More uses for biofuel byproducts on the way

Researchers, entrepreneurs, and venture capitalists nation-wide are looking for potential uses for the byproducts from large scale biofuel production. Researchers hope to achieve an industry similar to the traditional oil refinery industry where as the raw material is processed, a multitude of products are produced in addition to the primary product (fuel). Researchers believe that as more value is obtained from these byproducts, the economic viability of biofuels such as ethanol will increase.

One company, Purevision, is working on a way to convert lignin so that it can be used in glues, sealants, and detergents. “Most plans for cellulosic ethanol processing call for burning the lignin to generate steam and heat to run the process. As a fuel, lignin is worth around $40 a ton. PureVision has devised a way to make a different form of lignin–one with a molecular composition that could make it an attractive material for a variety of industrial products like glues, sealants and detergents. Ed Lehrburger, PureVision’s founder and chief executive, said he thought his lignin could sell for $300 a ton or more. Lehrburger said his company was collaborating with a wood and paper products manufacturer that is interested in using the lignin for a biobased glue for its laminates, plywoods and other products.

Lignin makes up roughly 25% of the total mass of most plants.  Suppose that by 2017 we achieve Bush’s goal of 35 billion gallons of ethanol per year.  Since many experts put the maximum corn ethanol production for the US at around 15 billion gallons, this means that roughly 20 billion of these gallons will need to come from cellulosic sources.  At 100 gallons of ethanol per ton of switchgrass (a huge simplification): 20 billion gallons/100 g/t*.25t lignin/t biomass = 50 million tons.  50 million tons *300 dollars per ton= 15 billion dollars/year.  Say that the only half of this lignin is able to be obtained, it is still a 7.5 billion dollar per year industry.  This is huge.  Of course this all depends on how much it costs to convert a ton of lignin from being worth $40/ton to $300/ton and the details in the article seem to be lacking here.

“Lin and his colleagues are trying to turn the resulting glycerol into a substance called 1,3 propanediol, or PDO, the base material for a substance used in upholstery, carpets, clothing and other applications. DuPont uses PDO to make its Sorona line of fabrics.  “For every gallon of biodiesel you make, you make a pound of glycerol,” said George Kraus, a professor of chemistry at Iowa State, where he is director of the Center for Catalysis and a collaborator of Lin. “A lot of people have been contacting us about burning it, and we say there have to be better uses.”  The price of glycerol, now 20 to 50 cents a pound, could drop as low as 5 cents a pound as biodiesel production increases.  Kraus said the higher quality glycerol made with the new process could command a much higher price. “What we see,” he said, “is an opportunity to make something that might cost 80 cents a pound.”  This isn’t exactly relevant to this site but it is interesting none the less.

Many believe that as more uses are found for what are currently waste streams from biorefineries, the economics of biofuels will improve.  Anyway, the article goes through many other examples like the ones I quoted and is definitely worth a read.

Great Article Regarding Food vs Fuel “debate” in Poor Southern Countries

I saw this article on biopact, it is a very enlightening read about how biofuels will actually act to reduce world hunger for all the critics and counters a lot of the common environmental arguments against biofuels.  It is certainly worth saving on this site and worth a read.

Rep John McDonough on Cellulosic Ethanol in Maine

Rep. John McDonough has written a piece for the Portland Press Herald about how he believes Maine needs to invest heavily in technology to create cellulosic ethanol from wood.  He believes that Maine due to it’s large forested areas can become the “Saudi Arabia” of ethanol.

As to why he believes that Maine should invest in cellulosic ethanol, he says:

“For one, it takes much less energy to grow trees. Fertilizer is not required, and Mother Nature takes care of irrigation. Trees also are available year-round and do not come and go with the growing season.

Wood is not a food source and it has a higher energy yield than corn. Unlike with corn-based ethanol, you get more energy out of the process than you put in.

Rising fuel prices are not the only reason this development is critical and timely. In the age of terrorism, we find ourselves reliant on foreign oil from countries run by hostile regimes, giving them the power to manipulate — or cripple — our economy. Energy independence isn’t just about price security, it is about national security.”

