Biofuel Industry Won't Meet Government Production Targets After All

By Ucilia Wang

The United States will not be able to meet the mandate to use 36 billion gallons of biofuels by 2022, reported the U.S. Energy Information Administration Wednesday.

The country could meet that goal by 2030, with most of the biofuels coming from corn-based ethanol, the EIA said in its preliminary annual report. The report looks at the country's generation and use of energy, from electricity to transportation fuels from 2007 to 2030 (see EIA charts).

The EIA issued the report on the same day when President-elect Barack Obama named former Iowa Gov. Tom Vilsack to the agriculture secretary post. Vilsack is a big biofuel proponent.

Congress passed the mandate last year to promote biofuel use, an attempt to reduce the country's dependence on foreign oil. The legislation in effect created a huge market, and it specifically requires the increased use of certain types of biofuels, including cellulosic ethanol.

Although the mandate prompted a rush of private equity investments into biofuels, filling the government quotas won't be so easy after all. The EIA predicts that the biofuel industry will be able to produce roughly 30 billion gallons, not 36 billion, by 2022.

The EIA projections confirm what some in the private industry have been saying. A recent survey by investment firm ThinkEquity shows that cellulosic ethanol makers will likely miss federal targets by a weighty margin, at least in the near future.

Instead of meeting the goals to produce 100 million gallons of cellulosic ethanol in the United States by 2010, the survey indicated that only 28.5 million gallons will be available in 2010 (see Consumers to Pick Up Tab for Off-Target Cellulosic Ethanol Industry).

The survey suggests that a dramatic growth in cellulosic ethanol production will happen by 2011. If that happens, it will require producers to line up financing and build refineries according to plans. The industry could then produce 247.6 million gallons to meet the 250 million goal for 2011.

Since 2030 is a long ways off, the EIA could revise its forecast in the next few years if biofuel producers are able to boost production quickly.

Unlike corn-based ethanol, cellulosic ethanol comes from plants that are not used for food. That's a promising premise, given the fierce debate over whether the growth in corn ethanol has contributed to rising food prices worldwide.

But the cellulosic ethanol industry is still in its infancy. Many companies are still perfecting their chemical processes to turn wood chips and grasses into fuels. ThinkEquity's David Woodburn estimates that the industry will only have about 6.3 million gallons of production capacity by the end of this year.

Meanwhile, refuel retailers and consumers will have to pay the government to cover the shortfall.

It turns out that the federal mandate requires gasoline retailers to buy credits from the U.S. Environmental Protection Agency if they aren't able to blend a certain percentage of biofuels. Retailers, in turn, can be expected to pass on the costs to consumers.

Here are some other interesting tidbits from the EIA's 2009 outlook:

• The energy per dollar of the gross domestic product is declining, and so is the per capita energy use.
• Crude oil prices have been taking a dive lately, but they could reach $130 per barrel by 2030 (in 2007 dollars).
• Despite efforts to use more renewable energy, from electricity to transportation fuels, fossil fuels still will provide 79 percent of the total energy in 2030.
• The nation's appetite for electricity will continue to grow, but at a slower pace than previously thought. Renewable energy policies and better technologies to conserve power use are making a difference.
• The electricity consumption grew 1.1 percent annually between 2000 and 2007. It's expected to grow 1 percent annual growth between 2007 and 2030.
• Natural gas and renewable sources such as biomass, solar and wind could represent the largest growth in electricity generation. The agency expects that the power generated by natural gas-fired plants will add 139 gigawatts to the nation's power mix between 2007 and 2030. Renewables could add 57 gigawatts. Coal will still be a big player, adding 46 gigawatts. Nuclear could contribute 13 gigawatts.
• By using more renewable energy and using energy more efficiently overall, the United States will generate 9.4 percent less greenhouse gas emissions by 2030 than what the EIA predicted last year. The EIA revised the forecast for 2030 from 6.851 billion metric tons to $6.4 billion metric tons.
• Energy-related emissions are expected to increase 0.3 percent per year and could decline with new policies to cut emissions.

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Comments

[k9s-4-k8:]

Corn based ethanol is just pork and should be saved as feed for pork.

2008 Dec 18 12:16 PM

[john s. gordon:]

you have focused on cellulosic ethanol, but don't overlook biodiesel.
> jack

2008 Dec 19 09:13 AM

[Pedro42:]

There is new technology to convert black liquor from pulp mills to synthesis gas (syngas) and further to methanol, DME or synthetic diesel.
Black liquor is the combined by-products, such as lignines, extracted from the wood that is fed in to a paper and pulp mill. It is burned today with an energy efficiency of 20%. By converting it to syngas the energy efficiency becomes 70%. There is enough black liquor in North America to make 10 billion gallons of methanol. The cost is lower than for sugar cane ethanol. Methanol and ethanol are very similar in performance and can be mixed in gasoline. Solid biomass can also be gasified albeit at a higher cost but still competitive with ethanol production. The EIA should not discount this source for biofuels.

