The Biofuel Bubble—…the winners likely will be Shell, BP, DuPont, and other majors

[OKIsItJustMe]

http://www.businessweek.com/magazine/content/09_17/b4128038014860.htm

The Outlook for Energy April 16, 2009, 5:00PM EST

The Biofuel Bubble

A horde of startups have smart ideas. But the challenges are many, and the winners likely will be Shell, BP, DuPont, and other majors

By John Carey

It's a bold vision: Replace billions of gallons of gasoline not with ethanol from corn or other food crops but with biofuels made from plants, such as prairie grass in Tennessee pastures or algae percolating in Florida. Such a move would slash dependence on oil, create thousands of jobs, and reduce emissions that contribute to global warming. In the U.S., the idea has powerful political support. Congress has decreed that the country must be using 21 billion gallons of "advanced" biofuels a year by 2022. Washington is backing that goal with tax breaks, loan guarantees, and scores of millions of dollars in grants, with more support expected in upcoming energy bills. These inducements and the vast potential market have stimulated investments of more than $3 billion and spawned a new industry.

More than 200 companies, from 12-person startups to oil giants, are developing next-generation biofuels using a bewildering array of technologies. Pilot and demonstration plants are operating or are under construction from Florida to California. "We can have it all: more fuel, more food, and fewer carbon emissions," says John B. Howe, vice-president of Verenium (VRNM), a Cambridge (Mass.) company that makes ethanol from sugarcane waste at a demonstration plant in Jennings, La.

Yet behind the very real innovations and investments, the brash claims and the breathless headlines, lies an inconvenient truth. Replacing petroleum with biofuels is a tough business. Even as the industry develops, many of the companies—probably most—will not survive. "We've seen a venture capital-led bubble," says Alan Shaw, CEO of Codexis, a Redwood City (Calif.) manufacturer of enzymes used to make drugs, chemicals, and biofuels. "I cannot see how the small companies can build a business and still get a return to their original investors. The numbers just don't add up."

Nor will many Americans soon be filling their gas tanks with these next-generation fuels. Industry executives concede they'll fall far short of the mandated 2010 level of 100 million gallons of biofuels made from cellulosic materials such as prairie grass or cornstalks. Meeting the 2022 goal is also unlikely. It would require not only building hundreds of fuel factories—at a cost of $500 million or more each—but also surrounding each one with thousands of acres of land planted with energy crops such as prairie grass. "We're talking about a fairly substantial transformation of the rural economic landscape," says Jack Huttner, vice-president of DuPont Danisco Cellulosic Ethanol, a joint venture of Danisco and DuPont (DD) that is building a demonstration plant in Tennessee.

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[HysteryDiagnosis]

1. How to use biofuels like a smart person.

I'm pretty sure the mining industry should be ALL OVER THIS... and probably isn't, not even a little. Just from a safety standpoint, the need for ventilation, diesel particulate in the air, generators with exhaust and so on... just from these few standpoints alone, they should be all over this like white on rice.


http://www.sciencedaily.com/releases/2009/01/090126100645.htm


ScienceDaily (Jan. 29, 2009) — A team of scientists at the U.S. Department of Energy’s (DOE) Brookhaven National Laboratory, in collaboration with researchers from the University of Delaware and Yeshiva University, has developed a new catalyst that could make ethanol-powered fuel cells feasible. The highly efficient catalyst performs two crucial, and previously unreachable steps needed to oxidize ethanol and produce clean energy in fuel cell reactions.

Their results are published online in the January 25, 2009 edition of Nature Materials.

Like batteries that never die, hydrogen fuel cells convert hydrogen and oxygen into water and, as part of the process, produce electricity. However, efficient production, storage, and transport of hydrogen for fuel cell use is not easily achieved. As an alternative, researchers are studying the incorporation of hydrogen-rich compounds, for example, the use of liquid ethanol in a system called a direct ethanol fuel cell.

“Ethanol is one of the most ideal reactants for fuel cells,” said Brookhaven chemist Radoslav Adzic. “It’s easy to produce, renewable, nontoxic, relatively easy to transport, and it has a high energy density. In addition, with some alterations, we could reuse the infrastructure that’s currently in place to store and distribute gasoline.”

[JohnWxy]

2. MIT designed ethanol enabled direct injection engine uses 55 ethanol & 95% gas - 25% to30% improved

gas consumption. The ethanol produced in 2008 equalled about 6.3% of the total gasoline supply. The MIT scientists formed a company with Ford to mass produce these engines. ford plans to introduce them in 2010. tehy are estimating they will cost an extra $600 to $1,000 to make these engines.

If all the cars on the road were powered by this engine we currently produce enough ethanol to meet those needs and still have some left over.

Long run we need electric cars but it will take about 20 years before electric cars will make a significant impact (say 25% - 38% of rduction in gas usage. Before 20 years goes by we will have to do something or it won't matter what we accomplish in 20 years.