Ronald's Comments

In commenting on the USDA's "Crop Land Report", Jim Lane writes: "No sign of the ethanol-fueled land-use change that supposed to be going on all throughout this period?"

One cannot simply look at a decline in cropland and conclude that. One has to compare it with a counterfactual. Would there have been an even greater decline in land devoted to crops in the absence of the ethanol boom? Also, at issue in the fuel-versus-food debate is not just total cropland but also how the cropland is used -- i.e., whether the expansion of corn production is at the expense of other crops. Finally, the debate is, in any case, more about what happens outside the United States -- e.g., if the combination of less rotation with soybeans, and more diversion of soybeans to biofuels, fuels sharp rises in the international prices of vegetable oils, which in turn leads to land conversion in Latin America or south-east Asia.

Once again, Renewable Energy World fails to go behind the headlines and dig out the real story behind a biofuel.

First, many of the flights ARE using food -- specifically oil from false flax (Camelina sativa). The oil from this plant is highly edible. It is not "non-food".

Second, if the aviation industry were the only industry transforming used cooking oil into fuel it would be something to applaud. But it isn't: Canada, Europe and the United States now all have biodiesel blending mandates, which puts bio-jet in competition with biodiesel for the same feedstock. The more used cooking oil bio-jet manufacturers use, the less is available for biodiesel manufacturers, who then in turn have to look to other feedstocks, including edible oils.

The aviation industry's claim that it is concerned about the environment would be much more credible if it openly called for the ending of subsidies and mandates for ethanol and biodiesel. But it won't, because it wants to benefit from the same subsidies as these fuels enjoy.

Yet another example of REW's journalistic standards in evidence: their reporter didn't even get the name of the ITC right. (All it would have required would have been to do a simple Google search). The 'C' in ITC stands not for 'Council' but 'Commission' (in capital letters, please):

http://www.usitc.gov/trade_remedy/731_ad_701_cvd/investigations/2011/cspv_cells_and_modules/prelimphase.htm

As for Daniel Oliveira's assertion that 'plenty of US industries have and are receiving subsidies', that is certainly true, including in respect of U.S. solar manufacturers. In addition to the federal loan guarantees that we all know about, numerous states have -- and continue to provide -- assistance to companies setting up shop in their jurisdictions, either through dedicated green-development programs or through ad hoc 'economic development' deals. As we sometimes see, though, states get into bidding wars. As documented here (http://www.michigancapitolconfidential.com/13704):

"A company that had never manufactured solar modules before used promises of two relatively modest incentives in Texas, one of them $2.8 million from the city of Corpus Christi, in a kind of slingshot maneuver to win a roughly $40 million incentive package to build a solar module plant in Saginaw, Mich."

'The camelina-based fuel also exemplifies a trend in biofuels production away from raw materials that can be used for food, ... .'

Please, instead of simply parroting PR material from the biofuels industry, do some research. Camelina oil is very much food, and was grown extensively for food in eastern and central Europe until the 1940s (after which it was displaced by higher-yielding oilseeds). To quote from http://www.greatnortherngrowers.com/montana-grower-cooperative-camelina.html:

'Camelina, with its high content of OMEGA-3 fatty acids, (38% of the total fatty acid content), offers an opportunity to supply the growing demand for high quality edible oils . This makes camelina oil a rich source of essential fatty acids and excellent source of omega-3 fatty acids. These compounds may have favorable nutritional implications and beneficial physiological effects. Camelina oil can reduce serum triglycerides and cholesterol.'

Tildy Bayar then writes: 'Due to unsteady production in Brazil, the U.S. became a net ethanol exporter for the first time in 2010, with 1.3 billion liters heading to the largest markets of Canada, Jamaica, the Netherlands, the United Arab Emirates and Brazil.'

No, it was not just because of 'unsteady production in Brazil.' It has also been because U.S. ethanol consumption has hit the blend wall, and exporters have figured out how to tap into the USD 0.45 per gallon blenders' credit. As a result, the European ethanol industry, represented by ePURE, has formally requested that the European Commission investigate trade practices of the U.S. ethanol industry.

