At the end of January, Department of Energy officials announced $114 million in grants over the next four years for four small-scale biorefineries. These test plants will serve as pilots for future commercial-scale operations, and each plans to produce advanced biofuels from non-traditional sources.

The investment comes at a pivotal time in the renewable fuels industry, as producers ramp up their efforts to meet a new federal mandate, passed in December, requiring biofuels production to increase nine-fold to 36 billion gallons by 2022. Close to two-thirds of this -- 21 billion gallons -- must come from "advanced sources," meaning non-food crops, such as switchgrass, or biomass, like wood chips.

Producing these advanced fuels is more complex than making ethanol, though, and, so far, none has progressed beyond the laboratory.

The technology is available, though, and the challenge now lies in cost reduction and mass production, said Greg Krissek, director of government affairs for ICM, a producer of ethanol-production technology slated to receive $30 million in DOE grants for a new biorefinery in St. Joseph, Miss.

"It's learning how to do this on a commercial scale and making it economically viable," Krissek told United Press International. "It's feasible today in the lab to make (biofuels) from biomass, but it remains two to three times as expensive (as corn ethanol)."

ICM anticipates reaching full operation at the new plant by the end of 2010 and going to market one year later.

The test plants represent a step toward reaching President Bush's goal of producing cost-competitive advanced biofuels by 2012. But these four biorefineries won't even begin to meet the recently passed advanced biofuels mandate of 21 billion gallons by 2022.

At an expected 2.5 million gallons per year, the production rate of the pilot plants will be only 10 percent of a commercial biorefinery. Going from production rates today to the mandated rate in 2022 will require a Herculean effort, said Brent Erickson of the Biotechnology Industry Organization, which represents biotechnology companies.

"It is a huge investment," Erickson said. "We estimate to build 300 of these commercial-scale biorefineries to meet (the mandate) is equal to the Apollo project and the Manhattan project together."

And it's not just building the biorefineries that presents a challenge.

"The problems we see are on the other end," Erickson said. "Will we have enough infrastructure to transport these biofuels? Will the automobile industry make enough flex-fuel vehicles (specially designed to run on gas or high-ethanol blends)?"

If the goal can be achieved, though, it will translate into major energy security gains, by decreasing foreign oil imports, and environmental benefits, by helping wean the nation from carbon-emitting fossil fuels, its proponents say. That holds true for these small-scale projects as well, which will use a variety of sources to create the fuels and are planned for construction in Boardman, Ore.; Commerce City, Colo.; and Wisconsin Rapids, Wis., in addition to the Missouri plant, DOE representatives say.

"With all of these projects, the amount of fossil fuel used to produce the biofuels is significantly less than that associated with gasoline -- on average as much as 90 percent less over the lifecycle," according to a recent DOE statement.

But policymakers and industry leaders should be cautious about investing in widespread production before all the environmental impacts have been assessed, said Jason Hill, co-author of a recent article, published in the journal "Science," that questioned whether traditional ethanol production might actually increase greenhouse gas emissions. This could occur if land is converted to cropland to grow feedstock for renewable fuels, the authors of the study said.

"It's a really good thing to get these pilot facilities up and running," Hill told UPI. "The warning is that when we scale that up to commercial size, the land use change becomes critical."

Cellulosic ethanol -- from waste products and high-cellulose crops -- probably won't be as harmful as traditional ethanol, Hill said, but some, particularly energy crops, could still require land use change.

"Where is it going to come from?" he asked. "If it's from our fertile land, where are those crops being displaced to? If not, it's going to come from our reserve land or it's going to come from other land."

And all of those scenarios represent land use change.

Converting land to cropland can cause other problems besides carbon emissions, Hill said, including disruption of wildlife habitats. Other cellulosic sources may be more promising, such as waste wood and agriculture products, but even these can't be used exhaustively because crop residues, such as corn leaves and stalks, help prevent erosion when left on the land.

However, new technologies could prevent many of these concerns, said Anna Rath, a vice president at Ceres. This energy crop company will provide seeds that have been genetically modified for desirable traits to local farmers who will grow them as feedstock for the ICM test plant in Missouri.

"Biotechnology will enable us to increase yields substantially, both in tons per acre and gallons per ton," Rath said. "This means we'll need fewer acres to produce the same amounts of fuel."

Some modified varieties have increased storage capacity for carbon in their root systems and others allow for no-till farming, both of which decrease the release of greenhouse gases into the atmosphere, Rath said.

That may not be enough to satisfy those worried about land-use change, though, as Ceres Chief Executive Richard Hamilton "expects energy crop acreage across the U.S. to increase rapidly as best practices are duplicated in other areas," according to a news release.

It also looks like more and more farmers will have an incentive from the federal government to convert fallow land to cropland if the farm bill, currently in conference in Congress, passes. Both the House and Senate versions provide funding to stimulate increased production of cellulosic energy crops.

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