Editor’s Note: Meeting the Challenge is an open-ended series from EnergytechStocks.com intended to build a blueprint for how the world can meet the incredible increase in all forms of energy that will be needed by 2030 without endangering the environment or nations’ security. In the coming weeks and months, recognized experts will share their ideas, and important new investment themes (including some that could turn out to be worth many billions of dollars) should emerge.

Posted: September 13, 2007

As part of his “We’re going to need it all” approach to meeting the challenge of securing the world’s energy future, the American Petroleum Institute’s chief economist, John Felmy, said in Part 3 of his six-part series that plug-in hybrid electric vehicles capable of running on electricity supplied by an ordinary wall outlet could help alleviate the rising strain on global oil supplies.

But while Felmy was optimistic about the contribution plug-ins might make, he was downright ecstatic about the potential contribution that cellulosic ethanol might make. “Potentially, it’s a Holy Grail,” he told EnergyTechStocks.com.

While the oil industry is publicly perceived as being opposed to ethanol, Felmy is excited at the prospect of one day turning waste into fuel. “We could be closer than we’ve ever been” he said as part of a discussion about new enzyme technology for breaking down the cellulose.

To be sure, ethanol, whether it is made from cellulosic waste or, as it is today, from food crops such as corn, represents a problem for the oil industry because it is too corrosive to be transported through the existing petroleum pipeline system. But as a number of independent experts have also said, Felmy said that a lot of ethanol’s problems may be solved if the ethanol is converted into biobutanol, a biofuel that can be transported through oil pipelines.

While Felmy didn’t elaborate, his tacit endorsement of biobutanol would seem to suggest that the oil industry itself could soon be seen publicly as a big supporter of cellulosic ethanol, and that partnerships might possibly arise among giant oil and agricultural firms.

Still, not even cellulosic ethanol excites Felmy as much as another energy source that will be the subject of Part 5 of this series.

Part 5 of Felmy Series will run Tuesday, September 18