Energy Information Administration Report on Potential for Biomass Ethanol

A recent report published by the U.S. Energy Information Administration finds that advancements in production technology of ethanol from cellulose could reduce the cost of production and result in production increases of 40-160 percent by 2010. The report, Outlook for Biomass Ethanol Production Demand, notes that while cellulose-based feedstocks would be less expensive than grain, the current production cost of cellulose-ethanol is much higher as the materials are more difficult to convert to ethanol. "Advances in feedstock processing and biotechnology could, over the next two decades, reduce cellulose-based ethanol costs to between $0.69 - $0.98 per gallon, partly by using genetically engineered bacteria in the fermentation process," the report states.

The report notes that ethanol demand will be largely impacted by the outcome of the MTBE debate, stating, "without the minimum oxygen requirement, refiners would have more flexibility to meet reformulated gasoline requirements with blending alternatives, such as alkylates."