A sweet future for bio-fuels?

I've been accused of being a worrier and I suppose that it's true--though not about day-to-day things. I worry about the big stuff: economics, nuclear proliferation, climate change, fossil fuels, etc. Oil is one of the things I worry about these days. There are academic disputes about when the world will run out of oil, but it makes intuitive sense that it has to happen some time--or at least that at some point it will get prohibitively expensive to keep finding more. With China and India getting on the oil bandwagon, it doesn't take a genius to figure out that the global oil discovery/production/distribution system is and will be stressed to the limit. Oil has great potential to be a flashpoint for global conflict. That list of problems doesn't even include the environmental consequences of burning up more and more oil every year.

Oil is becoming a more precious resource every day, and it is the foundation of many industries, such as plastics, pharmaceuticals, and chemicals. Saving oil for critical applications like these and burning less of it for transportation again makes intuitive sense. Here's the rub: where do we find a reliable, cheap fuel for the millions of cars and trucks around the globe?

BIO-FUEL FUTURE

One answer is to develop bio-fuels that reduce or eventually eliminate the need for gasoline. This is not pie-in-the-sky stuff. Ethanol is already a major part of U.S. gasoline blends. And Brazil has achieved astounding success with its own ethanol industry. For example, a recent front-page article in the Wall Street Journal explained how, after nearly 30 years of development, Brazil is producing cost-effective ethanol made from sugar cane. Ethanol is now available at 29,000 gas stations in Brazil and Brazilian producers can make it for an average of $1 a gallon, compared to the international price of producing gasoline at $1.50 a gallon, according to the article. Even though ethanol gets less mileage than gasoline, it's still cheaper per mile driven. As a result, ethanol now has about a 20% market share of Brazil's transport fuel market, compared to the rest of the world, where use of alternative fuels is just 1%.

In the U.S., ethanol is made mostly from corn, which costs 30% more than Brazil's ethanol partly because the starch in corn must be turned into sugar before being distilled into alcohol. The article said that it may take the U.S. several decades to bring the cost of ethanol down to 80 cents per gallon, which is the benchmark for Brazil's most efficient producers.

How did Brazil get to this point? Extensive and expensive research sponsored by the Brazilian government as well as commercial development. Today in Brazil, flexible fuel cars running ethanol, gasoline, or a mixture of both account for 7 out of 10 new cars.

FUTURE FOR OLD MILLS?

What does this have to do with the paper industry? Lots. Technology Summit II, held in 2004, included a great deal of discussion about the development of a bio-fuel segment within the U.S. pulp and paper industry. There will be more and more unused pulping capacity in the United States and Canada that can be converted to bio-fuels, as South America becomes the center of the global wood pulp industry. Creating biofuels can also be done in conjunction with making wood pulp.

It's not just talk anymore. Potlatch Corp., Spokane, Washington is collaborating with several partners in studying the feasibility of a pilot biorefinery for converting forest and agricultural waste to biofuels and other chemicals at its Cypress Bend, Arkansas, pulp and paperboard mill. The proposed biorefinery pilot project could reduce Potlatch's energy costs and use of fossil fuels. Potlatch and its partners hope to receive a DOE grant to develop the project.

That's one example. What else can be done? Brazil's example shows that it takes a concerted effort by government and industry to fund the research needed to develop a new energy product. The North American pulp and paper industry must become a player in the biofuels future. Jim McNutt, executive director of CPBIS, noted that there have been some estimates that in two to three decades, 25% or more of the domestic energy supply will come from biorefinery-processed wood fiber.

In a recent article, Ben Thorp said that, to survive, North American commodity mills must innovate with a business model that generates more profits by creating products like biodiesel and ethanol. One day, these products may outpace production of traditional pulp and paper products. However, to get from here to there will require a lot of money and hard work--while we still have the resources to lead the charge.

ALAN ROOKS

Editorial Director

Contact Alan at [phone], or by e-mail at: [e-mail]

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