How to Move Forward with Ethanol?

In order to reach renewable fuels goals, more ethanol production will have to be cellulosic - but when will it be viable?

Published on: Jul 4, 2007

Lawmakers in Congress have passed a Renewable Fuels Standard calling for the production of 36 billion gallons of ethanol by 2022, with more than half of that coming from cellulosic ethanol rather than the current feedstock of choice, corn. The figure is six times more than current production and five times more than the7.5 billion gallon standard for 2012.

But will the U.S. really be able to produce 21 billion gallons of commercially viable ethanol?

"I do think it's achievable," says Neil Koehler, CEO of California-based Pacific Ethanol, in a CNN Money report. "There's no question that when you get to cellulosic technology, the raw material base is there to support those kinds of gallons. We need 36 billion."

Others worry about the environmental impact of moving to ethanol. "The fact that we can make cellulosic technologies with a smaller environmental footprint doesn't mean that we will," says Nathanael Greene, senior policy analyst at the environmental watchdog National Resources Defense Council. "What we're doing now is just looking at the spigot rather than looking at what's behind it all."

There's also the question of how to get cellulosic ethanol started on the right foot. USDA and Congress are putting a fair amount of money towards research and development of cellulosic ethanol technologies. Some legislative proposals have also suggested subsidizing dedicated energy crops such as switchgrass - and idea which Otto Doering, a public policy expert at Purdue University, says is flawed. House Agriculture Committee Chairman Collin Peterson, D-Minn., has echoed those sentiments.

"We don't need any more crops being subsidized - we're trying to go the other way," Peterson said in a press call in late June. "The last thing to do is give people incentives when there's no market for it. I mean, we do some crazy things sometimes in government, but that's one of the crazier I've heard about."

"We're using 144 billion gallons of gasoline a year and we're all excited because we're going to be producing 8 billion gallons of ethanol, which is costing us $4 billion," Doering says. "If I put that $4 billion into conservation ... it would be the gift that keeps on giving. Once you put the technology into place to get the conservation going it gives you the return every year."