Posted on 04/14/2009 11:28:15 AM PDT by reaganaut1
Two years ago Imperium Renewables feted U.S. senators and other bigwigs at the opening of a biodiesel plant at the port of Grays Harbor, Wash. The $88 million plant was heralded as a great green hope in the fight against global warming. At the event, Imperium chief executive Martin Tobias dipped his finger in a container of biodiesel and took a taste for the crowd.
Imperium's prospects aren't looking so sweet today. The plant at Grays Harbor is sitting idle. Most of Imperium's employees (110 two years ago), including Tobias, have been sent packing. The company has not much to show for the $155 million of capital it raised except a white elephant and a probably meager bank account.
The problem: economics. To make a gallon of biodiesel you start with a gallon of edible oil (palm, rapeseed or soybean) that costs, say, $2.70 today, then spend another 80 cents or so on transportation and additives. Biodiesel competes with petroleum diesel, priced around $1.50 wholesale. The biofuel gets a $1 federal subsidy. Still, it's hard to get buyers to pay $3.50, or even $2.50, for something when the alternative is $1.50. Imperium isn't the only biodiesel refiner in distress. Most of the U.S.' 176 producers aren't doing much better.
Turn salad oil into truck fuel? What were they thinking? Well, it almost made sense a few years ago, when veggie oils were cheaper and Congress decreed that a certain amount of diesel was to be of the renewable kind. It seemed there would be no end of do-gooders willing to pay whatever it took to make their transportation fuel green.
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Turns out there was a catch in the federal mandate. It was to apply only if the Environmental Protection Agency found that biodiesel reduced greenhouse gas emissions.
(Excerpt) Read more at forbes.com ...
Don’t worry, King Ray-Ray and The rat Congress will think of a way to force Americans to buy the more expensive, less practical alternative.
“It seemed there would be no end of do-gooders willing to pay whatever it took to make their transportation fuel green.”
It seemed there would be no end of do-gooders willing for all the rest of us to pay whatever it took to make their transportation fuel green. There fixed it.
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Nobody bothers to run the numbers before starting these sure loser projects. Due dilligence is important.
If they can make any bio-fuel cheaper than regular fuel then good for them, if not I don’t want my tax money being wasted on it.
I may be able to compromise if a there is reasonable % limit on how much is subsidized.
Something like a set-in-stone limit of 10% subsidy. So the governement will only subsidise 10% over maket value per quarter based on previous quarter.
So if regular gas is $2.00 a gallon the government would only subsidize ethanol 20 cents per gallon and no more.
If regular gas went down to $1.50, then the government would only pay a 15 cent subsidy on the ethanol.
I would rather not have a subsidy int he first place, maybe the next step we need to take is to limit subsidies and then work to end them. Use incrementalism for our own darn goals for once.
I'm sure the math was impeccable, but based on the assumption (prevalent back then) that crude oil would never, ever, be under $120/bbl ever again.
That's the problem with assumptions, especially when it comes to predicting how much stuff will cost in a year or two. It's the same thing that caught the mortgage-bundlers in the run-up to the current economic crisis.
Actually, basic research into that kind of technology would be a damned good use of tax money. There's a huge national security payoff, just for starters.
They assumed that fuel prices would skyrocket forever just like housing prices.
Agreed, research money is a good thing, but an outright subsidy for an inefficient process is definitely not.
The Space Program was a good project in it’s first 20 years for fostering new science and materials technology. It should have gone private years ago, but the many dumb treaties we signed which removed tangible property rights and regulations on nuclear power in space effectively maimed the private space industry.
Where the heck can I buy $1.50 diesel??? Around here the cheapest diesel is still $2.39 a gallon. I'll take a 60% discount.
Grogoire has gone “all in” on her global warming agenda. She was so convincing that the Jefferson County Department of Community Development has on full time planner dedicated to Global Warming. (even thought they have let 15% of the staff go over the last few months and can’t handle their normal workload of customer service to tax paying citizens)
Why does it have to be edible? Wouldnt it be cheaper to use something like cattails or sawgrass?
