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Arctic Leaf

Star light, star bright: Wishing for a cleaner, less-expensive fuel

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Star light, star bright, I wish I may, I wish I might, have this wish I wish tonight… How many of you said these words on a starry night, particularly if you were with your best girl or boyfriend as a teenager? Or, as a loving parent, how many of you taught your child to say these words as part of your effort to build his or her vocabulary or memory…or just to instill their capacity to dream?

Now Kate Gordon, the, legitimately well respected, president of Next Generation, seems to have forgotten the difference between wishing, hoping, dreaming and reality. Her recent brief “expert” article in the Wall Street Journal departs from reasonable projection into fanciful wishes.

Gordon is correct that the “average car” on the U.S. road is about 11 years old and that their negative impact on GHG emissions and our health is significant. She is also correct in pointing to the large impact that high gas prices have on “our wallets,” (I would add) particularly for low and moderate-income households. Clearly, for the poor and near-poor families and for the economically fragile moderate-income households, present gas prices mean less of the basic necessities: modest job choices, good food, housing and healthcare.

Where Gordon and I part company is with her suggestion that an auto replacement initiative or what she calls an Enhanced Fleet Modernization programs would generate a visible, short-term impact and would likely be supported now, by assumedly the federal or state governments, in a significant way. (I should indicate that while I was head of the urban policy in the Carter administration, HUD senior officials thought about offering support by providing older cars to carless, low-income folks to permit them to secure job opportunities in the suburbs. How times have changed. The concern about GHG emissions and other pollutants emitted from older cars that run on gasoline are now seen as a real environmental problem.) The difficulty with Ms. Gordon’s proposal is number one, money and bureaucracy; number two, money and bureaucracy; and number three, money and bureaucracy. Even California, which she touts, has had mixed results with its replacement and incentives to replace older car programs. Clearly, exporting California’s experience to many other states, given economic and political constraints, would be difficult and would likely result annually in a relatively small impact on the nearly 300,000,000 cars in the U.S of which approximately 85-90 percent are over six years old.

Car replacement is a nice thought, but probably, at this time, an exotic one. If policymakers are seriously looking for a way for large numbers of owners of older cars to immediately reduce their vehicle’s negative effect on the environment, air quality and their own costs of fuel, there are better ways. While we wait and hope for the advent of vehicles that are ready to run on renewable fuels and that simultaneously meet the travel as well as budget needs and demands of most low, moderate and middle-income Americans, we should look at natural-gas-based ethanol as a fuel for newer flex fuel cars and for large numbers of older vehicles converted to flex-fuel vehicles.

Ethanol is not perfect as a fuel but it is better than gasoline. It emits fewer GHG emissions and other pollutants harmful to the nation’s quality of life. Recent regulations, like ones initiated by Colorado, that significantly reduce emissions from drilling now will likely make life cycle environmental evaluations of natural gas changed into ethanol a much better environmental deal. The process appears technologically feasible at a cost lower than the production costs of gasoline. If ethanol is allowed to compete with gasoline by oil companies on an even playing field — oil companies generally control who gets what and where at most “gas” stations — ethanol will be cheaper than gasoline for the consumer.

It is relatively inexpensive to convert older cars to flex-fuel vehicles — perhaps as little as $100 to $200. Finding a way through lessening the cost of certification to expand the number of conversion kits certified by the EPA and, or, where relevant, allowing recalibration of software and engines, would expand the benefit-cost ratio for many older cars. Star light, star bright, we can have the wish we wish tonight concerning a cleaner environment and lower consumer prices in a relatively short time, while we continue to push for electric vehicles and a whole range of renewable fuels to achieve prime-time performance for most Americans.

Arctic Leaf

Right, wrong and indifferent — the AAA, oil and alternative fuels

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My favorite automobile service group — the AAA — has once again treaded without fear or trepidation into analysis. Remember earlier, when it suggested that E15 harms engines, based on what looked like an oil-industry-generated study? The AAA’s methodology was weak and its conclusions suspect, a judgment supported by the EPA’s response. According to the agency, AAA’s conclusions were erroneous and based on a limited sample. EPA’s own findings were generated from a relatively large sample of cars, indicating that E15 is safe for most engine types and reaffirmed the wisdom of its approval of E15 usage.

I was surprised to find an article in Oil Price by blogger Daniel Graeber, based to a large degree on comments from AAA’s Michael Green suggesting that the oil shale boom has prevented gas prices from going higher than they are now. Graeber approvingly quoted Green, who said, “Sadly, the days of cheap gasoline may never return for most American drivers despite the recent boom in North American crude oil production.” Assumedly, Green meant that the cost of drilling tight oil will remain high and the costs per barrel of oil will follow suit.

Green apparently went on to indicate that political leaders, particularly, members of Congress who argue for a drill-baby-drill policy, are wrong to link more wells to significant price relief for folks who find gas costs a real problem.

The AAA is right when it suggests that, despite the oil shale boom and signs of increasing demand in America, refineries are sending increased amounts of oil-based products overseas. Understandably, their patriotism doesn’t extend to accepting a lower price for oil in the U.S. when they can get higher prices overseas.

The article appears inconsistent, when at one point it mentions that crude oil inventories are running above average, and later blames current exports for low supplies and low supplies for preventing a drop in prices at the pumps.

Both are correct in indicating sales of oil products abroad probably do have an effect on costs-up to now probably marginal. Certainly, if Washington extends export privileges, increased sales of oil abroad may have a more significant impact on consumer costs. More relevant, however, concerning gasoline costs at the pump, will be economic recovery in the U.S., investor speculation and the oil sector’s ability to manage prices.

