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Can algae be the next biofuel?

The lure of the oceans has always had a special appeal for advocates of biofuel. The vast reaches of the deep speak of a promise that unlimited amounts of space will be able to bring forth completely sustainable forms of energy.

“Two-thirds of the globe is covered with water,” says Khanh-Quang Tran, a Norwegian researcher who has published papers on the possibility of growing algae as a biofuel on an industrial basis. “If we used only a tiny portion of that space, we’d have enough to supply ourselves with all the fuel we needed.”

Of particular interest to researchers is one species, laminaria sacceyarina (“sugar kelp”), which grows along the coast of many countries, including Scandinavia. It is the “seaweed” that seems to be a flower but is actually all one undifferentiated cellular structure that takes on various forms in competing for sunlight. As the name implies, it contains lots of sugar – three times as much as the sugar beet. Scandinavian scientists have been especially intent on harvesting this plant for food and fuel use.

“It’s actually regarded as a nuisance, since it grows everywhere and clogs the beaches,” says Fredrik Grondahl, a researcher at the KTH Royal Institute of Technology in Sweden who heads the Seafarm project. “But it absorbs nitrogen out of the water, effectively as a wastewater treatment plant. It’s regarded as an environmental problem, but it’s actually a valuable resource.”

The big question will be this: Can a weed that grows so prolifically in the sea be domesticated so that it can grow in large quantities under controlled conditions?

Sweden and Norway seem to have taken the lead on this project, mainly because of their long coastlines, where the algae grows intensely in a cold climate. The Seafarm project involves  growing underwater algae farms on ropes. The team collects excess algae from the Baltic Sea and cultivates it as food and fuel. One technique is called the “sporophyte factory farm.” The algae spores are sown onto ropes. They sink and grow in the sea. In about six months, they have grown onto the ropes and are harvested and processed on land covering two hectares. From there it can be converted to eco-friendly food, medicine, plastics and energy fuels such as methanol. The city of Trelleborg, where the farm is located, estimates that 2.8 million liters of fuel can be extracted from its algae resources.

Kahnh-Quang Tran of Norway has been following another line of research. He mixes a slurry of kelp biomass and water and heats it rapidly to 350 degrees Centigrade. Tran says the fast hydrothermal liquefaction gives him a product that is 79 percent bio-oil. A similar experiment on the U.K. was only able to produce 19 percent oil, but Tran claims that the rapid heating improves the process tremendously. “What we are trying to do it mimic the natural process that produces oil,” he said. “Whereas it takes geological time in nature to produce oil, we can do it in a matter of minutes.”

Tran is now looking for partners who can help him move up to an industrial scale.

Another plan developed in France and the Netherlands is to line highways with algae pools in the hope that they will immediately absorb the carbon exhaust that comes from automobiles. This will remove CO2 from the atmosphere and recycle the fuel as well. An experimental installation was demonstrated at the summer garden festival at Genève Villes et Champs this year.

Another country that is experimenting with algae is Australia. This October, the Muradel Corporation opened a $101. 7 million demonstration plant in Whyalla designed to produce 30,000 liters of green crude every year. The company is employing its Greeen2Black technology, designed to produce a continuous stream of environmentally sustainable crude equivalent.

Muradel CEO and University of Adelaide Associate Professor David Lewis said if the demonstration plant were successfully scaled to a commercial plant, it would produce 500,000 barrels of refinable green crude a year by 2019 – enough petrol and diesel to fuel 30,000 vehicles for a year. The planned 1,000-hectare commercial plant would create at least 100 new skilled jobs in the Whyalla region.

“This is world-leading technology which can be scaled up exponentially to help steer our fossil fuel-dependent economy toward a more sustainable future,” Lewis said.

Not everyone is enthusiastic about algae. “It will take anywhere from 5 to 15 years to produce on a scale that would be meaningful to the nation’s every needs,” says Jim Rekoske, general manager of Honeywell’s UOP division. He likened it to trying to maintain the water balance in a fish tank.

