The US mandate for ethanol production pushes up corn prices – doesn’t it?

In a year that saw the worst drought in decades in the US, the ‘food vs. fuel’ debate is highlighted once more. The corn crop has been badly hit, pushing up prices, so farmers are urging the government to drop the requirement to make ethanol from corn. However, the Environmental Protection Agency (EPA) has just refused (again – they also refused in 2008).

© Rdodson | Stock Free Images & Dreamstime Stock Photos

The interesting thing is that the EPA says dropping the ethanol blending mandate wouldn’t make any difference to corn prices. Which seems rather counter-intuitive doesn’t it? In 2007, a little over 10% of US corn was used for ethanol production, whereas now that figure is 40%. Surely that must have an impact on price?
Specifically, the EPA said:

“EPA examined a wide variety of evidence, including modeling of the impact that a waiver would have on ethanol use, corn prices, and food prices. EPA also looked at empirical evidence, such as the current price for renewable fuel credits, called RINs, which are used to demonstrate compliance with the RFS [Renewable Fuel Standard] mandate.

“EPA’s analysis shows that it is highly unlikely that waiving the RFS volume requirements will have a significant impact on ethanol production or use in the relevant time frame that a waiver could apply (the 2012-2013 corn marketing season) and therefore little or no impact on corn, food, or fuel prices. We analyzed 500 scenarios, and in 89% of them we see no impacts from the RFS program at all.”

To my mind, this is just another good example of how hard it is to draw a direct link between food prices and biofuels. That’s not to say I think using food crops for fuel is generally a good idea, just that I think looking at food prices is going to be a tough way to argue against it.

In a 2008 report, the International Energy Agency pointed out that estimates of biofuel impact on food prices can vary somewhat. They cited an estimate by the Council of Economic Advisors, who estimated that biofuels accounted for 3% of that year’s rise in food prices, compared to a World Bank estimate that biofuels accounted for 75%! The CEA had used only data on corn markets, and extrapolated it out to all food crops, while the WB had simply looked at the impact of oil price on food prices, and then assumed that all of the remaining increase was due to biofuels.

So, back to the EPA’s decision – how can they say that using all this corn won’t have an impact on price? Well, there are two broad reasons.

First off, they’re not really saying that using corn for ethanol doesn’t impact on price, they’re just saying that removing the Renewable Fuel Standard for this year won’t help. In fact, there are several other forces that determine how much ethanol is blended into gasoline in the US, such as:
• Ethanol has been cheaper than gasoline for the last few years
• Gasoline sales have been declining in the US, this year down 5% on last year, which means less ethanol is needed to hit the target
• Demand for ethanol is driven just as much by the Clean Air Act, which requires an ‘oxygenate’ to be blended into fuel to lower emissions of carbon monoxide, and ethanol is the cheapest oxygenate

The second reason is that although more corn is being used in ethanol, it’s compensated for in other ways. For one thing, that huge 40% figure doesn’t allow for the fact that the by-product of ethanol production, Dried Distiller’s Grains (DDG), is itself a high grade animal feed. Allowing for this, it’s actually about 27% of corn which is used for ethanol. For another, US corn exports have fallen by over half since the food price spike of 2008 because those high prices caused much more land to be put into corn production elsewhere in the world.

One final piece of the puzzle is the RINs (Renewable Identification Numbers). These are certificates that fuel companies get to show how much ethanol they’ve blended into their fuel. For the last few years, most fuel companies have blended more than they had to, because ethanol was cheaper than gasoline, so now they’ve got spare RINs, which they can use to meet some of this year’s mandate. Which means if the price of corn ethanol goes up, they can use RINs instead, lessening the RFS’s impact on corn prices.

So what do we learn from all this? Well, like I said, drawing a direct link between food price and biofuel policies is never going to be easy – there are a lot of different factors to take account of. But let’s face it, using all that corn for ethanol still sounds like a bad idea, in a year when the US corn crop fried and the European wheat crop was flooded. So what’s the real argument against?

Well, in the US, the RFS could have been challenged on environmental grounds. In fact, the last time the RFS was challenged, by the Republican Texas Governor Rick Perry in 2008, it was also on economic grounds, after Perry considered but rejected the idea of a challenge on environmental grounds. Of course, an environmental challenge would have led to questions about the greenhouse gas emissions associated with corn production, and that would have opened up a can of worms within Perry’s own party.

The thing is, by challenging the RFS on purely economic grounds, the farmers of America have probably let the EPA right off the hook. Because there are some pretty serious questions that need to be asked about what land has been used to increase corn production in the rest of the world, and, within the US, where’s the water going to come from for next year’s crops?

Reuters, EPA, EPA Insider, Ethanol Producer, Dairy News, International Energy Agency

Is ‘range anxiety’ a problem for running trucks and buses on compressed gas – and does it need to be?

[This post is based on part of a presentation I gave to the Global Biomethane Congress in Brussels this October. The full presentation is available here.]

