Posts Tagged ‘biofuel’
First- and second-gen biofuels get White House boost
It looks like the Governors’ Biofuel Coalition got what it was looking for from President Obama – an endorsement of biofuels development, support for the continued viability of the existing ethanol industry and an invite to partner with members of the administration on energy independence.
In a letter late last month to the coalition leadership, Obama asked the Coalition to join him in implementing his Presidential Biofuels Directive, which was issued earlier in May.
The directive outlined the President’s vision for biofuels development and his expectations for key cabinet and administration officials to lead the Administration’s biofuels initiatives. The President noted that the Coalition’s February 2009 recommendations helped form key points of the directive, and led to the President’s request for the Coalition to work with “members of my cabinet to implement the directive.”
Biofuels are the “primary near term option for insulating consumers against future oil prove shocks and for lowering the transportation sector’s carbon footprint,” the president writes.
In the letter Obama says he is committed to the rapid development of “an array of emerging cellulosic technologies so that tomorrow’s biofuels will be produced from sustainable biomass feedstocks and waste materials rather than corn.”
He continues: “This transition will be successful only if the first-generation biofuels industry remains viable in the near-term, and if we remove long-standing artificial barriers to market expansion necessary for large volumes of of advanced renewable fuels to find a place in America’s transportation fuels system.”
We’ll end the week on a high note with items from here on the left coast and one from the “other” Washington.
A new joint venture announced yesterday, called S4 Energy Solutions LLC, will develop, operate and market plasma gasification facilities for renewable energy generation from waste byproducts.
The joint venture “is expected to process waste from the country’s increasingly segmented commercial and industrial waste streams to produce a range of renewable energy and environmentally beneficial fuels and industrial products as well as to generate electricity,” the companies said in a joint press release.
The initial focus for S4 will be to process medical and other segregated commercial and industrial waste streams. Future commercialization plans could include the processing of municipal solid waste once the technology has been demonstrated to be economical and scalable for such use.
“We see waste as a resource to be recovered, and this joint venture with the PEM system will help Waste Management’s commercial and industrial customers maximize high energy value waste streams to generate valuable renewable energy products based on their unique environmental and logistical considerations,” said Joe Vaillancourt, managing director at Waste Management.
Under the plasma gasification process, waste materials are fed into a closed chamber where they are superheated to temperatures of between 10,000 and 20,000 degrees Fahrenheit using an electricity-conducting gas called plasma. The intense heat of the PEM™ rearranges the molecular structure of the waste, transforming organic (carbon-based) materials into an ultra-clean, synthesis gas (syngas).
The syngas could be converted to transportation fuels such as ethanol and diesel, industrial products like hydrogen and methanol or used as a substitute for natural gas for heating or electricity generation.
Alternative energy company Saline Green Project this week chose Marshall, MO, as the site for a commercial-scale cellulosic ethanol bio-refinery facility, producing renewable fuels, chemical products and electricity.
According to a report in The Sedalia Democrat the company has had an interest in opening a plant in Marshall for more than a year. Frank Imo, Saline Green CEO, said that local support for the project was encouraging and was a big factor in making the project possible.
Saline Green will provide start-up funds for the project, and will seek investors as it nears completion.
Saline Green spokesman Donte Tamprateep was quoted as saying that his company has been working with a group of scientists who helped develop the technology required to efficiently convert cellulosic biomass to its simple sugar state.
Cellulosic ethanol is a biofuel produced from wood, grasses and inedible plant parts. Tamprateep said the biggest challenge the company faced was finding a way to break down cellulose in a cost-effective manner.
The company apparently has hooked up with Pure Energy Corporation, which has invested more than $30 million over the last 15 years in an effort to develop the next generation of cellulosic ethanol technology.
“The Saline Green Project will serve as both a world-class sustainable energy production facility and also a showcase of cutting edge technology in the cellulosic ethanol, chemical and green electricity fields,” said Irshad Ahmed, president and CEO of New Jersey-based Pure Energy.
So why Marshall? One reason becomes apparent by looking at a map. The town of more than 12,000 is located in the middle of the country with excellent access to road and rail routes. From a supply chain distribution viewpoint, it’s a good choice.
The news on renewable energy is mixed this week, what with the carbon emissions “cap and trade” (aka the latest market swindle) debate now fully controlled by well-heeled lobbyists and the algae producer GreenFuel Technologies shuttering its doors, a victim of the economy and a lack of cash.
But a couple of items crossing the desk, er computer screen, are heartening and one is positive and somewhat startling, given the parlous state of the economy and global credit markets..
Environment News and REN21 (see links next door) report that for the first time, more renewable energy than conventional power capacity was added in the European Union and the United States last year.
That demonstrated a “fundamental transition” of the world’s energy markets towards renewable energy, according to a report released May 13 by REN21, the global renewable energy policy network based in Paris.
