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Calif. proposition 87 and biofuels - Nov 6

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Many more articles are available through the Energy Bulletin homepage


Big venture capitalists pony up in sizzling market that may get boost from Prop. 87

Matthew Yi, SF Chronicle
In the heart of Silicon Valley, David Pearce's startup Miasole is in a mad dash to figure out a more cost-effective way to manufacture solar cells.

So far, he's been getting help from big investors including venture capital firm Kleiner Perkins Caufield & Byers, whose portfolio of success stories includes Google and Sun Microsystems.

But fledgling Silicon Valley firms like Miasole that are trying to make breakthroughs in producing energy from alternative sources like the sun, corn or even bio-waste, may end up finding a bigger boost if California voters approve Proposition 87 on Tuesday.

The statewide ballot initiative seeks to raise $4 billion by taxing oil production in California and using the funds for research and development, production and distribution of alternative fuels. The ultimate goal is to slash California's petroleum consumption by 25 percent by 2017.

Companies like Miasole won't be the only potential beneficiary if the measure passes. The new public money would continue to fuel what has been a surprising increase in venture capital investments in companies that are looking for commercially viable alternative fuels and energy.
(4 Nov 2006)


Why cellulosic ethanol will not save us (Prop 87)

Tad Patzek, Venture Beat
Today it is commonly believed that burning freshly cut plants is morally superior to burning old fossil plants. Even more curiously, some are convinced that stripping ecosystems of gigantic quantities of biomass can go on year-after-year, forever, and with no consequences.

This attitude is best exemplified by the DOE/USDA 2005 report by Perlack et al.: “…An annual biomass supply of more than 1.3 billion dry tons can be accomplished with relatively modest changes in land use and agricultural and forestry practices.”

Much of Proposition 87 is built around this delusionary DOE/USDA vision.

...One simply cannot remove biomass and nutrients from an ecosystem without putting these nutrients back, protecting the soil structure, and suffering from lower yields in later crop rotations in industrial plantations.

...If one does not buy such obvious delusions and one wants to live better while not destroying the Earth, what is one to do? Instead of stumbling into Proposition 87, it might be better to ask the following questions:

1. What changes of our social and urban infrastructure will be necessary to decrease energy use in the US by a factor of 4-6?

2. How can the public be educated about the inevitable changes of our lifestyles?

3. How can one talk in a sensible way about the complex issues of environment/human interactions? In particular:
(a) How can one formulate the thermodynamics of living ecosystems and bring their descriptions into economic accounting?
(b) How can one consistently compare most energy resources and energy extraction schemes?
(c) How can one quantify the impact of energy supply schemes and life choices on the ecosystems in which we are embedded?
(d) Will there be enough clean air, water, and soil to sustain our society?
(e) How will the progressing global climate change impact energy consumption and production?

The formulation of answers to these questions might start another proposition. That future proposition would be for the people, not their cars.

Tad Patzek is a professor of Civil and Environmental Engineering at UC Berkeley.
(5 Nov 2006)
FWIW, I will be voting for Proposition 87 but I agree with Patzek - I'm looking for a "future proposition would be for the people, not their cars." -BA


Water Scarcity Seen Dampening Case for Biofuel

David Brough, Reuters via Planet Ark
GENEVA - Water scarcity harms the case for using food crops to make biofuels, a leading environmental author and journalist said on Thursday.

"The downside of growing food for fuel is water," said Fred Pearce, author of the book "When the Rivers Run Dry".

Surging crude oil prices have strengthened the argument for green energy created by cultivating food crops such as sugar cane to make ethanol fuel and vegetable oils to make biodiesel.

The politics of water will become critical as demand for water from rising populations and the needs of industry increase, said Pearce, editor of Britain's New Scientist magazine.

About one billion people lack access to clean drinking water, Pearce said in a keynote speech to the two-day Sugaronline conference in Geneva.

Vast quantities of water were needed to cultivate crops, with two-thirds of the world's water used in agriculture, Pearce said.

"Sugar is one of the thirstiest crops in the world," he said, estimating that 600-800 tonnes of water were required to grow one tonne of cane.

Brazil, the world's biggest sugar producer, has a thriving biofuels industry, converting about half its cane into fuel ethanol to power vehicles.

Pearce said the booming sugar business aimed at powering cars for the affluent had become a key component in water politics because of concerns over water scarcity.

