March 12, 2008

Ethanol: How far, How Close

In recent years, everybody is dreaming about one cheaper & cleaner fuel ethanol. Though the cleanliness over its total life cycle is still a debatable point along with energy efficiency debates. I am considering few Nos which were presented in some othe blog for my visitors. In this we will see the total requirement & growth of Ethanol as fuel & as industry demand.


What is the total Oil demand of the world as whole. It is ~90 Million barrels/day, which gives us an annual demand of 32850 Million barrels/year. On the other hand world Ethanol production in 2005 was ~328 million barrels/day. Wonderfully it is only ~1% of the demand.

The rise in ethanol capcity in recent past has been ~15%/year which has caused a food grain price rise of 20-40% in last 3 years worldwide. So can you imagine the scenario if we go for even 20% replacement of oil - foregt about 100%. This is the scenario even if I delete all industrial demand of ethanol.

Add one more interesting factor that Ethanol's energy content is only 60% of the Gasoline / Oil content for the same mass as Ethanol is having 76 KBTU/Gallon while gasoline has 125KBTU/Gallon. So net equivalence is only 0.6% of current demand.

Energy production wise, I have already written my previous post
Ethanol - Facts & Common Sense the lowest positive enrgy production says it produces 134 units of energy for every 100 Unit input. So we are basically generating (Even if I consider this report as 100% correct) than we are effective only 34/100 = 34%. While it is given as 74 units / 100 unit for gasoline. So it is having a net impact of 50% higher energy gain. Even if I consider this as a fact than also ethanol goes back to 0.9% equivalent to Oil demand.

Whereas actual fact is something different, as Oil production consumes ~1 Unit of energy for every 5 units of energy. Just a commonsense man ( No oil company will be able to make profit if it would have been consuming more than its content bcoz Oil is sold on the basis of its energy content not based on quantity). So Ethanol production itself is much more energy in-efficient.
Given this scenario, when food prices are rising steeply & grain shortage is there, I dont see even it is catching to 10% of the world oil demand in next 5 - 10 years period and if it does then be prepared for a world where no food will be available as currently the growth rate of agriculture sector in terms of produtivity is even less than 10% whereas we are talking about 100% rise every year at current levels.

How can you claim that Ethanol is a substitute for Oil......NO.....WAY. Forget it...

Moral - Never focus your strategy based on this wonderfully misleading fact which is fooling the globe.....

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