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The New Ethanol Future Demands a New Public Policy

David Morris, Institute for Local Self-Reliance (ILSR)
Ethanol’s time has arrived. After 25 years of fighting just to survive in the face of overt hostility from most of the automobile and oil industries and the environmental community, ethanol has become a darling of investors and politicians alike. The vast majority of both political parties, even those who just two years ago were highly critical, are applauding ethanol. American automobile companies have made the ability of their cars to run on majority ethanol blends a major selling point in their new ads.

Wall Street may invest over $3 billion this year alone in new and expanded ethanol production. Investors recognize this is a perfect storm on the upside for biofuels. The price of oil is $70 a barrel. The federal government has guaranteed a national market for ethanol almost twice as large as the current market. Five states have already adopted 10 percent mandated blends.(Hawaii, Minnesota, Missouri, Montana, Washington). Half a dozen other state legislatures are debating a mandate. The handsome federal incentive for ethanol(51 cents per gallon) remains in effect until the end of 2010.

… Today, around 80 percent of new ethanol production is coming from absentee owned plants producing 100 million to 125 million gallons per year.

The ownership structure of the new plants significantly weakens the close link between expanded ethanol production and expanded prosperity in the agricultural sector. The farmer is slipping back into his or her traditional role: supplier of raw materials to a concentrated value-added processing and manufacturing sector.

The context for ethanol, and biofuels in general, has changed. Policymakers should redesign federal policies to reflect this change. That requires redesigning both the federal ethanol mandate and the federal ethanol tax incentive.
(21 June 2006)
The remainder of the article proposes several changes in policy, with the purpose of benefitting farmers and rural communities. The ILSR has many downloadable documents on bio-fuels. I still have not seen any studies or arguments that convincingly counter the environmental and EROEI criticisms of ethanol. The following article reports that subsequent generations of the technology will meet some of the criticisms. -BA

Elusive cornucopia: why it will be hard to reap the benefit of biofuel

James Mackintosh, Financial Times
Not long ago, politicians encountered ethanol only when sipping a dry martini. But now a combination of soaring petrol prices, fears over a reliance on Middle East oil and concern about global warming has led governments in Europe, America and Asia to promote alcohol as a fuel for cars.

Wall Street is drunk on ethanol, pouring cash into constructing refineries and searching for any company that can claim a link to “green” fuels.

…But strip away the hoopla and it becomes clear that the benefits of this investment, both for the environment and for energy security, are being wildly overstated – because money is being poured into technologies likely to be outdated within a decade. Moreover, a big switch to biofuel with today’s technology would serve only to replace US and European dependence on foreign oil with a dependence either on foreign biofuels or foreign food. Neither is likely to gladden the hearts of national security hawks.

…So how sound is the rationale for all this activity? Ethanol and biodiesel can certainly help reduce greenhouse gases from road transport, which produces about one-quarter of global emissions. As plants grow, they absorb carbon dioxide, the main greenhouse gas, which is then emitted again when the fuel is burnt in an engine.

But what is rarely highlighted is just how small the savings are in the US and Europe from using the current technology – and how much land is needed. It is difficult and expensive to convert food crops such as corn, wheat, sunflower, sugar beet or rapeseed grown in Europe or the US into fuel and requires intensive energy.

As a result, according to a study by Alexander Farrell of the University of California, Berkeley, published in Science magazine, today’s ethanol production processes cut overall greenhouse gas emissions by only about 13 per cent compared with petrol. In Brussels the Commission has found that the standard production methods for sugar-beet ethanol in Europe reduced global warming emissions by a “modest” one-third compared with petrol.

The Commission’s study concludes that home-grown biofuels are an expensive way to cut emissions: “More greenhouse gas could be saved for the same money in other sectors,” it says.

…Mr Hwang – who, like many environmentalists, spent a decade fighting attempts to boost ethanol use before becoming a supporter – argues that first-generation biofuels need support in order to have a market ready for when better fuels arrive.
(21 June 2006)
Long in-depth article. The original at Financial Times is behind a paywall. The entire article is posted here.

California sets “clean energy” oil tax on ballot

Bernie Woodall, Reuters via Yahoo!News
Californians will vote in November on a ballot measure proposing a constitutional amendment that would tax oil production to fund a range of alternative energy efforts, Secretary of State Bruce McPherson said on Wednesday.

