The Ethanol Bubble?

from the invest-away dept

There’s been a lot of talk lately about alternative fuels, with ethanol suddenly jumping into the spotlight as the hot choice, despite it being nothing particularly new. It’s good to see investment and research going into an area that greatly needs some innovation. However, with so much investment money going into the space, along with all the recent attention, it risks being another bubble-type situation. The problem here is that overhype in alternative fuels could mean that any early problems or failures (which there are likely to be) would get so much attention that it would scare off additional investments or any form of customer support. Hopefully, if there is some form of a bubble, it’s the good kind that allows many different ideas to get tested very quickly. While the original link above discusses efforts by high profile VCs and folks like Bill Gates to invest in ethanol, expect plenty of attention to go controversial scientist Craig Venter’s new efforts. Venter, of course, is famous for his work on the human genome — but also for his brash style and his reputation for having quite an ego (one that resulted in him using his own genome for the research done at Celera — despite the fact they were supposed to use an anonymous donor). Venter’s latest efforts involve creating a “designer microbe” to be used in the production of ethanol (and hydrogen, too, while he’s at it).

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Comments on “The Ethanol Bubble?”

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dorpus says:

Velly old technology

Ethanol has been mixed into gasoline since at least 1980. It’s a glorified subsidy for corn belt farmers, who always grow too much corn. It costs more energy to make ethanol than is extracted from it — the “environmentally friendly” argument is complete BS. The farm lobby has long taken advantage of the deeply ingrained image of the earnest farmer to receive huge subsidies from governments.

Devil's Advocate (user link) says:

Re: Re: Velly old technology

I would be willing to bet that this is still considerably more energy being spent than is required to produce gasoline, though. Ethanol should be viewed as more like a battery or an energy storage medium. Sure, it does get a lot of energy from the sun via the corn growing, but what about all of the petrolium based products used to create the ethanol? Fertilizers, tractor fuel, corn transportation, and even the chemicals and energy used in the process of refining the corn to ethanol. I’m no expert in this situation, but from what I’ve read, there’s really no net gain.
It’s a start, but we shouldn’t feel like we’re really getting anywhere until we can grow corn and convert it to ethanol entirely with ethanol-based energy, and end up with a net gain.

NOCcer says:

Re: Re: Re: Velly old technology

While net gain would be wonderful, I think the major push is to shift the focus of our energy glut towards our own resources rather than the Middle East — even if superficial.
Tractors, trains and all that can be converted to use the Ethanol so long term it may even be slightly more energy efficient long-term.
Frankly, I find it rather tickling to think of Iraq/Iran/Turkey etc buying our corn for fuel because no one wants their silly Crude Oil anymore.

alternatives says:

Re: Re: Re:2 Velly old technology

Tractors, trains and all that can be converted to use the Ethanol so long term

Wow. You are still ‘old school’.

*IF* technology can crack the ‘room temprature superconductors’ – produce a ‘wire’ that is superconducting at 60 degrees Celisus, the new electrical grid could take wave power from the coasts, wind/solar and move it about the country as needed. Nations like the US which have land and oceans would be less screwed than places that are landlocked and have a high population to land ratio.

Transport of cargo would end up being the ‘excess generation capacity’ load. If it is nighttime with no wind and calm seas, the cargo no go.

alternatives says:

Re: Re: Re: Velly old technology

I would be willing to bet that this is still considerably more energy being spent than is required to produce gasoline, though.

Lets see: Harvest seeds, save them, prepare land, plant seeds, care fore plants, Take plant matter, add mechanical seperation, obtain product to feed to yeast, (suffer a caloric cut in energy of about 1/2 to feed the yeasts), apply energy to seperate the alcohol from water/materials.


Take 98 TONS of organic matter. Bury it. Wait thousands of years. Extract oil. Add energy, take gasoline out of the seperation.

Now, for your analysis to be correct, you have applied “NO COST” to the part where 98 tons of organic matter is buried for years, processed and stored for humanity. Why is it you feel there is no value for the old stored sunlight VS new stored sunlight, other than you can attach a US Federal Reserve Note and call both processes “equal”?

