Jon Markman

SuperModels10/11/2007 12:01 AM ET

Shuck the ethanol and let solar shine

Solar power and compressed natural gas offer more-efficient energy technologies than planting, fertilizing, harvesting and refining fields of corn into fuel. Investors, take note. Congress, listen up.

By Jon Markman

New research by a University of California petroleum engineering professor suggests that worldwide crude oil supplies will start to run so low over the next nine years that resource-blessed countries like Saudi Arabia will begin to hoard them for domestic use instead of exporting -- and states with large reservoirs of natural gas, like Montana, will seek ways to avoid sharing with less-advantaged neighbors like Oregon.

Attempts to forestall the political and economic damage by turning aggressively to agriculture for "renewable" transportation fuel in the form of ethanol will prove futile, according to professor Tad W. Patzek, as new calculations show that the entire surface of the Earth cannot create enough additional biomass to replace more than 10% of current fossil fuel use.

The process of sowing, fertilizing, reaping, distributing and refining corn and grasses for ethanol feedstock uses up nearly as much carbon energy as fuel farmers claim to save, and it generates so much soil degradation and toxic byproducts that widespread use will leave the Earth denuded and hostile to human life within decades, according to the professor's data.

Apocalypse now, again

Patzek, in a controversial paper presented last month to the Organization for Economic Co-operation and Development, says military battles over fast-depleting fossil fuels will combine with insufficient replacement strategies and escalating population growth soon to imperil the human race unless coordinated global efforts to curb energy demand are taken quickly. "Change will be made for us unless we make changes," he said in an interview from his UC Berkeley office this week.

Of course, we are accustomed to apocalyptic statements about the environment these days, after recent campaigns to raise awareness of ecological disasters ranging from global warming to the destruction of the rain forest. But we can't really do too much about those beyond changing a few light bulbs and recycling cereal boxes.

Yet a provably insane public policy focused on ethanol production is something we can urge politicians to halt. We can also demand that tax dollars and product development funds be spent on more long-lasting transportation fuel solutions based on solar energy and compressed natural gas. And as investors we can take positions in companies that are likely to benefit from improvements.

Let me explain the problem in the simplest terms. The main thing you need to keep in mind is that all energy on our planet comes from the sun. Through the magic of photosynthesis, shrubs and trees hundreds of millions of years ago grew plentifully worldwide in swamps. They died, were covered by layers of sediment amid tectonic change, and were then baked via geological processes into oil, gas and coal.

Video on MSN Money

Corn © Bob Rashid/Corbis
Stall on ethanol
It's been a hot year for ethanol, but has it been too hot? Two industry executives discuss the problem.

Fast-forward to the early 1900s, and petroleum engineers figured out how to discover, exploit and transport this buried treasure on a mass scale. Then followed the greatest explosion of industry, freedom and wealth the Earth had ever known. For 100 years, as long as supplies were abundant and cheap, all was well. Enter the sport-utility vehicle, air conditioning, two-hour commutes to work, $200 cross-country flights and skyscraper cityscapes lit up all night.

The big drain

Is this sustainable? At the risk of sounding like an environmentalist crackpot, maybe not. It's now becoming clear to scientists that half a billion years' worth of natural energy production has been drained in a century. As production has slowed amid intensified demand from emerging nations, prices have risen eightfold to allocate diminishing resource to those with the greatest ability to pay. Now scientists like Patzek say depletion has reached the phase when it will accelerate exponentially with rising needs.

Figure there's maximum another 100 years left, but after only another eight years the difficulty of acquiring it will be felt so dramatically that governments of exporters will feel compelled to stockpile instead of trade.

Continued: An inefficient solution

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