal fields situated on land around coal fired power stations would make sense and allow the coal users to obtain carbon-tax credits and then use the resultant biodiesel in adjunct diesel generators running them into the grid without any need to create new infrastructure’.

So what is the CO2 balance?

I don't know about biofuels but it sounds worth thinking about. You need to know the economics of production in detail. For example harvesting coconuts does not seem practical.

Was any reason given for not extending the diesel subsidy? Is there any mainstream work going on in Australia re biodiesel? For example among energy producers, universities, CSIRO etc?

Anonymous said...

Why did Australian so disadvantage biodiesel in its humdicrib? To my paranoid pinko mind crony capitalism comes to mind where Shell, via its propaganda arm, the IPA, pulled the government into line.

But there may be some rational reason, so I'll reserve my judgement at this point on the why...

I would say that 99% of the biodiesel work is being done in the States. That's because it has the agri sector that can take advantage of it and there are a lot people there who are very keen indeed to root the Saudi cartel and this would be one way to do it as the US uses about half of the world's petroleum.

Harvesting coconuts is not practical. Nor is corn for the alcohol, as has been suggested (but I suspect as a straw man).

Nor is going around to fish and chips shops for their used oil.

If you look at the table on wiki, algae is the only way it makes any economic sense on a yield per hectare basis: it dwarfs anything else.

Genetically engineering algae to produce more oil is the go, nobody could possibly complain.

If the Yanks treated it on the scale of a Manhattan Project, within 5 years the problem and its economics would be completely solved.

Maybe kangaroo paws yield oil?

Sir Henry Casingbroke

hc said...

This 2005 study

suggests that biodiesel would be economic in its cheapest production mode (this ignores the algae option) with oil prices of $60US per barrel.

If this is right the algae option needs investigation for costs. Otherwise you would need to get CO2 reductions to make it worthwhile or have higher oil prices than at present.

two bob said...

Using the CO2 produced from a coal fires power station sounds sexy but when the biodesiel produced is used by cars etc. the CO2 is then released to the atmosphere. We might be getting more bang for the CO2 emitted but it is not renewable energy.

Really we should be looking at a closed system where the algae is processed or burnt to produce electricity and the CO2 recycled.

Then the process would be comparable with growing crops for biodesiel and their relative efficiencies determined.

Sir Henry Casingbroke said...

I agree, two bob, but I indicated that this is an "interim" technology. It is a net improvement because it recycles some of the CO2 at least; also running on biodiesel would remove some of the particulate matter (soot) from the air above cities that have a "basin" situation like Sydney and Wollongong. Biodiesel is absolutely clean in that respect.

Harry, I would imagine costings would be different for Australia to those of US from whence you quote the cost study.

This is because of one essential factor: cost of land and the opportunity cost in its utilisation.

Algae grows very well on degraded land. Indeed, it prefers it. And you wouldn't have to shoot algae during drought. If we are talking about subsidies, the farm lobby still sucks out a fair amount of revenue in a McEwanite throwback. Giving sheep farmers a crop that will grow in marginal country that only supports sheep that will eat almost anything.

Currently around places such as Katanning, WA the land is lying around useless. This would rescue the farmers who had lost acreage due to salinity. Ditto closer to major population centres like Bathurst, Cowra, Boorowa, Wagga, along the Dukes highway south east of Adelaide (Keith, etc) and so on.

Uncle Nick said...

It's happening bro!

What official records and statistics won't tell you - because those that do it are keeping their mouth shut, but there are a lot of people just making their own diesel fuel. Just like brewing your own beer before it ws legalised.

A mate of mine who has a courier business was selling biodiesel to his fellow couriers. Sure enough, government revenue inspectors were around to his place demanding a fuel excise. They reckoned he was selling the fuel without paying his on litres sold.

So he said prove it. How many litres did I sell? They found all the equipment but that wasn't proof because he was using it himself in his own courier business and as he kept no records they had to go away empty handed.

I think those couriers got sort of co-op barter deal going where no money changes hands. On top of that, now I think they got a shifty lawyer on the case to tangle things up so there is co-ops, trusts, research corporations run out of shelf companies.