What so many people don’t seem to understand is that it is all about economics.  Wood is expensive.  Most trees (excluding poplars and the like) grow extremely slowly compared with other potential energy crops.  When you include the opportunity cost of the land’s value and taxes etc. it is expensive to own land to grow trees and this is why wood is so expensive as a feedstock (and will only continue getting more expensive as demand rises).

Trees are also a carbon “sink” (see my article on carbon flux), which basically means that they are storing carbon that would otherwise be in the atmosphere contributing to global warming.  If a tree gets replanted, this would seem irrelevant, but this becomes problematic when trees do not get replanted.  Also when trees get replanted, it often leads to a monoculture which is obviously bad for biodiversity.

I am not saying that ethanol from wood is necessarily a poor idea, just that it’s potential is limited.  People often think of the huge amounts of trees that we have in this country and think, what an amazing source of fuel.  It is not nearly that easy, there are a lot of negative consequences to cutting down a lot of trees thus it needs to be done in a sustainable way.  It will certainly be one piece in the cellulosic ethanol puzzle, although it seems extremely unlikely that Maine will become the new “Saudi Arabia” of ethanol.

One more noted section of the article: “Our paper mills can use the leftover wood they usually burn or send to landfills for ethanol creation instead.”

Paper mills burn the leftover material in order to generate power for the plant.  If the wood is instead converted to ethanol then the plants will need to spend millions of dollars more per month on electricity.

University of Aarhus Scientists Working on Converting Seaweed to Cellulosic Ethanol

Biopact is covering a program at the University of Aarhus which is considering a type of seaweed known as sea lettuce as a potential biomass source.  Sea lettuce would make an excellent candidate for a biomass source since it grows extremely quickly (it doubles in mass every 3 to 4 days), and it has a high natural sugar content.

Michael Bo Rasmussen, one of the scientists at the National Institute of Environmental Research at the University of Aarhus, believes that sea lettuce could theoretically yield 200 to 500 tons per hectare.  This is orders of magnitude higher than any current land candidates.

Unfortunately, harvesting and processing most seaweed is also expected to be orders of magnitude more expensive than harvesting more traditional biomass crops such as switch grass is expected to be.  If someone can come up with a good way to do this though it would likely be extremely lucrative for the discoverer.

Not very much research has been undertaken since the 70’s, the last time that oil prices sky-rocketed.  Modern researchers will be taking over where their predecessors left of 30 years ago.  The University of Aarhus research will be part of a 16 million dollar program by the Aarhus Research Foundation.

Denmark is a Nordic country, thus it is not expected to produce very much traditional biomass do to land limitations and it’s climate.  Sea lettuce would be a very good substitute for traditional biomass since one thing Denmark does have is a lot of coastline and Sea Lettuce is a salt-water plant.

Cellulosic Ethanol from Rice Straw Plant Being Built in California

Ron Kotrba has written an incredibly interesting article for Ethanol Producer Magazine about a company which hopes to soon be making ethanol from rice straw in California.  Currently, California rice farmers must pay $25 to $45 per acre to have the rice straw baled and removed from their fields.  Colusa Biomass Energy Corp. (CBEC), the company which is currently in the process of building their first plant to process rice straw, has offered to take it off their hands for a mere $15.  There is a general understanding that once the plant is built CBEC will be removing the straw at no charge.

Rice straw has limited other uses since it has a very high sodium silicate content which is not palatable to livestock and is very abrasive for machinery.  CBEC intends to separate the silicate and use it as an extra revenue stream, selling it to a range of manufacturers.

The plant will be relatively small, processing “35,000 acres of rice straw into 12.5 MMgy of ethanol and 33 million pounds of sodium silicate.”  This is not necessarily a bad thing however as it will cut down on average transportation costs to the plant.  Generally 3.5-4 tons of rice straw can be collected per acre.

The amazing thing is that CBEC will be doing this with no federal or state money.  They have generated enough investor interest to fund their project via investment capital.   CBEC has been doing small scale research for years, it is only relatively recently that they hired Harris group, a respected engineering firm to do an analysis to see whether their research can be scaled into an economical, large scale, continuous process.  Harris group seems to think that this is doable, so the project is moving forward.

