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Friday, August 15, 2008

HoHum, Friday, No Crisis After All

The Empire State survey showed manufacturing conditions improving a bit. From the low, it's a significant rise.

US industrial production was up 0.2. From a year ago, it has dropped only 0.1. This is quite a difference from most other economies. The details are more impressive than the headline; utilities were down 1.9 this month, but business equipment rose 0.8. That's probably on insourcing. Capacity utilization was 81.4, which is above the 30 year average and well above the 2001-2002 average (recession).

So it is not yet time to emit clarion calls of alarm about the US economy, although the YoY -5.3 drop in the construction segment is definitely still a drag.

Oil is down again. It still has considerably further to go.

I wonder if biodiesel from algae is going to become a market reality over the next 4-7 years? I have been following the saga of PetroSun this year. It started up its first commercial algae-to-biodiesel stock facility in Texas this spring:
The current algae farm consists of 1,100 acres of saltwater ponds that the Company projects will produce a minimum of 4.4 million gallons of algal oil and 110 million pounds of biomass on an annual basis. The Company has dedicated 20 acres of ponds for a proposed algae derived JP8 jet fuel research and development program.
"Our business model has been focused on proving the commercial feasibility of the firms' algae-to-biofuels technology during the past eighteen months," stated Gordon LeBlanc, Jr., CEO of PetroSun. "Whether we have arrived at this point in time by a superior technological approach, sheer luck or a redneck can-do attitude, the fact remains that microalgae can outperform the current feedstocks utilized for conversion to biodiesel and ethanol, yet do not impact the consumable food markets or fresh water resources."
Rednecks remain focused on beer and fuel, I'm telling ya. PetroSun withdrew from the DARPA project for jet fuel because the project was delayed and it said it had an opportunity for commercial:
"Although it was an honor to be selected as a team member with such an elite group of companies, PetroSun has chosen to go down a separate path in order to expedite the potential of algae being processed into a commercial jet fuel," stated Gordon LeBlanc, Jr., CEO of PetroSun, Inc. "The DARPA program has been stalled due to a protest that was filed on May 29th by a firm that was excluded from the DARPA decision. Our withdrawal was prompted by the uncertainty of the award process, combined with an opportunity to initiate a project with a renewable fuel refiner and a commercial jet fuel end-user. PetroSun's corporate position acknowledges a true sense of urgency to prove that algae-to-biofuels can become an immediate part of the solution for our nation's energy independence."
It is working on new projects in the US and Australia:
The Board of Directors has approved plans to install a pilot plant designed for algae production at an Arizona wastewater treatment facility. This project will be a scaled down version of a commercial algae farm system utilizing the wastewater and associated nutrients from the municipal treatment plant to produce algae as a biofuel feedstock.
Well, until one sees hard numbers one does not know what to think. Imperium appears to be in trouble, so that gives me pause. However the Seattle plant was supposed to be using plant oils, and my guess is that the input costs rose too high?

But algae is known to be viable, although cost estimates have always been above the cost of oil. Until now, that is.

Some background on biodiesel from algae at U of New Hampshire, which has a biodiesel project group. There are stats in here on what it would take, and my theory was that I would be checking them with information from PetroSun, but it hasn't reached that point yet. A lot depends on marginal costs.

The theory is that algae would produce the raw material ("green crude") that could be used in refineries to make the biodiesel, which could then be used in place of regular diesel in current vehicles. Existing diesel cars can burn this stuff; I'm not sure if it has been tested in trucks. The military is very interested.

I am in no way recommending investing in this or other such companies, however I do feel that it is extremely likely that this fuel source will come into play within the next decade. That hypothesis only increases my skepticism about projections of higher and higher oil prices. Somewhere around $95 this should be a viable technology over time (the initial investment would be temporarily increase that cost). In general, production costs fall sharply over time. The $95 is still too high for economies to sustain current activity and usage, but it certainly is another indication that there is a ceiling to oil prices.