Some farmers are doing it as well, a mate in the Gold Coast hinterland tells me. Again, no money officially changes hands. And they are beginning to do deals with truck drivers who deliver stuff to to them and dozer operators who come to put in dams.

No records kept, but. One way to reduce the input costs. And nobody is talking about it, I mean why would they?

Fuzzflash said...

Any way one can cut the government out of the action is OK by me, especially if one can do so and have inexpensive road fuel too. Big carbon must be soiling their britches at the prospect of global citizens, slowly and steadilily at first, and then with building social back-pressure, topping their vehicles up at home or a mate's place.
So what's the Ruddster gonna do about it when he dispatches the Rodent later this year? Implement another Volksted Act type prohibition while the little commuter/businessperson sets up fat cracking stills in his/her back shed. I imagine many a battling aspirant will show a spot of enterprise with respect of bio-diesel self starting kits; that form of enterprise much esteemed by Baroness Thatcher, because in the fullness of time Sir Henry, uncle nick, hc and two bob, are we not all businessmen?

I know plenty of people who smoke chop-chop(excise free) baccy, and none of the end users have ever been prosecuted to my knowledge.
No government in a functioning democracy will have the bottle to blitz the backyarders, especially if everyone is in on the rort. A little anarchy is like Peck's Paste, it goes such a long way. And boy, is it ever good for the environment and our grandkids' heritage.

Tony Gallenti said...

To answer Sir Henry's question why, one needs to look at Fuel Tax Act 2006 and work backwards.

The government's rationale seems to be to create a unified single credit system as there is a dog's breakfast of schemes at present.

But this may be a ruse to protect the existing players, i.e. maintain the status quo.

Complicating matters is the clean air legislation which requires gradual reduction in the use of sulphur in petro-diesel. Sulphur acts as a lubricant for the engine and is in its way analogous to lead in petrol.

Biodiesel does not require sulphur because it has in it all the lubricant qualities necessary. Indeed, blending biodiesel at about 20% with petro-diesel will replace the sulphur.

The oil majors would like to bring the biodiesel industry in as a supplier of additive to them rather than face them as an out and out competitor. Currently they have monopoly power, all right, a cartel, or an oligopoly, and quite naturally they don't want to share it with anybody.

Mallesons site gives a good overview of the legislation, here

Fuel Tax Act and biodiesel

The Fuel Tax Act 2006 (Cth), which commenced on 1 July 2006, has introduced a unified fuel tax credit system to replace the existing system of grants and rebates. Fuel grants and credits may be payable under the Energy Grants (Credits) Scheme Act 2003 (Cth) depending on the extent to which biodiesel is blended with diesel and how it is used.

Unblended biodiesel (B100) used on road in registered vehicles weighing over 4.5 tonnes will be eligible for a fuel grant, but at annually decreasing percentages until 1 July 2010 when they will be reduced to zero. There is no grant entitlement for off road uses of B100. However, from 1 July 2011 the acquisition, manufacture or importation into Australia of biodiesel for off road use will become eligible for a fuel tax credit equivalent to the amount of fuel tax paid on the fuel.

Biodiesel blends that meet the federal diesel fuel standard will be treated on the same basis as diesel fuel. If a biodiesel blend meets the diesel standard it is not considered an alternative fuel and is not eligible for a grant under the energy grants (credits) scheme. However, users will be entitled to the full rate of fuel tax credit of 38.143 cents per litre (with exceptions for vehicles over 4.5 tonnes travelling on public roads, which are only entitled to the partial credit of 18.51 cents per litre). These blends are frequently used for commercial purposes such as farming, mining and transport, and are largely unaffected by the Act.

The question then becomes what percentage can be blended. At present most assume that a five percent blend (B5) will be eligible for the tax credits, but those with the capacity to make higher percentage blends that continue to comply with the diesel standard will be also able to claim this tax treatment. This will be more difficult to achieve for biodiesel producers that lack an established fuel blending capability.