Cheap oil has been, recently, and likely will be in the future, a fantasy. The cost of oil per barrel has hovered at around $100 and upward for an extended period, and drilling in shale is relatively expensive. Continuous exogenous and existential (don’t you like those words — they create great passion and emotion) threats from the Middle East and Eastern Europe, also, will likely tilt oil prices upward in the near future.

I would commend the AAA, assumed by many to be the leading advocate for automobile owners in the nation, for grasping the fact that the behavior of producers is likely to lead to higher gas costs and create burdens, particularly for low and moderate-income groups. Now with this knowledge, shouldn’t the AAA argue for breaking oil’s near monopoly on fuel? If the AAA was really interested in helping vehicle owners lower their cost of fuel, it might take the lead in arguing for choice at the pump. Wouldn’t it be great if they really stood up for more open fuel markets as well as alcohol-based transitional fuels, such as ethanol and methanol? Competition at the pump from flex-fuel vehicles, combined with conversion of older vehicles to flex-fuel cars would, over time, mute increases in gas prices and, at the same, time generate environmental benefits for a better America. Support for alcohol-based fuels is consistent with support for renewable fuels, if one is concerned about the environment and GHG emissions. Let’s bring them on as fast as we can. But let’s acknowledge that renewable fuels are not really ready yet for prime time. They are too expensive for many Americans and their technical limitations, particularly concerning electric batteries, are not yet coincident with the desires of most Americans.

Arctic Leaf

Rin Tin Tin, RINs and the price of ethanol

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Is the son or daughter of Rin Tin Tin alive and well? For a while I thought he or she was, while catching up on my reading over the weekend. I kept reading articles about RINs (Renewable Identification Numbers), their possible impact on the ethanol market and relatively high ethanol prices, despite the apparent weakening of the ethanol market. There seemed to be RINs and more RINs on every page I turned! Because I hadn’t slept for two nights, I couldn’t really focus on the contents of the articles, but only on the dog Rin Tin Tin and his offspring. How many of you have done that? Come on, be honest. Don’t make me feel bad!

I felt guilty after it became obvious that my focus on Rin Tin Tin resulted from a tired brain and eyes. I am back to the complex world of RINs today. (I had a bit of sleep).

Okay, you ask, “What the hell are RINs?” They are sort of a pass at reflecting company fulfillment of government mandates concerning biofuels. For this article, think ethanol! They are issued at the point of ethanol production or the purchase of the fuel by companies. They are approved by the EPA. They reflect a credit that verifies that the required amount of ethanol has actually been blended into gasoline. Succinctly, the Renewable Fuel Legislation, now the law of the land, mandates that a Renewable Identification Number (RIN) must be attached to every produced or imported gallon of renewable fuel in the U.S. One more thing, RINs are separated from the batch of renewable fuel when it is blended with gasoline. This fact indicates compliance with the law and Renewable Volume Obligations (RVOs). Credits, at this juncture, can be used for trading purposes.

In 2012, before the EPA’s Nov. 2013 proposal to change RIN quotas and lower requirements for ethanol, the price of RINs was very volatile. Initially, they ranged around 1 to 10 cents a gallon. By spring of 2013, however, they were around $1.

Why the price increase and what does it bode for the price of ethanol in the future? Initially, the RINs were thought of as a way to encourage refiners to produce renewable fuels, like ethanol, and to “pay” for credits if they don’t “play” by  meeting fuel targets.

Part of the volatility and increase in costs of RINs, probably, has to do with speculation by banks and other financial institutions. Thomas D. O’Malley, chairman of PBF Energy, indicated in a recent New York Times article that financial institutions “helped transform an environmental program into a profit machine…These things were designed to monitor the inclusion of ethanol in the gasoline pool…They weren’t designed to become a speculative item. For the life of me, I can’t see the justification for it.” Interviews with members of the financial community, conducted by the New York Times, seem to suggest agreement with O’Malley.

According to the Times, speculation in RINs “could have consequences for consumers. In the end, energy analysts say, the outcome will be felt at the gas pumps — as the higher cost of the ethanol credits get tacked onto the price of a gallon of gasoline.” The Times reports that the “credits, which cost 7 cents each in January [2013], peaked at $1.43 in July, and [were] trading for 60 cents” in September. Jordan Godwin in the Barrel Blog indicated that like RINs in 2013, ethanol prices in 2014 are downright wacky. “In a matter of less than two months, ethanol prices went from six-month lows to eight-year highs.” Godwin and others blame delayed returning train cars during the winter and constraints on supply and production. I would add speculation by Wall Street and uncertainty as to the impact and longevity of EPA’s new regulations concerning the reduced mandates for ethanol and other biofuels. It’s a dilemma for proponents of alternative fuels. Less speculation regarding trading, sustained predictable production and refinement of the distribution system, (along with avoidance by some retailers and blenders to price ethanol well over costs) would facilitate more competition with gasoline at the pump. More predictable competition and larger sales at the pump of E15 and E85 would generate more private-sector fixes to the ethanol supply chain as well as likely stabilize prices and, over time, lower them. In light of ethanol’s benefits to the nation, wise folks might be asked to find policies and stimulate market behavior that permit the American people to have it both ways.

Arctic Leaf

Is butanol the next big thing in biofuels?

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Fuel Freedom recently learned about a man named David Ramey who drove his 1992 Buick Park Avenue from Blacklick, Ohio to San Diego using 100 percent butanol, without making any adjustments to his engine.

