Is Sugar The New Oil?

by David

With oil prices high, volatile, and trending ever higher over the long term, biofuels are understandably getting a lot of play. They should. The world of petroleum is a world of “haves” and “have nots.”  Most nations of the world are net importers of oil—the “have nots”—and they are left to the whims of a cartel that controls most of the world’s oil reserves. Moreover, this cartel is not particularly friendly to the “have nots” of the world.

Biofuels offer an alternative to oil for the “have nots.” But biofuels cannot just be pumped out of the ground. They are produced from cheap carbon sources. One the cheapest and most plentiful is sugar.

Codexis CEO Alan Shaw has been saying that sugar is the new oil. He is right, at least for now. Unless and until photosynthetic microorganisms are developed to be efficient producers of biofuels, the main source will be fermentation using inexpensive carbohydrates—sugars.

The main hurdle right now to producing biofuels at a sufficient volume to displace most of the oil-based fuel is not technology. Given the pace of development of processes to produce ethanol, butanol, terpenes, and other advanced biofuels from sugars, I can foresee the technology being ready to compete as long as oil stays above $100 per barrel. So, if technology is not the barrier, what is? I think it is the lack of availability of enough of the new oil.

Here is a simple calculation that illustrates the limitation on sugar availability.

From 1 acre of farmland we can produce about 328 gallons of ethanol using corn as the source of sugar.

Total US farmland: 442 million acres (USDA)

If every acre of US cropland were planted with corn (choosing another crop producing sugar for biofuels production will not make a significant difference in this calculation), we could produce 328 * 442 million = 145 billion gallons of ethanol. And no food.

US gasoline consumption is about 377 million gallons per day (the average of two independent estimates) or about 138 billion gallons per year. That means if every plantable acre of cropland were used to produce crops for biofuel, but could just barely cover our current needs for gasoline. And this estimate does not include the amount needed for diesel, aviation fuel, and other end uses, nor does it adjust for ethanol being a poorer fuel than gasoline.

Of course, this is not a realistic situation. We also need to produce food, and a lot of it. But the extreme circumstance illustrates the impossibility of producing enough sugar from croplands.

Clearly, then, we need a better source of the new oil for the fermentation approaches to biofuel production to succeed, and there is only one realistic option: cellulosic waste. The challenge is converting all that cellulose—and there is an abundant amount in cornstalks, corn cobs, saw dust, and assorted plant debris—into fermentable sugars. The companies that create the most efficient methods for converting cellulose into the new oil will be big winners in the energy economy of the future.

It is also possible that the photosynthetic methods, harnessing the energy of sunlight to convert carbon dioxide to fuel, will prove themselves. If algae or other photosynthetic microbes are demonstrated to be more cost effective, photosynthetic processes will eventually take over as the producers of biofuels. And in that case the new oil will be a substance that the EPA wants to label as a pollutant: carbon dioxide.

{ 1 comment… read it below or add one }

Ajay May 16, 2011 at 12:25 pm

Biofuels no doubt is a good alternativet to fossil fuel, provided it doesnt affects the food sector.There is need to develop biofuel technology on efficent and effective microbial convertion of sugar to oil as well as developing plant biomass which is easier for microbial enzmes to digest.

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