A report released today summarized the conclusions of a study conducted between March and November 2008 by Sandia National Laboratories and the General Motors R&D Center. According to the report, the U.S. could achieve a goal of producing 90 billion gallons of biofuel by the year 2030. Of this amount, researchers concluded that corn-derived ethanol would account 15 billion gallons with the balance coming from cellulosic ethanol products.
Based on cost assumptions used in the study, the report concluded that cellulosic ethanol is cost competitive with oil at 90$ per barrel. Because of the potential differential in a continued environment of low oil prices, the report made a number of recommendations to encourage ethanol production.
"Government policy incentives such as carbon taxes, excise tax credits, and loan guarantees for cellulosic biofuels have the ability to mitigate the risk of oil market volatility, thus reducing the risk and increasing the attractiveness of cellulosic biofuels investments," the report stated. "However, these policy incentives would have to protect cellulosic biofuels against low priced petroleum-based competitors for an extended period to attract significant capital investment."
The report also emphasized the importance of strong support for research and development that would allow ethanol plants to increase their yields and lower their costs. Additional R&D efforts would be needed to allow high-yield energy crops to be cultivated on marginal land that requires little or no irrigation to avoid adverse impacts on food production and water supplies, the report conclused.
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