The actual process is described by the article to work as follows:

“We wash it, then introduce a mild solution of a strong acid then [which] hydrolyzes out the lignin and the hemicellulose,” Bowers says. “Then a second hydrolysis process occurs where we extract the cellulose from the remaining substrate.” He says the process whereby CBEC hydrolyzes the substrate, removing most of the lignin and all of the silica, is proprietary. “We have designed the hardware and the software to propel a reverse osmosis custom filtration device that we built to do the extraction,” Bowers says. “Through filtration, we separate the silica out and precipitate it as silica sodium oxide, and from the other side we pull out the lignin.” Once the lignin is dried down, CBEC plans to use it as boiler fuel. The company’s sales forecasts indicate the ability to retrieve 34-cents a pound from the more than 33.5 million pounds of sodium silicate, a versatile compound used to make everything from micro-electronics to toothpaste.  Once the cellulose and hemicellulose are separated from the lignin and silica, fermentation begins. “Our fermentation will look just like the corn guys’,” Bowers says.”

I hope that they don’t look exactly the same, if CBEC tries to break down the cellulose like corn starch (using amylase), they are going to be sadly mistaken.  They will be needing to use cellulase which as far as I know still acts more slowly than amylase and will be considerably more expensive.  I wonder whether they are going to just take on the cost of the cellulase or if they have figured out a plan for this expensive item too.  I would be extremely interested in the details of how exactly their second hydrolysis process works as well.

“We’re considering separate five-C and six-C lines”–and how do they propose to enzymatically break down the hemicellulose? I could be very mistaken but as far as I know there is not yet an economical way to break down hemicellulose since hemicellulose consists of so many different sugars.  You would need a multitude of enzymes each being unique to the sugar that they attack.  They could break down the hemicellulose via acid hydrolyis however but that is questionably economical.

Anyway, the company hopes to expand to 11 refineries by 2012 located in California, Texas, and Arkansas.   In the long term they see a lot of potential for global expansion since rice is such a staple crop world wide.  Whether they succeed or not, I guess we will have to wait and see.

Disproving “The great biofuel fraud”

Someone by the name of F William Engdahl has recently written an article for the Asia Times. This however is not just any article, it is probably THE IDEAL example of an article based on faulty data and misinformation about ethanol. Here I am going to go through a lot of his arguments against ethanol and disprove them one by one. I will quote his statements and then provide a rebuttal with a source (most of the sources can actually be found in previous articles that have been discussed on this site). Don’t get me wrong, there are some valid and descent reasons to be against the mass production of ethanol, Engdahl however seems to get almost everything wrong.

” The center of Bush’s program, announced in his January State of the Union address, is called “20 in 10″, cutting US gasoline use 20% by 2010. The official reason is to “reduce dependency on imported oil”, as well as cutting unwanted “greenhouse gas” emissions. That isn’t the case, but it makes good PR. Repeat it often enough and maybe most people will believe it. Maybe they won’t realize their taxpayer subsidies to grow ethanol corn instead of feed corn are also driving the price of their daily bread through the roof.”

The most often repeated and first major argument of Engdahl’s is that corn ethanol competing with food increases the price of food and that is why food prices have increased so much in the past 18 months. In fact the main reason that the cost of food has gone up so drastically as of late is because of the rising cost of oil. This is because the cost of the actual corn is only a tiny percentage of the total cost of the food that we consume. To confirm this assessment I would refer interested readers and Mr. Engdahl to this report.

“The late American satirist Mark Twain once quipped, “Buy land: They’ve stopped making it.” Today we can say almost the same about corn, or all grains worldwide. The world is in the early months of the greatest sustained rise in prices for all major grains, including maize, wheat and rice, that we have seen in three decades. Those three crops constitute almost 90% of all grains cultivated in the world.”

When the cost of corn (the main ingredient in corn flakes) accounts for a mere 5% of the total cost of the box of cereal, even if the cost of corn doubles again next year it would still only increase the cost of your box of cornflakes by roughly $.20. This is not going to break anyone’s bank. The 90% figure is sensationalist and doesn’t matter even a little to basic supply/demand as anyone who has taken econ 101 can tell you.

