02/21/2009 05:12 am ET Updated May 25, 2011

Staying in the Lead on Biofuel Development -- Part 2

Ever since the beginning of America's ethanol industry over 30 years ago, scientists, chemical engineers, entrepreneurs and policymakers have sought ways to expand production beyond using corn or other grains as ethanol feedstock. To make ethanol requires breaking down starch into sugar. Converting sugar cane, as they do in Brazil, or corn here in the US, to ethanol requires far fewer steps than converting wood chips, corn cobs, switchgrass or other cellulosic substances. The key issue in converting cellulose is finding the right enzymes or bacteria to extract the sugar from cellulose.

Now, breakthroughs by scientists in their laboratories are enabling ethanol refiners to invest in new facilities, some of which are also using federal loans or grants, to demonstrate the commercial feasibility of cellulosic ethanol.

The advantages of moving to the next generation of biofuels are many. Producing ethanol from cellulose can cut carbon dioxide emissions by 86% compared to gasoline according to the US Department of Energy. Because of the many potential cellulosic feedstocks, ethanol can be produced in almost every part of the country.

For example, Verenium, a Boston-based biotech company, is converting bagasse, a byproduct of sugar production, into ethanol at a plant in Jennings, Louisiana. Just recently, the company announced the construction of commercial scale facility in Florida that will convert renewable grasses to 36 million gallons of fuel a year.

Range Fuels, based in Colorado, is using a thermo-chemical process for a 120 million gallon a year facility in Soperton, GA to produce ethanol from wood and wood waste from Georgia's pine forests and sawmills.

In Pennsylvania, Coskata Inc., a leading developer of next-generation biofuels, is building a commercial demonstration plant which will convert a variety of feedstocks, including woody biomass as well as agricultural and industrial wastes into ethanol using a gasification process.

Although credit is still tight and some projects will take longer to be completed, the ethanol industry and the US government, along with several state governments, are moving forward on developing a large-scale cellulosic ethanol industry. According to a recent USA Today story, venture capital firms "have poured $682 million into cellulosic start-ups since 2006," while the Department of Energy has "provided nearly $850 million for research and development."

With strong support from the incoming Obama administration and the nation's new Nobel Prize winning Energy Secretary, Steven Chu, we will continue to see rapid development of cellulosic ethanol, just in time to meet the growing production requirements so necessary to reduce our reliance on imported oil.