Advisers to the Nation on Science, Engineering, and Medicine

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences.

The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering.

The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine.

The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council.

www.national-academies.org

This page intentionally left blank.

Energy, which has always played a critical role in our country’s national security, economic prosperity, and environmental quality, has over the last two years been pushed to the forefront of national attention as a result of several factors:

• World demand for energy has increased steadily, especially in developing nations. China, for example, saw an extended period (prior to the current worldwide economic recession) of double-digit annual increases in economic growth and energy consumption.

• About 56 percent of the U.S. demand for oil is now met by depending on imports supplied by foreign sources, up from 40 percent in 1990.

• The long-term reliability of traditional sources of energy, especially oil, remains uncertain in the face of political instability and limitations on resources.

• Concerns are mounting about global climate change—a result, in large measure, of the fossil-fuel combustion that currently provides most of the world’s energy.

• The volatility of energy prices has been unprecedented, climbing in mid-2008 to record levels and then dropping precipitously—in only a matter of months—in late 2008.

• Today, investments in the energy infrastructure and its needed technologies are modest, many alternative energy sources are receiving insufficient attention, and the nation’s energy supply and distribution systems are increasingly vulnerable to natural disasters and acts of terrorism.

All of these factors are affected to a great degree by the policies of government, both here and abroad, but even with the most enlightened policies the overall energy enterprise, like a massive ship, will be slow to change course. Its complex mix of scientific, technical, economic, social, and political elements means that the necessary transformational change in how we generate, supply, distribute, and use energy will be an immense undertaking, requiring decades to complete.

To stimulate and inform a constructive national dialogue about our energy future, the National Academy of Sciences and the National Academy of Engineering initiated a major study in 2007, “America’s Energy Future: Technology Opportunities, Risks, and Tradeoffs.” The America’s Energy Future (AEF) project was initiated in anticipation of major legislative interest in energy policy in the U.S. Congress and, as the effort proceeded, it was endorsed by Senate Energy and Natural Resources Committee Chair Jeff Bingaman and former Ranking Member Pete Domenici.

The AEF project evaluates current contributions and the likely future impacts, including estimated costs, of existing and new energy technologies. It was planned to serve as a foundation for subsequent policy studies, at the Academies and elsewhere, that will focus on energy research and development priorities, strategic energy technology development, and policy analysis.

The AEF project has produced a series of five reports, including this report on alternative liquid fuels for transportation, designed to inform key decisions as the nation begins this year a comprehensive examination of energy policy issues. Numerous studies conducted by diverse organizations have benefited the project, but many of those studies disagree about the potential of specific technologies, particularly those involving alternative sources of energy such as biomass, renewable resources for generation of electric power, advanced processes for generation from coal, and nuclear power. A key objective of the AEF series of reports is thus to help resolve conflicting analyses and to facilitate the charting of a new direction in the nation’s energy enterprise.

The AEF project, outlined in Appendix A, included a study committee and three panels that together have produced an extensive analysis of energy technology options for consideration in an ongoing national dialogue. A milestone in the project was the March 2008 “National Academies Summit on America’s Energy Future” at which principals of related recent studies provided input to the AEF study committee and helped to inform the panels’ deliberations. A report chronicling the event, The National Academies Summit on America’s Energy Future:

Summary of a Meeting (Washington, D.C.: The National Academies Press), was published in October 2008.

The AEF project was generously supported by the W.M. Keck Foundation, Fred Kavli and the Kavli Foundation, Intel Corporation, Dow Chemical Company Foundation, General Motors Corporation, GE Energy, BP America, U.S. Department of Energy, and our own academies.

Ralph J. Cicerone, President

National Academy of Sciences

Chair, National Research Council

Charles M. Vest, President

National Academy of Engineering

Vice Chair, National Research Council

This page intentionally left blank.

Transportation plays a key role in the economies of industrialized societies, especially in light of increasing globalization. As in most countries, transportation in the United States has relied heavily on petroleum-based fuels. The influence of volatile oil prices on the U.S. economy, increasing U.S. dependence on imported oil and its effect on U.S. energy security, and recognition of the large contribution of transportation to emissions of greenhouse gases call for development of alternative transportation fuels from domestic sources that have lower greenhouse gas emissions than do petroleum-based fuels. Biofuels and coal-to-liquid fuels are options that can improve the nation’s energy security inasmuch as biomass is a renewable resource and the United States has the world’s largest known coal reserves. However, those options raise important questions about economic viability, carbon impact, and technology status. To assess the technological status, costs, and environmental effects of alternative liquid transportation fuels produced from coal and biomass, the National Research Council convened the Panel on Alternative Liquid Transportation Fuels. The panel’s work was part of a larger study initiated by the National Academy of Sciences and the National Academy of Engineering—the America’s Energy Future project (Appendix A).

In approaching its task (Appendix B), the 16-member panel of experts (Appendix C) began by reviewing the literature and also gathered input from invited speakers (Appendix D) on the production of biofuels and coal-to-liquid fuels. Because of the uncertainties and widely different opinions expressed in the literature, the panel decided to conduct its own analyses of the costs, potential supply, and life-cycle greenhouse gas emissions of alternative fuels produced from biomass, coal, or both. An advantage of conducting its own analyses was that the

panel could use a consistent basis and assumptions to compare the costs and environmental effects of different alternative fuel options. As the panel was writing its report (from November 2007 to November 2008), the commodity prices and capital costs of building energy plants fluctuated widely. The panel therefore included sensitivity analyses of feedstock costs, capital costs, and oil prices to see how they might affect choices of fuels.

The panel concluded that alternative liquid fuel technology can be deployable and supply a substantial volume of clean fuels for U.S. transportation at a reasonable cost. Transforming the U.S. transportation fuel system from domination by petroleum-based fuels to supply by various domestic sources will take several decades. Sustained and aggressive efforts are needed to accelerate the further development and penetration of alternative liquid fuel technologies.

I thank the panel members and the liaisons from the Committee on America’s Energy Future for dedicating much time to the study. We were on a tight schedule to complete a complex task. Each member devoted time and effort to the study because we recognized not only the importance of achieving energy security for the nation but also, and more importantly, the immediate need for demonstration of the technical feasibility and economic viability of alternative liquid transportation fuels from domestic sources.

Michael P. Ramage, Chair

Panel on Alternative Liquid Transportation Fuels

This report is a product of the cooperation and contributions of many people. The members of the panel thank the consultants and the following persons who provided input to the panel:

The members of the panel also thank all the speakers who provided briefings to the panel. (Appendix D contains a list of presentations to the panel.)

This report has been reviewed in draft form by persons chosen for their diverse perspectives and technical expertise in accordance with procedures approved by the National Research Council’s Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making its published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence,

and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We thank the following individuals for their review of this report:

Although the reviewers listed above have provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations, nor did they see the final draft of the report before its release. The review of the report was overseen by Elisabeth M. Drake, Massachusetts Institute of Technology, and Robert A. Frosch, Harvard University. Appointed by the National Research Council, they were responsible for making certain that an independent examination of this report was carried out in accordance with institutional procedures and that all of the review comments were carefully considered. Responsibility for the final content of the report rests entirely with the authoring panel and the institution.

This page intentionally left blank.