Aviation Industry an Enormous Growth Challenge for Biofuels

To meet the demand for sustainable aviation biofuels with algae, the industry would have to build a new plant every month for the next 20 to 30 years, Biojet Corp. Chairman Chuck Fishel noted during Tuesday’s General Plenary Session at BIO’s World Congress.

Michael Lakeman of Boeing put forward a more cautious goal of meeting 1 percent of jet fuel demand with biofuels by 2015. That would still require 60 million gallons, though, and from Boeing’s perspective, they must be truly sustainable.

Fishel still worries whether the airline industry is an attractive market for algae and advanced biofuels. Biotech companies can make more money by pursuing low-volume, high-value chemicals than high-volume, low-value jet fuels. So would airlines be able to compete for these sustainable solutions?

Navy Director of Operational Energy Chris Tindal, however, is far more certain about the Defense Department’s needs for sustainable biofuels, particularly from algae. The Navy has set a goal of using 50 percent renewable energy by 2020 and launching the Great Green Fleet by 2016. Currently, the military uses about 2 percent of all energy used in the United States, with most of that represented by transportation fuels. So, it is a niche market, but one that still requires cost competitiveness as well as a sustainable level of greenhouse gas emissions.

Navy Asst. Sec. Chris Tindal Speaking at the 2011 BIO World Congress

Tindal also made clear that what the Navy wants is to be able to pull into ports around the world to refuel with biofuels. Relying on a single large producer of fuel and a long worldwide supply line would recreate one of the problems with the military’s reliance on oil.

Ways and Means Should Include Job Creation of Advanced Biofuels and Bioproducts in Green Jobs Leg

On Wednesday, April 14 the House Ways and Means Committee will hold a hearing on Energy Tax Incentives Driving the Green Job Economy. The focus of the hearing is to examine the effectiveness of current energy tax policy and identify additional steps that the Committee can take to ensure continued job growth in this area while at the same time advancing national energy policy focus on a discussion of current and proposed energy tax incentives. Witnesses for this hearing have not been announced and we do not know how much of the hearing will focus on transportation fuels however, energy tax incentives for biofuels and biobased products should be a significant area of focus for this round of green jobs legislation. These technologies are ready to deploy and create near term job opportunities.

Industrial biotechnology is the key enabling technology for producing biofuels and biobased products like bioplastics and renewable chemicals to aid in reducing our dependence on foreign sources of oil, thereby reducing greenhouse gas emissions. They also have the ability to crate jobs, jobs that are currently moving overseas due to their reliance on petroleum as a feedstock or more favorable economic or political environments.

The United States has invested considerable amounts of taxpayer dollars to try to revive our economy. Too often, though, the resulting jobs are being created overseas, as other countries invest in green technology deployment. As a result, the opportunity to improve our economic competitiveness is lost. The United States is a leader in the research and development of green technologies, but to maintain that lead we must invest in the companies that are putting that green technology to work in our economy. These industries have shed hundreds of thousands of domestic jobs over the past two decades, as petroleum producing countries have attracted more capital investment. For example, U.S. chemical and plastics companies have increased capital investment outside the United States by 32 percent over the past decade, while increasing investment within U.S. borders by only 2 percent.

The Renewable Fuel Standard (RFS) enacted as part of the Energy Independence and Security Act of 2007 sets the minimum level of renewable fuel that must be produced and blended into the US transportation fuel supply at 36 billion gallons by 2022. 21 billion gallons of that requirement must be cellulosic or advanced biofuels. Direct job creation from the advanced and cellulosic biofuels volumes in the RFS could reach 29,000 by 2010, rising to 190,000 by 2022. Total job creation could reach 123,000 in 2010 and 807,000 by 2022. Jobs will be across many sectors of the economy. Some projected job creation sectors are: labor/freight, mixing and blending machine operators, shopping/receiving/traffic clerks, truck drivers, chemical equipment/technicians, chemical plant/system operators/electrical, sales etc.

