Renewable fuels

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Renewable fuels are alternative fuel sources such as ethanol and biodiesel (e.g. soy, vegetable oils, animal fats, or recycled restaurant greases), in contrast to alternative fuels such as natural gas, LPG (propane) and hydrogen. Renewable fuels became particularly newsworthy with the signing of the Energy Bill on August 8, 2005 which expanded the current use of renewable fuels in the United States. The Bill called for a minimum of 4 billion U.S. gallons (15 million m³) of renewable fuels to be used in 2006, only to increase to 7.5 billion US gallons [28 million m³] by 2012.

The passage of the energy bill was motivated by a number of factors, including existing U.S. agricultural subsidies, a powerful farm lobby, as well as the desire for independence from Middle Eastern oil. Other factors such as planetary warming due to an increasing greenhouse effects and the gas emission standard required by the Kyoto Protocol were additional factors. Pollution, and injury to our fragile environment is a significant factor. Unlike fossil fuel combustion, which unlocks carbon that has been stored for millions of years, use of ethanol results in low increases to the carbon cycle.

Thanks to advances in biotechnology, researchers—to borrow an analogy from the Grimm Brothers' Rumpelstiltskin—can now transform corn, straw, and plant wastes, into "green gold" or cellulosic ethanol while simultaneously replacing "black gold" or oil with a sustainable, domestically produced biofuel. The environmental, financial, and geo-political ramifications of this endeavor are staggering, particularly in an industrialized economy that is energy dependent, and in which energy is the most significant unit of wealth that drives money in a world-wide economy. An unprecedented opportunity to convert the fertile lands of Iowa and adjacent U.S. states from 'amber waves of grain' to renewable ethanol, is a historic inflection-point in which the United States can become the "Kuwait" of the future, particularly as Middle Eastern oil will, by conservative estimates, literally run out within the next one-half century.

Contents

[edit] Peak oil

The peak oil theory suggests that petroleum is a finite resource that is rapidly depleting. Of the world-wide total remaining petroleum reserves of approximately 1,277,702,000,000 barrels (about one half of the original virgin reserves) and a world-wide usage rate of 25,000,000,000 per year, only about 50 years worth of petroleum is predicted to remain at the current depletion rate. Petroleum is imperative for the following industries: fuel (home heating, jet fuel, gasoline, diesel, etc…) transportation, agriculture, pharmaceutical, plastics/resins, man-made fibers, synthetic rubber, and explosives. Clearly, if the modern world remains reliant on petroleum as a source of energy, the price of crude oil could increase markedly, destabilizing economies world-wide. Consequently, renewable fuel drivers include: high oil prices, imbalance of trade, instability in oil exporting regions of the world, the Energy Policy Act of 2005, the potential for windfall profits for American farmers and industries, avoidance of economic depression, avoidance of scarcity of products due to a volatile ‘peak oil’ scenario expected to begin as early as 2021,[1] and a slowing of global warming that may usher in catastrophic climate change.

[edit] Addicted to oil

America's current petroleum demand, which continues to rise steadily, poses ever growing environmental problems, and dependence on foreign petroleum. U.S. oil consumption is approximately 20 million barrels/day, yet production is only 6 million barrels per day. Our cost to import oil is approximately $200 billion dollars a year. While it costs the Arabian Peninsula just one U.S. dollar to extract a barrel of oil, the cost on the world market has varied up tp $100/barrel. While U.S. oil usage increases by 2% per year, the economy has been growing at 3.3% per year. Over the past several decades, the petroleum cartel has self-imposed intentional cuts in oil production - either because they seek higher profits, or because of their protesting of American foreign policy. These production cuts have caused drops in the U.S. stock markets, but have sometimes been ameliorated by the United States releasing more of its reserves. The Strategic Petroleum Reserve currently holds about 640 million barrels of oil and is being filled to a level of 700 million barrels. Should, for example, oil production be stopped entirely, or becomes depleted, the U.S. would have only a single year of resources to fall back upon. From a national security standpoint, such a situation is untenable, and calls for the immediate incubation of long term energy solutions prior to a 'peak oil' scenario which would force the economy to grinding halt. Although additional drilling in areas such as continental shelf, the Gulf of Mexico, off the U.S. West Coast, Alaska, and the Great Lakes may stave off the inevitability of the problem, it would be only a temporary solution, and carries the risk of further polluting our environment.

[edit] Hydrocarbons and carbohydrates

Global fossil carbon emissions, an indicator of consumption, for 1800-2000. Total is black. Oil is in blue.
Global fossil carbon emissions, an indicator of consumption, for 1800-2000. Total is black. Oil is in blue.

Hydrocarbons, molecules of hydrogen and carbon, are combustible compounds resulting from eons of compression of vegetation, or fossil fuels. This means that when, for example, gasoline is fed into an internal combustion engine, a large amount of energy per pound (high energy density) is captured by the engine. Hydrocarbons are all substances with low entropy (meaning they hold a lot of energy potential), which can be released and harnessed by burning them. The downside is that they emit pollution such carbon monoxide and soot.

Carbohydrates, like hydrocarbons contain hydrogen and carbon atoms, as well as one additional atom: oxygen. They are a chief source of food energy. The simplest model is in which the sun’s energy is stored in plants as sugar, and used as a source of food to grow. When animals eat those plants – our metabolism releases that energy to us, enabling us to live. For example, the sugar in sugar cane and corn can be converted into 'moonshine' - ethyl alcohol or ethanol, which is inflammable and usable as fuel. It is also possible to convert the sugar in the corn husks – which are inedible and ordinarily thrown away – into ethanol. Ethanol - gasoline's carbohydrate-based surrogate – is similarly inflammable and combustible, and unlike gasoline, does not pollute. Also, because it possesses an oxygen atom, it is dubbed an 'oxygenate,' which endows it with the additional advantage over gasoline of combusting without any engine knocking; it also helps gasoline burn cleaner by reducing smog.

