Attendees of the two-day conference, which was partly sponsored by the U.S. Army War College, didn’t exactly make for a treehugging crowd. They included security analysts from Fort Bragg, economists, energy consultants to large investors and governments, former oil industry executives and scientists developing alternatives to oil and coal.

2009 U.S. energy consumption by source, U.S. Environmental Protection Agency

That greenhouse gases are taking a toll on climate, environment and health was never in question during the conference. Indeed, speakers expounded on the costly consequences that U.S. dependency on fossil fuels has on healthcare at home and defense overseas.

James Bartis, a senior policy researcher with the RAND Corp., a global policy think tank with an office in the Middle East emirate of Qatar, was one of the speakers at the conference. In testimony before the U.S. Senate Committee on Energy and Natural Resources two years ago, Bartis urged that there was “a compelling need to reduce greenhouse gas emissions” and a need for research on technologies that would allow us to use less oil, coal and natural gas, the three fossil fuels linked to almost 90 percent of the emissions.

At the NCSU conference, where he participated on a panel of alternative energy experts, Bartis was asked why lawmakers aren’t heeding his advice more. “There’s a lot of money to be had [with fossil fuels] and there’s a lot of inertia,” he responded.

About 83 percent of the U.S. economy runs on fossil fuels and Alan Hegburg, a senior fellow at the Center for Strategic and International Studies and the conference’s keynote speaker, didn’t expect much will change the next 10 years.

Coal is plentiful and cheap – no country has more coal reserves than the U.S. Crude oil is also still plentiful and cheap to extract – in the Middle East, which has more than half of the world’s oil reserves.

Fossil fuels pack a lot of energy. Their production is efficient. The delivery infrastructure is finetuned. And markets are well developed. In contrast, energy alternatives cost more and are less energy-dense. And functioning delivery systems to drive demand are rudimentary at best where they exist.

“Getting this train to change tracks will take a huge effort,” Hegburg said.

Then why try? Speakers at the conference offered as the main reason the hidden costs of fossil fuels.

Generating electricity from coal and burning oil for transportation is a dirty business. In 2005, pollution caused an estimated $120 billion in damages to human health, crops, timber yields, buildings and recreation nationwide, according to a report the National Research Council published 18 months ago.

Another study published a few weeks ago in the Annals of the New York Academy of Sciences estimated that extracting, transporting, processing and combusting coal caused $345 billion in damages to the health and the environment in 2005.

Factor in the hidden costs and electricity would be at least twice as expensive, according to the study. Do the same with oil and gasoline prices would be at least $1.50 per gallon higher, Bartis said.

Suddenly, wind and solar energy and investments to boost energy efficiency and conservation become competitive. Calls from research hubs for more funding to make cleaner energy alternatives cheaper and more efficient begin to make sense.

North Carolina’s Research Triangle is one of those hubs.

Last summer, the University of North Carolina at Chapel Hill, Duke University, NCSU and the Research Triangle Park-based research institute RTI International formed the Research Triangle Solar Fuels Institute to bring together local experts in chemistry, electrical engineering, material sciences and nanotechnology with the goal of developing technologies that tap the sun and make liquid fuel.

Researchers at RTI are working on capturing and reusing carbon dioxide – the most prominent greenhouse gas in the Earth’s atmosphere – producing bio-crude from organic waste and developing a nanotechnology light bulb that promises to be more energy efficient than a fluorescent light and doesn’t contain harmful mercury. Not far from RTI, at the corporate biotech research lab of Swiss agribusiness giant Syngenta, researchers have genetically engineered corn that requires less water and energy to make fuel ethanol.

And North Carolina, the third largest U.S. biotech hub by number of companies, has targeted biodiesel and ethanol from corn and biomass to meet an ambitious goal: By 2017, 10 percent of liquid fuels sold in the state should be locally grown and produced. This target goes hand-in-hand with the federal mandate that oil companies increase the use of renewable fuels such as ethanol in gasoline blends.

The federal ethanol mandate had its critics at the NCSU conference – diverting about one-third of the U.S. corn crop into ethanol production has contributed to rising food prices. But other speakers credited the mandate for keeping the discussion alive at a time when energy-related research funding is threatened by massive cuts.

