It is not unusual to convert lower cost, available resorces into more highly sought after ones - one term for this is "value added". And in many parts of the country some energy resources are plentifully available, and can be used to convert real low value items (such as corn, based upon its current price of 7 cents per pound) into more value added ones, like the average of Ethanol and DDGS ( 34 c/lb and 6 c/lb, equal to 13.3 c/lb for the corn). So here is a take on the EtOH from crops arrangement sweeping the nation. Part of the Energize America 2020 discussion.... and a tale of unexpected consequences.
In the U.S. renewable fuels usually pertains to liquid fuels that can be used in transportation or stationary engines (remote generators). The two best examples are food oils (new or recycled) that can be blended with/substituted for diesel, and ethanol (EtOH), which is generally used instead of MTBE (Methyl teriary Butyl Ether, alias Most Things Biodegrade Easier) in gasoline as an octane booster and oxygenate. The increase in the production of EtOH from biomass (so far, usually corn) has been significant in the last few years, and EtOH production now consumes the starch portion of 15% of the U.S. corn crop. However, EtOH production from corn consumes essentially NONE of the protein, oil, fiber or mineral portion of this corn, just that portion of corn which can either make sugars (corn syrup) or "the spare tire" in America’s couch potatoes. Corn typically has an assay of 61% starch, 9% protein and 3% oils, with about 12% water content in dried corn.
Most corn consumed in this country is still fed to animals (principally cows, pigs and chickens), which are then "rubbed out" on an industrial, mass production scale and converted to foods. In general, about 8 lbs of grains and beans produce 1 lb of chicken, while 10 lbs make a pound of pig, and 12 lbs make a pound of cow. Most of the grain (and the starch in that grain) consumed by these animals gets converted into a mix of methane and CO2. As a result of a variety of factors, the average meat eating American human produces about 1500 lbs of CO2 per year than a corresponding non-carnivorous human. The "range fed" animals produce significantly lower greenhouse gas amounts per lb of product, but are more expensive to produce than feed-lot grown animals. Most of the plant protein consumed in feed-lots exits the animal as liquid or solid waste, and is a source of great concern due to the volumes generated and the cheap and tawdry manner that is employed to deal with this waste (which is also a resource, in terms of "fixed" nitrogen, and potential methane production via anaerobic digestion). However, proper waste disposal would raise the price of meat somewhat – still not permissible, evidently.
Corn production has, until very recently, been a money losing proposition for both farmers and taxpayers, and which has had the net effect of subsidizing the food for the meat eating public. The excess corn production was usually dumped abroad into third and fourth world countries (an FZ term, where conditions are really bad), which resulted in huge amounts of impoverishment of farmers in those countries. In the case of Mexico, such farmers often were forced to become ex-farmers, who often migrated illegally to the U.S. This further worsened the economic viability of major portions of the labor force, especially in factory and construction trades, while having positive effects on some corporate executives, such as those that own slaughterhouses and non-union construction companies. However, the corn dumping by the U.S. has now ceased, as the demand for EtOH has caused a major change in rural economics.
In September of 2006, corn prices were quoted in bulk at less than $1.90/bushel, and with 56 lbs/bushel, this was less than 3.34 cents per lb of dried corn (3 lbs of cooked polenta). DDGS prices (derived from corn in EtOH production, which is higher in protein, vitamins, minerals, fiber and oils content than in the precursor corn) were near $80/ton. By November, corn prices were moving past, $3.60/bsh, and DDGS prices were being quoted at $115/ton. At present, prices for corn are near $4.20/bsh, or 7.5 c/lb. In effect, the price of corn is no longer set by over-supply/government subsidy/corn production costs, but instead by the price of gasoline, which is largely a function of the world oil price. Food and energy prices are now linked in a novel manner – it used to be that oil and natural gas prices were corn price determinants because they were a part of production costs (fertilizer, tractor/shipping, other chemicals). The rise in corn prices due to corn demand in EtOH production facilities is also going to result in a net transfer of income and wealth to rural agricultural areas, which will be done without (direct) government aid. Given the large number of U.S. Senators who come from agricultural states, this is also a huge shift in political power/motivation. Such wealth transfers have been occurring only with direct government aid in the last several decades, due to the fact that corn prices tended to be below the cost of production. This also represented a huge subsidy for the meat eaters of the U.S. – now "chicken fingers" are going to have to rise in price (but will consumption for this pseudo-food drop?). And since food consumption in the U.S. and logic have only a bizarre, Alice in Wonderland relationship, many strange consequences are in store, especially for a "cheap meat-addicted" society.
