Green Options

Editor’s note: Here’s the final installment of Alexis Madrigal’s series on California’s ethanol mandate.  If you haven’t read the first four parts, you’ll find them linked at the bottom of the page.
V: Where the Khakis Meet the Carhartts
Dozens of companies up and down Silicon Valley are hard at work rethinking the gasoline that’s powered internal combustion engines since Henry Ford oversaw assembly lines. They’re designing and growing fatty algae whose bodies are filled with oil that just so happens to mimic diesel fuel. They’re using genetically-modified bacteria to munch tires and sugar cane into petrol. Anything that contains carbon, they reason, can be turned into a liquid hydrocarbon with the right combination of chemical process and engineered microbes. They call these experiments advanced biofuels, and they, we’re assured, will be better for the environment than ethanol.

And yet, for all the press, all the beautiful minds at work on the best science, the ultimate success of the enterprise might rest in the crusty industrial checklist of the logistics situation. Trains, trucks, and the people who connect one to the other could have as much of an impact on the market as the particular molecular manipulations that produce the right fuel.

Editor’s note: If this is your first look at Alexis Madrigal’s five-part series on California’s ethanol mandate, make sure to check out the first three installments (linked at the bottom of the page).
IV. In Which Our Hero Is Called Upon One Too Many Times
The California Energy Commission expects ethanol to continue to become more integrated into the state’s energy system. In response to Federal legislation, ethanol blends are expected to increase from about 6 percent now to 10 percent by 2012. That will drive demand from 1 billion gallons of ethanol this year to 1.7 billion gallons by 2012. Put in perspective, if the expected changes occur, ethanol use will have grown 1.6 billion gallons in a decade. The total ethanol market will be larger than the Netherlands’ entire gasoline market, and only a little smaller than Thailand’s.  As rapid changes in industrial infrastructure go, it’s spectacular.

But now a host of new regulations are forcing even more changes to liquid fuel in the state.

Our dependence on oil, rightly called an addiction, has given rise to a strong movement to kick the habit. The coalition pushing for an end to crude oil derivative use for transportation fuel comes from an odd variety of corners with distinct interests.

Responding to those concerns, the California legislature and governor have promulgated a cluster of laws and regulations designed to change the fuels you put in your car. The following table summarizes these overlapping desires made law.

Editor’s note: Part three of Alexis Madrigal’s series on California’s ethanol mandate focuses on the challenges of transporting the fuel.
III. How to Move A Billion Gallons of Fuel from Iowa to California
Back in the 1980s, with smog choking American cities, the government decided to tinker with the gasoline hydrocarbon formula to create cleaner burning fuels. The easiest way to do that is to add a little oxygen to the gas. Adding O2 is a little like blowing on a flame: the controlled fire inside your car’s engine burns a little more efficiently and thus a little cleaner, reducing toxic air pollutants, carbon monoxide, and ozone.

Spurred by state and Federal regulations but committed to selling the most petroleum they could, oil companies found the cheapest oxygenate they could, a crude-derived chemical called MTBE. Subsequent environmental impact studies determined that MTBE was a groundwater pollutant, and in 1999, then-Governor Gray Davis ruled that all MTBE had to be removed from California’s gasoline by the end of 2002 (though the phase out was extended).

That left the state casting around for an alternative way to get extra oxygen into its gasoline blend while maintaining the smog-control benefits of the previous blend, and quick. They settled on ethanol, the only scaleable oxygenate available.

“This actually was a major shift in a lot of different things. The phase out was something extremely rapid. It required [the oil industry] to use the only other oxygenate alternative, which was ethanol,” says Rahul Iyer, a founder of the biofuels infrastructure startup Primafuel.

Editor’s note: Yesterday, guest contributor Alexis Madrigal introduced the rationale behind California’s ethanol mandate, and alluded to some of the “behind-the-scenes” changes that the mandate required. Today, he takes a look at one piece of the California ethanol infrastructure.
II. The Geography of Green
In northern California, the major incoming station for ethanol is the NuStar Selby Terminal outside Crockett, in unincorporated Contra Costa County.

At places like Selby, rail cars filled with ethanol are unloaded into holding tanks, then eventually transloaded into a truck (or a pipeline) that delivers the fuel to a refinery. The Big Oil refiners splash-blend it with hydrocarbons inside tanker trucks into what the state calls gasoline.

That’s one of the things that Selby’s manager, Mike McDonald got shipped to California to do, after his last post at a refinery in the Caribbean. He’s sturdily-built with closely cropped hair. In his blue coveralls, it’s obvious he’s no suit or hipster. When I show up uninvited at Selby early one evening, after weeks of trying to get the NuStar press handlers to call me back, I catch McDonald still working.

And why wouldn’t he be? Selby never stops working. The terminal operates 24-hours a day, 365 days a year. It can store three million gallons of liquid fuels, the vast majority of it being oil.

Editor’s note: On July 10th, I asked if you’d be interested in “crowdfunding” a feature article on meeting ethanol mandates in California.  You were: within two days, enough money was donated so that Spot.us, a new venture dedicated to crowdfunded reporting, was able to commission Wired.com staff writer Alexis Madrigal to move forward with his article.

We’re proud to be the first media source to publish Alexis’ article.  It will run as a five-part series: three parts published here on Gas 2.0, and the other two on Ecolocalizer.
I. How to Take Some Oil Out of An Energy System — Fast
“Don’t change horses in midstream.”
–aphorism based on 1864 Abraham Lincoln speech

What happens if, all of a sudden, you need to change the entire energy infrastructure on which California’s transportation system runs?

Most Californians probably haven’t noticed, but that’s exactly what a combination of Midwestern farmers, Big Oil companies, railroad operators, and fuel terminal owners have done over the last decade.

In switching out MTBE, a former component of California gasoline, in favor of ethanol, a behind-the-scenes change of huge proportions took place. The state and its industrial infrastructure companies managed to start putting a billion gallons of ethanol into our gas tanks a year, without anyone really noticing.

“Gasoline is just one component in what is legislated to be motor fuel. You can’t sell it without the ethanol,” says John Mahon, who runs renewable fuels for Kinder Morgan, a key player in California’s liquid fuels market. “Ethanol becomes a critical path.”