[edit] Ethanol

Ethanol is a grain alcohol that burns cleanly as a high-octane fuel, without the need for octane enhancements such as methyl tert-butyl ether (MTBE) which pollutes the environment. Ethanol, like MTBE is an oxygenate (adds oxygen)that is blended into gasoline as an additive and prevents engine "knocking" while simutaneously heping gasoline to burn cleaner and reduce smog. Most gasoline pumps in the United States utilize a formulation consisting of 90% gasoline and 10% of ethanol known as E10, but contribute to smog-forming oxides of nitrogen. In contrast, E85 is a mixture of 85% ethanol and 15% gasoline and is now available at a limited number of gasoline stations. Ethanol also degrades quickly in water and, therefore, if spilled, poses much less risk to the environment than an oil or gasoline spill. Thus, from an environmental perspective, E85 is less polluting. However, ethanol does emit acetaldehyde, a probable carcinogen, and a substance that standard emissions-testing equipment must be engineered to measure.[2] Many of the nation's 100+ corn-ethanol plants are generating 35% profits, which is helping fuel a plant-building boom that could double the size of the industry by 2008. However, because the boom is pushing up the price of corn, the Renewable Fuels Association, the group that lobbies for the ethanol industry, is now helping to build a political coalition for cellulosic ethanol.

[edit] E85 Ethanol’s popularity

High tech and business world luminaries - like Richard Branson, Paul Allen, Steve Case, Vinod Khosla, John Doerr, and Bill Gates have become ethanol advocates and are investing heavily in ethanol. Microsoft co-founder Paul Allen is investing in a Seattle firm that wants to use canola oil, which comes from rapeseed, to create ethanol fuel. And Vinod Khosla, the Kleiner Perkins partner and Sun Microsystems co-founder, has investments in two cellulosic ethanol companies. Microsoft's Bill Gates, has bought 25% of Pacific Ethanol, a Fresno, California company that is planning to build dozens of ethanol refineries in the U.S. In July of 2006 Goldman Sachs invested $27 million into a Canadian company called Iogen, which wants to produce ethanol from switchgrass, a perennial grass that is inexpensive to grow. Iogen, a non-publicly traded company, is building the world's first full-scale commercial cellulose-to-ethanol plant by 2010. Another reason for ethanol's popularity is its contribution toward providing economic revitalization in rural communities across the country.

[edit] Brazil and U.S. as leaders in ethanol production

Brazil stands out as a model for ethanol production, as it is no longer dependent on oil. Approximately 77% of new cars sold in Brazil are flexible fuel vehicles.[3] Brazilian ethanol is distilled into alcohol more efficiently for approximately $1 (U.S.) per gallon because of heavy rainfall levels and access to cheap labor. The fermentable sugar cost per gallon of ethanol is $.30 cents (when compared to corn which is $.91 cents). In contrast, U.S. corn-derived ethanol costs 30% more because the corn starch must first be converted to sugar before being distilled into alcohol. Unfortunately, despite this cost differential in production, in contrast to Japan and Sweden, the U.S. does not import Brazilian ethanol because of strict U.S. trade barriers (tariffs) corresponding to a levy of a 54-cent per gallon. These are promoted by the powerful American sugar lobby, which does not want a competitor to high-fructose corn syrup, and domestic sugar interests. The United States and Brazil lead the industrial world in global ethanol production. On March 9, 2007 Ethanol diplomacy was the focus of President Bush's Latin American Tour, in which he and Brazil's president, Luiz Inacio Lula da Silva, agreed to share technology.

[edit] A New-Found Opportunity

Brazil's sugar cane-based industry is far more efficient than the U.S. maize-based industry. Brazilian distillers are able to produce ethanol for 22 cents per litre, compared with the 30 center per liter for corn-based ethanol.[4] Sugarcane cultivation requires a tropical or subtropical climate, with a minimum of 600 mm (24 in) of annual rainfall. Sugarcane is one of the most efficient photosynthesizers in the plant kingdom, able to convert up to 2 percent of incident solar energy into biomass. Ethanol is produced by yeast fermentation of the sugar extracted from sugar cane. Sugarcane production in the United States occurs in Florida, Louisiana, Hawaii, and Texas. In prime growing regions, such as Hawaii, sugarcane can produce 20 kg for each square meter exposed to the sun.

Ethanol currently constitutes only a small fraction of the United States' fuel supply, but domestic production capacity has more than doubled since 2001, to over 4.5 billion gallons per year. Production is likely to soar over the next several years, since the Energy Policy Act of 2005 set a renewable fuels standard mandating 7.5 billion gallons of annual domestic renewable-fuel production by 2012. President Bush eventually seeks to generate a western-hemisphere dominated industry that can produce as much as 35 billion gallons (130 billion liters) a year - equal to the entire world's production as of 2007.[5]

Loop holes in the Brazillian sugar cane trade barriers permit various Central American (Columbia, Costa Rica, and Panama), Carribean, and various Andean Countries tarrif-free thanks to concessionary trade agreements. the United States can extend an olive branch toward Cuba's ailing sugar-case farms by allowing co-mutual dependency that would permit a post-Castro Cuba to play economic catch-up with sugar cane as its cash-crop. The inclusion of Mexico in tarrif-free sugar cane imports would, like our neighbhors in Central America and the Carribean, accomplish so much more than fair-market exchange.


Given the United States' ravenous need for energy, there simply is not enough spare land in the U.S. to grow adequate feedstock (barring cellulosic ethanol) to meet Mr. Bush's 35 billion-gallon target of ethanol production. Moreover, the United States stands to benefit enormously by investing in her friendly western-hemisphere neigbhors than on oil from hostile nations like Iran and Venezuela. Additionally, an ethanol boom in Latin America would crate many jobs, that would help stem the steady normward migration of illegal immigrants. For example, a recent study from the Inter-American Development Bank posited that replacing as little as 10% of Mexico's petrol consumption with locally refined ethanol would save Mexico $2 billion a year and create 400,000 jobs.[3]