Bill says:

Re: Re: Re: Velly old technology

What is not mentioned here is that the “spent grain” left after Ethanol is made, is then fed to cattle, just as it would have been with-out the ethanol process. The only difference is that it must be fed within a couple of days as it is wet. It gets done and the feed value it still there. This changes the cost issue compleatly. Now think, think , think.

alternatives says:

Re: Velly old technology

It costs more energy to make ethanol than is extracted from it — the “environmentally friendly” argument is complete BS.

Show proof for your claim. Oh that is right, you don’t “do proofs” you rant, rave and flail about.

I’ve seen numbers which show break even or slightly above energy input. No where near close to the 100:1 oil used to give.

(Remember WHY farm crops were made into concentrated ethyl alcohol. 1) A way to use damaged crops. 2) Mice/rats/time all damage stored grains/crops. Alcohol above 20-25% is ‘eternal’ – not much can effect change if it is stored in a sealed container. Thus the converted crop is stablized. 3) Booze used to be a ‘cash crop’ – you could being in a jar of the stuff and get cash/items in town.)

The farm lobby has long taken advantage of the deeply ingrained image of the earnest farmer to receive huge subsidies from governments.

VS the military machine maker lobby? VS the Telecom lobby? VS the Entertainment lobby? What is your point? That large industrial farms are only profitable with favorable legislation?

Hey, how about the subsidy that oil gets? One form of that subsidy is the effects of the Carter Doctrine, the whole Iraq thing – one and Two. Kinda a bloody subsidy eh?

Mica says:

Re: Re: Velly old technology

Stop spreading the FUD that Ethanol costs more to produce than it can be sold for. Someone asked for facts and here they are.

-Ethanol is 1/2 the cost of gasoline. Proof-Brasil uses diesel, petrol, and ethanol. The ethanol is 50% of the petrol and it is a 100%, not a mix. This is a market economy price thereby establishing a market price for cost without any subsidies.

-Lies. Engines exist to run 100% ethanol and gasoline, called dual fuel and sold by the same major car manufacturers as in the USA. There is no new technology to develop, they exist NOW. Don’t believe Bush and the oil lobby FUD about needing to spend billions to develop it.

-100% Ethanol produces water and carbon dioxide as byproducts…no more smog or pollution.

-Ethanol is a renewable energy resource.

-Ethanol can be produced locally.

-Ethanol can buffer petroleum speculative price raises.

Michael says:

Re: Re: Re: Velly old technology

“-100% Ethanol produces water and carbon dioxide as byproducts…no more smog or pollution.” -Mica

Note that gasoline also produces carbon dioxide and water as products. You’re failing to mention that both gasoline and ethanol produce additional by-products. Ethanol is not clean, but if used properly, can produce less CO than gasoline, although additional NOx can be a side-effect.

Also worth noting that it produces in the neighborhood of 30-40% less energy than gasoline per unit mass.

Not trying to support or debunk it. Just trying to complete the picture.

Mike says:

Re: Re: Re: Velly old technology

The problem with ethanol is not the economic cost. The problem is with the energy balance – ethanol requires more energy to produce it than it will produce in an engine (I’ve personally done the energy comparison between ethanol and gasoline). Ethanol does produce clean emissions, however, the energy used to produce the ethanol is still mainly derived from fossil fuels. So, the problem is that while your car may be emitting cleanly, so where else more pollution may be generated in order to make the ethanol. I’m not against using ethanol, but to my knowledge, there is not a full proof method for its energy efficient production, unless another alternative evergy source is used (which may be possible at this point in time).

alternatives says:

Re: Re: Re:2 Velly old technology

I’ve personally done the energy comparison between ethanol and gasoline.

You have? Ok, then please explain how 98 ton of organic matter to make a gallon of gasoline vs one ton of sugarcane baasse to make 112 gallons of ethanol?

How about taking the basic unit of energy THE PHOTON and compute how many photonic units are in the 98 tons to make a gallon of gasoline VS the photons used to make a gallon of ethanol.

Because an actual energy comparison WOULD account for the energy input – photons. And photons ARE the base energy input.

alternative evergy source is used

BINGO! Using a non-portable form of energy (Solar heating is what I use) and, say, a wind turbine or PV cells to run machines to mechanically seperate the material to make a liquid ‘fuel’ is a way to store energy value.

Downside to that model? It doesn’t ‘scale’ to cover the worldwide volume of energy demands.

mbuel76 says:

Re: Re: Re:3 VeRy old technology

Have none of you heard of Brazil? Brazil is over 80% dependant on Ethanol based fuels to fuel their vehicles and power production. To say that it’s not a possibility is absolutely ridiculous. And Brazil isn’t even using the new technology to pull ethanol from bio waste.

