Honda sees possible ethanol breakthrough

USA Today Reports:

Honda (HMC) announced Thursday that it may have found a breakthrough in converting leaves, plant stalks and other biowaste into the alternative fuel ethanol.

The new process makes the conversion more efficient by using a microorganism developed by a Japanese lab that can chomp its way through vegetation more efficiently than in the past. The new bugs are better at converting sugar in plants into alcohol, or as it's known in its denatured form, ethanol.

The process results in a "significant increase in production of bio-ethanol," Honda said in a statement from Tokyo. The improvements deal more effectively with "fermentation inhibitors" that get in the way of the microorganisms.

[Update 09/21] Here is another piece on ethanol as an alternative energy source by TheStreet.com: Look Past Ethanol Hype to Coal:

What's wrong with ethanol? First off, it's going to be impossible to grow enough corn and soybeans to have any impact on U.S. fuel supplies. The U.S. consumed close to 150 billion gallons of gasoline last year. The Energy Policy Act passed by Congress last year mandates production of 7.5 billion gallons of ethanol by 2012. That won't even make a dent in the problem.

Another critical issue is that ethanol absorbs water, but gasoline doesn't. Because water tends to collect in petroleum pipelines, they would need to be drained to transport ethanol. Given the cost and small volumes involved, as well as concerns that ethanol has a corrosive effect on pipelines, the consensus is that it makes more sense to ship ethanol by truck, train and boat. Setting up the infrastructure to do this will be expensive and require wide-scale changes.

... ...

Perhaps most importantly, it's unclear that ramping up ethanol production would result in lower costs than oil. Most studies suggest that the process of making a gallon of ethanol actually uses more than a gallon of fossil fuels, making ethanol more expensive. By contrast, using coal liquefaction techniques such as the Fischer-Tropsch process, the break-even cost is somewhere in the range of $25 to $35 a barrel of oil.