If you get into a room with a lot of people who make up part of the cellulosic ethanol industry, things can get a little technical. This is the situation here in Chicago for the Platts 3rd Annual Cellulosic Ethanol and Biofuels conference. A few hundred representatives from a lot of companies in the cellulosic ethanol "space" (I hear this term so often these days - the green tech space, the green car space, etc. Why?) are here and the rapid-fire presentations are truly talking to the choir, as it were. Sure, attendees disagree exactly how to best make cellulosic ethanol, but they all understand, well, the space.

So, join me as I share a bit about what was said and done at the conference. This post will cover the first few seminars, when some of the broader questions about cellulosic ethanol and the market were taken up. I'll have more posts later about other aspects of the discussion. Jump past the fold for more.

John McKenna, managing director of Hamilton Clark & Co., opened the conference by making the case that it's a great time to invest in biofuels. Despite all of the bad economic news, he said, the truth is that government mandates will continue to push the demand for ethanol (see below), so, hey, buy now. I'll keep my checkbook packed away, but thanks for the tip.

Candace Wheeler, GM's technical fellow of chemical and environmental sciences research and development, gave a presentation titled "Partnerships in the Growth of a Cellulosic Ethanol Industry." As our regular readers can probably guess, this meant lots of talk about Coskata and Mascoma.

Ethanol fits into the beginning stages of GM's "gas friendly to gas free" line, and Wheeler said that GM believes that next-gen biofuels offer the best near-term hope for clean, renewable petroleum alternatives and are going to be commercially viable in 2010-2011.

As an example of the potential of second-generation biofuel in the coming years, Wheeler explained how scientists have been able to pump up corn yields in the U.S. since 1940. Since that date, the average U.S. corn yield per acre has grown five-fold thanks to double-cross hybrids and bioengineering. It is currently up to 160 bushels an acre (the 1940 average was around 30 bushels), and Wheeler said that yields of 300 bushels per acre are coming. While there is an undeniable move away from corn ethanol in the ethanol industry, these sorts of yield increases can be applied to cellulosic ethanol crops in the coming years, finally putting the food vs. fuel debate to rest.

In case you were wondering what GM's delineations are for the biofuel generations, here they are:

  • 1st - corn
  • (1.5) - cassava and sweet potatoes
  • 2nd - grasses and wood
  • 3rd - algae
  • 4th - direct synthesis (maybe some day)

For now, GM is focusing on expanding the E85 fueling infrastructure in eight states and is working with a lot of biofuel consortiums, some with the DOE, others with universities and state governments. If we're going to get to 36 billion gallons (see below), we need to look at all the options, Wheeler said, and the next 2-3 years are a "crucial time" in figuring out what's what.

Listen to Wheeler here (24 min):

Susan Ellerbusch, vp of global biofuels at BP, gave a talk titled "Achieving Sustainable Biofuels More Quickly and the Role of Lignocellulosic Biofuels." She said that BP's main goal right now is producing the right biofuels at the right time and wanted to get the message across that BP is taking biofuels very seriously. I leave it to you to decide if the company is more talk than action, as one person suggested to me that they are.

BP has invested a billion dollars in biofuels in the last two years, and Ellerbusch said this sort of outlay will likely continue. It makes sense for BP to get into the "space," since the company estimates that biofuels will make up between 11 and 19 percent of the transportation fuel market by 2030; they might climb as high as 30 percent. Of course, while we're used to the "forward-looking statements" in press releases, Ellerbusch actually included one in her presentation, so don't be surprised if these numbers don't pan out. Still, BP has put at least some of its money where its mouth is. The oil giant (I know, I know, they're supposedly all "beyond petroleum" now) has a multi-pronged approach to biofuels. BP has made a $1 billion investment in the Brazilian sugarcane ethanol company Tropical and also has a partnership with DuPont to make biobutanol. BP/DuPont have a biobutanol demonstration unit that will become operational some time in 2009. The big question that needs an answer, she said, was how to make biobutanol cost effectively (isn't that always the big question?). BP has also made a $90 million investment in Verenium to develop and commercialize cellulosic ethanol. Listen here (23 min):

Richard Bain, the principal research supervisor at the National Bioenergy Center at the National Renewable Energy Laboratory (NREL) spoke about the growing importance of ethanol as a domestic fuel source, especially how the U.S. will transition to cellulosic ethanol. After all, the attendees at this expo were repeatedly made aware (as if they weren't already) that 36 billion gallons of biofuels per year will be needed in 2022 thanks to the Energy Independence and Security Act of 2007 (EISA, PDF available). As the White House put it last December, the EISA wil increase "the supply of alternative fuel sources by setting a mandatory Renewable Fuel Standard (RFS) requiring fuel producers to use at least 36 billion gallons of biofuel in 2022. Although the President proposed a more ambitious alternative fuels standard in his State of the Union Address, the RFS in the bill he signed today represents a nearly five-fold increase over current levels."

I'll tell you right now, Bain's presentation is not meant for the mass-market. This is an insider's conference, and Bain knew his audience. I'll post the audio (26 min)

... just be prepared to scratch your head now and again if you're anything like me. My eyes and ears just sort of went out of focus during most of the talk but perhaps you're able to concentrate a bit better than me.

Joseph Skuria, president of DuPont Danisco Cellulosic Ethanol LLC, gave an update on the biofuel partnership between DuPont and Danisco. Government and industry are well on the way to solving the technical challenges of cellulosic ethanol, he said, but there is still work to be done. A renewable fuel standard doesn't set the market price, but it does set the floor and eases access to biofuels Listen (24 min):

I always try to place my microphone where it won't pick up too much ambient noise - things like rustling papers and keystrokes - but I couldn't do much about the jackhammer upstairs or the low volume of the PA system. Apologies. In any case, stay tuned for more from the conference in a little bit.

Our travel and lodging for this event was provided by GM.

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