“No advocate of the ethanol boondoggle addresses the huge social cost that is beginning to hit the dining-room tables across the US, Europe and the rest of the world. Food prices are exploding as corn, soybeans and all cereal-grain prices are going through the roof because of the astronomical – US Congress-driven – demand for corn to burn for biofuel.”

Correlation does not imply causation.

“Biofuel – gasoline or other fuel produced from refining food products – is being touted as a solution to the controversial global-warming problem. Leaving aside the faked science and the political interests behind the sudden hype about dangers of global warming, biofuels offer no net positive benefits over oil even under the best conditions.”

This is actually almost true, certain studies indicate that there is close to no net positive benefits from corn ethanol, others indicate slight benefits (generally no more than 30% however). Here is a study which likely is close to the truth. “For GHG emissions, E85 produced by dry milling achieves a 19% reduction, and E85 produced by wet milling achieves a 14% reduction.”

You also completely (and conveniently) neglect the expected carbon emission reductions associated with cellulosic ethanol:”Under the near-future case, for E85, woody cellulosic ethanol reduces petroleum use by
70%, GHG emissions by 102%, and fossil energy consumption by 79%.”

GHG = Green House Gas.

“Big Oil is also driving the biofuels bandwagon. Professor David Pimentel of Cornell University and other scientists claim that net energy output from bio-ethanol fuel is less than the fossil-fuel energy used to produce the ethanol. Measuring all energy inputs to produce ethanol, from production of nitrogen fertilizer to energy needed to clean the considerable waste from biofuel refineries, Pimintel’s research showed a net energy loss of 22% for biofuel – they use more energy than they produce. That translates into little threat to oil demand and huge profit for clever oil giants that re-profile themselves as “green energy” producers. “

Joke: What happens when you use crop yield and conversion efficiency data from the 70s when trying to do a life cycle analysis for today?

Punchline: You get data today that would have been a useful argument against ethanol during the 70s!

From the department of energy:

“The most official study of the issue, which also reviews other studies, concludes that the “net energy balance” of making fuel ethanol from corn grain is 1.34; that is, for every unit of energy that goes into growing corn and turning it into ethanol, we get back about one-third more energy as automotive fuel. That may not sound impressive, but bear in mind that while the gasoline that ethanol displaces is largely imported and a high-level pollution source, the mix of energy inputs for producing bioethanol includes much domestic and relatively cleaner energy. On the basis of liquid fuels alone, the net balance is 6.34 (USDA Office of Energy Policy and New Uses, The Energy Balance of Corn Ethanol: An Update).”

Also, the energy balance from sugar cane is between 8:1 and 10:1.

“The bio-ethanol architects did their homework, we can be assured. It’s increasingly clear that the same people who brought us oil-price inflation are now deliberately creating parallel food-price inflation. We have had a rise in average oil prices of some 300% since the end of 2000 when George W Bush and Dick “Halliburton” Cheney made oil the central preoccupation of US foreign policy. “

As I have already shown, the price of our food is far more dependant on the price of a barrel of oil than the price of a bushel of corn. Obviously as oil prices increase, food prices will increase (with a few year lag since the supply curve does not instantly correct itself).

“Environmental analyst Lester Brown recently noted, “We’re looking at competition in the global market between 800 million automobiles and the world’s 2 billion poorest people for the same commodity, the same grains. We are now in a new economic era where oil and food are interchangeable commodities because we can convert grain, sugarcane, soybeans – anything – into fuel for cars. In effect the price of oil is beginning to set the price of food.”"

The reason that people are starving isn’t because there is not enough food to feed the people of the world, it is because the people of the world can not afford to feed themselves due to lack of jobs. Yesterday I wrote about an article which highlights how a Chinese company is buying up millions of acres of Congo palm oil plantation with the intention of creating massive amounts of biofuel. The Congo people are absolutely thrilled about this as it will create jobs for those who are currently some of the poorest in the world and the money will trickle down throughout the rest of the economy so the people can actually buy some food. I would argue that biofuels are actually going to end up reducing world hunger, not increase it. The areas of the world with the largest starvation also tend to be areas where biofuel crops grow best.