[edit] Flexible fuel vehicles

The first Ford Model T was engineered to run on ethanol so that farmers could produce their own fuel. Unfortunately, it would be prohibitively expensive to convert fuel systems originally designed for E10 to E85; it might also violate emissions-control laws in some states. The National Ethanol Vehicle Coalition estimates more than 2 million Flexible Fuel Vehicles (FFV's) have been sold in the United States. E85 vehicles are now sold by the Big Three automakers (General Motors, Ford, and Daimler Chrysler). Toyota, which surpassed General Motors in late 2006 as the World's largest automaker is eyeing the flex-fuel market. Because alcohol is relatively corrosive to critical fuel-system components, compared to gasoline, any car part that comes in contact with the fuel has been upgraded to be tolerant to alcohol. Normally, these parts include a stainless steel fuel tank and Teflon-lined fuel hoses. Other minor modifications include changes to their fuel tank, fuel lines, fuel injectors, computer system, anti-siphon device and dashboard gauges. The additional cost of these modifications is estimated to be less than $200. While there are millions of cars out on the American road that can run on either E85 or E10, most automobile owners instead fill up with regular gasoline because of a shortage of filling stations offering the alternative fuel. Other consequences of using ethanol as a fuel include clogging of the fuel filter, rough-running engines, and corrosion in aluminum gas tanks.[6]

Ethanol has an energy content of 75,600 British Thermal Units (BTU's), while gasoline has 115,400 BTU.[7] Another way of saying this, is that ethanol contains approximately 34% less energy per gallon thean gasoline.[8] This difference results in 27% poorer fuel economy for ethanol[1], although vehicle acceleration remains unaffected when used in flexible fuel vehicles; what this means is that a car engine has to burn more fuel to generate the same amount of energy to drive the engine. Flexible fuel engines are designed to run more efficiently on gasoline than ethanol, although E85 fuel economy could approach that of gasoline if manufacturers engineered engines to run optimally on ethanol.[9] Such engines would be endowed with a 30%-40% larger carburetor jets (by area) or fuel injectors, and allow engines to benefit from ethanaol's much higher octane rating. Subsequently, flexible fuel vehicles may be viewed as a bridge-technology prior to the introduction of engines that run most optimally on ethanol. Optimized ethanol-only automobile engines allow for an increase of the engine's compression ratio[10] and correspondingly increased thermal energy, attaining efficiency comparible to a diesel engine.[11]

[edit] E85 fuel stations

There are nearly 800 public E85 fueling stations available in the United States (out of 176,000 nationwide), at prices comparable to regular gasoline (when discounting the reduced fuel economy of E85), primarily in the corn-growing Midwest, where corn is grown and the homegrown fuel is produced. The number of gas stations offering E85 is expected to double over the next year as service stations are being offered incentives from government and ethanol industry grants up to $30,000 for the costs of retro-fitting pumps and tanks for E85 fuel. Unfortunately, this does little to offset the cost to install pumps and tanks for E85—a hefty $200,000 per station.[12] Although ethanol contains about 65% by volume of the energy that gasoline does, the per gallon cost of E85 is 75% the price of regular unleaded gasoline. Moreover, in addition to cutting down on dirty tailpipe emissions, E85 boosts performance because of its higher octane. The overall consumer cost of E85 is close to E10, and any short term price advantage is usually lost because vehicles usually burn E85 quicker than regular fuel.


A recent development in the expansion of E85 filling stations is Walmart's announcement that it will possibly sell E85 at its 385 gas stations countrywide. Wal-Mart along with its popular division, Sam's Club has a partnership with Murphy Oil Corp. which operates more than 900 gas stations in Wal-Mart parking lots. Should they decide to follow through with plans, Walmart has the potential to be the single largest retailer of E85in the nation.


Kroger stores are selling E85 at fuel stations nationwide expanding outward from Houston, and Dallas, Texas. HEB stores are also offering E85 at some fuel stations in the Texas Hill Country. Both chains are initially offering the alternative fuel at a price lower than that of regular unleaded gasoline.

[edit] Ethanol production process

Ethanol is produced by yeast fermentation of the sugar extracted from surgarcase or sugar beets, emitting carbon dioxide - a potentially harmful greenhouse gas; the fermentation process yileds both ethanol and water. This water must be removed if ethanol is to be utilized as fuel. Purification to 95%-96% (known as hydrated ehtyl alcohol) is adequate for ethanol-only engines, whereas blending with asline requires a purity of 99.5% to 99.9%, and is known as anhydrous ethanol.[13]


Currently, one bushel of corn produces 2.8 U.S. gallons of ethanol (390 L/t), in addition to approximately 17 lb (0.3 t/t) of by-products which may be used as animal feed. Corn-yields per acre have improved from 86 bushels to 150 bushels per acre (5.4 t/ha to 9.4 t/ha) since 1975; these genetic modifications correspond to a 75% increase in corn yield is due to genetic modification of corn seed.[14] Currently, hybrid seeds are being designed (by DuPont and Monsanto) that will boost the starch content and improve fermentability of the corn used, thus raising its ethanol production value; moreover, this increase in corn yield counters criticism that the expected boom in ethanol production would raise food prices and reduce America's grain exports.

Ethanol production may occur through two corn processing methods: dry and wet corn milling; the main difference between the two is the initial treatment of grain. In dry milling operations, liquefied corn starch is produced by heating corn meal with water and enzymes. A second enzyme converts the liquefied starch to sugars, which are fermented by yeast into ethanol and carbon dioxide; released CO2 during fermentation is captured and may be sold for use in carbonating beverages and in the manufacture of dry ice. Wet milling operations separate the fibre, germ (oil), and protein from the starch before it is fermented into ethanol.[15]

[edit] Environmental efficiency of grain based ethanol

Despite CO2 (a greenhouse gas) released during ethanol production and combustion, it is recaptured as a nutrient to the crops that are used in its production. Approximately 75% of ethanol production is performed via the dry corn milling process, since dry corn mills are less expensive to construct. The problem with traditional grain based ethanol is that it utilizes fossil fuels to produce heat during the conversion process, generating substantial greenhouse gas emissions. Because of this shortcoming, grain based ethanol may be viewed as a short term "fix" whereas the long term environmental solution to energy use is cellulosic ethanol production which substitutes biomass for fossil fuels, changing the emissions calculations significantly. Corn-produced ethanol reduces greenhouse emissions, when compared to gasoline, by 20%-30%.

[edit] Benefits of corn-ethanol

Corn-based ethanol will replace MTBE as an oxygenating agent in gasoline, eliminating a groundwater pollutant. Ethanol refineries are much cheaper and easier to build and expand than crude oil refineries. There is strong political support for corn-based ethanol because it opens a new market for U.S. farmers and helps automakers and oil companies meet clean air and renewable fuel regulations.