Another huge possibility is:

Methane Ice.

Shale oil (apparently Shell has figured out how to get it from the ground for a 20 dollar a Barrel Equivalent.)

Coal to Oil (there are many more efficiencies that can go into this technology.)

I also see that you linked to a peak oil conspiracy theorist… to say that mankind won’t innovate when the shit hits the fan is quite presumptious.

Anonymous of Course says:

Re: Re: Re:2 Velly old technology

The heat balance calculations for an ethanol
plant show a near break even or very slight
gain in energy. No matter what is done with
improvements in the feed stock, corn, switch
grass… we still have to do better in the
conversion process to make ethanol viable as
more than an auxillary source of fuel.

I think it’s great for disposing of excess or
damaged crops. I don’t think its use should
be mandated. It delivers less energy and even
if the production price is halved that doesn’t
include all the taxes that have to be added
back on eventually.

Bio-diesel is the way to go. And yes, I
put my money on it. I have a VW Golf TDI,
47-51mpg combined driving, no batteries

Michael says:

Re: Re: Velly old technology

Sorry but I have to put my two cents in here.

When will stupid people get off there horse and learn the facts about the wars in Iraq. It HAS NOTHING TO DO WITH OIL!!!

We get a VERY small percentage of our oil from there and the US were the ones to recommend that Iraq keep with the pre-existing oil contracts. Contract which did NOT include the US. So tell me if we get almost none of our Oil from Iraq how can you say we went there for the Oil?

alternatives says:

Re: Re: Re:2 Velly old technology

this stupid STUPID war, is about oil.

President Carter made absolutely clear in his final State of the Union address that one aspect of our foreign policy remained unchanged:

“An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.”

How about:

If those considerations did not enter into the Bush administration’s calculations when the president ordered the invasion of Iraq in 2003, it would have been the first time in more than 50 years that the uninterrupted flow of Persian Gulf oil was not a central element of American foreign policy.

Now…who to believe, people in Washington DC *OR* my own lying eyes?

alternatives says:

Re: Re: Re: Velly old technology

learn the facts about the wars in Iraq. It HAS NOTHING TO DO WITH OIL!!!

Where ARE you proposing to get the ‘facts’ from? The US Government? Please show were the ‘facts’ are to be found. Take me to your mind-reading machine and time machine so I can find out what was going on in the mind of the executive branch.

Michael says:

Re: Re: Re: Velly old technology

Also worth noting, for those that mentioned our small oil imports from Iraq, that between Saudi Arabia, Iraq, and Kuwait combined, it’s more than Canada, our largest supplier.

No, Iraq is not a huge supplier. But the Middle East as a whole is, and you can bet that our government wants to ensure stability there.

Joe says:

Re: Re: Re:3 Velly old technology

What do you think would happen to the US if it did not have a stable oil supply? Look what happened when the hurricane hit New Orleans. Imagine that x 1000. The Great Depression part two. If you think there are two America’s today, what would it look like when the rich stay rich and the poor and middle class have no jobs, no transportation, and no food. This would not just affect the US either.

Don’t get me wrong, I think we need to get off of oil based energy and fast. I just think it is naive to think that we should have no business over there.

Adam says:

Re: Re: Re: Velly old technology

Here’s how clown:

It’s not based on what we get from them NOW, it’s what they HAVE. It has long been the desire of the CIA (documentation can be found via info released via the freedom of information act dating back to the 1950’s) to control the vast resources of oil in the Middle East because of what policy makers refer to as “Strategic Veto Power.” Meaning, if we own all the oil, we can control it’s price, so if anyone says boo to us, maybe $2.00 a barrel will shut them up. You’re entitled to maintain your position, but documentation would lead “reasonable” people to see things as they ARE.

