Biofuel Boom

In his budget address this year, Wisconsin Governor Jim Doyle declared his desire to build "America's first cellulosic ethanol plant." He'd better hurry.

Today, almost all of the world's ethanol fuel is produced from corn or sugar, but that seems likely to change. State governments are pumping millions of dollars into commercializing ethanol production from cellulose, a material that exists commonly in plants.

Some states are focusing on research, hoping to perfect the process to turn cellulose into fuel, a process that isn't as well-developed as the production of ethanol from corn. One of the boldest initiatives is in Tennessee, where this year's state budget includes $40 million for a "demonstration" plant. The facility is expected to produce 5 million gallons of cellulosic ethanol a year and allow researchers to improve the production process.

Other states hope to back large, commercial facilities. Doyle wants $5 million to help fund a biorefinery in his state. Georgia has committed $6 million to a commercial cellulosic plant and approved new tax exemptions for ethanol facilities this year.

Governments are interested in cellulosic ethanol for some of the same reasons they're interested in other biofuels: They decrease dependence on foreign oil, help reduce air pollution and can be a boost to the local economy. Cellulosic ethanol is especially appealing because sources of cellulose are everywhere. The fuel can be produced from crop wastes or from crops that grow on marginal land--decreasing the risk that ethanol production will lead to higher food prices. For states, the benefit is bottom-line: Whatever grows in their own climate can be turned into fuel and sold.

Florida is funding research into using bagasse, a byproduct of sugar production, for cellulosic ethanol. Wisconsin is looking at wood and waste from paper mills. In Georgia, the focus is also on timber. "We don't have any oil wells here," says Jill Stuckey, Georgia's director of alternative fuels. "We have lots of pine trees."

Tennessee's attention is on switchgrass, a quick-growing perennial that is closely associated with cellulosic ethanol. Researchers have found that switchgrass grows well in Tennessee, but the challenge lies in ensuring that farmers can make money growing it and that refineries have the supply they need. The state is spending millions to study the economics of switchgrass production.

The focus on cellulosic ethanol has corn states feeling a bit nervous. This spring, the Minnesota legislature debated providing the same payments to cellulosic ethanol producers that the state makes to corn-based ethanol producers, but ultimately rejected the idea.

Cellulosic ethanol won't render obsolete the 120 or so ethanol refineries that are currently in operation or the several dozen more that are planned, even though almost all of these plants are designed for corn. The production process for cellulosic ethanol is similar to corn-based ethanol, so existing plants could be retrofitted to handle cellulose. "It is," says George Philippidis, a cellulosic ethanol researcher at Florida International University, "almost like remodeling a house instead of building a new one."