Twenty-First Century Snake Oil

The title of this post is from a recent paper: Captain T.A. ‘Ike’ Kiefer, Twenty-First Century Snake Oil: Why the United States Should Reject Biofuels as Part of a Rational National Security Energy Strategy, Waterloo Institute for Complexity & Innovation Occasional Paper No.4, January 2013.

The paper argues that biofuels do more to harm the causes of national and global security than to help them. To reach this conclusion he looks in depth at factors such as energy return on investment (EROI), energy density, power density, water footprint, food competition, environmental damage, land confiscation, and lifecycle greenhouse gases emissions.

I personally would not expect a uniformed officer from an operational background to dig into these details. But this was not the first time I have been surprised. In the past, I had the pleasure to share my views with a few military officers doing research for their thesis. This is once again a proof that the US Department of Defense employs plenty of bright people but (unfortunately) it doesn’t consult them. Instead, it pays plenty of money to private consultancy companies for subjects that could well be done by its own personnel.

Back to Capt Kiefer’s paper. The concept of Energy Returned on Energy Invested (EROI) is not much investigated by the DoD’s green lovers. Capt Kiefer makes a very good point: “Accelerating the use of fossil fuels by foolishly and wastefully using them to make much lower EROI biofuels brings any day of future fossil fuel scarcity that much closer and is completely counterproductive to every “clean” and “green” energy goal. Applying ammonia fertilizer to any crop intended for biofuel is an indefensible waste of energy.”

In discussing markets and price volatility he points out something which is largely ignored by the DoD’s greens: “Deriving fuel from farming does not liberate it from petroleum dependence or oil market price volatility, but rather increases price volatility by adding an additional linkage to global agricultural commodities markets.” He adds later on that “Converting fossil fuel hydrocarbons into plant carbohydrates and then back into hydrocarbon fuels is a futile attempt at perpetual motion in chemistry.”

He demonstrates elegantly the point I have been trying to do on my blog for years: “The civilian leadership of the US Navy is often heard quoting the statistic that a $1 rise in the cost of a barrel of oil increases annual fuel costs by $31 million. Yet, the cheapest price the Navy has paid for any biofuel to date is $1,080.66 per barrel ($25.73 per gallon).  Since 2007, the military has spent $67.8 million on 1.35 million gallons of biofuel, averaging more than $50 a gallon or $2,100 a barrel, and costing the taxpayers $60 million more than if conventional fuel had been purchased. This does not include more than $47 million paid for pure research on alternative fuels. "

By the way, do not forget that since 2007, DoD has paid less than $4 per gallon of conventional petroleum derived fuel. Because of this fact, he adds towards the end of his paper that “Regardless of this, it is logically indefensible to buy a $30.00 per gallon fuel over worries about the price volatility of a $3.00 per gallon fuel.To dig up with these numbers is not easy, believe me. You can see here the Table he meticulously researched (On Page 30). (I had given up a similar effort last year).

If the DOD had added the external cost of producing and transporting biofuels in its Fully Burdened Cost of Fuel methodology the dark side of biofuels for the US military would have been more dramatic.

Let me now quote some bitter truths from Capt Kiefer’s paper:

“Imagine if the US military developed a weapon that could threaten millions around the world with hunger, accelerate global warming, incite widespread instability and revolution, provide our competitors and enemies with cheaper energy, and reduce America's economy to a permanent state of recession. What would be the sense and the morality of employing such a weapon? We are already building that weapon—it is our biofuels program. We need to quit the moonshine and face the sober facts. The DoD should pivot away from biofuels in its own energy strategy and the federal government should recraft its overall national energy strategy to be compatible with physics and biology and economics for the sake of national and global security.

…The US government should not push to commercialize any energy candidate until it has demonstrated lifecycle performance at competitive EROI without subsidy……The government should end subsidies and market-distorting policies that encourage low-EROI energy sources over high-EROI sources.

…The US military and federal government need to rationally and authoritatively define “renewable,” “sustainable,” and “green,” and enforce empirical standards for meeting these criteria based upon rigorous lifecycle and opportunity cost analyses.

…Sound decisions cannot be made based solely upon popular opinion, personal opinion, orthodox worldviews, or even common sense. Wise leaders must have "uncommon sense" founded upon a broad and deep education, and keen insight achieved through thorough study of the science and the empirical evidence of the issue at hand. National energy strategy is nothing less than national survival strategy. Those who would craft such strategy or advise policy-makers need to be well-grounded in chemistry, thermodynamics, biology, and economics, so they might discern the difference between promising avenues of research and perpetual motion schemes that defy physical laws and waste our nation’s time and treasure. Trying to biofuel our way to energy independence is like medieval physicians trying to bleed their patients back to health. It is time to stop the bleeding.”

Wow, bravo. The US Navy Secretary Ray Mabus must read Capt Kiefer’s paper before giving the next speech on the “great benefits” of biofuels for the US military.

Meanwhile, the biofuels comedy continues in the US. You know that the Environmental Protection Agency announced in January that it would be increasing the mandated amount of cellulosic biofuel refineries must purchase in 2013 to 14 million gallons. Let’s put this into context. How much cellulosic biofuel is produced today in the US? Zero! To meet the EPA’s mandate, refiners are simply forced to purchase biofuel credits for cellulosic biofuel. Well, capitalism always finds options. See, especially this: The Biofuels Train To Nowhere: No Government Schemes That Cannot Be Scammed