” The green claims for biofuel as a friendly and better fuel than gasoline are at best dubious, if not outright fraudulent. Depending on who runs the tests, ethanol has little if any effect on exhaust-pipe emissions in current car models. It has significant emission, however, of some toxins, including formaldehyde and acetaldehyde, a suspected neurotoxin that has been banned as carcinogenic in California.”

You use hyperbole to the extreme: “Compared with gasoline, ethanol tends to produce less benzene and butadiene, but more acetaldehyde and formaldehyde, when burned.” Basically ethanol produces slightly less of some negative compounds and slightly more of other negative compounds. This isn’t even “dubious” and certainly not “outright fraudulent.”

Anyway, you ignored most of the valid arguments against ethanol usage and argued mostly for the bad ones which have already been invalidated on numerous occasions. For example, I would argue that the implementation by the administration has been relatively poor. The subsidies are depleting an already overreaching budget. A carbon tax and possible other taxes on gasoline and large vehicles would be far more effective.

In conclusion I would suggest that perhaps Mr. Engdahl spend more time researching facts and less attempting (and failing) to prove his slogan: “Just because you’re paranoid doesn’t mean they aren’t out to get you.”

Engdahl, F William. “The great biofuel fraud” Asian Times Online, August 1 2007. <http://www.atimes.com/atimes/Global_Economy/IH01Dj02.html>

Cellulose-Fed Fuel Cells

Researchers at Penn State have developed an experimental cellulose based fuel cell. Since there are no known bacteria which can degrade cellulose and reduce the anode, they needed to use two separate bacteria. They used cellulolyticum to ferment the cellulose, and Geobacter sulfurreducens which is electro active to create the charge. “Microbial fuel cells work through the action of bacteria that can pass electrons to an anode. The electrons flow from the anode through a wire to the cathode, producing an electric current. In the process, the bacteria consume organic matter in the water or sediment.”

The fuel cells were mostly inefficient, producing only 150 milliwatts per square meter.  Modern fuel cells generally produce roughly ten times as much.  “As a proof of concept, the researchers are happy with their results, but they would like to see the power density increase. One approach would be to find a community of bacteria that could tolerate small amounts of oxygen because some of the bacteria use up the oxygen before it reached the anaerobic bacteria. Another approach would be to improve the design of the oxygenless fuel cell.”

A lot of the trouble that was had was due to the fact that the bacteria that were used were anaerobic and were killed in the presence of oxygen.  Since most fuel cells work using an air cathode, this was inconvenient and led to a less efficient dual chamber design than would otherwise have been achieved.  The researchers used pure cellulose also which requires significant processing to separate from from other biomass components.  Another challenge will be to develop a fuel cell that can accept generic biomass which contains cellulose, hemi-cellulose, lignin, and other extractives.

International Fuel Ethanol Workshop Hosts Record Attendees

Ethanol Producer Magazine reports that FEW, the International Fuel Ethanol Workshop which opened a month ago today hosted a record number of participants this year.  “You know, the first Fuel Ethanol Workshop was held here in St. Louis in 1984. I think there were between 38 and 40 people at that first Fuel Ethanol Workshop, and no exhibitors. This year we have about 5,200 registered … and nearly 700 exhibitors.”  Since 1984, the industry has gone from producing roughly 500 million gallons of ethanol/year to roughly 7 billion gallons of ethanol/year.

In that time the industry has come a long way, but still has a vast potential for expansion.  Currently, nearly all ethanol is made from corn.  This will be changing in the next 15 years or so as cellulosic ethanol technology becomes mainstream.  “The push to bring cellulosic ethanol from pilot and demonstration to commercial-scale production has been on the front burner for some time now.  The joke within the industry is that cellulosic ethanol has been “five years away” from reality for the past 25 years. Whether the next five years of research and development will deliver commercial-scale cellulosic ethanol is yet to be determined.”  I would like to point out that there has been a lot of progress into cellulosic ethanol in the last year.  Mascoma’s wood plant in Michigan, the citrus peel plant in Florida, and Poet’s corn cob project in Iowa are all innovative and will lead to increasing process efficiency through their mass production.  Once the process is relatively efficient and proven, there will be more players who enter the market and competition will increase further driving innovation.

