Despite the sharp differences of opinion, there’s still some common ground between people like Khosla, whose unbridled faith in innovation has been nurtured by the successes of Silicon Valley, and the Midwesterners whose pragmatism was forged by the competitive economics of agriculture. In particular, most observers agree that annual production of corn-derived ethanol will level off within a few years. After that, any growth in biofuel production will need to come from new technologies.
But if cellulosic biofuels are to begin replacing gasoline within five to ten years, facilities will need to start construction soon. This fall, Range Fuels, a company based in Broomfield, CO, announced that it had begun work in Georgia on what it claims is the country’s first commercial-scale cellulosic-ethanol plant. The Range facility, which will use thermochemical technology to make ethanol from wood chips, is scheduled to reach a capacity of 20 million gallons in 2008 and eventually increase to 100 million gallons a year. Meanwhile, Mascoma has announced several demonstration units, including a facility in Tennessee that will be the first cellulosic-ethanol plant built to use switchgrass. But these production plants are federally subsidized or are a result of partnerships with state development organizations; attracting private investment for commercial-scale production will be another matter.
Indeed, ramping up the capacity of cellulosic-ethanol production will be a huge and risky challenge, says Colin South, president of Mascoma. “When people talk about cellulosic ethanol as if it is an industry, it is an unfair portrayal,” he says. “There are a number of pilot plants, but none of them have gotten out of the pilot scale. We still need to show we can actually run these in the form of an operating chemical plant.” South says that Mascoma hopes to begin construction of a commercial plant in 2009 and have it up and running by early 2011. But he adds that the company will only proceed when “the numbers are good enough.”
Perhaps the most crucial number, however, will be the price of crude oil. If it stays high, cellulosic-ethanol production could become economically competitive much sooner. But few people, least of all the investors who would risk hundred of millions of dollars on new plants, are willing to take that bet. Many remember the late 1970s, when the federal government earmarked roughly a billion dollars to fund biomass-related research, only to abandon it when crude-oil prices fell in the early 1980s. And while the price of a barrel of crude hovered in the mid-$90s this fall, and wholesale gas prices reached $2.50 a gallon, biofuel experts say they cannot count on such high prices. Many producers of next-generation biofuels say they want to be competitive with crude oil at around $45 a barrel to ensure long-term viability in the market.
Indeed, announcements about new cellulosic-ethanol plants tend to obscure the fact that the technology is still not economically viable. Gregory Stephanopoulos, a professor of chemical engineering at MIT, describes himself as “very optimistic” about the future of biofuels. But even he is quick to add that it will take another 10 years to optimize production processes for cellulosic biofuels. Among myriad other problems, he says, is the need for more robust and versatile microbes to make them.
- Boom or Bust? (PDF: Charts and graphs of the economics of biofuels)
- See images of high-protein grains and the production of hydrocarbons.
- University of Minnesota researchers explore the future of biofuels.
- C. Ford Runge explains the problems of corn ethanol.
- Venture capitalist Vinod Khosla details the market potential of alternative energies.
In a small conference room outside his office, Stephanopoulos takes out a pencil and paper and begins to draw a series of circles. You can imagine, he says, a biorefinery surrounded by sources of different types of biomass. He connects the circles at a central point, making lines like spokes on a wheel. You could, he goes on, imagine pipelines from these sources. What if the biomass were treated and piped to the biorefinery as a slurry? Stephanopoulos would be the first to acknowledge that such an ambitious infrastructure would take years to put in place, and that the idea raises numerous technical and engineering questions. But for the rest of the interview, the drawing sits patiently on the table–a simple target.