7
Biofuels

When automobiles started to be used about a century ago, their developers seriously considered fueling them with ethanol, José Goldemberg pointed out at the summit. In fact, racing cars of the time were fueled with ethanol because the octane number for ethanol is better than that for gasoline.

Ethanol continues to have advantages over gasoline as a transportation fuel. It is an agricultural product that can be continually renewed. It does not emit impurities such as sulfur oxides and particulates, which, Goldemberg suggested, are a greater cause of concern than global warming in the large metropolitan areas of the developing world. If the proper feedstock and agricultural practices are used, the use of ethanol produces fewer greenhouse gases than the use of gasoline. Yet ethanol, when produced from food crops such as corn, also has serious drawbacks as an energy source, which requires that a careful assessment be made of the potential of biofuels to contribute to future energy supplies.

ETHANOL PRODUCTION IN THE UNITED STATES AND BRAZIL

The United States and Brazil are the main producers of ethanol in the world. Production in Brazil in 2006 was 17.8 billion liters. The area used to grow sugarcane to convert to ethanol was 2.9 million hectares, out of a total sugarcane production area of 5.0 million hectares in Brazil and 20 million hectares worldwide.

Ethanol production in the United States in 2006 was 18.4 billion liters. The



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7 Biofuels W hen automobiles started to be used about a century ago, their devel- opers seriously considered fueling them with ethanol, José Goldem- berg pointed out at the summit. In fact, racing cars of the time were fueled with ethanol because the octane number for ethanol is better than that for gasoline. Ethanol continues to have advantages over gasoline as a transportation fuel. It is an agricultural product that can be continually renewed. It does not emit impurities such as sulfur oxides and particulates, which, Goldemberg sug- gested, are a greater cause of concern than global warming in the large metro- politan areas of the developing world. If the proper feedstock and agricultural practices are used, the use of ethanol produces fewer greenhouse gases than the use of gasoline. Yet ethanol, when produced from food crops such as corn, also has serious drawbacks as an energy source, which requires that a careful assessment be made of the potential of biofuels to contribute to future energy supplies. ETHANOL PRODUCTION IN THE UNITED STATES AND BRAZIL The United States and Brazil are the main producers of ethanol in the world. Production in Brazil in 2006 was 17.8 billion liters. The area used to grow sugarcane to convert to ethanol was 2.9 million hectares, out of a total sugarcane production area of 5.0 million hectares in Brazil and 20 million hectares worldwide. Ethanol production in the United States in 2006 was 18.4 billion liters. The 

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0 THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE area used to grow corn to convert to ethanol was 5.1 million hectares, out of a total area for corn production of 29 million hectares and 144 million hectares globally. Together, an area of 8 million hectares was devoted to ethanol production in Brazil and the United States. The total area used for agriculture in the world is about 1,300 million hectares, so less than 1 percent of this area is being used for ethanol production, Goldemberg pointed out. Similarly, the total amount of ethanol produced by Brazil and the United States in 2006 was about 36 billion liters, which is less than 1 percent of petroleum use. “You sometimes wonder why people are concerned so much,” Goldem- berg observed. However, there are several reasons for that concern, he added. Ethanol production in the United States and Brazil is slated to increase. In Brazil, production is expected to double by the year 2015. “That’s not an extrapolation,” Goldemberg said, “it’s a calculation based on the number of [ethanol] plants that have been licensed and are under construction.” In the United States, the 2007 Energy Independence and Security Act places an upper limit on corn-based ethanol of 56.8 billion liters per year by 2022, which is approximately a tripling from current levels. Furthermore, using more advanced cellulosic-based technologies, ethanol production in the United States could increase by at least another 80 billion liters per year by 2022, and in the European Union, where sugar beets are currently the crop used most often for ethanol, production could increase to 15 billion liters per year by 2020. At that point, ethanol could replace 6 percent of the gasoline used in the world. Production at that level might enable the ethanol-producing companies to establish “a new OPEC of ethanol,” Goldemberg said. “Saudi Arabia con- trols 12 percent of the oil, but it has a tremendous weight on what happens in the world. So this is not an insignificant matter.” Many countries have established mandates that call for particular levels of ethanol consumption in the future. Yet production costs vary greatly from country to country, from more than €50 per 1,000 liters for sugar beets in Ger- many to less than €15 per 1,000 liters for sugarcane in Brazil. In addition, the amount of energy it takes to produce a given quantity of ethanol varies greatly for different crops (Figure 7.1). In Brazil, the extraction of the juice from sugarcane leaves considerable biomass, which is known as bagasse. This bagasse can provide all of the energy for the heat and electricity needed to produce ethanol. But cobs of corn do not have that same energy content, Goldemberg noted. As a result, fossil fuels need to be burned to pro- duce ethanol from corn in the United States, making ethanol less attractive as a fuel in this context. Further, as the prices of fossil fuels rise, so will the cost of ethanol. A concern unique to Brazil is the contention that the production of ethanol is causing the Amazon forest to be destroyed. But Goldemberg argued that this concern is misplaced. Most of the ethanol distilleries are in the southeastern

