Cellulosic Biofuels Taking Food Out of the Picture

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Only one cogent argument can be made on behalf of corn ethanol, other than inflating the profits of corn and ethanol producers: corn ethanol could be a stepping-stone to more promising biofuels made from inedible organic matter.

More promising biofuels do exist. These are fuels made from the vast array of cellulosic plant materials: grasses, fast-growing trees, municipal trash, and crop residues. These are the "advanced biofuels" called for in the 2007 Energy Independence and Security Act. These materials can be converted into any number of liquid and gaseous biofuels, including but not limited to ethanol. Virtually every study on ethanol and biofuels highlights the potential attractions of cellulosic fuels.29 They're abundant and they're not crops that would otherwise nourish people. For a given plot of land, cel-lulosic biofuels have a far smaller carbon footprint than corn. And cellulosic material can even be grown on marginal lands not suitable to farming. The key remaining uncertainty is the cost of processing these materials into fuel. Because very little R&D funding has been devoted to these processes, they're at an early stage of development.

In his 2006 State of the Union address, President Bush recognized the opportunity of cellulosic fuels. The president declared, "Our goal is to make this new kind of ethanol practical and competitive within six years." Applause followed. Was this just more hype from a politician who would slip from the scene shortly? In this case, no.

In 2006, a number of demonstration and pilot plants began to be built around the United States. Wall Street investors and Silicon Valley venture capitalists were starting to pour money into biofuels, principally corn etha-nol but also start-up cellulosic biofuels companies. Goldman Sachs invested $27 million in Iogen, a Canadian company building a plant in Idaho to convert wheat straw into ethanol; Vinod Khosla, cofounder of Sun Microsystems and famed venture capitalist, began pouring funds into a variety of corn and cellulosic biofuels investments; and even BP, Shell, ConocoPhillips, and Chevron, the oil giants, soon got into the act. In 2006-07, Chevron awarded about $40 million over five years to the University of California, Davis, and Georgia Tech, ConocoPhillips awarded $22.5 million over eight years to Iowa State, and BP awarded $500 million over 10 years to UC Berkeley, the University of Illinois, and Lawrence Berkeley National Laboratory. In all these cases, the funding was to find new ways of producing biofuels for transportation.

But is it true that corn ethanol is a necessary and important stepping-stone to cellulosic biofuels? The argument in favor goes like this: (1) launching a corn ethanol industry creates excitement in the investment community, (2) it leads to a fuel distribution system that can accommodate future production of cellulosic ethanol, and (3) it encourages automakers to sell more flex-fuel cars, pushing aside chicken-and-egg concerns about how to get a transition started.

But these three arguments are flawed. While it's true that considerable funding is being drawn into cellulosic R&D and start-up companies, it's not obvious that the recent ramp-up of corn ethanol production had much to do with it. Corn ethanol has been widely marketed for almost three decades, and yet cellulosic investments didn't start to flow until 2006, when oil prices soared. When Dan Sperling began his academic career at UC Davis in 1982, many researchers were already experimenting with high-yield cellulose energy crops (especially poplar trees) and were developing better processes for converting cellulose to fuels. All those efforts and all those people disappeared. Funding from industry and government dried up during the Reagan administration of the 1980s and didn't come back until very recently. Meanwhile, ADM accepted billions of dollars in government subsidies for corn ethanol over these years and acknowledges not giving more than a passing thought to cellulose until 2006.30

The second argument that corn ethanol paves the way to a new fuel supply system is even more spurious. The current and expanding distribution system for corn ethanol relies on railroads and is largely redundant with the existing gasoline and diesel distribution systems. The reason for this is that ethanol absorbs water, while gasoline and diesel fuels do not. Because petroleum fuels don't absorb water, water has been allowed to saturate the entire petroleum distribution system—at the bottom of pipelines and storage tanks. Ethanol can't be integrated into this existing fuel distribution system because it would absorb the water in the pipelines and storage tanks, and then separate from the gasoline in the fuel tanks of cars, eventually damaging vehicle engines. This might seem like a trivial issue—why not just suck out the water?—but it's not. The cost would be astronomical and the process would require retrofitting or replacing the vast network of pipes and tanks. To solve this incompatibility problem, current practice is to transport ethanol in rail tank cars and mix it with gasoline just before delivery to fuel stations. It's a highly inefficient, redundant system. More to the point, expanding today's corn ethanol production does little to create economies of scale for future biofuels, whether ethanol or nonethanol.

The third argument, that corn ethanol investments motivate the production of flex-fuel vehicles that set the stage for later advanced biofuels, is possibly the weakest of all. It assumes that future biofuels will be ethanol. That assumption is probably wrong. Because ethanol is incompatible with the gasoline distribution system and because ethanol has only two-thirds the energy content of gasoline (per gallon), most biofuels research is focused on finding ways of converting biomass into higher-density fuels that are more compatible with gasoline and diesel. Indeed, there's considerable evidence that it might be cheaper to convert cellulosic biomass into molecules similar to gasoline and diesel. And the carbon footprint should be about the same as for ethanol. In announcing their large R&D investments in biofuels, BP, Chevron, and ConocoPhillips all made it clear that they were most interested in biofuels compatible with their prime movers—gasoline and diesel fuel.

If nonethanol, petroleumlike biofuels are used, there will be no need for flex-fuel engines. Flex-fuel cars may not only be a waste of money but they may also be problematic for two other reasons. Their engines are less energy efficient than engines optimized for a single fuel (such as gasoline or diesel). Second, manufacturers of flex-fuel cars gain fuel economy credits (even though the cars almost never run on ethanol). As mentioned before, these extra credits ironically allow the companies to sell more gas guzzlers, resulting in larger vehicle carbon footprints.

The future of biofuels is unclear, but it almost certainly won't be dominated by ethanol. Instead it will depend on developing entirely new types of genetically modified organisms and new methods of producing fuels from biomass. Innovative ideas are just starting to be pursued in research labs around the world. Many different biomass materials might be used in various fuels in very different ways. The clean energy revolution will likely unfold in surprising ways, especially as the price of oil rises and climate concerns heat up.

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