Ethanol and heavier alcohols, like biobutanol, are a transition. 
It turns out that ethanol and biobutanol, if blended correctly could
actually
it's an oxygenate, so it can increase
the octane. 
The automobile companies tell me if, 
European gasoline...
well, it's a different rating system, but if you account for the different rating system,
European
gasolines are
higher octane.
Now what does that mean? It means with today's direct-injection engines, 
lean burn and stratified burn technologies,
and with turbochargers,
you can get a gasoline engine,
which typically is 25%, maybe 30,
at best 35%
of Carnot efficiency cycle, you can get them up to diesel, 
which is 40, 45%.
So going from 30 to 45%, 
you've just increased
the amount of power per unit fuel, 
50%.  
That's profound. 
By a little increase in octane, which actually can be done with 
the blending 
of alcohols 
and let it rise rather than down blending. 
So that's a start. 
But in the end, 
if we can get the drop-in fuel substitutes, 
with the 10, 15% blends of 
ethanol, 
again as an oxygenate, 
that would be the end product.
Diesel and jet fuels, you need higher energy densities, 
even still, there's a premium on that.
We have a few policy issues that are
confronting us. We have an E10 blend wall, if you will. 
We have challenges to the E15 waiver; 
we have 
CAFE standards, increasing efficiency standards, which of course is driving 
down the consumption
for the petroleum side of the transportation
fuel.
Do you think the Renewable Fuel Standard—and of course now we're having some
 hearings and Senate activity looking at it.
Do you think it's in jeopardy?
Well, I hope not. I think 
the Fuel Standard, especially the one that 
is the market draw for 
non-sugar starch 
conversions,
this is like, cellulosic and beyond,
I think those are important. 
Again, 
the goal and the technology which I do think is achievable, 
is to get it to a point
 without subsidy. 
But, for the short-/mid-term,
we're going to need help, and these market-draw techniques are 
very important.
Let me say something about the
 fuel standards. 
I think it has a very bright side that is probably not appreciated, and
not really talked about. And, that is,
as we go to eventually 54 ½ miles per gallon for cars and
 light-duty vehicles,
for the first time, 
mass-marketed cars built in America, designed for Americans, 
can be sold abroad. 
Aside [from the fact that],
there is a very limited set of people 
who are willing to spend money on things that get 15 to 20 miles to a gallon
in large parts of the rest of world.
And, what people are finding is that you want to build 
a factory, a manufacturing factory somewhere, 
and then you want to run it as hard as possible to get the maximum return on 
your investment in the factory. 
And, so what I'm beginning to see is, factories producing automobiles in the
 United States, 
are now saying, 'You know what? We,  
with minor modifications, we can ship them abroad.' 
This is very important 
for bringing back the 
high-technology manufacturing back into the United States. 
It's important for 
our economic future,
for job growth, for all of these things. 
So, sometimes regulations like that actually are a stimulant. 
One that we already know worked 
is that, in the past
the pollutants on diesel engines were viewed as stringent. Initially, industry  
was very much against this.
But now, as Europe and the rest of the world is catching up, they are finding out that
the American diesel manufacturers have a leg up. 
They have developed this technology, and it's in a better place, and they have a leg 
up on
the world market. 
So again, 
there are some upsides, and nobody usually likes regulations, but in these particular 
instances
they've been affective. And, mostly it's
going to do a lot to decrease our dependency on oil.
We have a few questions from... 
What is the most exciting innovation that you've seen recently?
The most exciting innovation that I have seen recently? Oh, that's a tough one. 
Should I keep it to biofuels? Or could it be anything?
Let's keep it to biofuels.
I think some of the, what I call "systems biology advances" and "synthetic biology advances," 
could be potentially game changing. Not only for biofuels, but actually for 
increasing the productivity 
in agriculture,
for many, many things. And, I...
that's tremendously exciting
that as we've learned
to
put in these new metabolic pathways and control these microbes or plants,
 it's very exciting the opportunities you can do and 
 improve.
In normal plant breeding, 
perhaps many people forgot, that if you started with corn breeding
 in the 1930s, 
 the output per acre 
of corn in the United States has increased 8-fold. 
And, now
a lot of these microbes don't breed the way plants breed,
so you'll need some 
better techniques, but the opportunity
for improving
 what we do is enormous.
What are your thoughts about setting a floor price to facilitate industry 
participation and providing the stability that we need?
That's a very good question. 
Because
the backdrop of that, I'm probably talking to a whole 
room that knows this, is the fear that if you start to make investments
on pilot and commercial scale, 
what you're really worried about is
the bottom falling out of the market
of transportation fuel,
of oil going down to let's say, 
I don't think it will ever go down to $40 or 
$50 a barrel, but it could go down to, 
especially during slow economic times, 
it's conceivable that it could go down to $70 a barrel for a couple of years. 
If you're...
You've got this
beginning industry
that's pretty tough.
I raise this...
Apparently there are statutes that prohibit, for example, 
the U.S. government, as a procurer of fuels, 
really has to buy on sort of an open market, except for small little contracts, which don't 
put a big dent in their budget. 
So how do you actually guarantee the stability so that the bottom doesn't fall out for a couple 
of years? 
Now in the long term, 
we don't really expect, 
we hope that the economies pick up, 
and things return back to normal, but then back to normal means that
it's likely the price of oil
could go up.