It’s the fourth such exercise from REN21 and comes in the midst of an “historic and global economic crisis,” says Mohamed El-Ashry, chairman of REN21. Although the future is unclear, he continues, “there is much in the report for optimism.”
Global power capacity from new renewable energy sources (excluding large hydro) reached 280,000 megawatts (MW) in 2008 – a 16 percent rise from the 240,000 MW in 2007 and nearly three times the capacity of the United States nuclear sector.
Solar heating capacity increased by 15 percent to 145 gigawatts-thermal (GWth), while biodiesel and ethanol production both increased by 34 percent. More renewable energy than conventional power capacity was added in both the European Union and United States for the first time ever.
“The recent growth of the sector has surpassed all predictions, even those made by the industry itself,” says El-Ashry, adding that much of this growth was due to more favourable policies amidst increasing concerns about climate change and energy security.
Companies are devoting an increasing amount of capital to renewables. By August 2008, at least 160 publicly traded renewable energy companies worldwide had a market capitalization greater than $100 million, the report says.
During 2008, a number of governments enacted new policies, and many countries set ambitious targets, it continues. Today, at least 73 countries have renewable energy policy targets, up from 66 at the end of 2007. In response to the financial crisis, several governments have directed economic stimulus funding towards the new green jobs the renewable energy sector can provide, including the U.S. package that will invest $150 billion over ten years in renewable energy.
Developing countries – particularly China and India – are increasingly playing major roles in both the manufacture and installation of renewable energy. For example, China’s total wind power capacity doubled in 2008 for the fourth year running.
Access the 32-page report here.
EPA gives it up for PNW clean air projects
More positive news from my neck of the woods, namely the Pacific Northwest, from the EPA. The agency honored three PNW organizations for their innovative projects to improve air quality in the region.
The Puget Sound Clean Air Agency in Seattle, WA, Renaissance Fireplaces of Bellevue, WA, and the Nez Perce Tribe in Meridian, Idaho are winners of EPA’s Clean Air Excellence Award for air quality improvement programs. Nationwide 15 entities received the award.
At the Puget Sound Clean Air Agency a climate education program known as the Cool School Challenge engages students and teachers in practical strategies to reduce carbon dioxide emissions school-wide. The program also encourages student leadership and empowerment, fostering a new generation of air quality advocates, EPA says.
The Puget Sound Clean Air Agency and partners Puget Sound Energy and Northwest Clean Air Agency built the program around an idea created by environmental science teacher Mike Town and the students of Redmond High School.
Student teams conduct energy audits of classrooms assessing the greenhouse gas emissions of electricity use, waste and recycling practices, transportation, and heating. Classrooms then pledge to shrink their carbon footprint through simple but effective behavior changes, such as turning off one panel of lights, using durable coffee tumblers instead of disposable cups, or carpooling instead of driving alone. The Web-based program is designed for grades 7-12 and includes a Web site, a Challenge toolkit, classroom carbon calculator, classroom activities, and supplemental resources.
Now that is cool.
From cool to hot but still cool, in nearby Bellevue, Renaissance Fireplaces has produced the world’s first certified clean burning open fireplace. First introduced to the fireplace industry at the Hearth Patio and BBQ Association trade show in February 2008, the Renaissance Rumford 1,000 has been specifically developed to surpass the low emissions performance requirements of the new ASTM low mass fireplace standard. It incorporates a positive sealing outside air intake, a gasketed guillotine style glass door, and utilizes an insulated chimney to prevent uncontrolled cold air leakage from the chimney system. In addition to surpassing the national standards for woodstove emissions, the Renaissance Rumford fireplace surpasses the most stringent state standard of 4.5 g/hr set by the State of Washington.
Finally for this section of today’s program, EPA calls the Nez Perce Tribe Environmental Restoration and Waste Management Division’s Air Quality Program is “a model program that has developed and implemented a number of significant innovative air quality programs that go beyond applicable laws and regulations.” An example of this leadership is the Nez Perce Tribe’s smoke management program, which promotes community awareness of air quality concerns in connection with agricultural, open, and forestry burning.
The Tribe’s smoke management program, which has been in place since 2002 in a voluntary capacity, has achieved compliance through collaboration. The policies implemented by the program provide flexibility to the regulated community by allowing input, ownership, and responsibility to them as the affected public. There are also collaborative meetings with the EPA, states, and tribes in the region to amend the program’s policies and procedures.
The voluntary nature of the program allowed the agricultural community to prepare for the Federal Air Rules for Reservations (FARR) implementation in 2005. The agricultural community, which initially resisted the new FARR rules, now supports the program and is encouraging the State of Idaho to parallel the Nez Perce Tribe’s smoke management program.
The yang part, or is it the yin?
