Surprisingly, This Is Good News
The leading cellulosic ethanol company turns out to be a gigantic fraud:
Late last month, a federal court in Mobile ordered Cello Energy of Bay Minette, Ala., to pay $10.4 million in punitive damages for fraudulently claiming it could produce cheap diesellike fuel from hay, wood pulp and other waste.
Cello’s owner, Jack Boykin, allegedly built a sham facility and lured pulp producer Parsons & Whittemore Enterprises to invest $2.5 million in an ownership stake in 2007. In court, Parsons & Whitmore CEO George Landegger said he was unimpressed with the company’s facilities, and a string of expert witnesses testified that fuel samples were derived from petroleum sources.
Honestly, this is wonderful news: biofuels are a terrible idea, and anything makes them less likely to become an important part of our energy mix is really lucky news for us. So any early disasters that take the shiny off make me really happy.
Now, pretty much everyone knows that corn-based ethanol is a gigantic fraud, and persists mainly as a way to shovel pork at Midwestern farm states. That’s why many people put their hopes on “cellulosic ethanol”, which are processes to turn cellulose — the basic structural material of plants — into ethanol for fuel. The idea is that with cellulosic ethanol processes we can process biomass which comes from plants not important for food.
However, even cellulosic ethanol is a bad idea. The problem is that biomass is not an unlimited resource. It’s already the case that around a quarter of Earth’s net primary production (the rate at which plants turn solar energy into new biomass) is already appropriated by humans. Of that quarter, about 10 percentage points go to reductions in plant cover due to human activity, and another 15 percentage points go to agriculture and forestry.
If we try to replace a significant fraction of our liquid fuels with biofuels, then we will to dramatically increase the human share of NPP — the human economy is extremely energy-hungry. This means, as a consequence, that even more land area will be shifted from native ecosystems to simplified agricultural ecosystems (imagine vast plains of switchgrass). That will lead to an even faster loss of biodiversity than we’re already facing.
Now, it’s reasonable to ask what the value of biodiversity is: how does conservation help humans? We know that global warming is a real problem, so why should we hesitate to take a measure that might solve it when we can’t even name a concrete cost to th?
The answer is precisely that we don’t know how it could help, which is why it’s a bad idea to destroy it indiscriminately. Nature has a huge arsenal of biochemical pathways we know nothing about, and destroying them without even knowing they existed is foolish. Another way of thinking about it is that conserving biodiversity has value in the same way that scientific research or entrepreneurial activity do. We simply don’t know, starting out, what the payoff of research or a new business is — part of the point is that this is a knowledge discovering activity, whose payoff is uncertain in the Knightian sense.
It’s not even something we can properly ascribe probabilities to, which makes performing cost-benefit calculations a somewhat frustrating affair.
Comment by joe from Lowell —
August 1, 2009 @ 11:15 pm
Existing agriculture produces massive amounts of waste material – corn husks, wheat stalks, yadda yadda yadda – that could be turned into ethanol, without having to plant any more area to produce cellulose.
Also, the leaves in my yard are available for a modest fee every November.
Comment by larry Johnson —
August 2, 2009 @ 9:27 am
Just curious how old the writer is. I would guess a freshman/sophomore in high school
Comment by joe from Lowell —
August 2, 2009 @ 11:36 am
Could that be the Larry Johnson, the insane PUMA?
Comment by Glaivester —
August 2, 2009 @ 3:23 pm
I have to agree with Joe from Lowell here.
While some of the push to biofuel production is oftentimes counterproductive (particularly if we are subsidizing net-energy consuming inefficient production) there is plenty of waste biomass that, if an efficient means of producing biofuel could be found, would be a good energy supplement.
I’m not certain what Jim Henley is proposing as an alternative here. Does he want us to continue to use primarily fossil fuels, to go nuclear, to hope that we can find a cost-effective way to get energy from solar and wind, or has he jsut resigned himself to a low-energy future where we live in a 19th-century standard of living?