There are lots of advantages to running trucks and buses on gas, compared to diesel. Gas is cheaper (half the duty of diesel), cleaner (no particulate emissions), and if you use biomethane, i.e. gas from waste, then you can get up to huge reductions in greenhouse gas emissions. Vehicles even run more quietly on gas.

There are downsides of course. The main one is the initial cost of switching, but that goes for any new technology. But, as with electric vehicles, another big issue is how much fuel you can get in the vehicle, and therefore its range.

The problem is that gas is, of course, a lot less dense than diesel. In fact, most other fuels have a lower energy density than diesel, as illustrated by the chart below. (All data from the Oak Ridge National Laboratory in the US.)

The easiest thing to do with your gas is compress it, and for vehicles in Europe this usually means compressing to 200 bar. As you can see from the bar chart above, looking at the bars for CNG (Compressed Natural Gas), that means your fuel will take up much more space than diesel. The gas tanks are heavy too, so you may lose some of your payload. In practice, this usually means you can’t have as much fuel on the vehicle, and you have to accept a cut in range.

But is the drop in range really that much of a problem? I thought I’d do a few quick calculations to figure this out.

The typical set up for putting gas cylinders on mid-size trucks, and refuse collection vehicles, is in two banks of four 80 litre tanks, like in the picture below. This can of course be modified if requested, and buses often have a different arrangement with gas cylinders on the roof, but it seems that 640 litres of gas (2 x 4 x 80) is fairly standard. So how far will this get you?

Well, 640 litres of gas at 200 bar pressure has the same energy as about 150 litres of diesel. However, diesel is used in a compression ignition engine, whereas gas needs to be burned in a spark ignition engine, and compression ignition is about 25% more efficient than spark ignition. So, our 640 litres of gas will actually get us as far as about 120 litres of diesel.

Last year I wrote the final report on a trial of a gas refuse collection vehicle (RCV) by Leeds City Council. Their RCVs get about 3.3 mpg, which means that 120 litres of diesel would give a range of 86 miles. Urban RCV routes are about 50 miles in Leeds, with the longest routes into the surrounding area getting up to around 100 miles. So, a range of 86 miles shouldn’t present a barrier to cities all over the country running these fuel thirsty vehicles on gas.

What about buses? Well, a conservative estimate would suggest a bus getting 8 mpg, in which case 120 litres of diesel (equivalent) would give a range of 210 miles – which is plenty for an urban bus. Hardly surprising then, that cities all over the world are switching their buses to run on gas, mainly driven by the desire to improve air quality, although financial savings are also welcome.

Are trucks a different story, hauling up and down the motorway all day? Well, yes and no. For big articulated 44t trucks there currently isn’t really a 100% gas option (the reasons for which I’ll cover in another post soon). However, for the smaller, rigid trucks in the 7.5 – 26t range, gas is an option. An 18t truck, for example, might get around 12 mpg, so 120 litres of diesel would give a range a little over 300 miles. Department for Transport figures show that vehicles of this type make very few trips over this range.

There is no doubt that one of the things fleet operators worry about, when considering gas, is the drop in range of their vehicles. But as with electric cars, we’ve become so used to the incredible energy density of diesel and petrol, and the huge range it gives our vehicles, that it can be hard to swallow a reduction – even if the reality is that we don’t really need it most of the time.

[For those few applications where we do need greater range, gas vehicles can use liquefied gas, which you may have noticed from the graph has a much higher energy density. And indeed one of the big debates in the gas vehicle community is on the relative merits of compressing vs liquefying gas. But that’s a story for another post.]


Who’d have thought running an electricity grid and running a railway would have so much in common?

I was at a transport industry networking event the other night, chatting to Peter White of the University of Westminster. He was outlining strategies for reducing emissions from rail travel, and I was explaining the potential role of electric vehicles in grid balancing, and we realised that both problems were surprisingly alike.

The problem with running a railway is that you have to invest in loads of rolling stock to meet rush hour demand, and then it sits there idle most of the day. Here’s the total number of passengers in and out of London stations, hour by hour, on average (DfT stats):

That’s a lot of unused capacity outside the rush hour. If we could just spread out that morning rush, by employers allowing (or even encouraging) employees to have staggered start and finish times, the railways would be a whole lot cheaper to run – and more pleasant to travel on.

Turns out, that’s just what happened during the Olympics. As well as encouraging businesses to promote home-working during the Olympics, the ODA and Transport for London asked them to stagger shifts.

One of the most striking successes was with City trading firms. They’d always maintained there was no way they could allow flexible working, because of trading times, but with the Olympic spirit behind them they tried out an ‘early’ and ‘late’ shift. Turns out it worked beautifully, because the early traders were clued up on the Eastern markets, and the late traders got to see how things played in the US. How many other types of business could benefit from this approach?

