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According to Dan
Manternach, Editor and Publisher of Doane’s Focus Report, the current oil crisis is unlike those of the past, because it has not been created by temporary shortages. It is caused by rapidly increasing demand, mainly in China. This demand will not subside. It will more likely continue to increase. Those who have in the past promoted biofuels (such as ethanol and
biodiesel) as a means to end dependence on Middle East oil have been scorned. Conventional wisdom has been that biofuels can never come close to meeting this nation’s fuel consumption. While this is probably correct, it must be understood that we do not have to replace all the oil we use, or even all that we import. We only have to replace what we import from the Middle East.
It is well documented that the United States imports right around 60% of the oil it consumes each year. It is also well known that countries of the Middle East (mainly Saudi Arabia, Iraq and Kuwait) own most of the world’s oil reserves. By deduction, it is understandable that most of us would assume that the major portion of our oil imports come from the Middle East. Wrong! Figures in the table show that only 24.3% of our imported oil comes from the Middle East, and this amounts to only 14.5% of national consumption.
Estimated U. S. Oil Imports
Canada 17.3%
Mexico 17.1%
Saudi Arabia 15.5%
Venezuela 14.5%
Nigeria 11.8%
Iraq 6.8%
Angola 3.3%
United Kingdom 2.6%
Norway 2.0%
Kuwait 2.0%
Ecuador 1.8%
Algeria 1.7%
Colombia 1.6%
Gabon 1.3%
Equatorial Guinea 0.7%
Sources of Total U. S.
Oil Consumption
Domestic Production 40.0%
Middle East Imports 14.5%
Other Imports 45.5%
Clearly, these numbers change the picture completely. So what is the history of ethanol and
biodiesel, how are we doing right now, and what is the future potential? Let’s take a look at some of the facts. Our output of corn-based ethanol is rising by 30% a year. Brazil, long the world leader, is pushing ahead as fast as the sugar crop from which its ethanol is made will allow.
China, though late to start, has already built the world’s biggest ethanol plant, and plans another as big. Germany, the big producer of
biodiesel, is raising output 40-50% a year. France aims to triple output of the two fuels together by 2007. Even in Britain, a smallish biodiesel plant has just come on stream, and another as big as Europe’s biggest is being built. And after much U.S. government-supported research, a Canadian firm has plans for a full-scale ethanol plant that will replace today’s grain or sugar feedstock with straw
(www.iogen.ca).
The reason is simple. It is not greenery or energy security, the grounds on which governments justify subsidizing
biofuels. Just take the past year’s soaring price of fossil fuels, subtract the biofuel subsidy, and the answer is plain: for the user, biofuels are currently cheaper. Indeed, in our corn states, locally produced ethanol is close to being competitive even without subsidy; imported Brazilian ethanol could have been competitive long ago, had not a federal tax credit for ethanol, originally 54 cents per gallon, been carefully balanced by a 54 cent tariff.
Though production methods are rapidly evolving, the new fuels are new only in their rampant growth. An engine that Rudolf Diesel showed at the 1900 World Exhibition in Paris ran on peanut oil, and biodiesel has been in small-scale use here and there since the 1930s. You can make it from animal fats, oilseeds, used cooking oil, sugar, grain and more. Indeed, you can feed your diesel vehicle with cooking oil from the supermarket and it will run, until (as they will) the filters clog up. As for ethanol, Henry Ford was an enthusiast for crop-based ethanol in the 1920s.
In our own back yard, George Washington Carver conducted much of his pioneering work on creating products from agriculture. He generated 325 products from peanuts alone, more than 100 from sweet potatoes, and hundreds more from other plants native to the South. Surely, this was the birth of the now widely referred to biorefinery concept, or the agriculture- and forestry-based equivalent of an oil refinery which has been kept dormant for decades by low oil prices?
Today, both biofuels tend to be used in mixtures. Europeans typically use “B5”-standard diesel, blended with 5%
biodiesel, usually made from canola oil. In the U.S. many drivers, often unaware of it, are using E10 “gasohol”-10% ethanol, 90% standard gasoline. But the proportions can be higher than that. Some U.S. and Canadian public-sector vehicles run on B20. Californians use unmixed, 100%
biodiesel, and, with additives to keep it usable down to -20°C, it is sold even in much colder places like Germany and Austria.
As for ethanol, in its pure form it can damage standard gaskets and hoses. But, to meet Brazil’s supply problems, carmakers there, already familiar with it, in 2003 brought in “flex-fuel” engines that can run on any ethanol-gasoline blend you like; at present 75% to 25% is standard. These now account for 30% of new car sales. The U.S. version of flex-fuel runs on E85 (in practice, 70-85% ethanol, depending on the region and the season). Already, the U.S. has 4 million such cars, and they are multiplying. So are E85 pumps.
There is pressure too from the corn-growers, gleefully envisaging a huge new market; and hence from their politicians. The market is big already: of our 255 million tons of corn last year, 30 million went into ethanol. One or two states have adopted mandatory requirements for a certain use of this fuel; Minnesota requires E10 as a minimum, and its legislature has just voted to make that E20. A federal bill launched in March, calls for the use of eight billion gallons of biofuels a year by 2012.
So can biofuels help eliminate our dependence on Middle East oil? Perhaps not on their own and in the near term, but if combined with energy conservation measures, they almost certainly can. You make up your mind on this issue yourself, but if you have access to the internet, I would strongly recommend you first consult the “Winning the Oil End Game” site at
http://www.oilendgame.com/. |
