08S7B trailblazers

Biofuel

THE PROBLEM STARTS WHEN…
Propelled by mounting anxieties over soaring oil costs and climate change, biofuels have become the vanguard of the green-tech revolution, the trendy way for politicians and corporations to show they're serious about finding alternative sources of energy and in the process slowing global warming. The U.S. quintupled its production of ethanol--ethyl alcohol, a fuel distilled from plant matter--in the past decade, and Washington has just mandated another fivefold increase in renewable fuels over the next decade. Europe has similarly aggressive biofuel mandates and subsidies, and Brazil's filling stations no longer even offer plain gasoline. Worldwide investment in biofuels rose from $5 billion in 1995 to $38 billion in 2005 and is expected to top $100 billion by 2010, thanks to investors like Richard Branson and George Soros, GE and BP, Ford and Shell, Cargill and the Carlyle Group. Renewable fuels has become one of those motherhood-and-apple-pie catchphrases, as unobjectionable as the troops or the middle class.

THE UNDESIRABLE OUTCOME…
An explosion in demand for farm-grown fuels has raised global crop prices to record highs, which is spurring a dramatic expansion of Brazilian agriculture, which is invading the Amazon at an increasingly alarming rate.

Several new studies show the biofuel boom is doing exactly the opposite of what its proponents intended: it's dramatically accelerating global warming, imperiling the planet in the name of saving it. Corn ethanol, always environmentally suspect, turns out to be environmentally disastrous. Even cellulosic ethanol made from switchgrass, which has been promoted by eco-activists and eco-investors as well as by President Bush as the fuel of the future, looks less green than oil-derived gasoline.

Meanwhile, by diverting grain and oilseed crops from dinner plates to fuel tanks, biofuels are jacking up world food prices and endangering the hungry. The grain it takes to fill an SUV tank with ethanol could feed a person for a year. Harvests are being plucked to fuel our cars instead of ourselves. The U.N.'s World Food Program says it needs $500 million in additional funding and supplies, calling the rising costs for food nothing less than a global emergency. Soaring corn prices have sparked tortilla riots in Mexico City, and skyrocketing flour prices have destabilized Pakistan, which wasn't exactly tranquil when flour was affordable.

The basic problem with most biofuels is amazingly simple, given that researchers have ignored it until now: using land to grow fuel leads to the destruction of forests, wetlands and grasslands that store enormous amounts of carbon.

Backed by billions in investment capital, this alarming phenomenon is replicating itself around the world. Indonesia has bulldozed and burned so much wilderness to grow palm oil trees for biodiesel that its ranking among the world's top carbon emitters has surged from 21st to third according to a report by Wetlands International. Malaysia is converting forests into palm oil farms so rapidly that it's running out of uncultivated land.

Deforestation accounts for 20% of all current carbon emissions. So unless the world can eliminate emissions from all other sources--cars, power plants, factories, even flatulent cows--it needs to reduce deforestation or risk an environmental catastrophe. That means limiting the expansion of agriculture, a daunting task as the world's population keeps expanding. And saving forests is probably an impossibility so long as vast expanses of cropland are used to grow modest amounts of fuel. The biofuels boom, in short, is one that could haunt the planet for generations--and it's only getting started.

