Yesterday’s edition of Greenwire features an amazing column on cellulosic biofuels by reporter Paul Voosen. It’s got interviews with leading researchers, industrial history going back to WWII, science, economics, and the narrative suspense of a detective story.

Voosen’s main point: Despite substantial private and public investment, there have been “no Eureka moments” in the “long U.S. campaign” to scale up Nature’s digestive processes (found in fungi and the guts of termites, cows, dung beetles, and other fauna) to break down cellulose and create affordable alcohol fuels from prairie grasses, wood wastes, and other fibrous plant materials.

I’ll share some highlights from the article (subscription required) in a moment. First a few words about the policy context.

The fibrous material in plants is the most ubiquitous organic substance on the planet’s surface, and unlike corn and soybeans, the feed stocks for “conventional” or “first-generation” biofuel, cellulose is not a food crop. Thus, in principle, cellulosic biofuel could end oil’s dominance as a transportation fuel without inflating food prices or imperiling the hungry as conventional biofuels do. Call it the Great Green Hope. 

In his 2006 State of the Union Address, President G.W. Bush prophesied that cellulosic biofuels would be “practical and competitive within six years.” In December 2007, Congress passed and Bush signed the Energy Independence and Security Act (EISA). EISA expanded the Renewable Fuel Standard (RFS) — a Soviet-style production-quota scheme — created by the 2005 Energy Policy Act. Whereas RFS1, as it came to be called, required 7.5 billion gallons of ethanol to be blended into gasoline by 2012, RFS2 required 9 billion gallons of biofuel to be blended in 2008 and 36 billion gallons in 2022. In addition, RFS2 established new categories of biofuel (“advanced” and ”cellulosic”), setting production quota for each.

It’s now more than six years since Bush forecast the advent of “practical and competitive” cellulosic biofuel. And since Dec. 2007, industry has had the added inducement of a politically-mandated market for cellulosic biofuel. How accurate was Dubya’s prediction?

The EISA cellulosic biofuel target for 2010 was 100 million gallons. Because commercial-scale production failed to materialize, EPA downgraded the target to 6.5 million gallons, but even that symbolic goal proved to be too ambitious. In January 2011, Climatewire (subscription required) reported that “in the second half of 2010, not a drop of cellulosic ethanol — a much-touted fuel that taps the sugars from farm wastes and other non-food sources of biomass — was commercially blended with gasoline.” In November 2010, the Energy Information Administration (EIA) forecast that cellulosic biofuel production in 2011 would max out at 3.94 million gallons – about 1.6% of that year’s 250 million gallon EISA target. In June 2011, EPA said it expected to require the blending of between 3.45 million and 12.9 million gallons of cellulosic biofuel in 2012 (Greenwire, June 22, 2011). That works out to between 0.69% and 2.5% of EISA’s 500 million gallon cellulosic target for 2012. 

Here’s the big picture. In 2010, the USA consumed 138.6 billion gallons of gasoline. So even if EPA requires and industry blends 12.9 million gallons in 2012, cellulosic biofuel would displace less than 0.01% of current U.S. gasoline consumption.

What physical and economic factors account for the vast gulf between where cellulosic is today and the scale at which it would have to produced and sold to “set America free” from reliance on oil? Voosen’s article provides the most complete explanation I’ve seen. Herewith a few highlights:

Cellulose is difficult to break down into the simple sugars required for fermentation into alcohol fuels. Millions of years of evolutionary struggle have engineered plant fibers to be tough.

For eons, plants have locked the sun’s energy into complex strands of sugar, used to build their stems and leaves. These chains are far different from table sugar or grain starch; they cling together, providing the meat of tree trunks and cotton strands. They are the most abundant organic material on the planet, and one of the most hunted.

As long as plants have built up these complex sugars, life in all its forms, from microbes to mastodons, has sought ways to unleash that energy. Since plants can’t run, and live for hundreds of years, they have built remarkable defenses, wrapping their cellulose, as the sugars are called, in a sort of barbed wire that, to this day, defies human degradation.

Research on cellulose-digesting enzymes began during WWII. In the Pacific theater, jungle rot was destroying boots, sand bags, and tarps. Harvard mycologist Lawrence White commenced research on the fungus, QM6a, to unlock its digestive secrets. Scientists have been working on it ever since. 

Growing QM6a on heavy cotton fabrics to test its strength, military scientists soon found the fungus, a variety of Trichoderma, produced the proteins needed to tear apart plant walls with a single-minded intensity. Two of these scientists, Elwyn Reese and Mary Mandels, made study of QM6 their lives’ work.

Mandels created a mutant of QM6, now named Trichoderma reesei, that produced four times the typical amount of degrading proteins, and hopes rose that the mutant would soon unlock a source of nearly unlimited sugars from agricultural waste and trees.

The year was 1982.

Thirty years on, T. reesei remains the source of nearly all the industrial proteins — enzymes — used to break down plant walls, mostly in the paper business. One of the first studies JGI [Joint Genome Institute] undertook was to sequence its genome. By exploring its DNA, they hoped to identify a bounty of enzymes. What they discovered was a very simple genome, with limited variety, said Jim Bristow, the institute’s deputy director.

It was disappointing. “We assumed it would be a gold mine,” he said.

Scientists have also tried — so far without success — to scale up the bacteria-based enzymes some animals use to break down cellulose. A lot of research has therefore gone into finding solvents that could “reduce the sheer amount of enzymes needed to transmute grass into simple sugars.”