David Dayton

“Because there’s a mandate, climate control, security issues and oil is $100 a barrel, at least we’re still talking about alternative fuels,” said David Dayton, biomass program manager at RTI’s energy research lab.

How much military activities cost us to maintain our fossil fuel dependency is difficult to determine – neither of the two studies provided estimates – but conference speakers said ensuring a steady supply of crude oil drives national security spending.

With about 19 million barrels daily, the U.S. consumed more oil in 2005 than the next three biggest consumers, China, Japan and India, together, figures of the U.S. Energy Information Administration show.

Transportion, which in 2004 made up more than 60 percent of the U.S. oil demand, has become the dominant driver over the past 50 years.

Source: Annual Energy Review

The increase in demand has influenced which regions are important for the U.S. to protect.

The Middle East, which sits on more than half of the world’s oil reserves, has gained importance in U.S. national security spending in the past 30 years, even though former Defense Secretary Donald Rumsfeld insisted that invading Iraq had nothing to do with oil, as Peter Maass, author of “Crude World: The Violent Twilight of Oil,” wrote on his blog last summer.

A study published two years ago estimated that between 1976 and 2007 the U.S. spent $6.9 trillion in the Persian Gulf region on military efforts, all of them oil-related. After the end of the Cold War in Europe, Persian Gulf military expenses took up an ever increasing portion of the entire U.S. defense spending in the 1990s and jumped to 91 percent in 2001. By 2007, their portion of the entire U.S. defense spending had decreased to about 80 percent.

Nobel Prize winning economist Joseph Stiglitz and Linda Bilmes, a leading expert on U.S. public finance, estimated in the Washington Post last year that  the war in Iraq cost the U.S. in excess of $3 trillion and drove the price of oil up by about $10 per barrel.

This focus on the Persian Gulf region reflects the fact that more oil is shipped through the Strait of Hormuz, which connects the Persian Gulf with the Gulf of Oman and the Arabian Sea, than through any other narrow channel through which oil is shipped on global sea routes, according to numbers of the U.S. Energy Information Administration.

Every day, an average 15.5 million barrels of oil pass through the Strait of Hormuz, or about 18.5 percent of the daily oil production worldwide. More than three-fourths of the shipments are destined for Asian countries.

Source: WTRG Economics

Whether the U.S. investment to keep the oil flowing through the Strait of Hormuz was necessary is debatable, two speakers at the NCSU conference argued.

Eugene Gholz of the University of Texas Center for Energy Security and Ann Korin of the Institute for the Analysis of Globa Security argued that the price of crude is influenced mainly by production levels in countries that belong to OPEC, the Organization of Petroleum Exporting Countries.

It makes more sense for the U.S. to diversify energy consumption than to spend billions on military campaigns in the Persian Gulf or on currying favors with members of the OPEC cartel, Korin and Gholz suggested.

Once 15 percent to 20 percent of all of the vehicles in the U.S. can run on multiple fuels, Gholz said, the infrastructure to deliver gasoline alternatives will follow.

It’s advice North Carolina is heeding.

In addition to its commitment to boost the use of fuel ethanol made from plant fibers, the state is also at the forefront of establishing charging stations for plug-in electric vehicles, or PEVs. The Research Triangle is projected to get about 200 of the charging stations within the next year.

As a result, North Carolina is among the states where Nissan will fill the initial 50,000 orders for the Leaf, the first mass-produced, affordable electric car. The Leaf is not sold through dealerships. Deliveries started in December and January on the West Coast. The first cars are scheduled for delivery in North Carolina in April. (More on PEVs and the Leaf here.)

On Saturday, the day after the NCSU conference, Nissan brought about two dozen Leaf cars to the Raleigh farmers market for test drives.

Genetically modified trees could be next in line for global public scrutiny.

Much of the Hawaiian papaya crop is already grown on trees modified to resist a fungus that devastated the majority of Hawaii’s unmodified papaya plantations. A plum tree modified to resist blight and a tropical eukalyptus tree that can deal with freezing temperatures in the southeastern U.S. are up for regulatory approval and genetically modified trees for wood products, including biomass to make cellulosic ethanol, are being grown on research stations nationwide.