Comment by hf —
August 2, 2009 @ 6:46 pm
Glaiv – check the signature line.
Comment by Thoreau —
August 2, 2009 @ 9:41 pm
I’m tempted to agree with joe, except I’m not sure about (1) what they currently do with the cellulosic wastes from farming and (2) what the consequences would be if those wastes were diverted away from where ever they currently go. I somehow doubt that Big Agribusiness disposes of cellulosic wastes in the most environmentally friendly way possible, but I do assume that one way or another that biomass makes it back into the ecosystem, and I have no reason to assume that burning it would be a superior method for returning it to the ecosystem.
Comment by Neel Krishnaswami —
August 2, 2009 @ 10:37 pm
The problem with using cellulosic waste from farming is that any process that can profitably turn them into biofuel, is also a process that can profitably turn switchgrass into biofuel.
This means, in turn, that if we start producing biofuels before we’ve substantially reduced the total amount of liquid fuels we use, nearly every bit of land in North America that’s not already either being farmed or is a desert, could profitably be ploughed under and turned to producing biofuels. And markets respond quite well to incentives….
That’s why I hope that cellulosic ethanol is plagued by fraud, failure, expense, and scaling difficulties — I really hope it doesn’t succeed until after the automobile market has largely switched to things like plug-in hybrids, and total demand for liquid fuels is a small fraction of what it is currently. Otherwise native ecosystems are doomed (albeit in a low-carbon way).
Comment by stras —
August 3, 2009 @ 12:03 am
Good post, Neel.
Comment by Danny —
August 3, 2009 @ 9:26 am
So let me get this straight- fraud is good news because fraud helps your logic against Biofuels. Pretty sad.
It’s pretty clear to me that you have no scientific basis for being against ethanol.
And for all of you thinking the “timing” is the issue with biofuels- your dead wrong. We need alternative fuels to break our dependency on oil. Period! There is no timing issue and usage issue.
Comment by Eric the .5b —
August 3, 2009 @ 11:13 am
Aside from an angry foot-stamp, do you have anything like an argument or evidence for your assertion?
Comment by Danny —
August 3, 2009 @ 12:01 pm
Sure- we are 15-20 years away from hydogen fuel cells, at least half that from decent batteries and plug ins, and unfortunately plug ins are terrible for te environment until we wean ourselves off of coal plants.
Ethanol is not “THE” solution but it is one of the solutions. To think that we need to address all efficiency and conservations issues first- then come up with alternaives is simply foolish. Don’t get me wrong- I firmly beleive that coservation and efficiency is critical in the long hall but to throw ethanol under the bus under the guise that imported oil is a better option way off base. We need the current ethanol industries to thrive so the next generations can develop.
Lastly on the environmental side
Comment by Danny —
August 3, 2009 @ 12:04 pm
Lastly on the environmental we have increased ethanol and feed corn and export corn production every year for well over 20 years straight WITHOUT an increase in acreage or food and food graoin production.
The whole food vs fuel debate is a Big Oil PR move- unfortunately a very good one- but the facts dispprove it across the board.
Comment by Thoreau —
August 3, 2009 @ 12:32 pm
Actually, the dire need for alternatives is not necessarily a sufficient argument for ethanol. I’ve seen differing estimates as to whether ethanol replaces more petroleum than is required to produce it, but at the very least it is not a very efficient means of getting energy.
Comment by Thoreau —
August 3, 2009 @ 12:32 pm
BTW, great to see you blogging here Neel!
Comment by Eric the .5b —
August 3, 2009 @ 7:15 pm
Are you sure you don’t want to rephrase that?
Comment by Libertarians Everywhere —
August 3, 2009 @ 11:23 pm
We know that global warming is a real problem, so why should we hesitate to take a measure that might solve it when we can’t even name a concrete cost
We’ve lost him.
We’ve finally really lost him.
Oh, just checked signature line. Never mind.