For biodiesel blends that do not meet the diesel standard, the user may claim a fuel grant under the energy grants (credits) scheme for the biodiesel component and a fuel tax credit for the diesel component. When used in an eligible vehicle on a public road the fuel tax credit is reduced by a road user charge.

The negative effect on demand for biodiesel is likely to be tempered by the introduction of new laws restricting sulphur content in fuels.
This publication is only a general outline. It is not legal advice. You should seek professional advice before taking any action based on its contents.

robert merkel said...

Sir Henry,

Algae are an interesting possibility, but with conventional crops the yield is orders of magnitude lower; you'd have to devote most of the land currently devoted to crops, and then some, to make a significant dint in our energy needs.

At that point, you wonder whether it makes more sense just to grow biomass - any biomass - and burn it to turn an electric generator. That means you can burn the entire bloody plant, and you don't have all this complicated processing. Just dry it and feed it into the combustion chamber.

And geosequestration is not useless, if not the panacea its proponents sometimes make out. Consider the combination of biofuels and geosequestration working in tandem....

Ken Scott said...

Sir Henry you are not suffering from a paranoiac delusion. It's true what you say. Here is an item by Fred Benchley, BRW 30 Nov, 2006, p11.

"As greenhouse gas emissions continue to rise up the political agenda, the government's renewables policy is looking somewhat limp. Two elections ago, Howard set a target for Australia to use 350 megalitres (ML) of renewable fuels - ethanol and biodiesel - by 2010. That's only 1 per cent of current transport fuel consumption.

Even so, the oil companies, which need to blend ethanol into regular oil-based petrol to meet that target, have been slow.

Under the government's Biofuel Action Plan in 2005, oil companies are committed to an uptake of 89-124ML of biofuels this year, mostly from Manildra and CSR.

But uptake to November is only about 15ML of ethanol and 5ML of biodiesel.
'It's time to call a spade a spade,' the executive director of Renewable Fuels Australia, Bob Gordon,says. 'The 89-124ML of biofuels purchase and use target set by Caltex, BP and Shell will not be met by Caltex, BP and Shell
in 2006. It is an appalling outcome and any amount of spin cannot make
it otherwise.' "

Sir Henry Casingbroke said...

I am glad you asked that question Robert Merkel. Very kind of you to act as my straight man.

It doesn't make any sense whatsover to just burn biomass to turn an electric generator. No sense in environment terms and no sense in terms of efficiency and therefore economic sense. Burning biomass for transport may have been all right for Casey Jones but we have moved on technologically somewhat since 1864.

The main problem with your suggestion is that is a teribly inefficient way of generating energy because most of the heat disappears up the chimney.

Fuels we use to generate energy are essentially sun batteries. Biomass, coal and petroleum is all stored solar energy.

The more concentrated the energy the more efficient it is in terms of being able to transport it, store it and then convert it for our use. Nature has concentrated the energy on fossil fuels such as petroleum, bitumen shale and coal. We then further concentrate it by distilling it or cracking it, or mechnaically compressing it and liquifying it (LPG, CNG, etc).

Among engines to turn a generator, diesel is the most efficient, we literally get the most bang for the buck. That is why we do not use coal power in ships and trains any more, and all big trucks are nowadays diesel.

With regard to your suggestion that "with conventional crops the yield is orders of magnitude lower; you'd have to devote most of the land currently devoted to crops, and then some, to make a significant dint in our energy needs" this is sort of true but you are setting up a bit of a straw man and I am duty bound to administer a correction and dispose of the strawperson.

If you check out the table at wiki as per link I have given above in my post you will note that corn (maize) gives an oil yield of 172 litres per hectare and is the lowest of all oil-producing in the table. Yet it is the figure and the crop being continuously trotted out as an example how pointless this whole biodiesel stuff is.

But take jojoba bean, for instance, its per hectare yield is 1818 litres per hectare, more than 10 times that of corn. Palm oil is 5950 litres per hectare. Calculate that. Chinese tallow, 6545 litres per hectare. And then we come to algae: 95,000 litres per hectare.

So why do we need "conventional" crops? Algae will grow where even saltbush won't grow.

