Wednesday, March 14, 2007

Biofuel push draws inventors and investors

Source:

http://www.latimes.com/business/la-fi-ethanol8mar08,1,5226807.story?coll=la-headlines-business


The effort to turn plant waste into a new form of ethanol is attracting
ingenuity and investors.

By Elizabeth Douglass, Times Staff Writer
March 8, 2007

Near a cluster of purple petunias in a Thousand Oaks greenhouse sprouts
a key weapon in the nation's ambitious push into biofuels.

The plants don't look like much. They're just tall, spiky shoots of
prairie grass. But these stalks are souped-up samples of switch grass,
part of an urgent drive toward a new kind of ethanol using plant fibers
instead of corn kernels or sugar cane.

Ceres Inc., the biotechnology company nurturing this batch of switch
grass, is betting that the plant has a big future as an energy crop.
It's a strong candidate because it can be grown year-round in poor soil,
then harvested and converted to fuel ethanol without displacing
traditional food crops.

Researchers at Ceres and labs around the world are experimenting with
various crops and forms of plant waste and conjuring up enzyme cocktails
that would lower the cost of teasing energy out of the cell walls of plants.

Such work, once conducted in relative quiet, is now in the spotlight.
The federal government has stepped up ethanol research funding, and last
week the Energy Department announced grants worth up to $385 million to
jump-start construction of six small operations to refine ethanol from a
wider variety of plants. It marks the nation's first major foray into
the production of so-called cellulosic ethanol.

Ethanol will be on the agenda Friday, when President Bush travels to
Brazil to meet with President Luiz Inacio Lula da Silva. The two
countries are expected to announce a partnership to boost production of
biofuels such as ethanol, which Brazil makes from sugar cane. The U.S.
and Brazil already make 70% of the world's ethanol.

Wall Street and private investors have joined the search for new kinds
of ethanol, putting unprecedented amounts of money behind companies with
promising technologies. Oil giants have rushed in as well, striking
deals with universities and firms involved in biofuels.

"People are working feverishly on innovations …. Everyone's racing,"
said Nathanael Greene, clean energy policy analyst at the Natural
Resources Defense Council. "There are many more companies now working on
many different variations."

Among the motivators: Bush's goal of displacing 20% of the nation's
gasoline with alternative fuels and improved fuel economy by 2017.
Although biodiesel, hybrid cars, natural-gas-powered buses and other
energy advances will be part of the mix, most experts believe Bush's
benchmark can't be met without a substantial contribution from
next-generation ethanol.

"It's a big technology bet that cellulosic will be a primary
contributor," said Alexander Karsner, assistant secretary for the Energy
Department's energy efficiency and renewables group. Apart from outright
cuts in energy use, he added, such next-generation ethanol "is perhaps
the best hope we have in the transportation sector for minimizing the
human impacts on global climate change."

Today, ethanol made from corn kernels is the most pervasive renewable
fuel in the United States, blended into about 46% of the nation's
gasoline. Using a process similar to brewing beer, ethanol refineries
isolate starch from corn and convert it to sugars that are fermented and
distilled to get the finished product.

Corn-based ethanol remains this country's cheapest, easiest and quickest
way to displace gasoline in the short term, but it has substantial
drawbacks. It is laden with corn-state politics, clashes with food
supply needs and lowers fuel-efficiency. In some formulations, it can
increase certain pollutants even as it reduces others by replacing gasoline.

"It's good for going forward, but there are a lot of issues that come
up" with corn ethanol, said Ron Pernick, co-founder of Clean Edge, which
tracks venture capital funding. "We need to move to next-generation
biofuels, including cellulosic ethanol, and to next-generation
biorefineries."

Cellulosic ethanol is already a proven concept, with production
processes that work, said Mark Emalfarb, chief executive of Dyadic
International Inc., one of several biotechnology companies that are
isolating and patenting microbes used in making the fuel. "It's now a
matter of making it work on a large enough scale and at a low enough cost."

The National Renewable Energy Laboratory estimates the production cost
of noncorn ethanol at $2.25 a gallon, or about double what it costs to
make corn ethanol. BlueFire Ethanol Inc., an Irvine company that plans
to make ethanol from landfill plant waste, said it expected its process
to cost $1 a gallon.

"I describe a cellulosic biorefinery as the ultimate flat-screen TV,"
said Richard Hamilton, chief executive of Ceres, the Thousand Oaks
company using genetics to improve switch grass and other potential
energy crops. "The first few are going to be very expensive, but the key
part is getting those first few built so we can ride the cost curves down."

Iogen Corp. of Canada was the first to take cellulosic ethanol out of
the lab, opening a pilot plant in 2004 that has been making the fuel
from wheat straw at a rate of 260,000 gallons a year. Using an Energy
Department grant, the firm will launch U.S. production in Idaho Falls,
Idaho.

Last month, Massachusetts-based ethanol maker Celunol Corp. launched
production at the first U.S. test refinery for cellulosic ethanol,
located in Jennings, La., and has started construction of a larger
facility. The bigger project would produce as many as 1.4 million
gallons a year of ethanol made from crushed sugar-cane stalks.

The cellulosic approach can pull energy out of nearly any plant
material, but the process is difficult because it must draw sugars from
tough substances inside plants. Some processes draw out the sugars using
heat and chemicals; others employ specialty enzymes.

"Of the initial plants … not all of them will work perfectly," said
Karsner of the Energy Department, who expects cellulosic refineries to
be commercially viable by 2012. "They will be the training wheels, where
we get the kinks out of the systems and understand how to process
large-scale biomass."

Greene, of the Natural Resources Defense Council, is optimistic.
Cellulosic ethanol is easier on the environment than corn-based ethanol,
once fertilizer and tractor fuel are factored in, and it could put a
meaningful dent in U.S. petroleum use, he said, "so it's worth
struggling to figure out how to get there."

Back in Thousand Oaks, Ceres is gearing up for a cellulosic future that
CEO Hamilton believes will include lots of switch grass. When that
future arrives, he said, "we want to be there with the best seeds."


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