Anticipating criticism, academic and corporate proponents of biotech trees banded together to nip a “Frankenwoods” scare in the bud.

The effort was spearheaded by two nonprofits based in North Carolina’s Research Triangle area, the Institute of Forest Biotechnology and the Biofuels Center of North Carolina, and generated stewardship principles that promote transparency of the genetic modification and the tree’s origin.

Steven Burke

The 426-acre campus of the Biofuels Center, a former U.S. Department of Agriculture tobacco research station about 30 miles north of Research Triangle Park, is also the first field study site where genetically modified forest trees will be grown in accordance with the stewardship principles.

“We will soon have on this campus four examples of biotech trees,” said Steven Burke, president of the Biofuels Center.

N.C. State University researchers already planted about 40 cottonwood trees that are genetically modified to grow faster and produce less lignin, a naturally occurring polymer that strengthens and hardens wood but is costly to remove to make cellulosic ethanol.

Pest-resistant cottonwoods next to non-modified cottonwoods in an Oregon research study.

In the next few months, another 250 cottonwood trees that have been modified at Oregon State University to not only grow faster but also tolerate drought will be added. And in March, up to 30 American chestnut trees and 15 elm trees modified to be blight-resistant will be planted on the Biofuels Center campus.

David Harry and Steve Strauss, two forest biotech researchers at Oregon State University, argue in an essay that biotech trees are important because of the challenges posed by a growing world population, climate change and proliferating pests.

The biotech trees are important to companies like MeadWestvaco and Weyerhaeuser because they promise profitable wood products. MeadWestvaco and Weyerhaeuser sponsored the work the Institute of Forest Biotechnology did to come up with the stewardship principles and retired executive George Weyerhaeuser Jr. is the institute’s chairman.

They are also important to the South, a region that according to the U.S. Department of Agriculture’s Forest Service generates about 60 percent of the U.S. timber products, almost all of them from private forests. Demand for timber products is down, because the residential home construction industry is struggling.

And they are important to North Carolina, which has pledged to ramp up consumption of state-grown and state-produced biofuels to 10 percent of liquid fuels by 2017.

“It’s reasonable to envision a future, where North Carolina has a number of genetically modified trees as feedstocks for cellulosic biofuels,” Burke said.

This future must pass muster with the USDA’s Animal and Plant Health Inspection Service.

To do so, a biotech tree may pose no more of a plant pest risk than a non-modified tree, according to APHIS spokesman R. Andre Bell. Once it is approved, it can be imported, transported across state lines, or grown commercially in the U.S. without further regulatory oversight.

Environmental groups have questioned whether that’s enough to protect natural forests. They want to ban biotech trees because they are concerned they will mix with natural species, outgrow them and take their resources. (Comments by the Sierra Club here, by the Global Justice Ecology Project here and by the Biosafety Information Centre here.)

The stewardship principles don’t address those concerns. Rather, they are meant to generate good will by promising to identify genetically modified wood grown anywhere in the world.

The Institute of Forest Biotechnology has published the principles and is soliciting public input here.

The next step, said institute president Adam Costanza, is to have forest products companies commit to the principles in writing. But adherence will be on the honor system, Costanza acknowledged. “There’s no way to enforce something mandatory.”

Biofuel crops on a roadside near Raleigh. Photo: NCDOT

Sherrod heads NCDOT’s Roadside Environmental Unit, which is charged with keeping the state’s medians and roadsides safe and aesthetically pleasing. The unit is responsible for mowing, stormwater and erosion control, and the 25-year-old wildflower program. While many states have similar wildflower plantings, only two—North Carolina and Utah—have begun exploiting the potential of roadsides as a source of fuel.

The roadside biofuel project aims to answer two questions: whether it is feasible to grow biofuel crops on the state’s roadsides, where soil tends to be poor and compacted, and whether it is feasible to do so cost-effectively. Already, the first question has been answered. This year, Dr. Matthew Veal of N.C. State University extracted more than 100 gallons of canola oil from plants grown on four one-acre pilot sites across the state. This was mixed with conventional diesel to create what is known as B20, a blend of 20 percent biofuel and 80 percent conventional. Sherrod says that this mixture is used because diesel engines do not have to be modified in order to use it.

