Ethanol, Misunderstood and Underused | RefinerLink
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Ethanol, Misunderstood and Underused

By Simon Jacques

May 24, 2015
 

An alternative perspective on the value and uses of ethanol fuel.

 
 

Corn-ethanol is the world’s lowest cost liquid transportation fuel.

 

China imports U.S. ethanol, and so do other oil producing countries like UAE and Saudi Arabia. The United States will export 1 billion gallons of ethanol to foreign countries, primarily driven by the fact that ethanol is the cheapest octane molecule on the planet.

 

One comparison between sugarcane ethanol and corn-based ethanol we often hear is how Brazilian sugarcane is more efficient and has higher yield per hectare. This assessment is always misconstrued and inaccurate.

 

Typical comparisons incorrectly calculate average corn yield per acre of total land in the U.S.  to determine efficiency. As Alabama, Georgia, and other peripheral states do not yields as much corn as the U.S. Midwest, they have limited corn crops, thus should not be factored in the calculation.

 



If you solely compute yield per acre in the “corn belt”, typically American ethanol produced per acre or hectare greatly surpasses Brazil.

 

Another factor not properly considered in the ethanol discussion is octane. Corn ethanol is roughly 115 octane, which compares favorably to the nasty big oil components of reformate, benzene, toluene, and the such.

 

As Corporate Average Fuel Efficiency (CAFE) standards ramp up, and consumer desires for greater horsepower from smaller engines continue to grow, the only way to meet expectations is to increase gasoline octane values.

 

This suggests that within our lifetime we will probably see the average motor gasoline octane increase from 87, to 91 and beyond as we design smaller engines. This strengthens the need for high octane ethanol.

 

Lastly, let’s debunk the greatest misconception out there. Ethanol is not starving the world!

 

On the contrary, mill ethanol production produces food because the process uses only the starch portion of the corn, which is about 70% of the kernel.

 

All the remaining nutrients – protein, fat, minerals, and vitamins – are concentrated into distillers grain, which is turned into a valuable feed for livestock (i.e. food). One corn bushel is 56 pounds and will produce at least 2.8 gallons of ethanol and 17 pounds of distillers grain.

 

Ethanol produces food despite the media’s false divergent hype!

 

Ethanol is the cheapest Octane Molecule on Planet Earth, which plays very well for corn-based ethanol in the future. Ethanol is a green fuel that is underutilized and not well understood by our Governments.

 

As we increase awareness of the general public, society should increasingly find value in the benefits of corn-based ethanol.



To see more from the Trade, Shipping and Finance Wizard visit: 

http://jacquessimon506.wordpress.com/

 

 
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  • Ron Lutz :   If ethanol is the cheapest highest octane material, then we should not have to regulate its use. Allow the market place to work.

    Jun 01, 2015

  • Simon jacques :   It is a valid comment made by Ron. IF I may nuanced "allow the market place to work". Energy Markets are hugely regulated because of externalities such Pollution. The Environmental Protection Agency (EPA) has established a compliance mechanism for the Renewable Fuel Standard (RFS) in which Refiners/Blenders can comply to this regulation by either purchasing Ethanol or Ethanol Credits. I suggest to read about these RINS http://www.refinerlink.com/blog/High_RIN_Prices_Support_Ethanol_Blending The value of these RINS credits can be higher or lower during RFS target announcements or impending compliance deadlines. Best Regards, Simon

    Jun 06, 2015

  • Justus Hendrickson :   I guess I am on the side that involves not putting food in your gas tank....

    Jun 07, 2015

  • Dan O'Connor :   The debate here should focus on one simple fact I rarely see discussed: energy in versus energy out. I have an old article that I can find the name of the author ( if you'd like) that is called "The Corn is not Green" (it was written by a Canadian journalist a number of years ago - and very well written). I don't want to hear about yield, I don't want to hear about cost (which doesn't reflect reality because of gov't subsidies). From everything I've seen at best energy in (total energy consumed producing the ethanol) is very close to the energy out (total energy in the ethanol produced). In some cases the energy input may be greater than the energy produced in the final ethanol product. The fact that it's close means it's not a solution to any of our energy problems and it invalidates all of the arguments made in the paper you attached. It doesn't make sense to spend 1 BTU of energy from any fuel source to produce about 1 BTU of ethanol unless the ethanol has some higher value use than fuel value - which it doesn't if used as fuel. Please show me an article that thoughtfully considers the fuels burned in farming process, energy related to fertilizer production and distribution on the land, and energy in the downstream ethanol processing versus the energy captured in the ethanol product. I'm not against progress, and I support our farmers, but I am against the government funding something that can't stand on its own because the economics can't justify it. Is there something here I'm missing?

    Jun 07, 2015

  • Simon Jacques :   The Corn-Ethanol process extract only the starch portion of the grain. The By-Products part of this process is called distillers grain, which is turned into a valuable feed for livestock (i.e. food), so no Justus we do not divert food into the gas tank. It was a point that I have adressed in this article. Regards, Simon

    Jun 07, 2015

  • Simon Jacques :   Remember this article is about the Economics Fundamentals of Ethanol Blending in 2015. Ron I will try to formulate you a great answer about what you read in opinions/comments on the internet. Mostly, I feel that these BTUs comparisons of Ethanol (E100) with other energies are skewed, E100 always made to look more unfavorable than it should. I had a mentor a long time ago (he is now doing investments in Midstream/Refining ) who taught me "if you torture the data long enough, you can get it to tell you anything you want" so whatever your argument is, the data for these E100 things is so sloppy that you can get it to say whatever you'd like. Fertilizing, tilling, spraying, combining the crop, trucking and deliver it to the Grain Elevator are a required energy footprint component in the food production process. It is difficult for me to see how Ethanol could add up to Corn energy footprint, corn acreage is the same since WW2, has not expanded. Also in your energy footprint calculus, ethanol is a storable liquid-transportation fuel. something never mentioned in the opinions/medias. Storability means low carry costs, low transportation costs, low losses, unlike some energy commodities (electricity which is expansive to store, transport with too many congestion losses). Even Natural Gas, per BTU basis to the end user is expansive. Regards, Simon