AND, HERE COMES THE NEW REASONS TO BE SUSPICIOUS OF ETHANOL…
OFFICIALS
in Tampa, Florida, got a surprise recently when a local firm building the state's first ethanol-production factory put in a request for 400,000 gallons (1.5m litres) a day of city water. The request by US Envirofuels would make the facility one of the city's top ten water consumers overnight, and the company plans to double its size. Florida is suffering from a prolonged drought. Rivers and lakes are at record lows and residents wonder where the extra water will come from.
They are not alone. A backlash against the federally financed biofuels boom is growing around the country, and “water could be the Achilles heel” of ethanol, said a report by the Minneapolis-based Institute for Agriculture and Trade Policy.
The number of ethanol factories has almost tripled in the past eight years from 50 to about 140. A further 60 or so are under construction. In 2007 President George Bush signed legislation requiring a fivefold increase in biofuels production, to 36 billion gallons by 2022.
This is controversial for several reasons. There are doubts about how green ethanol really is (some say the production process uses almost as much energy as it produces). Some argue that using farmland for ethanol pushes up food prices internationally (world wheat prices rose 25% this week alone, perhaps as a side-effect of America's ethanol programme). But one of the least-known but biggest worries is ethanol's extravagant use of water.
A typical ethanol factory producing 50m gallons of biofuels a year needs about 500 gallons of water a minute. Most of that goes into the boiling and cooling process, which is similar to making beer. Some water is lost through evaporation in the cooling tower and in waste discharge. All this is putting a heavy burden on aquifers in some corn-growing areas.
The good news is that ethanol plants are becoming more efficient. They now use about half as much water per gallon of ethanol as they did a decade ago. New technology might be able to halve the amount of water again, says Mike Fatigati, vice president of Delta-T Corp, a Virginia company which has designed a system that does not discharge any waste water. But others are sceptical. “There are things you can close loop [ie, recycle efficiently] and things you can't,” says Paul Greene, a senior director for biofuels with Siemens Water Technologies, designers of the water-purification technology used in ethanol factories. Perhaps ethanol just isn't as bio-friendly as it looks.

A TALENT SHORTAGE HITS GREEN START-UPS
ON MAY 1st applications closed for the first intake of a novel kind of executive-education programme. Set up by a bunch of venture-capital firms and other companies in New England, the three-month course will teach its “fellows” about renewable energy. To qualify for a fellowship, applicants must be successful entrepreneurs from other industries, such as IT or health care, and be zealous about profiting from greenery.
“A lack of talent, especially entrepreneurial talent, was one of the biggest bottlenecks to growth we identified in the clean-tech industry,” says Peter Rothstein of Flagship Ventures, a venture-capital firm that is one of the programme's founders. That bottleneck worries investors, who have been pouring cash into everything from solar energy to hybrid electric cars: last year global investment in renewable-energy businesses alone rose by 60%, to $148.4 billion, according to New Energy Finance (NEF), a research firm.
Although the prospect of minting money while helping to save the planet has attracted a stream of executives from other industries to clean-tech start-ups, few of them have much experience of their new field. In a recent global survey of 75 senior executives involved in clean-tech firms conducted by NEF and Heidrick & Struggles, a headhunter, over 90% cited top-level recruitment as a serious concern.
Counting on converts from other industries is risky, because some of the skills needed to run clean-tech companies are very different from those required to, say, launch a website. For one thing, the bosses of renewable-energy start-ups need to understand enough about the science to be able to pluck scientists from obscurity. For another, they need a grasp of project-financing techniques for costly prototype power plants. They also need to be able to deal with capricious regulatory and fiscal regimes. “If you've never done anything in the energy space, it can be intimidating,” says Bill Davis, the boss of Ze-gen, a start-up that generates electricity from waste.
Hence the New England bootcamp's goal of helping 25 aspiring green entrepreneurs a year to make the transition. As well as giving them an overview of the latest scientific research, the course also includes sessions on project finance and government regulations.
Start-ups also face a battle for engineers and scientists. And as small firms take advantage of a growing enthusiasm for greenery in East Asia and the Middle East, they also need more staff with international experience. Tracking down such rare pearls can be a distraction for busy bosses.
Like the bosses of many other clean-tech firms, Ms Cormack is using headhunters. They like the clean-tech business because wages, on which their commissions tend to be based, are rising fast. Not so long ago, executives would do meaningful green jobs for menial pay. But in recent years, wages have soared as the industry has grown and attracted big utilities and private-equity firms. Now what matters to the geeks is a different kind of green. “Good people can set their own price tag,” says one recruiter, “and they want jam tomorrow, not in five years.” It looks like they'll get it.

Acknowledgements:
• Ethanol and water--Don't mix, Feb 28th 2008 MIAMI, The Economist
• Clean-technology firms--Labour pains, May 1st 2008 SAN FRANCISCO, The Economist
• CHINA'S QUEST FOR RESOURCES--A ravenous dragon, Mar 13th 2008, The Economist
• The Clean Energy Scam, Thursday, Mar. 27, 2008 By MICHAEL GRUNWALD, Time.com
• The New Green Leaders, May 5th 2008, NewsweekSounds Good, But…, May 5th 2008, Newsw

posted by shao you @ 9:30 PM