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Unintended Consequences: The Ethanol Corn- nundrum

Unintended Consequences: The Ethanol Corn- nundrum. Shengzhi Li, Anirvan Mukherjee , Anand Desai, Lingke Wang, Ruby Lee Team 178 Shrewsbury High School, Shrewsbury, MA. Ethanol. CH 3 -CH 2 -OH Fuel Corn based 10/90 Ethanol/Gas blend Federal ethanol incentive (1970s) EP Act (2005).

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Unintended Consequences: The Ethanol Corn- nundrum

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  1. Unintended Consequences:The Ethanol Corn-nundrum Shengzhi Li, AnirvanMukherjee, Anand Desai, Lingke Wang, Ruby Lee Team 178 Shrewsbury High School, Shrewsbury, MA

  2. Ethanol • CH3-CH2-OH • Fuel • Corn based • 10/90 Ethanol/Gas blend • Federal ethanol incentive (1970s) • EP Act (2005)

  3. Our Task Analyze the environmental and economic effects and cost of replacing 10% of US gasoline usage with ethanol over the next five years. Assumptions: • No natural disasters, etc. • Farmland remains constant • No technological changes • Population remains constant

  4. How much ethanol will replace 10% of annual U.S. gasoline usage? • In 2007, 137.8B gal gasoline used (EIA) • 10% is 13.78B gal • 1.5 gal of ethanol≈1 gal gasoline • 20.66B gal/yr ethanol • 285% of current production (7.229B gal/yr)

  5. The Ethanol Cycle • Consider both cost and carbon dioxide emissions • 1. Corn Growth and Harvest • 2. Transportation to Refineries • 3. Fermentation • 4. Transportation to Gas Stations • 5. Burning Ethanol

  6. Growing and Burning • No net increase or decrease in CO2 emissions • Growth: 6CO2 + 6H2O + light  C6H12O6 + 6O2 (photosynthesis) • Fermentation: C6H12O6 2C2H5OH + 2CO2 • Burning: C2H5OH + 3O2 2CO2 + 3H2O + energy

  7. Ethanol Production • Includes energy used in the fermentation process of corn into ethanol • Coal Power (Heat source) 41,700 BTU/gal = 5.21 kg CO2/gal • Electricity: 1.32 kWH/gal = 1.77 kg CO2/gal 1.341 kg CO2/kWH • Total: 6.98 kg CO2/gal*Statistics from Louisiana DNR

  8. Costs of Production • Cost of 1 bushel corn = $5.80 (Chicago Board of Trade) • 2.6623 gal ethanol/bushel corn  $2.179/gal • Cost of producing ethanol = $0.4124 • 25.2¢ byproduct credit for dried grains + 0.6¢ credit for carbon dioxide produced • Net cost = $0.1544/gal • Total cost to produce ethanol = $2.33/gal*Statistics from DOA

  9. The Transportation Model • Production of ethanol concentrated in Mid-West • Transportation costs and emissions will be significant • This model aims to quantify the above

  10. THE TRANSPORTATION MODELSetup and Assumptions • Four phases of ethanol transportation: • Farm to refinery (truck) • Refinery to nearest railroad (truck) • To destination railroad station (train) • Railroad to final destination (truck) Left:Corn production Right:Refineries :: OVERLAY ::

  11. THE TRANSPORTATION MODELSetup and Assumptions • Four phases of ethanol transportation: • Farm to refinery (truck) • Refinery to nearest railroad (truck) • To destination railroad station (train) • Railroad to final destination (truck) Overlay of corn farm and ethanol refinery maps × Left:Corn production Right:Refineries :: OVERLAY ::

  12. THE TRANSPORTATION MODELSetup and Assumptions • Country partitioned into three regions by state • Ethanol production proportional to corn production • Ethanol demand proportional to population

  13. THE TRANSPORTATION MODELTransport Distances in Phases II,IV • Regions not within 100 mi of a railroad blackened • Sparsely populated • 100 mi is ceiling value of distance in phases II, IV Map of Class I Railroads

  14. THE TRANSPORTATION MODELOptimized Phase III Transport Distance • Phase III comprises the majority of ethanol transportation • We must determine how much ethanol to ship,and how far we must ship it • Approximate homogeneity in regions means we canuse these as production and consumption regions • Optimization involved computing an input-output (AIJ) matrix Rows: Destination ProductionVector Columns:Sources DemandVector

  15. THE TRANSPORTATION MODELOptimized Phase III Transport Distance • The solution to this system is: • t is a free variable • Each entry must be positive, so

  16. THE TRANSPORTATION MODELOptimized Phase III Transport Distance • We now choose the t value that results in the least inter-region transport. • Since the regions are about evenly spaced, we can count the number of regions crossed as a measure of distance. • To minimize this, we must maximize t, so t = 0.2185 • The final input-output matrix is:

  17. THE TRANSPORTATION MODELPhase III Transportation • Inter-region transportation scheme is radial, thus we must use an RMS to estimate average inter-region distances • Region 1 to Region 2: 1100 miles • Region 1 to Region 3: 1850 miles • Thus, the mean distance traveled is given by: • Transportation by truck to the railroad may be either toward or away from the destination; independent of Phase III