One environmental advantage to corn-derived ethanol is that corn is "carbon neutral" during its growth cycle. That means that the CO2 that the corn plants use in photosynthesis is nearly equal to the amount of CO2 emitted by making fertilizer, farming, and hauling the corn to an ethanol plant. Some American farmers have built ethanol plants in recent years in expectation of demand for ethanol as a substitute for middle eastern petroleum.

[edit] Problems associated with corn-derived ethanol

The cost of building 100 ethanol megaplants is $140 million (as compared to the $10 million + dollars to build a single crude oil refinery); the cost of natural gas to operate these plants is estimated at $15-$25 million per year, while the amount of water required in the production of ethanol is roughly 2 million gallons per day. And since corn is one of the most water-intensive crops to grow,[16] the volume of water involved in production makes it imperative that the water used be treated sewage water, rather than the Ogalalla aquifer beneath the great plains, which is being drawn down at rates exceeding 100 times replacement rate.[17]

Others argue that the benefits versus rewards, from an environmental perspective, are substantially less. Whether or not ethanol production from corn is efficient is debatable. Proponents of corn-derived ethanol point to studies emphasizing an overall net positive energy creation, whereas others claim that when the complete production costs of farming, fertilizer, ethanol distillation, etc... are taken into consideration, ethanol utilizes 30% more energy to produce than it creates.[18] [19]Ethanol proponents say that ethanol simply puts back the same carbon dioxide that plants from which it's made absorbed while growing, and hence does not add to the world's balance of greenhouse gases. In contraxt, recent studies have show a positve energy bandce for ethanol ranging between 23%-40%.[20] The reality may lie somewhere in the middle.

There are also ethical challenges in deciding the best use of natural resources. The "fuel or food debate" rages over the loss of dedicating more land to ethanol crops would squeeze the supply of land for food production. Demand for biofuels is raising the price of crops which may adversely affect food supplies. In January 2007, corn was selling at a 10-year high of well over $3/bushel (compared with the recent norm of around $2/bushel). Poultry and Pork producers are feeling the pinch of rising corn prices, which may soon be felt as higher bills at the grocery check-out counter. Moreover, government-sponsored efforts to cull forest lands for "biomass" fuel stocks could deplete habitats. For example, dedicating more land to ethanol crops would squeeze the supply of land for food production. There is currently 349 million acres of available farmland, and an additional 388 million acres of idle land. The amount of land required to plant enough corn to replace imported fuels is 238 million acres. Realistically, peak corn-ethanol would likely top out at between 11–15 billion gallons per year - only a fraction of the 140 billion gallons of gasoline consumed each year in the United States.

The process of producing corn-based ethanol, including harvesting the grain and converting it into liquid fuel, requires significant fossil-fuel inputs, which ultimately exceed the amount of energy generated. This means that we are importing oil from Saudi Arabia to produce ethanol in the US at a net energy loss. When compared to petroleum fuel, producing and using corn-based ethanol results in only about a 13% reduction in greenhouse-gas emissions, because the production process itself generates pollution that offsets the benefits of cutting gasoline use. Moreover, over-utilization of soil for corn has negative impacts of soil degradation and fertility.[21]

Producing corn is very energy intensive, and uses fossil fuels in virtually every step of the crop cycle: transporting and planting the seeds; operating farm equipment; making and applying fertilizer; and transporting the corn to market. Fertilizer, herbicide, and insecticide production consume the most fossil fuels. Fossil-fuel based fertilizers also contaminate the soil and groundwater, but they can not be replaced by natural fertilizer: there are not enough animals to provide the fertilizer to grow the corn necessary to produce all the grain-based ethanol needed to run American cars. And the herbicides and pesticides necessary to grow corn at an industrial scale leach into the groundwater, too.

There is an ongoing debate concerning the amount of energy it takes to produce ethanol from corn. For example, it takes energy equivalent to about one gallon of gasoline to make four pounds of nitrogen, the main ingredient in most fertilizer, and every one of the more than 15 million acres planted in corn is dusted with about 58 pounds of nitrogen. Given the variety of factors that go into growing corn, estimates vary widely about the amount of energy used: one estimate contends that it would require 1.5 gallons of ethanol to provide the same amount of energy as a gallon of gasoline.

Others challenge these conclusions, asserting that this analysis is based on obsolete data and miscalculated key energy values and does not account for the useful by-products, such as animal feed, of making ethanol; taking all that into account, ethanol could provide up to 40% more energy than is consumed in making it.

The question of sustainability arises when we consider that ethanol from corn can't possibly be grown forever because growing corn depletes the soil even if sustainable farming methods such as crop rotation are used. Some researchers argue that ethanol production from corn could wear out the soil within 30 years.

Ethanol, even in gasoline blends, cannot be shipped through the country's existing gasoline pipeline system because it is easily contaminated by water and corrodes the pipes;[22] there is no ethanol pipeline anywhere in the world, although Brazil's Petrobras claims to have one in the planning stages. Ethanol is currently shipped by truck or rail car to fuel distributors, who then mix it with gasoline before delivering it to filling stations in more trucks. This adds to the cost of ethanol and to its overall CO2 emissions. In order to use ethanol on any large scale, transport vehicles will either have to be retrofitted for ethanol, or the government be forced to build or subsidize pipelines.

There is no shortage of disagreement on the pros and cons of using corn-ethanol as a petroleum substitute. What does emerge from the discussion is that while corn-derived ethanol may be a short term solution to America's energy problem, it casts doubt on corn-based ethanol's long-term viability, and begs the need for a long term solution: enter cellulosic ethanol.

[edit] Cellulosic ethanol

Some of ethanol’s disadvantages can be avoided if a source other than corn is used. Cellulosic ethanol is ethanol derived from essentially inexhaustible resources by utilizing the cellulose that is found in all plant matter, in contrast to starch-based ethanol produced mainly from corn. Made from plant biomass using enzymatic or microbial action, cellulosic ethanol is potentially more energy efficient because the distillation temperatures are substantially lower than for corn ethanol. Consequently, very little energy is used directly in making the ethanol. A 10% blend of cellulosic ethanol would reduce greenhouse gas emissions by up to 10% compared with gasoline, and an 85% blend would reduce CO2 emissions by as much as much as 50%[23], mostly due to the reduced emissions from fertilizer production.

