A bitter setback for sugarcane ethanol
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You’d think that Obama’s stimulus package would be a potential bonanza for companies producing almost any type of renewable energy. Not so. Turns out businesses making ethanol from sugarcane are out of luck.
That’s been the experience of one impressive two-year-old California-based startup, California Ethanol & Power. Using technology borrowed from Brazil, they’re growing sugarcane in the Imperial Valley to make fuel-grade ethanol.
They’ve raised about $6 million so far from friends and family, according to COO David Rubenstein, and are trying to accumulate another $8 million. But, while the company seems like a perfect candidate for receiving stimulus money, Rubenstein says he’s having a hard time fitting into the government’s official categories for renewable energy. The product isn’t considered corn ethanol, of course, nor does it fit the definition of cullolosic ethanol. “We’re stuck in the middle,” Rubenstein said to me. That’s despite the fact that sugarcane ethanol is considered to be an advanced biofuel, because it will have a greater than 50% reduction in GHG emissions as compared to gasoline (the federal renewable fuel standard).
It’s a shame. The company, which is now applying for a permit to build its first plant, has an ambitious and promising plan. First, it will turn most of the sugarcane into ethanol. Plus, the leftover mass of shredded stalks will be combusted to create steam that can then be used to generate electricity. Organic matter, called vinasse, will be cleaned up to produce marketable biomethane. Inorganic compounds in the nutrient-rich vinasse can be used as fertilizer feedstock. In total, they’d produce 66 million gallons of ethanol a year and 49.9 meg. of electricity, some of which they’d sell to the California grid. That may not sound like a lot, but it’s only the beginning. They plan to open four more facilities.
They also have a pretty smart arrangement with the families who own the land the company is using. Working with a group of five farmers, they plan to increase the number of acres for growing sugarcane to 44,000 acres by 2011, from 500 today. It’s a good deal for the farmers, who are getting paid for the use of their land and reimbursed for any costs. And CE&P takes care of the harvesting.
Ironically, the company is growing 17 varieties of sugarcane to see whether any of them might require less water, fertilizer and pesticide than the current crop–and they’re doing it in a USDA-owned greenhouse. So, not only are they not eligible for government money. They’re paying the feds for using their greenhouse.
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From what I can determine the evapotranspiration of sugarcane in the Imperial Valley would be nothing less than 40 inches of water a year. Sugarcane in a SW USA starving for water! Please, NO!
Sugarcane ethanol (about 90 cents/gallon to produce compared to today’s current wholesale price gasoline of $1.90) is a success in Brazil due to an abundance of water, sunlight and cheap labor not to be found anywhere in the US. Even there, sugarcane ethanol spells doom for huge tracts of tropical rainforest and savanna, as if the pressures from the beef and timber industries weren’t enough.
I’ve heard Energy Secretary Chu speak and revisited his powerpoint on biofuels and what he supports/indicates is GMO-microbial production of hydrocarbons from (non-irrigated) switchgrass grown on US-government fallowed land, primarily for use as airline fuel as airplanes need an energy-dense fuel due to weight consideration.
This is a long way– a very, very long way in every possible way– from sugarcane ethanol in the Imperial Valley to fuel our SUVs.
The cane California Ethanol & Power, LLC is growing will not use any more water than what has been used to grow the various field grasses our cane is replacing in the Imperial Valley. Our sugarcane will replace field crops such as sudangrass and alfalfa, which are used primarily for animal feed and, in many cases, are exported to other countries. The local farmers welcome this opportunity for an alternative, sustainable crop that will result in a stable revenue stream.
In fact, we are meeting with long time cane farmers and water experts today in the Imperial Valley to discuss ways to be even more water efficient. And, the Imperial Irrigation District is pursuing a number of initiatives on water conservation, innovative efficiency measures, and progressive management tools as one of their overall goals of protecting the economic well-being of the Valley and CE+P will work with them to insure we are as water-wise as we can be. Furthermore, our company will also recycle the water that is inside the cane after being harvested. That recycled water alleviates the need to use fresh city water used within the production facility.