We'll see. I think we should drill; I doubt the environmental impact of drilling is really worse than such projects. Over 1,000 acres to produce only 4 million gallons of biodiesel a year raises questions about scaling, and I wonder how much energy has to be used to produce that amount of fuel? Algae biodiesel will use a lot of land and water, and even if it is seawater, such production will have an environmental effect. But then, so does large scale solar and wind, and biodiesel has several big advantages compared to solar and wind. I don't know what the pollution characteristics would be if this fuel were to be used widely in passenger vehicles.

However, such projects are definitely not as destructive to human life and welfare as corn ethanol. I think that program should be scrapped.

Since there is no worldwide death-to-the-masses crisis this Friday, some enterprising folks at a DU forum are discussing whether human sacrifice (provided the victims were volunteers) should be legal. I think not, given general human nuttiness, but at least in such a case the victims would be volunteers. It seems to me that the hungry and cold poor people of the world have been set up as involuntary victims of too many "green" initiatives which have passed as credos into the political system, and I think it is immoral.

Would using sewage as the feedwater source reduce algaeal blooms where the sewage is released? How would phosphate buildup be managed? If algae are harvested (and not just oil) how would the phosphate (and other stuff, including sulfur compounds) be removed from the algae?
NJCommuter, I don't know. That is why I think a period of experimentation is necessary. For example, PetroSun expects to produce 110 million pounds of biomass each year. What happens to that biomass?

Of all renewable resources, hydroelectric probably has the least environmental impact. However environmental regs have essentially foreclosed all new hydro projects.

I truly wonder if we aren't being extremely shortsighted in our priorities.
MoM, permit me some long-considered but still incomplete thoughts here. Disjointed, but here they are in brief:

I still can't find any serious fault in biochar methods as a means to free coal-fired power from CO2 emissions concerns, and I particularly - and perversely - like the possibility that small-scale biochar plants, under the rubrics of carbon credits lately proposed, could make a farmer's life into a kind of heaven on earth.

They get paid for sequestration, paid for byproduct volatile fuels, reduced costs for fertilizer, improved soils and increased crop yields.

With hydro essentially blocked by fishery concerns and questions of scalability casting doubts on algae/biodiesel, I've been looking elsewhere.

I see that Cornell has committed to looking at the process seriously, and that New Zealand proposes becoming a world center for biochar research (with only a couple of professorial chairs funded), but I think the usefulness of the process is underappreciated most everywhere else.

The only commercial enterprise I've seen in the US, Eprida, is in your back yard. Georgia. I don't even care that they're in the global warming camp - what they're doing has broad implications for agriculture, ocean 'dead zones' and just plain common aversion to wastefulness.

What does it take to get something like this decently evaluated and moving in the agricultural community? I wish I knew.

Short article:

I agree with you, MoM, human sacrifice is immoral...even if it is volunteer. There are many sick people out there who will agree to all kinds of things without, either thinking through decisions or, understanding the full consequences of their actions.
Burnside - It is relatively common practice in my area to fire field stubble, not to mention to burn through woods. The practice is nothing new; it was first used by hunter-gatherers to make the soil more productive, thus increasing plant growth and prey.

I doubt it can compensate for CO2 emitted by fossil fuels.

When we burn a field or woods, we plow firebreaks. Alternatively, the area burns naturally, so burning brush through keeps wildfires somewhat at bay.
Viola - that thread gave me the pip. I'm surprised no one else remarked on it. Killing is killing.
Mama, can you just imagine how bazaar it would get if such a thing was permitted? Unreal!

We just visited San Antonio and I saw a number of homeless people lying around. One lady was clearly mentally ill. Such people would be in grave danger by such notion as human sacrifice.

Btw: I have not researched this yet, but what do you know about mental hospitals that were closed down a number of years ago? I just heard that in a seminar we just attended but they did not expound further on it. Does that mean that the entire USA has no more mental hospitals? Do mentally ill people now simply live on the street, being a danger to themselves as well as to others?

I trust you are doing well! :-)
How would the mentally sick be in danger from human sacrafice? The sacrafice thing says to me that it should be a human worth more than other (thus a sacarfice to lose).

Throw the homless to the algae.
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