The same processes that agriculture reformers have long pushed on farmers for improving their land – polycultures, cover crops, perennials like switchgrass that replenish the soil – could be the key to the future of biofuels, according to venture capitalist Vinod Khosla.

In a wide-ranging talk on biofuels economics released over the last few weeks at Greentech Media, Khosla compares both the financial and environmental costs of various biomass processes, and their possible feedstock.

Corn doesn't come off well.

“For fuels, processes that can directly use all components of biomass (cellulose, hemi-cellulose, sugars, starches and lignin) may have an advantage of higher yields per ton and lower costs per ton,” he explains.

Corn ethanol basically converts sugars and starches to fuel. It's efficient, and the process is straighforward. But the corn itself costs money and degrades the soil. That's why alternative processes are needed.

HCL Cleantech, which has an experimental system in North Carolina, has what Khosla is talking about. They use concentrated hydrocholoric acid (which contains just hydrogen, oxygen and chlorine) to break down all of a plant's cellulose, producing lower-cost sugars and enough lignin to drive the process.

For North Carolina the benefits are obvious. It makes forest waste – what's left over after logs and paper-quality chips have been logged – a possible biofuel. About 20% of southern forest biomass is currently wasted, and 30% in northeast and Alaska forests, Khosla said, providing inexpensive feedstock, which in theory can yield up to four times more ethanol per acre than corn.

At 2000 gallons per acre, however, it would still take 18 million acres of land to get 36 billion gallons of fuel, the industry's target. (Total U.S. consumption of fuel comes to 280 billion gallons a year.) Sounds like a lot, but in the last decade 30 million acres have gone out of production due in part to degradation of the land.

That's where better land management practices can come in on the side of cellulosic alcohol. Switchgrass, miscanthus and sorghum can all replenish soil depleted by the production of row crops like corn and sugar cane, and can produce biomass for ethanol production if their cellulose can all be captured. If you alternate corn and soybeans on land for 10 years, then switch to these perennials for 10 years, you're replenishing the soil and creating economic cellulose feedstock at the same time.

Winter cover crops that let the soil rest can deliver cellulose, as can polycultures, in which a variety of plants are used rather than a single plant, he said. Thus while a manufacturing process using cellulose may cost more than one using starches and sugars, it is more sustainable and even cheaper in the long run, he concluded.

“Well over a billion acres of land that was formerly agricultural has been abandoned worldwide because of degradation due to poor farming practices, and there is another billion acres of underutilized grassland, savanna and shrubland that could be used as well,” he concluded. “Thinking globally, I suspect that pasture intensification and the land that would free up as the single largest lever that can be pulled to produce biofuels.”

Thus a little technology innovation really can make biofuels scalable and at costs comparable to those of oil, especially as oil is not getting cheaper while innovation in biofuels is still to come, he concluded.