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 BIOFUELS 12 10 energy output/input ratio 8 (from fossil fuels) 6 4 2 0 Sugarcane Sugar beet Wheat straw Corn Wood ethanol feedstock Figure 7-1.eps FIGURE 7.1 Feedstocks produce varying amounts of energy compared to energy inputs. SOURCE: José Goldemberg, State of São Paulo, Brazil, “Biofuels: How Much, How Fast, and How Difficult?,” presentation at the Summit on America’s Energy Future, March 13, 2008; based on data from Macedo et al. (2004), UK DTI (2003), and USDA (1995). part of the country, with some in the northeast (Figure 7.2). Two-thirds of the ethanol in Brazil is produced in the state of São Paulo, which is far from the Amazon. There, sugarcane production replaced earlier crops such as cof- fee in response to government incentives to reduce the amount of petroleum imported into Brazil. “The Amazon Forest is being cut and no one more than the Brazilians—many Brazilians, including myself—are very annoyed at that, and we are fighting very strongly to eliminate that. But the deforestation of the Amazon is 1 million hectares per year. It’s not 7, it’s not 5, it’s 1.” The Brazilian government’s initial mandates in the 1970s called for 20 per- cent of gasoline to be replaced by ethanol. These mandates were “absolutely essential,” Goldemberg said, “because as soon as you had a mandate the private sector had a sure market and a stimulus to develop the technologies.” In addi- tion, the government encouraged car manufacturers, which at that point were foreign, to produce cars that would operate on 100 percent ethanol. That cre- ated a problem, because with any agricultural product shortages and surpluses can develop. More recently, the problem has been addressed with the develop- ment of flex fuel cars, which can use different mixes of ethanol and gasoline. Today all gasoline is blended with some quantity of ethanol, and gasohol is economically competitive with gasoline in Brazil.

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2 THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE Amazon Forest Pantanal grasslands Atlantic Rainforest Sugarcane cultures FIGURE 7.2 Sugarcane cultures are located in the southeast and northeast of Brazil, far Figure 7-2.eps from the Amazon Forest. SOURCE: Adapted from UNICA (2005; Figure 5, p. 131). broadside mostly bitmap image low resolution Since 1980, ethanol prices in Brazil have generally fallen, while the inter- national price of gasoline (in Rotterdam) and the price of gasoline in Brazil have gradually risen, with a strong spike in recent years (Figure 7.3). “Ethanol was very expensive in the beginning,” Goldemberg said. “As time went by, the learning curve decreased tremendously the cost of production.” Further increases in productivity can be expected in the future. From 1975 to 2005, the yield of ethanol per hectare in Brazil grew from 2,204 to 5,917—an annual increase of 3.77 percent—with most of the gains from agricultural improvements rather than distilling innovations (Figure 7.4). “It’s a fantastic situation,” said Goldemberg. “I wish all technologies would behave this way.” Now researchers are looking at the possibility of genetically modifying agricultural crops to further increase yields. Goldemberg cited informal infor- mation that additional gains of 30 percent are feasible in the near future. In the United States, corn yields also rose from 1975 to 2005 (Figure 7.5).