Almost done for today. I know it’s a lot of reading, but it is free.
On the downside, CNET News’ Green Tech blog reports that GreenFuel Technologies, one of the first companies to enter the algae biofuels business, is shutting down after running out of money.
The blog’s Martin LaMonica wrote that investor Duncan McIntyre of Polaris Venture Partners confirmed GreenFuel Technologies’ demise, saying that the company is a “victim of the economy.” He said investors, who have raised more than $70 million for GreenFuel Technologies since 2001, are exploring ways to sell the company’s intellectual property and assets.
The financial situation at GreenFuel Technologies had been degrading since last year, despite the fact that the company had landed a $92 million deal to sell algae-growing greenhouses to a cement maker in Spain, LaMonica says.
In January of this year, the company laid off about half its staff, bringing the number of employees to 19.
At last the end is in sight dear reader, at least for today, but not anytime soon for cap and trade apparently. See this item in today’s Triple Pundit, which some of you may know I contribute to on occasion (but not this piece):
Verenium Corp., which develops next-generation cellulosic ethanol and high performance specialty enzymes, reported a “strong start” for the year, with a dramatic improvement in the net bottom line.
While the Cambridge, MA company posted a net first quarter loss of $286,000 that was a huge improvement compared to its first quarter 2008 loss of $23.1 million.
The story was not quite the same regarding its operating losses – revenue minus operating expenses – because they continue to mount. Its operating loss increased 7 percent over the last year’s first quarter to $18.4 million.
Verenium says it has made significant progress so far this year, especially in the biofuels segment of its business. Earlier this year it entered into a 50-50 joint venture with BP to develop, own and operate cellulosic ethanol facilities using non-food feedstocks with a total commitment of $45 million in funding and assets from the two partners.
It also identified Highlands County, FL as the location for a first commercial-scale cellulosic ethanol facility. This facility will be developed as part of the joint venture with BP and is expected to provide the region with approximately 140 full-time jobs once commercial operations begin. The project was awarded a $7.0 million grant as part of Florida’s “Farm to Fuel” initiative. The joint venture also submitted a loan guarantee application to the Department of Energy during the quarter.
Also in the first quarter, Verenium began the “optimization phase” of its 1.4 million gallon/year demonstration-scale plant in Jennings, LA. In a corporate move, it consolidated its R&D organization to include the Jennings pilot plant and demonstration-scale biofuels facilities under Greg Powers, EVP of Research and Development.
Verenium has also appointed James E. Levine, an energy banking and finance executive from Goldman Sachs, as EVP/CFO to support efforts to rebuild its capital structure and secure financing for commercial projects.
During the quarter it implemented “aggressive expense management initiatives” to decrease operating expenses. Operating expenses in the first quarter increased slightly, however, by $321,000, to $32.7 million.
On the balance sheet, Verenium reported that its cash position – including cash, cash equivalents and short-term investments – had more than doubled since Dec. 31 to $15.8 million.
Carlos A. Riva, president and CEO, commented in the company’s financial release: “As we look toward commercial operations, we continue to be very encouraged by the political climate and support for alternative energy and, specifically, biofuels.”
The answer is blowing in the wind and biofuel.
True, at least for a part of the renewable energy solution. A Reuters report is saying that the U.S. wind industry is counting heavily on legislation that calls for the generation of 25 percent of the nation’s electricity to be generated from renewable sources by 2025.
Before you ask why so long? Consider that a paltry 7 percent currently of our juice comes from all types renewables. Pretty woeful and we’re way behind but the start has to begin somewhere. Keep the rally caps on.
The wind power industry has posted strong growth for several years but that has hinged mainly on uncertainties around the on-again, off-again production tax credit.
Investment in new wind power capacity grew from $3 billion in 2005 to $17 billion in 2008, but was projected to fall to $13 billion this year, due to lost financing, low prices for natural gas and political uncertainty, Reuters reported.
The fallout for the U.S. wind industry, the world’s largest producer of wind power at 28,000 megawatts (MW), could result in industry consolidation.
However, the American Wind Energy Association (AWEA) recently reported that more than 2,800 megawatts of wind energy industry was installed in the United States over the of the first quarter of 2009. New projects in 15 states now bring total wind power generating capacity in the U.S. to 28,206 MW.
Attendees at the Windpower 2009 conference called on U.S. Interior Secretary Ken Salazar to lobby for congressional passage of legislation to create a national renewable energy standard.
“At no time in our history has the need for a new energy policy been so urgent,” Salazar was quoted as telling members of AWEA at conference. Salazar said that if the U.S. fully pursues its potential for wind energy on land and offshore, it can generate as much as 20 percent of U.S. domestic electricity by 2030 and create a 250,000 jobs.
Supporters of a national standard, including AWEA, say it would provide a target and boost demand for the energy credits that wind farms and other renewable projects create.
