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MIT Energy Conference: Focus on Ethanol and Plug-ins

by Joe Adiletta

The recent 2006 MIT Energy Conference brought together a broad mix of students, Venture Capitalists, Industry gurus, and scientists to hash out the direction of the future global energy crisis, and to explore the possibilities for a more sustainable course.

Although the conference topics ran the gamut from “The Nuclear Renaissance” to “Building Efficiency,” the centerpiece was the standing-room only, afternoon keynote by Vinod Khosla, one of the world’s leading venture capitalists and the leading voice in the VC community on the urgency of widespread adoption of ethanol in the US.

Khosla argues that the US could rapidly and effectively transition its transportation infrastructure to an ethanol-based one, similar to Brazil’s rapid historic transition of a similar nature.

In his arguments, Khosla leveraged work done by Argonne National Labs and summarized in The Debate on Energy and Greenhouse Gas Emissions—Impacts of Fuel Ethanol Khosla claimed this work is the most comprehensive study on the effects of ethanol on the US.

Moreover, he fervently disagreed with some of the major recent works touting the downside to a US ethanol movement. Khosla called upon lawmakers to provide three simple ”solutions“ to support this movement:

  1. A requirement that 70% of new cars produced be Flex Fuel Vehicles (FFVs);

  2. Mandate that 10% of all fueling stations carry E85; and

  3. If oil falls below $40 per barrel, provide a “cheap oil” price support structure.

Moreover, Khosla made the pitch that based on the technology that he has personally seen in labs around the world, there is no reason to believe that substantial advances won’t be made in all of the following:

  • Yield of biomass per acre
  • Cost per ton of biomass
  • Yield of ethanol per ton of biomass
  • Cost per barrel of ethanol
  • Productivity of cellulosic-based techniques

Given these expected advances, and an already proven ethanol economy in Brazil, Khosla made a compelling argument that the time for national transition is, in fact, now.

Transportation and Plug-ins. Professor John Heywood of the MIT Auto Lab led the Transportation in 2020 panel at the conference, with panelists from General Motors, Shell, A123Systems (earlier post) and Scientific American.

The representative from Shell maintained that while the immediate future appears to be focused on oil and gas, they are maintaining an agnostic approach to future fuel demands, as no clear winner technology has yet emerged. That said, the Shell rep did maintain that a shift to a more renewable fuel infrastructure was in the national interest, and a probable outcome.

Reinforcing the market’s lack of clarity around a winner, Ric Fulop of A123Systems noted that in all probability (and given past history in any number of industries) the “best” technology would not win.

Rather, the technology that has the potential to grab the market, create a full-scale supply chain and provide significant customer benefit stands to carry the day. In his opinion, this is going to be PHEVs, and further along, flexible-fuel PHEVs.

Further highlighting this point, Hymotion (earlier post) brought a converted plug-in Toyota Prius to the conference. (General Motors also brought its third-generation HydroGen3 Fuel Cell vehicle, and Vectrix an all-electric cycle for a ride and drive.)

Hymotion’s solution is compact and efficient. With the spare tire removed from under the lift gate in the rear of the Prius, the Hymotion battery console slides neatly into place, and provides up to 30 miles of non-fossil-fuel driving.

Both the volume required and, potentially the range, ought to be significantly improved when Hymotion drops in a set of A123 batteries, which they said they plan to test in the near future.

Of particular curiosity surrounding Hymotion—and PHEVs in general—was the apparent lack of immediate knowledge of the technology within the Venture Capital community. Routinely, there were conversations describing the immediate benefits of PHEV technology to VCs, who by and large stood amazed by what could be accomplished.

[Joe Adiletta is an MIT Sloan Alum and one of the organizers of the MIT Energy Conference.]



Joe Rocker

GM and Ford are now building E85 vehicles. The problem is no gas stations carry it. Why doesn't congress pass a bill that taxes gasoline an extra 15 cents per gallon if the station does not carry E85? Non-conforming stations would be taxed at a higher rate.

Jens Riege

One curiousity I have is the inclusion of the cost of using lots of water to grow the corn or other plant material. Water supplies are not unlimited, and the increased use of water to supply corn for fuel may limit this option's ability to provide enough fuel. Higher water use will likely increase the cost of water to the farmers as well, assuming they can get it at the higher prices.
Secondly, when corn is used for fuel, that would indirectly increase user costs in the form of higher food prices: Higher demand for corn would raise the price of corn and its byproducts used in hundreds of food products: corn syrup, corn meal, corn flour, etc.
Likewise the price of food generated from animals that feed on corn would also increase.
As long as corn is considered as a fuel source, the costs of lost corn as food supply must be included into the cost to the ultimate consumer.

Cellulosic Ethanol may be a better way to generate ethanol as long as it is made from waste plant material.