Scientist are seeking the fuel - sugar locked away in the stalk and leaves of the plants in the form of cellulose, the basic building block of plants. Cellulose is a carbohydrate polymer that makes up the walls of all plant cells and is also found in green algae and some bacteria; it is most easily identified by the lay population as grass or tree bark. The most underutilized energy asset on the planet is cellulosic biomass.

Cellulosic ethanol holds promise of a much higher capacity than corn derived-ethanol, possibly as much of 45 million gallons per year[24]—or 30% of U.S oil consumption. This corresponds to the amount of foreign oil the U.S. currently imports from OPEC nations.

This newly emergent source of ethanol involves the conversion of cellulose (from sawdust, paper waste, and inedible plant waste) to ethanol, although the chemical conversion is not yet as efficient as the corn-to ethanol conversion, but is expected to become financially feasible relatively soon. Sources of cellulose include a wide variety of cellulosic biomass feed stocks including agricultural plant wastes (e.g., corn stover, cereal straws, sugarcane bagasse), plant wastes from industrial processes (e.g., sawdust, paper pulp) and energy crops grown specifically for fuel production, such as perennial grasses. These grasses include switchgrass (a tall prairie grass) that is highly drought resistant[25] and other forage crops that are promising feed stocks for ethanol production. The perennial grass has a deep root system, anchoring soils to prevent erosion and helping to build soil fertility. Switchgrass (commonly used for hay) in particular has several advantages. As a native species, switchgrass is better adapted to US climate and soils, uses water efficiently, is highly drought resistant, does not need a lot of fertilizers or pesticides, and absorbs both more efficiently.

Over the short run, it is likely that the inedible parts of corn will most likely be utilized to manufacture cellulosic ethanol, especially as corn is both energy- and water-intensive to grow. In contrast, switch grass is cheaper to grow and requires less water, but requires special harvest and transport machinery which is not yet available. Additionally, farmers will likely be hesitant to grow switchgrass until there is a market for the crop, while industrialist who build cellulose ethanol manufacturing plants will not proceed until a ready supply of farmland is utilized for growing switchgrass.

[edit] Efficiency of cellulosic ethanol

When comparing ethanol production from corn, sugar, wheat, or soybeans, cellulosic ethanol requires less energy to produce. Cellulosic ethanol's favorable profile stems from using lignin - which makes up the bulk of the dry mass comprising cellulosic biomass; lignin is also a biomass by-product of the conversion operation, to fuel the process. Greenhouse gases produced by the combustion of biomass are offset by the CO2 absorbed by the biomass as it grows, hence lignin has no net greenhouse emissions. From an environmental perspective, cellulosic ethanol is a win-win scenario because the conversion process demonstrates greenhouse gas emission reductions of about 80%, when compared to gasoline. Moreover, cellulosic ethanol is not dependent on fluctuating corn or sugar prices. Additionally, corn production gobbles up a lot of power in the form of everything from fertilizer to pesticides. Finally, farmers in the agricultural states are lobbying to develop capacity and infrastructure, as well as mandates for use. An alternative source of biomass in more urban areas is the waste stream, where conversion could provide localized production and urban environmental improvements.

[edit] U.S. Government preference for cellulosic ethanol

In his State of the Union Address on January 31, 2006, President George W. Bush stated, “We'll also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years.” The U.S. Department of Energy released a report on July 7, 2006 with an ambitious new research agenda for the development of cellulosic ethanol as an alternative to gasoline. The 200-page scientific roadmap cites recent advances in biotechnology that have made cost-effective production of ethanol from cellulose, or inedible plant fiber, an attainable goal, with federal loan guarantees for new cellulosic biorefineries. The report outlines a detailed research plan for developing new technologies to transform cellulosic ethanol - a renewable, cleaner-burning, and carbon-neutral alternative to gasoline - into an economically viable transportation fuel. Included is a mandate to produce 250 gallons of cellulosic ethanol by 2013. The Department of Energy has invested in research on enzymatic, thermochemical, acid hydrolysis, hybrid hydrolysis/enzymatic, and a variety of other approaches toward achieving success in discovering an efficient and low cost method of converting cellulose to ethanol.

President Bush's 2007 budget earmarked $150 million for the research effort - more than double the 2006 budget in favor of the cellulosic lobby. Taxpayers and consumers are already shouldering part of the cost: each gallon of ethanol sold is subsidized by a 51-cent/gallon federal tax credit paid to U.S. producers.[26] These subsidies, along with state incentive programs, cost the nation over $2 billion a year, leading legislators to pledge to invest in cellulosic ethanol. Finally, in response to potential loss of profits, OPEC could decide to drastically drop the price of oil, in an effort to stall U.S. attempts to wean society off of petroleum. It is unknown whether any such OPEC change would deflect the U.S. from its commitment to replace gasoline with ethanol.

Another dampening factor is the short term loss of income to American refiners of crude oil. The U.S. market is especially lucrative, sometimes earning its refiners $20 or more on every barrel of crude oil they refine. Exxon Mobil Corp. earned $1.3 billion in its refining arm in the second quarter, up 11% from a year before. The expectation, over the long run, is that the U.S. economy would more than earn its share back if our primary source of energy were manufactured and processed in the United States, but individual companies could be adversely affected.

The opportunities to address national security, climate change, and rural economic pressures by increasing the deployment of cellulosic technologies are viewed as a "win-win-win" by many. Cutting oil imports, reducing the greenhouse gas emissions, and creating jobs in our rural communities are all positive attributes of the commercialization of these technologies.

[edit] Biofuel companies

Unfortunately, costs of producing ethanol from cellulosic feedstock such as wood chips are still about 70% higher than production from corn, because of an extra step in the production process, when compared to production of corn-derived ethanol. Until recently, the idea of extracting ethanol from farm waste and other sources was barely clinging to life in the recesses of university campuses and federal labs, because production problems, as well as the need to bring together a vast team of specialists. Consider: Finding a bacteria from a cow's intestinal tract or from elephant dung that has the correct enzyme to degrade cellulose, and then bringing in geneticists to modify that enzyme kept this discouraging feat from every growing beyond its embryonic state. Now, that is all changing with a race by approximately thirty companies attempting to accomplish this alchemic feat, and in the process working directly or coordinating with: environmental groups, biotechnology firms, some major oil companies, chemical giants, auto makers, defense hawks and venture capitalists. The winner will be whoever can make can make cellulosic ethanol in mass quantities for as little money per gallon as possible.

