NGV’s: an ‘ethanol’-like boondoggle?

by A Siegel | 4:45 pm October 21st, 2010 | 15 Comments »

Despite all the green washing out there (and there is lots of it, lets be clear), corn-based ethanol is far from a panacea in terms of reducing America’s dependence on imported oil, dependency on fossil fuels, reducing greenhouse gases and representing a good investment for the taxpayer. While supporting corn ethanol is, it seems, great politics to get through the Iowa primary, independent study after independent study shows that it is not a good deal for the taxpayer, the economy, and the environment. The absolute ‘best’ case, from honest analysis, is that this is a very costly and inefficient path for very marginal reductions in fossil-foolish dependencies and minimal greenhouse-gas emission reductions. Other analysts come out with the conclusion that we actually lose ground in GHG emissions in returns for the $billions being pumped into corn ethanol.

Right now, we seem to be watching (in slow motion?) a headlong rush into another “ethanol”-like boondoggle driven, in no small part, by the $70 million or so that T Boone Pickens has put behind promotion of The Pickens’ Plan.

There are ‘bipartisan’ bills in both the House and Senate promoting various paths for incentivizing natural gas vehicles (NGVs) with quite significant resources behind them. These planned expenditures of $10s of billions seem to be moving forward with essentially zero independent analysis of their viability, GHG implications, and, perhaps even more importantly, any comparative analysis of the cost-effectiveness of a mass program for subsidizing natural gas in (for example, the trucking industry) versus the costs of other options for carving away at America’s oil addiction.

One simple question to ask, how much would it cost the nation for every barrel reduction in daily oil demand? If we price that oil at $100 barrel, every oil of reduced demand equals $36,500 per year in reduced imports. In pure dollar terms, for example, a preliminary analysis shows that it would cost:

$75,000 of cost to taxpayers per barrel cut from daily oil demand via Natural Gas for Truck Transport. This does not, however, include the additional costs for the natural gas to move the trucks (which Congressional action would subsidize) nor the additional costs of refueling infrastructure (which the Congressional action would subsidize) nor does it account for the additional cost of natural gas for other uses (such as heating our homes) nor does it account for the pollution impacts of drilling and natural gas burning
$36,000 cost to taxpayers per barrel/day cut from oil via electrification of rail without counting the cost of the electricity but also not counting many other benefits (such as safer highways, reduced maintenance costs on highways, reduced pollution…)
$10,000 cost to taxpayers per barrel cut from daily oil deman with the installation of feedback systems in cars with considerable other benefits including safer roads.

And, there are many — many — more options out there that would likely be more effective on cost, energy, and environmental terms. We should understand this field of options before leaping ahead with $billions or $10s of billions or even $100s of billions of subsidies.

In the face of Republican opposition to comprehending reality amid the hottest year in recorded history, Senator Harry Reid has declared that the Senate Democrats will back off from pursuing climate legislation in 2010:

“We have a responsibility – both to our constituents and our children – to take on America’s energy challenge. Many of us want to do that through a comprehensive bill that creates jobs, breaks our addiction to oil and curbs pollution. Unfortunately, at this time not one Republican wants to join us in achieving this goal. That isn’t just disappointing. It’s dangerous.

Thus, a much more limited energy bill will move forward. Sadly, one of those components looks to be inclusion of subsidizing a fossil-foolish subsidy for natural gas transportation:

our country is blessed with abundant resources and we must tap into those. That is why we will invest in the manufacturing of natural gas vehicles.

Here is a question for Senator Reid:

You have closely aligned yourself with “your friend, T Boone Pickens” and are promoting his desire for large government investment for expanding natural gas transportation. Have you had any independent organization do an analysis of the life-cycle greenhouse gas emissions of such a NGV program? If so, will you release it? If not, why not? And, associated, have you had an analysis done of the cost effectiveness for the taxpayer of such a program compared to other options for reducing our oil dependency?

I know of no such analysis re total GHG nor of the relative costs to the taxpayers of various options. My calculations suggest that a massive investment in natural gas vehicles would be a pretty bad deal for the planet and the taxpayer. On this, see CAP’s American Fuel: Contaminated on so many levels.

Note: Not to mention the environmental impacts of natural gas production. See FRACK YOU! Mother Earth!.

Note: Hat tip to Patriot News Daily Clearinghouse about Senator Reid’s announcement.

15 Responses to “NGV’s: an ‘ethanol’-like boondoggle?”

On July 26th, 2010 at 6:07 pm MPGomatic Said:
You wrote, “there are many — many — more options out there that would likely be more effective on cost, energy, and environmental terms.”

What can we run in our trucks and buses right now that fills that bill?

BTW, your “feedback systems in cars” link is broken.
On July 26th, 2010 at 6:14 pm A Siegel Said:
Okay:

1. Feedback: http://getenergysmartnow.com/2008/12/08/feedback-systems-key-to-a-better-energy-future/ is an example of discussion.

