Images courtesy of Technology Review
It may not shed much new light on the issue, but Technology Review's superb 3-part series on the price of biofuels does an admirable job of rounding up a lot of the current and past knowledge. More importantly, it quotes a number of experts who provide a more realistic - and sobering - perspective on the speed with which we can expect next generation ethanols such as cellulosic ethanol to become viable in the marketplace. The consensus amongst scientists and economists is that cellulosic ethanol is not likely to become much of a factor until 2010, at the earliest, or 2015.
Vernon Eidman, an emeritus professor of agricultural economics at the University of Minnesota, suggesting the economics for cellulosic ethanol look "interesting" (hardly the full-throated endorsement), noted that several issues, both practical and technical, could slow its large-scale production. He takes a much more hard-nosed view of the costs that will be involved to process the biomass and transport the resulting ethanol, remarking that people had a tendency to be "fooled" into seeing the glass as always half-full.
Perhaps the most critical factor in ensuring the longterm success of biofuels, the article notes, is the high price of oil. As David Rotman, the author, explains:
"If it stays high, cellulosic-ethanol production could become economically competitive much sooner. But few people, least of all the investors who would risk hundred of millions of dollars on new plants, are willing to take that bet. Many remember the late 1970s, when the federal government earmarked roughly a billion dollars to fund biomass-related research, only to abandon it when crude-oil prices fell in the early 1980s. And while the price of a barrel of crude hovered in the mid-$90s this fall, and wholesale gas prices reached $2.50 a gallon, biofuel experts say they cannot count on such high prices. Many producers of next-generation biofuels say they want to be competitive with crude oil at around $45 a barrel to ensure long-term viability in the market."
Via ::Technology Review: The Price of Biofuels (magazine)