It should have been one of the more earth-shattering admissions of the last hundred years when George W. Bush—the former Texas oilman who steadfastly denies that oil ever played a part in our decision to invade Iraq—announced that America was in fact “addicted to oil.” Instead, America’s response was more akin to hearing one’s 55-year old effeminate bachelor uncle come out of the closet to the family at a holiday dinner: everyone knew it already, but no one ever expected him to say it.

However, the evidence was staggering. The United States of America sucks up more than a quarter of the world’s annual oil production, and does so by borrowing one billion dollars a day in order to purchase it, somewhere on the order of $250 Billion a year or more. Our Administration is comprised of oil executives, our foreign policy apparatus is inextricably woven into the oil industry, consisting of a reckless approach to petro-diplomacy, where we either engage in oil trade with some of the more brutally repressive regimes on the planet like Saudi Arabia and Nigeria, whom we prop up with our military and the infamous “Carter Doctrine,” or we actively seek to overthrow those who chose to defy us: Mosaddeq in Iran, Ho Chi Mihn in Vietnam, Saddam Hussein (twice), or presently, Venezuela’s Hugo Chavez, and Iran’s Mahmoud Ahmadinejad.

These policies have bred massive international enmity towards the United States, and created an economic system so dependent on oil that even the slightest interruption to the oil supply has far-reaching ramifications, such as we saw first with the removal of Iraqi oil from the world market, and then the refinery catastrophe in the wake of Katrina and Rita.

And the situation is only getting worse. All oil refineries are at capacity, supply has either peaked or is rapidly approaching the peak, while demand is projected to grow 50% by 2025, spurred by the massive economic growth of developing nations like “Chindia” and Brazil. Consequently, oil prices have increased 500% since 1998 when it was $13 a barrel. And when we consider the very real possibility of another mega-hurricane season, or a terrorist attack on the Saudi refining operation, it becomes excruciatingly obvious that we need to make serious changes and fast, or else we may not be around the pick up the pieces.

So when policy makers in Washington start talking about ending this vicious cycle of dependency, naturally, everyone is paying attention.

Enter BIO 2006, the annual convention of the Biotechnology Industry Organization (BIO), held in Chicago, April 9-12th. Nineteen-thousand attendees converged on the cavernous McCormick Place Convention center to hawk new technologies and wares, connect up with investment opportunities, or pitch their city or state as the perfect destination for the burgeoning Biotech and Life Science sector, which, according to the Department of Commerce, will comprise 18% of the U.S. GDP by 2020, or nearly three trillion dollars. That is one immense piece of pie (GDP projections: Goldman Sachs).

And this year, “Biofuels,” or renewable fuels made from plant material, were the center of attention, leading the industry’s clarion call for renewed interest and investment. The two main products the industry is promoting are Biodiesel and Ethanol. Biodiesel is derived when organic plant oils are mixed with alcohol. It is thick and resembles vegetable oil, and combusts at a very low temperature. Ethanol is a clear, highly flammable and volatile fuel made of alcohol primarily derived from the fermentation of sugars and starches, and cellulose, a complex carbohydrate, (C6H10O5)n, that is composed of glucose, or sugar, units. Ethanol is primarily being promoted as a replacement for gasoline in automobiles, whereas Biodiesel has a wider industrial applicability.

On the heels of Bush’s “addicted to oil” speech, heading into the convention, BIO released a letter to Congress on March 13th requesting full funding for programs authorized in the Energy Policy Act of 2005 that would support research and development into ethanol production, support private investment in modern “biorefinery” construction, and provide loan guarantees and market incentives for rapid adoption of cellulosic ethanol motor fuel (made from cellulose). This would all be made possible through the introduction of the newest scintillating—and, of course, controversial—field of Biotechnology, known as industrial, or “White,” biotechnology.

EuropaBio, the European equivalent of the Biotechnology Industry Organization, is advancing the cause of “White Biotechnology,” described as “when industry and nature thrive together.” It claims to be able to reduce pollution and waste, decrease the use of energy, raw materials and water, create new materials and biofuels from our waste products, and provide an alternative to many chemical processes. It uses living cells like moulds, yeasts or bacteria, as well as enzymes to produce eco-friendly substances made from renewable raw materials—also known as “biomass”—like plant matter, starch, cellulose, vegetable oils, agricultural waste, old grease, etc.