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1000 2000 900 2004 800 1980 700 1990 600 500 400 1980 gasoline prices (2004) US$/m3 2000 2005 2005 300 1990 1990 200 price paid to ethanol producers; 100 0 0 50000 100000 150000 200000 250000 300000 Ethanol Cumulative Production (thousand m 3) Ethanol prices in Brazil Rotterdam regular gasoline price Brazil regular gasoline price Figure 7-3.eps FIGURE 7.3 The price of ethanol has dropped steadily compared with the price of gasoline on the international market and in Brazil. SOURCE: José Goldemberg, State of São Paulo, Brazil, “Biofuels: How Much, How Fast, and How Difficult?,” presentation at the Summit Broadside on America’s Energy Future, March 13, 2008; based on Goldemberg et al. (2003). 

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 THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE 6500 6000 5917 5500 Liters per hectare 5000 4500 4000 3500 3000 2500 +3.77% per year in 29 years 2000 2024 1500 2001 2003 1991 1995 1999 1975 1979 1981 1983 1985 1987 1993 1997 1977 1989 Figure 7-4.eps FIGURE 7.4 The yield (in liters) of alcohol per hectare has tripled over the past three decades. SOURCE: José Goldemberg, State of São Paulo, Brazil, “Biofuels: How Much, How Fast, and How Difficult?,” presentation at the Summit on America’s Energy Future, March 13, 2008; based on Datagro calculations in The Brazilian Sugar Cane Agroindustrial ComplexAnalysis of Status and Opportunities, an unpublished study prepared by the Brazilian Reference Center on Biomass, 2007. 350.0 Actual Corn Yield Trend 90-08 300.0 Marker Assisted Breeding Technology Bumps 4% 250.0 Bushels per acre 200.0 150.0 100.0 50.0 0.0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 FIGURE 7.5 The yield (in bushels per acre) of corn could increase 4 percent per year during the period 2015 to 2020 through the 7-5.eps of new technologies. SOURCE: Figure application José Goldemberg, State of São Paulo, Brazil, “Biofuels: How Much, How Fast, and bitmap image low resolution How Difficult?,” presentation at the Summit on America’s Energy Future, March 13, 2008; data from U.S. Department of Agriculture. type with new vector

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 BIOFUELS With a new genetic technology known as marker-assisted breeding, future gains could approach 4 percent per year. Such gains could reduce the conflict between ethanol and food production, Goldemberg said, which has become a major issue in the United States. SECOND-GENERATION TECHNOLOGIES Ethanol production currently is based on the long-established technology of fermenting sugars to produce alcohol. But new technologies could greatly increase the production of ethanol and other biofuels from agricultural prod- ucts. For example, only about a third of the energy in sugarcane is contained in sucrose, Goldemberg noted. The remainder is contained in the bagasse and in the plant’s tops and leaves. The bagasse consists largely of cellulose and hemicellulose. If cellulose could be converted into biofuels, the gain from all agricultural products, including other crops, grasses, and wood, could be increased considerably. At the moment, the U.S. biofuels program is focused on ethanol, partly because “it’s the only game in town,” said Samuel Bodman. Also, money spent on ethanol goes to U.S. farmers rather than to some other country. But extract- ing ethanol from cellulose would have many advantages, Bodman said. First, it could cut greenhouse gas emissions by 80 percent compared with the use of fossil fuels. It also could be the first step toward an even greater potential break- through: making straight-chain hydrocarbons and aromatics—essentially equiv- alent to gasoline—from agricultural products. “That will change the nature of the business, if in fact it proves to be correct,” said Bodman. “There’s a lot going on, and we’re at a very early stage in the evolution of this matter.” Going from cellulose to gasoline or diesel first requires getting at the cel- lulose in a plant, Ray Orbach said. Plant stems and stalks have great strength because of a polymer called lignin that surrounds the cellulose and gives the plant strength and protection. Lignin keeps enzymes from reaching the cellulose to break it down into sugars that can be transformed into fuel. Currently, high temperatures or strong acids are used to break down these materials. However, “termites do it every day,” Orbach observed. In parts of the San Diego area, a stick can be pounded into the ground in the evening, and by the next morning Formosa termites will have digested the stick to extract nutrients. “Is there a way that we can figure out what the termite does, or how a cow’s inner stomach works to break down plant fiber? Nature has figured it out.” The Energy Department recently conducted a competition to fund centers focused on advanced biofuels concepts. Three proposals were funded at a level of $10 million in 2007, with $25 million slated for the centers over the next 5 years. The Joint BioEnergy Institute led by Lawrence Berkeley Laboratory with five partnering institutes is using model organisms to search for breakthroughs in basic science and is exploring the microbial-based synthesis of fuels beyond

