Executive Summary

During the past few years, new technologies have emerged that, if properly nurtured, could provide the key to a broader effort to wean Americans off foreign oil, drastically reduce pollution, help slow global warming and revolutionize portable power. One is an industrial process that may make ethanol far cheaper to produce than ever before, with the potential of making this much-maligned—and over-subsidized—biofuel economically competitive with gasoline. This is far more promising, in the near term, than much of the research on which we're currently spending federal dollars and intellectual energy.

As far as the science books are concerned, ethanol is merely a form of alcohol, commonly produced from corn, which is mixed in with gasoline to provide transportation power. The ethanol industry produced 4 billion gallons last year, less than 3 percent of the volume of gasoline consumed by Americans. As a result, only a small fraction of gas stations actually sell ethanol-gasohol mixtures.

Figure 1: Annual Production Volume, Production Capacity, and the Number of Refineries 2000-2005

A new and promising technology has the potential to make ethanol fuels much more practical. This method for producing ethanol not from corn kernels, but from the plant's stalk, roots and leaves, is known as cellulosic material. So-called cellulosic ethanol has been around for years, but breaking down the cellulose to make it fermentable was inefficient, expensive, and manufactured a fair amount of pollution.  But only until recently have companies developed a process for making it more efficiently. Cellulosic ethanol made from stalks and husks (and other plant cellulose material) still has to be fermented, but it uses cast-off waste products of food that's already being grown.

Cellulosic is just one form of biomass, which is energy produced from organic substances. Biomass is derived from many types of waste organic matter, both animal and vegetable, such as crop stalks, tree thinning, wooden pallets, construction waste, animal waste, agricultural waste and lawn trimmings, etc.

Using renewable resources for our future energy supply is a step in the right direction because it environmentally friendly by reducing pollution and helping to preserve other energy sources which are scarcer.  It also represents a hope for those nations that are deprived of natural energy sources, like oil and natural gas.