Posting in Energy
A biofuel executive is questioning whether research and development will be squandered without government investment into production.
Today, the White House announced a US$510 million investment into biofuels for transportation. I’m wondering whether it was enough of a commitment to keep the industry moving forward in the absence of a comprehensive national energy policy.
The funding is surely welcomed news for biofuel start-ups, which are hungry for financing to break ground on commercial scale plants. Many are idling by waiting on investment to get off the ground - aside from a few notable exceptions such as Solazyme.
Politicians are talking about energy security, but no substantive actions are being taken, while oil remains heavily subsidized. Renewed government commitment may make a difference; however, $510 million does not convey any real sense of urgency.
I spoke with BlueFire Renewables CEO Arnold Klann about the state of the biofuel industry in July, and wasn’t encouraged that the promise of cellulosic ethanol technology would be realized within a reasonable timeframe.
The industry faces two fundamental problems: infrastructure and financing. I’d also include hyper partisan politics trumping science and logic.
The industry knows which sources of ethanol work best, but there’s a lack of demand for feedstock to supply commercial scale plant and a lack of infrastructure to harvest those crops, Klann said. In short, a purpose-grown crop is very expensive.
Cellulosic ethanol sources include wood wastes, urban trash, landscape residue, rice, and switch grass. Other biofuels are created using algae.
A handful biofuel companies have established themselves where infrastructure is already in place. BlueFire Renewables is one such example – it has a plant in Mississippi where timber is harvested, so woodchips are readily available. Corn based ethanol leveraged idle farmland.
Another positive is that the U.S already has infrastructure built out the wazoo for liquid fuels. Ethanol is a logical transition fuel from that perspective. A gas station won't need to be rewired to fill up your tank.
But it all comes down to financing. Many banks don’t want to take risks on projects in the wake of the 2008 economic meltdown, Klann explained. “If government loan guarantees are not forthcoming technologies will never get a day in the sun even though there’s lots of money invested in R&D.”
Disparate interests ranging from the chemical industry to fuel producers and refineries must all be brought to the table, and more government loan guarantees are necessary unless Wall Street renews its enthusiasm to invest in ethanol, Klann explained.
While venture capital investments into green tech are increasing, VCs are very good at taking something that’s already been financed and commercializing it. It’s unlikely that investors would pony up to build a commercial plant from scratch.
Klann suggested that a national catalyst on par with the 1970’s oil embargo might be necessary for significant near term action. He also noted that biofuel techonlogy is also relatively new, having been invented within the past 20 years. It took solar and wind power decades to become commercialized.
“All the sudden we wake up and don’t have access to oil from the conventional places we’re getting it. Short of something like that it will putz along at some extent. Many companies won’t exist in year or two, and won’t get funding without a plant built and revenue being generated,” Klann said.
“We may be squandering opportunity already for this country… I just don’t know. Bureaucracy does not move quickly.”
That's just one opinion.
Big names like Ford, the originator of car culture, are investing in biofuel research, and some biofuel companies are altering their business models by diversifying into food products and pharmaceuticals.
I'd like to hear your thoughts. Is the government doing too little, or should it step aside and let the market figure it out?
Related on SmartSplanet:
- Take your Omega 3's if you want your biofuel
- U.S. House: Biofuels? Let the military pollute
- U.S Navy, Cobalt, to develop jet biofuel
Aug 17, 2011
Creek to be Austin's version of chat voice the San Antonio River Walk. Good luck on that one. I doubt that joggers would use it; I'm not sure who would. The Austin City Council is great kalam on spending Other People's Money, and then raising taxes and fees for thecitizens to cover for their little pet projects. The photo was taken from great "make-out" spot... if you don't mind the three ahj w,jd The Austin City Council is great on spending Other People's Money, and then raising taxes and fees for thecitizens to cover for their little pet projects. The photo was taken from great "make-out" spot... if you don't mind the three
If you don't rewire the gas stations, how will you prevent dry ethanol from re-absorbing water from the environment to attain its most stable state of 95/5 ethanol/water mix? You either rewire/repipe your gas stations or modify your car. Or use very little amounts of ethanol to make sure the water becomes negligible.
At depth in the oceans there is methane ice. Harvesting it without releasing uncontrolled amounts into the atmosphere is a serious engineering problem. Maybe the engineering can be perfected. If so then this natural gas is available in greater quantities than all the oil reserves.
Typical reactionary response void of complete thought that is like a cancer dragging us down. No argument from me that corn based ethanol is a non starter and should not be subsidized due to low yield and impact on food supply. However, there is a diverse source of options for ethanol that are not food products and yield far more than corn mentioned above and are a part of the ethanol Mr. Klann is referring to (not just corn). It is easy to sit back and criticize but perhaps exercise your brain a little and, rather than merely offering criticism and pathetic attempts at flaming, offer what you think would be a better alternative if none of these are acceptable options for you.
The problem with using food crops to make fuel is that it causes shortages of food. The revolutions in Tunis and Egypt were based on rising cost of corn that the poorest could not afford. The revolutions are less about ideology and more about hunger. The cost of food for everyone goes up when corn is diverted to fuel. It would be better to find a vegetable source for biofuel that is not needed for food and also does not reduce resources needed for food production. There are some species of algae that might be a better source for biofuel.
Put another way, if the feedstock for biofuel is from any part of the food chain, it is a non-starter. We don't want to be in competition with our food supplies for our fuel supplies.
40% of the 2011 US corn crop will go for ethanol production at a time when we grow over 1 million acres less corn than we did in 2007. Just how much food do you want to take out of people's mouths Mr. Klann? Mr. Klann needs to shut his pie hole.
Destroying forests is as damaging as many other options. we need different solutions. Ethanol is not the answer anyway, the fuel value is too low, speaking as an engineer. Of course, methanol is even worse. maybe if Kudzu could be converted into a liquid methanol polymer? We have rather a lot of that, and we want to get rid of it. Though, I think that the real future solution will be electric rail, and electric cars, powered through the highways. All supplied by Nuclear. Fission for the near term, and fusion for the long term. Nothing else can provide the power quantities we need, without destroying large parts of the environment. Except for maybe orbital solar, but that's even more far out than fusion is right now. Environmental scientists are starting to wake up to the serious environmental consequences of both Ground Based Solar and Wind. Those will be limited to niche sources in the future, longer than 15 years out.
The sources mentioned by Mr. Klann are capable of meeting less than 20% of our current ethanol usage. Until they develop a source that does not take from the food chain all bio-fuels are unsustainable.
There is one problem with your post. If a potential source of 'bio-fuel' DISPLACES any food crop, then it has the same end result as the current internationally disastrous Ethanol programs.