January 25, 2006

FORTUNE says: Ethanol is the answer to the energy dilemma

Ethanol, and specifically cellulosic ethanol, is making the BIG MONEY time with an article in Fortune magazine. This lengthy, and yet breathless, article places the focus squarely on the benefits of an ethanol renewable future with background information about Brazil's bold and successful energy policy and the impact flex-fuel automobiles has made to secure low prices in the face of shortages of either petroleum or ethanol.

Below are some choice excerpts from the article.


How to Beat the High Cost of Gasoline. Forever!
Stop dreaming about hydrogen. Ethanol is the answer to the energy dilemma. It's clean and green and runs in today's cars. And in a generation, it could replace gas.

More than five million Tauruses, Explorers, Stratuses, Suburbans, and other vehicles are already equipped with engines that can run on an energy source that costs less than gasoline, produces almost none of the emissions that cause global warming, and comes from the Midwest, not the Middle East. These lucky drivers need never pay for gasoline again--if only they could find this elusive fuel, called ethanol.

Instead of coming exclusively from corn or sugar cane as it has up to now, thanks to biotech breakthroughs, the fuel (ethanol) can be made out of everything from prairie switchgrass and wood chips to corn husks and other agricultural waste. This biomass-derived fuel is known as cellulosic ethanol. Whatever the source, burning ethanol instead of gasoline reduces carbon emissions by more than 80% while eliminating entirely the release of acid-rain-causing sulfur dioxide. Even the cautious Department of Energy predicts that ethanol could put a 30% dent in America's gasoline consumption by 2030.

Energy visionaries like to dream about hydrogen as the ultimate replacement for fossil fuels, but switching to it would mean a trillion-dollar upheaval--for new production and distribution systems, new fuel stations, and new cars. Not so with ethanol--today's gas stations can handle the most common mixture of 85% ethanol and 15% gasoline, called E85, with minimal retrofitting. It takes about 30% more ethanol than gasoline to drive a mile, and the stuff is more corrosive, but building a car that's E85-ready adds only about $200 to the cost. Ethanol has already transformed one major economy: In Brazil nearly three-quarters of new cars can burn either ethanol or gasoline, whichever happens to be cheaper at the pump, and the nation has weaned itself off imported oil.

And have you heard about GM's yellow gas caps? In the next few weeks the auto giant is set to unveil an unlikely marketing campaign drawing attention to E85 and its E85-ready cars and trucks like the Chevy Avalanche. They will sport special yellow gas caps, and if you already own such a vehicle, GM will send you a gas cap free. California governor and Hummer owner Arnold Schwarzenegger is backing a ballot initiative that would encourage service stations to offer ethanol at the pump.


Gary Dikkers said...


The Fortune article made a tremendous oversight by ignoring the fact that farmers cannot raise corn without applying nitrogen fertilizers.

Unfortunately, 90% of nitrogen is now made from natural gas, and 60% of that nitrogen is made overseas from foreign natural gas and imported into the U.S. Some agricultural scientists estimate that within five years we will have to import almost 100% of the nitrogen fertilizer corn farmers need.

A fuel such as corn-based ethanol that is utterly dependent on natural gas is not the route to energy dependence. Being dependent on foreign natural gas is no better than being dependent on foreign oil.

Corn ethanol may be a good investment because of the mandates, tax credits, and subsidies corn farming and the ethanol industry enjoy, but just being a good investment does not mean it can take us to energy independence.

Those who read the Fortune article must remember their interest is making money, and the mandates, tax credits, and subsidies attached to corn ethanol are what make it a good investment.

C. Scott Miller, EDP said...


This blog is not advocating corn-based ethanol as the sole basis of an alternative energy paradigm. The clear emphasis here is on cellulosic ethanol made from agricultural, forestry, and urban waste. And I think that is the thrust of the article as well - "Instead of coming exclusively from corn or sugar cane as it has up to now, thanks to biotech breakthroughs, the fuel (ethanol) can be made out of everything from prairie switchgrass and wood chips to corn husks and other agricultural waste. This biomass-derived fuel is known as cellulosic ethanol."

And you are wrong about the subsidies being the only thing propping the ethanol industry. It matters where we spend our money - the Mid-west or the Middle East - you decide. At least ethanol gives us an option. We need to develop an infrastructure - preferably, as you point out, one without reliance on fossil-fuels for any aspect of fertilization or energy. Our subsidized corn industry is no where nearly as subsidized as the oil industry, and look who is making the profits.

The status quo is terrible. Liquid renewable energy is necessary. Cellulosic ethanol made from waste (unfertilized, if you will) is my solution. What's yours?

Gary Dikkers said...

Scott said, "And you are wrong about the subsidies being the only thing propping the ethanol industry."


I didn't say subsidies are the only thing propping up the ethanol industry. I said that mandates, tax credits, and subsidies are what make corn-based ethanol an attractive investment. The Fortune article was about investment opportunities, not about the solution to our energy problem.

Scott said, "Liquid renewable energy is necessary. Cellulosic ethanol made from waste (unfertilized, if you will) is my solution. What's yours?"