“You have to have just the right temperature and the right amount of carbon dioxide to get these growth spurts,” he said. Algae farms are also very susceptible to invasive species and have to be monitored constantly. Still, an acre of algae can ideally produce 15,000 gallons of biofuel per year, as opposed to only 420 gallons per acre from corn ethanol. “We could replace all the diesel we consume now on half of 1 percent of our current farmland,” says Douglas Henston, CEO of Solix Biosystems of Fort Collins, Colo. Solix is supplying the military with biofuels at a whopping $33 per gallon.

So, will algae make the same progress in the United State that it seems to be making in Sweden and Norway? American researchers may take up the challenge as well. The long coastal lines are not there to tempt us, but research breakthroughs may finally make algae biofuels more practical and economically viable everywhere.

Biofuels from woody plants and grasses instead of the corn and sugarcane

Scientists are using biotechnology to chip away at barriers to producing biofuels from woody plants and grasses instead of the corn and sugarcane used to make ethanol. NC State’s Forest Biotechnology Group, which has been responsible for several research milestones published this year, summed up research progress and challenges for a special issue of the Plant Biotechnology Journal.

Read more at: Phys

Image rights: Phys.org

Breaking Energy: Kansas ethanol plant a big win in RFS equation

While the debate rages about what the threshold for biofuels should be in the government’s next (and long-delayed) Renewable Fuel Standard, Breaking Energy’s Jared Anderson has a timely post about the makeup of the current RFS, as it was proposed by the EPA last November.

There are thresholds within the larger thresholds, and it looks like the cellulosic ethanol target will go down. But as Anderson notes:

“While the battle over the RFS continues, the cellulosic ethanol industry took a major step forward today with the inauguration of a commercial-scale plant in Hugoton, Kansas. The biorefinery has the capacity to produce 25 million gallons of cellulosic ethanol per year, which alone exceeds EPA’s proposed 17 mm gallon blending target under RFS. The plant also generates 25 MW of electricity, which supplies its own needs and provides excess power to the local community.”

Anderson signs off with:

“The RFS will remain controversial, but this new plant is a big win for the cellulosic ethanol portion of the equation.”

(Photo credit: Shutterstock)

“Methanol Mania” Hits The Gulf Coast

Lane Kelley of ICIS Chemical Business calls it “methanol mania” and he probably wasn’t exaggerating. Last week Texas and Louisiana underwent an explosion of activity, promising to turn the region into a world center for methanol.

Earlier this month, Louisiana Gov. Bobby Jindal announced that Castleton Commodities International LLC (CCI), a Connecticut firm, will be building a $1.2 billion methanol manufacturing plant on the Mississippi River in Plaquemines Parish. The plant is expected to produce $1.8 million tons of methanol a year.

“This plant will help our children stay in Louisiana instead of leaving the state to find jobs,” said Jindal. “My number one priority it to make Louisiana a business friendly place.”

But that’s not even half of it. The Environmental Protection Administration (EPA) just gave its final approval to a $1 billion methanol plant to be built near Beaumont, Texas. The facility will be operated by Natgasoline LLC, a subsidiary of a Netherlands-based company that already employs 72,000 people in 35 countries. It will employ thousands of construction workers and carry a $20 million payroll when it begins operating in of 2016.

Does that sound like a lot? Well, don’t forget Methanex Corporation, the country’s largest manufacturer of methanol, is in the process of moving two plants back from Chile to Louisiana. One plant is scheduled to open in a few months. And ZEEP (Zero Emissions Energy Plants), an Austin-based company, has just raised $1 million for a proposed plant in St. James Parish, La.

Does that sound like a full plate? Well, it’s still just the beginning. The Connell Group, a government-supported operation, announced long-range plans for what would be the largest methanol plant in the world — even if only half it gets built. The first unit, located in either Texas or Louisiana, would produce 3.6 million tons a year, twice the current world record holder in Trinidad. Together, the two units would produce more than the current U.S. demand, 6.3 million tons a year. The term “Gigafactory” soon may be standard vocabulary.

So what’s going on? Well, the plan is for nearly all this Texas and Louisiana methanol production to be exported to China. The widening of the Panama Canal for supertankers, scheduled to be completed in early 2016, will be a bit part of the puzzle. Believe it or not, China also has plans to build three more plants in Oregon and Washington. But they run into trouble there, of the West Coast’s dislike of fossil fuels.

So China is planning to use American natural gas as a substitute for its own coal, in producing large amounts of methanol. It’s no different from the Chinese buying up farmland in Brazil and Ukraine in order to grow crops.