The Ways and Means Committee can aid in accelerating this job creation by incentivizing biorefinery construction here in the United States. In 2008 Congress enacted a cellulosic biofuels production tax credit and enhanced depreciation for advanced biofuels facilities as part of the 2008 Farm Bill, both of which are scheduled to expire on December 31, 2012. Due to an overall downturn in the worldwide economy, this tax credit has not yet been utilized by cellulosic biofuels producers. This credit needs to be extended now in order to signal to investors that a plant being constructed this year, will have certainty in the availability of that tax credit once the plant begins to produce the advanced biofuel. A tax credit that expires before or shortly after production begins, does not create economic security for a yet to be built advanced biofuel biorefinery looking for funding. Furthermore, capital costs for construction of next generation biorefineries, which utilize renewable biomass to produce next generation biofuels and biobased products, are a substantial barrier to commercialization. Congress should provide an investment tax credit to help accelerate construction of next generation biorefineries and speed deployment of next generation fuels, chemicals and products.

Historically, the U.S. chemicals and plastics industry was the envy of the world. At its peak in the 1950s, the industry was responsible for over 5 million domestic jobs and a $20 billion positive trade balance for the United States. Jobs associated with the industry were typically among the highest paid in U.S. manufacturing. However, the petro-chemicals and plastics industries are now hemorrhaging jobs overseas. Conversely, biobased products and chemicals production, like domestically produced biofuels, will stay in the U.S., in close proximity to their biomass feedstocks. Total US employment in the chemicals industry declined by over 20% in the last two decades and is projected to decrease further. The US is a world leader in industrial biotechnology with a wide range of companies pioneering new, renewable pathways to traditional petroleum-based chemicals and plastics.

The potential job creation from bio-products is immense. Consider that the nascent biobased products industry employed over 5,700 Americans at 159 facilities in 2007 and every new job in the chemical industry creates 5.5 additional jobs elsewhere in the economy. Currently the biobased products portion represents only about 4 percent of all sales for the industry. Congress should create targeted production tax credits that can help them to expand their share of the market and grow additional domestic jobs. With an industry with the potential to grow by over 50% per year, bio-products can form the basis for a strong employment growth engine for the US.

Clearly commercializing the advanced biofuels and biobased products industries is an integral solution to creating high caliber domestic green jobs in the United States that will catapult this country to be a leader in successful high tech, sustainable technologies. BIO will be urging the Ways and Means Committee through written comments to recognize that innovations such as these are some of the most promising sources of green jobs and economic growth for the future.

From Pacific Rim Summit: Specialty Crops, Renewable Feedstocks & Sustainability

This panel on the second day of the Summit consisted of Richard Gustafson from the University of Washington, Gillian Madill, an independent consultant representing views of the environmental NGO community and John Sheehan, from the Institute on the Environment at the University of Minnesota.

While Mr. Gustafson and Mr. Sheehan gave informative talks on lifecycle assessment modeling and sustainability issues, Ms. Madill lit up the room with her talk titled, “Environmental Concerns with Energy Biotechnologies.” Ms. Madill started the conversation with the assertion that the environmental community and the biofuels community have the same goal, to supply energy in a new way that preserves the environment and our earth. Renewable energy and technology are tools to get to that end.

The environmental community has several valid concerns over widespread biofuels production. They see biofuels as a transition technology on our way to an energy future less dependent on liquid fuels, some would say zero liquid fuels. Zero because of the belief that no biofuels are carbon neutral. The question asked by environmental groups is, Why incentivize an unsustainable industry? Some concerns raised by Ms. Madill on behalf of the environmental community include deforestation of sensitive lands such as rain forests, environmental degradation, incorporation and containment of genetically engineered crops and organisms and intellectual property protection.

The biofuels industry plans to be a sustainable industry, but it is a new industry on the verge of commercialization with a formidable competitor. Ms. Madill’s point was that the environmental community and industry, while striving for some common goals, are currently at odds.

As I expressed to Ms. Madill, at the heart of this debate is the fact that most of the controversy centers around land use and protecting sensitive ecosystems. If biofuels went away tomorrow, other industries would compete for those same sensitive areas. After all, solar and wind farms require significant acreage as well, not to mention building schools or highways or the new grocery store that just opened in your neighborhood. Any industry that has a footprint will at some point, one can only assume in a future low carbon world, be mandated to quantify their lifecycle assessment, including land use and potentially indirect international land use, as biofuels are today.