Bob Dinneen, president and CEO of RFA responded to ethanol critics who are of the belief that ethanol production negatively impacts food supplies (and prices) by saying: “The food versus fuel discussion that we’re hearing today, we need to address head-on,” Dinneen said. “We need to be the ones to inform people that when we process corn into ethanol, we’re not taking food out of the mouths of babies. We’re borrowing the starch and we’re leaving behind a very high-value, high-protein feed product that is going to those food markets.”  Regular readers of THIS site however already know that rising corn prices have almost no impact whatsoever on food prices.

“All of this growth … has been in spite of a lot of negative newspaper articles, a lot of negative press, naysayers, the professor [David] Pimentels of the world who offer nothing but hollow criticism based on poor data, based on a lack of research,” he said. “I want you to ignore the naysayers. I want you to laugh at the negative news articles that may appear in the paper. And I want you to totally ignore the paid-for professors who claim to know more about this industry than you do, because you know what? They are wrong. You are doing the right thing. The more noise that these people make, the more I’m convinced that you are doing the right thing.”

While it is true that ethanol (cellulosic especially) is a very good start to solving our energy needs, completely ignoring naysayers probably isn’t the best approach.  Criticism can be useful if it is backed up by fact.  To completely disregard all criticism would be foolish and detrimental to our society.  If someone argues corn ethanol has a negative energy ratio, they are completely wrong and their criticism is foolish as there have been numerous studies that point to the contrary.  Someone who ignores total energy usage statistics and believes that ethanol is the end all solution to our energy problems while ignoring enormous evidence to the contrary however is also foolish.

“Dinneen summed up the current state of affairs this way: “Today, ethanol is blended in 50 percent of the nation’s fuel. Every single gallon of gasoline sold in New York is blended with ethanol. Every single gallon of gasoline sold in California is blended with ethanol. Every single gallon of gasoline sold in Houston, Texas, where big oil company executives have to drive to work every day on your fuel, is testament to how far we’ve come. But we certainly have a long way to go.”

Jeff Broin on Cellulosic Ethanol

Jeff Broin, President and CEO of Poet is interviewed by Stephen Lacey in a podcast on Inside Renewable Energy. Poet is the leading dry mill producer of ethanol in the US. Broin talks first about Poet’s corn ethanol production and some common misconceptions with that process. He then talks about Poet’s cellulosic research including their recently announced initiative to turn corn cobs into ethanol via cellulosic hydrolysis. More information about Poet can be found here.

Just a heads up, the first 10 minutes or so of the podcast are spent talking about wind turbine shortages (which is pretty interesting and worth listening to none the less).

What SHOULD we do about our energy predicament?

At the moment there is a 51 cent per gallon subsidy on all ethanol. Many in the ethanol industry are also asking for a further 75 cent per gallon subsidy for cellulosic ethanol to aid the transition from corn to cellulosic raw material. The argument for these subsidies is that ethanol (especially cellulosic) is still a growing industry thus it needs help in order to grow to replace it’s predecessor (big oil). People also point out the environmental and political benefits of using ethanol. Current subsidies are expected to expire in 2010 and will be reevaluated at that time. The current proposal by democrats is to add a 50 cent per gallon subsidy to cellulosic ethanol which will expire with the already existing ethanol subsidy in 2010. There is a lot of opposition to additional subsidies since the government which is already short on funds has spent $5.1 billion on existing ethanol subsidies in the last year alone. This number will inevitably continue to increase as ethanol usage ramps up. Additional opposition comes from livestock producers who are concerned about increasing costs of livestock feed.

There are several other ethanol related proposals in congress as well. Loan guarantee programs which would reduce risk for investors by allowing the government to take on some of the investment risk (and decrease interest rates on loans) are being considered. Another proposal is to provide funding to community colleges to begin biofuel technician training programs to provide workers for the industry. Currently there is a 30% subsidy to gas stations who install E85 pumps for the cost of the installation, this subsidy could be enhanced. Finally, research into a trans-continental ethanol pipeline is being considered to reduce transportation costs of the product. Existing gasoline pipelines can not be used since they run the risk of water contaminating the product.