But the Chinese have other things in mind as well. Zhejiang Geely Holding Group Co., Ltd, Chery International, Shanghai Maple Guorun Automobile Co., Ltd. and Shanghai Automotive Industry Corp. all produce methanol-adaptive cars, which now accounts for eight percent of China’s fuel consumption. Israel is also experimenting with methanol from natural gas as a substitute for imported oil.

Methanol produces only 50 percent of the energy of gasoline, but its higher octane rating brings it up into the 65 percent range. It produces 40 percent less carbon dioxide and other pollutants and would go a long way toward helping China improve its pollution problems. As far as methanol production is concerned, China sees only see an upside.

So what’s going on in this country? Well, so far we have the world’s largest reserves of natural gas, we are on the verge of becoming a world center methanol manufacturer — yet we still have a set of rules and regulations and sheer inertia that prevent us from powering our cars with methanol. For some strange reason, the United States is about to become a world center for the production of methanol, yet we still haven’t figured out how to put it to one of its best uses.

Sounds like an opportunity for somebody.

The game of checkers and corn-based ethanol

Recent news concerning the use of corn waste or residual products to create commercially viable ethanol reminds me of a game of checkers. One jump forward, one jump backward, one move sideways. Depending how smart, bored or prone to crying the players are, the game often results in either a stalemate or a glorious victory, particularly glorious when it’s your grandson or granddaughter.

The good news! The American-owned POET and the Dutch-owned Royal DSM opened the first facility in Iowa that produces cellulosic ethanol from corn waste (not your favorite corn on the cob), only the second in the U.S. to commercially produce cellulosic ethanol from agricultural waste, according to James Stafford’s recent article in OilPrice.com (Sept. 5).

The new owners jumped (note the analogy to checkers…my readers are bright) with joy. They announced, perhaps, a bit prematurely, that the joint project, called Project LIBERTY, is the “first step in transforming our economy, our environment and our national security.” After their press release, quick, generally positive, comments came from electric and hydrogen fuel makers, CNG producers, advocates of natural gas-based ethanol and a whole host of other replacement fuel enthusiasts. The comments reflected the high hopes and dreams of leaders of public interest groups, some in the business community, several think tanks and many in the government who see transitional replacement fuels reducing U.S. dependency on oil and simultaneously improving the economy and environment. Several were fuel agnostic as long as increased competition at the pump offered a range of fuels at lower costs to consumers and reduced environmental harm to the nation.

Ethanol from corn waste, if the conversion could be made easily and if it resulted in less costs than gasoline, would mute tension between those who argue that use of corn for ethanol would limit food supplies and provide consumers a good deal, cost wise. The cowboys and the farmers might even eat the same table. (Sorry, Mr. Hammerstein.)

Life is never easy. Generally, when a replacement fuel seems to offer competition to gasoline, the API (American Petroleum Institute — supported by the oil industry) immediately tries to check the advocates of replacement fuel. The association didn’t disappoint. It made a clever jump of its own with a confusing move…sort of a bait and switch move.

API’s check and jump is reflected in their quote to Scientific American. It indicated, in holier-than-thou tones, “API supports the use of advanced biofuels, including cellulosic biofuels, once they are commercially viable and in demand by consumers. But EPA must end mandates for these fuels that don’t even exist.” Wow, how subtle. API supports and then denies!

What a bunch of hokum! Given their back-handed endorsement of advanced biofuels, would API and its supporters among oil companies agree to end their unneeded government tax subsidies simultaneously with EPA’s reductions or ending of mandates? Would API and its supporters agree to add provisions to franchise agreements that would allow gas station owners or managers to locate ethanol from cellulosic biofuels in a central visible pump? Would API work with advocates of replacement fuels to open up the gas market to replacement fuels and competition? Would API agree to a collaborative study of the impact of corn-based residue as the primers of ethanol with supporters of residue derived ethanol, a study including refereed, independent evaluators, and abide by the results? If you answer no to all of these questions, you would be right. API, in effect, is clearly trying to jump supporters of corn-based residual ethanol and block them from producing and marketing their product. Conversely, if you believe the answer is yes to one or more of the questions, you will wait a long time for anything to happen and I will offer to sell you the Golden Gate Bridge and more.

