Where’s Henry Ford when we need him?
Ford liked home-grown renewable fuels. His Model T could be modified to run on either gasoline or pure alcohol. He and others promoted the use of ethanol, which was used to fuel cars well into the 1920s and 1930s. Even Standard Oil marketed a 25 percent ethanol gas in the 1920s in the Baltimore area.
But after World War II, fuels from natural gas and petroleum became plentiful and cheap and soon federal officials lost interest in alcohol fuel production. That changed with the 1970s oil crisis and with the passage of the Clean Air Act.
Today’s ethanol industry depends significantly on federal regs that promote its use, as well as hefty tax incentives (53 cents per gallon). Without these, it’s obvious the industry would shrivel to the size of a corn kernel – and the federal subsidy is due to expire in 2007.
When you talk about ethanol, the assumption is that you’re talking about ethanol made from corn. After all, ethanol consumes 6 percent of the nation’s corn crop. But ethanol can be made from other inputs. As long as the input can be broken down into basic sugars, it can be used to make ethanol.
In California, for example, a Dairy Farmers of America-owned cheese plant, Golden Cheese Company, started producing ethanol from cheese whey residue in January. Actually, I should say it restarted production, because it had produced ethanol for more than 10 years beginning in the mid1980s.
The cheese plant claims it creates enough cheese whey to produce 5 million gallons of ethanol per year. A Kraft plant in Minnesota also uses whey to make ethanol.
In Washington and Colorado, plants use beer waste to make ethanol; an Idaho plant uses potato waste. And Hawaii recently approved $50 million in tax credits for ethanol plants that support the sugar industry.
In 1998, the United States produced 1.4 billion gallons of ethanol. Roughly 10 percent of that is made from grain sorghum, barley, wheat, cheese whey and potatoes.
Also looming on the horizon is “biomass ethanol” production, which replaces corn with “cellulosic feedstocks” – agricultural and forestry wastes, recycled paper, straw and components of municipal waste. There’s even talk of “dedicated fuel crops,” such as switchgrass or fast-growing hybrid poplars, that are grown and harvested solely for the purpose of fuel production.
The U.S. Department of Energy says cellulosic ethanol has environmental advantages over corn-based ethanol because it takes significantly less energy to make a gallon of ethanol. The down side is that the production process is a lot more complex and the technology, while available, is unproved on a commercial scale.
Currently, the DOE estimates the cost of producing ethanol from cellulose to be between $1.15 and $1.43 per gallon. Proponents claim the cost of producing ethanol could be reduced by as much as 60 cents per gallon by 2015 with cellulosic conversion technology.
Before corn growers dismiss biomass ethanol production as a competitor to be thwarted, consider this: Corn growers own one of the largest accessible supplies of biomass – leaves and stalks left behind after harvesting. Corn stover accounts for 100 million metric tons of biomass waste annually.
If investors can throw money away on worthless dot com ventures, surely there are investors for a high tech bricks-and-mortar venture that combines the lure of biotechnology and environmental friendliness.
Henry Ford would’ve reached in his pockets.