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George Schultz & James Woolsey on plug-in hybrids, cellulose ethanol etc.
Jun 15, 2005 (From the CalCars-News archive)
This posting originally appeared at CalCars-News, our newsletter of breaking CalCars and plug-in hybrid news. View the original posting here.
Want more? Become a subscriber to CalCars-News:­newsroom/­050610.cfm - Highly readable EXCERPTS from a policy paper, "Oil and Security" by the recently reconstituted "Committee on the Present Danger" -- in particular, a very good basic summary of the promise of cellulose ethanol. It is also significant that the authors include the often-overlooked light-weighting of vehicles (while improving crash-resistance).

by George P. Shultz and R. James Woolsey

George P.Shultz is a former Secretary of State and is currently Distinguished Fellow at the Hoover Institutiion, Stanford University. R. James Woolsey is a former Director of Central Intelligence and is currently Vice President of Booz/Allen Hamilton. The two are co-Chairmen of the Committee on the Present Danger.

(With Senate debate of the Energy Bill imminent, this paper is being posted at this time. It has been submitted to the CPD board for discussion, commentary and membership approval.)


This paper could well be called, "It's the Batteries, Stupid." Four years ago, on the eve of 9/11, the need to reduce radically our reliance on oil was not clear to many and in any case the path of doing so seemed a long and difficult one. Today both assumptions are being undermined by the risks of the post-9/11 world and by technological progress in fuel efficiency and alternative fuels.

We spell out below the risks of petroleum dependency, particularly the vulnerability of the petroleum infrastructure in the Middle East to terrorist attack a single well-designed attack could send oil to well over $100/barrel and devastate the world's economy. That reality, among other risks, and the fact that our current transportation infrastructure is locked in to oil, should be sufficient to convince any objective observer that oil dependence today creates serious and pressing dangers for the US and other oil-importing nations.

We propose in this paper that the government vigorously encourage and support at least six technologies: two types of alternative fuels that are beginning to come into the market (cellulosic ethanol and biodiesel derived from a wide range of waste streams), two types of fuel efficient vehicles that are now being sold to the public in some volume (hybrid gasoline-electric and modern clean diesels), and one vehicle construction technique, the use of manufactured carbon-carbon composites, that is now being used for aircraft and racing cars and is quite promising as a way of reducing vehicle weight and fuel requirements while improving safety.

The sixth technology, battery improvement to permit "plug-in" hybrid vehicles, will require some development although nothing like the years that will be required for hydrogen fuel cells. It holds, however, remarkable promise. Improving batteries to permit them to be given an added charge when a hybrid is garaged, ordinarily at night, can substantially improve mileage, because it can permit hybrids to use battery power alone for the first 10-30 miles. Since a great many trips fall within this range this can improve the mileage of a hybrid vehicle from, say, 50 mpg to over 100 mpg (of oil products). Also, since the average residential electricity cost is 8.5 cents/kwh (and in many areas, off-peak nighttime cost is 2-4 cents/kwh) this means that much of a plug-in hybrid's travel would be on the equivalent of 50 cent/gallon gasoline (or, off-peak, on the equivalent of 12-25 cent/gallon gasoline).

A plug-in hybrid averaging 125 mpg, if its fuel tank contains 85 per cent cellulosic ethanol, would be obtaining about 500 mpg. If it were constructed from carbon composites the mileage could double, and, if it were a diesel and powered by biodiesel derived from waste, it would be using no oil products at all.

What are we waiting for?

<snip> 7 factors


The above considerations suggest that government policies with respect to the vehicular transportation market should point in the following directions:

1. Encourage improved vehicle mileage, using technology now in production. Three currently available technologies stand out to improve vehicle mileage.


First, modern diesel vehicles are coming to be capable of meeting rigorous emission standards (such as Tier 2 standards, being introduced into the U.S., 2004-08). In this context it is possible without compromising environmental standards to take advantage of diesels' substantial mileage advantage over gasoline-fueled internal combustion engines.