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 THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE ethanol. The Great Lakes Bioenergy Research Center led by the University of Wisconsin-Madison and Michigan State University with six partners is explor- ing the breakdown of plant fibers, methods to increase production of starches and oils (which can be more easily converted to fuels), and the environmental and socioeconomic implications of moving to a biofuels economy. The BioEn- ergy Science Center led by Oak Ridge National Laboratory with nine partners is focusing on the decomposition of plant fiber and on the potential energy crops switchgrass and poplars. Already, this work has begun to produce dividends, according to Steven Chu. For instance, researchers at the Joint BioEnergy Institute have sequenced the DNA of the more than 100 microbes within a termite that help break down wood, creating the possibility that a designer microbe could be genetically engi- neered that has the proper combination of enzymes to break down wood in an industrial setting to generate fuels. Organisms also could be created to produce long linear hydrocarbon chains rather than ethanol. “In the first half-year of the DOE biofuels program, we now have our first gasoline-like and diesel-like fuels being generated by organisms,” said Chu. Once such a technology is scaled up, the same process could be used to make gasoline, jet fuels, and diesel fuels. “It’s not crazy to think of that,” said Chu. “It’s already proved in principle.” Some of the plants used for biofuels can be grown in marginal areas, such as salty ground. Also, plants especially suited to biofuels can be tremendously productive. For example, Chu showed a slide of miscanthus that grew almost 20 feet high from one fall to the next spring, with no applications of fertilizer or water (Figure 7.6). The goal of federal research and development is to develop a sustain- able carbon-neutral biofuels economy that meets more than 30 percent of the U.S. transportation demand without competing with food, feed, or export demands.1 Orbach acknowledged that 30 percent is “a huge fraction. There’s a lot riding on bioenergy, and we are up to our ears in trying to get it developed.” In particular, environmental issues associated with bioenergy derived from plants must be addressed, including the effects on water, soil quality, land use, and biodiversity, Orbach said. LAND USE The use of land for biofuels production competes with the use of that land for other purposes, which has raised the concern that biofuels production will add to the upward pressure on food prices. But Goldemberg pointed out that the price of food over the long term has been declining gradually since the early 1970s, although food prices do tend to undergo substantial fluctuations. 1Officially, the DOE Biofuels Program goal is to displace 30 percent of gasoline consumption with biofuels by 2030 and to make cellulosic ethanol cost-competitive by 2012.

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 BIOFUELS FIGURE 7.6 The feedstock grass Miscanthus in a non-fertilized non-irrigated test field at the University of Illinois yielded 15 times more ethanol per acre than did corn. NOTE: Estimates of the ratio for energy output to energy input for Miscanthus range from 12 to 19. SOURCE: Photo courtesy of Steve Long, University of Illinois at Urbana-Champaign. Biofuels production will occupy “a relatively small amount of land,” he said. Ethanol production also could have a stabilizing effect on oil prices, which would ease fluctuations in food prices. And the overall environmental con- sequences of ethanol production are small compared to the use of 86 million barrels of oil per day. Goldemberg also looked at the prospects for increased sugarcane produc- tion in other countries. Brazil is not unique in its capacity to grow sugarcane. Approximately 100 countries in the developing world produce sugarcane, including all of the Caribbean countries. Goldemberg strongly urged U.S. policymakers to consider supporting the production and export of ethanol from the Caribbean, where the United States has a strong presence. “You might say, ‘We’ll be changing dependence on the Middle East for another dependence, on the Caribbean.’ Well, the Middle East and the Caribbean are very different places.” At the height of the Roman Empire, the Roman legions refused to fight if they were not supplied with 1 kilogram of bread per day. The wheat for this

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 THE NATIONAL ACADEMIES SUMMIT ON AMERICA’S ENERGY FUTURE bread did not come from Italy, Goldemberg pointed out. It came from North Africa, which became a rich area because of its food exports. Goldemberg optimistically concluded, “If the Roman Empire imported wheat to meet the needs of the Romans, I don’t see why this is not considered a viable strategy for the United States.”