An Engineer

GM and Ford are now building E85 vehicles. The problem is no gas stations carry it. Why doesn't congress pass a bill that taxes gasoline an extra 15 cents per gallon if the station does not carry E85? Non-conforming stations would be taxed at a higher rate.
Mainly because there is not enough ethanol to go around, and won't be for many years to come. Notice than when a new ethanol plant is announced, the breathless reporter will state the capacity as X million gallons per year. Reality check: big oil refineries quote their capacity in 100,000s of barrels per day. US oil consumption is ~20 million barrels per day!

And, as Jens points out, making fuel from food is an incredibly stupid idea.

The problem with US legislation is this: We need legislation that define what renewable fuel is (in the broadest possible terms) and encourage it. What we have is lobbyist-driven legislation that tries to encourage specific technologies (hydrogen, ethanol, biodiesel, etc.)

We need to get away from undercover farm subsidies, if we want to get renewable energy make a dent in overall concumption.


"using lots of water"
While the cost would increase, there are hydroponic options for growing biomass, which can limit the negatives:

I agree that the idea of growing our energy ignores the fact that it will largely shift consumer costs from the energy sector to the farm sector. This approach does address the national security issue, but is not entirely a solution for energy costs. That is one good argument for PHEV -- at least the electricity can be produced by wind or other renewable sources and nuclear is still an option.

I am amazed that the VC's are not more familiar with the PHEV concepts. Perhaps they simply think the established auto companies have too much capacity to compete in that area, so there is little opportunity for startups to profit from an IPO.


If consumers (and businesses and governments) demand flexible fuel vehicles and pay the premium to buy them they will be built. And if Ethanol is cheaper than oil, gas stations will being carrying it or there will be specialty stores that will carry it.

So add a $1 tax to oil derived fuel and let the market work out which alternative fuel or automobile technology makes sense. That way the legislators don't have to try to be engineers.


The fundamental basis of any energy strategy should be maximum conservation. I fear that our fundamental strategy appears to be questionable alternatives such as ethanol. Ethanol, even if shown to have a positive EROI, still uses lots of energy people. So, ethanol use, like every thing else, should be minimized. Unfortunately, congress and others are pushing ethanol like it's some sort of guilt free, low cal free lunch.

Ron Fischer

With little near-term prospect for broad availability of E85, and given that VCs have now "gotten the message" about PHEVs, I predict PHEV-related companies will now experience the "shock and awe" of VC funding. Watch for a ramp-up of PHEV fleet conversions.

I think smart investors won't go near ethanol until something in the supply chain changes. MTBF elimination was the last one.


I am very interested in the performanceof the A123 Batteries. This is the first mention I have heard about these batteries in quite some time.

Mark R. W. Jr

I think these guys are on the right track. Now the main challenge will be to implement many of the things they speak of such as the alternative fuel infrastructure.

Bob Tasa

So add a $1 tax to oil derived fuel and let the market work out which alternative fuel or automobile technology makes sense. That way the legislators don't have to try to be engineers.

I would hate to pay this but its starting to sound like a good idea to get us off the oil habit. The money should go to fund rebates on battery operated/alternative fuels. What about the french Air car? It seems pretty reasonable.



The nation is struggling to provide 2.58% ethanol nationwide, as mandated by Congress, using corn as the base.

Sugarcane can provide an 8 to 1 energy gain, where corn is only 1.2

They have even modified sugar cane to be easier to use for cellulose ethanol, providing even more ethanol per acre.
(this was a link on this site)

Harvey D.

Conversion to E-85 cellulosic ethanol fuel + PHEV + 100+ mpg lighter efficient vehicles would have a drastic effect on fossil fuel consumption while keeping the Ethanol consumption within acceptable-sustainable production level in USA and Canada.

Doing what GM and Ford proclaim, i.e. using E-85 in our current 2 to 3-ton gas guzzlers will not be sustainable and would eventually use to much of our essential crop land.

A $1/gal to $2/gal progressive additional federal tax on fossil fuel may be the minimum incentive required to convince us to switch to E-85 and PHEVs.

Patrick Malone

While it makes me happy to read that VCs are finding interest in alternative fuel development and the technology to drive on it, I am frustrated by the transportation industry engineers that peddle the "plug-in" concept as a boon in fuel efficiency, and hope someday soon a person attending one of these conferences will display significantly greater moxie.

At this time, our primary source of electricity is coal or some from of hydrocarbon (natural gas, diesel, etc.) and it is best not to bring into a discussion what America "will" use one day. Keep with the facts of today and the next 10 years in your thinking - that much we can hang onto with some level of confidence for discussion's sake.

