Open Letter to President Barack Obama:
Horsetrade Keystone for the Ethanol Pipeline to the East Coast
November 11, 2014
Dear President Obama,
The congress will pass a Keystone Pipeline bill and send it to President Obama. He is predisposed to veto it, but the damage will have been done. His policy of ‘all of the above’ energy options will be broken, he will look obstructionist, and he will give the Republicans a strong argument in the next Presidential Election. Clearly if the administration is positioned as obstructionist, anti-oil and anti-coal and anti jobs; killing both the corn ethanol and nascent cellulosic ethanol industry along with pipeline construction jobs, the Republicans will have ample fodder to carry the next Presidential election. And with the Keystone Pipeline bill through congress (Republicans have a filibuster proof majority), the next Republican President will sign it.
So how can President Obama get a win-win out of this situation? Mr. Obama, by taking seriously the offer of Republican Senate leader Mitch McConnell to come to the table and use compromise to move things forward, can actually promote major items on his agenda. Here’s the suggestion. Horse trade the 1179 mile Keystone Pipeline, under stronger safety conditions, in exchange for the proposed 1800 mile Megellan-Poet ethanol pipeline from the Midwest to the East Coast. Ethanol pipelines exist in Florida and Brazil so the technology is well understood, and ethanol is safer than oil to transport. This solves problems in both the oil and the ethanol industries, creates more than twice as many jobs, removes the increasingly serious transportation bottlenecks that our rail system imposes for both Bakken oil and Midwestern ethanol, gets ethanol to the east coast that needs it for cleaner air with even lower GHGs, helps auto companies meet the new CAFÉ standards. It also promotes Mr. Obama’s other agendas (see below), and leaves him, and the Democratic Party in a stronger position.
How does it accomplish these goals? The overriding accomplishment is by establishing the groundwork for lowering carbon dioxide emitted into the air. Yes, autos burning ethanol will contribute to lower CO2 (and if they burn cellulosic ethanol they may reduce CO2 by 85-90%), but there are two other major ways, both related to ethanol. The ethanol industry has cracked the code for cellulosic ethanol by using a little known fact that when they make cellulosic ethanol from wastes, they generate a lot of electricity from the part of the wastes that can’t be used to make ethanol – the plant lignins. The lignins are used to generate electricity. In Kansas, the new Abengoa cellulosic ethanol plant generates 21 MW. The Italian cellulosic ethanol producer Beta Renewables estimates that by selling their surplus electricity they can make ethanol for 56 cents a gallon. Thus, every cellulosic ethanol plant is, in practice, a small electricity generating plant; and one that produces CO2 neutral electricity. With 200 ethanol plants in the US and with each having the potential of generating 10-20 MW of electricity as a by-product of making cellulosic ethanol, if they add on the capability, fostering the use of cellulosic ethanol will have the benefit of replacing the need for 10-15 coal fired electricity generating stations (the average coal plant being 228 MW). If all vehicles used cellulosic ethanol we would essentially be removing as much carbon from the air as if all the CO2 from coal fired electricity generation was sequestered. This is a major way to reduce carbon going into the air, and can significantly enhance the EPA attempts using sequestration. To see this production capacity increase, the ethanol needs to economically get to market. The Eastern US is a huge market, if the ethanol price and availability is right.
The second way this horse-trading will lower our carbon footprint, is through the economics of ethanol vs. oil. The national availability of ethanol will be a driving force enabling the auto companies to move forward with ethanol optimized vehicles, which the EPA has shown can be as efficient as diesels and of course much cleaner. They have the technology, and use it at NASCAR and Indy, but are reluctant to make it generally available because of the lack of fueling stations. Internally they argue that it would be a big help in meeting the forthcoming CAFÉ standards. In this way Mr. Obama again can further all of these goals.
But there is more. Wastes, from forests and municipalities are filling landfills, and feeding forest fires. The efficient use of ethanol in vehicles, will elicit more demand for ethanol (lower pricing and no mileage drop) and open the waste-to-ethanol industry all over the country.
Of course filling stations and the fuel availability go hand-in-hand with vehicle availability. It’s almost chicken-and-egg, but by horse trading for the right of passage of ethanol to the East, we can break the cycle. In the end cheap ethanol, in efficient autos, will have the marketplace deciding what fuel they use. And economics usually wins. By exporting this technology all over the world, the Keystone pipeline will become irrelevant, and we can all breath cleaner cooler air.
Sincerely,
Robert Falco, PhD, Director if IER