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TORONTO (Reuters) - In the search for renewable energy, turning low-value materials like switchgrass and corn husks into ethanol to fuel cars is something of a Holy Grail.
In theory, these materials would replace corn as the main feedstock for ethanol in North America, reducing the pressure on farmland that has played a role in rising food prices and put drivers into competition with hungry people.
But scientists on the front lines of this search are finding that making the process commercially and environmentally viable is proving much harder than some of the hype would suggest.
In a greenhouse on the top floor of the science complex at the University of Guelph in southwestern Ontario, microbiologist Anthony Clarke stands next to rows of corn plants sprouting out of black plastic pots.
In them, he sees the future of renewable fuel -- but he's not looking at the corn kernel.
"We have all that other green matter: the leaves, the stalk, the husks even," he said. "So the idea would be to use that material for the biofuel and the grain itself as a food."
But turning plant waste into fuel is not easy. Plant cellulose is woven into a tight grid, making it difficult -- and costly -- to extract the glucose needed to make ethanol.
"There is a technology out there for biofuels from cellulosic material, but it does involve acid and steam," said Clarke. "Both require energy to produce. So more energy is going in, currently, and expense, then is being recovered."
With the current technology, cellulose delivers less energy than corn. But if the scientists can make their dream technology work, cellulosic ethanol could be three to eight times more energy efficient than corn ethanol.
Clarke and his colleagues are using micro-organisms that produce cellulose-munching enzymes -- much like ones that let a cow digest grass -- to try to make the dream a reality.
(Video on cellulosic research here)
The goal is to create an inexpensive and natural way to produce cellulosic ethanol on a commercial scale.
The research is supported by Ottawa-based Iogen, a leader in second-generation biofuels.
Iogen, backed by Royal Dutch Shell and Goldman Sachs Group, has run a demonstration plant in Ottawa for four years, and hopes to soon be pumping out cellulosic ethanol from a C$500 million ($504 million) commercial-scale plant in the Canadian prairie province of Saskatchewan. The company is planning a similar plant in Idaho.
While Canada is on the forefront of cellulosic innovation, its actual ethanol industry is small, producing less than 1 billion liters in 2006, compared with 18.5 billion in the United States and 13 billion in Brazil.
Other companies in the race for next-generation biofuels include DuPont Co and General Motors of the United States. GM has even rolled out 12 models of flex-fuel vehicles, designed to run on an 85 percent ethanol blend.
"The reality is that next-generation biofuels are the future," said Canadian Renewable Fuels Association president Gordon Quaiattini. "It's taking a waste product and creating value from it."
But economist Al Mussell of Guelph's George Morris Centre think tank said the technology is not yet viable.
"The cellulosic-based ethanol is one of those technologies that about ten years ago they said, 'we're about five years away from having this' and five years ago they said, 'well, we're five years away from having this,"' he said.
"So if you ask someone today it won't surprise me if they say, 'you know, we're just five years away."'
Until the technology for cellulosic ethanol catches up with the demand, grain-based ethanol will continue to be the biofuel standard in North America.
This poses a problem for environmentalists, who believe in the rush to appear "green," governments have pushed forward an environmentally and socially flawed product.
"In theory, biofuels are a good thing," said Greenpeace Canada energy coordinator David Martin, who points out that plants are a cleaner fuel source than petroleum as they do not add new carbon dioxide to the air.
"In reality, though, biofuels are turning out to be a disaster."
Martin blames biofuels in part for the increase in corn prices, which have tripled in the past three years to record levels above $6 per bushel.
But grain-based ethanol producers say they are being made a scapegoat in the global issue of food inflation.
"The high cost of food has everything to do with the cost of energy, and little to do with the actual cost of grain," said Robert Gallant, chief executive of Canadian producer and distributor Greenfield Ethanol.
"The cost of oil has gone up 100 percent. Do the math."
(Audio slideshow on corn ethanol here dex.html)
(Graphic on corn ethanol here mb-ethanolgraphic--450.jpg)
Gallant sees corn ethanol as a stepping stone in the quest for cellulosic ethanol, which he hopes will someday replace corn and wheat ethanol as the primary biofuel source in North America.
"When cellulose comes along it will be able to displace much more of the petroleum-based energy source, so it will have a positive environmental impact," said Gallant. "It truly is part of the wave of the future."
And, despite the research difficulties, countries around the world are betting heavily on biofuels to meet their commitments to reduce emissions.
In Canada the plan is to raise use of second-generation biofuels like cellulosic ethanol to 5 percent by 2010 from 1 percent now.
And European Union leaders have committed to raise the share of biofuels in transport to 10 percent by 2020 from 2 percent, and said that target was based on the assumption that second-generation biofuels would become commercial.
Reporting by Julie Gordon; Editing by Eddie Evans