Biofuels are at a crossroads. The economy is spiraling downward and oil prices have dipped below $90 a barrel for the first time since October 2007—which doesn’t mean that oil is getting cheap again, just that a general contraction of the economy has set in. Now more than ever, alternative energy sources in general, and fuel for America’s vehicle fleet in specific, are needed.
The two main kinds of biofuels are the very short ethanol (C2) and essentially all longer chain hydrocarbons. Apart from the lower energy content of ethanol, both are better for the environment than fossil fuels—no surprise there. But, how you go about producing these two kinds of fuels are different stories, and here is where the advantage breaks down.
Basically you can produce ethanol from corn, which is hugely inefficient, and we won’t go down that road. Rather, the sensible way is to utilize the residual plant mass left after the corn is harvested, which is composed of cellulose, hence the name of the end product—cellulosic ethanol.
Synthetic diesel fuels, on the other hand, can be generated by esterifying soybean oil or with de novo synthesis using a chemical-engineering approach with bacteria or yeast taking the role of the main producers.
To make the distinction even simpler: what we have here are two different fuels, one ready to be piped into the current infrastructure, one not. In my opinion, ethanol, as a wholesale solution, is not the way to go—the existing infrastructure of the entire oil distribution economy is geared toward longer chain hydrocarbons.
First, ethanol itself would cause much greater corrosion in the pipelines thus necessitating large capital investments in order to convert parts of the infrastructure. Second, the distribution of the raw materials for cellulosic ethanol, namely the concentration of the agriculture in the U.S. Midwest, is a problem. The fuel would have to be produced locally in order to keep transportation costs low, then infrastructure would need to be built to collect and distribute it. Third, research has been conducted that shows evaporating ethanol may actually exacerbate the smog problem. This last point can most likely be solved with creative engineering approaches, but again changes in infrastructure and vehicles would be necessitated.
Conversely, the process of generating synthetic long chain fuels is still technologically complicated, but at least the end product will fit neatly into the refining and distribution infrastructure currently in place. Couple that with an upcoming increase in highly fuel efficient and low-emission diesel engine vehicles and you are almost guaranteed to be producing at peak capacity for a while until new entrants into the field start cutting margins.