Is This the End of Peak Oil?

By George Harvey

Industrial Technology Research Institute (ITRI) made an announcement in late October that sounds like it could change the world. They are bringing a technology to market that makes butanol from cellulose. The thing that makes this special is that they claim the process doing this is carbon-negative. In other words, the process of making butanol actually takes more carbon dioxide out of the atmosphere than it puts in. Since cellulose feedstock is close to carbon-neutral, the butanol made from it is as well. And butanol is a liquid that can be used as a fuel. ITRI is one of the most prestigious research facilities in the world, so I think we can take this claim seriously.

There are a number of things about this claim that are worth thinking about. One is that, like ethanol, butanol can be mixed with gasoline for automotive fuel. Butanol has a number of advantages over ethanol, however. It is made from cellulose, which can be derived from just about any plant material, including agricultural, forestry, and food waste. By contrast, most ethanol comes from sugar, and in North America is usually made from corn. Butanol has more energy than ethanol, and so will provide better gas mileage. In addition, butanol will not harm an engine if the mix is greater than 10%, while the ethanol mix of 15% is considered problematic. In fact some vehicle engines run on straight butanol without modification, and those that cannot, might be converted for it at relatively low cost.

According to the ITRI press release, transportation fuel made from butanol could cost as low as $2 per gallon. We might note that the cost of extracting oil from shale just happens to be about $2 per gallon, and this oil has to be transported, refined, transported again, and sold, with a markup for each step.

Butanol can also be used as feedstock for a large number of chemicals. It is probable that nearly anything that can be made from petroleum could be made from butanol. This includes anything from plastics to paint solvents, from adhesives to detergents.

In bringing their product to market, ITRI is not building production facilities and developing a marketing network. What the organization is doing instead is licensing the technology to companies that are capable of using it.

The effect of using this product will be profound, if it turns out to be as claimed. Switching from the ethanol currently used in gasoline to bio-butanol would, by itself, reduce the US carbon emissions by 60 million tons per year. As greater quantities become available, we could decrease our carbon emissions by greater amounts.

There is a catch that ITRI did not mention. While it is true that if this works out, we will be able to reduce some carbon emissions easily, it is not true that we can simply go on wasting resources and get away with it. Cellulose has to come from somewhere, and though a lot can come from waste from paper, forestry, farming, and industry, it remains to be seen how much we butanol we can get from these sources. We can grow plants for the purpose, but we will have to do this in a sustainable manner. But the real catch is that we will probably never be able to replace the amount of oil we consume with biologically produced products. We must do more.

One thing is certain. If this process is both feasible and “scalable.” then the rising price of oil is surpassing the cost of replacing it with renewable products. As that happens, oil production will decline, not because sources are running out, and not because we have to abandon oil to prevent worsening global warming, but because oil will have effective competition from alternative, renewable fuel sources that cost less. When that happens, we are past “peak oil,” and we witness the decline of the oil industry. The good news of this scenario is that we do not have to be in want if we simply conserve.