The advocates and producers of cellulosic-based ethanol from corn waste (next move) were suggested by overheard advisors to API. These advisors from the oil industry cheered API’s last move and noted that a recent study in Nature Climate Change, a respected peer-reviewed journal, suggested that biofuels made from corn residue emit 7 percent more greenhouse gases in early years than gasoline and does not meet current energy laws. They wanted checkerboard pieces held by advocates of corn residue off the policy board.

Oh, but the supporters are wise! They don’t give in right away. They pointed to an EPA analysis which indicates that using corn residue to secure ethanol meets existing energy laws and probably produces much, much less carbon than gasoline. Studies like the one reported in Nature Climate Change do not, according to an EPA spokesperson, report on lifecycle changes in an adequate way — from pre-planting, through production, blending, distribution, retailing produce and use. Moreover, a recent analysis funded by DuPont — soon to open a new cellulosic residue to ethanol facility — indicates that using corn residue to produce ethanol will be 100 percent better than gasoline, concerning GHG emissions. (Supporters were a bit hesitant about shouting out DuPont’s involvement in funding the study. It is a chemical company with a mixed environmental record. But after review, supporters indicated it seemed like a decent analysis.)

The response of supporters and its intensity caused API and its advisors to withdraw their insistence, that the checkers of the advocates of corn based residue derived ethanol come of the board. Instead, they asked for a two-hour break in the game. The residue folks were scared. “API was a devious group. What were they up too?”

When the game started again, both supporters and opponents pulled out lots of competing studies, before they made their moves. The only things they agreed on was that the extent of land use devoted to corn, combined with the way farmers manage the soil and the residue, likely would significantly affect GHG emissions. Keeping a strategic amount of residual on the soil would help reduce emissions.

Supporters of corn-based residue argued for a quick collaborative study that might help bridge the analysis gap. But they wanted a bonafide commitment from API that if corn-based residual, derived ethanol, proved better than gasoline, it would support it as a transitional replacement fuel. No soap! The game ended in a stalemate.

Based on talking to experts and surveying much of the literature, I believe that the fictional checkers game tilts toward corn residual derived ethanol, assuming significant attention is granted by farmers to management of the soil and the residue. Whether corn residual-based ethanol becomes competitive as a transitional replacement fuel will be based mostly on farmer intelligence, consumer and political acceptance and a set of even playing field regulations. It, as well as natural gas-based ethanol, as I have written in previous columns, are worthy of a set of demonstration efforts. The nation will have an extended wait until electric and hybrid cars make a big dent regarding the share of the total number of cars in America. We have a moral obligation to do the best we know how to do to lower GHG emissions and other pollutants. We shouldn’t let the almost perfect in our future reduce the possible good now.

What the world needs now is land (and honesty) to get to replacement fuels

I had the good fortune to meet and work a bit with Dr. Edwin Land, the inventor of the Polaroid camera. We were both on an informal poverty task force created by President Kennedy. I always admired Land. Throughout his life, his comments were always thought-provoking. His suggestion that “politeness is the poison of collaboration” really challenged, and continues to challenge, many of the facilitation and leadership gurus and practitioners who sometimes seem to have invented linguistic anti-depressants. Translated: don’t get angry, hold your tongue, mind your manners, mute some of your views or make them sound less critical, try to be nice and likeable, move toward a win-win situation, compromise and, if you get intense, take a break and go out for a while. Have a beer?

Times have changed, but only a bit, since Land died in the early nineties. Many participants still go into a collaborative and/or facilitative policy process with squeamishness about being direct and honest about their concerns. Because of this fact, it takes many sessions, rather than a few, to get real, difficult issues on the table and achieve a real meaningful and honest dialogue. Bonding and game playing (real and surreal) are often seen as more important than advocacy as well as early substantive dialogue. There is often little chance to compromise because the people at the table compromise their own views before they speak. They want to be polite. We don’t really know what they really think. Building collaboration in the hands of a facilitherapist (my own word), is regrettably, at times, using everyone’s favorite term, an existential threat. It makes collaborative victories, frequently short-term ones, in light of the fact that underlying disputes and tension were not given an airing.

