There is simply not enough available farmland to provide more than about 10 percent of developed countries’ liquid-fuel needs with first-generation biofuels. The additional crop demand raises the price of animal feed and thus makes some food items more expensive—though not nearly as much as the media hysteria last year would indicate. And once the total emissions of growing, harvesting and processing corn are factored into the ledger, it becomes clear that first-generation biofuels are not as environmentally friendly as we would like them to be.
Second-generation biofuels made from cellulosic material—colloquially, “grassoline”—can avoid these pitfalls. Grassoline can be made from dozens, if not hundreds, of sources: from wood residues such as sawdust and construction debris, to agricultural residues such as cornstalks and wheat straw, to “energy crops”—fast-growing grasses and woody materials that are grown expressly to serve as feedstocks for grassoline. The feedstocks are cheap (about $10 to $40 per barrel of oil energy equivalent), abundant and do not interfere with food production. Most energy crops can grow on marginal lands that would not otherwise be used as farmland. Some, such as the short-rotation willow coppice, will decontaminate soil that has been polluted with wastewater or heavy metals as it grows.
Huge amounts of cellulosic biomass can be sustainably harvested to produce fuel. According to a study by the U.S. Department of Agriculture and the Department of Energy, the U.S. can produce at least 1.3 billion dry tons of cellulosic biomass every year without decreasing the amount of biomass available for our food, animal feed or exports. This much biomass could produce more than 100 billion gallons of grassoline a year—about half the current annual consumption of gasoline and diesel in the U.S. Similar projections estimate that the global supply of cellulosic biomass has an energy content equivalent to between 34 billion to 160 billion barrels of oil a year, numbers that exceed the world’s current annual consumption of 30 billion barrels of oil. Cellulosic biomass can also be converted to any type of fuel—ethanol, ordinary gasoline, diesel, even jet fuel.
http://www.scientificamerican.com/article.cfm?id=grassoline-biofuels-beyond-corn