To me it seems that additional subsidies are not the way to go. Sure they might be a relatively effective way to transition the country to biofuels, but at the cost of further bankrupting the treasury? A better way to encourage ethanol usage would be to implement a broad carbon tax. This tax would not only apply to gasoline, but all non-renewable carbon sources. What if it started out as a 15 cent per gallon tax on carbon emissions from gasoline. Every year this number would increase by an additional 15 cents per gallon for the next 15-20 years. While not immediately overly painful for consumers, gasoline wasting habits will definitely be reduced in the long run. There will be far less people commuting 2 hours each way to work driving SUV’s that get 15 miles to the gallon while being the lone occupant of their vehicle if they are spending so much more on fuel for their vehicles. Not only will this act to decrease waste, it will generate revenue for the country which can be used to fund environmental initiatives. The notion that such waste of resources is acceptable is ridiculous. A kilowatt hr value can be calculated for a gallon of gasoline so that the tax can be equally applied to coal and other non-renewable carbon based power generation which will encourage alternative power generation and less electricity usage in general.

The US spends a lot of money to protect our oil assets and interests in the middle east. Further taxing gasoline and other forms of oil would be an additional measure that would generate a revenue stream to help fund this asset protection. Those who benefit the most from the oil (people who use the most) should be responsible for paying a higher share of the cost to protect our flow of oil. This tax could be transitioned the same way as I mentioned the previous tax would be enacted. Perhaps in smaller increments however (maybe 5 cents per gallon per year). This would not apply to coal since most coal that we use actually is mined in this country thus it does not need defense. The revenue generated by this program would go to national defense.

A final measure that I would propose would be either a tax or a subsidy to car buyers depending on the mileage that a car gets. The highway and city mpg would be averaged. If a car that is bought in say 2008 gets less than 23 miles per gallon let there be a $100 tax per mpg less than 23 on the purchase price of the car. So if a car gets 18 MPG there will be an additional $500 tax on it. If a car in 2008 gets between 23 and 33 mpg, there is no tax and no subsidy. If a car gets over 33 mpg, there would be a $100 government subsidy on the cost of the car for each mpg over 33 it gets. Every year the lower and upper bound would increase by 1 which would maintain a 10 mpg difference between the two bounds while transitioning the country into higher fuel efficiency standards. Those who want to buy cars that are big and wasteful can, but they will be paying someone else to drive a smaller car to offset their wasteful emissions (the tax revenue generated would fund the subsidies). There would obviously need to be exceptions. For example, we do not want to discourage usage of services such as commuter vans. There will also need to be limits put on maximum subsidies allowed or else the government could potentially be paying people to have cars. A separate set of standards would also need to be adopted for motorcycles and other transportation classifications (airplanes, busses, etc). Perhaps a $100 subsidy could be given to all flex capable vehicles as well.

I would allow the current subsidies to be phased out when they expire in 2010 with the exception of cellulosic ethanol which I would extend another 5 years to encourage breakthroughs. I would not however add any additional subsidies for cellulosic ethanol at the moment. With the additional taxes on gasoline, ethanol will be competitive and thus will not need the subsidy. By allowing a slow transition period people will have time to move if they decide to or find a job closer to their homes. In Europe it is abnormal for people to work in a different city than they live, thus they use far less fuel commuting. The US should be working towards this so that we waste less.

Cellulosic ethanol will help and is a solution but it is definitely not THE solution to our energy issues. Most of the oil usage reductions will come from cutting waste. Monetarily penalizing those who waste is a very good way to discourage it (as opposed to making it cheaper to waste via subsidy). In the mean time it is also a very good way of generating revenue for a government trillions of dollars in debt. Although the numbers that I listed are relatively arbitrary (in order to determine optimal numbers research will need to be done), they do seem relatively fair. There will be winners and losers no matter what we do (those who like big cars and commute a long way to work will be the losers here). We need to do something though so why not try to waste less so that this can actually work?