Sticker shock may be a factor in developing cellulosic ethanol plants.

The process necessary to take sugar from grain and convert it into a fuel has been around for a long time, says Joe Bouton, senior vice president and director of the Forage Improvement Division at The Samuel Roberts Noble Foundation in Ardmore, Oklahoma.

He figures construction costs for an average-size grain ethanol plant runs about $70 million. “For cellulosic plants, it's a three or four-fold difference, maybe as much as $350 million.”

But that start-up price will come down, he says. “Technology will drive prices down eventually.”

In the meantime, he and other Noble Foundation scientists are trying to make forages, specifically switchgrass, easier to convert into sugar and, ultimately, ethanol or other alcohols.

“It's relatively easy to use the starch in corn. Bootleggers have been doing it for years. But for cellulosic ethanol, we have to back up the process a few steps.”

For some conversion processes, the lignin found in plants makes the procedure a bit tougher and more expensive, Bouton says. Generally, lignin represents about 30 percent of all plant material.

He and other Noble Foundation scientists have been working on reduced lignin forages for years. “The ultimate bio-refinery for vegetative matter is a cow,” he says. “So if we make a feedstock that's better for animals it likely will be better for biofuel production as well.”

Reducing lignin by 10 percent helps animals digest forages, he says. “That reduction also will increase the yield of ethanol.” Less lignin means less difficulty breaking cellulose down into sugars.

Bouton says the technology to reduce lignin content in alfalfa is in place and it will likely work in grasses as well.

“We have a grant from the USDA to develop low lignin switchgrass. There is a lot of interest in that work. Low lignin will be a value-added trait.”

Bouton says initially cellulosic ethanol plants will use whatever is available as feedstocks. That may include crop residues, timber scraps and crops grown specifically for fuel use. “Eventually, ethanol manufacturing facilities will place a higher value on feedstocks that are more efficient,” he says.

A high-lignin switchgrass may offer potential for energy as well. Steve Rhines, vice president, general counsel, and director of Public Affairs, says plants with increased lignin contain more energy and could prove to be valuable in certain conversion processes.

“The yield per unit of input remains the goal,” Bouton says. “At the end of the day, yield is the basic economic factor. We could get a premium price for designer feedstocks, such as switchgrass.”

He says economical cellulosic ethanol production is close. “We know we can do it. We have the technology. We know we can grow switchgrass. We just need bio-refineries to provide an end-market for the agricultural producer.”

Bouton says it's the chicken and egg dilemma. Bio-refiners and energy companies are reluctant to build bio-refineries until they have a consistent source of feedstocks and producers are reluctant to ratchet up feedstock production until they have reliable markets for their crop in place.

The potential economics for the end product look good. “At $1.07 per gallon, the initial target set by the federal government, cellulosic ethanol should be viable and competitive,” Rhines says.

“It's also a matter of national security,” Bouton says. “We're currently sending $350 billion a year overseas for foreign oil. We can put that money into our own economy and pay for energy we produce.”

As the price of gasoline hovers around $3 per gallon, the risk to ramp up ethanol production is low. “We see a lot of interest,” Bouton says. “The government has begun to facilitate some things — jump-starting important projects for this industry.

“We are encouraged by the excitement of agricultural producers we have talked to, the advancements in technology, and the role the government is playing to move this process along.”