When we generate electricity, there is an immediate 30% loss in total energy available in the form of heat at the power plant as the massive engines turn the giant dynamos at high speed (larger than the 60 kW generators I used to work with as an engineer on submarines). When that electricity is then sent downstream to your house, it usually passes through at least one power station along the way - a place that generates added power to boost what was lost in the wire (10% to hysteresis). When it finally reaches your wall outlet where your plug-in vehicle is charging, the electricity must enter your batter where it is converted back into chemical energy with a net loss of another 30%. When you decide to hit the road in your plug-in, the energy must again change from chemical to electricity (30% lost again) then travel through the thin wires and tiny windings in your electric motor (another 10% lost to hysteresis) before finally providing your vehicle with motive power.

A plug-in does get more miles per gallon … that’s mile per gallon in your car … but not gallons burnt trying to electrify your municipal power grid. I wish this was not so, but the laws of thermodynamics are absolute, and plug-in proponents must come to understand the larger picture.


An other problem with flex fuel vehicles is that they aren't very flexible...
They are just gasoline engines capable of using ethanol, but not using it properly.
FFVs need to start incorporating either variable compression, or a turbocharger controlled by computer to up cylinder pressure while using ethanol in order to get proper use of it.

Obviously ethanol is not an overnight solution, but I think that nuclear power infrastructure with decent Ethanol PHEVs as common-place would vastly help our energy woes... in the long term.

Joe Adiletta

Regarding the implication that somehow PHEVs are a bad idea because of the transmission of electric power, I ask, what is your solution?

I suspect that the US, on the whole, needs to push for an upgraded electrical grid anyway, right?

Choose to maximize the generation of renewable energy upstream, in a distributed manner, while upgrading the infrastructure; tackle environmental issues by overhauling one coal plant at a time OR do what? Continue to somehow peddle minimal, incremental change in ICEs?

Or perhaps you prefer the efficiency of H2? Let's see, take electricity, break apart water (or break up fossil fuel sources), compress it, pump it, transport it, pump it, store it, pump it, store it, convert to electricity.

It's a classic problem. The further upstream you catch the issue - in any industry - the cheaper it is to resolve. It happens in manufacturing, computer programming, you name it. What amazes me is the lack of moxie that people in the power industry have in their complaints about how PHEVs are going to somehow overwhelm the electrical grid - as if they wouldn't be plugged in "off hours", and as if we didn't need to urgently address the grid ANYWAY.

The real issue is that there is no "perfect" solution to any of our problems, despite the public's lack of desire for any type of sacrifice whatsoever. In our current culture of entitlement, we expect there to be a solution that will: cost the same, require nothing of us, perform better, etc. All the while, the truth is that for any REAL change, we have to work together, bite the bullet and transform ourselves, and transformation is never completely pleasant.


It amazes me that, for all the talk about cellulosic ethanol and enzymes (which simply convert the cellulose to sugars to make it suitable for sugar fermentation) very few people, including Vinod Khosla, are talking about "syngas fermentation" (Wikipedia or my blog) for the production of ethanol and co-generation of electricity.

Syngas - produced by gasification of a virtually limitless array of biomass, waste and/or fossil fuel blends - is being converted into ethanol in several pilot plants - BRI Energy in Fayetteville, AR being the most promising.

Think of it - waste reduction, ghg reduction, pollution reduction, ag-forestry-urban clean-up, ethanol production, co-generation of electricity, decentralization of fuel production and distribution, reduction of fossil fuel dependence, employment and VC investment opportunities - all from one universally applied technology. It's potentially a much bigger (and life saving) paradigm shift than the internet.

Joseph Willemssen

Regarding the implication that somehow PHEVs are a bad idea because of the transmission of electric power, I ask, what is your solution?

Automated personal vehicles that travel subsurface and can be both local and long-distance (at high speed).

But that's me.

Paul Malone

In response to plug-ins being bad because of all the electicity lost. I would like to bring up these points.

1) It is a lot easier to clean one electric plant than millions of cars. The point is if we use PHEV the power plant becomes the main source of the pollution and it is a lot easier to clean one plant that to clean millions of non PHEVs.

2) If you plugged in you PHEV at night I believe you would be using the excess electricity that the power plants can produce because they are designed to meet peak demand. So there wouldn't be a huge investment needed in infastructure.

3) Moves energy off of oil (foriegn or domestic) and towards electricity which is a Homegrown MADE IN THE US of A!!

4) You must use envirnomentally friendly batteries like Valence Phoshate Lio or an equivalent. I haven't researched A123 yet.

Harvey D.

We currently use an average of 40 KWh/day for home use, another 10 KWh/day (+25%) for one PHEV per house, introduced over a 10+ year period, would not tax the electrical distribution network that much, or not at all if the PHEVs are recharged at night when power usage is very low.

With huge hydro + wind (95 000 + MW) untapped potential, increasing the current production installed capacity by 25% (from 40 000 MW to 50 000 + MW) over 10 + years is very doable, it's not even a major challenge.

