I had a chance to attend some sessions at the World Congress on Industrial Biotechnology and Bioprocessing in Toronto this week. Gotta say, I learned quite a bit about some of the impressive advances taking place in the biotech sphere that will move us toward economic, large-scale commercial production of cellulosic ethanol. Critics of the ethanol movement who focus on corn need to look beyond this feedstock and begin considering what the world of biofuels will look like 10 years from now, when genetically-modified switchgrass, guayule and other dedicated, high-energy-content crops begin growing on previously unusable land. These crops will be cold and disease resistant and will be engineered to provide a higher yield per acre, making them not only economical for farmers and ethanol producers but also alleviating pressure on traditional food and animal feed crops such as corn. Different dedicated crops will serve different geographies better, so each region will pursue its own strategy.

Ceres Inc. and the Samuel Roberts Noble Foundation are collaborating on such research and believe that these crops will begin to emerge as early as 2008. (J. Craig Venter’s recently launched company, Synthetic Genomics Inc., appears to be another player here.) My point is that 10 years from now we’ll realize that corn was merely a transitionary crop and that as the biofuel market gathers steam the proportion of corn used in the mix of feedstock will begin to fall. These organizations believe it’s realistic to reach the U.S. government’s goal of having ethanol displace 30 per cent of its oil-based transportation fuel by 2030, with a heavy reliance on cellulosic ethanol. The U.S. Department of Energy released a research roadmap last week on how the country is going to get there.

I spoke with Andre Boucher, the general manager of Suncor Energy’s St. Clair ethanol plant in Sarnia, Ontario, yesterday about this issue. The plant, which began operation earlier this month and is the largest ethanol production plant so far in Canada, relies exclusively on corn and has developed a network of farmers that supply it with feedstock. The byproduct of its process is then sent back to these farmers as animal feed. Boucher said once a plant is built, it pretty much relies on the feedstock it’s built around. So he expects corn will serve the Sarnia facility indefinitely. That said, he realizes that as more plants get built and more pressure is put on corn supplies, the emergence of commercial cellulose ethanol facilities will begin to change the market dynamics and new plants built at that point will be focused on handling cellulose-rich materials, including feedstock like switchgrass, agricultural/forest residue and industrial wood waste. Boucher pegs the turning point at 5 to 7 years. Here, Ottawa-based Iogen Corp. appears to be leading the pack and has lined up some major investors, including Goldman Sachs and Royal Dutch/Shell Group. Other players include Cambridge, Mass.-based Mascoma Corp., which just got an equity injection from Khosla Ventures, and Toronto-based SunOpta Inc., a bit of a hidden secret in cellulosic ethanol circles. Indeed, an ethanol war is brewing.

On top of dedicated crops, we must take into account that agricultural/forest residue, municipal organic waste, and the like will play a big role in meeting demand and also alleviate pressure on food/animal feed crops. We’re talking wheat straw, corn stalks, forest slash, and other stuff that would otherwise just rot on the ground or get burned in a big pile. (Though we’ve got to keep in mind that some of this leftover stuff must remain to put back nutrients in the soil).

In any event, this approach puts huge emphasis on enzyme research, since one key to maximizing ethanol production from high-cellulose materials is to find the right enzymes and, just as important, the right mix of enzymes that will extract as much sugar (glucose) as possible from the cellulase and hemicellulase in a given feedstock. Many of these enzymes are being found in certain types of fungi — i.e. jungle rot — and even termite guts. Genencor, Novozymes, Diversa, and Dyadic International are examples of companies focused on finding enzymes and building enzyme libraries. Today, Dyadic announced new enzymes with “an extremely high ability to convert different cellulosic substrates to glucose, the critical raw material for the production of ethanol.”

This is just a brief overview of what I heard today. I only took in a slice of the discussion, but it was fascinating nonetheless and gives me hope that biofuel can play a greater role in displacing oil than its critics suggest.

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