Canola being harvested from a pilot plot in June 2010. Photo: NCDOT

Canola seeds ready for extraction into biodiesel. Photo: NCDOT

Whether biofuel can be produced cost-effectively is the more challenging question. The initial pilot project was designed to test different subclimates and tillage regimes. But Sherrod says that farming small, disparately located plots is about as efficient as running to four different supermarkets across a county to shop the sales. They are now looking to scale up with larger plots that will allow them to farm more efficiently; at that point they can compare certain fixed costs. “We know what it costs to mow a mile,” he says. Now they would like to know what it costs to till, plant, and harvest a mile of crops.

As Sherrod points out, one way or another, large machines are going to be servicing these roadsides. “Our objective,” he says, “is for dollars of mowing to be reallocated to energy.” The same amount of money might be spent, but it would produce a tangible benefit in the form of biodiesel.

Knowing that corn-based ethanol has gotten a bit of a black eye in the renewable energy community in recent years, I asked Veal to talk me through the difference between ethanol and biodiesel. One argument against ethanol is characterized as “food versus fuel”: ethanol production would take large amounts of acreage currently used for food crops. The roadside biofuel program, though, would be using marginal lands, not North Carolina’s rich agricultural fields. (As an aside, Veal suggests that a largescale roadside biofuel program might also provide jobs for farmers.)

Another problem with ethanol is that of embedded energy—the amount of fuel that is used to plant, vertilize, harvest, and distill the product. Veal says that creating biodiesel is less energy-intensive than creating ethanol, because rather than using heat for distillation, the final product is created through a chemical reaction that requires less input of energy.

Canola oil being extracted from seeds. A simple chemical process will transform it into biodiesel that will be used in the NC Department of Transportation fleet. Photo: NCDOT

He uses a screw press to extract oil from the seeds once they are harvested, then mixes in some chemicals. In 24 hours, the oil has separated into biodiesel and glycerin that is reserved for other uses. Because heat is not used to create the product, very little energy is expended in its manufacture, compared to ethanol.

Veal brought the roadside biofuel idea to Sherrod after learning about Utah’s endeavor in a workshop. It has both state and federal funding and feeds into North Carolina’s renewable energy mandate. Surprisingly, other states are not so far following suit. “We’ve left all the other states in the dust,” says Sherrod.

More information on North Carolina’s roadside biodiesel project will be presented Thursday at a workshop sponsored by Triangle J Council of Governments at RTP Headquarters.

Enzymes get cheaper and better

After 10 years of work, Novozymes announced it can make enzymes that brings down the production costs of  cellulosic ethanol to below $2 per gallon. The enzymes, called Cellic CTech2, have shown to work in corn cobs and stalks, wheat straw and woodchips.

All commercially available fuel ethanol is made by turning the starches in corn kernels into sugar. The goal has long been to switch from corn, which is also a food source, to biomass waste such as corn stalks and woodchips. But the cost of the enzymes that break down the cellulose in biomass to sugar has always been too high for cellulosic ethanol to compete with gasoline and corn ethanol at the pump.

Novozymes is a Danish enzyme producer with a large production plant at its U.S. headquarters in Franklinton, north of Research Triangle Park. Part of the research to bring down the cost for Cellic CTech2 was done in Franklinton, but marketing director Poul Anderson told Transport & Logistic News that the enzymes will be produced at Novozymes’ proposed Nebraska facility.

Horizant raises safety concerns

An experimental restless leg treatment that GlaxoSmithKline, a British drugmaker that has its U.S. headquarters in RTP, developed with a California partner fell short of regulatory approval because of safety concerns.

The Food and Drug Administration raised questions about pancreatic tumor cells in rats that were found in preclinical tests of the drug, which goes by the name Horizant and is a longer-lasting version of an epilepsy drug that is already on the market. The epilepsy drug was approved despite having raised similar safety questions, because the seriousness of the condition it treated justified the risk.

A Jeffries analyst estimated that Horizant could have generated up to $500 million in annual sales.

Hamner establishes ties to Norway

The Hamner Institutes for Health Sciences, an RTP research institute, set up a second partnership to help biotech companies overseas speed up their drug development.