2. Point is overall systems of systems — where do we invest as a society? Not a ‘trucks and buses’ specific point. If we have $5 billion to spend, where can we spend it wisely to reduce oil demand and cut emissions.

3. There are hybridization options that are more cost effective at reducing CO2 for trucks & buses. They can be electric, hydraulic, otherwise …

4. Plug-In Hybrid Electric Buses are already proved … and work well. See: http://getenergysmartnow.com/2008/12/16/plugging-in-for-a-better-tomorrow-the-school-bus-solution/

Etc …
On July 26th, 2010 at 7:14 pm MPGomatic Said:
Ah, but what is the cost of the batteries? Is the electricity generated by burning coal?

Are you proposing to hybridize long-distance 18-wheelers?

We can replace ALL the oil burned in those vehicles with CNG and various forms of biodiesel. A hybrid still burns oil. CNG burns much more cleanly. We have an abundance of it.

Then, of course, it’s a question of where the excess ULSD fuel will go …
On July 26th, 2010 at 7:36 pm A Siegel Said:
Actually …

(A) Again, it is the overall system implications and system options. What is the best use of the tax dollars a reasonable set of standards. For example:

In this case, ROI could be judged in:

1. # of barrels of oil imports/demand reduced per $invested. (Or, how much does it cost to cut demand by 1 barrel/oil/day.) On these terms, the NGV subsidy doesn’t look good.

2. Creation of jobs per $invested. Again, NGV subsidy looks worse compared to other options.

3. Reduction of CO2 emissions per $invested (or cost per ton of reduced emissions). Again, NGV subsidy looks bad compared to other investment options.

4. Durability (sustainability over time) of the infrastructure investment. Again, NGV looks poor compared to other non-oil options.

5. Reduction of pollution in cities/neighborhoods/areas with much diesel truck traffic. Here is the one area where the NGV option has a pay-off … but so does (for example) moving toward various hybrid vehicle options for trucks/etc that would have higher reduction in oil demand & ghg emissions per $invested.

(B) Electrifying rail provides a path for reducing (significantly) long-haul trucking.

(C) RE “burns much more cleanly” — natural gas is not “clean”, it is less dirty than oil.

(D) “we have an abundance of it” is an issue that depends on continued fracking and relies on assumptions of continuing to burn it at today’s usage. Put a significant portion of transportation onto this fuel supply, and the equation shifts.

(E) Why not engage in the discussion that I put forward — that this is a costly way to support the objective of reducing US oil demand?
3. Have you looked at the improved fuel efficiency options for long-haul trucking … as discussed in, for example, Winning the Oil End Game?
On July 26th, 2010 at 8:17 pm MPGomatic Said:
You do realize how easy it is to convert certain vehicles to CNG? And how abundant and cheap it is in certain parts of the country?
On July 26th, 2010 at 8:25 pm A Siegel Said:
1. The #s that I used to support the calculations come from NGV proponents.
2. It is easy to convert and, yes, it can be lower cost to drive the vehicle. This does not mean that the USG should subsidize it — the calculations haven’t been done as to the value to the taxpaer.
3. Something that I wrote elsewhere:

To be clear, natural gas has a role in the nation’s energy future, to help speed a move toward a lower carbon economy and as part of the transition to a truly clean energy system. NG can even have a role in transportation, with some interesting options as with the PHENGSB (Plug-In-Hybrid Electric Natural School Bus). The issue is the greenwashing throwing of $billions at NG vehicles when far better options exist — already in hand — to reduce our oil addiction and cut our carbon emissions.

By the way, “you do realize” that it seems that you are changing the conversation with each post — why not address the questions above?
On July 26th, 2010 at 8:36 pm MPGomatic Said:
My apologies that the conversation has not followed your agenda.

School buses should run on Domestic Biodiesel or CNG. How much does it cost to put a battery pack into a bus? Do you have some hard numbers on that? I’d reckon that the cost would be astronomical.

Don’t get me wrong. I like electric vehicles (a lot). They will have their place … eventually … if not too late … if Americans will buy them, without massive subsidies …
On July 27th, 2010 at 12:54 am A Siegel Said:
The PHESBs, last I looked (awhile ago), were about $200k / each built by PhDs … order of 100 brings them into production and into the range of $130k. At that price, they end up being cost neutral with diesel buses at about 7 years at $2 gallon gas. Buses are run for 17 years. And, there are other benefits.
On July 27th, 2010 at 12:58 am MPGomatic Said:
Perhaps. Perhaps not. They still burn petroleum.
On July 27th, 2010 at 1:05 am A Siegel Said:
Certainly can burn biodiesel.