    Jun 07, 2015

  • Paul Bryan :   Corn ethanol has a positive energy balance and a net GHG reduction compared to petroleum-based gasoline -- the few "studies" that say otherwise are skewed, subjective, and more often than not, from a handful of ethanol-haters (Pimentel, Patzak, et al.) who are essentially ignored by anyone attempting to perform a scientifically valid, objective analysis. At the same time, the RFA, Corn Growers, et al., also sponsor studies that reach equally ridiculous conclusions on the favorable side. The money spent on both sides and driven entirely by self-interest makes it hard to get a true picture. Bottom line: Corn ethanol provides a modest net energy savings and a modest GHG reduction, and a significant net reduction in use of LIQUID fossil fuels. Cane ethanol is superior across the board, and cellulosic biofuels are POTENTIALLY even better, but they are nowhere near economical today, especially in the absence of a realistic penalty for GHG emissions.

    Jun 08, 2015

  • Paul Bryan :   Ethanol DOES put food in the gas tank. Yes, DDGS is a fine animal feed, but the calories that came from the starch HAVE been converted to ethanol, not food. Here again, the anti-ethanol crowd has greatly exaggerated this issue, especially at current volumes, where food prices are only modestly affected by diversion of corn / cropland to fuel vs. food. On the other hand, the corn ethanol crowd does not like to acknowledge the globally insignificant contribution of ethanol at current volumes (well under 5% net crude oil displacement globally). If we tried to increase ethanol production from corn to a truly significant global level, food supplies WOULD be SERIOUSLY impacted. Crop yields go up every year, and as long as they do (relative to world population), we can modestly increase crop diversion to fuel without disrupting the fuel supply. But the rapid ramp-ups supported by the corn lobby (E10 to E15 today, then to E20 tomorrow, then to E30 and E85 soon after) is NOT sustainable, and would be good only for corn growers and ethanol producers.

    Jun 08, 2015

  • Simon Jacques :   Ethanol, Misunderstood and Underused, and.... abused http://energypolicy.columbia.edu/events-calendar/future-renewable-fuel-standard# For a Serious discussion on the future of ethanol and the RFS.

    Jun 09, 2015

  • TimC :   I'm disappointed that the author did not address the production of ethanol from fossil feedstocks. Using thermocatalytic processes, e.g. Celanese TCX, ethanol can be produced from natural gas or coal, without using any crops, without any NPK fertilizer consumption or runoff, without diverting any croplands away from food production, and with about 10% as much water usage. Why then are we producing ethanol from either corn or cane? If we have decided that ethanol is our oxygenate of choice for RBOB blending, why aren't we producing it from cheap, abundant, domestic natural gas?

    Jun 09, 2015

  • Simon Jacques :   Celanese, it is actually a very smart idea, transforming natural gas into ethanol to blend, better store it and burn it. thanks for your comment.

    Jun 11, 2015

  • Paul Bryan :   Methane is NOT easy to convert into ethanol, or into ANYTHING containing more than one carbon atom. It can be done, but if it was economical, there would be many TCF of stranded gas being converted to liquids today. Ethane, sure, but ethane is generally too valuable for other uses to be made into fuel. Beyond that, making ethanol from natural gas does not address the problems of fossil carbon emissions. Corn, cane, and cellulose all help reduce fossil GHG emissions to one extent or another. The best methane can claim is: "It's better than coal!"

    Jun 17, 2015

  • Rick Manner :   The net energy balance for corn ethanol is not good and it has a significant RVP issue but it certainly makes octane blending a whole lot easier. Most refiners probably would not use it if it wasn't forced upon them.

    Jul 16, 2015

  • Nelmo Fernandes :   The question of the use of ethanol mixed with gasoline is quite interesting. First there are always environmental issues, that is often considered with little technical analysis and with an ideological way. An interesting question is the case of Brazil where ethanol was in the past used in engines 100% ethanol and currently in flex cars (where you can mix various formulations of ethanol and gasoline). In our case, with the reduction of the sulfur content in gasoline and the mandatory ethanol blend we face an increased final value of octane. With the blend of hydrotreated naphtha and ethanol (27% by law in Brasil) we produce a fuel with higher octane number. Anyway, the local historical, social and industrial context is a determining factor of the beneficial effects, or not, in the refining industry.

    Jul 16, 2015

  • Mark Edwards :   Have socialist policies ever been reversed once implemented? That would mean admitting there were mistakes made. The socialists made a mistake once, but most of the time when they discuss it, then they contend that they were wrong, it turns out that even when they make a mistake things actually turn out all the better for it as some kind of bizarre accident. Me, I prefer to make my decisions based on 1) Proper Philosophical Reasoning, and 2) If you can calculate something, then calculate it, don't just skip it and argue based on errors in 1) above. I have never seen someone submit the calculations on Ethanol. Maybe someone has, but I have not seen them.

    Jul 16, 2015

  • Robert kent :   I would suggest keeping the true biofuels requirements (celluosic, etc) because they could be game-changers, but dropping corn based ethanol as food groups agree it raises food prices which is very anti-progressive, worse for the environment per the EPA, and disliked by most consumers, and it raises gasoline and diesel prices by 6+ cpg for no apparent reason other than raising the price of corn. Allow ethanol into gasoline, but do not require it. Give consumers a choice.

    Jul 16, 2015

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