Substantial penetration of diesels into the private vehicle market in Europe is one major reason why the average fleet mileage of such new vehicles is 42 miles per gallon in Europe and only 24 mpg in the US. Although the U.S. has, since 1981, increased vehicle weight by 24 per cent and horsepower by 93 per cent, it has essentially improved mileage not at all in that near-quarter century (even though in the 12 years from 1975 to 1987 the US improved the mileage of new vehicles from 15 to 26 mpg).

Hybrid gasoline-electric

Second, hybrid gasoline-electric vehicles now on the market show substantial fuel savings over their conventional counterparts. The National Commission on Energy Policy found that for the four hybrids on the market in December 2004 that had exact counterpart models with conventional gasoline engines, not only were mileage advantages quite significant (10-15 mpg) for the hybrids, but in each case the horsepower of the hybrid was higher than the horsepower of the conventional vehicle. (ETES p. 11) If automobile companies wish to market hybrids by emphasizing hotter performance rather than fuel conservation they can do so, consistent with the facts.

Light-weight Carbon Composite Construction

Third, constructing vehicles with inexpensive versions of the carbon fiber composites that have been used for years for aircraft construction can substantially reduce vehicle weight and increase fuel efficiency while at the same time making the vehicle considerably safer than with current construction materials. This is set forth thoroughly in the 2004 report of the Rocky Mountain Institute's Winning the Oil Endgame ("WTOE"). Aerodynamic design can have major importance as well. This breaks the traditional tie between size and safety. Much lighter vehicles, large or small, can be substantially more fuel-efficient and also safer. Such composite use has already been used for automotive construction in Formula 1 race cars and is now being adopted by BMW and other automobile companies. The goal is mass-produced vehicles with 80% of the performance of hand-layup aerospace composites at 20% of the cost. Such construction is expected to approximately double the efficiency of a normal hybrid vehicle without materially affecting manufacturing cost. (WTOE 64-66).

2. Encourage the commercialization of alternative transportation fuels that can be available soon, are compatible with existing infrastructure, and can be derived from waste or otherwise produced cheaply.

Biomass ethanol

The use of ethanol produced from corn in the U.S. and sugar cane in Brazil has given birth to the commercialization of an alternative fuel that is coming to show substantial promise, particularly as new feedstocks are developed. Some six million vehicles in the U.S. and all vehicles in Brazil other than those that use solely ethanol are capable of using ethanol in mixtures of up to 85 percent ethanol and 15 per cent gasoline (E-85); these are called Flexible Fuel Vehicles ("FFV") and require, compared to conventional vehicles, only a somewhat different kind of material for the fuel line and a differently-programmed computer chip. The cost of incorporating this feature in new vehicles is trivial. Also, there are no large-scale changes in infrastructure required for ethanol use. It may be shipped in tank cars, and mixing it with gasoline is a simple matter.

Although human beings have been producing ethanol, grain alcohol, from sugar and starch for millennia, it is only in recent years that the genetic engineering of biocatalysts has made possible such production from the hemicellulose and cellulose that constitute the substantial majority of the material in most plants. The genetically-engineered material is in the biocatalyst only; there is no need for genetically modified plants. Typically the organism that is engineered to digest the C5 sugars freed by the hydrolization of the hemicellulose also produces the enzymes that hydrolyze the cellulose.

These developments may be compared in importance to the invention of thermal and catalytic cracking of petroleum in the first decades of the 20th century processes which made it possible to use a very large share of petroleum to make gasoline rather than the tiny share that was available at the beginning of the century. For example, with such genetically-engineered biocatalysts it is not only grains of corn but corn cobs and most of the rest of the corn plant that may be used to make ethanol.

Such biomass, or cellulosic, ethanol is now likely to see commercial production begin first in a facility of the Canadian company, Iogen, with backing from Shell Oil, at a cost of around $1.30/gallon. The National Renewable Energy Laboratory estimates costs will drop to around $1.07/gallon over the next five years, and the Energy Commission estimates a drop in costs to 67-77 cents/gallon when the process is fully mature (ETES p. 75). The most common feedstocks will likely be agricultural wastes, such as rice straw, or natural grasses such as switchgrass, a variety of prairie grass that is often planted on soil bank land to replenish the soil's fertility. There will be decided financial advantages in using as feedstocks any wastes which carry a tipping fee (a negative cost) to finance disposal: e.g. waste paper, or rice straw, which cannot be left in the fields after harvest because of its silicon content.