My suggestion would be to partner to serve the common goal, protection of our vital and sensitive areas and resources which are important and treasured by all.

Weekly Industrial and Environmental Bio Blog Roundup

This week we start off with a little Road Music, From Bluegrass to Switchgrass, from our colleagues at the Biofuels Center of North Carolina. They’ve put together a nice set of bluegrass pieces. To listen visit their web site.

Gas2.0 announces this week that BP could start selling biofuels in 2010, writing that,

“BP has partnered with Verenium to bring a commercial-scale cellulosic ethanol facility online next year to start bringing alternative fuels to a gas”

Wednesday, according to the Government Monitor,Tom Vilsack announced,

“the publication of nine additional BioPreferred product categories which will now be eligible for Federal procurement preference.”

Making, “more Than 1,000 Biobased Products Eligible For Federal Procurement,” the Monitor reports.

You can find USDA biopreferred on Twitter, http://twitter.com/BioPreferred and on the Web at: www.biopreferred.gov.

So what’s the deal with this conversation on whether or not biofuels are carbon friendly? We at BIO have certainly have had a lot to say on the matter and you can find all our opinions on our biofuels page.

However, our opinions aside, the folks at the journal Science, where the initial study and follow-up policy paper were published say that they are giving us the inside story, by holding a moderated conversation between Tim Searchinger and John Sheehan—kind of interesting, take a look for yourself.

That’s all for this week. See you next week!

Compounded Climate Accounting Errors

Timothy Searchinger, visiting scholar at Princeton University, Dan Kammen of the University of California Berkeley, David Tilman of the University of Minnesota and other authors from the Environmental Defense Fund published an interesting new proposal in the Policy Forum section of Science magazine today. The argument put forward is that “Replacing fossil fuels with bioenergy does not by itself reduce carbon emissions, because the CO2 released by tailpipes and smokestacks is roughly the same per unit of energy regardless of the source.”

The premise behind this proposal is that the world is facing such a great need to reduce carbon emissions that future sources of energy and biofuels cannot make use of any currently sequestered carbon. Maybe… but there’s a perverse consequence of using this logic. Fossil fuels are a source of sequestered carbon. If you then say that all existing biomass is an untouchable source of sequestered carbon, you are essentially counting that sequestration as a benefit of having used fossil fuels for the past 150 years.

The logic is particularly tortured when a foregone sequestration penalty is attributed to biofuels when none is counted for petroleum.

There is much in the paper to agree with — particularly in recognizing carbon sequestration benefits from improved land management practices and energy crops. And certainly, the challenge of climate change is so great that implementing best practices for carbon sequestration is a necessity.

But a proposal that attributes carbon sequestration in trees as a plus in the accounting of fossil fuel use is counterproductive.

Visualizing the indirect effects of oil

It has been pointed out numerous times on this blog (herehere and here) that you can’t have a true comparison of fuels if you account for the direct effects of all fuels and the indirect effects of only one. But that is what the U.S. Environmental Protection Agency (EPA) and the California Air Resource Board (ARB) have proposed. Both the EPA in their proposed RFS II rules and ARB in their Low-Carbon-Fuel-Standard have calculated the direct effects of all fuels and then only looked at indirect land effects and applied them only to biofuels.

Is it reasonable to claim that there are NO indirect effects from petroleum? One study, published in the academic journal Biofuels, Bioproducts and Biorefining, suggested that accounting for the military protection of pipelines alone would double the greenhouse gas emissions of Persian Gulf oil. But if you don’t want to read through the study, just watch this video from the Renewable Fuels Association. They say a picture is worth a thousand words and in this case I think they’re right.

Weekly Blog Wrap Up

There’s a lot going on in the blogosphere about the world of biofuels this week. Yesterday, the World Wildlife Fund released a report,which according to NCTechnews.com,

“concludes that industrial biotechnology can provide dramatic reductions in greenhouse gas emissions and provide strong progress toward a green and sustainable economy. WWF calls for increased political backing for the industry to leverage the positive environmental effects. The findings are based on peer-reviewed research from Novozymes, the world leader in bioinnovation, as well as contributions from experts and WWF”

Renewable Energy World writes about the “The Algal Advantage.” Algae is big because,

“The big pay-off in algae biofuels will be as drop-in replacements for gasoline or jet fuel. Successful test flights have already been run on mixtures of petroleum and algal-based jet fuels. Chisti says, “generally, only a portion of the crude algal oil is suitable for making biodiesel, but all of it can be used to make gasoline and jet fuel.” For this, the fatty acids in the algal oils are refined by hydrogenation and hydrocracking.”