Ordinarily this wouldn’t be big news. But with the EPA now considering cutbacks in the 2014 biofuels mandate, some producers of ethanol are starting to turn to butanol as a way of getting around the limitations of the 10 percent “blend wall” that is threatening to limit ethanol consumption. This could be another breakthrough in our efforts to limit foreign oil.

Butanol is the alcohol form of butane gas, which has four carbons. Because it has a longer hydrocarbon chain, butane is fairly non-polar and more similar to gasoline than either methanol or ethanol. The fuel has been demonstrated to work in gasoline engines without any modification to the fuel chain or software.

Since the 1950s, most butanol in the United States has been manufactured from fossil fuels. But butanol can also be produced by fermentation, and that’s where another opportunity for reducing our dependence on fossil fuels exists.

The key is a bacterial strain called Clostridium acetobutylicum, also named the Weizmann organism for pioneering biological researcher Chaim Weizmann, who first used it to produce acetone from starch in 1916. The main use for the acetone was producing Cordite for gunpowder, but the butanol, a byproduct, eventually became more important.

Once set loose on almost any substratum, Clostridium acetobutylicum will produce significant amounts of butanol. Anything used to produce ethanol — sugar beets, sugar cane, corn grain, wheat and cassava, plus non-food crops such as switchgrass and guayule and even agricultural byproducts such as bagasse, straw and corn stalks — can all be turned into butanol. (Of course, not all of these are economical yet.)

Given the modern-day techniques of genetic engineering, researchers are now hard at work trying to improve the biological process. In 2011, scientists at Tulane University announced they had discovered a new strain of Clostridium that can convert almost any form of cellulose into butanol and is the only known bacterium that can do it in the presence of oxygen. They discovered this new bacterium in, of all places, the fecal matter of the plains zebra in the New Orleans Zoo.

DuPont and BP are planning to make butanol the first product of their joint effort to develop next-generation biofuels. In Europe, the Swiss company Butalco is developing genetically modified yeasts from the production of biobutanol from cellulosic material. Gourmet Butanol, a U.S. company, is developing a process that utilizes fungi for the same purpose. Almost every month, plans for a new butanol production plant are announced somewhere in the world. Many refineries that formerly produced bioethanol are now being retrofitted to produce biobutanol instead. DuPont says the conversion is very easy.

What are the possible drawbacks? Well, to match the combustion characteristics of gasoline, butanol will require slight fuel-flow increases, although not as great as those required for ethanol and methanol. Butanol also may not be compatible with some fuel system components. It can also create slight gas-gauge misreadings.

While ethanol and methanol have lower energy density than butanol, both have a higher octane rating. This means butanol would not be able to function as an octane-boosting additive, as ethanol and methanol are now doing. There have been proposals; however, the proposals are for a fuel that is 85 percent ethanol and 15 percent butanol (E85B), which eliminate the fossil fuels from ethanol mixes altogether.

The only other objection that has been raised is that consumers may object to butanol’s banana-like smell. Other than that, the only problem is cost. Production of butanol from a given substratum of organic material is slightly lower than ethanol, although the increased energy content more than makes up for the difference.

Ironically, the EPA’s decision to cut back on the biofuels mandate for 2014 is now driving some refiners to convert to butanol, since its greater energy density will help it overcome the 10 percent “blend wall.”

“Michael McAdams, president of the Advanced Biofuels Association, an industry group, said butanol was a ‘drop-in’ fuel, able to be used with existing gasoline pipelines and other equipment because it does not have a tendency to take up water, as ethanol does,” The New York Times reported last October. “‘It’s more fungible in the existing infrastructure,’ he said. ‘You could blend it with gasoline and put it in a pipeline — no problem.’

“Butanol would also help producers get around the so-called blend wall, Mr. McAdams said…With the 10 percent limitation, ‘you don’t have enough gasoline to put the ethanol in,’ he said. ‘You don’t have that problem with butanol.’”

So here’s to butanol. It will be yet another big step in reducing our dependence in foreign fuels.

Arctic Leaf

Of myths, oil companies and a competitive fuel market

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I do not wish to join the intense dialogue concerning whether or not the government should allow exports of crude oil. Others are already doing a good job of confusing and obscuring the pros and cons of selling increased amounts of America’s growing oil resources overseas.

What I do want to do is just focus on the logic of one of the oil industry’s major arguments for extending the permitting of exports — again, not on the wisdom of exporting policy. Permit me to do so in the context of the industry’s long-standing argument concerning the pricing of gasoline to U.S. consumers. The argument is that more oil drilling in the U.S. will lower the price of gas and put America on the path to oil “independence.”

In somewhat of circuitous manner, oil companies are using the opposite of their domestic advocacy for “drill, baby, drill” policy as a way to keep prices lower at the pump. Their yin is that producing more oil in the U.S. and sending significant amounts overseas, combined with declining vehicular fuel demand, will lower gas prices. Economist Adam Smith would applaud the simplicity if he were alive and well. Their yang presents a bit more complicated set of “ifs.” That is, the industry presumes that fulfillment of the yen (excuse another pun) to export will result in more U.S. oil being drilled because of increased world demand generated by the assumed ability of the U.S. to produce oil at less costs than the world price for oil. It will also help foster infrastructure development in the U.S. to break up current log jams concerning oil transportation. Finally, it will facilitate more efficient refineries, allowing them to specialize in different types of oil. The yin and yang will result in (marginally) lower prices of gasoline — so goes the rhetoric and oil-industry-paid-for studies.