In Brazil, the majority of sugarcane is being grown in the south and south central regions of the country. Cane is not able to grow in the climate of rain forests so it is false information when one says that the rain forest will be chopped down to grow sugarcane. Sugarcane has been successfully grown in California’s Imperial Valley for decades – and we continue to do so successfully. The soil, availability of irrigation water, the dry climate, and intense sunlight means the sugarcane can be planted and harvested year round. Our results are showing that the Imperial Valley may be one of the best sugarcane growing regions in the world based on tons and sugar produced per acre.
We are in agreement that someday a way of making ethanol from switch grass and other plant material could be ideal. In fact, once that process is developed and made commercial, our project would be ideal to convert the cane tops and excess mass into an additional multimillion gallons of fuel. However, for switch grass, one issue that fails to be addressed is the harvesting of grass from unusable land and the collecting of forest waste. What is the cost and environmental impact attributed to those areas to harvest the material and then transport it to a facility to make the ethanol? What would the yield of fuel be for each acre collected? At this point, a process has yet to be developed, whereas sugarcane-to ethanol and electricity is a proven low-carbon, sustainable solution.
In our case, we think we have the best “next generation” of fuel and we would be capable of processing more renewable fuel per acre than any other type of commercially proven technology. We would create in excess of 12 units of energy for every unit of energy that was used to produce it. One can always find fault with any ambitious alternative fuel plan, but if we don’t pursue something (and in our case, a proven technology) the only alternative is to stay the course we have been on for years – using fossil fuel – and to simply wait and hope that someday the magic bullet will be found.
In response to another comment. See in context »I guess I’d say that, while there are pro’s and con’s to sugarcane ethanol, there is enough potential that companies in that business should be included in federal sustainable energy funding.
I note that sugarcaneenergy’s response does not include actual estimates of water usage. Here’s an official study that puts the level at between 70-80 inches of water a year, all but 3 inches of which will come from the Colorado River, so overexploited that it doesn’t flow to the sea anymore. As TS doesn’t print links, please google the study, I note that sugarcaneenergy’s response does not include actual estimates of water usage. Here’s an official study that puts the level at between 70-80 inches of water a year, all but 3 inches of which will come from the Colorado River, so overexploited that it doesn’t flow to the sea anymore. Google the study: bali guerrero sugar cane
The argument of replacing one incredibly wasteful practice, hay farming/beef production, with another incredibly wasteful process, sugarcane ethanol production/car driving, is specious and should not appeal to anyone. The only justifiable agricultural use of the Imperial Valley is winter vegetable production, perhaps date farming, using less than half the water as sugarcane and providing the nation produce at a time when most of the nation is in freezing conditions.
Yes, sugarcane ethanol is a proven technology–in Brazil, where abundant water resources and cheap labor (about 1/10 the cost of the USA) and an auto fleet only 12% the size of the ours allows it to be ecologically and economically feasible without heavy taxpayer subsidy.
No one should wait for a magic bullet–there are no magic bullets. But if there were one it would be that we can increase automotive efficiency by a factor of ten, that’s tenfold, 200mpg equivalent, by moving quickly to plug-in hybrid cars running mostly on wind- and solar-generated electricity and by doubling car ridership from the current average of 1.3 people to 2.6 people.
Personally, I substitute about 4,000 miles of auto transportation a year with electric bicycle transportation, 2000mpg-equivalent. There are many ways around the 20mpg automobile problem. Sugarcane ethanol from the desert SW isn’t one of them and we shouldn’t be wasting taxpayer money on an unsustainable “sustainable energy” boondoggle.
Bob-Is part of your argument that we should not be putting our efforts into creating new types of fuel for automobiles, but, rather, we should be pushing use of other types of transportation?
I do feel we aren’t doing enough in mass transit. Like we’re doing almost nothing. And the stimulus package doesn’t offer a lot in this area.