See: http://www.ethanolproducer.com/articles/8292/epure-requests-investigation-into-u-s-ethanol-exports-to-eu

Renewable Energy World continues to be a disappointment when it comes to reporting on biofuels. Instead of telling it like it is, it tells it as the industry would like you to think it is.

@ John,

Whether one believes that '10% ethanol results in a 1.5% reduction in fuel economy' (one can equally observe that compression-ignition engines, when used with diesel are even more efficient than can be accounted for by differences in thermal density between gasoline and diesel), the fact of the matter is, standard energy-accounting practice expresses different fuels in common energy units, based on their thermal density.

@ Bill and John,

Your figures relate to volume. Most discussions of energy normalize volumes for differences in energy density. In that case, the contribution of ethanol to total supply of gasoline-like fuels was more like 7%.

@ Steve Poppitz and On The Point,

No question that there is a large TECHNICAL potential for solar energy (Hawai'i is a sunny place), wind energy (the wind blows steady in a lot of places), and geothermal energy (on the Big Island and Maui), and OTEC around several of the islands. But technical potential does not equate to economic potential. There is the annoying detail of finding sites that locals don't object to for wind, for example. And the costs per kWh differ widely across the technologies. Just asserting that these technologies have potential does not get us very far.

On the question of agave, the claims look impressive:

www.slideshare.net/agaveproject/Agave-Project-Presentation

But Dr. Anumakonda Jagadeesh writes that "Agave ... is being used in biofuel production on a massive scale in Mexico." Is it really? According to the director of The Agave Project, Arturo Velez, writing on the link above:

"We still don't have all the necessary infrastructure to commercially produce ethanol in Mexico, although some tequila industries are somewhat interested. If they decided to give it a try, we could be commercially producing ethanol in 6 to 8 months. Another option is to export agave-derived feedstocks for ethanol production to the USA. That can be done immediately."

If, could, perhaps. Doesn't sound like "on a massive scale" yet to me.

The On Project writes, "Ocean Thermal Energy Conversion (OTEC) would be the perfect solution to Hawaii's energy needs." Really? Then how come private utilities haven't built them? The one demonstration plant off the Big Island of Hawai'i produces, at peak, 0.05 MW.

http://www.nrel.gov/otec/achievements.html

@Garyrich2000,

What I am saying is that all these ideas about raising the most favoured nation (MFN) tariff on solar cells and modules from zero to 10% (or whatever), or applying variable import tariffs on all imports that are proportional to some bureaucrat's assessment of the foreign country's environmental performance, are pissing in the wind if they would not fly at the WTO. The only kind of "tariff" that would be allowed (as long as there is supporting evidence and proper procedures are followed) would be one of the agreed WTO remedies: an anti-dumping duty, a countervailing duty, or a special safeguard measure. The latter was recently applied successfully against Chinese tires:

http://www.mondaq.com/unitedstates/x/145168/Trade/WTO+Appellate+Body+Upholds+Special+Safeguard+Measure+Imposed+By+The+United+States+On+Certain+Chinese+Tires

If, however, you and others are proposing that the USA withdraw from the WTO, then all I can add is "Be careful what you wish for ... ."

P.S., I didn't say you were the same Gary as Anonymous, but the alert I receive that there has been a new comment attributed comment 64 to somebody named "Gary". It even showed a photo of the person!

Gary (Anonymous comment No. 64) writes that 'A good reason for a tariff would be to force countries that have no environmental standards to step up and protect the environment.' Again, Gary, do you mean a specific tariff on imports from China (i.e., a trade remedy), or to impose a general tariff, or tariffs, of some height?

Since you speak of 'countries' in the plural, I assume you mean the latter. Dream on. WTO jurisprudence has already ruled unilateral attempts to restrict trade on the basis of alleged environmental problems in the exporting country as contrary to its rules. But, setting international law aside, let's look at the practicality of it. Who would decide how high the tariff would be, and on what basis? How often should the tariff be adjusted? Should companies that meet the reference environmental standard have to pay the same tariff as ones from the same country that do not?

Should Norway (a major oil exporter) and Switzerland, which get most of their electricity from clean hydro-electric plants, impose tariffs on U.S.-manufactured goods because the electricity that U.S.-based companies use is generated predominantly by fossil fuels (43.5% from coal and 22.2% from natural gas)? Should Singapore impose high tariffs on imports of U.S. corn because of nutrient pollution in the Gulf of Mexico. (And if it does, does anybody think that will change the amount of fertilizer applied by U.S. farmers?)