Paraphrasing Dr. Pangloss in “Candide,” the oil companies hope for the “best of all possible worlds.” But, before Americans run out and buy stock, note the price of gasoline does not directly reflect oil production volume. Indeed, gas prices, despite increased supplies, have gyrated significantly and now hover nationally over $4 a gallon. Generally, oil and gas prices relate to international prices, tension in the Middle East and investor and banker speculation — not always or directly domestic costs. Stockholders and executives of oil companies function not on patriotism but on profit and to the extent that the law permits, they will sell overseas to get the best price — in effect, the best dollar over payment for a barrel of oil. Consumers, I suspect, are rarely a significant part of their opportunity costing.

Unfortunately, lack of strong empirical evidence tempers the company’s argument that increased world demand will stimulate good things like refinery efficiency and log-jam-ending infrastructure. Maybe if the price per barrel is right (clearly, higher than it is now) and seems predictable for more than a small period of time, refinery and infrastructure developments will be positive. But, the costs to the consumer, in this context, will be higher. It will also be higher because shale oil is tight oil and more risky and costly to drill.

Oil independence is a myth suggested by oil industry and a non-analytical media. Certainly, the oil boom and less vehicular demand have generated less imports and less dependency. But we still buy nearly 300 billion dollars’ worth of oil every year to respond to need and we still produce far less than demand.

Somewhere in the dark labyrinth of each major oil company is a pumped-up (another pun), never-used, secret justification for franchise agreements impeding the sale of alternative fuels in their retail outlets. To alleviate guilt, it may go something like this: “Monopolies at the pump will allow us to make larger profits. You know we will someday soon want to give back some of the profits to consumers by lowering the price of gasoline.” If you believe this still-secret beneficence, let me sell you the Brooklyn Bridge.

There is another way to steady the gasoline market and lower consumer costs. Inexpensive conversions to allow older vehicles to use safe, cheaper and environmentally better alternative fuels (as opposed to gasoline), combined with expanded use by flex-fuel owners of alternative fuels, would add competition to the fuel market and likely reduce prices for consumers. Natural-gas-based ethanol is on the horizon and methanol, once the EPA approves, will follow, hopefully shortly thereafter. Electric cars, once costs are lower and distance on single charges is higher, will be a welcome addition to the competitive mix.

Arctic Leaf

The Battle Over Ethanol Takes Shape

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The decision isn’t scheduled until June but already opposing sides are converging on Washington, trying to pressure the Environmental Protection Agency over the 2014 Renewable Fuel Standard for ethanol.

Last week almost 100 members of the American Coalition for Ethanol descended on the nation’s capital for its annual “Biofuels Beltway March,” buttonholing 170 lawmakers and staffers from 45 states.  The object was to send a message to EPA Administrators Gina McCarthy to up the ante on how many billions of gallons the oil refining industry will be required to purchase this year.

The ethanol program is currently in turmoil.  The latest problem is rail bottlenecks that have slowed shipments and created supply shortages over the winter months.  Record-breaking cold and four-foot snow pack have been partly responsible but the rail lines are also becoming overcrowded.  With all that oil gushing down from the Bakken and Canadian crude now finding its way into tank cars as the Obama Administration postpones its decision over the Keystone Pipeline, ethanol is getting tangled in traffic.  .

“Ethanol for April delivery sold for about $3.02 a gallon on the Chico Board of Trade, an 81 percent increase over the low price during the past 12 months of $1.67 a gallon reached in November,” reported the Omaha World-Herald last Friday  “This weeks settlement price of $2.98 a gallon was the highest since July 2011.”  With only so much storage capacity, some ethanol refineries have been forced to shut down until the next train arrives to carry off the inventory.  As ethanol becomes mainstream, it is becoming more and more subject to market events beyond its control.

But the big decision will be EPA’s ruling in June.  In accord with the 2008 Renewable Fuel Act, Administrator McCarthy must set a “floor” for amount of ethanol refiners will have to incorporate into their blends during 2014.  The program ran into trouble last year when the 13.8 billion gallon requirement pushed ethanol beyond the 10 percent “blend wall” where the auto companies will not honor warrantees in older cars.  Refiners were forced to purchase compensating Renewable Identification Numbers (RINs), which exploded in value from pennies to $1.30 per gallon, forcing up the price of gasoline.  Contrary to expectations, gasoline consumption has actually declined over the last six years, from 142 billion gallons in 2008 to 134 billion in 2013 as a result of mileage improvements plus the lingering effects of the recession.  Last November McCarthy proposed reducing the 2014 from 14.4 billion gallons to 13 billion.  The industry has been crying “foul” ever since.

But there are other ways to fight back.  Last week in Crookson, gas stations were offering Minnesota drivers 85 cents off a gallon for filling up with E-85, the blend of 85 percent ethanol that many see as the real solution to the blend-wall problem.  “We want the public to understand there are different ratios of gasoline and ethanol and how they can save you money,” Greg LeBlac, of the Polk County Corn Growers, told the Fargo Valley News. 

At the annual meeting of the American Fuel and Petroleum Manufacturers (APFM) in Orlando last week, Anna Temple, product manager at WoodMac, made the case that the industry should forego efforts to raise the blend wall from 10 to 15 percent and instead shoot for the moon, leapfrogging all the way to E-85, where ethanol essentially replaces gasoline completely.  (The 15 percent only ensures starts in cold weather.)

“E-15 is a non-starter in terms of market share,” Temple told her audience, as reported by John Kingston’s in Platts.  http://blogs.platts.com/2014/03/25/eight-fillups/  She argued the incremental battle would absorb vast amounts of political capital yet still not be enough to absorb the 15-billion-gallon target for 2021.  Instead, Temple pointed to the growing fleet of flex-fuel vehicles that now numbers around 15 million, headed for 25 million in 2021 or 10 percent of the nation’s 250-million-car fleet.

