Cellulosic ethanol could compete with gas, study says

The U.S. can replace one-third of its annual gasoline use with ethanol by 2030, concludes a joint study released Wednesday by Sandia National Laboratories and General Motors.

Of the 90 billion gallons of ethanol that need to be produced in 2030 to meet that goal, the study says, 75 billion gallons could come from cellulosic ethanol.

Using cellulosic ethanol--or ethanol produced from forestry or agricultural waste--is considered a way to prevent the displacement of crops that feed humans.

Corn-based ethanol has been blamed by some for higher food prices and shortages because food producers are at times forced to compete with energy companies for the grain. Some also argue that the growing demand for such crops is also responsible for indirect land-use change, the destruction of rain forests and wetlands to make room for more farmland.

Proponents of cellulosic ethanol argue that because the fuel is produced from agricultural byproducts, it has no impact on the food supply or land use.

Cellulosic ethanol could be competitive in price without the need for incentives when oil is at $90 per barrel, according to the study. That cost analysis includes factors such as land and water use, transportation of feedstocks, construction of plants, and the energy used to produce cellulosic ethanol.

The inference here is that the biofuel may not be competitive if gasoline prices fall while the cost of making the biofuel does not.

Something else to consider: General Motors is an investor in the cellulosic-ethanol company Mascoma.

The Sandia-General Motors report follows a University of Minnesota study published last week in the Proceedings of the National Academy of Sciences.

That study found that cellulosic ethanol could help reduce air pollution in more ways than previously thought. The research group found that cellulosic ethanol not only emits less greenhouse gas than gasoline than was previously known, but also emits fewer fine particles into the air. The researchers also came up with a formula quantifying the long-term health and environmental costs from the fuel production and use of three types of fuel.

"For each billion ethanol-equivalent gallons of fuel produced and combusted in the US, the combined climate-change and health costs are $469 million for gasoline, $472-952 million for corn ethanol depending on biorefinery heat source (natural gas, corn stover, or coal) and technology, but only $123-208 million for cellulosic ethanol depending on feedstock (prairie biomass, Miscanthus, corn stover, or switchgrass)," the University of Minnesota report said.