BIRMINGHAM, Ala. (ResourceInvestor.com) -- In the Grimm Brother's fairy tale, Rumpelstiltskin spins straw into gold. Thanks to advances in biotechnology, researchers can now transform straw, and other plant wastes, into "green" gold - cellulosic ethanol.
While chemically identical to ethanol produced from corn or soybeans, cellulose ethanol exhibits a net energy content three times higher than corn ethanol and emits a low net level of greenhouse gases. Recent technological developments are not only improving yields but also driving down production cost, bringing us nearer to the day when cellulosic ethanol could replace expensive, imported "black gold" with a sustainable, domestically produced biofuel.
Cellulosic ethanol shows great promise as an alternative to corn based ethanol. The U.S. Department of Energy released a report (USDOE Report) on July 7, 2006 with an ambitious new research agenda for the development of cellulosic ethanol as an alternative to gasoline. The 200-page scientific “roadmap” cites recent advances in biotechnology that have made cost-effective production of ethanol from cellulose, or inedible plant fibre, an attainable goal. The report outlines a detailed research plan for developing new technologies to transform cellulosic ethanol - a renewable, cleaner-burning, and carbon-neutral alternative to gasoline - into an economically viable transportation fuel.
“Cellulosic ethanol has the potential to be a major source for transportation fuel for America’s energy future,” Under Secretary for Science Raymond L. Orbach said. “Low production cost and high efficiency require transformational changes in processing cellulose to ethanol. DOE’s Genomics: GTL program is poised to help do just that.”
In his State of the Union address on January 31, 2006, President Bush stated “We'll also fund additional research in cutting-edge methods of producing ethanol, not just from corn, but from wood chips and stalks or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years.” While corn and sugar have been used for some time as an addition or replacement for petroleum based fuels, cellulosic ethanol requires less energy to produce and is not dependent on fluctuating corn or sugar prices.
An illustration of the production process shows how cellulosic ethanol is made.
Kansas City-based Alternative Energy Sources, Inc. [Nasdaq:AENS] announced that it has entered into a letter of intent to acquire all of the outstanding capital stock of Flex Fuels USA Inc. and its affiliate ACN Energy Consulting Inc. in an all-stock merger. The parties expect to sign the merger agreement on or before Sept. 15, 2006. Total consideration for the acquisition is up to 11.5 million shares of Alternative Energy Source's common stock, 8 million shares being issued upon execution of the merger agreement and 3.5 million shares being issued upon completion of certain milestones related to Flex Fuels USA's cellulosic ethanol technology.
Alternative Energy Sources will use the existing technological knowledge of Flex Fuels to achieve production of ethanol at a lower cost and with more input diversity than existing ethanol producers.
Mark Beemer, CEO of Alternative Energy Sources, stated, "Alternative Energy is excited about adding cellulosic ethanol into our aggregate ethanol portfolio. We have had an intense period of carbohydrate-based ethanol evaluation of sites, and are in the process of optioning land in corn belt states for greenfield plants. Adding cellulosic ethanol will provide tremendous diversification to our future ethanol production base."
Mr. Beemer, formerly with ADM, has 18 years of extensive experience in the grain and energy industries according to a recent 8-K report filed with the SEC.
Flex Fuels, based in Huntsville, Ala., has developed proprietary technology to efficiently produce cellulosic ethanol using biomass and other forms of waste rather than corn or sugar. As a result, these facilities will not be affected by fluctuations in prices or supplies of corn and sugar, Beemer noted. Alternative Energy and Flex Fuels USA estimate four to five months of design and engineering, with an anticipated construction beginning in the second quarter of 2007. Once processes are finalized, he said the company anticipates building the first cellulosic ethanol facility in the Eastern United States.
William Longshore, president of Flex Fuels USA, Inc. added, "Our ability to efficiently convert everyday biomass waste streams to useful renewable fuels will give us the lowest cost position in the industry. We look forward to joining the Alternative Energy Sources team to commercialize this technology."