“If U.S. drivers poured about 200,000 barrels-per-day of E-85 into their flex fuel cars in 2021, that would take care of about 17 percent of the scheduled ethanol mandate,” Temple said.  “It would only require that flex-fuel owners fill a 15-gallon tank eight times a year.”   The remainder would be absorbed in the 10 percent blend and ethanol producers would not have to cut output.

Platts’ Kingston checked the math and found that even this goal would leave ethanol consumption slightly above the blend wall at 10.5 percent.  “Still, the very modest number of eight fill-ups per flex fuel vehicles per year makes the whole blend wall issue seems a lot less daunting,” he confessed.

Of the 15 million people who own flex-fuel vehicles, of course, many don’t even realize it.  (The yellow gas cap or a rear-end decal are the giveaway.)  But the number of gas stations offering E-85 pumps is rising.  The Energy Information Administration now estimates the number at 2,500 with most of the growth taking place outside the Midwestern homeland.  California and New York each have more than 80 stations apiece.

The problem of rail bottlenecks can probably be solved by increasing the number of E-85 outlets and flex-fuel vehicles to bring supplies closer to the place of consumption.  Still, the industry would probably be happy to have a bigger renewable fuel mandate as well.

Arctic Leaf

Can New Catalysts Turn the Corner for Methanol?

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The concept of converting our abundant natural gas supplies into liquid methanol in order to replace oil in our gas tanks has had trouble gaining traction for several reasons, all of which are about to face change.

The first reason is that most of the attention towards additives has been focused on ethanol made from corn. Driven by highly specific government mandates, corn ethanol — which now consumes 45 percent of the country’s corn crop — has taken up whatever role industrial methanol might have been chosen to play as a gasoline additive.

Secondly, there’s the problem of the Environmental Protection Agency. Not only has the EPA not approved methanol for gas tanks, the organization actually imposes huge fines on anyone who converts a gasoline engine to methanol without its permission.

The third, and less distinguishable explanation for methanol’s difficult implementation, is that the whole idea has never been very sexy. Methanol has little to do with the “Cutting Edge” or the “New Age Economy.” The manufacturing of methanol is a 60-year-old process practiced doggedly by dozens of industrial facilities around the world. They produce 33 billion gallons a year at the reasonable price of $1.50 per gallon; the energy equivalent of $2.35 gas. Meanwhile, Elon Musk seems to announce a new milestone for the Tesla, or some “breakthrough” in battery technology or cellulosic ethanol emerging from the university laboratories each week, making methanol appear rather plain-Jane and old fashioned. In effect, the solution to our gas tank woes has been hiding before us in plain sight.

Now an announcement from the Scripps Howard Research Institute and Brigham Young University may change everything. In a paper published last week in Science, a team led by Roy Periana of the Scripps Florida Center and Professor Daniel Ess of Brigham Young University say they have found catalysts made from the common elements of lead and thallium that facilitate the conversion of gaseous methane to liquid methanol, potentially making the process even cheaper and more accessible.

The hydrogen bonds in the alkanes (methane, ethane, propane, etc) are among the strongest in nature. To break them involves a heat-driven process invented in the 1940s that is conducted at 900 degrees Celsius. For more than two decades, the Scripps team has been looking for catalysts that would shorten this heat requirement. In the 1990s they came up with a series of catalysts employing platinum, palladium, rhodium and gold, but quickly realized that these elements were too rare and expensive for commercial application. So it was back to the drawing boards in search of something more useful.

Last week in Science they reported success:

The electrophilic main-group cations thallium and lead stoichiometrically oxidize methane, ethane, and propane, separately or as a one-pot mixture, to corresponding alcohol esters in trifluoroacetic acid solvent.
The process reduces the heat requirement to only 200 degrees Celsius, which introduces enormous potential for energy savings. That “one-pot” notation is also crucial. Methane, ethane and propane all come out of the Earth together in natural gas. Currently, they must be separated before the heat-driven process can begin, With the new catalysts, no separation will be necessary. This means that methanol could become significantly cheaper to harvest than it already is. More importantly, these findings signify that methanol conversion will be able to weather the inevitable price increases that will result as demand for natural gas supplies multiplies.

Periana says the process is three years from commercialization. Reports Chemical & Engineering News:
The team is in discussion with several companies and entrepreneurs and would ideally like to jointly develop the technology with a petrochemical company or spin off a startup.

Periana also claims that “Initial targets would be higher-value, lower-volume commodity chemicals such as propylene glycol or isopropyl alcohol directly from propane.” He told reporter Stephen Ritter:

The next target could be to develop lower-temperature processes for higher-volume chemicals, such as converting methane to methanol and ethane to ethanol or ethylene as inexpensive sources for fuels and plastics.

An enormous portion of the world’s energy consumption is still tethered to oil, particularly the transportation sector, where oil constitutes 80 percent of consumption. As oil becomes more and more difficult to find, natural gas use is escalating. In addition, 25 percent of the world’s gas is still flared off because it has been uneconomical to capture. All this could change rapidly if a low-cost conversion to methanol becomes a reality. Reuters grasped the implications of this development when it reported that the new catalytic processes “could lead to natural gas products displacing oil products in the future.”

Arctic Leaf

A Big Year for Natural Gas Vehicles

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“The NGV market experienced a growth spurt in late 2013, and that is expected to continue in early 2014, with new engineers and vehicles coming to market.”

That’s the conclusion of a very optimistic report issued by Navigant Research on the progress of natural gas vehicles – particularly NG trucks and buses – in the United States and the world.  (The report, sorry to say, costs $4000 but the executive summary can be seen online at http://www.navigantresearch.com/research/natural-gas-trucks-and-buses.)

