Industry fears growing pains as producers begin to scale up

Source: Niina Heikkinen, E&E reporter • Posted: Tuesday, March 17, 2015

As the United States seeks to reduce its carbon footprint, one of the most visible targets for increased efficiency is transportation fuel.

Today, most U.S. drivers fill their tanks with gasoline blended with 10 percent ethanol that is primarily derived from corn and other grains. However, critics of corn ethanol say its large-scale production is taking over land that could be better used for food production, and that growing corn requires the input of too many resources that contribute to greenhouse gas emissions.

Such criticisms have spurred the development of advanced, or second-generation, biofuels, which proponents say require lower-quality land, use fewer resources, sequester more carbon into the soil and boast bigger yields than corn.

Last week, hundreds of industry leaders gathered in Washington, D.C., to discuss the future of commercialized advanced biofuels. Many are hopeful that the fuels will become a growing part of overall ethanol production within the next decade. Still, much remains uncertain about advanced biofuel’s future role in reducing the amount of gasoline used in the transportation sector.

Companies presented a wide range of possible ways to produce alternative fuels by using feedstocks like miscanthus and switch grass or even algae and municipal solid waste.

Kevin Weiss, the CEO and president of Byogy Renewables Inc., extolled the benefits of cultivating agave as an energy crop because it requires lower levels of irrigation and fertilizer than corn and is also a good source of both sugars and biomass.

Others, like Vincent Chornet, the president and CEO of Enerkem, promoted conversion of municipal solid waste as a more environmentally friendly way of managing the astronomical amount of material discarded by people around the world each day. The company has the world’s first biorefinery that is able to convert municipal solid waste into biofuel, located in Alberta, Canada.

Companies want EPA guidance

Although each company presented different processes for developing their biofuels, many industry leaders reiterated the same concern: that without reliable political support and guidance from U.S. EPA, the advanced biofuel industry would not be successful.

EPA is now three years late in producing an up-to-date renewable fuel standard, and the delay is helping to scare off potential investors and endangering the businesses of biofuels producers, according to numerous industry leaders.

While the Advanced Biofuel Association made headlines by calling for reform to the RFS, the vast majority of industry leaders attending the conference called for stricter administration of the fuel standard, which they said had been working well before last year. Several speakers countered that any efforts to alter the RFS would prove to be “very risky” and “destabilizing.”

Although some critics had said that advanced biofuels have failed to live up to their promise, production levels are right on track with targets under the renewable fuel standard, according to Joe Jobe, CEO of the National Biodiesel Board.

“The first eight years of the RFS was meant to get most of the growth of the RFS volumes from conventional biofuel. And thanks to the success of the ethanol industry, it has done that,” Jobe said. “After 2015, all of the growth of the program was by design, and indeed was decreed by Congress, to come from the folks in this room, to come from the advanced biofuel industry.”

By 2022, oil companies are expected to blend a total of 36 billion gallons of alternative fuels into transportation fuels, under the Energy Security and Independence Act of 2007 (EISA).

Navy sails ahead

Even though advanced biofuel use remains a small part of transportation fuel use, it has become much more important to the Navy and Marine Corps.

Secretary of the Navy Ray Mabus said all of the Navy’s ships and aircraft have been certified for drop-in biofuel use.

“Being overly reliant on outside sources of fuel and power is an economic and security risk, and it’s a risk I’m not willing to take in the Navy and the Marine Corps,” Mabus said at the conference Wednesday.

While the other branches of the armed services have begun adopting more alternative energy use, the Navy is leading in terms of implementation, according to Mabus.

The Navy is neutral about what type of feedstocks it will use and has tested options ranging from municipal solid waste and cooking oil to woody biomass and algae. The only requirements for biofuels are that they can be used as drop-in fuels, that feedstock cultivation cannot take away land from food production, that the biofuel reduces its carbon footprint and that it is cost effective.

“Our goal was that by 2020, no less than half of our energy will come from non-fossil fuel sources, now I’m sure that we are going to meet that goal by the end of this year,” he said.

Consumers are left behind

However, it could take significantly longer for American consumers to see high-percentage ethanol fuel blends for their own vehicles. Currently, gas stations are authorized to sell blends of up to 15 percent ethanol, but few places have pumps that carry it.

“Why is it that the Navy is allowed to go to 50 percent renewables and the public is stuck at 10 percent?” said Doug Rivers, director of corporate research and development at ICM Inc., a biofuels technology company.

Part of the problem is that the industry is still growing. After years of research and development, more companies are beginning to scale up their production of biofuels, a process they referred to ominously as crossing the “valley of death.”

The challenges they face in doing so are immense, and as the publisher of Biofuels Digest, Jim Lane, remarked, “many [companies] in the destructive creativity of capitalism will die before our eyes.”

Industry leaders outlined the obstacles involved in increasing production. Much of the infrastructure for supplying and producing biofuels commercially has to be built from scratch. It is still unclear whether farmers will be able to produce enough affordable and low emissions feedstocks to make enough fuel to meet expected demand.

Not only do the feedstocks have to have high yields with low inputs of water and fertilizer, but farmers also have to be convinced to grow the new and unfamiliar crops, said Madhu Khanna, a professor of agriculture and consumer economics at the University of Illinois, Urbana-Champaign.

There are also technological kinks to work out, like making sure the fuel has enough lubrication and is not corrosive to machinery. Researchers are still working on developing yeasts that can break down different types of sugars at once, so that the production process becomes more efficient, according to Rivers.

“It feels like you are a juggler on a unicycle,” said Theodora Retsina, CEO of American Process Inc., about the upscaling process.

Still, she and many others at the conference said that despite the challenges, advanced biofuels have a great deal of potential, especially as the country works to become more energy independent and environmentally responsible.