Many critics of EtOH production (especially from corn) have cited the large fossil fuel requirements needed to produce a given quantity of EtOH and DDGS, as well as the large quantity of fossil fuels needed to produce a given quantity of corn. For example, almost all of the protein made by corn needs to be derived from fixed, reduced nitrogen (ammonia, urea, manure), which puts the "amino" in amino acids, and which in turn are the building blocks of proteins. To make 1 bushel of dried corn, approximately 47,000 Btu of energy or raw materials are required. Included in this 47,000 Btu is approximately 18,200 Btu of methane (= 17.5 cubic feet at standard conditions, or 0.78 lbs), most of which is used to make ammonia (not necessary, just cheaper). This 1 bushel of corn will produce approximately 2.7 gallons of EtOH (17.7 lbs) and 18 lbs of DDGS (dried distillers grains with soluables) and 17 lbs of CO2, which was fixed by sunlight. For a modern EtOH facility, the following energy balance occurs to produce a gallon of pure EtOH:
Distillation/processing 18,200 Btu
DDGS Drying 17,400 Btu
Electricity 5,000 Btu
Corn production/transport 18,000 Btu
Total ~ 58,600 Btu
Since a gallon of EtOH has a lower heating value of 77,000 Btu/gallon, the net energy production is about 1.3 units per 1.0 unit of fossil fuel input. In some facilities, the fermentation solid residue (WDGS) can be used without drying; the energy ratio would become 1.86:1. However, the WDGS has a very short stability lifetime, and must either be dried or consumed within a few days (such as with nearby farms, food factories and feedlots), otherwise bacterial decay occurs. In general, most electricity used on farms in the U.S. is supplied by polluting means (coal, nukes, natural gas).
As far as wind turbines are concerned, farms are often one of the preferred locations – lease income (or ownership by farmers in that rare and fortunate situation) is extremely useful, and crops can be grown to the edge of the tower base. However, wind turbines could also be a significant source of renewable energy input into EtOH facilities, in ways that increase the renewable energy content of the EtOH and DDGS/decrease the required fossil fuel inputs. This can occur in three significant ways:
- Replacement of the electricity made via polluting means (5,000 Btu/gallon EtOH). This would raise the renewable energy ratio (RER) to either 1.43: 1 or 2.13:1, depending on the fermentation solid marketing approach. RER refers to the ratio of renewable energy obtained from the amount of non-renewable energy expended to obtain this renewable energy (EtOH in this case).
- The use of superheated steam DDGS driers, instead of the conventional heated combustion air driers. In conjunction with devices known as steam compressors, the waste heat from the DDGS drying can be used to provide all of the steam needed for the distillation and processing operations. These compressors would use electricity to produce higher pressure superheated steam from the drier low pressure exhaust steam, while at the same time producing a higher quality DDGS product (they cost about $14 million for a 100 million gal/yr facility). The net effect would be to increase electricity consumption to 6,800 Btu/gal, and raise the Renewable Energy Ratio (RER):
DDGS Drying 17,400 Btu
Electricity 6,800 Btu
Corn production/transport 18,000 Btu
Total 42,200 Btu
The RER then becomes 1.82:1, or 2.18:1 if renewable electricity is employed.
- A portion of the DDGS could be burned in special gasifiers/combustion systems to provide the heat needed for DDGS drying. The result is no net consumption of fossil fuels, but at the expense of approximately 30% of the DDGS product, which would otherwise be sold to provide a side stream of revenue to the EtOH facility. Assuming electricity use rises to 7,000 Btu/gallon, the RER becomes 3.08 for the EtOH plant, or 4.28:1 if renewable electricity is employed.