“As the cost of oil climbs and emission from large diesel and gasoline engineers garner more scrutiny, fleets and governments are increasingly looking for alternative to fulfill their needs at lower costs and with lower emissions,” says the study.  “At the same time, new drilling techniques and new pipelines make natural gas a significantly more competitive vehicles than a decade ago.  The result is growing markets for medium duty and heavy duty NG trucks and buses.”

Indeed, the Navigant report does not anticipate an expanding market for natural gas vehicles in general but sees growth concentrated in the area of trucks and buses, particularly fleet vehicles for large corporations and municipalities.  The great advantages here are: a) vehicles can be bought in bulk; b) they can be fueled at central depots, and c) fleet vehicles tend to pile up the mileage, which means a quicker payback period from savings over gasoline.

In Palmdale, California, AT&T has converted its utility trucks to compressed natural gas in an effort to save money on fuel and cut down on carbon emissions.  “The vans are large enough to accommodate bulky gas canisters hidden beneath the floor,” reports Robert Wright in the Financial Times.  [http://www.ft.com/intl/cms/s/0/9f06bea8-69ea-11e3-aba3-00144feabdc0.html#axzz2osEhWAna]  The conversion costs $6,000 but operating costs will be reduced 10 cents per mile, meaning the initial investment will be recouped after 60,000 miles.  Most utility fleet vehicles hit that number within two years.

Some municipalities are even finding it worthwhile to switch to natural gas in smaller vehicles.  In Conway, Arkansas, the police department’s Chevy Tahoes are being converted to run on natural gas.  The effort is being promoted by Southwestern Energy, which will be building two CNG filling stations in the area.  Trussville, Alabama is scheduled to make the same conversion next year.

The switch to natural gas will receive a big boost in 2014 when Cummins Westport, a Connecticut company, introduces a 12-liter NG engine that is designed to sell between the existing 9- and 15-liter products.  “This will is expected to provide robust growth for the day cab market in North America,” says Navigant.  Volvo Trucks will also be taking aim at that market niche with a 13-liter LNG dual fuel engine.

Hovering behind all this is the effort by T. Boone Pickens’ Clean Energy Fuels to build a “natural gas highway” across America.  CLNE, which trades on the NASDAQ, plans to sell natural gas at truck stops along the nation’s interstate highway system.  The company is even planning to build its own liquid natural gas terminal in Jacksonville, Florida.

“Natural gas is a better transportation fuel than gasoline,” says the indomitable Pickens, who is engaged to be married for the fifth time at age 85.  “It’s cheaper, it’s cleaner and it’s a domestic resource.”

In fact the market is now getting so crowded that providers are starting to bump up against each other.  In the Northwest, Clean Energy is objecting to plans by Puget Sound Electric, Portland-based NW Natural and Spokane-based Avista Utilities to build filling stations for natural gas vehicles.  “We feel that because of their monopoly status, regulated utilities will have an unfair advantage entering the natural gas refueling market,” said Warren Mitchell, chairman of Clean Energy.   “Choices in the marketplace are a good thing,” responded Ben Farrow, of Puget Sound.  “We don’t want to compete unfairly.”

Nevertheless, despite all this activity in the United States, Navigant actually sees Asia as natural gas’s prime growth market.  By 2020 the report anticipates annual sales of 400,000 medium and heavy-duty trucks and buses, but the Asian Pacific will account for an astounding 76.2 percent of these sales while North America will provide only 12.7 percent and Europe 8.6 percent.  With 1.2 million NGVs on the road by that time, China and the United States will represent a combined 96 percent of the world market.

Compressed natural gas still has its problems.  Even when stored at 3,600 pounds per square inch, compressed gas takes up five times the space of a gas tank holding the same amount of energy.  This means that on a Chrysler Ram 2500 pick-up the tank still occupies nearly half the truck’s rear cargo bay.  Obviously, the bigger the truck or bus, the better it will be at accommodating this bulk.  But when it comes to ordinary passenger cars, finding room for the gas tank will be much more difficult.  That is why there is still only one NG passenger vehicle – a Honda Civic – on the road today.

Converting passenger vehicles to natural gas will probably require a liquid fuel.  Methanol and butanol, both of which can be made from natural gas feedstock, are likely candidates. But that still lies ahead. For now, the progress of CNG among heavy duty trucks and buses is an encouraging sign that we may be able to reduce our dependence on foreign oil.

Arctic Leaf

Are Hydrogen Cars the Future – Again?

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The hydrogen car may be on the road to another comeback – again.  At the annual auto show in Los Angeles last week, both Honda and Hyundai unveiled “concept cars” of hydrogen models they expect to be available by 2015.  As a result, the automobile press has been filled with stories its revived prospects.

“For a long time, hydrogen fuel-cell vehicles were seen as a tantalizing technology to help reduce society’s reliance on oil,” Brad Plumer wrote in the Washington Post. “But the vehicles themselves were seen as forbiddingly expensive. Not the pendulum may be swinging back.”

“Toyota made a decagon – the fuel-cell car is going to be a big part of our future,” wrote Bradley Berman in The New York Times, quoting Toyota spokesman John Hanson.  “Today Toyota is not alone,” he continued. “Four other carmakers – General Motors, Hyundai, Honda and Mercedes-Benz – are also promising fuel-cell cars in the next few years.”