In the March 13th release, BIO CEO Jim Greenwood said, “Industrial biotechnology is causing a dramatic paradigm shift in transportation fuels that will end our national addiction to oil. We need to rapidly move forward commercializing these technologies for cellulosic ethanol production, which will strengthen our energy and national security.”

Some say, cynically, that the timing of it all couldn’t have been better. The Biotech sector has been reeling from an effluvia of bad PR. There have been serious problems with the introduction of the first two fields of Biotech, “Green” BioAgriculture, symbolized by the massive global opposition to GMOs and the rapacious, unethical behavior of the Monsanto corporation, and “Red” BioMedical technology, symbolized by the American political furor over cloning and stem-cell research. Last year India announced that since 1997 some 25,000 farmers have committed suicide after being wooed by Monsanto into planting pesticide-resistant Bt Cotton which didn’t work, causing the farmers to go bankrupt. Because of this (and if that wasn’t enough for the industry to handle), on March 17th of this year, Canadian farmer Percey Schmeiser, whose lawsuit with Monsanto went all the way to the Canadian Supreme Court, got together with NGOs in the EU and filed suit against Monsanto and the BioAgricultural industry at the UN High Commission for Human Rights, alleging that the industry is destroying farmers lives and livelihoods around the world.

Naturally, “White” industrial biotech skeptics and critics abound. But are there the same concerns with these new technologies? And what precisely do they mean when they talk about creating a “BioBased Society?”

The Bio-Based Society

“Through recombinant DNA technology, scientists can use microorganisms in new and exciting ways to manufacture polymers, vitamins, enzymes, or transportation fuel. By harnessing the natural power of enzymes or whole cell systems, and using sugars as feedstock for product manufacture, industrial biotech companies can work with nature to help us move from a petroleum-based economy to a ‘bio-based economy.’” – BIO web site

At a Plenary session on Biofuels, former CIA head R. James Woolsey claimed that “Biotechnology will be for the 21st century what physics was to the 20th,” unlocking the secret potential of the planet in ways never before imagined, while at the same time rescuing us from the social and environmental perils of the petrochemical system.

“For every billion dollars we shift from foreign oil to domestic biofuels, we can add anywhere from 10-20,000 American jobs,” Woolsey said, “and at least half of our gasoline needs can be grown here with cellulose [to make Ethanol].”

Lofty ambitions for sure. But this, at least, has become the new conventional wisdom. In their January 27th issue, Science Magazine published “The Path Forward for Biofuels and Biomaterials,” a self-described “road map” to “the development of a sustainable industrial society and effective management of greenhouse gas emissions”:

“Advances in genetics, biotechnology, process chemistry, and engineering are leading to a new manufacturing concept for converting renewable biomass to valuable fuels and products, generally referred to as the ‘biorefinery’. The integration of agroenergy crops and biorefinery manufacturing technologies offers the potential for the development of sustainable biopower and biomaterials that will lead to a new manufacturing paradigm.”

Right now, ethanol use very limited, comprising only about 2% of the total amount of transportation fuels used in the U.S. Biodiesel accounts for less than 0.01%. But the U.S. Dept. of Energy has set goals to replace 30% of the liquid petroleum transport fuel with biofuels, and to replace 25% of industrial chemicals with biomass-derived chemicals by 2025. The latter is a critical step towards saving the ecosystem.

Science continues, “this biorefinery vision will contribute to sustainability not only by its inherent dependence on sustainable bio-resources, but also by recycling waste, with the entire process becoming carbon neutral.”

And from all quarters has come the call to begin building this infrastructure, to not wait to begin the process of mass transformation. Or, in the words of one European biotech executive, “The Stone Age did not come to an end because of a lack of stones. So too, the Oil Age will not come to an end because of a lack of oil.”
Biodiesel vs. Ethanol

Matt Atwood, an organic chemist and the Project Manager for Biodiesel Systems, LLC, one of the Midwest’s first biodiesel start-ups located in Madison, WI, says biodiesel needs to happen now.

