Carbon Footprint, Trade Evolving with Industry

By Sam Rushing | September 08, 2008
Carbon dioxide is one of the greatest challenges with respect to emissions control and greenhouse gas minimization. From a global perspective, some 75 million tons per day are emitted into the atmosphere, of whichin the best case25 million tons are absorbed by the oceans, which are approaching a point of high saturation. The oceanic sink for carbon emissions is not an answer but a natural mechanism to absorb an ever-growing sum of carbon dioxide emissions, driven by an ever-hungry world with extraordinary energy demands. The world's oceans are in trouble, losing marine habitats in part due to oceanic acidification.

Extraordinary and ever-growing energy demands are driven by the internal combustion engine, as well as coal- and natural gas-fired power plants. Power plants alone can account for up to 40 percent of the total carbon emissions in some developed economies. Growing demand for the internal combustion engine, due to the lack of other affordable or technically viable options for day-to-day transportation, will be fueled by huge growth forecasted for growing economies in China and India. This means an increase in greenhouse gas emissions. Ethanol has been a friendly and hopeful means to mitigate this extraordinary global problem.

The carbon dioxide industry, as a so-called merchant trade, could have a global, annual consumption of up to 22 million metric tons, of which the United States produces 40 percent. The business is growing at less than 3 percent annually. The ethanol sector, with respect to the supply of raw carbon dioxide into the merchant gas scheme within the United States, accounts for about 40 percent of the total amount of raw gas. Byproduct from anhydrous ammonia production, reformer operations, ethylene oxide and concentrated natural wells are other options for supply of raw gas to the merchant trade.

On the other hand, ethanol has been the saving grace for the carbon dioxide industry, as natural and ammonia sources have been and will continue to be lost in record numbers. An ethanol project can yield a significant multimillion dollar additional revenue stream to the suitable ethanol project. The location of such revenue opportunities should be fully evaluated in order to squeeze out as much revenue for the ethanol producer. When taking this into consideration, and the growth of both grain- and cellulose-based technologies, certain new ethanol-based carbon dioxide plants will move forward specific to regional market opportunities. Of course, a finite number of new plants for merchant carbon dioxide will be developed in the years ahead in North America.

Globally, this issue is also subject to market forces, but a need remains to handle the politics, economics and physical control of the growing carbon emission problem. Some methods to handle excess carbon dioxide include enhanced oil recovery (which does not fully sequester the product), various conceptual sequestration schemes, and the development of new types of carbon sinks, many of which are conceptual at best.

Carbon Trading, Energy Bill's Impact
Years ago, the concept of carbon trading was not much of a consideration. Today, however, the market in greenhouse-gas emissions could well outpace the traditional commodities markets and become the largest traded commodity. This is not overstated, but also an opinion of the U.S. Commodities Futures Trading Commission. Globally, the carbon trading market was worth more than $60 billion in 2007. However, the United States accounted for a small portion of this sum. Approximately $50 billion of this overall sum was carried out under the European Union's emissions trading scheme, with practically the full balance carried out under the Kyoto Protocol. Some estimates show the global carbon market would be worth more than $3 trillion by 2020, assuming the United States should participate via a form of cap-and-trade program to limit carbon emissions, as well as a version of the current Kyoto Protocol. Carbon markets impact the power, oil, gas and coal markets as well. Cap and trade is essentially a ceiling placed on the emissions of companies, whereby the unused quota is traded with one another. This mechanism should ensure that carbon emissions are cut at the lowest possible cost. Such a mechanism will likely become a federal mandate in 2009, which is one step toward positive thinking surrounding emissions reduction.

The United States consumes approximately 190 billion gallons of gasoline and diesel fuel per year, of which about 65 percent, or 124 billion gallons, is derived from foreign sources. This foreign reliance was a major driver in the passage of the Energy Independence and Security Act of 2007.

The act did not address the need to increase electricity growth demands, plus numerous additional energy issues. However, it does address the most important and demanding issue related to energy today. Crude oil as a primary transportation energy source will be reduced under the Energy Bill. The means of reducing gasoline will take place through corporate average fuel economy increases representing a reduction in gasoline use by 1.1 million barrels per day in new vehicles while inserting 36 billion gallons per year of renewable fuels into the fuel supply.

The provisions are essentially on target at this time from a realistic viewpoint covering government mandates, which has not been possible for both the consumer and industry to handle on their own since the oil crisis of the 1970s.

Carbon footprint is the common term surrounding the growing concern about greenhouse gases. Companies and individuals are seeking a means to develop a more accurate picture of their emissions, particularly in terms of supply chain, life cycle, and other factors surrounding emissions. Life cycle essentially considers all phases of the product development from raw materials through consumption and disposal. The greenhouse gas protocol is probably the most widely used international accounting tool for government and business leaders to understand, quantify and manage greenhouse gas emissions. The protocol is about 10 years old and is a partnership between the World Business Council for Sustainable Development and the World Resources Institute, which is working with government entities, businesses and various environmental groups to develop a new generation of credible and tangible programs for managing climate change problems.

Over the past year, many companies and stockholders have been evaluating the greenhouse gas protocol to develop new guidelines on supply chain and life-cycle greenhouse gas emissions accounting capabilities. In turn, the World Resources Institute and the World Business Council for Sustainable Development outlined a survey to assess the need for new guidelines. The survey was sent to 400 companies, stockholders and industry experts. Approximately 100 replies sent a clear answer for the greenhouse gas protocol to develop new guidelines on this subject. The result is action to develop a consultation process and develop new guidelines on supply chain and life-cycle greenhouse gas accounting and reporting during 2008. The ethanol industry is a key component.

Ethanol Plant Effects
Since the United States began the development of ethanol as a transportation fuel, use has grown from 175 MMgy in 1980 to 4.9 billion gallons annually in 2006. Virtually all of this ethanol has been produced from corn. During this growth period, corn farming productivity has grown dramatically, and energy use in the typical ethanol plant has been reduced, in some cases by 50 percent. Most corn-based ethanol plants are fueled by natural gas, which has skyrocketed in price. The high price for natural gas has brought about a switch to other fuels, such as wood chips and coal. The wide range of ethanol plant types and process fuels, combined heat and power, and distillers wet grains are some factors defining plant types. The range in plant types yields distinctly different energy and greenhouse gas emission effects on a full fuel-cycle basis. This means that greenhouse gas emission impacts vary significantly, from a 3 percent increase when using coal to a 52 percent reduction when using wood chips. The end result is an examination of plant types, whereby corn ethanol production can move toward a more sustainable path.

Cap-and-trade scenarios are a future option in the United States as a means of working toward trying to cut carbon emissions. With the Energy Bill, the effects should be an eventual reduction of gasoline usage in new cars while inserting 36 billion gallons per year of renewable fuels into America's market. The logical renewable fuel is ethanol. The placement of the greenhouse gas protocol should yield new guidelines on supply chain and life-cycle greenhouse gas accounting and reporting. All of this represents a new generation of programs for managing climate change, which is good news for the ethanol industry. As the ethanol industry transforms into more efficient forms of production, corn-based ethanol will yield more efficient and viable forms of production for tomorrow's non-petroleum fuel options. The future developments in cellulose are another direction whereby lower emissions and greater efficiencies are available as a transportation fuel versus the shrinking global supply of petroleum products.

Ethanol as a low-carbon fuel, along with future ethanol industry plant modifications and developments, fits well into life-cycle evaluation and assessment of the industry from feedstock to the final fuel product and handling of carbon dioxide emissions.

Sam A. Rushing is the president of Advanced Cryogenics Ltd. of Tavernier, Fla. Reach him at or (305) 852-2597.