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Investing in Renewable Energy: Making Money on Green Chip Stocks by Jeff Siegel, Chris Nelder

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Chapter 9. BIOFUELS: More than Just Corn

As we discussed in Chapters 1 and 8, peak oil is a liquid fuels problem. Renewably generated electricity is definitely the future, but until we build a new electrically powered infrastructure, we're still going to need liquid fuels for transportation.

The obvious best liquid fuel alternatives are biofuels, which are liquid fuels that are made from plants. There are other alternatives, such as turning coal and natural gas into liquid fuels, but at this point in time, none are scaled up to any significant level, and the economics of them remains to be seen. Since these liquid fuels made from coal and natural gas are based on fossil fuels and are not renewable, they are also outside the scope of this book.[315]

More than two-thirds of our petroleum use goes to transportation, so by switching to biofuels (in combination with higher-efficiency and plug -in vehicles) we can make a significant dent in our consumption. Plus every gallon of fuel we can grow domestically instead of importing it from a foreign supplier is a win on all levels—economically, politically, and environmentally.

THE COMPLEXITIES OF BIOFUELS

The issues surrounding biofuels are complex, and the opinions on them are widely varied, so we'll start with a brief overview of biofuels, and then explore some of the important questions.

There are two main types of biofuel in use today: ethanol and biodiesel. Figure 9.1 summarizes their production methods.

Ethanol

Ethanol is simply alcohol—the ...

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