Absolutely correct, a liquid, portable fuel is necessary. The long term solution is nuclear fusion energy. With clean, non-polluting fusion energy we can crack water into oxygen and hydrogen and use the hydrogen for fuel (or energy carrier). The only problem is that fusion energy is always 30 years in the future.

The short term solutions are conservation, and methyl alcohol (methanol) made from coal.

The U.S. is the Saudi Arabia of coal and we have enough coal to make methanol for however long it will take to finally make fusion power a reality.

What I am sure of is that corn-based ethanol is not the answer. Growing corn is so dependent on natural gas that we really shouldn't call it renewable and sustainable.

C. Scott Miller, EDP said...

Gary -

What about cellulosic ethanol - is that even a temporary answer in your opinion?

What is renewable about methanol made from coal?

Gary Dikkers said...

I see hope for cellulosic alcohol -- just as long as it is self-sustaining and we don't use fossil fuels to make it as we do corn-based ethanol.

Ethanol from switchgrass and agricultural and wood industry waste is certainly worth exploring.

Scott asked, "What is renewable about methanol made from coal?"

Obviously coal is not renewable (at least not unless we are willing to bury organic matter and wait 100 million years or so) but the U.S. does have almost inexhaustible quantities of coal.

Methanol from coal would be a completely domestic fuel, and would give us a breather while we figure out how to make fusion power a practical reality.

Methanol would be just as good a portable liquid fuel as corn ethanol, but unlike corn ethanol we would consume no foreign fossil fuels making it.

C. Scott Miller, EDP said...

The production of corn-based ethanol is expensive in fossil-fuel usage because not only is heat needed in the fermentation process, but fossil-fuels are used to produce the fertilizer, seed, tend, and harvest the corn, transport the feedstock (and waste) to centralized processing centers, and then distribute the final product.

In the bioconversion process, you discount the farming expenses because you are processing waste not specific crops. Urban waste is probably a better example because all the collection and shipping expenses are already being spent. Syngas fermentation of urban waste would actually lower fossil fuel usage from the status quo because after sorting, trucks and trains are used to transport unrecyclables to landfills. These deleterious uses of fossil-fuel would be eliminated.

Currently, yes, natural gas is used to ignite the gasification process. But much of the fuel of gasification comes from the waste feedstock itself - so right there the waste has been turned into a recyclable energy source. With technological development that attends paradigm shifts, it could be that the natural gas will eventually be replaced by ethanol produced by the system. Already, the cogenerated electricity from syngas fermentation greatly exceeds the amount used by the system.

Not to mention that waste landfill is a looming environmental crisis that costs society heavily. Landfill availability has already "peaked." Landfill diversion of waste is necessary in as many forms as possible - with utmost urgency. Politicians cannot sit on this.

Fusion power is too pie-in-the-sky for me. Hydrogen shows more promise but is also more than a generation away for all practical purposes. We need a renewable liquid fuel competitor to gasoline now so we can reap the benefits that Brazil seems to be enjoying from its flex-fuel economy.

gary t anderson said...


My name is Gary Anderson and I am president and co-founder, along with my wife, of The Forest School, which is a private, non-profit, research, education and training center in central KY.

I tend to agree with the remarks critical of a future based upon agricultural sources for ethanol or methanol. When the NET energy is calculated properly, modern western agriculture - and the distribution of its products - are a net energy loser. This is not a factor that we can "fudge". It is an energy reality that few Americans are equipped to understand.

I would offer as a modest alternative what we believe is a truly renewable and sustainable source of biomass for either direct conversion to work, or for conversion to liquid fuels...wood "waste" from the conversion of logs into lumber on-site, and then the conversion of that lumber into value-added products like flooring, molding, construction lumber, etc.

We use horses to extract logs, modern portable bandmills to convert logs to lumber, and solar kilns to dry the lumber. Even with harvesting only that amount of timber that grows annually in our woods (about 4%-6% of standing volume), we still generate about 750 pounds of very dry wood waste per acre. We also sequester 500 pounds of carbon - in the form of lumber - per acre each year, not including the sequestered carbon in the stumps and roots of harvested trees.

We leave logging slash and stumps in optimal condition to capture wild mushroom spores and thus grow free food for us. We also developed a very inexpensive and labor-saving method of growing mushrooms of of culls and logging slash in the woods. These methods result in hundreds of pounds of organic, energy-independent food per acre annually.

We call this approach Integrated Forest Management. We make several times more money per acre each year than agriculture does in KY, and that's including tobacco AND Thoroughbred horses.

We are now working towards the development of small portable syn-gas converters to make methanol from wood waste on-site. We will soon have this info, and more info on IFM, up on our website, roughcreekfarm.com. Please visit and contact us if you want to help.

Ed Kravitz said...

I have been asked to submit a proposal to a major railroad company to create a mobile methanol plant which will convert used railroad ties to methanol. We have a machine to shred the ties and telephone poles and want to feed them into a mobile plant built on railcars. Anyone with expertise that could help us with the design and or construction of a prototype please contact me.

Ed Kravitz
San Diego & Midwestern Railway Partners LLC