- Eliminate the use of fossil fuels in the ammonia consumed in growing the corn, which would lower the "corn" input to approximately 11,000 Btu/gallon. This could be accomplished by better use of manure/animal wastes, as well as by the use of wind derived electricity to make the hydrogen that is used to synthesize ammonia. The RER for such an arrangement then goes to 7:1 if renewable electricity is employed for item (3).
- Finally, for EtOH plants that have ready market for WDGS, a new processing/distillation energy source could be employed. This would be heat pump power distillation systems, where electrically powered heat pumps recycle most of the energy consumed in distillations, instead of dumping the heat injected to distillations out via cooling water. Again, the RER would rise to between 4.28:1 to 7:1, depending on how the ammonia is prepared.
Thus, wind turbine derived electricity could be employed to drastically reduce the fossil fuel inputs into EtOH production form corn (or other crops, such as sugar beets). Since most of this energy would probably derive from the local area surrounding the EtOH facility, the net effect would be improved local economic conditions, with locally produced electricity used to enhance the value of the crop products such as EtOH/DDGS. Very often, wind turbine electricity made on farms is exported to distant areas, and only a very tiny fraction of the value of this electricity is retained in the local area. Using wind turbines in EtOH production systems thus becomes a way of enhancing the value added in the conversion of corn to EtOH and DDGS.
However, these approaches are not too likely to proceed until the crisis in near-future North American natural gas production/supplies becomes manifest, and world oil prices go through their next wrenching upwards adjustment, as occurred in the 2004 to early 2006 time period. At present, we are still in the trough of the last and next petroleum price versus time "graph", thus once again in a period of relative petro-price complacency.
There has been much talk lately of cellulose derived EtOH. This also will not be economically viable until EtOH prices get above $4.50/gallon, due to the complexity, capital intensive plants, and the dilute nature of the crude EtOH made by fermentation of cellulose derived sugars. Obviously, EtOH production from crops will be much more profitable than from cellulose, unless crop prices rise to more than double what they currently are. Perhaps cellulosic EtOH will put a cap on food crops like corn, but maybe the corn-crude oil connection will still reign supreme for at least the next decade.
In effect, the only thing likely to keep crop prices low is low petroleum/natural gas prices. Since these are going to get higher due to hydrocarbon resource depletion coinciding with increasing/existing transportation energy demands...well, you do the math. A long term option around the food or fuel predicament may be electric cars, but since no plug-in hybrid vehicles are currently in production/likely to be in significant amounts for several years, electricity and personal transportation are essentially unrelated events. And thus electricity will provide negligible relief to the transportation sector of the U.S.
So, in conclusion, food and oil prices are likely to be very interconnected, as the need for a gasoline substitute in the U.S. evolves/becomes more prominent. Which means that as oil prices rise, so will corn prices. A powerful rural lobby will insist that corn prices stay connected to EtOH production/stay connected to the rising cost of oil and oil derivatives, like gasoline, as the alternative is the (up until late 2006) continued impoverishment of rural America, as well as the dumping of cheap foods into 3rd and 4th world countries. However, for the carnivores among us, dire choices await. They can either cut back on the meat ingestion, or pay up. Odds are, the carnivores are not going to be happy campers adapting to the choice of meat or veggies in return for no fuel or fuel for the ‘mobile. And as oil and natural gas prices rise, EtOH producers can either adapt to a low polluting, wind turbine sourced route, or go to the polluting coal route for process heat. For them, given the choice of required CO2 sequestration for coal burning, or the wind turbine approaches, wind turbines will turn out to be the lower cost option. However, this may be politics at its ugliest, with their legislators battling for the right to pollute the atmosphere with fossil fuel derived coal in return for relatively cheap/highly profitable EtOH, thus keeping the country hooked on liquid fuels. Hopefully, they will not be allowed to align with the angry carnivores. And besides, only decreased liquid fuels consumption/higher efficiency/different habitation patterns can obviate the need to import petroleum; maximum EtOH production from the U.S. is only likely to be around 4 million barrels EtOH/day. Our current gasoline consumption is 9.5 million barrels/day, and EtOH production is near 400,000 barrels/day.
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