But it's those little down slides, and 
a couple years of 
a downturn
are enough, and experience has shown before that it's enough to wipe out 
a new industry. 
So, that's something that
we as a country have to think hard about. 
Just to... and, I'll...
not too long on this question, but Brazil did that; they guaranteed a price. 
In the '70s, early '80s, they started an ethanol biofuels industry. 
The price of oil went back down to
20, 30 dollars a barrel. They got wiped out. 
They started again 
and guaranteed a floor 
for Brazilian ethanol, and
that gave them enough time
to actually improve the production methods;
so you get threefold more
sugar per acre.
The production methods
greatly improved, and the cost came down.
And, now I hear that they can be competitive—well, 
right now the sugar prices are high, so
they are selling sugar instead of ethanol, 
but they would be competitive with oil at 
40, 50, 60, 
depends on who you talk to,
dollars a barrel. So, that's pretty good.
And, so, we have the capability, it's
 not as easy as 
Brazilian sugar cane, 
but we have that capability with 
our resources.
A couple of questions have come in that are
interesting. They are
all the President's "All-of-the-Above" strategy
for energy and power resources.
Do you see natural gas as a power-generation
or as a transport fuel?
I do. Right now, for heavy trucking, 
it appears it already makes sense. If you do the math
on that,
your typical
large, heavy-duty truck
averages about 100,000 miles a year. 
Diesel prices, 4 or 
even higher, 4.50 dollars a
gallon.
Right now, 
the truck would cost $100,000
 just to modify it, which is putting in liquid nitrogen tanks and a feeder 
system; 
the same internal combustion engine can be modified. 
The prices vary; it can be as much as another $100,000, but the 
real price
after you get some competitors into the market, and they're coming in, 
would be 30 to 50,000 dollars more. 
But even at double the price of the truck, 
capital investment, 
the payback period
appears to be something like
four years.
The great thing about trucks is, every 100, 150 miles on major 
interstates,
you can put liquefied natural gas fueling stations. 
They could be supplied by trucks. 
So, you don't need a fueling station everywhere, 
and heavy-duty trucking is about 20% of our
transportation energy.
So, you can 
automatically see maybe half of that 
being off-loaded.
Long, whole freight trains, 
which have 100, 150 cars, you can carry one tank of liquefied gas;
it's a similar sort of thing. 
More problematic in light-duty vehicles 
because you need more fueling stops unless it's a centrally located fleet, but there 
are other issues.
Because now you're thinking compressed-natural gas not liquefied-natural gas.
Because
there's a huge difference between going 20 or 30,000 miles, which is
delivery-van range, and going 100,000 miles. 
Then the payback looks like it stretches 
forever.
So,
we are looking at ways to
store the natural gas in a more compact form; things like that—to nudge it. 
But we do see trains and long-haul trucks as a ready market.
One last question here. 
Our biggest trading partner, Canada, a clean-energy dialogue has been opened between the U.S. 
and Canada, 
 and can you comment on this
collaboration?
Well I think it's very important 
for many respects.  We share a lot of things.
We share, quote, a lot of industries, in the sense that if you look at the automobile manufacturing,
it kind of spills over into both countries. 
And,
it is very
important.
We also, both Canada and the U.S., grew up 
with abundant 
energy resources.
And,
as we go into the future,
where
there is real risk, significant risk, to climate change, 
we have to
figure out how to
have the energy accessible and affordable, but also much cleaner. 
So, it is very important
that we work together.
As 
Assistant Secretary 
Danielson said, biofuels and biomass are truly transformational. 
We've kind of reached our time limit for discussion this morning. 
And, again I want to express 
appreciation for your time and coming here.
And,
finally I do want to make one comment:
as you're a member of the field, I want to congratulate the scientific field of
physics
for the remarkable achievement and the exciting announcement last week 
about the Higgs Boson [particle]; that's astonishing. 
I've read a bunch of articles about it; I'm fascinated.
Well, this is 
certainly a very important discovery. 
It actually goes way back to when I was a graduate student, a post doc, 
and my work then 
was
testing this new electro-weak theory where 
the so called Higgs-magnism was used in order 
to
give substance to the theory that these 
forces needed a mass, and this was something that was concocted before that
and says, 'We've got it all figured out except for the fact that these particles, we know that 
that they have a huge mass, but they seem to be mass-less.' 
So, they're looking for a mathematical mechanism to do this. 
So, when that Higgs mechanism came along, this is really in the '60s,
and it was in the early '70s when I was working on this. 
So, it's certainly
going back to my very roots; we certainly knew about this. Now, here's one of the things, 
while very exciting, but we also want, we want 
to see a little surprise. 
For literally half a century, we knew that there should be a particle like this, 
but what scientists really delight in is, 
yeah, we see the particle, but it's got new wrinkles on it, and we don't understand 
everything;
because then our ears perk up.
Now, having said that, it's a great achievement, and I was talking to a group—
it was actually a budget committee—
yesterday, and one of the people mentioned this, 
and I said, well, I said the same thing: 
'We need a surprise; otherwise, it appears 
 we have it all figured out, except for the other 95% of the 
universe where we don't have a clue—
 the dark energy and the dark matter.' 
Well, I can see that your passion
has continued in this field. 
Mr. Secretary, thank you very, very much. I appreciate your time.