The prospect of an automobile running on hydrogen is indeed perpetually attractive.  Hydrogen is the most common element in the universe.  When combined with free oxygen in the atmosphere it “combusts” to produce H2O – water.  There are no other “exhausts”. Thus hydrogen promises transportation absolutely clean of any air pollution.  No global warming, either.

But it isn’t quite that simple.  The question that always presents itself is, “Where do you get the hydrogen?” Although hydrogen may be the most common element on earth, all of it is tied up in chemical compounds, mostly methane and water.  Accessing this hydrogen means freeing it up, which requires energy.

Most of our commercial hydrogen is made by “reforming” natural gas, which splits the carbon and hydrogen in methane to produce carbon dioxide and free hydrogen. That doesn’t help much with global warming.  Another method is to split water through electrolysis. That is a much cleaner process but requires a considerable amount of electricity. Depending on what power source is used, this can produce zero or ample emissions. If it’s coal, the problem is made much worse. If it’s clean sources such as solar or nuclear, then there can be a strong advantage. In the 1930s, John Haldane proposed giant wind and solar farms that would generate hydrogen that could fuel all of society. Such facilities generating hydrogen for transportation would be a step toward such a utopia.

Even then, however, there are problems.  Hydrogen is the smallest molecule and leaks out of everything.  It is very difficult to transport.  Joseph Romm, a disciple of alternative energy guru Amory Lovins, was appointed head of hydrogen car development program under President Bill Clinton and worked for two years on its development.  In the end, he became very disillusioned and wrote a book entitled The Hype About Hydrogen, in which he argued that the idea really wasn’t practical. Romm is now one of the country’s premier global warming alarmists on ClimateProgress.org.

What has apparently brought hyfrohgen cars back to the forefront has been the substitution for platinum as the principal catalyst in the fuel cell process.

A fuel cell produces an electric current by stripping the electron off a hydrogen atom and running it around a barrier that is otherwise permeable to a naked proton.  The proton and electron are reunited on the other side of the barrier, where they combine with free oxygen to form water.  Until recently, platinum was the only substance that could fill this barrier function. This made fuel cells very expensive and raised the question of whether there was enough platinum in the world to manufacture fuel cells in mass production.  But several platinum substitutes have now been found, making fuel cells considerably cheaper and more accessible.

Estimates are now that next year’s Hyundai and Honda FCVs will sell for about $34,000, which puts them in the range of electric vehicles such as the Nissan Leaf and the Toyota Prius.  (The Tesla, a luxury car, is  priced in a much higher range,)  The problem then becomes fueling.  The FCV offers considerable advantages over the EV in that it has a range of 300 miles, comparing favorable to gasoline vehicles.  It can also be refilled in a matter of minutes, like gasoline cars, whereas recharging  an EVs can take anywhere from  20 minutes to three hours. But hydrogen refueling stations have not materialized, despite former governor Arnold Schwarzenegger’s promise of a “hydrogen highway.” At last count there were 1,350 EV recharging stations around the country but only ten hydrogen stations, eight of them In Southern California.

All this suggests that neither hydrogen cars or electric vehicles will be sweeping the country any time soon.  Neither the Chevy Volt nor the Nissan Leaf have sold well and are not expected to do much better next year.  If you read the press stories carefully, you soon realize that the reason the automakers are constantly cycling back and forth between electric and hydrogen cars is that they are trying to meet California’s requirements for low-emissions vehicles that will allow them to continue selling in the state. The problem, as always, is consumer resistance..  The automakers can manufacture all the hydrogen and electric cars they want but consumers are not always going to buy them, especially at their elevated price.  So the manufacturers will end up dumping them on car rental agencies where they will sit on the back lots, as did the first generation of EVs.

There is, however, one type of alternative that succeeded handsomely in California and had widespread consumer acceptance, although it is completely forgotten today.  That is methanol.  In 2003, California had 15,000 cars running on blends of up to 85 percent methanol.  Consumers were extremely happy and did not have to be dragooned into buying them.  Refueling was easy since liquid methanol slots right into our current gas stations. Cars that run on methanol can be manufactured for the same price as cars that run on gasoline.

The experiment only ended because natural gas, the main feedstock for methanol, had become too expensive.  In 2003, natural gas was selling as high as $11 per mBTU, making it more expensive than gasoline.  That was before the fracking revolution.  Today natural gas sells for less than $4 per mBTU and the industry is coping with a glut.  Methanol, which is already produced in industrial quantities, could sell for $1 less than motorists are now paying for energy equivalent in gasoline.  Moreover, methanol can be made from garbage and crop wastes and a variety of other sources that would reduce it’s carbon footprint.

Hydrogen and electric cars each have a future and it is good to see the auto companies keep experimenting with them.  But each has impediments that are going to be difficult to overcome. Methanol, on the other hand, is a technology that could be implemented today at a price that not require subsidies.  Even if it is only perceived as a “bridge” to some more favorable, low-carbon future, it is worth pursuing now.

 

Arctic Leaf

The Principal Impediment to Alternative Fuels Is – Government Regulation?

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In their path-breaking study, “Fuel Choice for American Prosperity,” the Energy Security Council carefully outlines the dilemma that our complete dependence on oil for transportation has created.

“It’s not the oil we import, it’s the price,” was the way they summarized it. As I outlined in a previous post the authors show how OPEC still controls the bulk of the world’s oil reserves and has not increased its output since the 1970s. As a result, even though we have increased domestic production dramatically and cut down on consumption, we are actually paying more for our oil imports than we were ten years ago. Why?  Because, OPEC is still able to manipulate the price to keep it at $100 a barrel. It’s not the black stuff we import that crimps our economy, it’s the price of oil we must accept from a monopolistic cartel.