…California is third in the United States in oil production and requires no tax on oil companies for extracting natural resources, unlike Alaska (15 percent tax), Texas (4.6 percent), and Louisiana (12.5 percent), according to Californians For Clean Alternative Energy.

If voters approve the ballot measure, the state will get new revenue of between $200 million to $380 million annually from a tax of 1.5 percent to 6 percent on oil production, according to the state’s nonpartisan legislative analyst.

The money would fund research and development of alternative energy including solar and wind power and electric and hydrogen-fueled cars. Both public and private organizations will be eligible for funds.
(21 June 2006)

Ship It, Ship It Good
How companies are driving down the impacts of shipping

Joel Makower, Grist
We all know that planes, trains, and automobiles use gobs of fuel and spew mega-gobs of greenhouse gases and other pollutants into the atmosphere — and that makes freight transport a particularly dirty business.

The environmental impacts of shipping goods hither and yon are significant but relatively obscure, the true costs hidden amid complex shipping tariffs and product price tags. Businesses that rely on products being moved from one place to another have been able to do little to change the performance of truck, rail, and marine cargo companies. Moreover, cargo companies haven’t been on most environmental activists’ radar screens.

But that’s changing. The growing focus on climate and energy — along with such evergreen issues as biodiversity and air and water pollution — have brought shipping’s environmental impacts into the fast lane. Activists are starting to wage campaigns against dirty shippers. And a handful of companies, including some of the world’s largest freight haulers, are beginning to take action.
(23 May 2006)
Discussion at Gristmill: The shipping news.

Club of Rome wants deserts to become source of renewable energy

Refocus Weekly
The world’s deserts could serve as an “overabundant source of clean energy through solar thermal power plants,” according to the president of the Club of Rome.

“With the accelerating energy demands of China, India, Brazil and elsewhere, a huge demand for energy will be unleashed which simply cannot be met by gas and oil,” says Jordanian prince El Hassan bin Talal. “Reserves of these fuels are limited, while its accessibility is threatened by social and political risks” and the risks to climate demand reduction in the use of fossil fuels.

“We need a concerted effort to increase energy-efficiency, and we must move our dependency to renewable energy sources,” he said in his welcoming address to the ‘World Energy Dialogue’ in Germany. “It is ironic that people around the world impose on themselves low-carbo-hydrate fat-free diets for their health but the environment also needs a low-carbon emissions-free diet to recuperate its supporting capacity.”

“In our part of the world, we look around us and we see deserts drenched in sunlight,” he said. “Can the sun-belt, in tandem with the technology belt, make solar energy the fuel of our civilization and the basis for a secure, affordable and attainable energy system?”…

The Club of Rome produced the report, ‘The Limits to Growth,’ which sold 12 million copies and warned that unlimited economic growth would lead to destruction of the biosphere and exhaust energy resources.

“As president of the Club of Rome, I would like to say that it is with some sadness that the ‘Limits to Growth’ study produced in 1972 should be so dire in its predictions and so accurate even to the present day,” said the Jordanian prince. “In the past three decades, this sombre warning has been ignored.”
(14 June 2006)
BE comments: “The Club of Rome goes from being the original and cannonical doomers to being techno-optimists?! Weird.”

I’m feeling increasingly positive about the prospects of solar energy however articles which imply that energy consumption can continue to grow unabated are totally misleading.

Pedro from Madrid has some more detailed critical comments over at Energy Resources. -AF

Nuclear Power: A Leap into the Dark Energy Chasm

Prof. Peter Saunders, ISIS
Prof. Peter Saunders raises issues of transparency, cost, safety, wastes and carbon emissions savings to show why nuclear power is not an option.

In 2003, following an extensive review and consultation, the Government published a White Paper, Our energy future – creating a low carbon economy [1]. Less than two years later, it announced a new review, Our energy challenge: Securing clean, affordable energy for the long term [2]. It may seem odd to have a second review covering much the same ground so soon after the first, even with the large increase in the price of oil. But the first review had ruled out nuclear energy and the Prime Minister now clearly wants to push ahead with it. As the White Paper had promised a consultation, a consultation there would have to be.

Well before the
date on which the report of the consultation was to be published, the Prime Minister announced, apparently on the basis of a dossier that no one else had been able to see, that nuclear energy was back on the agenda “with vengeance.”

Failing to replace the current ageing plants would fuel global warming, endanger Britain’s energy security and represent a dereliction of duty to the country.

That would be a serious charge if it were true, but is it?
(21 June 2006)