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South Africa: Ethanol – Boon Or Bust?
All Africa/UN IRIN
South African farmer Hannes Haasbroek flew home from an agriculture conference in the United States six years ago, inspired by the novel and potentially lucrative idea of distilling maize into bioethanol fuel for vehicles.
Haasbroek’s friends laughed at him; some called it a crazy idea. But in little more than a year, South Africa’s first billion-dollar bioethanol factory will be pumping out 500,000 litres of the liquid fuel every day. Seven more of the enormous factories are planned for sites across the country. ..The plan is deceptively simple: turn food into fuel. ..
“Africans have the potential to become the Arabs of the biofuel industry,” said Johan Hoffman, chief executive of Ethanol Africa, the company that plans to build eight biofuel factories across South Africa.
“There is a potential to use vast areas of this massive continent for biofuel production, and all that is needed is water and an electricity supply,” Hoffman said. “Africa has the potential to provide energy for the world – who is going to supply the growing economies of China and India? We already know there is a finite amount of oil left in the earth, and it is being used in enormous quantities and will soon be gone.”
“The [South African] government wants to create jobs in rural areas and redistribute land from white to black farmers, and bioethanol production could be the solution to both problems,” Hoffman said. “Bioethanol will create jobs, not just for the farming industry, but for whole communities, and uplift the poor.”
With unemployment estimated at 40 percent and a farming industry that could theoretically triple in size from 1.5 million to 4.5 million hectares, South Africa could be the ideal environment for a vast bioethanol industry. ..
“I wish they would stop building these ethanol factories,” said the University of Cape Town’s Dr Harro Von Blottnitz, a chemical engineer who has spent years studying biofuels in African contexts.
“It is well documented – it takes energy to make energy, and the amount of energy it takes to grow and harvest these crops barely produces a surplus return,” he said. “While bioethanol production makes some sense with high oil prices, I don’t think our government has wrapped its mind around all the consequences, and studies that should be done, haven’t been done.” ..
While some bristle at the idea of the poor and hungry competing with luxury all-terrain vehicles for the world’s supply of grain, Ethanol Africa says it will use only yellow maize in its factories, and not the white maize favoured by consumers. ..
(15 Sept 2006)
If ethanol producers in SA manage to hitch their wagon to land redistribution and job creation schemes there will be no stopping them, regardless of unasked questions on net energy and the dismal history of small commodity producers in globalised markets.-LJ
Extracting grain of truth on ethanol
Paul Higgins, The Age
A LOT of nonsense has appeared in the media in the past few days about fast-tracking the subsidising of ethanol so we can reduce petrol prices. If we look at the cold, hard facts, it is obvious this will not bring down the price of petrol for the general consumer. ..
Recent estimates of ethanol production from sugar, presented at the recent Australian Ethanol 2006 conference, had a price of 70¢ a litre for ethanol with sugar at $300 a tonne. With raw sugar now at $405 a tonne on the New York Coffee, Sugar and Cocoa Exchange, the price of ethanol would have to be much higher before you could get people to build a sugar-based ethanol plant. At these raw sugar prices, it is unlikely that significant levels of sugar-based ethanol would be produced, although ethanol can be produced from C molasses at a cheaper price. ..
However, even if ethanol can be produced much cheaper than petrol, it is economically naive to suggest that the ethanol producers would sell it at a low price. Products are priced at a level that is competitive in the market, which takes into account competing products, their prices and their usability. Why would someone who produced ethanol at 45¢ a litre sell it for 55¢ if they could sell it for 80-85¢ a litre? The only situation in which ethanol would be sold for significantly less than petrol would be if the supply were close to or higher than demand; but it would take years to ramp up ethanol production.
(15 Sept 2006)
Consumer Reports: The ethanol myth
Consumer Reports’ E85 tests show that you’ll get cleaner emissions but poorer fuel economy … if you can find it
…after putting a 2007 Chevrolet Tahoe FFV through an array of fuel economy, acceleration, and emissions tests, and interviewing more than 50 experts on ethanol fuel, CR determined that E85 will cost consumers more money than gasoline and that there are concerns about whether the government’s support of FFVs is really helping the U.S. achieve energy independence.
CR Quick Take
Despite the avid support of the Bush administration and major American car companies, E85 is unlikely to fill more than a small percentage of U.S. energy needs.
* E85, which is 85 percent ethanol, emits less smog-causing pollutants than gasoline, but provides fewer miles per gallon, costs more, and is hard to find outside the Midwest.
* Government support for flexible-fuel vehicles, which can run on E85, is indirectly causing more gasoline consumption rather than less.
* Most ethanol is being blended in a 10 percent mix to reduce smog-producing emissions and stretch gasoline supplies.
(Oct 2006 issue)
India backs down on ethanol blending
The government will not make the 5% ethanol blended petrol programme mandatory from November this year as had been expected. CNBC-TV18 reports that this is bad news for sugar companies like Bajaj Hindustan, which expanded capacity in anticipation of compulsory blending.
This is some sobering news for sugar stocks that have been on a high since the government announced its decision to press ahead with the ethanol blended petrol programme from November. High level officials have said that the move will not be made mandatory.
The Oil Ministry has argued that for the 5% ethanol blending petrol, 610 million litres of ethanol would be required. The domestic industry would not be able to supply such a huge quantity. But, the Agriculture Ministry clearly doesn’t agree and wants the government to safeguard the interest of domestic farmers. Sources also say that import duty on alcohol would be slashed to 7.5%. The government is also mulling waiving all or part of excise duties in proportion to the extent of ethanol blended in petrol. ..
The government plans to give huge incentives for alcohol production from foodgrains.
(14 Sept 2006)
Honda claims cellulose ethanol breakthrough
Chris Woodyard, USA Today
Honda announced Thursday that it may have found a breakthrough in converting leaves, plant stalks and other biowaste into the alternative fuel ethanol.
The new process makes the conversion more efficient by using a microorganism developed by a Japanese lab that can chomp its way through vegetation more efficiently than in the past. The new bugs are better at converting sugar in plants into alcohol, or as it’s known in its denatured form, ethanol.
The process results in a “significant increase in production of bio-ethanol,” Honda said in a statement from Tokyo. The improvements deal more effectively with “fermentation inhibitors” that get in the way of the microorganisms. ..
(14 Sept 2006)