Yesterday, Sandia National Laboratories, in conjunction with General Motors’ R&D, released a report stating the US could produce 90 billion gallons of cellulosic ethanol by 2030. That level of production could replace a third of the current gasoline usage.
The only problem? They don’t know how to do it. And neither does anyone else.
On Monday, Toyota said it would work with a consortium to figure our how to produce cheap cellulosic ethanol. Last week, Valero announced it was purchasing some of defunct corn ethanol producer Verasun’s plants. These companies are developing systems that can blend gasoline with ethanol. If done properly, this can make the gasoline cheaper, as they are thinning the gasoline with the biofuel.
The price of gasoline, and oil, weigh heavily on the logic of pursuing ethanol based projects. As it stands right now, cellulosic ethanol can not compete with gasoline.
AP: The “seed to station” floor cost of ethanol without taxes is $1.50 per gallon, and gasoline will undercut it if it’s priced below $2.25 per gallon without taxes, or $2.65 at the pump, the study found.
The average national retail cost for a gallon of gasoline on Tuesday was about $1.93. One year ago at this time a gallon cost about $2.95.
The cost of E85 ethanol was $1.655 per gallon Tuesday.
…It found that cellulosic ethanol could compete with $90-per-barrel oil, assuming 91 gallons of ethanol could be produced from a dry ton of biomass, building a cellulosic ethanol plant would cost $3.60 per gallon of capacity and plants would pay an average of $40 per dry ton of feedstock.