CenLamar

Biofuels and Agrifuels (as seems to be becoming the more accepted term) has been a common topic in the news and on this blog (here) and (here) and will continue to be a topic of great discussion for the near future and perhaps a permanent fixture in our energy and agriculture future.

I happened to run across an interesting article in the Lafayette Daily Advertiser that spotlights Louisiana’s previous flirt with biofuels. This was definitely one of those Tim Allen noise type moments because honestly I had NO idea Louisiana had ever had a biofuels industry.

Well, unfortunately I was right. We never did…

Sort of.

We in fact began exploring ethanol production in Louisiana in the late 1970’s and as the article points out had 10 active ethanol plants in operation in 1986. However the drop in oil prices down to $10/barrel, a lack of environmental regulations and more than anything else absolute sabotage from our state Legislature and Governor Edwards pretty much cut off ethanol at the knees.

The Lafayette article is available (here) and I definitely encourage everyone to read the entire thing. It’s likely to really annoy anyone who has a disdain for wasteful and ineffective government. Our legislature’s bad track record on alternative energy is truly one of the most shameful aspects of our anti-development image here in Louisiana. I personally worked on a project to convert abandoned oil rigs into an offshore windfarm a couple of years ago. It needed some legislation for tax credits (you know those things Louisiana gives to EVERYONE) to become viable. This windfarm was going to use old rigs (an environmental hazard) to harness free wind, to produce low cost electricity to sell to someone else. And get this the Louisiana Legislature voted no. Was it because it was not viable?

Hardly. In fact we had a buyer already for the electricity. The US Airforce’s Keesler Air Force Base in Biloxi was contracted to buy all the electricity at a higher than normal rate. That’s right, we were going to use Louisiana’s trash to sell free power to Mississippi! And our boy in Baton Rouge said no.

Well, Texas said yes, and now the windfarm is under construction off the coast of Galveston. The above picture is from the state of Texas who is proudly boasting of their new development (oh and just in cae anyone missed it, Texas produces a LOT of oil)… OK, back to ethanol.

According to Bob Moser’s article:

In 1986 Louisiana’s ethanol future looked bright. We made ethanol with sugarcane molasses — 32 million gallons worth — and mixed it to make 319 million gallons of “gasohol,” more than any year before. The state was expected to lead the nation’s budding ethanol industry.

So in 1986, the Challenger blew up and obviously so did our collective common sense in regard to biofuels. We actually first created a viable and booming industry and then in strange government fashion summarily executed that same industry! Mr. Moser again:

[Bold Mine] The state Legislature passed several laws in 1979 to kick-start a program mixing 10 percent ethanol into gasoline. Louisiana’s 8 cent motor fuel tax was erased for gasohol, and with the federal 4 cent tax exemption, as well, nine companies announced Louisiana ethanol plans.

The subsidy package alone was enough to attract private investors to ethanol, Theriot said. Louisiana’s gasohol tax exemption in 1985 was $28 million, the largest exemption in the U.S.

Louisiana ethanol plants first ran in 1985, and cane molasses, a byproduct of the normal sugar extraction, was the only feedstock used.

Cane farmers reaped a $5.3 million increase in the price of molasses, according to reports from the Louisiana Department of Natural Resources. The budding gasohol industry created 178 new jobs that year.

Did anyone miss that? 178 jobs! And that was only in a single year. We created around 600 jobs with Union Tankcar over 2 years and we’ve been talking about that ever since. Sugar Cane Ethanol created over 150 jobs in a single year before it even got off the ground and this was in 1986 when there was barely a market for it! Please excuse me while I imagine more, even louder exclamation points in my head for a second…

OK, why are these jobs a big deal? Well for one they were innovative and two, they aren’t there anymore!

Take a look at these two photos below. This is our government at work:

Above — in 1986 the world’s most advanced and innovative Agrifuels plant ever built. Despite its very industrial look, it was almost completely green – a concept that wouldn’t even be pioneered in our collective national psyche for 20 more years.

Right — That same plant today. Like so many things in our state it’s a sitting pile of rusted debris where a former beacon of hope and industriousness could have been born.

Note that the plant sits decaying while still surrounded by steadily growing sugar cane.

In fact this plant was more than just a source of ethanol fuel. it was also a potential lifeline to struggling sugar cane farmers and introduced even more sustainable crops like sorghum to the area. It gave one of our core industries a stronger foot to stand on while serving to develop an industry we would fight to have today.

Mr. Moser:

By the late 1970s, the price of world sugar was declining, local farmers lost their profit margins and five sugar mills closed in South Louisiana, said Jason Theriot, a native of New Iberia and doctoral candidate at the University of Houston specializing in energy and environmental history.

“Saving sugar cane was goal No. 1,” he said. “If it helped the nation reduce oil imports, that, as we say, was lagniappe.”

The article goes on to tell us of this noble attempt and the above pictured plant that never had a chance.

Built in 1986, the $107 million Agrifuels Iberia Parish Ethanol Plant was 10 years in the making by local oilfield fabricator Dailey Berard and a team of investors.

It was considered a cutting-edge project on the national level, would produce 100,000 gallons of ethanol per day for Louisiana, and would change regional cane farming forever. Three other Agrifuels plants were proposed for the state, pending success of the first.

“For years farmers had been using bagasse (a fibrous pulp leftover from cane after sugar extraction) to make things like paper, building materials, animal feed and even oilfield mud products,” Theriot said. “Agrifuels’ plan was to use bagasse to run the refinery. It would use no natural gas, no petroleum … Agrifuels in New Iberia was 20 years ahead of its time.”

A dozen or so sugar mills and 200 local cane farmers were on board to provide the molasses and grow sweet sorghum, a crop with high sugar content that takes one-third the time to grow as cane, could be planted during fallow months and harvested with a farmer’s same cane equipment.

But a day after the plant turned on its lights the state cut its tax incentive — the same incentive that other financiers banked on when developing their plans for Louisiana ethanol. Agrifuels couldn’t produce a drop.

I honestly don’t even know what to say at this point. How on earth did we tolerate such a fiasco in our state government. The idea of creating an industry, knowing it was a success, and then killing it to please the petroleum puppeteers is simply insane. Myself and Lamar and Daniel are far too young to have any memory of this happening, so it’s all history for us. However, if anyone is out there reading this who remembers it, PLEASE leave some comments. Crazy.

Louisiana is slated to open a new Ethanol plant this year at Laccasine. This plant is supposed to become operational by fall of 2008 and in fact will be starting its production 22 years after government shut down the other plant only a few miles away.

The map above shows current biofuel production sites in Louisiana. Click on the map to go to the Daily Advertiser’s page on Ethanol. It’s interactive and provides details on each plant (interactive map on their page).

I honestly believe that pro-sugar legislation is one key point we should — as citizens and voters be demanding at every turn. And for once, the green and progressive activists like myself have something to arm ourselves with — MONEY! It just simply makes sense to protect our agriculture economy and to develop our agrifuels business. Check out the graph below. It’s from Exxon-Mobil. That’s right, even the world’s largest oil company is interested in the fact that Sugar Cane is one hell of a useful source of fuel:

You will note that according to Exxon-Mobil the production cost of sugar cane-based ethanol is half that of corn-based ethanol. And, at $30/barrel that makes the final product of refined sugar cane ethanol roughly $70 per barrel cheaper than raw unrefined crude oil!

So I ask you all…if we already have this:

Do we really want to forsake our natural opportunity for this:

Act.