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CHICAGO – With corn ethanol under heavy scrutiny as critics blame it for increasing food prices, hunger and deforestation across the globe, the need to develop renewable fuels from non-food sources is manifest.
Backers of these so-called next-generation biofuels say they can run your car on algae, grass, agricultural waste, even household garbage. Imagine solving this nation’s energy crisis by turning something so ugly as garbage and weeds into a cheap fuel that pollutes far less than gasoline. It seems like wishful thinking.
But a spate of energy startups across the country say the time for next-generation biofuels has come. In an industry that is perpetually five years down the road, operators say the first commercial batches of fuel will be ready by the end of next year.
The technology to transform algae and garbage into fuel may seem cutting-edge, but it has been around for some time. So why is it only now that the technology is being proposed for use on a commercial scale in the United States?
Proponents of next-generation biofuels say they have gotten short shrift from lawmakers. All the while, producers of corn- and soybean-based biofuels have gotten a leg up thanks to support from powerful special interest groups – from farmers to food processors – who have the means to curry favor in Congress.
Bias in Subsidies
Mike McAdams formed the Advanced Biofuels Coalition in Washington, D.C., to push for an equal distribution of subsidies and support among producers of all biofuels, including those from non-food sources.
"If what we really want to do is build this industry, an industry that is in its infancy, what we need is a consistency in the federal government to support this technology and move it forward,” said McAdams, who serves as executive director of the coalition.
McAdams and other proponents of next-generation biofuels are up against some of the largest corporations and organizations in the country who have deep pockets and longstanding relationships with lawmakers in Congress.
Last month, the Renewable Fuels Association, an ethanol trade group in Washington, D.C., teamed with some of the largest companies in the country, including Monsanto, Archer Daniels Midland, Deere and DuPont, to form the Alliance for Abundant Food and Energy. The group says it will use advertisements and lobbying money to press for continuing support of crop-based biofuels, which are blamed for rising food prices.
It is difficult to calculate exactly how much money is spent lobbying for biofuels, since large corporations such as ADM – primarily a food processor but also the largest producer of corn ethanol – spend their lobbying money on other causes as well.
But according to data from the Center for Responsive Politics, a Washington watchdog group, about $7 million was spent in 2007 by groups lobbying solely for corn-based ethanol or soybean-based biodiesel. That compares with $3.1 million spent lobbying solely for next-generation ethanol or biodiesel the same year, according to the same data.
The result is subsidies, taxes and legislation that favor certain technologies and sources of biofuels over others, McAdams said. "You can't give one guy a buck, another 50 cents in a gasoline market," and expect them to have an equal chance, he said.
In 2005, for example, production of ethanol in the United States surged thanks in part to a 51-cent tax credit for every gallon of ethanol blended with gasoline. But ethanol is only one biofuel out of a spectrum of fuels that can be produced from a variety of sources using different technologies, some of which have distinct advantages over ethanol.
Butanol, one such fuel, can be blended with gasoline at higher concentrations than ethanol without need for a special engine. Butanol also has a higher energy content than ethanol, which delivers about a third fewer miles per gallon than gasoline.
McAdams said he is making progress in educating Congressional lawmakers. The recently minted farm bill, for example, contains a $1.01 per gallon subsidy for producers of all biofuels made from cellulose. Early on in negotiations, the credit was slated only for producers of cellulosic ethanol, McAdams said.
Upsetting the Status Quo
Still, groups like McAdams's have much ground to make up if they want to have an equal footing with producers of traditional biofuels. Corn-based ethanol and soybean-based biodiesel are attractive to investors because they have a proven track record and utilize familiar materials and a set infrastructure.
But steep oil prices and environmental concerns, along with other factors, could provide the incentive for lawmakers and investors to branch into unfamiliar territory.
Jeff Langbehn is the head of the Lake County, Ind., Solid Waste Management District. In mid-August, the district board green-lighted plans to build a plant that can make 30 million gallons of cellulosic ethanol from municipal solid waste – essentially garbage.
Langbehn said the rise in fuel prices, along with a general greening of attitudes, forced the board to study options for disposing of the county's waste they wouldn't have otherwise considered.
"Those things really combined to form a perfect storm allowing economics to drive the model," Langbehn said.
The plant, if approved by the Indiana Department of Environmental Management and the U.S. Environmental Protection Agency, will be built by Genahol-Powers 1 LLC of Evansville, Ind. Operators say the plant can turn 90 percent of garbage into ethanol. Minus the plant, the trash would likely pile onto a landfill.
In doing so, the company will charge Lake County $17.50 per ton to dispose of its waste. This is much less than the $40-plus per ton the county currently pays to have its waste hauled away to neighboring counties. It sounds like a sure bet, but Langbehn said there is resistance to upsetting the established way of doing things.
"Had the landfill people come in at $25 to $30 per ton, this discussion wouldn't be taking place," Langbehn said.
Rigel Stone is manager of business development at Bluefire Ethanol, which in late July was granted a conditional use permit by the County of Los Angeles to build what it says is the first commercial cellulosic ethanol plant in the country. Stone agreed that next-generation biofuels technology had been available and commercially viable for some time, but that cheap oil discouraged investors from supporting a first-of-its-kind facility.
"No one cared about petroleum alternatives until their pocketbooks were hit with higher gas prices," Stone said in an e-mail. "Most, if not all, of the cellulosic ethanol technologies available today were designed to compete with crude oil at less than half of its current market cost."
Stone said next-generation biofuels would not be around without corn ethanol having first paved the way. But with proper funding, he said, Bluefire could have had a number of cellulosic ethanol facilities in operation today. And it is only now that high fuel prices and environmental concerns have raised an awareness of the benefits of next-generation biofuels technology that funding has come from the government and private investors.
"With that awareness,” he said, “comes opportunities to get these biorefineries financed, in the ground and producing renewable fuel.”
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