Energy security the main game?

Wes Bolsen is the Chief Marketing Officer for Coskata inc. Bolsen, a native of Chicago, has probably been left out of his dad's will since choosing not to follow the old man into farming.

But Bolsen Senior may look more kindly upon the fruit of his loins now that Bolsen the younger is out there spruiking for Coskata, a company with a patented method of extracting ethanol from virtually anything that can yield carbon and hydrogen -- and the plan is to pay farmers for organic waste.

"We could convert [missing American Teamster boss] Jimmy Hoffa, if we could find him," Bolsen told the Carsales Network.

The point that Bolsen makes, flippancy aside, is that Coskata's hybrid process -- one that relies on gasification AND fermentation to produce ethanol -- readily lends itself to commercialisation, and at a cost that places it on an even footing with petrol production and retail supply. Coskata's innovation is largely confined to combining two existing processes (gasification and fermentation) with anaerobic (not oxygen-breathing) micro-organisms in a 'bioreactor' taking care of the 'biofermentation'.

By its nature, the production process is an efficient one, capable of producing power that can be scavenged to drive other processes and water that can be recycled back into the production system.

400 litres of ethanol can be produced from a dry ton of biomass, leaving just two per cent residue in the form of ash.

"You can do something that is good for the world, you can do something that is available today -- but [you] don't have to pay more for it," is how Bolsen concisely outlines the advantages of ethanol.

Bolsen argues that ethanol, given two thumbs up by General Motors, is a better option than diesel, electric, hybrid and even -- in the middle future -- hydrogen.

Why? Internal combustion engines will run the E85 'flex fuel' (a blend of 15 per cent petrol to 85 per cent ethanol) with little modification and, consequently, little increased cost to the consumer. By rights, E85-capable engines should be cheaper to develop than diesel engines, let alone electric or hybrid drives and fuel cells. The 'flex' qualifier also establishes that engines tuned to run on E85 will run equally well on E10 or even 100 per cent petrol.

Or perhaps not equally well exactly. According to Bolsen, the ethanol actually runs cleaner and is a higher octane fuel than petrol -- but the car-makers can't take optimum advantage of ethanol's 119 octane rating because current engines must still run on 100 per cent petrol as well as E85.

"If we could snap our fingers... In the future, you'd start seeing different compression ratios maybe, on the vehicle, to take advantage of that higher octane fuel," explains Bolsen.

Among the other claims that the company makes for its process, ethanol produced by Coskata produces 96 per cent fewer CO2 emissions (well-to-wheel) than petrol -- a figure posited by an independent researcher.

Coskata's method means any sort of agricultural waste or indeed any sort of organic waste -- organic in the carbon-specific sense implicit in the science of organic chemistry -- could be used to produce billions of gallons of ethanol and the company anticipates that by 2020, 30 per cent of current demand for petrol in the US could be displaced by ethanol. The importance of this goes beyond a cleaner environment, peak oil and reducing the oil industry's economic power -- it leaves the US independent of the 30 per cent of oil it imports from OPEC nations.

"There's still going to be gasoline usage," says Bolsen. "If you get to where you want to -- and you're displacing 30 per cent of the world's oil -- that, in the US is all the oil that would come from outside of the US. So you'd be 'energy independent'."

No need to go to war over oil, in other words. For countries like Australia though, the situation is not as rosy. Richard Marshall, Holden's Director of Energy and the Environment, tells us that Australia is reliant on foreign oil industry supplies for up to 50 per cent of energy demands, so even with wholesale change-over within 15 years (the average age of the Australian parc is 10.4 years) to E85 flex-fuel vehicles, there'll still be some shortfall there.

"Our current Australian oil reserves are around the 50 per cent mark..." says Marshall, following up with the observation that our demands are outstripping the industry's ability to supply from local reserves, so that 50 per cent will dwindle. In effect, peak oil is already here for locally-extracted reserves.

"When we talk about 'energy security', it's not so much about 'energy independence'," Marshall continues, "it's about just being able to get the fuel you need at the right price -- and that's really the concern. By displacing a significant amount of petroleum, it does place us in a much better position to be able to source the fuel we need at the right price."

"You don't want to be dependent on what OPEC does want to charge you for that barrel of oil," adds Bolsen. "Let's just say I don't think they're very happy at $40 or $50 a barrel of oil."

Australians will take note of Coskata's method of ethanol production for reasons beyond 'energy security', of course. For a start, it actually requires less water to produce a litre of ethanol than a litre of petrol, says Bolsen, who reckons Coskata's ethanol production method actually reduces water use by 50 per cent. In a "water-stressed" area like Australia and parts of the US, that's an important consideration.

There's no need to import new plant species into our fragile environment, since existing crops can yield enough bio-mass without detriment to local food production, but according to Marshall, "fast-growing melaleucas" could provide the raw material also and that's a plant that's native to Australia. There's an abundance of sugar cane growing in Queensland that could also provide the waste bio-mass to supply an ethanol production base.

In addition to all that, Bolsen mentions such wasted resources as gases from steel mills and land fills as potential sources for ethanol production.

What neither Holden nor Coskata have allowed to enter their deliberations is how ethanol may be complemented by other alternative fuel/alternative drive systems such as (bio)diesel, electric cars and hydrogen.

If ethanol alone can reduce reliance on fossil fuels for road transport by as much as 30 per cent by 2020 (and Coskata reckons the same figure will apply for Australia as much as it does for the US), how much more will reliance on the oil industry fade as these other alternatives become more popular?

The winners in widespread adoption of E85 and flex-fuel vehicles, says Bolsen, will be farmers or "feedstock providers", as he describes them.

"We're sitting in one of the worst economic crises since the Great Depression in the US -- and we're going to start fuelling economic growth and infrastructure in what our new President would call 'green jobs' in the United States and around the globe."

How does this affect Holden? The company appears to be setting itself up as a long-range transportation provider for the future. While other companies, like Mitsubishi (more here), are beginning to plan for an electric-vehicle future of urban run-abouts, Holden would continue to offer internal-combustion cars running on a flex fuel that could be available from any service station around the country.

CO2 emissions and peak oil need not spell the end of the piston engine then, but infrastructure will still need to ramp up to meet the demand from 2010, when Holden begins selling flex-fuel cars. As Marshall says about E85: "We need to make sure there's enough pumps available so people can take advantage of it."