Liberty's Blog: Gasoline Ethanol and Methanol.

Saturday, April 15, 2006

Gasoline Ethanol and Methanol.

Gasoline prices are now about $2.75 a gallon and rising. We can expect prices to continually rise well over $3.00 a gallon before our long summer ever start. There is lots of blame being thrown around. OPEC of course is a favorite. Crude prices last week broached 67 bucks a gallon, and there seems no end in site. Some of us see the emerging market in China as a primary cause of increasing crude prices. Then again popular today are the oil company conspiracy theorys.

Our government and her regulation agencies is probably most responcible for this round of price increases. About his time of year refinerys start manufacturing government mandated summer blends. Every city, region and state has its own formula. Slate has a nice post explaining the summer blend programs.

Refineries brew their summer blends by removing hydrocarbons that are more prone to evaporate in hot weather. These chemicals, called volatile organic compounds, react with airborne pollutants in the summer sun to form ozone, one of themain components of smog. From June 1 to Sept. 15, the EPA mandates that pumps in 12 high-ozone urban areas—such as Los Angeles, New York City, and Baton Rouge—deliver gasoline that meets special low-evaporation standards. Several states have voluntarily adopted the rules, and 15 have enacted their own seasonal-blend regulations on top of the EPA's. For example, pollution-conscious California has mandated that service stations must start selling its summer blend in May.

Switching over every year causes some shortages usually resulting in a bump in prices about this time of year as they switch over to the summer fuel. This year the bump is more like a mountain. One of the reasons is that that legislation has all but mandated that the additive MTBE be replaced with ethanol. MTBE is made from the ingredient methanol is used as an oxygenate is being replaced with Ethanol or grain alcohol which is mostly made by fermenting corn grain and distilling it. MTBE did have some potential water contamination issues, and ethanol is a homegrown renewable fuel. A pretty sexy sounding idea, replacing the nasty sounding MTBE with farm grown moonshine. A payoff for big political contributer Archer Daniels, and promising higher corn price for farmers.There is only one problem. Where to get the extra ethanol?
The existing ethanol plants were already running at capacity, while methanol operation were being shut down. So while crude prices are already increasing, shortages of ethanol are skyrocketing the prices even more.

All of this is would would be of transientory interest, but for the larger issue of energy independance. President Bush mentioned both methanol and ethanol as key in becoming energy independant. Ethanol is made by brewing carbohydrates and distilling it. In this country the raw materials is corn in South America sugar cane is used. The amount of corn we can raise is limited to the farmable acerage. Ethanol consumption puts pressure on food and livestock feeds driving the food cost up. Reason has a good discussion about the economic side effects.

Pimentel, unlike the USDA study, also considers the effects of growing more corn on the natural environment. For example, he estimates, "To produce 1.7 billion gallons of gasoline equivalents (only 0.8 percent of total gasoline) using ethanol we must use about 2.2 million hectares of land; if we produced 10 percent of U.S. gasoline, the land requirement would be 22 million hectares." In other words, today about 5 million acres of land that might otherwise revert to nature is being used to grow corn to produce ethanol. The new ethanol mandate could raise this to 10 million acres. It is a fair question whether or not that really is the environmentally friendly thing to do.

Pimentel also claims that the demand for corn as a feedstock for ethanol raises the price of corn, which means that beef producers must pay more for their feed. Therefore, more expensive corn raises the price of beef to consumers by about $1 billion dollars.

One justification for adding ethanol to gasoline is that it boosts octane ratings and causes it to burn cleaner, thus preventing air pollution. But does adding ethanol to gasoline prevent smog? It may have done so at one time, according to Ed Stork, former director of Mobile Source Pollution for the Environmental Protection Agency; but now, says Stork, "There is no point in pouring ethanol into the fuel mix anymore." Why? Because modern automobiles burn modern reformulated gasoline much more cleanly.

Methanol is currently mostly manufactured from mostly natural gas. We have large proven reserves, and even larger not-quite proven reserves. Methanal can also be created from coal, wood or just about any other biomass matereals. Including the cornstalks that that the ethanol process doesn't use. Its not that ethanol is a bad replacement but relying on it soley doesn't contribute much to energy independence.

The United States uses 380 million gallons of gasoline a day. If we were to replace that entirely with ethanol we would have to harvest approximately four times as much agricultural output as we currently grow for food production. Now it is true that we don’t need to replace all of our gasoline, at least not in the short term. Replacing half would make us substantially energy independent. Furthermore, future processes might eventually wring out higher ethanol yields per acre. Surplus ethanol from Brazil or other tropical nations could also be imported. Nonetheless, relying on ethanol alone would require putting under fresh cultivation an amount of land greater than what we now use for food production. This would cause many strains. So if we are to use alcohol fuels to achieve energy independence, a broader resource base is needed. This can be provided by methanol, which can come from both a broader array of biomass materials and also from coal and natural gas. Methanol production from coal is particularly important, since coal is America’s, and the world’s, cheapest and most prevalent energy resource. The United States could power its entire economy on coal for centuries, and large reserves also exist in allied countries. Current coal prices stand in the range of three cents a kilogram, much cheaper than agricultural products, so methanol can be made from coal at low cost. By mixing it at various rates with ethanol over time, we can increase supplies, reduce prices, maximize environmental benefits, and vastly increase the flexibility of our alcohol economy. Insisting that future vehicles have the capability to burn both alcohols is thus critical.