Old or misstated data are sometimes cited for the proposition that huge amounts of land would have to be introduced into cultivation or taken away from food production in order to have such biomass available for cellulosic ethanol production. This is incorrect. The National Commission on Energy Policy reported in December that, if fleet mileage in the U.S. rises to 40 mpg -- somewhat below the current European Union fleet average for new vehicles of 42 mpg and well below the current Japanese average of 47 mpg then as switchgrass yields improve modestly to around 10 tons/acre it would take only 30 million acres of land to produce sufficient cellulosic ethanol to fuel half the U.S. passenger fleet. (ETES pp. 76-77). By way of calibration, this would essentially eliminate the need for oil imports for passenger vehicle fuel and would require only the amount of land now in the soil bank (the Conservation Reserve Program ("CRP") on which such soil-restoring crops as switchgrass are already being grown. Practically speaking, one would probably use for ethanol production only a little over half of the soil bank lands and add to this some portion of the plants now grown as animal feed crops (for example, on the 70 million acres that now grow soybeans for animal feed). In short, the U.S .and many other countries should easily find sufficient land available for enough energy crop cultivation to make a substantial dent in oil use. (Id.)

There is also a common and erroneous impression that ethanol generally requires as much energy to produce as one obtains from using it and that its use does not substantially reduce global warming gas emissions. The production and use of ethanol merely recycles in a different way the CO2 that has been fixed by plants in the photosynthesis process. It does not release carbon that would otherwise stay stored underground, as occurs with fossil fuel use, but when starch, such as corn, is used for ethanol production much energy, including fossil-fuel energy, is consumed in the process of fertilizing, plowing, and harvesting. Even starch-based ethanol, however, does reduce greenhouse gas emissions by around 30 per cent. Because so little energy is required to cultivate crops such as switchgrass for cellulosic ethanol production, and because electricity can be co-produced using the residues of such cellulosic fuel production, reductions in greenhouse gas emissions for celluslosic ethanol when compared to gasoline are greater than 100 per cent. The production and use of cellulosic ethanol is, in other words, a carbon sink. (ETES p. 73)


The National Commission on Energy Policy pointed out some of the problems with most current biodiesel "produced from rapeseed, soybean, and other vegetable oils as well as . . . used cooking oils." It said that these are "unlikely to become economic on a large scale" and that they could "cause problems when used in blends higher than 20 percent in older diesel engines". It added that "waste oil is likely to contain impurities that give rise of undesirable emissions." (ETES p. 75)

The Commission notes, however, that biodiesel is generally "compatible with existing distribution infrastructure" and outlines the potential of a newer process ("thermal depolymerization") that produces biodiesel without the above disadvantages from "animal offal, agricultural residues, municipal solid waste, sewage, and old tires". It points to the current use of this process at a Conagra turkey processing facility in Carthage, Missouri, where a "20 million commercial-scale facility" is beginning to convert turkey offal into "a variety of useful products, from fertilizer to low-sulfur diesel fuel" at a potential average cost of "about 72 cents per gallon." (ETES p. 77)

Other Alternative Fuels

Progress has been made in recent years on utilizing not only coal but slag from strip mines, via gasification, for conversion into diesel fuel using a modern version of the gasified-coal-to-diesel process used in Germany during World War II.

Qatar has begun a large-scale process of converting natural gas to diesel fuel.

Outside the realm of conventional oil, the tar sands of Alberta and the oil shale of the Western U.S. exist in huge deposits, the exploitation of which is currently costly and accompanied by major environmental difficulties, but both definitely hold promise for a substantial increases in oil supply.

