on thermochemical processes, so the actual potential supply function would lie between the two sets of supply functions shown in Figures 5.7 and 5.8. If corn grain ethanol (shown in Figure 5.7) has not been phased out by 2020, it would add about 0.67 million barrels per day of gasoline-equivalent production to the supply.

To put the results in perspective, the gasoline and diesel used by light-duty vehicles (LDVs) in the United States in 2008 was estimated to be about 9 million barrels of oil equivalent per day (1 bbl of crude oil produces about 0.85 bbl of gasoline equivalent). Total liquid fuels used in the United States was 21 million barrels per day, 14 million of which were used for transportation and 12 million of which were imported. Thus the 2 million barrels of gasoline equivalent of ethanol produced from cellulosic biomass and the 0.7 million barrels of gasoline equivalent of ethanol produced from corn grain have the potential to replace about 30 percent of the U.S. petroleum-based fuel consumed by LDVs, or almost 20 percent of all transportation fuels.

The potential supply of gasoline or diesel fuel from thermochemical conversion of a combination of biomass and coal (with CCS) is greater than with biochemical conversion of biomass alone. Moreover, the costs of thermochemical conversion of combined coal and biomass are lower than those of either biochemical or thermochemical conversion of biomass alone. The cost differences occur because coal is a lower-cost feedstock than is biomass. In addition, co-feeding coal and biomass allows a larger plant to be built and reduces capital costs per volume of product.

Using 60 percent coal and 40 percent biomass on an energy basis, almost 4 million barrels per day of gasoline equivalent—and thus of oil—can potentially be displaced from transportation. This would amount to 60 billion gallons of gasoline equivalent per year, or almost 45 percent of the gasoline and diesel used by LDVs in 2008. (The calculation assumes that all of the 550 million dry tons of cellulosic biomass sustainably grown for fuel will be used for coal-and-biomass-to-liquid fuel production. Thus the estimates represent the maximum potential supply.)

Alternative liquid transportation fuels from coal and biomass have the potential to play an important role in helping the United States to address issues of energy security, supply diversification, and greenhouse gas emissions with technologies that are commercially deployable by 2020.