Lack of infrastructure remains key challenge for plant-based fuels 

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, April 22, 2015

Infrastructure challenges remain a barrier toward increasing the amount of biofuel in the marketplace and creating a more diverse fuel mix, the Obama administration said today in its Quadrennial Energy Review.

The report, which represents the administration’s overview of the current status of the nation’s energy infrastructure, calls on the government to continue research and development in the area of drop-in biofuels, or those that have the same properties as hydrocarbon fuels.

The government should also provide support to states, communities and private entities for investing in infrastructure for higher blends of ethanol, the QER says.

“Continued growth in ethanol use will depend in part on investment in additional distribution capacity; growth in the use of other biofuels, such as ‘drop-in’ fuels, will depend on continued investment in research, development, demonstration, and deployment,” the report says.

Vice President Joe Biden and Energy Secretary Ernest Moniz today touted the release of the report at the offices of Philadelphia electric utility PECO. Overall, the QER proposes billions of dollars in new spending programs or tax credits to support a variety of energy infrastructure, including oil and gas pipelines and the electric grid (Greenwire, April 21).

In the QER, the Obama administration highlighted biofuels as a key part of increasing the diversity of the transportation fuels market, which is currently dominated by petroleum gasoline and diesel.

But while U.S. ethanol production has increased in the last few decades, driven most recently by the 2007 renewable fuel standard, expansion beyond 10 percent of the fuel market is currently limited by declining gasoline demand, the QER says. The 10 percent limit is commonly referred to as the “blend wall.”

Given that gasoline demand is not expected to grow significantly in the coming years, according to the report, future growth in ethanol requires infrastructure that can handle higher ethanol blends.

Although U.S. EPA has approved a 15 percent blend of ethanol for cars with model years 2001 and newer, E15 has been slow to penetrate the market, and the vast majority of gasoline sold at gas stations still contains 10 percent ethanol. Flex-fuel vehicles, which can handle ethanol blends of up to around 85 percent, are becoming more common, but there’s only about 3,000 gas stations in the nation that sell E85.

“Continued growth in ethanol use will depend in part on private sector investment in additional distribution capacity of higher-level blends,” the QER says.

The Departments of Energy and Defense should also continue investment in next-generation biofuels that can be dropped into existing fuel infrastructure, the QER recommends. Specifically, the administration’s report says the departments should focus on drop-in jet fuel for airplanes and diesel.

“These applications are important given the challenges of electrifying airplanes and other large vehicles,” the QER says. “Most production is in the pilot or demonstration phase, and, beginning in 2011, some commercial flights in Europe and the United States have flown with 50-50 biofuel blends. Despite this, biofuels for aviation and large vehicle applications still face considerable challenges in penetrating these markets.”

The QER comes as EPA is preparing to release a rule by the beginning of June to propose targets for ethanol and advanced biofuel production through the renewable fuel standard program (E&ENews PM, April 10). The biofuels industry has blamed agency delays in setting the targets for 2014 and 2015 for decreased private investment in next-generation fuels.