Top Scientists and Petroleum Operatives See a Future for Bio-Products

If you’ve sort of forgotten about domestic ethanol as an alternative to imported gasoline, be assured that Tom Stephens hasn’t.

Stephens, who was in Orlando recently to speak at the National Ethanol Conference, is vice chairman of global product operations for General Motors. He knows as well as anybody that our gasoline supply won’t last forever, and we’re long past the point where we should be concentrating our efforts on weaning the U.S. from our dependence on oil. GM has lived by that philosophy and has been the automotive leader in offering up flexible fuel vehicles that run on gasoline, E85 or any gasoline-ethanol combo in between.

Despite all their efforts, those by NCGA and many others, there are only 7.5 million E85 capable FFV’s in operation today and 2,000 stations offering up the corn-based, eco-friendly fuel. Surely nothing to sneeze at but given our voracious appetite for gasoline in the U.S. we have plenty of room for improvement.

With that sobering assessment, let’s take a look at some signs of what the future might hold.  The U.S. Department Energy projections say ethanol production is on the rise and we will make 800,000 barrels a day in 2010, up from 700,000 last year. Another 50,000 barrels a day will be added in 2011. The trend seems to document the buzz in the industry that ethanol makers are recovering from the sluggish economic conditions that have plagued every industry.

 That’s a good thing considering the ethanol industry added $53 billion to the U.S. gross domestic product and $16 billion in U.S. household income last year even as the ethanol industry struggled.

 Bright spot number two comes from Robyn Stevens, NCGA’s Manager Research and Business Development. Even though many of us have forgotten why we headed down the biofuels path to begin with, the petroleum industry themselves have not.

 Stevens, who recently attended a Bio-based Chemicals Summit in San Diego, CA, says “one of the most interesting points that I took away from the conference is that all of the oil companies and petrochemical producers are heavily investing and actively working on creating bio-based replacements for their current products.”

 Much of the technology that was presented was using fermentation with modified bugs (microbes) – the same process used to make ethanol – but for the businessmen and scientists attending the San Diego Bio-fest their goal extends well beyond ethanol. They want to create chemical end-products that would be either direct substitutes for current petrochemicals or replacement chemicals, Stevens said.

 While many bio-product advocates tout the environmental benefits these new products offer, Stevens said, in the end economics will dictate product mix and progress.

  A panel discussion including representatives from Ashland, DSM White Biotechnology, Procter & Gamble, Dow Chemical, and Huntsman all expressed similar views that, in order for them to consider a biobased product, it absolutely must come at a significant cost savings and meet or exceed current performance.

 This journey toward redefining corn didn’t start last week. Scientists have been working to redefine corn, moving it from food and feed product to chemical feedstock, in earnest since 1980 because they had a vision of how to turn price-depressing productivity into an economic generator.

 They have had a significant measure of success. In 1980, almost 60% of corn was fed to livestock, one third was exported and less than 10% went to food and industrial uses.  This year 40% of the crop will be fed to livestock, 15% will be exported, and 45 will move to food and industrial applications, with emphasis on industrial or non-food uses.

 Given yield increases and overall crop size in the last three decade, it makes the percentages above even more mind boggling. Anyone out there still think bio-based corn products are going to fade?