Thanatos says:

Re: Re: Re: Velly old technology

I have always been very neutral with this war, and i know right now it seems we are not in afghanistan or iraq for oil, but think of chess. you strategically place your pieces and make sacrifices to go for the ONE ultimate kill. Valid proof for this theory? of course not, just floating in my brain. But it does make you think that if there might be trouble in a neigboring country in the near future, let’s say… IRAN, would our government let the other player take their turn and lose a very strategic space? hmmm…

Bill says:

Re: Velly old technology

I believe it takes about 15% more energy to extract and refine GASOLINE than you get out of it.
Ethanol sounds great but does not have to come just from corn. Prarie switch grass is supposedly easier to grow (it was here naturally long before the farmers) and generates more alcohol. Cheaper than gas.
Recently while in L.A. I rented a Ford Taurus that had an FFI (Flexible Fuel i.e., E85) sticker on the inside of the gas lid.
The cars that can use it are already here.

Vox says:

Re: A couple of corrections

It is currently accepted about scientists in the field that Ethanol is break even energy. Meaning that it costs that same about of energy to produce as it generates.
Switchgrass (which is really called Miscanthus) Is not an alternative source of Ethanol or anything that you can burn in your car. Miscanthus is a fuel being researched as an alternative to coal for power plants. It can be co-fired with coal or replace coal entirely.
Creating opinions based on what information you’ve collected from personal blogs and media outlets can be misleading. I STRONGLY suggest you dig into PEER REVIEWED scientific journals. I’m not saying they don’t have an agenda as well, but reading from Joe Bob’s blog who heard it on FoxNews is worse.
PLEASE check your facts before spouting off rhetoric as if it’s the one true gospel.

alternatives says:

Re: Re: A couple of corrections

Is not an alternative source of Ethanol or anything that you can burn in your car.
Interesting claim. Via thermal distillation I can get methanol out of grass. Via harvest and soaking of wet grass, I can get a %age of ethonal. (because the Carbon Dioxide to cellilous process in plants uses sugars. If I harvest that small bit of sugar, I can ferment it. Ever seen ‘a county lad/lass’ reach down, pull the seed head off of a bit of grass, bite the green, soft end off the stalk, then toss the seed head to the ground? There is enough sugar there for you to taste. ) Via grinding to increase surface area, one can place 2 ensymes which will convert the complex carbohydrates (Hint: Complex carbs are wood, cellulose, ligan) into sugars for fermentation. Via a high temperature, low acid process you can get sugar to ferment in grass. Finally via a 2 bacteria process you can take that ground up grass and make a buytl acid that then is converted to a buytl alcohol.
. I STRONGLY suggest you dig into PEER REVIEWED scientific journals.
How about the business plans of companies that claim they are using any of the above methods? How about the patents?
Because all of the above I’ve listed is ways of taking grass and making a flamable liquid. Some predate Henry Ford, some were championed BY Henery Ford, and others are new.

Spyvie says:

Re: Re: A couple of corrections

Your correction directly contradicts a report I heard on NPR the day after the President?s speech when he mentioned switchgrass. The ?expert? they interviewed, some university level researcher as I recall, said switchgrass could be used to produce methanol more efficiently than corn.

I?m no expert on alternative energy, just someone who tries to pay attention.


Re: Re: Re: A couple of corrections

The ?expert? they interviewed, some university level researcher as I recall, said switchgrass could be used to produce methanol more efficiently than corn.

That would be the ‘put the cellulose in a NO O2 container and heat it while collecting the gas’ way of making methanol.

has enzymes to do cellulose to sugar conversion.

Using a two step process with C. tyrobutyricum making the ‘smelly’ butyric acid and C. acetobutylicum taking the acid and making butanol.

Either way, you have to grind the grass up, the finer the better.

Dig about here if this topic interests you:
and look at the patents.

No matter HOW you take plant matter and process it into liquid potentional energy, the plan HAS To have a way of getting the ‘leftover’ byproduct back to the land and some crop rotation so the soil gets back its nutriants. OTherswise, the result will be a strip mining of the topsoil. Don’t look behind you, but the US Geological service estimates only 300 years of economically mineable Phosporus. That means no “K” in NPK.

And finally, do note how Dourpus has not shown her face back in this thread. Post N’ Run coward that she is.

McC says:

Re: Re: A couple of corrections

Dear Vox:

Respectfully, you should heed your own advice and research prior to spouting off against those that spout off. Switchgrass (Panicum virgatum) and Miscanthus x Giganticus are two different biofuel plants. You can learn more about Miscanthus and it’s advantages over switchgrass at, or

You need to read more peer-reviewed scientific journals covering cellulose-based ethanol production (or just google it) because in fact you CAN produce ethanol via biomass crops, as well as co-fire it with coal. So yes, your E-85 vehicle could run on Miscanthus (based ethanol, that is).

