[Terrapreta] [Gasification] new studies on GHG footprint of biofuels darkens the picture

[Richard Haard]

Also not a big money maker

Yesterday Robert Rapier posted this essay on the economics of corn/ 
ethanol on oil drum. It seems with current feedstock prices and a  
production ratio of 2.7 lbs of corn per gallon of ethanol producers  
are only making 15 cents per gallon over cost. Even if efficiency  
claims are as high as 2.8 it make me wonder if it all worth it since  
we use 150 billion gallons of gasoline and 60 billion gallons of  
diesel yearly yet if we replaced 15 % of this fuel demand with 100% of  
our corn crop we would be starving as well as the animals we feed for  
meat and the people in other countries who depend on our corn exports.

His summary

Times are tough for ethanol producers. They are in the same boat right  
now as refiners - enduring very poor margins. This is what the  
economics roughly look like at $5 per bushel of corn and $8/MMBTU of  
natural gas. To produce 1 gallon of ethanol today requires:

$1.85 of corn
$0.33 of energy
$0.14 of enzymes, yeast, etc.
$0.23 of labor, maintenance, and various miscellaneous expenses
There is a DDGS credit per gallon of ethanol of $0.55. Thus, the total  
cost to produce a gallon of ethanol today is $1.85 + $0.33 + $0.14 +  
$0.23 - $0.55, or exactly $2/gallon of ethanol. For reference, the  
February contract for ethanol in the Midwest as of this writing is  
$2.15. And $2/gallon is merely cost of production. It doesn't take  
into account any return on investment.
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