He explains that the diesel engine is the backbone of the American economy, and diesel is its life blood. It accounts for only 12% of our total fuel consumption, but it transports 70% of the nation’s goods to the tune of $6 trillion annually, which amount to about 51% of our GDP. 18 million tons of freight and 14 million people are transported daily by the use of diesel.

This is primarily because diesel engines are much more efficient than gasoline engines. One gallon of diesel is equal to 1.5 of gasoline and 2 gallons of ethanol. Diesel outperforms ethanol 2 to 1, or is about two and a half times more useful in terms of mileage or “work done.”

“The creation of the biodiesel industry in the U.S. is imperative. If we don’t begin to solve this problem now, there is a very real possibility the U.S. economy might collapse. If we can’t get products to market, we’re in big trouble. And when you consider how perilous the oil supply is, it becomes excruciatingly obvious that we can give up the gasoline/ethanol, but we cannot give up the diesel. People can adjust on a personal level to gasoline shortages (bikes, car pools, mass transit), but industry and commerce simply cannot.”

The first step America needs to take, as elucidated in Winning the Oil Endgame is to increase efficiency in autos, which decreases demand. But Americans have shown that they are not going to drive less, unless oil goes too high, and no one knows how much “too high” is. According to Atwood, increasing efficiency by using hybrid autos is better than bringing new fuels on line in the short term, but even if we go so far as to increase efficiency by 20%, we only stave off demand growth for five years. So, while we work on greater automobile efficiency, we need to be concurrently building the new infrastructure with whatever oil we can manage to save.

But all one needs to do is look at the diesel market in Europe, which Atwood describes as “monstrous,” to see its widespread appeal.

“Fifty percent of their autos are diesel powered, as opposed to less than 1% in America, and some get approximately 100 MPG. The diesel market will grow substantially in the U.S. in the coming years because it is a superior fuel to both gasoline and ethanol.”

Those who were around in the early 80s will remember that for a few years after the oil shocks of the mid-70s the auto industry went through massive changes, as cars drastically downsized and engineering efforts were focused on increasing fuel efficiency, which became the benchmark by which cars were sold. Back then, the king of the hill was the VW Rabbit Diesel which got 60 miles to the gallon. Biodiesel, as shown in Europe, can easily shatter that.

Atwood also says the introduction of diesel hybrids should take place within the next year or two. Additionally, new lower EPA mandates for sulpher content in auto emissions has led to the introduction of biodiesel as a necessary additive to the commercial diesel supply. This indicates that the changeover process will be slower and more methodical than some have predicted.

“The green Light for the biodiesel industry wasn’t turned on until the fall of 2005 when Bush signed the Energy and Transportation bill. It made biodiesel ‘blends’ the low-cost fuel in the marketplace,” said Atwood. Now, the industry is lobbying for the approval of the $120 million from the Department of Energy Biomass and Biorefinery Systems R&D program included in the President’s 2007 budget request, which amounts to just over half the authorized level of funds.

A side-by-side taste test

To date, the problems with ethanol are substantially more complex than those of biodiesel. The primary problem with ethanol is that it is already dominated by the corporate establishment, and has been heavily subsidized by the federal government over the last many years to the tune $.51/gallon and almost a trillion dollars. Biodiesel is not subsidized, it is incentivized. Ethanol in the U.S. is a fifteen-year-old industry, and biodiesel is in its infancy, whereas the exact opposite is true in Europe.

Traditional ethanol production facilities cost about $2/per annual production gallon, so a 50 million gallon ethanol plant will cost $100 million to build, sometimes more, as in the case of the Iogen plant in Canada, which cost $300 million for the same capacity. Comparatively, biodiesel production facilities cost about a $1/per annual gallon to build, a savings of 50%.

Additionally, according to a recent study by Cornell University, in terms of energy output compared with energy input for ethanol production, the study found that corn requires 29 percent more, “switch grass” 45 percent more, and wood biomass 57 percent more fossil energy than the fuel produced.

