"Cellulosic Ethanol - The real bottom line to replacing imported oil" by Irv Mermelstein

The Engineered Coated Products (ECP) division of the Intertape Polymer Group is a major supplier of AquaMaster Linings for irrigation ditches, lakes and ponds and HayMaster Tarps to cover hay in the fields where it's grown.  As such, we have a business stake in cellulosic ethanol.  Our interest is further amplified by the potential of changing our dependence on imported petroleum and cleaning our atmosphere. 

We (the US) currently use 130 billion gallons of gasoline annually to fuel our transportation and pleasure needs, forecasted to grow 1.1% per year.  We import over $250 billion US of petroleum, eliminating this could help balance our imports and exports. 

To totally replace that usage by Cellulosic ethanol, we would need 130 million acres of hay and other biomass forage.  We have 58 million acres of unused farmland; 32 million acres are in the Conservation Reserve Program costing us $1.6 billion US in subsidies not to farm.  The other 72 million acres can be developed, mostly with irrigation.  Remember what FDR did by building hundreds of dams and canals throughout the west - It all began in 1933 when he told his Secretary of Agriculture, Henry Wallace, an Iowa Professor: "We are a nation of 120 million people, but in the year 2000 we will be around 300 million. You must figure out how we will feed the country and anything you need will be provided".  FDR was "a free wheeling, free spending patrician", but electrification paid off the debts he accumulated and THEY solved the problem of THEIR future.

WE have to solve the problem of OUR Future and the return of the family farm could be the solution. A 500- acre farm growing 10 tons of hay, or other forages, per acre can yield 5,000 tons annually.  At an estimated cost of $40 to $50 per ton, that family farm operation would net between $100,000 and $150,000 a year.  This would not involve growing any food for us or the animals we currently feed through our current farming commitments. Estimates are that a ton of forage biomass will yield about 100 gallons of E-85, leaving domestic oil capacity to provide its' share of total production of fuel.

We would need 260,000 - 500 acre family farms or the equivalent, totaling 130 million acres of forage and biomass production (wood waste and other biomass adds to the total, which can be quite substantial). 

We would need approximately 600 refineries to generate the 130 billion gallons of E-85.  Refineries would be located an average of every 65 miles in each direction across the country.  The tonnage of biomass required needs to be hauled via trucks, trailers and railcars.  Refineries must be closer to raw material production.  The finished product can be piped to wholesale destinations and delivered to stations in tank trucks.  Exports will further help balance our export/import spending.

Per billion gallons of E-85 produced, it is estimated that between 10,000 and 20,000 jobs will be created to support the above effort.  That's between 1.3 and 2.6 million jobs.

We have been producing millions of gallons of corn ethanol in recent years.  There are close to 100 corn ethanol refineries in operation.  Under our scenario, what happens to corn ethanol?  Corn ethanol has been an additive to gasoline (it raises the octane) and is only 10% of the total gallon delivered.  It could be called E-10. Corn Ethanol will join with other grains like soy and canola, becoming part of the ongoing biodiesel development.  Bio-diesel uses animal fat mixed with grain ethanol and is growing nicely. 

Corn ethanol takes a gallon of energy to produce about 2 gallons of ethanol, whereas cellulosic ethanol takes a gallon of energy to produce about 8 or 9 gallons of ethanol.  With a $50 per ton cost of forage, current refined cost to produce cellulosic ethanol is about $1.15 per gallon.

Cellulosic ethanol yields 3/4 the "miles per gallon" that regular gasoline generates.  The price difference will offset that yield, but science holds forth the promise of many improvements just like science developed in the petroleum industry. Senior citizens well remember 19 cents per gallon for gasoline - when cars got 5 or 6 mpg!

Scientists have said that cellulose is the largest single biological ingredient in the world.  It is in every plant that grows, everywhere.  It can be the source of all energy requirements in the whole world.  Brazil is 15 years ahead of the USA on this program.  Their ethanol comes exclusively from sugar cane waste that they used to burn and they eliminated their oil imports, saving $43 billion, solving two problems with cellulosic ethanol.

Some of the tactical needs to consider include the following:

Fuel pump conversion can cost $20,000 each. There are 176,000 stations in the US; only about 600 have E-85 equipped pumps, mostly in the mid-west;

Cars need factory installation to be able to run either E-85 or regular gas. GM and Ford have announced big numbers for outfitting new cars. GM promotes "Live Green; Go Yellow". Cars with a yellow gas tank cover can use regular gas or E-85;

Private investment will help hasten the changeover;

State and Federal Taxes and Subsidies can hasten the conversion. Any short -term indebtedness would be paid for out of future savings and tax adjustments or benefits, just as FDR's spending was repaid from his electric power developments.

We need to excite all interested parties to harmoniously stir the pot and generate action by governmental agencies, refinery developers, the farming community (like the homestead act of 1862), the trucking and rail industry, the seed and chemical producers, barn builders and the investing public. Cellulosic ethanol, the renewable energy grown by the farm industry can and should replace petroleum; make us self sufficient in energy; help balance our export/import payments; spur the economy with millions of new jobs.

(Source:  Irv Mermelstein.  Irv Mermelstein of Tucson, Arizona, is managing partner of Market Tek Management Consulting as well as a board member and consultant to the Intertape Polymer Group of Bradenton, Florida, where he was instrumental in the development of the Novathene Cotton Bale Bag and the "HayMaster" Program for in-the-field hay storage.  He also established an advisory group of 8 Agricultural University PhD's which provides various agricultural-economic studies aimed at increasing the quality and value of hay and other silage crops.)

Contact:  Irv Mermelstein, Intertape Polymer Group, telephone:  (941) 727-5788, email:  irvym@comcast.net, www.itape.com.