Let us grow algae for oil not to replace cash food crops but elsewhere. I am sure it would be more lucrative for farmers than try to raise sheep in marginal country as is the case in many parts of Australia. We could easily convert the subsidies already given to them - and we do subsidise farmers in many little hidden ways, despite people like Harry Clarke, Dave Clark and Ross Gittins shouting about it from the rooftops for some time now.

Geosequestration is worse than useless. It takes net energy to pump it deep underground. Why deep underground? Well, you wouldn't want it leaking it because it is a deadly poison to people and animals. What I am suggesting is that we can make carbon dixide work for us, we can recycle it to make biomass more concentrated and more efficient as fuel. Geddit?

Now to the main issue here, a mystery, or perhaps a puzzle with a piece missing.

Why is the Howard government hobbling the biodiesel industry just is it is getting off the ground?

Read the posts in this thread, follow the links and then maybe you could provide an answer, Robert.

robert merkel said...

Henry, you will note that virtually every crop you have listed there is a tropical plant. Guess what palm oil plantations are displacing? Tropical rainforest. In any case, you're still talking about ridiculously large areas of agricultural land required to be devoted to non-food uses to make this work.

As an approximate illustration, Australia uses roughly 20 billion litres of fuel a year. Let's pick palm oil again; you'd need more than 3 million hectares of palm oil to grow enough to meet Australia's energy needs. By comparison, our total area of sugar cane under cultivation (our largest tropical crop) is 441,000 hectares. Where are you going to get the water to irrigate such immense plantations?

And that's just for Australia, a massive agricultural exporter with a small population. How in the hell are more densely populated countries with much smaller net agricultural surpluses going to make such schemes work?

I like the potential of algae, too, but note that the algae trials currently underway to absorb power-station CO2 use fresh water, and lots of it.

To make this work on the scale required to make a real dint in oil consumption, you need algae growing in salt water.

And, finally, Sir Henry, if you have a once-through system where coal is mined, burned, the exhaust fed through algae pools, which are then turned into diesel and burned in vehicles, in effect you've reusing the CO2 once. That gives a roughly 50% cut emissions compared to burning coal and petrodiesel (actually, less, because the algae won't absorb all the CO2 from the coal). Nothing to sneeze at, but not nearly as much as we'll need.

Sir Henry Casingbroke said...

Robert, I do not think we are in basic disagreement, it is just that you are always raising these strawpersons. Stop it, or you'll go blind.

I am hoping this discussion is in good faith and not a polemic just to see whose is bigger.

Forget palm oil, peanuts, corn, fish and chips oil and all that bullshit. I agree that for any massive switch we are ultimately talking algae.

But, but, Robert, already the biodiesel industry is almost viable in Australia using lower yielding biomass.

Second point, we are not seriously talking about all of our energy needs at this stage.

These things do not happen overnight. Remember that petroleum was initially used for lighting and cooking. Internal combustion engines ran on, I think, coal gas at first.

Coal, liquefied coal, lpg and natural gas are going to be with us for some time to come.

On top of that there will be electricity from geothermal sources, waves, tides, wind, direct solar arrays, perhaps from nuclear fuel cycle, maybe nuclear fusion, particle accelerators, plasma strippers; on top of that technology will come to our aid in helping us use less power for a given result, like those energy efficient lightbulbs, fridges, washing machines and so on.

Rgearding your pointt about algae - what you say is not true: it does not have to be fresh water at all!

The latest work done at New Mexico State University’s Agricultural Science Center at Artesia see here shows algae will grow quite happily in brackish or saline water.

But let's cut to the chase. My main concern is, and has been all along is, Why is the Howard government hobbling the biodiesel industry just as it is getting off the ground?

Now I am just a gifted amateur so thought I would ask someone who really knows because their arse is on the line.

For the sake of our discussion, you and me Robert, I googled up an Australian biodiesel guru - one Adrian Lake, the Director and founder of the Australian Biodiesel Consultancy and he was kind enough to respond to the question: what is happening in taxation that is disadvantaging this fledgling but so promising an industry. Even though he was on the road (in Malaysia!).

This what he said:

"The inital change that brought the disadvantage and confusion in the market, was the fuel tax bill.

