Yesterday I attended sessions at the Green Chemistry and Engineering Conference in Washington, D.C.
There were a few topics being presented, but the symposium I chose to attend focused exclusively on biofuels. More specifically, it focused on how to expand their use without sacrificing quality while still maintaining both environmental and financial sustainability.
To that end, speakers from the United States, Asia, Europe and Latin America convened to discuss their latest research findings and offer their opinions on the best ways to fully integrate biofuels around the globe.
And although there was talk of traditional ethanol and biodiesel, ethanol produced from cellulosic sources seemed to be at the forefront of everyone's mind. But the push toward commercially viable cellulosic ethanol is going to be a tough one and, inevitably, three questions arose about its future success:
- Can we produce enough feedstock without affecting food crops?
- Can we make it on a commercial scale?
- Can we make it cost-competitive?
From what I heard in the conference room on the second floor of the Capitol Hilton, things are lookin' pretty good.
You see, the United States Department of Agriculture (USDA) has been stockpiling seeds--to the tune of 500,000 varieties. Originally the seeds were kept to preserve biodiversity--and they'll still do that--but now they'll also be used to find the most productive crops for use as cellulosic feedstocks.
They want to ensure they choose the best crops with the highest yields and the most extractable starches. This produces the most ethanol per acre.
The USDA, together with the Department of Energy (DOE), has been doling out money to pioneering firms in the cellulosic arena. The money is being poured into R&D to further advance the mass production of cellulosic ethanol.
According to Brad Barton, Director of Commercialization & Deployment for the DOE's Office of Energy Efficiency and Renewable Energy (EERE), we can make cellulosic ethanol all day, albeit in small quantities in tightly controlled environments.
The goal, he says, is to be able to do it on a grand scale, in huge vats, when there are a variety of variables present like dirt and different plants.
As it stands now, we're going to have 35 billion gallons of renewable fuel in our pipelines by 2017. And everyone at the summit agreed that only 15 billion could sustainably come from corn-based ethanol, leaving a 20 billion gallon void.
The general sentiment at the symposium was that cellulosic ethanol would have to fill that void.
A source from the Renewable Fuels Association at the conference told me that demonstration plants for cellulosic ethanol would be in place as early as 2010, with commercial facilities to follow soon after.
Folks, that's less than three years away. But in terms of market response time, it might as well be tomorrow, because big money is already piling into this sector. Especially in the areas of pretreatment technology and enzyme production.
In fact, one of the biggest movers on Wall Street yesterday was a company called Verenium Corporation (VRNM:NASDAQ).
Verenium develops specialty enzyme products used in the production of biofuels, and has recently completed an upgrade of the nation's first operational cellulosic ethanol pilot facilities in Lousiana.
The stock picked up nearly 20% by the close of the trading day on Wednesday.
And today it added another 13.7 percent.
Alternative Energy Traders are certainly cleaning up on that one.
And for long-term investment opportunities, Green Chip Stocks members are already sitting pretty with SunOpta (STKL:NASDAQ).
SunOpta's BioProcess Group specializes in the pretreatment of biomass for cellulosic ethanol production.
So far, we're up over 54% on this one.
We also have another cellulosic stock in the pipeline for this year.
I should have more on that for you later this summer.
Until next time,
Nick
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