2008 Dec 19 10:45 AM

[Erich J Knight:]

Now that Carbon will have a price;
Biochar, the modern version of an ancient Amazonian agricultural practice called Terra Preta (black earth), is gaining widespread credibility as a way to address world hunger, climate change, rural poverty, deforestation, and energy shortages… SIMULTANEOUSLY!

The IBI Announces Success in Having Biochar Considered as a Climate Change Mitigation and Adaptation Tool;
POZNAN, Poland, December 10, 2008 - The International Biochar Initiative (IBI) announces that the United Nations Convention to Combat Desertification (UNCCD) has submitted a proposal to include biochar as a mitigation and adaptation technology to be considered in the post-2012-Copenhagen agenda of the UN Framework Convention on Climate Change (UNFCCC). A copy of the proposal is posted on the IBI website at
The International Biochar Initiative (IBI).

Modern Pyrolysis of biomass is a process for Carbon Negative Bio fuels, massive Carbon sequestration,10X Lower Methane & N2O soil emissions, and 3X Fertility Too.
Every 1 ton of Biomass yields 1/3 ton Charcoal for soil Sequestration, Bio-Gas & Bio-oil fuels, so is a totally virtuous, carbon negative energy cycle.

Below is an important hurtle that has been overcome in certification in the EU. Given that their standards are set much higher than even organic certification in the US, this work should smooth any bureaucratic hurtles we may face.

EU Permit Authority - 4 years tests
Subject: Fwd: [biochar] Re: GOOD NEWS: EU Permit Authority - 4 years tests successfully completed


Doses: 400 kg / ha – 1000 kg / ha at different horticultural cultivars

Plant height Increase 141 % versus control
Picking yield Increase 630 % versus control
Picking fruit Increase 650 % versus control
Total yield Increase 202 % versus control
Total piece of fruit Increase 171 % versus control
Fruit weight Increase 118 % versus control
HOMEPAGE 3R AGROCARBON: www.3ragrocarbon.com

The Biochar provisions by Sen.Ken Salazar ( AND now Secretary of Interior!) in the 07 & 08 farm bill,
www.biochar-internatio...

NASA's Dr. James Hansen Global warming solutions paper and letter to the G-8 conference, placing Biochar / Land management the central technology for carbon negative energy systems.
arxiv.org/ftp/arxiv/pa...

The many new university programs & field studies, in temperate soils; Cornell, ISU, U of H, U of GA, Virginia Tech, New Zealand and Australia.

Glomalin's role in soil tilth, fertility & basis for the soil food web in Terra Preta soils.

Given the current "Crisis" atmosphere concerning energy, soil sustainability, food vs. Biofuels, and Climate Change what other subject addresses them all?

This is a Nano technology for the soil that represents the most comprehensive, low cost, and productive approach to long term stewardship and sustainability.

Carbon to the Soil, the only ubiquitous and economic place to put it.


Also:

October 28, 2008

U.S. Department of Agriculture to Evaluate CQuest™ Biochar

Non-Funded Cooperative Agreement Signed

The objective of the biochar research is to quantify the effects of amending soils with CQuest™ Biochar on crop productivity, soil quality, carbon sequestration and water quality. Field trials will involve incorporation of biochar in replicated field plots and on-farm strip trials with monitoring of crop yields, soil quality, water quality, emissions of greenhouse gasses, and soil carbon sequestration. Laboratory studies will involve amending soils with biochar and quantifying changes in soil quality and microbial activity during incubations.

Biochar will be shipped from Dynamotive's West Lorne facility to Agricultural Research Service (ARS) locations in Iowa, South Carolina, Idaho, Washington, and other ARS locations. Initial results are expected during the 2009 growing season.

www.dynamotive.com/en/...

2008 Dec 19 10:54 AM

[john s. gordon:]

black liquor is burned in recovery boilers to recover the magnesium content of the liquor & recycle it to the pulping process. since the valuable product is the MgCO3 not the steam, the energy efficiency is not the dominant factor.

the original copeland process incinerator of 1948 was used for this application, since then has also been used for incinerating oil-refinery wastes. the u.s patent office for no reason at all refused to give him a patent for his process, so he got a canadian patent instead. i used to run into george copeland @ fluiidized-bed conferences in the 1970's/

don't mix methanol with your gasoline unless you want to create a water bottoming problem, most storage tanks @ retail outlets have a water phase @ the bottom of the tank.
> jack

2008 Dec 19 11:00 AM

[Joe Lovshe:]

The Government should get out of the "king making" business as there track record would indicate. Creating "winners" is a joke. If the government had pushed for the telephone industry with mandates, subsidies and tax breaks back in the 1930's we'd still be turning a crank to make a phone call.

2008 Dec 24 06:44 AM