With the majority of such biofuel companies (Iogen Corporation, SunOpta's BioProcess Group, Genencor, Novozymes[2], Dyadic International, Inc. (AMEX: DIL), Kansas City-based Alternative Energy Sources, Inc. [Nasdaq:AENS], Flex Fuels USA based in Huntsville, Alabama (now owned by Alternative Energy Sources)[3], or BRI Energy, LLC [4], Abengoa Bioenergy[5]) located in North America, the United States is in a unique position to lead the way in the development, production, and sale of a new source of energy.

One notable company that deserves special mention is Archer-Daniels-Midland Company (ADM) which has already invested heavily into building approximately 100 corn-ethanol production plants, known as bio-refineries, and churns out about one-fifth of the country's ethanol supply. This occurred due to seasonal overcapacity in its corn syrup plants when surplus was available to produce ethanol. Moreover, ADM is in a unique position to utilize unused parts of the corn crop, and convert previously discarded waste into a viable product.[27] The hull surrounding corn contains fiber that the Decatur, Illinois, grain-processing giant's ethanol-making microorganisms can not use. Figuring out how to convert the fiber into more sugar could increase the output of an existing corn-ethanol plant by 15%. Consequently, ADM wouldn't have to figure out how to collect a new source of biomass but merely use the existing infrastructure for gathering corn - resulting in an advantage over its competitors. ADM executives want government help to build a plant that could cost between $50 million and $100 million. Prescient in their position in the quest for success, ADM recently hired the head of petroleum refining at Chevron, Patricia A Woertz, to metamorphose ADM into the Exxon-Mobil of the ethanol industry.[28] If ADM succeeds, it will catapult beyond the ethanol industry to compete with the larger, global energy industry. In essence, the old paradigm of processing a barrel of crude oil into gasoline will be replaced with processing a bushel of corn into ethanol.

Meanwhile DuPont, the chemical giant, is attempting to figure out how to construct a biorefinery fueled by corn stover—the stalk and leaves that are left in the field after farmers harvest their crop. The company's goal is to make ethanol from cellulose as cheaply as from corn kernels by 2009. If it works, the technology could double the amount of ethanol produced by a field of corn.

Diversa Corporporation, a biotech company based in San Diego, examined how biomass is converted into energy in the natural environment. They have found that the enzymes inherent in the bacteria and protozoa that inhabit the digestive tracts of the household termite efficiently convert 95% of cellulose into fermentable sugars. Using proprietary DNA extraction and cloning technologies, they were able to isolate the cellulose-degrading enzymes. By reenacting this natural process, the company created a cocktail of high-performance enzymes for industrial ethanol production enablers. Although still in the early stages of this work, the initial results are promising. Currently, these expensive enzymes cost about 25 cents per gallon of ethanol, although this price is very likely to decline by half in the coming years.

Construction of the first U.S. comerical plant producing cellulosic ethanol begins will commence in the State of Iowa in February of 2007. The Voyager Ethanol plant in Emmetsburg, owned by Broin Companies, will be converted from a 50 million-gallon-a-year conventional corn dry mill facility into a 125 million-gallon-a-year commercial-scale biorefinery producing ethanol from not only corn but also the stalk, leaves and cobs of the corn plant. Most ethanol plants rely on natural gas to power their processing equipment. The process to be used at the Emmetsburg plant will enable the plant to make 11 percent more ethanol from a bushel of corn and 27 percent more from an acre of corn. The process cuts the need for fossil fuel power at the plant by 83 percent by using some of its own byproduct for power. The $200 million plant is scheduled to begin in February and take about 30 months to complete. Project completion is contingent upon partial funding from a USDOE grant, which is likely as the U.S. Government views the renewable energy project as a full-blown national security issue.

There is much reason for hope. Consider: Malthusian doomsday predictions hung over the civilized world for close to one hundred years. In the same manner, that Fritz Haber turned Malthusian projections on its head by discovering a catalyst to ‘fix’ nitrogen, Craig Venter, the scientist who helped map the human genome, is using $31 million in venture-capital funding to make genetically modified plants and plant-eating enzymes via Synthetic Genomics, his newest venture.

[edit] U.S.-Israeli joint venture in renewable energy

In May of 2006, a proposed U.S.-Israel Energy Cooperation Act[6] would appropriate a meager $20 million annually from the U.S. to world-famous Israeli scientific talent. Introduced by bipartisan cooperation in May of 2006 and approved overwhelmingly in July, the language of the bill stresses that energy independence is “in the highest national security interest of the United States,” especially since many of the oil-exporting countries utilize profits to fund terrorism and hostile propaganda. Israel was chosen because of successful U.S.-Israel joint collaborations in the past, and because Israeli have already made several technological breakthroughs in alternative, renewable energy sources. Aside from this, Israel’s track record of innovation and success speaks volumes: Israel leads the world in the number of scientists and technicians in the workforce, with 145 per 10,000. Israel has the highest per capita ratio of scientific publications in the world by a large margin, as well as one of the highest per capita rates of patents filed. In proportion to its population, Israel has the largest number of startup companies in the world. In absolute terms, Israel has the second largest number of startup companies in the world; the U.S. has somewhat more with 3,500 companies, mostly in high-tech. Israel is ranked #2 in the world for venture capital funds right behind the U.S. With more than 3,000 high-tech companies and start-ups, Israel has the highest concentration of high tech companies in the world, apart from the Silicon Valley. Outside the United States and Canada, Israel has the largest number of NASDAQ listed companies.

One striking example of Israeli-American collaboration is the funding by Battery Ventures, one of America’s oldest venture capital (VC) companies and listed by Forbes Magazine as one of the top ten VC companies in the U.S., has recently invested $150 million dollars in a Technion University (Haifa) incubator focused on renewable energy, and will continue to invest similar funds annually in conjunction with Vertex Ventures.