In the past 30 years world food production had doubled to meet food demand from a growing population, but the amount of water used had tripled.

Part of the answer was to boost the efficiency of irrigation infrastructure.

"You can't irrigate the world's ethanol needs without huge gains in irrigation efficiency," Pearce said.
(20 Oct 2006)


Exploding U.S. Grain Demand for Automotive Fuel Threatens World Food Security and Political Stability

Lester R. Brown, Earth Policy Institute
Now that the year’s grain harvest is safely in the bin, it is time to take stock and look ahead. This year’s harvest of 1,967 million tons is falling short of the estimated consumption of 2,040 million tons by some 73 million tons. This shortfall of nearly 4 percent is one of the largest on record.

Even more sobering, in six of the last seven years world grain production has fallen short of use. As a result, world carryover stocks of grain have been drawn down to 57 days of consumption, the lowest level in 34 years. The last time they were this low wheat and rice prices doubled. (See data.)

The growth in world grain consumption during the six years since 2000 averaged roughly 31 million tons per year. Of this growth, close to 24 million tons were consumed as food or feed. The annual growth in grain used to produce fuel ethanol for cars in the United States alone averaged nearly 7 million tons per year, climbing from 2 million tons in 2001 to 14 million tons in 2006.

Now the amount of grain used to produce fuel is exploding. Investment in crop-based fuel production, once dependent on government subsidies, is now driven by the price of oil. With the current price of ethanol double its cost of production, the conversion of agricultural commodities into fuel for cars has become hugely profitable. In the United States, this means that investment in fuel ethanol distilleries is controlled by the market, not by government.
(3 Nov 2006)


The Ethanol Illusion
Can we move beyond an energy policy running on hype and hot air?

Michael B. McElroy, Harvard Magazine

...The best, immediate option would be to conserve: to use less gasoline. We can do this either by driving more with less, or simply by driving less. The growth in U.S. gasoline consumption has moderated to some extent in recent months in response to higher prices. Economists expect it to moderate further, or indeed reverse, if the price of gasoline were to climb to, say, four or even five dollars a gallon. This could happen if, as some experts suggest, oil prices were to increase by 30 percent from their present lofty level to, say, $100 a barrel. But a large fraction of the revenue raised in this scenario would flow (as it does today) to the coffers of the oil-producing states and we could expect serious economic dislocation at home (remember the 1970s fuel shortages). Why not take the bull by the horns and change consumption patterns by domestic action?

How about a dollar-a-gallon tax on gasoline, or even more? (Ethanol could be exempted.) That would bring in approximately $150 billion or so a year of additional government revenue (less, of course, if the tax were successful in reducing demand) and provide an important stimulus both for conservation and for the development of alternatives to gasoline. The revenue could be recycled (no net new taxes!) to provide tax relief or subsidized medical care or any of a host of other revenue-neutral benefits for those most directly affected by high gas prices and least able to pay them-the least advantaged members of our society. And there are other actions we could take, perhaps less radical though arguably less efficient from an economic perspective. We could tax gas-guzzling SUVs and increase rebates that subsidize more energy-efficient vehicles. Or we could raise CAFE (corporate average fuel economy) standards and turn the problem over to the auto industry to moderate gasoline demand. Surely there are other possibilities as well.

What we need now is a serious debate on national energy policy. At least in the short term, turning fields of corn or grain into ethanol will not significantly reduce what President Bush describes as our addiction to foreign oil. The pro spects for ethanol from cellulose may be more promising than is the case for corn, but the benefits, assuming they exist, surely lie a decade or more in the future. We must forgo looking for scapegoats: the oil companies did not get us into our current pickle and their profits (approximately 8 percent of revenues) are not obscene. We should support politicians who are not afraid to articulate bold new suggestions with clarity and honesty. But we should be hardnosed in holding to task those who would propose easy fixes. Senator John McCain was not totally out of school when he summed up the corn/ethanol energy initiative launched in the United States in 2003 as “highway robbery perpetrated on the American public by Congress.” We must be careful not to buy into excessive hyperbole-absent careful analysis-as we search for alternatives to vulnerable supplies of imported oil.

Michael B. McElroy is Butler professor of environmental studies. An extended, more technical discussion of the issues raised in this article is available on his website, www-as.harvard.edu/people/faculty/mbm.
(Nov-Dec 2006)

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