Algae is also big because, Sapphire Energy has developed a car that runs on algae derived fuel, that can cross the country on just 25 gallons of fuel. The Singularity Hub writes about the car, called Algaeus and has this to say,

“According to the press release, the coast to coast trip will be a ten day journey (September 8 -18) that culminates in the nationwide premier of the new movie Fuel by Josh Tickell of Veggie Van fame. See the trailer below. While the media coverage of the movie is sure to be hyperbolic, I’m much more interested in the premises behind Sapphire Energy. This San Diego based company hopes to use its algae-based fuel to work in the three major petrol markets: gasoline, diesel, and jet fuel. They plan on ramping up production to a rate of than 2 million gallons of diesel per year in the next two years. That’s a small blip on the petroleum market, but a blip that is arriving much sooner than many expected.”

Still in the world of biofuels, Green Tech writes about making better biofuels,

“Research on nuclear energy and hydrogen has yielded what backers say is a technology that could replace U.S. oil imports with biofuels made from agricultural by-products.
Scientists at Idaho National Laboratory have been working for the past year and a half on a process to convert biomass, such straw or crop residue, into liquid fuels at a far higher efficiency than existing cellulosic ethanol technologies.”

“The key advantage is that bio-syntrolysis would extract far more energy from available biomass than existing methods, said research engineer Grant Hawkes. Using traditional ethanol-making techniques, about 35 percent of the carbon from wood chips or agricultural residue ends up in the liquid fuel. By contrast, the bio-syntrolysis method would convert more than 90 percent of that carbon into a fuel, he said.”

The New Energy World Network, picks up the story with a post about Continental airlines,

“Biofuels are increasingly being seen as a viable alternative to conventional jet fuel in the US, according to Continental Airlines’ managing director for Global Environmental Affairs, Leah Raney. The Houston-based carrier has also been implementing its green initiatives across its ground services fleet in its major hubs in Houston, Newark and California by switching to electric vehicles and related infrastructure and using biodiesel in cold weather locations.”

Do you like dates, the fruit, not the social activity? Can you imagine those little packages of sweetness being turned into biofuel? They can in Iraq.

According to the Bioenergy Site,

“Iraq’s prime minister has approved a project by a United Arab Emirates-based company to make biofuel from dates that would otherwise be wasted because they have started to perish, Iraqi officials said on Sunday.”

“Faroun Ahmed Hussein, head of the national date palm board, said the Emirati company would produce bioethanol from dates that farmers cannot export because they are starting to rot. It would be used domestically at first, then possibly later exported.

He declined to name the company, estimate the cost of the project or say how much bioethanol it was expected to produce.

He said Iraq produces 350,000 tonnes of dates annually, a sharp fall from 900,000 tonnes produced before the US-led invasion to oust Saddam Hussein but still more than the 150,000 tonnes it currently consumes. Some are fed to animals, he said.

“They can’t export the left over quantities owing to their poor quality,” Hussein said. “Farmers will be happy to sell their rotten dates instead of throwing them away.”

And finally the world of biofuels winds up with a serious policy issue, that is a “Greater Distinction Needed for Biofuels as Fuel Component under Cap and Trade,” writes 25x’25, they go on to say,

“As Congress continues its debate on comprehensive climate legislation, any measure adopted must adequately recognize and incentivize the extensive benefits biomass and the production of biofuels can provide to address global climate change. The 25x’25 Carbon Work Group has recently reemphasized the need for policy makers to modify pending cap-and-trade provisions to more clearly recognize those agricultural and forestry practices that can contribute to climate change regulation and make those practices eligible as offset projects. Policy makers also should make clear in a final climate change bill that biofuels, including the biofuel component of fuels blends, are not obligated under the emissions cap and are a preferred alternative to fossil carbon-based transportation fuels.”

That’s it for this week. See you next week.