A few months ago, the Hamner established ties to China, now a link to Oslo, Norway, and one of the leading European clusters to develop cancer treatments followed.

As part of the emerging international network, the Hamner will provide the Norwegians access to three comprehensive cancer centers located in North Carolina, the Shanghai Center for Disease Control, and Tianjin Institute for Hematology. Training and education will include post-doctoral training in innovative drug safety technologies, business training for entering the U.S. market, and regulatory training for compliance with FDA standards. Oslo will contribute its research and Phase I resources and potential access to its own growing European network of collaborators.

Government funding for research is up sharply from five years ago, so are concerns about global warming.

Temperatures are rising most everywhere around the globe. The concentration of carbon dioxide in the atmosphere is also up, a hallmark of more than two centuries of industrialization.

More carbon dioxide is in the atmosphere today than in the past one million years, according to measurements taken from columns of South Pole ice. Sea levels are rising, because the sea ice at the North Pole is melting. The Arctic ice cap shrunk about 25 percent from 1979 to 2005, satellite photos show.

Robert Jackson

By the end of the century, carbon dioxide amounts are projected to double. That could raise ocean levels 1½ feet, enough to put most of North Carolina’s Outer Banks and stretches of the state’s coastal areas under water.

“We’re heading into territory the Earth hasn’t seen in millions of years,” said Robert Jackson, director of the Duke University Center of Climate Change. (Photo at left)

It’s a prospect that gives researchers looking for alternative energy sources pause, because climate change is first and foremost thought of as an energy issue.

The notion of exploring the sun, the wind, water, geothermal heat and plants as energy sources takes on new meaning when the purpose of the research shifts from trying to preserve the status quo to trying to ensure survival.

“We may be entering territory that is unexplored,” said Carl Bauer, director of the U.S. Department of Energy’s National Energy Technology Laboratory.

Carl Bauer

Jackson and Bauer made their statements during the RTI Fellows Symposium, a two-day event built around scientific challenges in need of attention. The symposium, which attracted about 400 researchers, was held Monday and Tuesday at the University of North Carolina’s Friday Center in Chapel Hill.

Global warming and what role biofuels will play in the energy supply were two of the scientific challenges addressed at the symposium. (More on personalized medicine, another scientific challenge discussed at the symposium, here.)

Alternatives to oil and coal are nothing new. Geothermal heat made hot spring spas possible thousands of years ago. Windmills pumped water into irrigation canals and milled grain for centuries. Ethanol powered some of the first cars more than 100 years ago. Nuclear power plants started sprouting in the U.S. and Europe in the late 1950s.

None of the energy sources are ideal. But fossil fuels have a lot going for them. They pack a big bang for the buck and are fairly easy to store and transport across the globe.

Bauer projected that by 2030 the energy demand will increase by about 11 percent in the U.S. and by about 45 percent worldwide. With fossil fuels providing much of that energy, worldwide carbon dioxide emissions would go up by about 45 percent.

David Dayton

Biofuels are more expensive than gasoline and less energy dense, but they are a good option to reduce the amount of carbon dioxide emitted into the atmosphere, said David Dayton, director of chemistry and biomass program manager at RTI International in Research Triangle Park.

Dayton was part of a panel of experts at the RTI symposium Tuesday who talked about biofuels. Also on the panel were Bauer, Steven Burke, chief executive of the Biofuels Center of North Carolina, and Rakesh Agrawal, a professor of chemical engineering at Purdue University in West Lafayette, Ind.

Ethanol made from corn produces on average 19 percent less carbon dioxide than gasoline. If the feedstock is biomass, such as agricultural residue, forest waste and switch grass, the reduction can exceed 80 percent.

Rakesh Agrawal

There’s just one problem: Not enough land to supply the entire U.S. transportation sector with ethanol fermented from the cellulose in biomass, said Agrawal.

By 2022, ethanol production is projected at 36 billion gallons, less than a fourth of the amount of fuel the U.S. is projected to need for transportation.

So the U.S. Department of Energy, which pays for much of the research, is no longer focused on fermentation technologies to produce ethanol. Rather, the DoE is shifting to a broader strategy and spreading out funding among technologies, Dayton said.