Let’s not even mention that it’s worse for the environment than diesel is. And, it can ruin a 30k diesel engine, unless additives are used, even more environmental damage.
http://edition.cnn.com/2007/TECH/science/04/02/biofuel.debate/
http://www.foxnews.com/story/0,2933,313446,00.html
Now you want to talk about the effects of putting growing for food against growing for fuel? Puhleees. We would need to use 100 times more land mass, and deforest 500 times more to do it, to produce the ingredients needed to “grow” bio-fuels, and eat.
Snake oil.
Two words. Natural. Gas. Either compressed, or liquid.
It’s the perfect “bridge” fuel.
Taxpayers don't mean diddly squat to these lefty political hacks anymore when they can get re-elected entirely with the votes of non-taxpayers.
Space has long since "gone private" in areas where money can be made.
What you're talking about is the kind of space stuff like manned missions, which have no likelihood of a positive return on investment within a reasonable amount of time.
“I’m sure the math was impeccable, but based on the assumption (prevalent back then) that crude oil would never, ever, be under $120/bbl ever again.”
Companies these days are full of starry eyed eco-yes men. I was on a project to evaluate the feasibility of biofuels production as my company was thinking of getting in on it. The other 4 reviewers thought it was a great idea, based largely on it being feel good, save the gay whales from global warming, etc. From past experience I knew it was not feasible and was going to be a disaster and said so. The decision was made to steer clear and management is quite happy we avoided the biofuels train wreck.
For the past 25 years the Massachusetts Personal Income Tax Form has included a box to allow taxpayers to pay more than they owe in taxes after the Libtards insisted that people want to pay more taxes. Result: 0.002 (two-tenths of one percent) of taxpayers have ever chosen to do so. LOL!
And with all that money on the line. Amazing....isn't it.
It dropped below $2 for a while here in Houston but that’s ove....
The $1.50 is about average wholesale lately...
You'd be surprised at the assumptions made to justify a flawed business plan. The "it's cool and makes me feel good" factor should never be underestimated!
Look at the bankruptcies of Iridium and Globalstar satellite systems, for example. They were among several companies (including similar satellite systems that never got off the ground) who assumed that they'd be able to tap that huge untapped customer base in the equatorial regions, where most of the world's population lives (in abject poverty, for the most part).
The rational business mind says that if they don't have land-lines now, they don't have the money to buy into an expensive satellite system. Another rational business mind might have pointed out that cell phone systems are a lot cheaper to build and maintain than a big constellation of satellites. Either way, a little sustained thought would have told those folks that the idea wouldn't make any money.
But, just as with bio-fuels, the touchy-feely aspects of "serving the under-served" was a huge factor in those companies' thinking.
They got billions of dollars in investment capital, and of course it all evaporated. But it sounded cool at the time.
It isn't the original numbers but the escalation that happens when they run feed stock demand up...
I can imagine how fun it would be driving/flying in formation with a bunch of other folks who are fighting the cross-wind....
“They run the numbers... A buddy was in on an Ethanol Plant. With the federal grants and subsidies it would have been a go until corn went threw the roof. It isn’t the original numbers but the escalation that happens when they run feed stock demand up...”
The original numbers were based on assumptions that were clearly and predictably wrong. An impartial and responsible evaluation takes that into account. Just because the feedstock is cheap today doesnt mean it will be cheap tomorrow. Prices are not constant. Likewise the cost of competing fuels might drop. This is what happened in the 70’s. Oil prices went sky high and govts invested billions in alternative fuels. Then OPEC lowered the oil price and crushed their competition, just like today. It is almost impossible to synthesize an alternative fuel that is cost competitive with something you just pump out of the ground and heat.
WA ping
It means buying in big time bulk and before taxes.
New York Harbor No 2 Diesel Low Sulfur Spot Price
The rail system has no real alternative and it survives while ethanol and bio-diesel have competition and are faltering...
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