So what to do?  Do we set up protests outside OPEC’s corporate offices in Vienna?  Do we bring an anti-trust suit in some world forum? People have actually tried such things and gotten nowhere. No, the only way to extricate ourselves from this market is to break the monopoly that oil has on our transportation system. If oil had competitors, it will start acting like any other commodity and respond to supply and demand. The key to breaking the OPEC monopoly, says USESC, is to develop alternative fuels.

When it comes to asking why we have not made more progress in developing alternative fuels, however, USESC has a surprising answer: government regulation. Government regulation? How can that be? I thought the government was doing everything it could to foster alternatives and try to lower our oil imports. Well, as usually happens when the government gets involved in manipulating a market, things quickly get complicated and murky. Here’s what has happened:

CAFE standards. When Congress first started setting corporate fleet average standards, responsibility was given to the Environmental Protection Agency. In retrospect, this was an odd choice, since EPA is more concerned with air pollution than reducing oil consumption. The Department of Energy would have been a more logical choice. This didn’t become visible in the 1980s when pollution concerns centered on the combustion products of sulfur and nitrogen. But now that carbon dioxide and global warming have become the principal concerns, the EPA has subtly changed its emphasis. As USESC points out; “CAFE’s initial energy security centric vision has been blurred by the desire to use the law to promote greenhouse gas emission reduction goals.”

In its latest regulatory effort, for example, the EPA will reward auto companies for introducing alternative fuels by applying a “multiplier” to their corporate fleet average beginning in 2017. Every electric and hydrogen fuel cell vehicles will count as two vehicles in the denominator of the corporate average, phasing down to 1.5 by 2021. For plug-in hybrid electric vehicles (PHEVs) and compressed natural gas vehicles (CNG), the multiplier will be 1.6, phasing down to 1.3.

All this seems fair enough. EVs and FCVs use no gasoline and plug-in hybrids are only partially dependent on oil. The real problem, however, is that flexible-fuel vehicles – cars that are designed to burn ethanol, methanol or gasoline – have only been given credit based on how much E-85 they burn in real-world driving. The auto manufacturers have used this to avoid making improvements in car efficiency. This is regrettable because flexible fuel engines burning either ethanol from homegrown corn or methanol derived from natural gas would be the best say to cut down on imported oil. Both methanol and ethanol are liquids and fit right into our current gas station delivery system. Compressed natural gas and electricity, on the other hand, require a whole new replenishing system. Yet the EPA remains wary of both ethanol and methanol because they produce carbon exhausts. CNG also produces carbon exhausts, of course, and EVs drawing power from coal or natural gas will produce exhausts at the power plant. The EPA has tried to compensate for this by adding upstream carbon releases for EVs and other alternative fuels but it does not do the same for gasoline!  In short, the whole multiplier system is a mess. The EPA would do much better just trying to reduce oil dependence rather than bringing carbon emissions into the equation.

Costs of converting to alternative fuels: One of the most important steps in developing alternative fuels is converting existing gasoline vehicles to run on other fuels.

In general, there are three types of conversions – switching a gasoline or diesel car to run solely on another fuel (dedicated), changing a vehicles to run on higher alcohol blends (flex fuel), or installing an additional fuel tank so that the vehicles can burn the competing fuel as well (bi-fuel). In American, however, onerous regulations and staggering costs of conversion has deterred consumers.

The study points out that installing a CNG tank in an American car costs $10,000 while the same tank in Europe can be installed for $3,800. The difference is the strength of the tank as dictated by the EPA. Of course we don’t want to be in a situation such as Pakistan where CNG cars are exploding due to poor tank quality.  But even in comparison to other developed countries, U.S. regulatory requirements are excessive. 

Taxing by volume instead of by energy content: The federal and state governments places taxes on gasoline and any other product used to propel trucks and automobiles. The logic here is that the money goes into special highway trusts that maintain the roads. But the tax is imposed by the gallon rather than by energy content. USESC maintains that this is discriminatory because methanol, ethanol and other non-gasoline products have less energy density and therefore require more volume for the same amount of energy. This is a fine point and might be disputed by the oil industry, which would say if ethanol and methanol have less energy content, that is simply their tough luck. Ethanol, on the other hand, has been exempted from the federal highway tax and most state gas taxes, which is what makes it economical to add to gasoline.

The ban on methanol: Finally, although the USESC report does not even mention it, the biggest regulatory impediment to alternative fuels is the EPA’s failure to authorize the use of methanol in gas tanks. Putting anything in your gas tank requires permission from the EPA because of air pollution considerations. Although methanol actually produces less nitrous oxides and less particulate matter than gasoline, the EPA has never given it an OK. Although methanol made from natural gas might be the best alternative for replacing gasoline, it is does not yet have EPA approval.

Changing any and all of these regulations would require a huge concerted effort by some constituency that had a strong material interest in pushing it through Congress. Unfortunately, there is no such group. The natural gas industry is not yet organized around the issue and is more concerned about defending fracking and opening up natural gas exports. T. Boone Pickens is pushing CNG for trucks through his Clean Energy Fuels but there is no similar effort to promote the use of natural gas in cars. The entire farm bloc is behind corn ethanol, of course, which is why it has been so successful. But there is no similar interest promoting methanol, which may be just as good an alternative or better.

Under these circumstances, the best alternative is to persuade the auto manufacturers to produce flex-fuel vehicles that can run on any fuel – natural gas, hydrogen, biodiesel, E85 (85% ethanol) or M85 (85% methanol). The adjustment would not add significantly to the price of a new car and would open up the field to all the competitors attempting to replace gasoline.

Let the best fuel win.