This argument would also pertain to hybrids and electric cars. That is, they are all ways to help us maintain our wasteful lifestyles, instead of really conserving by, for example, building and using mass transit.
On the other hand, the only thing that’s going to push Americans to opt for mass transit, even if it’s made more available and improved, is if fuel prices go up. Otherwise, it’s not realistic to expect most people to be willing to change. Not going to happen.
Anne–What happened to the exchange between myself and sugarcaneenergy?
OK, seems like t/s is up and running again . . .
To answer your question within the context of your column, enlightened capitalism . . .
First, I don’t generally believe in subsidies. They are just a way of keeping our overheated economy overheated. I believe in taxation. When gasoline approached $5.00 a gallon here in San Luis Obispo, CA, last year the eGo electric bike shop was selling $50,000-worth a month. Carpools, vanpools, buses were full. The waiting line for Priuses was months and dealers were getting huge premiums. High prices is/are the best stimulus for conservation there is.
On the other hand, residential photovoltaics has been subsidized to the tune of several billion dollars over the last several years in CA. What that has created is many McMansions having their massive a/c systems, their pools, their spas, their koi ponds, their air-conditioned dog houses powered with “green energy” on the ratepayer nickel. Similar to the notion of a sugar cane ethanol subsidy–”all ways to help us maintain our wasteful lifestyles,” as you succinctly put it.
Skipping a few paragraphs, mass transit is not as easy as it sounds due to the fact that relatively little of the US has the population density to support these systems. In our area, bike-buses are a great way to get around, but it takes a lot longer, the capacity is limited and they aren’t for everyone.
Due to our set-up I think highly efficient personal transportation is the way we generally must and will go in most of the country. Carpooling in plug-in hybrid cars will definitely reduce GHG-emissions by 90% over the current standard of 1.3 people riding in a 21mpg Ford Taurus, for example. How do we make that enlightenment happen? Tax gasoline up into the $10/gallon range just like they do, alas, in Europe.
It seems like we are in agreement across the board, Anne, except for the stimulus/subsidy issue. My short take on stimulus is to go ahead and heavily tax the stuff we don’t want like oil consumption but make it revenue-neutral. Example: The average family uses about 1000 gallons of gasoline a year. Add another $3/gallon tax on gasoline at the pump but provide each family a $3,000 credit/rebate on their income taxes. They’ll know what to do–buy a plug-in hybrid car, drive less, carpool, get an e-bike. Part stimulus, part good ole’ frugality. Or, if you want to stimulate the economy further, just give each family a larger tax credit/rebate instead of funding PV, and solar-thermal electricity and sugar cane ethanol boondoggles.
Trust the market place, heavily regulated, not “enlightened capitalism”. It isn’t even up to the level of an oxymoron. Capitalism’s amorality is its most useful feature.
OK, I don’t have the faith in the efficiency of the marketplace you do. Too many powerful interests acting to inhibit growth of competitive industries. I also think stimulus is necessary now—that is, our current economy can’t pull through without government help.
I don’t mind taxation of stuff we don’t want–taxing gas the way they do in Europe. When gas was so expensive last summer, suddenly people were a lot more interested in gas efficient cars and public transportation.
But it does bother me how that will make less-affluent families suffer in the short-term.
“Efficiency of the marketplace.” That’s what Libertarians believe in. I’m arguing quite the contrary to their virulent anti-tax position. I’m arguing *for* taxation– the sort of taxation that stimulates competition. Instead of a monoculture of wasteful cars we’d have plug-in hybrid cars, bikes, e-bikes, NEVs, mass transit, vanpools, jitneys.
Taxation should always be progressive. We have way too many working poor. Europeans get a lot back for their taxation. Less affluent people can cross Paris in 30 minutes for a dollar or so, can walk the wondrous streets for free. Try that in LA.
Public policy should wag the marketplace, not vice versa. Subsidy is the marketplace wagging public policy.