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Straw and Wood Chips

Page history last edited by PBworks 13 years, 9 months ago

Straw and Wood Chips in Line as Energy Sources

 

US: January 9, 2007

 

 

NEW YORK - Biotech and energy companies are racing to glean ultra-clean fuel from untapped sources like straw and wood chips, betting policies to tackle climate change and rising food prices will make it competitive with oil.

 

 

Heartened by last year's record crude prices and rising awareness of global warming, many governments and deep-pocketed venture capitalists believe in the fuel -- cellulosic ethanol.

Tougher policies to combat climate change -- such as carbon taxes -- could bring it into direct competition with oil, given that it produces far less of the greenhouse gas, carbon dioxide, compared to fossil fuels.

 

In addition, it could ease struggles for farmland, given that existing biofuels are made from food crops like US corn, Brazilian sugar cane, and European and Asian oil seeds, helping drive food prices.

 

In fact, China, the world's third largest traditional ethanol producer -- well behind the United States and Brazil -- has already sought to limit new distilleries that make fuel from food crops because of high grain prices.

 

"The high cost of corn could be one of the best things that's happened in a long time to cellulosic ethanol," said Christopher Flavin, president of Washington, D.C. environmental research group the Worldwatch Institute.

 

Corn prices have risen to near record levels as the United States, responsible for about 65 percent of the grain's global exports, devotes ever more farmland to the crop.

 

Cellulosic ethanol could also reduce emissions because it would tap low-input feedstocks such as switchgrass and fast growing trees. Those crops can be grown locally, which could reduce transportation costs and emissions.

 

Burning biofuels generally belches less heat-trapping CO2 than oil because the plants they are derived from absorbed the same gas in the first place. But much energy is used up producing the present crop of biofuels -- undermining the aim to limit greenhouse gas emissions.

 

Emissions of CO2 from cellulosic ethanol are 85 percent less than gasoline, compared to about 25 percent less with traditional ethanol, according to US Department of Energy studies conducted by the Argonne Laboratories.

 

 

DEMAND

 

US ethanol demand will rise to 8 percent of motor fuel by 2030, with corn providing the bulk, according to the US Energy Information administration, the statistics branch of the DOE. With overall US fuel demand expected to also rise, that would hardly replace oil imports from the Middle East.

 

"To get into that market, it would be difficult with (corn) based feedstock," said Zia Haq, an EIA forecaster.

 

The new fuel could push the role of ethanol beyond a gasoline additive and into replacing some crude, widely expected to supply most motor fuel into 2050. The DOE has predicted that cellulosic ethanol could provide 30 percent of US gasoline demand if every bit of biomass were used.

 

Many analysts said that is too optimistic. Richard Newell, a fellow at Washington, D.C. think tank Resources for the Future, said with cellulosic, biofuels could make up of 10 to 20 percent of global gasoline demand by 2050.

 

The higher level has already been achieved by Brazil with traditional ethanol, thanks to its long growing seasons, cheap labor and sugar cane, an efficient ethanol crop that's hard to grow in most places.

 

Cellulosic ethanol technology uses yeast and fungi to break down the woody bits or cellulose of plants but is far from mainstream, and demonstration plants are sprouting up.

 

US biotech company Dyadic is building a pilot plant in the US Midwest, with Spanish energy company Abengoa , which is also building one in its homeland.

 

Privately-held Canadian Iogen operates a demonstration cellulosic ethanol plant. And big players, such as Archer Daniels Midland Co. , Royal Dutch Shell Group and Goldman Sachs , are investing in other projects.

 

There are hurdles: microbes need to be perfected, and the new fuel costs more to produce than conventional ethanol.

 

One opponent is Cornell University's David Pimental, who argues all ethanol feedstocks require more energy than the fuels provide. Potentially critical will be future energy policy, which could impose higher costs on fossil fuels, shifting the economics in favor of these untapped biofuels.

 

The United States, unlike most other developed countries, does not regulate carbon emissions -- for example imposing a permits system through a carbon market -- but political pressure to do so is growing.

 

"Certainly if a (US) market develops for carbon, cellulosic would become a key player because it has so much of a better carbon footprint," said EIA's Haq.

 

Vinod Khosla, a California venture capitalist, reckoned that if cellulosic plants earned credits in an emissions trading program the fuel would cost US$0.20 to US$0.30 less per gallon (3.8 liters) than gasoline.

 

 

 

Story by Timothy Gardner

 

 

REUTERS NEWS SERVICE

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