We do despair of BP sometimes – this week more than most. It has invited us to talk about its new partnership in ethanol production, as if it were renewable energy. This is a deal to combine its existing biofuels and biopower with Bunge in Brazil to create basically a much bigger bioenergy company.
Ethanol uses carbon dioxide in its manufacture, distribution and when it is burned. And is already part and parcel of existing oil supplies – in different parts of the world cars can use either 100% ethanol, down to mixing it with petroleum in concentrations as low as 10% and these percentages are rising. In that sense BP knows these markets well and it is really just buying upstream in its production cycle to make more profit – nothing more.
Ethanol is typified as “low carbon” fuel, but in Brazil, many cars are 100% ready to run on it, and it uses about 1.5 times the equivalent of petrol (to travel as far, you need more of it). It still gives off carbon, varying amounts less than petrol, depending upon what plant and which part of the plant is used. Sugar cane is supposed to be the most efficient, and in Brazil it is quite common to cut the cane to create ethanol, and to use the residues to burn to create electricity and for this process to be quite a saving in CO2.
Ethanol from sugarcane gives off 70% less Co2 than conventional hydrocarbon transport fuels claims BP . But it still gives some off. Of course it is supposed to be a circular process, so when you grow more cane, you absorb a similar amount of carbon. Though of course not as much as rain forest.
There are issues. One is that the creation processes for ethanol makes CO2 directly, but the most worrying is that use of land for this means a food starved country like Brazil needs more land, some for meat farming, some for biofuels, and some for vegetable farming, and this leads to more trees being cut down by the current president of Brazil, Jair Bolsonaro – who stood up this week and claimed that satellite imagery showing how the burning of rain forest in Brazil has accelerated dramatically since he came into power, was a plain and simple lie. Shame the pictures show him to be wrong, and lying himself.
BP could and should avoid doing deals which are fundamentally unsound, and which promote this type of controversy. For instance the EU is about to say it cannot proceed with a trade deal with Brazil due to the excess deforestation, which has come about simply because of this type of greed. We’re not sure how BP will deal with its fresh supply of ethanol then if it has to use it all outside the EU.
BP said this will bring together two established industry players with complementary assets, in one of world’s largest fast-growing biofuels markets, and that it will lead to “highly-efficient” production of ethanol
The truth is that hydrogen and other materials are also potential fuels for cars, but that the most likely one is pure electricity. One of the biggest issues around Ethanol is how does it get distributed, since it needs a physical distribution business – which is currently carbon heavy. Distributing electricity is so much simpler, and more efficient.
We can see from the rise of EVs that petroleum has entered a slow death spiral as a business, clear that it is dying by 2035, and almost complete by 2050. Why get into a business that will be dead in 30 years? Clearly BP believes that this type of “almost CO2 free” businesses are fine.
We can only hope that it is merging with Bunge so that it can offload the entire business somewhere down the road, perhaps to Bunge.
Bob Dudley, BP group chief executive, said, “This is another large-scale example of BP’s commitment to play a leading role in a rapid transition to a low carbon future.” What he means is, a carbon rich way of making more and more money.