So how’s all this like running the electricity grid? Let’s say you’re National Grid, and you’re responsible for supplying us all with electricity. Your biggest problem is variable demand – everyone wants power at 5.30pm, and nobody wants it at 4am. Here’s the graph of demand on the UK grid through one day (1st January 2012 as it happens, data from National Grid):

So you have base-load generators, like coal and nuclear, which are cheap but hard to turn on and off, and you have peak-load generators (usually gas), which are only turned on when you need them, but which are therefore more expensive.

Just as with the railways, if we could spread demand more evenly, or store electricity, we could generate our power more efficiently. Grid operators call it ‘filling the bath-tub’. This is one reason why the electricity companies are so interested in electric cars – they all come with an energy storage device (i.e. the battery).

If we all went and bought electric cars tomorrow, and charged them overnight, it would allow for a much more even load on the grid. This would allow the energy companies to run more base load generation, and therefore provide cheaper electricity.  Of course, the opposite is also true – if everyone put their car on charge when they got home from work, we’d need even more peak capacity, making power more expensive.

Incidentally, price and greenhouse gas emissions are pretty closely linked here. If you buy an electric car in the UK right now, and charge it from midnight to 7am, you’ll be saving GHG compared to an equivalent petrol or diesel car. However, if you put your car on charge anytime from around midday to 10pm, you’ll be emitting around twice as much GHG as charging off-peak, and more than a petrol or diesel car.

Adding renewables like wind or solar to the mix is even more of a headache, because you don’t know when you’ll get the power. That’s when electric cars really come in handy – but more of that in a later post…

A bluffer’s guide to the difference between a ‘parallel’ hybrid and a ‘series’ hybrid. (And why the parallel hybrid came first.)

So, we’ve had the Prius around for a while, and that’s a hybrid – right? Then the Ampera/Volt comes along (with billboards everywhere you look), and it’s an electric car – or is it? Because it’s got a petrol engine too.

Well, when they’ve got their petrol engines running, the Prius and the Ampera represent two different ways of making a ‘hybrid’ – parallel and series, respectively. I’ve explained which technology I think is superior to many people at parties, and I still seem to have friends, so hopefully you’ll find this interesting too.

A ‘parallel’ hybrid has two complete drive-trains connected to the wheels, which operate in parallel, hence the name. Basically, you start with a regular petrol car (or a diesel, more of that in a later post) and you bolt on an electric motor and a battery that can also drive the wheels. The electric motor ‘assists’ the petrol engine when needed, allowing a car like a Prius to have a smaller petrol engine, and use less fuel, for a given level of performance.

The electrical energy in most parallel hybrids thus far has come from ‘regenerative braking’. Essentially, when you apply the brake, the wheels drive the electric motor in reverse, generating power which is stored in the battery. The new ‘plug-in’ Prius has a bigger battery, which you can charge up from a wall socket. This means that you can get a little over 10 miles on the electric motor alone, but most of the time that electrical power is still ‘blended’ with power from the petrol engine.

OK, sounds good right? Well yes, until you consider that a petrol engine is incredibly inefficient. At its most efficient, a ‘sweet spot’ of revs and load, it converts about 25-30% of the energy in the fuel into forward motion – the rest is mostly lost as heat out of the exhaust or the engine block. But that’s when you’re cruising at a steady, optimum speed. The rest of the time, when you’re accelerating, or decelerating, or in the wrong gear, the efficiency drops much lower. This means that the engine in a car has to be oversized to cope with all this variation.

Suppose you only needed the petrol engine to deliver a constant power, at constant revs? Like, say, the engine in an electrical generator. Hmmnn… and suppose you only had to have one drive train connected to the wheels, that would save a load of weight, right? Bingo! – you’re thinking of a ‘series’ hybrid. Electric motors drive the wheels, and they’re 85-90% efficient (very little heat loss), and that efficiency doesn’t vary much at different speeds. Then you charge up the battery using a small engine acting as a generator.

In theory, the series hybrid should be more efficient than a parallel hybrid, because the petrol engine only has to run at its optimum speed and load. It only has to deliver the average power requirement to the battery, which buffers this power, supplying more or less energy to the motors driving the wheels as the car accelerates, cruises etc. This is essentially what an Ampera does, although like a plug-in Prius it has a bigger battery, that you can charge up from the wall, so you can run the car on ‘pure electric’ mode for about 30 miles before the generator kicks in.

So why did we get a parallel hybrid, like the Prius, years before a series hybrid, like the Ampera? Well, it’s a simple question of what happens if it goes wrong. A parallel hybrid is in essence just a regular car with the electric motor helping out – if the electric drive train fails, you can still drive the car. But with a series hybrid, if the battery, the motor, or any of the complex systems managing them were to fail, you’re stuck at the side of the road waiting for a tow truck (or an electrician!). It’s only now, with ‘pure’ electric cars like the Leaf on the market, that big manufacturers have got enough confidence in the technology.

In my opinion, the Ampera, or cars like it, will lead the mass adoption of electric cars, for several reasons. But that’s for another post…