Why not, by the way, GPM rather than MPG in your username?
On September 13th, 2010 at 4:24 pm jerry dycus Said:
It’s apparently your writing style which doesn’t convey your points well that is the problem. One must write in context with enough info and reason so people know what you are talking about. Now you’ve explained some of it we actually agree on most things. And people don’t have time to click the links. You should explain it in your post.

First the problem is too much subsidies but mostly for oil, coal. If those real costs were in them them none of the other subsidies would be needed and the problems would solve themselves. That is where your argument should be..

But taken without possible future subsidies, NG clearly has a place in our future both as a transport and powerplant fuel. Ng costs no more in new vehicles than diesels do. It’s far cleaner and has less carbon footprint than diesel.

Even if RR are electrified which I support, that is going to cost a lot, likely a lot more than NG stations. But RR don’t go everywhere or quickly so trucks will always be needed for at least the rail to customer delivery. NG is a good choice for that.

Your misinformed diatribe on ethanol shows a lack of understanding energy costs as I explained. You must look at the full system including the other products and share any energy inputs with them. Since it’s a higher quality animal feed after making the ethanol, then the ethanol has little input energy costs.

So try to write better if you want others to learn from you and do better research so not to mislead them.

Please explain your $75k NG numbers as they just don’t make sense?

The $10k to cut 1bbl/day does save taxpayers a lot of money from imported oil costs, pollution damage among other benefits but waiting for how you got those numbers too.

I’m fairly smart and I can’t figure them out, how are others suppose too?
On September 13th, 2010 at 5:14 pm A Siegel Said:
Jerry

1. Appreciate the writing tips.

2. We are going to disagree on ethanol and the total value streams relative to the inputs. If you wish, provide documentation but there are many costs (the NG fertilizer, the top soil, the downstream pollution, etc …) that go on top of the heavy per gallon subsidies that make this a quite questionable investment in my — and, well, many others’ — opinion.

3. Have you ever looked at Oil End Game? This lays out pays to make trucks more energy efficient in ways that would save more CO2 than the NGV option.

4. Re the numbers for natural gas, hit the CAP link in the diary. This has the material from the Congressional language (as of a few months ago) which lays out the tax/other subsidies that are being proposed.

5. Re not hitting links — that is the version of footnotes. With 1000s of posts translating to million+ words, I am sorry — not ever diary/not every post can have every number. This is sourced work, the links are the traceable footnotes. The numbers that you can’t figure out are traceable via those links if you would chose to follow them. In any event, quoted from here:

Real-time feedback systems

For roughly $50 per vehicle, every single light-passenger vehicle in the United States could be fitted with a real-time feedback system: miles per gallon, cost per mile, or other feedback information directly on the dashboard. “The Prius Effect”, the impact of that real-time feedback, is said to be in the range of a 10 percent gain in fuel efficiency. At $50 per vehicle, equipping 200,000,000 light passenger vehicles and small trucks would cost $10 billion. For that $10 billion, which likely could be implement within 18 months or less, the US fuel demand would drop by over 1 million barrels per day. (And, by the way, have reduced traffic accidents and fatalities due to better driving habits developed in response to the feedback.) This path offers a reduction of daily oil imports at the cost of $10,000 per barrel (without those natural gas costs and, of course, without considering the other values offered, such as reduced pollution and improved safety).

Emphasizing proper air inflation, clean air filters, and proper oil when oil is changed could, by the way, provide another 10 percent gain in fuel efficiency … at nearly no cost.

Electrification of the rail system

For about $80 billion, the United States could electrify and improve the nation-wide rail system (and provide potential power corridors for Pickens’ wind power). Electrification of rail would basically eliminate the 250,000 barrels/day used by diesel-powered locomotives. Electrification, alone, would increase rail capacity by about 15 percent due to improved acceleration/deceleration, but this $80 billion would buy improvements as well. The improved capacity would enable shifting more cargo (back) onto the rails, with a reasonable estimate of at total of 2.5 million barrels/day in displaced oil use total.

Thus, in addition to reducing oil imports, electrification of rail has other benefits for the economy and environment.

$80 billion for 2.5 million barrels/day in reduced oil imports is $36,000 per barrel/day of reduced demand.

Above are just two (of many, many) examples of how to cut US oil demand at lower cost and with higher benefit than the snake oil that T Boone is attempting to sell the nation.

Clearly, we should not be, writ large, in an ‘either/or’ situation in trying to solve our energy and environmental problems. There is no single Silver Bullet. But, The Pickens Plan is no Silver BB but more an alluring poison pill with questionable empahsis on pushing natural gas toward lower efficiency uses, leaving coal out of the equation, and placing massive amounts of resources into moving transportation from one fossil foolish addiction to another. This quick analysis provides just one more angle to understanding that T Boone is seeking to sell something that we just shouldn’t buy.

