Grass to gas: bio-based ethanol is poised to take off.

When George W. Bush delivered his State of the Union Address this past January, three words appeared that had not previously been heard from the Oval Office: Switchgrass, stalks and woodchips. Here were kind words about bio-based ethanol technology from a President who'd never met a fossil fuel he didn't love.

Although traditional corn-based ethanol has a loyal constituency in farm states, support for bio-ethanol, also known as cellulosic ethanol, is not common among politicians. Bush's stance was welcomed in the industry. But even though the President touts cellulosic ethanol and predicts that it will be widely available within six years, he doesn't necessarily put his money where his mouth is.

Bush's signals on renewable energy have been decidedly mixed. Shortly before he visited the National Renewable Energy Laboratory (NREL) in Colorado last February, a $5 million funding shortfall forced the lab to lay off 32 workers. Bush blamed the layoffs on a "budget mixup," and NREL got its funding back.

Switchgrass is a fast-growing perennial plant native to the central and eastern U.S. and tolerant of many different soil types. To make cellulosic ethanol, switchgrass--or any cellulose-based plant--is broken down to make sugar, then fermented to make the fuel. Supporters say that when blended with petroleum products, ethanol from switchgrass results in a net energy gain of 334 percent, compared to just 21 percent for corn-based ethanol.

The cellulosic process has been invented and is being refined, but it hasn't been commercialized, and that's what is preventing it from going into our tanks today, says former CIA Director James Woolsey, among switchgrass's biggest supporters. "It's continued learning and rationalization and lower costs of a process that already exists, so there's nothing, in a sense, that has to be invented new," says Woolsey. "There's no Manhattan Project. The Wright Brothers have already flown. You're talking about improving the pitch and the propeller and the design of the wings so it's more stable."

Corn-based ethanol has made great strides. According to Tom Slunecka, executive director of the Ethanol Promotion and Information Council, the U.S. currently produces four billion gallons a year, or approximately three to four percent of the fuel supply. "It's growing rapidly," he says. "By 2012 we're projecting 7.5 billion gallons, but I think we'll far surpass that." Automakers get federal tax credits for producing "bi-fuel" cars and trucks that can run on ethanol, but until recently the lack of an ethanol refueling infrastructure hampered the actual use of the fuel. But now General Motors and other carmakers are promoting ethanol vehicles with a new vigor. Even without bi-fuel technology, all cars today can burn a 10 percent ethanol blend.

David Bransby, a professor in Auburn University's Agronomy Department, has been working on bio-ethanols for two decades. He says that the technology is ready to be used in the U.S., but there are barriers, including the fact that "we actually don't have a big market for it yet. If I planted a thousand acres of switchgrass, I don't know if I could sell it because all of the ethanol that is being produced in this country is derived from corn. You need a different production technology if you're going to process biomass, and we don't have any of those technologies commercialized yet," says Bransby, who nonetheless says that Bush's six-year commercialization timetable is reasonable.

But Michael Pacheco, who became director of the Energy Department's National Bioenergy Center (a division of NREL) after 16 years in the oil industry, is optimistic. "We're really making quite good progress," he says. "The costs have come down quite a bit. Just five years ago, a gallon of bio-based ethanol was $5, and today it's $2. With gasoline prices going up as much as they have the past several years, most people in the industry believe that those cost curves are going to cross over. When they do, there really will be a major investment growth in biofuels."

The process of harvesting tall-growing switchgrass is not dissimilar to mowing your lawn, but even though the weed is hearty, it can be fragile when it comes to production. "You cannot transport switchgrass very far," says Paul Nyren, director of North Dakota State University's Central Grasslands Research Center. "The cost of building the industrial unit has yet to be determined, but it all just depends on getting a pilot plant up and running," he says.

Pacheco says the biomass industry is on the verge of taking off, but there is difficulty in taking that first step. "I think it will take some government assistance for the first plants to actually get built," he says. "To develop a new fuels technology like this is a very expensive proposition. But the investment community is ready to put a lot of capital into the growth of the biofuels industry. They want to be ahead of that curve."

For those on the front line, government and investor support has been slow to nonexistent. Lawrence Stewart, independent marketing representative for Phoenix Consulting Group International, asks, "How do we get over the commercialization hurdle? Traditionally, the government has played that role with respect to new technologies. Once you get one or two plants up and running, we'll be golden, because then it can be financed. Why doesn't the government support this? That's a good question and something we ask a lot."

Slunecka says bio-based ethanol production is still in its infancy: He cites a Canadian plant currently producing 100,000 gallons per year. "It works, it's not science down the road" he says. "Private companies are trying to crack the cost barrier. But the feedstock potential is enormous. I can't wait until these cellulosic plants are bolted onto the front side of traditional ethanol plants."

Bransby says we need to take action, because we're in an international competition. "Europe is ahead of everybody in the use of biodiesel, and Brazil is leading the world in the production and use of ethanol. We are behind. I hope that the President's address indicates that there is going to be a change, but he's fighting a war in Iraq and trying to recover from two hurricanes. To be quite honest, these alternative fuels are just as important as those other things. It's all part of national security and needs to be treated with the same priority." CONTACT: Ethanol Promotion and Information Council, [phone], www.driving ethanol.org; National Bioenergy Center, www.nrel.gov/biomass/national_bioenergy.html.