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'Marketplace' Report: Alternative Fuel
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'Marketplace' Report: Alternative Fuel

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'Marketplace' Report: Alternative Fuel
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LUKE BURBANK, host:

From NPR News, it's DAY TO DAY.

Well, the race is on to find alternatives to gasoline to move the world's cars, trucks and buses. One of the approaches that's had some success in the United States is corn-based ethanol. Apparently, not quite enough success, though, at ;least according to the Department of Energy, which now wants to give six companies a total of nearly $400 million to figure out how to produce ethanol more efficiently.

Joining us now is John Dimsdale from MARKETPLACE in Washington. So John, corn ethanol just not good enough?

JOHN DIMSDALE: Well, yeah. The demand for corn is beginning to max out. Already the diversion of corn into fuel is raising the cost of producing eggs and chicken and beef, as corn farmers find better prices from fuel producers. The experts say you can't expect corn to supply any more than about 15 billion gallons a year, and that's less than half the president's goal of 35 billion gallons of alternative fuel by the year 2017.

BURBANK: That's not a great sign when the alternative to a finite resource is itself somewhat inelastic. What alternatives to ethanol are out there?

DIMSDALE: Well, the most obvious is what's called cellulosic ethanol - wood chips, switchgrass, straw - even the corncobs, or whole corn stalks. But there are some others. A plant in Florida would get a $33 million government grant to produce ethanol from yard waste. Most of these plant material fuels are still expensive - twice the cost of corn-based ethanol, which runs itself about $1.40 a gallon. Even at that price, Dirren Lovaz(ph), with the Natural Resources Defense Council, says ethanol is already a bargain.

Mr. DIRREN LOVAZ (Natural Resources Defense Council): Given the price run-ups in the oil markets over the past few years, there actually have been some months where it has been competitive. And if those price trends continue and the technology for producing ethanol keeps getting cheaper, the day when ethanol is competitive on a regular basis isn't too far in the future.

DIMSDALE: Plus, there's a California company that's even more adventurous. They're getting a grant to make ethanol using trash. The CEO thinks that by 2009 he can turn 700 tons of garbage every year into 19 million gallons of ethanol, and the cost would be about a dollar a gallon.

Mr. LOVAZ: You know, that seems like a perfect solution. We have too much trash and not enough fuel, but what my mom used to say? If it sounds too good to be true, it probably is.

DIMSDALE: Yeah, you've got to wonder whether the government's enthusiasm here for finding alternative fuels may be chasing some rainbows, but the inventor of the process claims that's it's already being done in Japan.

But the real reason to push for plant material as a source of fuel is the environmental benefit. Growing the corn or the switch grass or even pine trees helps to suck carbon dioxide out of the air. Ethanol isn't a purely clean burning fuel, but when you take the growing, the entire growing and burning cycle into account, it's great for getting rid of all those greenhouse gases.

LB: Thanks, John. John Dimsdale of public radio's daily business show MARKETPLACE. It's produced by American Public Media.

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