Reducing Oil Dependence and Creating a Better Environment: The Promise of a Bio-Based Society

04/29/2011 03:53 pm ET | Updated Jun 29, 2011

As countries in North Africa and the Middle East continue their descent into violence and chaos, crude oil prices have increased more than 20 percent. As Americans feel that pain at the pump, economists continue to express concern that the volatile oil market might plunge the U.S. back into recession.

Yet our society's dependence on oil is more than just an economic problem. The events of recent weeks have reminded us that the thirst for oil threatens global security. It hampers diplomacy. It supports petro-dictators.

The unfortunate truth is that the addiction will be difficult to break. Despite the high costs of oil, hydrocarbons remain the cheapest source of energy on the planet. The world needs a replacement; one that is sustainable, secure, and can compete on the open market.

The most promising replacement -- bio-based energy -- is more viable than many people realize.

For decades, scientists have known that organic biomass can be used to fuel our cars, trucks, and airplanes. Americans are already using simple materials, like corn kernels and sugarcane, for exactly that purpose. In 2010 alone, the U.S. produced 13.2 billion gallons of ethanol from corn. If you live in the continental United States, odds are you've used corn-based ethanol, blended with gasoline, in your car.

More complicated types of biomass -- corn cobs, wood chips, waste paper -- are far more difficult to turn into energy. But this type of biomass--known as "cellulosic biomass" -- is plentiful and renewable. It is also cheap, precisely because no one has much use for it. Today, it mostly rots in fields or sits in landfills. If we could turn it into low-cost energy, the world would have a viable, environmentally friendly alternative to oil.

For a long time, this seemed like a dream, but today it's becoming a reality. Thanks to a new enzyme, developed in laboratories, a refinery can convert cellulosic biomass into ethanol cost competitive to gasoline.

When you factor in the additional costs of distribution and marketing, cellulosic ethanol is not quite competitive with oil. Not yet. But it's getting closer. Today, the greatest challenge is not one of science, but of scale. If we can bring large amounts of cellulosic ethanol onto the market, we can indeed turn our oil-based society into a bio-based society.

This is particularly important for the United States. America has only 3 percent of the world's oil reserves, but produces more than 25 percent of the world's agricultural residues. In fact, the Department of Energy estimates the United States could produce 90 billion gallons of ethanol using only agricultural and forestry waste, and energy crops.

The bio-based society would also create American jobs. From farmers in the field to manufacturers of harvesting equipment, from operators at biorefineries to workers at biochemical plants, biofuels and bio-based products put people to work. Advanced biofuels could directly create 400,000 jobs by 2030, and indirectly create 1.5 million more.

In order to seize this opportunity -- in order to bring cellulosic ethanol production to scale -- policymakers must take three important steps.

First, the U.S. must direct research and development grants toward the next generation of bio-based products. The same ethanol that powers cars can be used to create renewable plastics and chemicals, further reducing our dependence on oil.

Second, the U.S. must build the infrastructure a bio-based society requires. For decades, the United States has funded refineries, pipelines, and ports to help the economies of oil-producing regions. Now, it's time to build biorefineries, and to create programs that help farmers collect and transport biomass.

Third, the U.S. needs to invest directly in industrial biotechnology. Over the long term, bio-based fuels, chemicals, and plastics will become hugely profitable on their own. But today, the industry faces high start-up costs, and competes with an oil industry that receives billions of dollars year after year in government funds.

To be clear, it will not take a century of subsidies to realize the vision of a bio-based society. Biotechnology holds the promise, and increasingly the certainty, of reshaping our world for the better. In the future, our cars, trucks, airplanes, and ships will run on fuels -- cheaper and environmentally friendly fuels -- derived from cellulose. Plastics will be made from plants rather than petroleum. American workers will be employed on farms and in biorefineries, making energy here rather than importing oil from Saudi Arabia or Venezuela.

All this is going to happen sooner or later. But when it comes to America's energy future, there's a big difference between sooner and later.

That's why America must act. With just a few key investments in cellulosic biofuel, the United States can bolster its national security, reduce the impact of oil price swings, and become the world leader in the energy -- and the economy -- of tomorrow.

Steen Riisgaard is the president and CEO of Novozymes, a leading developer of enzymes used in the creation of biofuels.