With this as context, let’s look at key policy and behavioral issues now confronting the nation, concerning the harmful link between gasoline, the economy and social welfare, and the environment, particularly greenhouse gas (GHG) emissions and other pollutants. As relevant, let’s also think about why it’s been so tough to move toward replacement fuels for gasoline, even though such options would benefit consumers and the nation.

Gasoline now fuels approximately 250,000,000 vehicles in the U.S. While GHG emissions from gasoline are down because of improved technology in vehicles, gas still generally spews more GHG than alternative fuels such as ethanol, methanol, electricity or fuel cells. Gasoline also fails health and well- being tests when measured against a range of other pollutants, including NOx and VOCs (volatile organic compounds). Gasoline prices, while seemingly low (only) compared to the recent past, in some cases remain higher than alternative fuels, by a significant amount, whether based on renewables or fossil fuel. In this context, most of you reading this column are neither poor nor near poor. Imagine though, that you are, and in order to work, you need find housing at a reasonable cost relatively close to your job, see a doctor or take your family to see an aunt or uncle. But if you secure these and other basics, you have fewer choices since you have to spend from between 10-15 percent of your meager income on fuel. This is a verity now for most low- and moderate-income households. Indeed, based on EIA projections of gas prices and conservative as well as liberal economists conclusions concerning job growth and income, the percentages, likely, will increase in the future. If you were a person of very limited means, what would you limit first: travel to and from work, decent housing, health care or food, etc.?

Now, none of the replacement fuels are perfect. Most, including those based on or derived from fossil fuels such as natural gas, do emit some measurable GHG and other pollutants. This includes electric cars, particularly those that do secure their power from coal-fired electric utilities. But all are better than gasoline on environmental, economic and social welfare indices.

Why then is there not a clear movement toward transitional replacement fuels? Sure, electric car sales and CNG sales are up and hydro fuels will soon be on the market. Hopefully, they all will succeed in attracting consumers. But right now, all three together constitute from 1.5 to 3 percent of sales of new cars.

Why? Well, electric cars, CNG and hydrogen fuel cars are expensive and out of reach for many American households. For some, particularly those who purchase lower-end electric cars, the miles per charge often create road fear on the part of drivers. “What if I get stuck on the L.A. freeway?” Fuel stations are few and often far between for both electric, CNG and hydrogen fuel.

New electric, CNG or hydrogen fueled cars, at least for the near future, will illustrate for us all the comparative purchasing power of the haves, the have nots and the almost haves. Hopefully someday soon, most Americans will be able to compete — price, technology and design wise — for larger shares of the automobile market. But even if they become competitive, they will not be able to generate a major dent in the number of existing vehicles that rely on the internal combustion engine for a long time. Look at the data yourselves! Given their predicted annual sales, how many years would it take before the fleet of privately owned vehicles contained a very large percentage of electric, CNG, or hydrogen fueled vehicles (perhaps as much as 50 to 75 percent or more)? I have seen figures ranging up to almost several decades from respected analysts . Clearly, if sales of hybrid and plug-in vehicles are counted in the totals, the amount of time, it takes will be lower. However, achievement of a proportionately large share of the total number of cars will still extend out a many many years.

What can we do to achieve legitimate important national objectives concerning the environment, the economy and consumer costs for vehicles and fuel almost immediately? We can move to expand the number of FFVs (flex-fuel vehicles) in the country, first, by encouraging Detroit to build more each year and second, by asking public, nonprofit and private sectors to work together with the EPA to certify more conversion kits as well as existing in-use cars for conversion to FFV status. The net results would be vehicles able to use much higher percentages of ethanol (E85) derived from natural gas or from corn cobs, husks and stalks as well as other biofuels.

The proposed strategy is a transitional one. Clearly, electric, CNG and hydro fueled cars, when able to meet market tests concerning consumer needs, should join the mix of choices at the pump. I am optimistic. For example, twenty two states led by Colorado and Oklahoma have agreed to use CNG fueled cars to replace older cars retired from their state’s fleets. Detroit with the pool of CNG cars purchased by the states has agreed make best efforts to develop a lower cost CNG vehicle. Electric cars are coming down in costs. Hydro fueled cars will likely be produced in larger numbers soon and technology over time will reduce vehicle prices.

