Tuesday, February 07, 2006

Biofuels: Alternative Fuel Sources

The comments from the President's State of the Union address last month concerning our need to be less reliable on foreign oil prompted a number of online articles regarding alternative fuel sources:

NY Times article "Corn Power Put to The Test" describes how researchers in Iowa are looking for an efficient process of producing ethanol. Their challenge is not to rely natural gas used in the production of ethanol, but to create enough natural gas to turn the corn into ethanol at a lower cost by using cow manure. The production of a form of natural gas inside the cows intestines (and duplicated in the factory) helps to create a higher ethanol content at a lower production cost.

Another article on the Oak Ridge National Laboratory Review entitled "Biological Ways of Producing Ethanol". discusses the use of a variety of alternative fuel sources and reducing the cost of developing ethanol. Their challenge is to determine the most efficient source with which to develop ethanol; corn, switchgrass, or hybrid poplars. Researchers are using a two step process; first the enzymes breaking down the corn/switchgrass, then the bacteria ferment and excrete the ethanol. The effects of bacteria that break down the corn or switchgrass into excretions of ethanol can be distilled and used as a biofuel. The researchers want to combine both steps into one to reduce production costs, however they cannot regulate the temperatures for both the enzymes and microbes simultaneously. Enzymes work best at 55 degrees, and the microbes work best at 35 degrees.

The third article discusses switchgrass as the most efficient energy producing ethanol: "Oklahoma Researchers Test Switchgrass for Biofuel Production". They are trying to prove that switchgrass is the least cost and most efficient alternative fuel source to produce. They found that the net energy produced from corn is about 21%, whereas the net energy from producing switchgrass is about 344% (1998 figures). With such an enormous difference in energy, they are now trying to determine the most efficient method of creating the ethanol by using enzymes (similar to the research in the previous article). The process of developing the ethanol by breaking up the plants components, then using the enzymes to break the switchgrass into glucose and pentose molecules. The solution then is fermented and distilled into ethanol.

There are a number of economical drawbacks to developing the ethanol from any alternative source, one being the cost of producing the ethanol at this point in time. For the most part, the marginal social costs (MSC) greatly outweigh the marginal social benefits (MSB) of creating and using biofuels instead of gas. The first law of thermodynamics -matter energy is neither created nor destroyed- plays an important part on the research currently being conducted. The matter energy for corn and switchgrass is being transferred into the ethanol form, but the switchgrass is retaining more of its energy matter than corn. This transfer of energy seems to make switchgrass somewhat more efficient. However, economic inefficiency becomes more of a problem when discussing the production costs with regards to: the capital and labor needed to grow the corn and other such products; farmers disagreeing to long term contracts to produce switchgrass instead of other less managed products; the cost of maintaining the factory; and the management of the farm and the equipment. Researchers do not know at this time what species of switchgrass to harvest or what part of the corn is the most productive for ethanol.

I think that we have a long way to go before any of this research or production can become reliable as alternative fuel sources. Fortunately, the more that we consider radical ideas such as these we will be in a better position to lessen our use of foreign oil.


Larry Eubanks said...

Any information about whether the research activities you write about are being subsidized by government? Is the research done privately by business? Is the research done by university faculty?

Assume for a moment the research noted is being carried out entirely by private sector business interests without government subsidy or other involvement? Do you think such research would generate a positive externality?

Denise Penn said...

Most of the research was subsidized, some heavily, by the Government. There were a variety of university and private businesses working on the research.

Naturally, there would not be as much of a motivation by these organizations to do the amount of research they have done without the subsidy. The subsidy has created a buzz of ideas and concepts that may not have been possible or probable.