Sugar based ethonal could be coming soon
I am not sure why they would have to be sold at a loss if they are coming in cheap to begin with. That would imply that the ethanol is cheaper from corn which makes no sense since Brazil is getting almost all of its ethanol from sugar based production.Imperial Sugar, one of the nation's largest sugar refiners and sellers, may soon be adding a product to its sweet lineup — ethanol.
The Sugar Land-based company is exploring a plan to build a large-scale ethanol plant next to its sugar refinery in Gramercy, La., Imperial CEO John Sheptor said.
The "hybrid" plant would make the fuel from a mixture of sugar and corn, he said, and would be among the first of its kind in the U.S., where the vast majority of ethanol produced is derived from corn.
After a business case study is completed this summer, Imperial will seek federal and state incentives for the project, as well as a partner with experience in the ethanol business, Sheptor said. The company does not yet have a cost estimate for the plant.
If the project makes financial sense, a plant could be up and running as soon as 2011, he said.
"We are very serious about pursuing it," Sheptor said.
The plan arrives during what could be a good opening for such a project. U.S. ethanol demand is rising to meet new federal mandates. There are also widening concerns about the negative ripple effects of using corn ethanol to curb America's oil habit.
While sugar is used to make ethanol in Brazil and other parts of the world, government price supports on domestically grown sugar make it expensive to use for ethanol production in the U.S.
And it seems unlikely that ethanol prices would ever be high enough to make it cost-effective to use domestic sugar unless there are federal incentives, said Matt Roberts, a professor of agricultural, environmental and developmental economics at Ohio State University.
"We'd be much more likely to meet those requirements with corn, possibly with grain sorghum," Roberts said.
Even so, Imperial is moving forward with its business study of an ethanol plant that would use domestic sugar.
At the same time, however, it is also taking another tack it views as far more promising to the potential future of sugar ethanol production in the U.S.
In the recent farm bill debate, Imperial Sugar lobbied legislators to increase the amount of sugar that can be imported to the U.S. and set aside for nonfood uses, including ethanol.
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In the end, they supported a provision that would protect them while still steering some foreign sugar to ethanol. It requires the U.S. Department of Agriculture to buy excess sugar imports from Mexico and other Central American countries, now coming here through free trade agreements, then sell them back into the ethanol market at what critics say would almost certainly be a loss.
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What would make sense is a market based product that did not need subsidies. It is not clear why corn still needs subsidies with the increased price of corn. Is the end product cheaper than the gasoline it is diluting?
One of the things to understand is that not all plants are made alike. Looking at the various 'bio fuels' via plants and you come to the following:
ReplyDeleteCorn is 9.39% efficient in converting sunlight into ethanol, over its growing season (which is seasonal). Ethanol conversion is to 300 gal/yr.
Sugar cane has a 6.3% conversion rate, but has the benefit (in Brazil) of being a year 'round crop. That 6.3% is annual, BTW. Per acre you get 662 gal. of ethanol (per year) via sugar cane.
So sugar cane, for Brazil, is a winner even at lower efficiency because it has a 5-harvest cycle before replanting, lots of sunlight, and is relatively cheap to grow.
Corn, for the seasonal US, is a winner because of lower sunlight amounts, more intensive crop maintenance and higher output per acre per season than sugar cane.
Note that in Brazil the trade-off is rainforest for sugarcane, losing biodiversity, while cropland in the US does not have that deforestation concern. Really, those acres of land have to come from *someplace*....
I've been putting together a longer term energy policy concept, to have as little government interference as necessary via an X-Prize system. We need to get out of the subsidy and price support system to get a good reckoning of what our energy costs are, but even with that said, plants are very inefficient in conversion of sunlight to useful energy and liquid energy sources need a longer term replacement...