And consider differences ACROSS goods. U.S. tariffs are zero on imports of fossil fuels imported from countries with which it has free-trade agreements, and close to zero on imports from other countries. Say we start charging differential tariffs on solar panels according to the environmental performance of the overseas solar manufacturers. If their overall environmental performance is still better than foreign producers of fossil fuels, what sense does that make?

So, we impose a tariff on imported oil. How does that address oil spills in our own back yard?

@Derek-Boyle

You write, 'Hawaii can enact a feed-in-tariff to make most if not all of these plants economically viable, ... sustainable and cheaper than oil.'

Well, yeah. Set a feed-in-tariff high enough and any energy source, even earwax, becomes profitable to produce. That does not, however, make it economically viable, nor sustainable, nor cheaper than oil.

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@Manuel Moraleda,

You ask, 'How is it that [in] Hawaii ... geothermal energy can't be exploited for electricity production?' It is being exploited, on the Big Island. Kauai's volcanoes are extinct, however. Nonetheless, geothermal technologies ARE being exploited on Kauai to help increase the efficiency of a solar-thermal plant:

http://featured.matternetwork.com/2010/4/kauai-farm-solar-thermal-meets.cfm

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@William Cormeny,

You write that 'Maui has enough sugar cane to light and air condition the entire island.' Evidence, please? Surplus power from Maui's one remaining sugar mill supplies just 7% of the island's electricity needs:

www.bizjournals.com/pacific/stories/2010/01/25/daily41.html?page=all

My guess is that the draw from lighting and AC is a much larger share of electricity consumption than 7%.

If you are suggesting that if Maui's sugar were to be used only for energy, then perhaps it could supply a significant share of the island's electricity needs. But note: cane production on Maui is highly water-intensive. During the drought of 2007-09, production fell by 37%. Moreover, the massive diversion of water to the fields has been opposed by local environmentalists and Native Hawaiians. As stated in this article, 'there is an opportunity to restore streams and the native ecosystems as well as ... the kalo (taro) agriculture that was [previously] the staff of life for Kanaka Maoli.'

http://http://www.dmzhawaii.org/?p=7594

Finally, at current sugar prices, there would be a large opportunity cost to using the cane for (lower-value) energy.

Mark,

First, the $4 billion in tax measures, if repealed, would translate into less than 35 cents per barrel equivalent of oil and gas consumed in the United States, or less than 1 cent per gallon of gasoline equivalent consumed. Even if oil and gas prices were to rise by that much, it would hardly make a difference in terms of electricity prices, especially as very little oil is used any more to generate electricity.

You then argue that "[e]xcept that the fossil fuel plants were built with subsidies which of course cannot be taken back." What subsidies, precisely? And how much does that translate per kWh?

Look, I am not disputing that by changing policies the field could become more level. What I am trying to do is to get people who make these sweeping kind of statements to provide numbers (or links to calculations by people who have), or at least acknowledge that they haven't actually run the numbers.

Cheers,

Ron

Mr. Simmons, you assert that 'If all, or even most, fossil fuel subsidies were eliminated today we would be there' -- i.e., producing renewable energy at a cost people can afford.

I'm all for eliminating inefficient fossil-fuel subsidies. But your claim is hard to substantiate, given that standard subsidies and tax breaks to fossil fuels are a fraction of their unit price.

Now, if what you really mean is 'If all, or even most, fossil fuel subsidies were eliminated today AND, WE WERE TO LEVY ENVIRONMENTAL TAXES ON FOSSIL FUELS TO ACCOUNT FOR THEIR EXTERNAL COSTS we would be there', your assertion would be more credible.

Steve, the 'Conservation' designation on Kaua'i does not refer to 'Conservation Reserve' or 'Conservation Easement' land, but to land within state parks, national parks, forest reserve, etc.

Certainly, nobody is going to farm (even trees) on 45 degree (and steeper) slopes.

http://www.kauai-seabirdhcp.info/background/images/KauaiMap_extralarge.jpg