Cellulosic Ethanol, The Phantom Fuel

Ethanol blended with gasoline has been around for a number of years. Most of you are forced by our benevolent government to buy gasoline blended with up to 15% ethanol. Ethanol/gasoline blenders receive large subsidies from our benevolent government which you get to  pay for when you buy your gasoline. Because ethanol is primarily produced from corn or sugar cane (in the US it’s corn) you also get to pay more for food products that use corn and because corn  is also used in animal feed, you get to pay more for meat and poultry.

Maybe it was because of the impact that ethanol from corn has on food prices, somebody came up with the bright idea to produce ethanol from non-food plants materials; such as, wood chips and grass clippings. Ethanol produced from non-food plant materials is called “cellulosic ethanol”. Our benevolent government’s Environmental Punishment Protection Agency (EPA) thought Cellulosic ethanol was such a great idea that they ordered all US refineries to blend a certain amount of cellulosic ethanol into their gasoline or else pay a fine. And, that brings us to today¡s story.

From Fox News:

Federal regulations can be maddening, but none more so than a current one that demands oil refiners use millions of gallons of a substance, cellulosic ethanol, that does not exist.

“As ludicrous as that sounds, it’s fact,” says Charles Drevna, who represents refiners. “If it weren’t so frustrating and infuriating, it would be comical.”

[…]

Refiners are at their wit’s end because the government set out requirements to blend cellulosic ethanol back in 2005, assuming that someone would make it. Seven years later, no one has.

“None, not one drop of cellulosic ethanol has been produced commercially. It’s a phantom fuel,” says Pyle. “It doesn’t exist in the market place.”

[…]

“Why would they ask them to blend any at all if it doesn’t exist?” Pyle said. “Because they know that they can squeeze some extra dollars out of them.”

[…]

“We are going to reduce your blending obligation by 98 percent because we feel that that’s the right thing to do,” says Brooke Coleman, the executive director of the Advanced Ethanol Council of the Renewable Fuels Association. “We are going to maintain your blending obligation on the gallons that we think are going to emerge.”

There’s more that is worth reading. “So the refiners are now suing the EPA, in part because the mandate gets larger and larger– 500 million gallons this year, 3 billion in 2015 and 16 billion in 2022.”

So, why  do think the Environmental Punishment Protection Agency was so sure there would be plenty of cellulosic ethanol for the refiners to use? I bet you have already guessed the correct answer, Our benevolent government has, since at least the GW Bush administration, been handing out loan guarantees. And, as also might have guessed, there have been some failures.

From Bloomberg:

Range Fuels Inc., a cellulosic ethanol company backed by as much as $156 million in U.S. loans and grants from President George W. Bush’s administration, is being forced by the government to liquidate its only factory after failing to produce the fuel.

The closely held company, which counts Vinod Khosla, a venture capitalist and Sun Microsystems Inc. co-founder, as an initial investor, shuttered the factory in Soperton, Georgia, in January after not delivering on its promise to convert woodchips into ethanol, which was intended to help the U.S. become less dependent on foreign oil.

Soperton’s failure comes after Solyndra LLC, a solar-panel maker that received a $535 million federal loan guarantee, filed for bankruptcy in September. The ethanol project received $46.3 million of a $76 million grant from the Energy Department and half of an $80 million loan from the Agriculture Department, according to each department.

Let me do some speculating here as to why cellulosic ethanol producers are asking for more government support.  My guess would be that collecting dead wood and grass clippings and what not and hauling them to processing plant and producing cellulosic ethanol and then hauling it to refiners is consuming more energy than the cellulosic ethanol contains. Why would our benevolent government be a party to such nonsense? In part it is because our benevolent government has since the days of Bill Clinton bought into the global warming scam. I would also speculate that some powerful people in our benevolent government want to help their friend and/or themselves to get very rich off of some of these schemes (Think Al Gore and George Soros). Do yo really think people like John Kerry and his rich French cousin are pushing so hard for America to buy into the UN’s Rio +20 agenda because they are so concerned about the world’s environment or is it that they have plans to become even richer at your expense? Then maybe I am a cynic and paranoid.

Well, that’s what I’m thinking.  What are your thoughts?

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26 thoughts on “Cellulosic Ethanol, The Phantom Fuel

  1. During the morning’s commute I saw some graffiti that said: “Global warming is happening: talk about it.”

    Heresies do die hard. Hopefully one day our benevolent government will be truly benevolent and stay the hell out of things it has no business sticking its nose in.

  2. I did not know such a terrible rule existed!

    I looked and found Rule 40 CFR 80.1456 under the clear air act:
    http://www.gpo.gov/fdsys/pkg/CFR-2011-title40-vol16/pdf/CFR-2011-title40-vol16-sec80-1456.pdf

    This rules describes, in detail, how much it costs affected produces for “cellulosic biofueld waiver credits”… $0.25 in 2008 dollars per waiver credit OR “$3.00 less the wholesale price of gasoline per cellulosic biofuel credit waiver”… whichever is greater.

    The most recent online report of the number of cellulosic biofuel waivers purchased is 12,186 for 2010:
    http://www.epa.gov/otaq/fuels/rfsdata/rfs2cellulosicwaivercredits.htm

    The EPA still dutifully reports that even in 2012 that ZERO gallons of cellulosic biofuels have been produced:
    http://www.epa.gov/otaq/fuels/rfsdata/2012emts.htm

  3. I would laugh if this were happening in another country but it’s happening here where the greatest minds and the greatest fools co-exist.
    When will the government just GET OUT OF PROPPING UP AND DESTROYING INDUSTRIES? AND THEN HAVING THE AUDACITY TO OVER-REGULATE THEM AFTER THEY’VE MUCKIED THEM UP?

  4. Indeed, Freedom, America is the place “where the greatest minds and the greatest fools co-exist”, and all the “greatest fools” are in government.

  5. They want us out of our cars and into their grid. All this is manipulation from on high and their may be many angles. One thing I’ve learned is that these Elites use their crisis like the Indian used their buffalo. They don’t waste any of the parts.

  6. Technologies that are not developed or mature cannot be pushed into fruition just by throwing money at them. Some people try to compare the government’s venture into the alternative fuel market to the Manhattan Project, a war time project of such importance that all the resources that could be thrown at the project, were, without regard to the cost.

    In the Manhattan Project the scientists at least had the equations figured out on nuclear bombs, and had alternative plans on how to get to the goal of building them. The payoff was that we won the war. You can argue about the morality nuclear weapons, but there was a payoff.

    Trying to force the evolution of technology with government money has never had a good track record. The fact is that if private companies are not developing a technology, there is a reason. That reason is usually because the science is not there, nor is the economics.

    The Obama crowd believes they can jump start and and force feed markets. That is dumb. It was also stupid for Secretary Chu to think he could force the solar panel market, and make his favorite company profitable, i.e, Solyndra.

    George W Bush was really dumb with the cellulose ethanol and the hydrogen car programs. Until the basic science is done, they are doomed to failure, and we have been doomed to lose more billions of dollars. It is within the competence of government to use taxpayers money as risk capital. They don’t know what they are doing.

  7. I just saw this story on the news earlier today. Just when one thinks they’ve heard it all, the government surprises us with this insanity. It seems as if every other day there is a news story like this. You simply cannot make this stuff up. Thank you for sharing!

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