[edit] Strategic inflection point

In the last decade of the 20th century, Andrew Grove, the former head of Intel described scenarios that have arisen in history which represent monumental paradigm shifts in the reality and nature of systems. He coined this phenomenon a 'strategic inflection point' because the variables governing the model are about to change insidiously and profoundly, and may either signal an end to the world order as we have known it, or represent an opportunity to rise to new heights and emerge stronger than ever.[29] This is precisely what has occurred and is still occurring with respect to world dependence on petroleum from the Middle East, particularly with respect to the re-emergence of Islam, powered by petroleum, as a world-wide power on the rise over the last century. While tangential to the central topic of this article, a brief sociological foray into Arab history and radicalized Islam is essential to understanding the source of the inflection point that has evolved over the past century and fast reaching its apogee.

[edit] Rise of Islam

The demise of the Ottoman Empire at the end of World War I coincides with the emergence of newly formed Arab states and the feasibility of oil extraction in the Middle East. The benefits reaped from a century of oil profits at first allowed Middle Eastern countries' investment in their own infrastructures, followed by global investments in land and businesses including in the United States. By the end of the 20th century, Islam had become the world's fastest growing religion in nearly every continent and nation, including China. By the middle of the twentieth century, the major oil producers, led by several Arab counties, created a cartel known as Organization of the Petroleum Exporting Countries (OPEC) which includes eleven countries whose members are predominantly Islamic nations, as well as Venezuela, a Christian nation in South America. Laws in the U.S. prohibit monopolies in most industries because of the principle that prices are higher and output is lower when firms do not engage in competition. Consequently, the U.S. has passed anti-trust laws to protect the public from non-competitive pricing. In the international arena, the U.S. has no jurisdiction in the sphere of commerce, and is at the mercy of the vagaries of cartels. OPEC flexed its muscles for the first time during the 1973 oil embargo which wreaked havoc on the financial stability of Western Europe and the United States. What emerged from a mere cartel was a unified and formidable political force that has greater geopolitical influence than their land mass or population would otherwise command.

[edit] United States

America's addiction to oil began with Henry Ford who had the vision to see the long term benefit of developing relationships with oil-rich countries. America's romance with the automobile would prove to fuel the need for petroleum derivatives for the following century. His pro-Arab stance was therefore a logical outcome of the economics of petroleum, and it was he who spearheaded the establishment of the largest Arab community in the United States - in Dearborn, Michigan and the Detroit environs, by providing many in that community with jobs in his factories. Indeed, the Detroit area hosts the largest population of Arab Americans in the U.S. Ford's good friend, Charles Lindbergh, the famous aviator saw the then fledgling airline industry as heavily dependent upon Arab oil, and shared similar political views.

Similarly, the particular close relationship the United States has with Saudi Arabia - the single largest oil producer - can be best understood as a symbiotic relationship: America's energy needs and Saudi Arabia's needs for capital. The Saudi's wish to modernize and beautify their desert country into a western style paradise, as well as create long term investments throughout the world for use once their oil reserves become depleted. Successive American presidents have provided "red carpet" treatment to the Saudis. The American posture toward Saudi Arabia and many other OPEC counties, while touted as a "special relationship" in the media, represents pandering to the hand that feeds it. This relationship was shaken by the rise of Islamic militancy, and most acutely by the events of September 11, 2001. For the first time in close to a century, the leadership of the United States as well as many of the American people, began to weigh the benefits versus costs of those relationships and reliance upon an energy source that was costly, easily interruptible, polluting, and which would eventually run out.

To date, the Saudis alone have invested approximately 70 billion dollars around the globe, 60% of which was invested in the U.S. Saudi Arabian investments in the United States have traditionally been a welcome counterweight to the systemic U.S. trade deficit with the Kingdom. As our demand for Saudi oil continues at 1.5 million barrels per day, U.S. service and merchandise exports revenues to the Kingdom cover nowhere near the level of expenditures for petroleum. One enabler of U.S. consumption has been the historic Saudi Arabian willingness to finance this trade deficit by investing in the United States. This relationship, while symbiotic, and necessary to a U.S. economy addicted to consumption, is viewed by many as "golden hand-cuffs" voluntarily worn by the United States.

The current account is the broadest measure of a nation’s balance of income payments with the rest of the world, and it is the difference between a nation’s receipts (exports and returns on domestic holdings of foreign investment) and its payments (imports and returns on foreign holdings of domestic investment). Just like a household that spends more than it earns, a nation must finance its current account deficit through borrowing. The balance of payments is one reflection of a nation's financial economic stability. The current U.S. account balance is a 'negative value.' As of 2004, the account balance in the U.S. was minus (-) 665.5 billion dollars. This borrowing on the part of the United States has, predictably, led to an enormous foreign debt.

The current U.S. international debt may be damaging to future U.S. living standards. This damage has not materialized because interest rates have been at historic lows in recent years, making U.S. borrowing extraordinarily cheap, and willingness on the part of China and other creditor nations to buy U.S. debt. When interest rates begin to rise in the United States, or when foreign investors and governments curtail the purchase of U.S. debt, the full consequences of the U.S. international debt may cause significant economic strife.

[edit] Around the globe

Today, Islamic people seek dominance in many venues, with the emergence of a world class broadcast network, Al Jazeera, which is slated to broadcast in English in late 2006, the tallest buildings in the world (e.g, the Petronas Twin Towers in Kuala Lumpur, Malaysia, and Dubai Tower in the United Arab Emirates - built by the infamous bin Laden construction company) as well as the importation of satellite universities of some of the West's most esteemed institutions of learning to the Middle East (i.e. Cornell University Medical School in Quatar) and elsewhere. As of the middle of the 2006, Qatar rivaled Luxembourg as the world's richest nation in per capita gross domestic product (GDP).

The U.S. Department of Commerce Bureau of Economic Analysis (BEA) defines Foreign Direct Investment (FDI) as "the ownership or control, directly or indirectly, by one foreign resident, of 10% or more of the voting securities of an incorporated U.S. business enterprise or the equivalent interest in an unincorporated U.S. business enterprise. " In August of 2006, a Saudi sheik, who owned very substantial stock in Citibank threatened to sell his stake in the company because earnings were lower than he expected. The wealth created by the sale of oil is increasing the cultural predominance of those who have benefitted by it. Objections and barriers to Arab-rich investment in the United States are on the rise, and became most obvious with the 2006 rejection of the $6.8 billion sale of the Dubai Ports owned by the United Arab Emirates, in which the will of the American people reversed an executive decision because of fears of terrorist infiltration.

