Instapundit links to this article by Robert Zubrin that makes the case for alcohol (ethanol and methanol) as the fuel of the future.

Ethanol for fuel use is currently manufactured using the starch in wheat or corn kernels. This is little different from the process used to produce alcoholic beverages. Research is underway to try to use cheaper plant materials, such as wood, and, presumably, the complete corn plant. The process of converting biomass to ethanol is an application ripe for genetic engineering and that is already happening:

In 2005, more than 4.5 billion gallons of fuel ethanol will be manufactured from corn starch and sugars. He said his technology will further expand ethanol production by converting celluloic waste into fuel ethanol, more than doubling current ethanol production.

Ingram, who is director of the Florida Center for Renewable Chemicals and Fuels at UF, cited a recent report from the U.S. Department of Agriculture and DOE that indicates more than one billion tons of biomass can be produced on a sustainable basis each year. Converting this to fuel ethanol could replace half of all imported petroleum in the United States.

Ingram said he genetically engineered the E. coli organisms by cloning the unique genes needed to direct the digestion of sugars into ethanol. With the ethanol genes, the engineered bacteria produce ethanol from biomass sugars with 90 to 95 percent efficiency.

Greg Luli, vice president of research for BC International’s laboratory at the Sid Martin Biotechnology Center in Alachua, Fla., said the firm plans to build a 30-million-gallon biomass-to-ethanol plant in Jennings, La (shown in pre-construction drawing at the header of this posting). “The facility, expected to be operational by the end of 2006, will convert organic waste into ethanol, a form of alcohol that can be used as an industrial chemical and as a clean-burning fuel,” Luli said. “Waste from the sugarcane industry in Louisiana will serve as the plant’s main feedstock.”

According to the BBI website, “BCI has successfully tested many cellulosic biomass materials, including these:
Sugarcane bagasse
Rice straw
Rice hulls
Softwood forest thinnings
Pulp mill sludge”

From an environmental perspective, the carbon in the ethanol comes from CO2 already in the atmosphere. When the fuel is burnt, the CO2 is recycled back into the atmosphere. Net impact on CO2 concentrations is far lower than is the case where fossil fuels are burnt. In that case, very ancient CO2 is being returned to the atmoshere hundreds of millions of years later.

The costs of transition from a petroleum economy to an alcohol economy are not unbearably high. Zubrin notes that:

…the development by the Netherlands Research Institute for Road Vehicles of a sensor capable of continuously measuring the alcohol content in mixed alcohol/gasoline fuel, and using this information to regulate the engine.

With this breakthrough, some 4.1 million vehicles were produced between 1998 and 2004 capable of handling various alcohol/ gasoline combinations. That is already five times the number of gasoline/electric hybrids on the road, and vastly increased use of such vehicles could happen overnight, for just a few hundred dollars extra per vehicle (compared to many thousands more for hybrids).

Current automotive technology can easily cope with a decades long transition from 100% petroleum to 100% alcohol and/or alcohol derived diesel substitutes. The fuel distribution system would need gradual revamping as the alcohol percentage rises. The US stock of oil refineries is so old it is a sunk cost for the oil industry. The gross profits of the industry could be profitably redirected to ethanol production.