Let's not make production-distribution of the required electrical energy more of a problem then it is. It is a very well know technology. An extra 25% to 40% could easily be introduced over a 10 to 15 year period. The best solution varies from one region to another, but there are many choices available, all more efficient then our current ICE vehicles.


I would agree that we can charge cars in off peak times. What I have not seen is a battery that has the power density, is amazingly cheap and lasts a long time.
Perhaps lots of people are working on it, but until we have something that can give a car a long range, costs very little and lasts a long time, we do not yet have a solution.
When you use batteries for deep cycle, it is a different use profile than in hybrids. If you are going to have the 80%/50% charge profile of hybrids but want the 100 mile range of EVs, this requires quite an amazing battery.


Harvey, I think you should be more optimistic. Americans burn 200 billion gallons of fuel per year. Assume a 25 mpg national average (It's less than 22 mpg). That means we drive 5 trillion miles/yr. At 1 MJ/mile, we can see that we need 5 trillion MJ of electric energy/yr. Consider this: Wind power.
5 trillion MJ/yr = 158549 Mega-Watts. (check my math). GE makes a 3.6 MW wind turbine with a 30% load factor so you get a 1.08 MW average output per turbine. This means we need 158549/1.08 = 146805 turbines. Each 3.6 MW turbine costs $3.6 million. Total cost $529 billion. Now find a battery that can be charged 5000 times with a capacity loss < 20%, high discharge, low internal resistance, (blah blah blah) Hint: A123 systems battery, problem solved


By the way, I know A123 systems battery probably does not meet the 5000 deep discharge cycle criteria, I was refering to the fact that this is what is needed for the battery to last the life of most hybrid cars.

Harvey D.

Freddy: The 95 000 MW hydro-wind production potential referred to our provincial QC-Hydro network only. USA wide requirements are much greater. The 160 000 MW needed could most probably NOT be supplied with Wind power alone. Something like 60% or about 100 000 MW would have to come from other sources (Imports, Sun, Hydro, Waves, Nuclear etc.)

We could eventually supply USA with about 40 000 MW of clean Hydro-Wind power but the price would be higher than the local Coal-fired plants or imported GaS and Oil.


The quickest road to transportation oil independence for the US is ethanol and/or biodiesel coupled with an electric hybrid drive system.

Cellulosic based ethanol (not only corn but any type of cellulosic plant matter) or biodiesel harnesses the endless supply of the sun without adding to the CO2 load in the atmosphere.
Ethanol or biodiesel is compatible with the current transportation fuel delivery and consumption infrastructure.
Home grown plant matter recycles the cost into the local economy.
Home grown plant matter eliminates the need for mega-corp oil companies to be efficient (smaller companies can compete).
Home grown plant matter takes fuel out of world politics.
Electric hybrid drives (i.e. electricity generated onboard the car and electric motors powering the wheels) allows a much more flexible energy to motion system. Note: This decouples the power generation from power used (an electric drive remains the same whether electricity is created via an ICE powered generator, batteries charged at home, fuel cells run by hydrogen, etc.).
Electric hybrid drives with battery/ultracapacitor provides a way to recapture lost energy (regenerative braking, no idling at stops, efficient low speed operation, optimized engine operation) in the current fundamentally inefficient ICE system.
Plug in batteries in an electric hybrid drive allows the transportation system to diversify fuel sources (electric power plant produces electricity via oil, coal, solar, wind, hydro, nuclear, tidal, natural gas, geothermal).

ICE optimized for 100% ethanol or biodiesel
Large capacity, with fast charge, lithium based (or as yet unknown type) batteries for automobiles
Cheap, ultra high power density ultracapacitors
Fully electric, drive by wire hybrid drives (eliminate mechanical systems)

Nice to have:
Decentralized central electricity generation
Much better, or much cheaper, PV cells

An Engineer

An even quicker road to transportation oil independence for the US is gasification/Fischer-Tropsch.

Any organic waste can be gasified. Once this is employed on a large enough scale, all carbon is recycled and the process becomes carbon-neutral [i.e. plastic made from G/F-T oil can be considered renewable].
The produced fuel is identical to the current transportation fuel. Can be blended into existing fuel supply at any convenient ratio.
Home grown plant matter and all other waste recycle the cost into the local economy.
Home grown plant matter and all other waste means it is harder for energy producers to form cartels that manipulate prices.
Home grown plant matter and all other waste takes fuel out of world politics. No more funding of Middle Eastern oppressors and terrorist-financers!
Great reduction in landfill waste.
Corresponding reduction in GHG emissions from landfills.

Only G/F-T plants, located at existing landfill sites and other sites that receive agricultural and forest waste.

Not needed:
Changes to fuel infrastructure.
Changes to existing vehicle fleet.

Seems like a no-brainer to me!

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