[edit] Conclusion

The United States is the largest guzzler of energy in the world; it is truly "addicted to oil." More recently, the U.S. economic fragility was nakedly exposed when the price of oil per barrel soared following Hurricane Katrina in August of 2005 while the U.S. continued to fail to rebuild the oil-producing infrastructure in Iraq, following the 2003 invasion. When considering these variables, coupled with the depletion of Middle East petroleum by what is estimated at one-half its original reserves, what emerges is a threat to the hegemony of the West, including the United States. However, this fall from dominance may be staved off by new and improved sources of energy. Given the environmental problems (pollution and global warming) with oil, the West's precarious future may be salvaged by the United States, which by virtue of its technology and resources, has the opportunity to reverse the declining fortunes of the West. This indeed is the inflection point, and the source of pressure by President Bush to spearhead the quest for alternative fuels.

Ethanol - whether derived from grains or cellulose has numerous benefits: it is environmentally friendly, it will help diminish man-made contributions to the greenhouse effect, it may enrich the American farmer and American companies rather than the oil-rich OPEC states, it will increase U.S. tax revenues, and substantially reduce, in President Bush's words America's "addiction to oil." Saudi Arabia, the most oil-rich member of OPEC is expected to earn some 156 (U.S.) billion dollars in 2006. New and enormous profits equivalent to that of the entirety of OPEC would be the reward earned by those that first profitably produced a viable alternative fuel source, as they would be the gatekeeper to a must-have product. The ability to successfully accomplish such a goal would most likely require the resources of a technologically advanced nation, such as the United States.

Ethanol isn't a panacea; it has both advantages and disadvantages. It is realistic to view corn derived ethanol as a partial antidote to the nation's reliance on foreign oil. In contrast, cellulosic ethanol promises greater gains in energy efficiency, but it will take time to develop and become economically viable. For the next five or ten years, corn-derived ethanol may be viewed as a short term "bridge-fuel" until cellulosic ethanol reaches mainstream markets. During this transition time, fossil fuels will continue to dominate the world's energy supplies. However, ethanol is only one part of a solution to a complex problem which must include an enormous ramp-up in alternative energy sources that include wind and solar power, hydroelectric power, biodiesel, hydrogen fuel cells, improved batteries such as the zinc-air battery, nuclear energy, and energy conservation. While there is no single solution to the looming energy crisis, cellulosic ethanol is likely to be part of the solution on the renewable fuel path.

From a profitability perspective, should the U.S. dedicate a Manhattan project-like intensity toward this endeavor, the windfall in terms of financial remuneration could more than wipe out the national debt. Currently, an incubator known as United States Department of Energy Genomics:GTL is poised to facilitate this endeavor. The Energy Department is staging a competition for its backing to build the nation's first three cellulosic ethanol plants. The department, which has $160 million to spend on the contest, is requiring each candidate to have a pilot plant showing a process that can be successful once it is scaled up.

The implementation of cellulosic ethanol and other sources of energy represents, an "inflection point" that will sever the umbilical-like bond the industrialized nations have with the petroleum cartel known as OPEC. If energy is the key unit of monetary value in an industrialized world, a clear shift in geo-political power in favor of the United States may materialize if the transformation away from petroleum and toward ethanol and other alternative fuels succeeds. This liberation from oil addiction to those sovereign states who have in the past successfully bent political expediency in their favor represents a paradigm shift in world politic. Moreover, the benefit to the environment may be incalculable.

[edit] References

Renewable Fuels - Ethanol | BioDiesel

  1. ^ http://www.news.cornell.edu/stories/July05/ethanol.toocostly.ssl.html
  2. ^ Consumer Reports. Special Report:The Ethanol Myth, October 2006, p.16.
  3. ^ The Economist, March 3rd-9th, 2007 "Fuel for Friendship" p.44.
  4. ^ The Economist, March 3rd-9th, 2007 "Fuel for Friendship" p. 44
  5. ^ Financial Times. "Bush Signs Green Fuel Development with Brazil; " March 10-11, 2007
  6. ^ US News and World Report; February 19:Letters.
  7. ^ National Highway Traffic Safety Administration, as quoted by:Consumer Reports. Special Report:The Ethanol Myth, October 2006, p.16.
  8. ^ (pdf) (Wang 2002)
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  13. ^ Ethanol Fuel - Wikipedia
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  15. ^ Ethanol: An Antidote for America's Oil Addiction? Citigroup Global Markets. May 1, 2006.
  16. ^ A Bet on Ethanol, with a Convert at the Helm; New York Times, October 8, 2006, p. 8
  17. ^ Encyclopedia Encarta "Ogalalla Aquifer;" Microsoft
  18. ^ David Pimintel, Cornell University professor of ecology and and agricultural sciences, quoted in: Consumer Reports. Special Report:The Ethanol Myth, October 2006, p.18.
  19. ^ Tad Patzek, professor of geoengineering at the University of California at Berkeley
  20. ^ Consumer Reports. Special Report:The Ethanol Myth, October 2006, p.18.
  21. ^ (Portuguese) http://www.nipeunicamp.org.br/proalcool/Palestras/16/Antonio%20de%20Padua%20Rodrigues.ppt
  22. ^ Consumer Reports. Special Report:The Ethanol Myth, October 2006, p.17.
  23. ^ Jerry Martin, Communication Director, California EPA Air Resources Board.
  24. ^ Consumer Reports. Special Report:The Ethanol Myth, October 2006, p.18
  25. ^ A Bet on Ethanol, with a Convert at the Helm; New York Times, October 8, 2006, p. 8
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  27. ^ A Bet on Ethanol, With a Convert at the Helm; New York Times, October 8, 2006, p. 9.
  28. ^ A Bet on Ethanol, With a Convert at the Helm; New York Times, October 8, 2006, p.1.
  29. ^ Grove, Andrew; "Only the Paranoid Survive." Doubleday,Mar 16, 1999

[edit] See also