Ag Giants Go Wild Over Next-Generation Ethanol

By Toby Shute
August 27, 2008
Comment (3)

1 Recommendation

While the food vs. fuel debate rages on, I think most of us can agree that using corn crop residue to produce bioenergy is a pretty palatable option.

This tasty target is the subject of a new powerhouse partnership between Big Ag aces Monsanto (NYSE: MON), Deere (NYSE: DE), and Archer Daniels Midland (NYSE: ADM). The trio's objective is to figure out the best way to harvest, store, and transport corn stover -- the stalks and leaves left in the field after harvest.

When I saw the press release issued by ADM -- the biggest bioenergy bull of the lot -- my first thought was that Monsanto would be crafting some enzyme that would pave a path for the trio toward cellulosic ethanol production. But Monsanto does seeds, not superbugs. No, the MonDeLand monster just needs to get the biomass from the field to the facility. Someone else can figure out how best to gasify or ferment it.

Compared to some bioenergy initiatives, this is a seemingly modest undertaking. Folks like DuPont (NYSE: DD), BP (NYSE: BP), and General Motors (NYSE: GM) have each launched joint ventures seeking to commercialize next-generation ethanol technologies. Ethanol leader Poet LLC is also moving quickly toward corn cob-ethanol pilot production.

The corn-waste approach is actually quite appealing. I don't know who will become the cellulosic champ, but insofar as so-called corn stover proves to be a viable next-generation feedstock, the trio will take a cut of the action.

Among the three companies involved, investors in our Motley Fool CAPS community favor Deere the most, awarding the agricultural equipment leader a top five-star ranking. Think Deere will continue to plow profits back to its shareholders? Go ahead and rate the company outperform right here.

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Fool contributor Toby Shute is (hyper-)active in CAPS under the name TMFSmashy. He doesn't have a position in any company mentioned. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a corn-fed disclosure policy.

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  • On August 27, 2008, at 5:34 PM, geologics wrote: Report this Comment

    Trucking and storage is really the issue on cellulosic ethanol and switchgrass. The energy potential of the right part of the corn kernel provides a decent density of energy per unit volume. Using other parts of the plant such as cob, stalk, or even similarly switchgrass, has less energy yield per overall plant matter volume. Hauling kernels out of the fields already requires giant trucks and then giant stockpiles. Lower energy density stocks require exponentially more trucks and more storage/stockpiles. Further, what is now 'wasted' or 'unused' is the stuff which is controlling erosion over winter and then being turned into the soil in spring providing organic matter. Hauling away more organic material than is done now will necessitate more fertilizer per season. More research may be required on this one...

  • On August 27, 2008, at 7:58 PM, loucanoe wrote: Report this Comment

    This is an absolutely terrible idea--at least if we want to continue to produce argicultural products. Leaving the stover or "waste" on the ground is very beneficial in that (1) it helps protect the soil from wind and water eroision, (2) returns nutrients to the ground which, in their absence, would require more fertilizer and other nutrient additions, (3) helps maintain porosity of the soil and thus reduces the need for water since rain is more likely to be absorbed than to run off, and (4) would be detrimental to wildlife by reducing habitat and feed for species such as rabbits, quail, pheasants, prairie chickens, and deer. Going this way might make some extra profits for a farmer for a few years, but he would pay dearly over the long term.

  • On August 28, 2008, at 5:26 AM, Biofuelsimon wrote: Report this Comment

    loucanoe does make a good point. But it is worth exploring just how much stover is needed, could taking half of it in a field leave enough cover for ground-living animals and enough organic matter for the soil to retain its structure, fertility and water-retention properties. There could be quite a lot of material that could be converted into fuel. I'm very concerned about these issues in my blog. It's worth exploring the science behind ideas.

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