Unfortunately, the Cornell study also claims that energy output to input for biodiesel production is -27 percent for soybean plants and -118 percent for sunflower plants. Not very good numbers.

Still, Atwood contends that those numbers will greatly improve as the infrastructure grows and becomes self-sustaining, and what is most attractive about biodiesel right now is that it “takes this faucet of money being pointed at other nations and points it back into the Midwest at farmers who can be brought into the production process.”

While this promises to be a boon to America’s cash-strapped farmers, critics of this technology—many of them farmers who were duped into converting their farms to GMOs in the mid-90s—are surfacing with questions, objections, and heartfelt recriminations against the biotech industry, whom they simply don’t trust.

Feedstocks and the lingering problem of GMOs

“Feedstocks,” or raw material required for an industrial process, is the lifeblood of biodiesel and ethanol. Industrial biotechnology uses plants and biomass as its feedstock.

Biodiesel Systems, LLC’s “feedstock,” like most of the early startups, will primarily be soy, grown by farmers in the Midwest, which is converted to soy oil that is sold on the commodities market. Because of this trading process, which right now is the only feasible way to obtain the appropriate feedstocks in the necessary quantities, Atwood claims they cannot determine whether the soy oil is organic or transgenic. But since the U.S. has an excess of soy, which makes it cheap to produce, it seems prudent to seize the opportunity to put the excess capacity to work, if it’s not going to be used for animal feed or in the commercial food supply.

“I understand the concerns with using GMOs in the biofuel supply, but fundamentally, as a scientist, you have to weigh the benefits against the detriments. Do I have a problem with GMOs being used only as fuel crops? I feel the benefits far outweigh the negatives, and nobody really knows the full negatives yet. What we do know is that if we don’t get this industry off the ground and quick, there is likely to be much greater problems in the world than dealing with the issue of ‘genetic drift.’”

At present, feedstocks are the bottleneck for biodiesel production. Europe isn’t producing enough to meet their ever-increasing demands, so they import much of it, which has caused widespread outcry. In June of 2005 British journalist George Monbiot published a column titled ““Worse than Fossil Fuel: Biodiesel enthusiasts have accidentally invented the most carbon-intensive fuel on earth”:http://peakoil.blogspot.com/2005/12/worse-than-fossil-fuel.html.” In the column, Monbiot cited a September 2004 Friends of the Earth report about the impacts of massive deforestation efforts in Southeast Asia in order to create palm plantations for palm oil used to supplement the European biodiesel feedstock market. The report stated, “In terms of its impact on both the local and global environments, palm biodiesel is more destructive than crude oil from Nigeria.”

Atwood believes Monbiot is overstating the case, and insists that the technology is sound, and the promise unprecedented. He points to the five year incentive program of the National Biodiesel Board, which estimates it will add $1 billion to U.S. farm income and create 50,000 new jobs.

Regarding the problems of arable land to be divided between food and fuel production: “We have more arable land than any other country in the world. But the Agricultural Reserve Program limited the amount of farmed land in the nation in order to constrain food prices. If that land was opened up for fuel crops, our supply can be greatly increased.”

The Reserve Program began the much-maligned farm subsidies that have caused so many problems in international trade, so by eliminating it, hypothetically, farmers can wean themselves off the subsidy and into profitability, working to produce biomass for biodiesel instead of participating in the government’s ethanol program. Critics complain that any more farming will be devastating to the environment.

The Department of Energy estimates U.S. biomass crop potential at around 160 million tons a year, which the say will save us one million barrels of oil a day. Unfortunately, right now, our oil consumption is around 21 million per day. So we’re going to have to do much better than that.

This acknowledges that we cannot simply ‘grow’ our way to diesel independence. To reach our national consumption in diesel we would need twice the arable land we have now, all growing soy. Biodiesel enthusiasts know this and have explored alternative crops other than corn or soy, like jatropha, a non-edible oil seed, which is a dual-use crop that produces both oil for biodiesel and biomass for sustainable industrial processes.

