Bush Admits Food Vs Fuel Issue, Boosts Cellulosic
By John O'Dell February 29, 2008 By Dale Buss, ContributorPresident Bush added to the chorus of support for cellulosic ethanol at his White House news conference Thursday, emphasizing it as a crucial part of the short-term answer to problems of fuel pricing and availability, as well as a long-term solution to food-versus-fuel problems.
Answering a reporter’s question about tax breaks for renewable forms of energy, Bush referred to the growing pressure under worldwide food prices that is being created by a rise in competing demand for U.S. corn stocks by ethanol producers.
“If you look at what’s happened with corn out there, you’re beginning to see the food issue and the energy issue collide,” the President said.
“And so, to me, the best dollar spent is to continue to deal with cellulosic ethanol in order to deal with this bottleneck right now.” He also said that “the best way to deal with renewables is to focus on research and development that will enable us to use other raw material to produce ethanol.”
It’s believed to be the strongest indication Bush has made that he understands present U.S. system of using corn for ethanol is problematic. Cellulosic ethanol production uses otherwise inedible cellulose from wood chips, plant fibers and other sources.
Like General Motors and Ford, Bush has been a big booster of corn-based ethanol as a domestically produced alternative fuel that quickly can replace gasoline in the U.S. distribution system.
“To see the President give this level of attention [to cellulosic ethanol] was very heartening to us because we’re such strong proponents of ethanol and are committed to the next step of developing cellulosic ethanol,” said GM spokesman Greg Martin.
Clearly, such huzzahs – especially from a lame-duck president – won’t make much difference by themselves in accelerating cellulosic ethanol into the American energy mainstream.
That is particularly true as long as the Bush administration continues to oppose Congress’s intention to tax oil companies to help fund renewables research, asserted Arnold Klann, founder and president of BlueFire Ethanol, an Irvine, Calif., company that is ramping up to break ground on California’s first cellulosic ethanol plant.
But having hopes expressed by the President for the fast rise of significant production of cellulosic ethanol in this country is sweet ratification of GM’s strategy.
In January, the automaker announced a partnership with a suburban Chicago startup, Coskata, that uses proprietary strains of bacteria to make ethanol out of farm waste, wood chips, old tires, landfill plastic and other organic materials.
Coskata plans to produce enough cellulosic ethanol by later this year to begin fueling the GM test fleet its Milford Proving Grounds northwest of Detroit.
And if that works, Coskata projects that it could be running its first commercial-scale plant, producing 50 million to 100 million gallons of ethanol annually, by 2011.
Company projections are that its process can produce cellulosic ethanol for less than $1 a gallon, about half of today’s cost of making gasoline. Some outsiders calculate that its cost would come out to about $1.30 a gallon on an energy-equivalent basis to gasoline and could debut in the marketplace at a retail price of around $2 a gallon.
The Coskata partnership intensifies GM's longstanding interest in ethanol. The car maker offers by far the largest selection of E85 vehicles in the marketplace and established ethanol power as a sub-brand with its “Live Green, Go Yellow” marketing campaign. GM launched the effort in 2006.
“In a way, in the world of ethanol, yellow is the new green, since today its main source is form corn,” said Brent Dewar, GM vice president of marketing and advertising, at the time.
Since then, GM has only been intensifying its investment in E85 vehicles and promoting the spread of E85 availability at gas stations nationwide, whatever the source of the ethanol.
Wes Bolsen, chief marketing officer of Warrenville, Ill.-based Coskata, said the President’s support can only help the company’s prospects for securing investments in additional new cellulosic ethanol plants by corporate partners on the other end of the supply chain from GM: feedstock suppliers.
“We’re in discussions, and we need to close deals,” Bolsen said. “We’re at the tipping point.”
Bolsen conceded that, because Coskata already considers its technology proven, there’s not much the company or its partners can do to get to the point of supplying cellulosic ethanol more quickly.
And while GM executives have said that they’re also interested in potential partnerships with other cellulosic ethanol producers, company spokesman Alan Adler said that “most of the companies we’ve looked at are still at least somewhat invention-dependent, meaning it will take a few years to get up and running and probably longer than Coskata’s gasification-based technology, which is ready today.”
No other automaker so far has demonstrated a commitment to or even interest in ethanol, or cellulosic ethanol, that rivals GM’s.
Ford, for example, believes that cellulosic ethanol “is ultimately where we need to be,” said spokeswoman Kristen Kinley, in part to alleviate the food-vs.-fuel debate. But she said that, “at the moment, fuel/ethanol producers are still working to find a cost-effective and efficient way to produce cellulosic.”
In the meantime, she said, Ford is providing and developing other alternative-fuel technologies including hybrids, plug-ins and hydrogen fuel cells and continues to add to its own fleet of E85-capable vehicles.
Klann, of BlueFire Ethanol, underscored the importance of getting funding of loan guarantees from Washington that would advance the nation’s fledgling cellulosic ethanol industry. He said “there are probably three or four companies’ technologies ready to be built that could offset oil consumption, but there is no funding for it” from Congress. “And the capital markets can’t handle this first-of-its-kind technology from a financing standpoint.”
Klann said that BlueFire – a public company that was hatched by renewable-energy concern Ark Energy – is ready to build a plant in California that will produce 3.1 million gallons of cellulosic ethanol annually from municipal waste.
LEAVE A COMMENT
That may have been the most accurate and coherent statement our executive administration has made this calendar year.
ADD A COMMENT