Center for Advanced BioEnergy Research, University of Illinois at Urbana-Champaign

Thursday, December 10, 2009

Is there a future for the US cellulosic ethanol industry?

Gerson Lehrman Group
December 9, 2009
Analysis by: GLG Expert Contributor
Analysis of: BP explores options, remains committed to cellulosic ethanol
Published at: http://www.biomassmagazine.com/

Summary

Even if technical challenges relating to the production of cellulosic ethanol are addressed, other factors may undermine the development of this industry in the US over the longer term.

Analysis
Criticisms of first generation ethanol, and in particular grain-to-ethanol, are well known. The volatile nature of grain prices translates into highly volatile margins and operating conditions, leading to boom-and-bust conditions in the sector. In addition, any food price increases going forward may reignite the whole food vs fuel debate, which is understandable. At its heyday, approximately 20% of US corn production was used to produce the equivalent of just 3.5% of domestic gas consumption.


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