Jatropha can produce 200 gallons of oil per acre planted, compared with 75 gallons of oil per acre of soy planted, and 150 gallons per acre of canola. Moreover, jatropha is grown in arid climes, where the agricultural footprint is small to negligible. Additionally, coconut produces 300 gallons of oil, and palm oil can produce a yield as high as 650 gallons.

But certain people simply aren’t convinced. In a March 29th Op/Ed, titled, ““Biotech Crops Will Hurt Family Farmers and Worsen the Energy Crisis”:http://www.commondreams.org/views06/0329-32.htm,” John Peck of the National Family Farm Coalition responded to BIO CEO Jim Greenwood’s statement that biotechnology will end our national addiction to oil by stating, “nothing could be further from the truth”:

“Thanks to Monsanto, farmers are now stuck producing vast quantities of low quality Bt corn that has hardly any market. This unwanted biotech corn must then be dumped – at taxpayer expense – into domestic ethanol production, factory livestock farms, or abroad in places like Mexico. There it contaminates indigenous varieties, undercuts peasant farmers, and creates desperate people who have no choice but to cross the border. And in the wake of the Starlink disaster, in which genetically modified corn not intended for human consumption found its way into fast-food tacos and elsewhere, one can only imagine the consumer safety threat posed by fields of high starch low fiber biotech corn, engineered with an ethanol enzyme, growing adjacent to sweet corn across the Midwest.”

Peck also points out that the conventional ethanol industry is dominated by factory-farm giant Archer Daniels Midland (ADM), a company with as high a contempt factor as Monsanto, and that many family farmers “have lost their shirts investing in co-op ethanol projects that get gobbled up by ADM when times get tough.” Peck and his colleagues are concerned that the millions of dollars Jim Greenwood is asking Congress to approve will end up going right into the pockets of Monsanto and ADM.

So what then is the solution, according to Peck?

“Rather than going to war or trusting in biotech, the Unites States would do much better by investing in comprehensive energy conservation, decentralized energy production, and genuine renewable alternatives such as wind, solar, and Biodiesel. At this point corporate control (or lack thereof) is the major difference between ethanol and biodiesel. Biodiesel is largely being made by farmers themselves around the world with existing oil crops. I suppose if ADM also gets the corner on the global biodiesel market and Monsanto comes up with new GMOs specifically engineered for biodiesel then we’ll have to cross that option off our list, as well.”

Where is this ship headed?

Experts at the BIO convention pointed to the U.S. as the world’s #1 growth market for Ethanol, and they expect to see a series of biorefineries develop in the “corn belt” of America which will produce fuels, natural biodegradable plastics, and food products. ADM has a commercial ethanol plant which is scheduled to come online in 2008, and with congressional approval of the $91 million in energy appropriations, we can expect to see more companies scrambling to get in on the act.

Because of this, we should not expect the present system of corporate control to change much unless efforts are made to create a locally-based, competitive biomass market, and demystify Ethanol. “White biotechnology will require a heavy application of Green biotechnology to become successful,” said Steen Riisgaard, CEO of Novozymes, a Bioengineering firm. “And eventually, White will transform into Green when plants are bioengineered to be optimal fuel stocks. This will not please the opponents of GMOs.”

But as Biotechnology continues to grow as an industry and the science behind it becomes more sound, it is clear than one can no longer effectively lump all Biotech into one monolithic category. A “principled” objection—which includes resistance to biomedical cures for diseases like cancer, AIDS, Alzheimer’s, and heart disease, as well as renewable fuels and materials—has the potential to backfire into a PR and outreach nightmare. Biofuels may not be the global panacea the corporate PR hacks are promising, but industrial biotechnology has the clear ability to make the world a better place, and we’d be insane to dismiss it outright, without giving it a chance.

As hard as it may be for them to do, the opposition will have to begin to contemplate that the despicable acts of the Monsanto Corporation are not emblematic of the entire field of Biotechnology. Conversely, the Biotech industry needs to understand their opponents. Both will need to work together to solve the oil crisis. The jury is still out on the bio-based economy, but from where most of us are sitting, it can’t be any worse than what we have now.

Charles Shaw is a regular contributor to GNN.