The Petroleum Crisis

A couple of years ago, on a rainy Sunday afternoon when I couldn’t play golf, I was scribbling on some paper, thinking of various things, trying to look busy to avoid the Honey-Do list.  I figured out how to determine if the mass of the universe was increasing or decreasing using simple high school experiments, but it would take about 10 centuries to complete the project.  I worked out that the gravitational constant actually is not so constant.  Not wanting to then go do the chores my wife had for me, I went on to consider other issues.  I had been pondering the case of Brazil for some time, who had in a relatively short period gone from virtual dependence on outside petroleum sources to complete independence.  I wondered if the US could­­­ possibly do this.

I started doing the calculations, as much to look busy to my wife as anything else.  Let’s see, if gasoline consumption (just gas, not diesel) is around 140 billion gallons per year (it has actually dropped some now but still over 130 billion gallons per year), and annual gasoline production in the US is about 26 billion gallons per year of gasoline, that leaves 114 billion gallons that are imported or produced from imported oil.  Following the model of Brazil, if we produced ethanol from sugar to make up the difference, how much sugar would it take, and what would be the cost? First of all, what was US sugar production?  Annual production is 8 billion kg.  Current sugar prices are about $15 per 100 lb.  One tonne of sugar cane produces about 140 kg of sugar, which in turn produces about 18 gallons of ethanol.  An acre of land produces about 190 tonnes of sugar cane, or 3400 gallons of ethanol.  To cover the 114 billion gallons deficit, then would take 114 billion/3400 acres, or 33.5 million acres.  This would be about 54,000 square miles, if my calculations are correct.  So take the bottom 50 plus miles of the south east coast and turn it into sugar cane production, assuming one crop per year and no crop rotation.  And assuming a price of $15 per 100 lb of sugar, and 58,520 lb of sugar per acre, the raw material cost would be about $2.50 at current sugar prices.  Of course, production costs could be less, but assuming we use the open market to produce the sugar, this is the cost at current market prices.  (We could use moonshiners to make the alcohol, so that should be pretty cheap!). Well, this was fun, and wasted about an hour of my afternoon, but my wife was still hovering around, so I decided to dig in to this problem further.  What if we used corn instead of sugar?  After all, there is much more area of the US that can grow corn than can grow sugar cane.  So I started back in. Annual corn production at the time was about 12 billion bushels per year.  Production was averaging 160 bushels per acre.  2.6 gallons of ethanol can be produced from a bushel of corn, so one acre could produce 416 gallons of ethanol.  At $4.10 per bushel corn prices, this would be $1.57 per gallon in raw materials.  247 million acres would be required to produce enough ethanol to cover the gasoline deficit for the US, or 427,000 square miles, again, if my calculations were correct.  I really wasn’t focusing on the calculations so much as getting out of housework.  If I got through all of this and my wife was still in the area, I would go back and double check.  But back to the subject…so to cover the deficit of gasoline with ethanol from corn production would essentially take all of the mid-western states dedicated to corn crop.  Hmmm, might work.  Guaranteed market, and price!  Farmers wouldn’t have anything to complain about! (Yeah, right.  I grew up in Iowa and know better.)  Material price looks good considering gasoline prices over $3.50 per gallon.  Win – Win. Of course, now we have the Dakota oil shale projects from the Bakken formation, which I think is one of the most exciting natural resource projects the US has seen in decades.  If we can dissuade the public from believing all of the crap and nonsense they see and hear on fracking, we can increase domestic production even more.  I can only hope Americans are allowed to develop these natural resources, and perhaps combine that with some domestic ethanol production.  I still prefer my corn on my plate and my sugar in my pantry, not in my gas tank. And by the way, on that rainy Sunday when I was doing this, by the time I finished the corn calculations, my wife had gone out so I put my pencil down and went to watch some sports.

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