Now back to Edwin Land. I believe his comments about politeness, perhaps a bit too absolute, reflect his and my own views that the ground rules for collaborative efforts and consensus building may impede honesty concerning discussions of difficult topics. Being polite sometimes circumscribes and weakens important strategic dialogue. Involved participants fear being direct and sometimes avoid linking their intense feelings to their commentary. They try to avoid criticism or be seen as breaking the mythology of togetherness concerning long-term objectives and initiatives. Indeed, both objectives and initiatives are often so long term, that they are vague and don’t really matter to folks at the table. So why not go along? Individuals either avoid saying things that might lead to even temporary policy, program or behavior conflict and debate.

Politeness, certainly, is generally a virtue in most circumstances. Perhaps Land went too far in his choice of words. But the term, if used to guide collaborative efforts, often serves to mask real disagreements and necessarily blunt conversation. I have done lots of facilitative sessions on policy issues between senior officials of different nations and the U.S., as well as between community leaders on education, growth, environmental, race and poverty issues. Maybe the difference is miniscule, but I like the term being “civil” rather than being “polite;” the former presumes disagreement and allows for willingness to entertain tough dialogue and the possibility that the dialogue might step, at times, on intellectual toes; the latter, when translated into behavior, often suggests a willingness to skirt conflicts regarding ideas, if it temporarily reduces the ambience at the table.

Leaders from all sectors need to help build a collaborative “coalition of the willing” among environmental, public interest, government, private sector, nonprofit and academic leaders to push for flex fuel cars and replacement fuels. The criteria for coalition selection should be relevance to the policy and political issues related to gaining the public’s access to multiple fuel choices at the pump and to secure a much larger number of new FFVs as well as existing vehicles converted to FFV status. Identification and selection should not be limited to leaders who think exactly like us. But both should be limited to individuals who care about the environment, the economic and job growth of this nation, the well-being of consumers, particularly low- and moderate-income consumers and, although not discussed above, the security of this nation and the world. Claims of absolute wisdom should be a non starter for membership.

I suspect if the leadership group is diverse enough and if reasonable ground rules concerning structure and processes are set at the outset (ones that encourage substantive dialogue and debate ), disagreements can be bridged based on the data and agreements reached on transitional replacement fuel strategies that would influence public and private sector decision makers. A good facilitator would be needed, one weaned on policy and strategy more than psychology. A nationally respected foundation, or possibly even EPA, could either support or indeed facilitate the proposed serious exercise in collaboration and democracy. Civility, not politeness, should be a principle governing the dialogue.

The best and worst of times for ethanol

For ethanol it is the best and worst of times. Silos are bursting with a bumper crop and the price of corn has fallen by half, from $7 to $3.50 a bushel over the past year. Refiners are buying feedstock at rock-bottom prices.

“This is the most profitable time I can remember,” Dan Syekh, plant manager at Southwest Iowa Renewable Energy of Council Bluffs, told the Lexington Clipper-Herald of Nebraska. “People are beginning to pay off debt and invest in ever more advanced technologies.”

Yet hanging over all this is the question of what the U.S. Environmental Protection Agency will do about the Renewable Fuel Standard, which specifies how much ethanol the refining industry must buy next year.

“I feel like [the EPA is] playing politics instead of doing what’s right for America,” Iowa Gov. Terry Bradshaw told a Farm Progress Show in Boone last week. “Farmers aren’t buying equipment and John Deere is laying people off. What EPA has done is not only damage farm income but cost us jobs in farm machinery and manufacturing.”

At issue is the EPA’s announcement last spring that it would cut the mandate from the 14.4 billion gallons, originally required by the law, to 13.01 billion gallons, in order to deal with overproduction. With gasoline consumption having fallen since 2007, although numbers are now starting to rise again, the federal requirement had pushed ethanol additives past the 1 percent “blend wall,” where auto and oil companies claim it will damage engines. Many people dispute this but the auto companies are refusing to honor warranties in cars that use blends higher than 10 percent without authorization. Others say the solution is E85 — a blend of 85 percent ethanol and 15 percent gasoline — is the answer but it is not yet widely available outside the Midwest.