In summary,

* T Boone: $75k per barrel cut from daily oil demand + additional costs for natural gas
* Feedback systems in cars: $10k per barrel cut from daily oil demand w/other benefits
* Electrification of rail: $36k per barrel/day cut from oil use w/other benefits

Where would should we put our dollars?
On September 13th, 2010 at 6:35 pm MPGomatic Said:
@A Siegel – The problem with “Real-time feedback systems” is that it is completely up to the driver to use the instantaneous fuel economy data. A considerable number of new vehicles come with instant MPG displays these days. But how many folks actually use those displays to get better mileage? There is no magic band aid.
On September 13th, 2010 at 8:05 pm jerry dycus Said:
Rather than ranting about Pickens plan and using strange numbers, just say how best to do it.

Where should we put tax $? No where!! Just tax oil, coal to pay their full, true cost which will about double their cost and everything else will fall into place. Then rebate the money back in a monthly check to every household, about $300 for them to buy more eff vehicles, insulate, etc their homes, etc. It subsidies to oil, coal that got us into this mess, subsidies is not how to get out of it. Stop them all and corporate welfare and eff energy use will follow.

Not only will this reduce oil, coal use but stimulate the economy at no cost.

I don’t understand how using less is suppose to cost more? All it takes is less materials and more eff use of them. It’s design, not higher costs as my 250 and 600mpg equivalent EV’s show.

There is no reason a home can’t be eff and make it’s own and it’s EV’s power for less than homes cost now. Again it’s just good design, not more expense.

As for trucks, they can be made for 3x’s the eff by using say a 300hp EV drive, 20 miles of battery, a 100hp NG motor and a 50hp waste heat generator plus lightweighting, aero.

All trucking, train can be cut by 50% because buying higher quality things that last decades means fewer freight is needed. Growing food closer to people and raising animals on grass rather than grain and switching to buffalo, deer, elk, etc supplies meat while letting the land return back to natural.

The gov should issue bonds and take over the tracks, make them all double/2way and electrify them, then charge for mileage to pay off the bonds, maintaining them. The present 1 way patch work of RR is ineff, slow. Then you would have many national lines instead of the ineff regional patchwork we have now.

RE is simple, inexpensive machines in home sizes costing under $2k/kw for wind, solar PV or CSP, CHP, tidal/river kinetic hydro. PV is now under $2/wt retail and $1.30 wholesale. All these are cheaper than coal, nukes, etc in home, building sizes with the retail price customers pay for electricity giving them a 3x’s advantage. Just need a national net metering and allow anyone to sell electricity to make it work.

But none of this need to cost the gov, taxpayers anything if the true cost of oil, coal is in them. The only thing needed is possibly loans but the gov can even make money on them, so no net costs.

The Winning the Oil end game was right in making more eff, lightweight vehicles, best by far electric. But it is wrong about celulosic ethanol, H2, fuelcells are not viable, just hype. Ethanol as I showed is the least cost biofuel, $1/gal without subsidies, with FT biomass process to turn waste biomass into HC’s or your choice.

So stop ranting about Pickens and start making oil, coal pay their full cost in as tax and rebate
system, a few law changes and the rest will happen naturally.
On September 13th, 2010 at 8:39 pm A Siegel Said:
Couple things:

1. We are actually much closer to agreement.

2. Re “rant on Pickens”, likely have done perhaps 10 times. 10 of 1000+ posts. Pickens has serious voice and serious access in Congress. If people don’t highlight issues with his proposals, they move forward with even greater ease. (And, well, they are too close to being enacted as is.)

3. Re PV/etc prices, need to focus on installed costs rather than the basic panel. Before tax credit/such, retail price for installed in my area ranges from about $5-7+ per watt.

4. Absolute agreement that we should make the true costs of fossil fuels (all fuels/energy?) apparent in / part of the direct transaction rather than putting the burdens into our lungs/etc. Have discussed / written on this a bunch. (For example, Global Warming Impact Fee.)

5. I don’t support a 100% rebate but a partial rebate — perhaps 50%, such that if you pollute less than average in nation, you ‘earn’ money. Would use that other ‘half’ to be funding energy R&D, some deployment, climate mitigation, and climate adaptation. Would be good to have a steady cash stream.

6. RMI/et al have certainly moved toward electrification of transportation/cars, away from hydrogen, since publishing Winning the Oil End Game. Don’t know where they are on cellulosic ethanol now.

7. Well, real questions as to what is ‘full’ cost — doubling is probably not an accurate figure. Some place gasoline’s true cost in the $16/gallon level and the ‘true cost’ of a kWh of coal electricity is likely several times higher than the price from a grandfathered old plant burning cheap coal.

8. If you’ve “shown” re ethanol, please provide links/such to the material that proves your argument about relative costs.

9, On the technology side, basically in full agreement on rail. Not sure on financing/gov’t ownership. (Not for or against, have thoughts both ways.)