For decades, one solvent after another has failed. High temperatures and harsh acids could work, but such processes, common in the paper industry, are expensive and energy intensive.

“People have been going crazy,” [Seema] Singh [of DOE's Joint BioEnergy Institute - JBEI] said. “Is there anything that can dissolve it?”

JBEI believes the answer lies in ionic liquids, ”salts that remain fluid at room temperature rather than crystallizing into the familiar table seasoning,” Voosen reports. JBEI’s solvents can remove 80% of the substance — lignin – that stiffens plant tissues and binds cellulose molecules to other molecules in plants. However . . .

The problem is far from solved. The 20 percent of lignin that remains hooked onto the sugars still fights the good fight, inhibiting enzymes and slowing down what should be an hour-long process to eight hours. That is far from fast enough for the cut-rate margins of the fuel business. The lignin is holding its ground.

UC Berkeley’s Energy Bioscences Institute (EBI), funded by a $500 million grant from BP PLC, is engineering strains of yeast that feed on all glucose in plant matter, including the sugar locked up in cellulose. Using this process, BP has begun a commercial-scale project. The company broke ground this year on its first cellulosic ethanol refinery. Located in Highlands Country, Fla., the “facility will produce 35 million gallons of cellulosic ethanol a year beginning in 2013, BP says.” But . . .

Even this new yeast strain, which eliminates a whole step and cuts enzyme costs by a third, won’t make BP’s Florida plant profitable. BP has accepted that it will lose money on the biorefinery, which is “almost certainly not going to work well,” [EBI Director Chris] Somerville said. And it will be expensive.

“They’re putting down $400 million for only 35 million gallons a year of capacity,” Somerville said. “Let’s call that $10 per annual gallon. That’s about two to three times as high as the corn ethanol guys.”

Genetic sequencing has identified genomes previously unknown to science, vastly expanding the sheer number of cellulose-digesting enzymes scientists can test. However, this is no guarantee that any enzyme from animal guts or fungi can produce alcohols on an industrial scale.

There are limits to where this genetic prospecting can go.

Imagine a fungus on a log. It digests the log only as quickly as it can use the sugars, and no faster. It wants to sustain itself, not the whole forest, said John Grate, the chief science officer of Codexis, a bioengineering firm that specializes in evolving known enzymes.

“The rotting log in a forest is not an industrial environment,” he said. “A termite’s gut is not an industrial environment. Natural evolution does not get you what industrialized mankind needs.”

In yesterday’s Greenwire (subscription required), reporter Paul Voosen reviews of the efforts of various firms to develop commercially competitive motor fuel from two types of single-celled photosynthetic bugs — algae and cyanobacteria.

For several years, biofuel entrepreneurs and alt-energy gurus touted oil extracted from algae as the next big thing — abundant, cheap, home grown, hi-tech, carbon neutral. In addition, unlike corn-ethanol production, growing algae in ponds or bioreactors would not inflate grain prices or divert food from hungry mouths into gasoline tanks.

But this narrative increasingly looks like hype. Voosen summarizes:

Often ignorant of algae’s biology, these companies stumbled into major physical and engineering hurdles that can derail most of their lofty goals, industry and government experts say. Even the most promising approaches are a decade or more away, experts say. By then, many firms will have failed.

He elaborates:

Most of these problems were predicted — and ignored. Algae are speedy growers, but they are also greedy, preventing sunlight from penetrating even moderately dense concentrations. The most popular algae varieties, which resemble single-celled plants, remain difficult to bioengineer. Water requirements are vast. And while pond scum are prolific in building up oily fats, they surrender their dearly built energy stores only if they are killed and broken apart.

Experts interviewed in this article include MIT biochemical engineer Greg Stephanopoulos:

“They make fuels from free CO2,” Stephanopoulos said. “It’s a no-brainer, right? They’ve got it all. So where’s the problem with that? The problem is that you cannot cultivate [algae] at high enough densities to make this a worthwhile process.”

For every gallon of oil made from algae in a pond, hundreds of gallons of water need to be circulated, he said. The algae cannot grow in dense concentrations, because they do an excellent job of blocking sunlight, even when they don’t use it for energy, instead wasting it as heat.

“The issue is not one of designing a better reactor,” Stephanopoulos said. “That’s not going to solve this problem. The issue is not of doing better molecular biology. Even if you make all the algal cell full of oil, still you’re going to have a [low] concentration of oil.”

Voosen titles his column “As algae bloom fades, photosynthesis hopes still shine,” because companies like Joule Unlimited are developing biofuel from cyanobacteria, which are easier than algae to decode and modify genetically. Also, production does not require breaking apart the cells to extract oil, as in the case of algae, because the cyanobacteria excrete ethanol.

So is ethanol from cyanobacteria the next big thing? Joule is holding its economic data close to the vest:

What irks Joule’s competitors and scientific peers is that the company remains vague in backing up its claims, even in its patent applications. No hard economic or production rates have been released — not an uncommon trait for a private firm — and even theoretical papers assessing the cost of industrial photosynthesis, including one recently published in Photosynthesis Research, provide little to the technically inclined reader.

Voosen comments: “Independent scientists find the short path to commercial production proposed by Joule to be optimistic at best. It is more likely that cost-competitive fuel production won’t arrive for another 10 or 15 years, if at all.”