That’s a good thing. In the case of alternative energy sources, Bauer said, “one size doesn’t fit all.

North Carolina, for example, focuses on biodiesel and ethanol from corn and biomass to meet an ambitious goal: By 2017, 10 percent of liquid fuels sold in the state should be locally grown and produced.

Steven Burke

The first corn ethanol plant is scheduled to go online in January in Hoke County, said Burke of the biofuels center.

Fourteen biomass feedstocks have been planted at research sites and private farms statewide and North Carolina’s 18 million acres of forest are expected to contribute wood waste for ethanol production.

The state also has a partnership with RTI to produce ethanol in other ways than fermentation. Outside of that partnership, RTI recently was awarded a federally funded contract to work on a process that turns biomass into a type of bio oil, which can be mixed and refined with petroleum.

The state’s 10 percent goal is a tall order, Burke acknowledged. It will require an increase of biofuels production from 2 million gallons in 2008 to 600 million gallons in 2017.

He’s counting on music to gain support and boost demand for biofuels. The biofuels center signed up 19 artists, who agreed to have their fan Web sites linked to the center’s site. All artists are featured on a CD called “From Bluegrass to Switchgrass.”

Burke called it music “for a state obsessed with fast-driving NASCAR.”

Testing Tysabri’s risks

The scientist who was instrumental in developing Tysabri has come up with a test to identify patients at risk of getting a potentially deadly brain infection known as progressive multifocal leukoencephalopathy, or PML.

Since 2005, Tysabri has been linked to 23 PML cases worldwide, that’s about 1 in 400 patients who received the drug. Four patients have died.

Elan, an Irish company that developed the drug, and Boston-based Biogen Idec, which makes it at its Research Triangle Park plant, maintain PML is rare. But patients and investors are getting worried – particularly after it became known recently that the caseload in Europe is much higher than initially thought.

Only eight of the PML cases occurred in the U.S., where doctors must follow strict guidelines of who may get Tysabri and regulators closely monitor adverse event reports for the drug. Most of the 16 cases reported in Europe were in Germany, where regulatory oversight was less strict.

Elan projects Tysabri sales of about $1 billion this year. But more patients could get the drug if a test became available to sort out those at risk of developing PML.

GSK’s need for a new Advair

GlaxoSmithKline will advance efforts to develop a next-generation treatment for chronic obstructive pulmonary disease, or COPD, but the British drugmaker stopped short of updating patients and investors about its next-generation asthma treatment.

GSK’s Advair is currently the top seller to treat asthma and COPD. But Advair, which generated about $8 billion in sales last year, could get competition from cheaper generic copycats starting next year. GSK, which has its U.S. headquarters in Research Triangle Park, fills the Advair disk at its RTP-area plant in Zebulon.

A next-generation Advair is in the works. GSK has a partnership with Theravance, a Bay Area drug development company, to develop a once-daily treatment that is a combination of a new long-acting beta agonist and a corticosteroid GSK already uses in another product.

On Tuesday, GSK said both partners “remain committed to the progression of the … program for the treatment of asthma. ” But for now, the new combination treatment will only go on to late-stage testing in COPD.

In other company news:

• Aldagen made its second attempt in two years to raise $80.5 million in an initial public offering of stock. The Durham biotech company filed for an IPO in May 2008 and withdrew its filing five months later.
• Metabolon, a Durham biotech company, completed a $12.3 million fund raiser. One of the investors in the round is Syngenta, a Swiss agricultural products company that has its research center for genetically modified crop seeds in RTP. Metabolon, which identifies biochemical biomarkers associated with disease and medicines, already had a partnership with Syngenta.

Oil from sticks and grasses

The RTP area is already a hot spot for biofuels research. Researchers, economists and economic developers at universities, companies and government organizations have been working on efficient ways to make ethanol from biomass such as wood chips, corn stover and switch grass.

Now, researchers at RTI International in RTP have received a $3.1 million contract from the U.S. Department of Energy to develop a one-step process that turns biomass in a type of bio crude. The biomass “oil” is an effort at finding a replacement for petroleum, the world’s most important source of energy since the 1950s.