"This removed the cost competetiveness for
biodiesel into the market, except for low percentage blends and caused many potential biodiesel customers to not take up the fuel as it took
nearly 6 months for the ATO to understand the position and ensure that their company could not be held liable for fuel tax.

"While this was bad enough, it was made worse with the Fuel Tax Bill 2006 effectivly subsidising fuel for all business use (diesel in Australia is over 95% commercial/industrial use).

"Unlike all other countries (USA included), who are either putting more tax on petroleum products and supporting or mandating the use of renewable
energy/fuels, Australia appently has decided to subsidise petroleum use and not support renewables.

"The large numbers of support dollars treasury keep bringing up are dollars they are not/never were going to recieve for biodiesel and they are now not going to collect for petroleum diesel.

"For now, the position allows biodiesel producers to sell blends of biodiesel that meet the diesel specification to be competitive with petroleum diesel.

"This can range from 5% up to about 25% depending on climate and the petroleum/biodiesel available.

"If the government adopts a blend standard for biodiesel and limiting the blend of biodiesel as diesel to 5%, it would remove any
competetive advantage for the fuel and without a mandate, even the current biodiesel retail sites would most likley have to close their bowsers or charge more for the product.

"The industry has a position that would like to see the labeling of blends of biodiesel above B5 (5% biodiesel) and that the blends meet the Australian Diesel Specification - a position that most vehicle
manufacturers has said they would have to support.

"This would allow for optimal blends of biofuel to be marketed to the public, greatly improving emissions and creating a potential multibillion dollar oportunity for Australian Farmers."

The Yanks are poulticing biodiesel distillers up to a buck a gallon. And the Europeans are also very keen. Check this out:

"With the significant rise in oil prices and the growing concern about stable, secure and environmentally friendly energy supplies, the
promotion of biofuels use in transport is a priority on the European political agenda. Today, biofuels are the only way to significantly reduce oil dependence in the transport sector. As part of its Energy Policy for Europe, the Commission is committed to encouraging the production and use of biofuels by proposing to set a binding minimum
target for biofuels of 10% of vehicle fuel by 2020."

My question to you Robert is, now that I have tapped the biodiesel industry for a comment, for us, why don't you activate your connections in the Liberal Party and get a straight answer from them.

What the fuck is going on???!!!

hc said...

A bit off topic but I am interested in the conflict in energy policy between pursuing conservation and encouraging use of alternative fuels that also release CO2.

In today's NYT Paul Krugman makes the same point in relation to ethanol:

What should we be targeting?

Sir Henry Casingbroke said...

Can't log on to the NYT site because it asks for password. But you are absolutely correct in what you say. Alternative biofuels, which are burned instead of fossil type fuels are emitters of CO2. There are other chemical issues that I won't go into here for the time being.

I know you are interested in biofuels as an ameliorator of global warming. Biodiesel or ethanol from plants aren't going to do it.

However there are many other agendas for biofuels some of which have been ventilated in this thread.

One is of course, to dry up funds currently going to islamic crazies via Iran and Saudi Arabia, and the Emirates. This would only work if the US itself got serious. Would price intervention cost less than conducting an holding operation in Iraq to protect oil flows there andthe region?

Again, this is quite calculable (your do-gooding instincts to bring democracy to heathens aside, H.)

Perhaps that is why the US govt is happy to intervene in the biofuels market with bounties/subsidies and kickbacks and Oz isn't. There's more of a political imperative which trumps representations from Texaco.

Which brings us to another conflict - that between US-based big oil, which is a player as an onseller and distributor of Middle East crude and the isolationists in the US polity who would like nothing better than to extricate the US from the world oil politics and the quagmire that stems therefrom.

Recycling C02 in the production of plant based fuels such as massive algae plantations using hydroponics seems to resolve the conflict you cite, somewhat.

Just think of algae (au naturel) infested waterways.

The reason is that runoff pollution (shit and piss from intensely farmed animals and unsewered humans) and rotting matter give of C02 and nutrients (nitrogen) and algae flock to C02 like you and me to a good cigar and a decent red.