Sanders Morris Harris, a Houston investment-banking firm, is serving as the financial adviser to Flex Fuels USA on this transaction.
As noted in BioCycle, conventional ethanol and cellulosic ethanol are the same product, but are produced utilizing different feed stocks and processes. Conventional ethanol is derived from grains such as corn and wheat or soybeans. Corn, the predominant feedstock, is converted to ethanol in either a dry or wet milling process. In dry milling operations, liquefied corn starch is produced by heating corn meal with water and enzymes. A second enzyme converts the liquefied starch to sugars, which are fermented by yeast into ethanol and carbon dioxide. Wet milling operations separate the fibre, germ (oil), and protein from the starch before it is fermented into ethanol.
Cellulosic ethanol can be produced from a wide variety of cellulosic biomass feed stocks including agricultural plant wastes (e.g., corn stover, cereal straws, sugarcane bagasse), plant wastes from industrial processes (e.g., sawdust, paper pulp) and energy crops grown specifically for fuel production, such as switchgrass. Cellulosic biomass is composed of cellulose, hemicellulose and lignin, with smaller amounts of proteins, lipids (fats, waxes and oils) and ash. Roughly, two-thirds of the dry mass of cellulosic materials is present as cellulose and hemicellulose. Lignin makes up the bulk of the remaining dry mass.
This method of producing ethanol has less environmental hurdles to overcome. Grain based ethanol utilizes fossil fuels to produce heat during the conversion process, generating substantial greenhouse gas emissions. Cellulosic ethanol production substitutes biomass for fossil fuels, changing the emissions calculations, according to Michael Wang of Argonne National Laboratories. Wang has created a "Well to Wheel" (WTW) life cycle analysis model to calculate greenhouse gas emissions produced by fuels in internal combustion engines. Life cycle analyses look at the environmental impact of a product from its inception to the end of its useful life.
"The WTW model for cellulosic ethanol showed greenhouse gas emission reductions of about 80% [over gasoline]," said Wang. "Corn ethanol showed 20 to 30% reductions."
Cellulosic ethanol's favourable profile stems from using lignin, a biomass by-product of the conversion operation, to fuel the process.
"Lignin is a renewable fuel with no net greenhouse gas emissions," explained Wang. "Greenhouse gases produced by the combustion of biomass are offset by the CO2 absorbed by the biomass as it grows."
Perennial grasses, such as switchgrass and other forage crops are promising feed stocks for ethanol production.
"Environmentally switchgrass has some large benefits and the potential for productivity increases," said John Sheehan of the National Renewable Energy Laboratory (NREL).
The perennial grass has a deep root system, anchoring soils to prevent erosion and helping to build soil fertility.
"As a native species, switchgrass is better adapted to our climate and soils," added Nathanael Criers, NRDC Senior Policy Analyst. "It uses water efficiently, does not need a lot of fertilizers or pesticides and absorbs both more efficiently."
One of the attractions of biofuels such as ethanol is they can be utilized in today's internal combustion engines with little or no changes.
"The only source of liquid transportation fuels to replace oil is biomass," said Nathanael Greene, author of the "Growing Energy" report. "Everyone is excited about hydrogen but there are some very serious technical and infrastructure challenges. If you can stick with a liquid fuel which is compatible with our infrastructure and the vehicles we use, it is an easier transformation."
Light duty cars and trucks can already run on gasoline containing 10% ethanol. There are an estimated 1.2 million flex-fuel cars on the road capable of running on a wide range of biofuels including E85, a mixture of 85% ethanol and 15% gasoline.
"Manufacturing flex-fuel vehicles is a trivial change," said Reade Dechton of Energy Futures Coalition "It costs less than $200 per vehicle. They are selling them now and people do not know that they are buying them."
Alternative Energy Sources is at the forefront of the new wave of biofuel companies that can reduce or eliminate America’s dependence on petroleum based fuels. With the promising new technology of Flex Fuels, AENS is shaping up to be a major player in the interesting field of biofuels. AENS Homepage