  18. THE TRANSPORTATION MODELDistance Calculation Results The average gallon of ethanol will travel: • A negligible distance in Phase I • Approx. 100 miles by truck in Phase II • 843.3 miles by train in Phase III • Approx. 100 miles by truck in Phase IV

  19. THE TRANSPORTATION MODELThe Cost of Transportation Transportation cost depends on: • For trucks and trains: • Distance traveled • Mileage (mpg) • Capacity • Cost of diesel ($3.65 /gal) • Driver wages ($23.30 /hr) • Total: 7¢/galEthanol

  20. THE TRANSPORTATION MODELEmissions from Transportation Transportation CO2 emission depends on: • For trucks and trains: • Distance traveled • Mileage (mpg) • Capacity • 12.26 kgCO2/galDiesel • Total of 0.15 kgCO2/galEthanol • Trains: 0.08 kg/gal • Trucks: 0.07 kg/gal

  21. CO2 Emissions Gasoline produces 11.0 kg of CO2 per gallon. BUT… We must consider energy equivalency: 1.5 gallons ethanol = 1 gallon gasoline = 1eeg ethanol Ethanol produces 10.70 kg CO2 /eeg = 2.7% reduction in CO2 emissions

  22. Costs $2.40/gal ethanol = $3.60/eeg Gasoline = $3.51/gal (EIA, April 21, 2008)

  23. Economic Impacts Corn Prices Wheat and other grain crops Developing nations

  24. The Ethanol Effect on Corn Relevant Assumptions: • Importing corn is not an option because of its cost-inefficiency • Usage of corn for animal feed, human consumption, industrial processes, and exports remains approximately constant • Yield of corn per acre will not increase significantly

  25. The Ethanol Effect on CornPart I – A Quantitative Look • Quantity of corn consumed (demanded) has increased from 2002-2007 • Price of corn remained relatively stable from 2002-2004 • Price of corn increased significantly from 2005-2007 2006-2007 2005-2006 2002-2003 2003-2004 2004-2005 Data Source: Department of Agriculture

  26. The Ethanol Effect on CornPart I – A Quantitative Look • Supply and demand are approx. equal from 2002-2005 • Demand exceeds supply significantly from 2006-2007 • As ethanol producers attempt to make supply and demand meet, they place pressure on corn producers to generate more corn, increasing corn demand. Data Source: Renewable Fuels Association

  27. The Ethanol Effect on CornPart II – A Supply – Demand Qualitative Explanation 2005-2007 and Projected Scenario: Demand increase is greater than supply increase 2002-2004 Scenario: Demand increase is approximately the same as supply increase

  28. The Ethanol Effect on CornPart II – A Supply – Demand Qualitative Explanation • From 2002-2004 supply of corn has grown approximately the same as demand of corn • Government subsidies help increase supply growth • Ethanol was not as widely used back then • From 2005-2007 demand of corn has begun to grow faster than supply of corn • Corn supply growth is limited by amount of arable land • Ethanol producers place pressure on farmers to grow more corn thereby increasing demand more quickly • The 2005-2007 trend of increasing corn pricesis expected to continue since much more ethanol will be demanded to replace 10% of gasoline usage.

  29. The Ethanol Effect on Wheat and Other Grains AdditionalRelevant Assumptions: • Demand for wheat and other grains remain approximately constant • Grains are mainly for food consumption and animal feed • Human population is expected to remain relatively unchanged in the next five years • Increasing corn supply results in decreasing wheat supply due to constant land assumption

  30. The Ethanol Effect on Wheat and Other GrainsPart I – A Quantitative Look • Quantity of wheat consumed has decreased from 2002-2007 • The price of wheat has increased from 2002-2007 • The price stability from 2002-2004 and the price spike from 2005-2007 of wheat matches that of corn. 2006-2007 2003-2004 2005-2006 2004-2005 2002-2003 Data Source: Department of Agriculture

  31. The Ethanol Effect on Wheat and Other Grains Part II – A Supply – Demand Qualitative Explanation

  32. The Ethanol Effect on Developing NationsAn Unintended Consequence • Significant pressure on developing nations • Food is already scarce • Prices are rising making food even less accessible • A 60% increase in grain prices = 40% decrease in calorie intake (Staniford 2008) • Hunger and poverty are the leading cause of war and unrest

  33. Are there better ways for the U.S. to attain national energy independence? • Energy dependence crisis lies in imported gasoline, not electricity • How to decrease demand for oil?

  34. Fuel Efficiency • Higher efficiency vehicles • Increase fuel efficiency standards (CAFÉ) • currently at 35 mpg fleetwide • recently raised from 27.5 mpg for cars and 22.2 mpg for trucks • Cap-and-trade system with mpg credits • similar to carbon credits

  35. Public Awareness • Integration into school curriculums • Public campaigning • Statistics and video distribution via Internet

  36. Alternative Fuels • Alternative biofuels • ethanol from cellulose and sugar cane • Solar cells • Fuel cells • Hybrid cars http://www.udel.edu/igert/pvcdrom/MANUFACT/SOLARCAR.JPG

  37. Ethanol: Is it viable? • Very little reduction in carbon-dioxide emissions • More expensive than gasoline • Increase in prices of food around the world • Production of ethanol also results in harmful byproducts (formaldehyde, pesticide runoff, acidification and nitrification of ecosystems)

  38. Questions

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