The Energy Independence and Security Act of 2007 calls for the U.S. fuel market to use 100 million gallons of cellulosic biofuel in 2010, according to Justin Moresco over at Red Herring. And according to Moresco, a report published earlier this month by investment bank ThinkEquity forecasts an 80% short fall in meeting this mandate.

The worst part of this situation is that the shortfall may serve as motivation to invest gobs of money into infrastructure projects and processing plant development for the production of cellulosic biofuel. And that, in my opinion, would be a bad thing...

Cellulosic biofuel (or cellulosic ethanol) is ethanol 2.0 - the next generation of the product. Ethanol production has until recently used food crops like corn and sugar cane, distilling them into ethanol in a process that

• consumes almost as much energy as it creates


• has limited benefit for the environment


• and diverts food crops from human consumption.

In other words, we're taking the grain that could fight famine in Africa and using it to get back and forth to work instead.

So why are we even still making ethanol? It's simple. Ethanol brings in a small profit for its producers and they've invested tons of money in the infrastructure needed to get it to market. So they're going to keep selling it to us for at least as long as it takes them to recoup their investment - whether that's good for the environment, for energy policy and for mankind or not. Because the infrastructure money is already spent.

So, are we about to make the same mistake with cellulosic ethanol? Let's talk about that... in a couple of days.


Photo courtesy of iStockphoto, Image# 3001911