Ethanol Pro&Con

Of note on the following.
Conversation with a contact at a major ethanol company (private) that when Kleiner Perkins met with them, they were pretty clueless about the prospects and problems.

On the Ethanol Bandwagon, Big Names and Big Risks - New York Times:

"VINOD KHOSLA was a founder of Sun Microsystems and then, as a partner at Kleiner Perkins Caufield & Byers, the Silicon Valley venture capital firm, he helped a host of technology companies get off the ground.

These days, Mr. Khosla, 51, is still investing in technology, but much of it has nothing to do with the world of network computing in which he made his name. He is particularly excited about new ways of producing ethanol — the plant-derived fuel that, he says, could rapidly displace gasoline. 'I am convinced we can replace a majority of petroleum used for cars and light trucks with ethanol within 25 years,' he said. He has already invested 'tens of millions of dollars,' he said, in private companies that are developing methods to produce ethanol using plant sources other than corn."

Counterpoint by Peter Huber in Forbes (copyrighted material)
Now the green-energy crowd is touting cellulosic ethanol. This is a blunder, one they will regret more than any of their previous blunders. It will level forests, destroy wetlands and disrupt ecosystems all around the globe.

Or at least it will if the enabling technology ever becomes economical. And it might. Even a Republican President, in a State of the Union address, resolved to develop the technology "for producing ethanol, not just from corn, but from wood chips and stalks, or switchgrass."

The green logic is simple: Use carbohydrates to replace hydrocarbons. Farmers and the lumber industry generate copious amounts of cellulose-rich waste. America has lots of spare prairie, which grows grass. Gather the waste, harvest the grass and renewable biomass can replace dwindling supplies of crude. The global warming problem is solved, too, because plant growth pulls carbon out of the air.

In fact what lies ahead is an environmental debacle. Corn contains sugar, and sugars are easy to turn into ethanol. Just ask Anheuser-Busch (nyse: BUD - news - people ) or E. & J. Gallo. But to get a high-grade fuel out of wood, stalks or grass you have to take apart cellulose, a much tougher molecule. Some microbes and fungi can do it. So can cows, but only by filling their massive guts with those same microbes. And they do it inefficiently, and make quite a mess.

But the grass-to-fuel boosters don't plan to use cows. They plan to build chemical refineries that do the cow-gut thing much better. The key technical challenge is cheap production of huge quantities of robust, cellulose-splitting enzymes. Biochemists and genetic engineers could well find ways to deliver.

Plants won't celebrate if they do. (Consider, by way of analogy, how we humans might feel about a scheme to perfect flesh-eating bacteria, those mercifully rare strep bugs that digest muscles, fat and skin tissue with horrifying speed.) Plants pack their seeds with readily digestible sugar because they want animals to eat them. Most of the seeds get digested, but those that slip through get deposited, prefertilized, in some distant spot, where they grow another plant. Cellulose, by contrast, is the adult plant's armor and scaffold. Voracious animals don't strip every last plant off the face of the earth only because most animals must work so hard to digest what plants are mostly made of.

We humans, however, are exceptionally clever at stripping and exploiting. What we can't eat, we burn in our cooking fires and hearths. Or we burn down trees just to clear space for seed-bearing crops. Or for pasture to feed our cows. Western countries began to curb their appetite for green cellulose only a couple of centuries ago, when they discovered that it's often easier to dig up fossilized forms, like coal and oil. Most of humanity, however, still relies on the fresh stuff.

Now picture a world in which cellulose-splitting enzymes are cheaper than bottled water, and a pint poured into the steel cow behind your hut will quickly turn a hundred pounds of wood chips or grass into a gallon of diesel. However sensibly we Americans might use the enzymes in Kansas, we know where cow-gut chemistry will inevitably lead in rural Burundi, India or China. Sure, a villager will fill the still with waste cellulose first. The enzymes, however, are just as happy to take apart freshly cut wood or grass, and that's what villagers will use instead when they need or want more energy than waste alone can supply. Just as villagers do today when they cook. The one difference is this: When the villager harvests wood or grass today, he can only bake chapatis, heat his hut or feed his cow. With cheap enzymes at hand, he can also power a generator and a motorbike.

History has already taught us what a carbohydrate energy economy does to a rich, green landscape--it levels it. The carbon balance goes sharply negative, too, when stove or cow is fueled with anything but waste or crops from existing farmland. It's pleasant to imagine that humanity might get all its liquid fuels from stable, legacy farms or from debris that would otherwise end up as fungus food. But that just isn't how humans have historically fed whatever they could feed with cellulose.

From the perspective of all things green, cellulose-splitting enzymes are much the same as fire or cow, only worse. Fire and cow consume cellulose, but the process is generally messy and inconvenient, which is a big advantage, from the plant's perspective. To improve on wood-burning fires, or grass-eating cows, perfect the cellulose-splitting enzyme. Then watch what 7 billion people will do to your forests and your grasslands.

Peter Huber is a senior fellow of the Manhattan Institute and coauthor of The Bottomless Well (Basic Books, January 2005).