Plug-in hybrids and battery improvements

A modification to hybrids could permit them to become "plug-in-hybrids," drawing power from the electricity grid at night and using all electricity for short trips. The "vast majority of the most fuel-hungry trips are under six miles" and "well within the range" of current (nickel-metal hydride) batteries' capacity, according to Huber and Mills (The Bottomless Well, 2005, p. 84). Other experts, however, emphasize that whether with existing battery types (2-5 kwh capacity) or with the emerging (and more capable) lithium batteries, it is important that any battery used in a plug-in hybrid be capable of taking daily charging without being damaged and be capable of powering the vehicle at an adequate speed. By most assessments some battery development will be necessary in order for this to be the case. Such development should have the highest research and development priority because it promises to revolutionize transportation economics and to have a dramatic effect on the problems caused by oil dependence.

With a plug-in hybrid vehicle one has the advantage of an electric car, but not the disadvantage. Electric cars cannot be recharged if their batteries run down at some spot away from electric power. But since hybrids have tanks containing liquid fuel (gasoline and/or ethanol, diesel and/or biodiesel) plug-in hybrids have no such disadvantage. Moreover the attractiveness to the consumer of being able to use electricity from overnight charging for a substantial share of the day's driving is stunning. The average residential price of electricity in the US is about 8.5 cents/kwh, one-quarter the cost of $2/gallon gasoline. So powering one's vehicle with electricity purchased at such rates is roughly the equivalent of being able to buy gasoline at 50 cents/gallon instead of the more than $2/gallon that it presently costs in the U.S. Moreover, many utilities sell off-peak power for 2-4 cents/kwh the equivalent of 12-to-25-cents/gallon gasoline. (Id. p. 83) Given the burdensome cost imposed by current fuel prices on commuters and others who need to drive substantial distances, the possibility of powering one's family vehicle with fuel that can cost as little as one-twentieth of today's gasoline (in the U.S. market) should solve rapidly the question whether there would be public interest in and acceptability of plug-in hybrids.

Although the use of off-peak power for plug-in hybrids should not initially require substantial new investments in electricity generation, greater reliance on electricity for transportation should lead us to look particularly to the security of the electricity grid. In the U.S. the 2002 report of the National Academies of Science, Engineering, and Medicine ("Making the Nation Safer") emphasized particularly the need to improve the security of transformers and of the Supervisory Control and Data Acquisition (SCADA) systems in the face of terrorist threats. The National Commission on Energy Policy has seconded those concerns. With or without the advent of plug-in hybrids, these electricity grid vulnerabilities require urgent attention.


The dangers from oil dependence in today's world require us both to look to ways to reduce demand for oil and to increase supply of transportation fuel by methods beyond the increase of oil production.

The realistic opportunities for reducing demand soon suggest that government policies should encourage hybrid gasoline-electric vehicles, particularly the battery developments needed to bring plug-in versions thereof to the market, and modern diesel technology. The realistic opportunities for increasing supply of transportation fuel soon suggest that government policies should encourage the commercialization of alternative fuels that can be used in the existing infrastructure: cellulosic ethanol and biodiesel. Both of these fuels could be introduced more quickly and efficiently if they achieve cost advantages from the utilization of waste products as feedstocks.

The effects of these policies are multiplicative. All should be pursued since it is impossible to predict which will be fully successful or at what pace, even though all are today either beginning commercial production or are nearly to that point. The battery development for plug-in hybrids is of substantial importance and should for the time being replace the current r&d emphasis on automotive hydrogen fuel cells.

If even one of these technologies is moved promptly into the market, the reduction in oil dependence could be substantial. If several begin to be successfully introduced into large-scale use, the reduction could be stunning. For example, a 50-mpg hybrid gasoline/electric vehicle, on the road today, if constructed from carbon composites would achieve around 100 mpg. If it were to operate on 85 percent cellulosic ethanol or a similar proportion of biodiesel fuel, it would be achieving hundreds of miles per gallon of petroleum-derived fuel. If it were a plug-in version operating on upgraded lithium batteries so that 20-30 mile trips could be undertaken on its overnight charge before it began utilizing liquid fuel at all, it could be obtaining in the range of 1000 mpg (of petroleum).

A range of important objectives economic, geopolitical, environmental would be served by our embarking on such a path. Of greatest importance, we would be substantially more secure.

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