Because you use so much more of the plant, and it is a perenial (grows back year-after-year), doesn’t require herbicide, pesticide, or have natural predators, biomass/cellulose based ethanol production blasts through the ‘Break Even’ economics of CORN-based ethanol. I call Miscanthus the Ron Popiel Showtime Crop — you know, just like the oven, ‘Set it, and Forget it’… or rather, ‘Plant it, and forget it’ until it’s time to chop it down and make some moolah. $1,000 an acre estimated from the Univeristy of Illinois research, without federal farm subsidies.

Speaking with authority to give the impression that you know what you’re talking about (when in fact you don’t) while at the same time belitting and chastising others is a far more aggregious error than just plain ole’ spoutin’ off. THAT is precisely the problem with FoxNews.

Santiago says:

Re: Velly old technology

That is because they’re using the wrong plant to make the ethanol.
In Brazil, for more than 20 years now they’ve been using sugarcane for making ethanol.
They turn the actual sugarcane into ethanol, and all the scraps are burnt in clean ovens to generate electricity to make the ethanol, AND they get a 20% surplus electricity production which they sell to the utilities companies.

BBones says:

Re: Re: Velly old technology

I believe an important point regarding the relative global advantages of bioethanol (and possibly other biofuels) vs. fossil fuels has been overlooked or at least underreported. That is the fact that the use of extracted fossil fuels releases into the atmosphere carbon atoms, mostly as CO2, that have been and would otherwise continue to be safely sequestered in the earth’s crust for millions or billions of years. This adds huge unnatural CO2 loads to the natural atmospheric carbon budget. Conversion of organic waste or dedicated crops to ethanol fuel merely “borrows” carbon that otherwise would soon be released to the atmosphere anyway from landfills or decomposition of plants that would have naturally grown in now-dedicated croplands. I think this effect may go a long way toward explaining the rapid increase in atmospheric CO2, and the inability of the biosphere to absorb it, since large-scale fossil fuel use began.

Spyvie says:

No Subject Given

The new part of ethanol research is in switchgrass, supposedly 2 or 3 times more biomass and therefore ethanol per acre than corn. This is where all the research is taking place. The difference I am told is the whole plant, stalks, leaves and all, are useable.

From what I understand, the efficiency of ethanol production from corn has improved to the point that it?s cost effective now, but switchgrass is better still.

wolff000 says:

No Subject Given

ethanol is a viable alternative fuel you can like it or not but that is a fact. does it take more energy to produce than petrol? well there are a number of ways to do it so that completely depends on the process being used. is it worth using? sure, as long as we can A.have enginess that run on it and perform just as well as the petrol counter-parts. B. can produce it in a manner that doesn’t harm the enviorment as much as harvesting crude oil.

monkey says:

Re: money in...

There is something I have noticed with even the intelligent discussions about ethanol vs. gasoline.
Not once has anyone noted that at the advent of gasoline production it was expensive, wasteful, and inefficient. octane was measured differently, but even so it was seriously lower. 80-82 was average in the 30’s. byproducts like coke were unusable at first. The railroads owned the oil fields, so infrastructure was given a boost through monopoly.

The point is:Ethanol could be ten times better than gasoline. but we wont get there without a huge open maw of marketshare, and the infrastructure to get it there. and big oil wont play nice.

Professor HighBrow says:

Re: No Subject Given

Well, I’m using nuclear power in my car. Costs a lot to get it on the road, but I never have to buy fuel again. Of course, if I have an accident, it may cause evacuation of a city the size of Cleveland..

Word is Bizzorn! ME TOO!
A little Plutonium or Uranium makes my car expensive, but I never have to by fuel again. And plus I can travel backwards in time if I hit 50mph with my Flux Capacitor.
And what’s with everyone complaining when I wreck my car? A little radiation never hurt anyone…

Those damn mutants won’t stop complaining about their hair falling out…

Anonymous Coward (user link) says:

Ethanol likely won't be the final answer...

At least corn based ethanol won’t be anyway…. Brazil has a very large sugar cane based ethanol process in place; beyond that is cellulosic ethanol and then there are other alternative fuel possibilities as well. America simply needs to get away from the dependence on fossil fuel – especially when that oil is from foreign countries. has a lot of good information.

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