The EPA was supposed to make a decision on the mandate last November but has delayed after the furor over its initial proposal. Only last week it sent a final proposal to the White House for review. Rumors are that the EPA has settled on a figure somewhere between the original mandate and its April number, but there is nothing definite. In any case, the Obama administration could take several weeks to approve, even pushing its verdict past the November elections. This is the longest delay in the program’s history.

For several years now the ethanol industry has seen its influence waning in Congress. In 2011, Congress repealed the tariff on foreign biofuels, opening the door to cheaper sugar ethanol. Then it allowed a production tax credit to expire. Perhaps most significant has been the loss of support from large portions of the environmental community. Last year the Associated Press ran a story documenting how the mandate has led to over intensive cropping and the removal of land from conservation soil banks. “Corn ethanol’s brand has been seriously dented in the last 18 months,” Craig Cox, director of the Environmental Working Group in Ames, Iowa, told Politico. “The industry is still politically very well connected but it doesn’t occupy the same pedestal it did two years ago.”

Yet oddly enough, all this is happening at the moment when the industry may be on the verge of a huge breakthrough. On September 3, POET, the South Dakota refiner of ethanol, and Royal DSM, a Dutch maker of enzymes, will hold opening day ceremonies in Emmetsburg, Iowa for the inauguration of what could be the country’s first cellulosic ethanol plant — long considered the holy grail of biofuels. King William-Alexander of the Netherlands is scheduled to be in attendance.

Cellulosic ethanol uses the non-grain parts of the corn plant — the shucks and stalks that cannot be eaten. By cultivating certain enzymes and bacteria from the stomach of cows and other ruminants, several companies now believe they are able to break down the starches in these plant “wastes” and turn them into fuel. Various inventors have made the same claim over the years but have never been able to achieve cellulosic digestion at a commercial level. Now it appears POET may be about to break the barrier.

They aren’t the only ones. In fact, there is now $1 billion worth of cellulosic ethanol investments in the Midwest about to bear fruit:

  • In Nevada, Iowa, DuPont is investing $200 million in a cellulosic plant that will have a capacity of 30 million gallons annually. Operations are slated to begin before the end of 2014.
  • In Hugoton, Kansas, Spain-based Abengoa Bioenergy is spending $500 million on a plant to make ethanol from corn leftovers, wheat straw, milo stubble and prairie grasses. It will produce 21 million gallons of ethanol plus 21 megawatts of electricity.

Should any of these plants succeed, it would change the face of the industry.

So ethanol finds itself in a very strange position. Just as it may be on the verge of a huge breakthrough in production, it finds its markets drying up. Several Midwestern agricultural professors have suggested that the real solution is E85, which readily substitutes for gasoline and would create an almost unlimited demand. There are 15.5 million flex-fuel vehicles on the road — 6 percent of the entire fleet — all of which accept E85. There are also 3,200 gas stations that dispense it. But there is a huge mismatch between them. Most of the stations are in the Midwest where support for ethanol is strong while the flex-fuel vehicles are concentrated in cities on the East and West Coasts. So far no one has come up with a solution for making a better match.

There remains one potential market, however, that could tide over the ethanol industry until better auto markets develop. This is the U.S. Navy. The Department of Defense burns 300,000 barrels of oil a day, 2 percent of national consumption. For some time the Navy has been trying to find “drop-in” biofuels that would substitute for imported oil in jets and other vehicles. This year, for the first time, the Navy will include biofuels in its annual procurements. It is trying to get 50 percent of its fuels from renewable resources by 2020. “Up in the air you don’t have any other choice but liquid fuels,” said Tyler Wallace, professor of agricultural economics at Purdue. “The U.S. uses 21 billion gallons of aviation fuel annually and cellulosic ethanol would make a perfect drop-in.”

So would a huge order from the Navy be able to galvanize an infant cellulosic industry? Or will ethanol have to continue to holds its breath waiting for a decision on the Renewable Fuel Mandate from the White House and the EPA? For the industry, it remains the best and worst of times.

New process helps overcome obstacles to produce renewable fuels and chemicals

There’s an old saying in the biofuels industry: “You can make anything from lignin except money.” But now, a new study may pave the way to challenging that adage. The study from the Energy Department’s National Renewable Energy Laboratory (NREL) demonstrates a concept that provides opportunities for the successful conversion of lignin into a variety of renewable fuels, chemicals, and materials for a sustainable energy economy.