Read this Interesting NY Times Article.
Great article in the NY Times. Iogen was the first large-scale cellulosic ethanol producer. With their demonstration plant going well in Ottowa, Iowa would be a great location for their first large-scale facility.
The article also talks about a more decentralized ethanol industry:
The vision of a decentralized ethanol industry is taking shape, albeit an industry aided by tax breaks and government mandates. There are now 113 American ethanol plants and an additional 77 under construction, according to the Renewable Fuels Association, the industry trade group. Most of them are right in the middle of the Farm Belt, in counties that have been losing people since the Depression.
it goes on to say:
“So far, the ethanol boom has been positive,” said Chuck Hassebrook, executive director of the Center for Rural Affairs, a nonprofit research group in Nebraska. “But government incentives should be tied to promoting local ownership and producing the crop in a way that is environmentally sustainable.”
But there are two issues with this statement:
1) There’s nothing inherently sustainable about government incentives
2) Big decentralized industries don’t last long in this country. Worst case scenario: big oil companies buy out the production capacity and promise a big windfall for the local mainstreet owners. Most likely, ADM and perhaps a JV (Cargill/Dow/DuPont, etc) will buy-out a lot of this capacity over time and develop some internal scale – particularly behind R&D efforts. It’s a good deal for everyone, even if it leaves local owners feeling a little dirty.
The following paragraph talks about the slow-to-roll cellulosic ethanol production:
The cost of converting something like straw to ethanol is more than twice what it is for corn, which is one big reason no cellulosic plant has yet opened. Still, if market forces and technology come around, the prairie could be dotted with refineries running entirely on grass or field stubble in five to eight years.
Brazil is producing ethanol from sugar cane (just another source of cellulose). Cost and technology not withstanding, it is completely possible to do now with the existing (and dying) sugar cane industry in both the carribean territories and in the south (Louisiana). So it is strange that there haven’t been any sizable, noticable cellulosic ethanol plays in the U.S.
Furthermore, the tariffs set on Brazilian ethanol, while understandable given the condition of our farmers to ramp up for a solid competition, can’t last long (they violate WTO regulations) and ultimately deprive American consumers with cheap, available ethanol. That FlexFuel Tahoe looks better every day and that Chevy Volt looks really great too (what’s good for Detroit is good for me). I need ethanol on the corner station though. I’d prefer it came from Iowa, but I’m good with it coming from Brazil too.
Doug
