Corn stalks, rice straw, wood chips – many materials often regarded as wastes – are all possible sources for the Holy Grail of renewable energy: cellulosic ethanol.

Proponents of cellulosic ethanol promise that the biofuel would greatly increase the volume of ethanol that could be produced in the United States, decreasing the demand for oil from foreign countries and reducing greenhouse gas emissions as well.

The boom in the construction of corn-based ethanol plants over the last few years has pushed corn prices higher, over $4 a bushel this winter, boosting the allure of cellulosic ethanol, said Matt Drinkwater, a London-based analyst at New Energy Finance Ltd., a specialist provider of information and research for investors in renewable energy.

"Cellulosic ethanol would enable you to use other feedstocks that aren't part of the food chain," Drinkwater said. Because of the high cost of corn, now pushing the price of tortillas up by 400 percent in some instances, protestors have hit the streets in Mexico. "You wouldn't have this conflict" with the production of cellulosic ethanol, he said.

Ethanol production in 2006 reached a record high of an estimated 4.9 billion gallons, according to the Renewable Fuels Association. The Washington DC-based trade group reports that there are currently 111 biorefineries in operation in 19 states with the capacity to produce more than 5.4 billion gallons annually. Another 78 biorefineries are under construction and 7 are expanding to add another 6 billion gallons.

While the production of corn-based ethanol is expanding, cellulosic ethanol has yet to be commercialized. Drinkwater said the sugars in cellulosic ethanol are more complex and harder to break down. "There is a lot of research and a lot of money being spent on engineering these metabolic pathways in the microbes," Drinkwater said.      ...read more