With the Bush crowd gone a solid renewable energy standard looks more and more like it might actually happen and happen soon – good news for wind, solar and biofuel sourcers.
Biofuels got a major boost in that regard May 5 from the White House.
In response to recommendations from the Governors’ Biofuels Coalition, President Obama officially directed members of his administration to shepherd the development of the U.S. biofuels industry.
His directive creates the nation’s first comprehensive biofuels market development program; coordinates infrastructure policies; and identifies policy options to improve the sustainability of biofuels feedstock production.
The coalition says the president’s action came in response to a letter from Govs. John Hoeven of North Dakota and Chet Culver of Iowa – the chair and vice chair of the Governors’ Biofuels Coalition respectively – that proposed a number of initiatives to accelerate U.S. development and use of renewable, sustainable, low-carbon fuels produced domestically.
“With this directive, a national strategic vision for the role of biofuels in America’s future has been established,” said Gov. Hoeven.
The May 5, 2009, presidential directive was distributed to Secretary of Agriculture Tom Vilsack, Secretary of Energy Stephen Chu, and Environmental Protection Agency Administrator Lisa Jackson. It creates a Biofuels Interagency Working Group led by these three officials.
The White House said the working group will:
- Develop the nation’s first comprehensive biofuel market development program, which shall use existing authorities and identify new policies to support the development of next-generation biofuels, increase flexible fuel vehicle use, and assist in retail marketing efforts;
- Coordinate infrastructure policies impacting the supply, secure transport, and distribution of biofuels; and
- Identify new policy options to promote the environmental sustainability of biofuels feedstock production, taking into consideration land use, habitat conservation, crop management practices, water efficiency and water quality, as well as lifecycle assessments of greenhouse gas emissions.
In his directive, the President called on Secretary of Agriculture Tom Vilsack to:
- Immediately begin restructuring existing investments in renewable fuels as needed to preserve industry employment; and
- Develop a comprehensive approach to accelerating the investment in and production of American biofuels and reducing our dependence on fossil fuels.
“Expanding our biofuels infrastructure provides a unique opportunity to spur rural economic development while reducing our dependence on foreign oil – one of the great challenges of the 21st century,” said Vilsack.
The President also announced that $786.5 million from the American Recovery and Reinvestment Act will be provided to accelerate advanced biofuels research and development and expand commercialization by providing additional funding for commercial biorefineries. These efforts will be overseen by the Department of Energy.
The DOE biomass program will leverage DOE’s national laboratories, universities, and the private sector to help improve biofuels reliability and overcome key technical challenges, with the goal of create advanced biofuels like green gasoline, diesel, and jet fuels.
The $786.5 million in Recovery Act funding is a mix of new funding opportunities and additional funding for existing projects. It will be allocated across four main areas:
- $480 million solicitation for integrated pilot- and demonstration-scale biorefineries;
- $176.5 million for commercial-scale biorefinery projects;
- $110 million for fundamental research in key program areas; and
- $20 million for ethanol research
“Developing the next generation of biofuels is key to our effort to end our dependence on foriegn oil and address the climate crisis — while creating millions of new jobs that can’t be outsourced,” Secretary of Energy Steven Chu said.
he President also announced the Environmental Protection Agency’s Notice of Proposed Rulemaking on the Renewable Fuel Standard. This proposal outlines the EPA’s strategy for increasing the supply of renewable fuels, poised to reach 36 billion gallons by 2022, as mandated by the Energy Independence and Security Act of 2007.
Increasing renewable fuels will reduce dependence of foreign oil by more than 297 million barrels a year and reduce greenhouse gas emissions by an average of 160 million tons a year when fully phased in by 2022. EISA will establish four categories of renewable fuels..
The new categories include:
- Cellulosic biofuels;
- Biomass-based diesel;
- Advanced biofuels; and
- Total renewable fuel.
In 2022, the proposal would require 36 billion gallons annually of renewable fuels, of which 16 billion gallons must be cellulosic biofuels; and 1 billion gallons must be of biomass-based diesel. At most 15 billion gallons of the renewable fuel mandate can be met with conventional biofuels, including corn-based ethanol.
For the first time, some renewable fuels must achieve greenhouse gas emission reductions compared to the gasoline and diesel fuels they displace. Refiners must meet the requirements to receive credit toward meeting the new standards.
This might be the best news direct from the top for the biofuels industry since, well, ever.
Total invests in Gevo
Gevo, engaged in “developing and commercializing” renewable hydrocarbon technology for the refining and chemical industries, said Total has invested in the company’s ‘series D’ investment offering. The amount of Total’s investment was not disclosed.
Gevo says in an April 27 press release it s “commercializing technology for the cost effective production of renewable, fungible hydrocarbons” such as gasoline blendstocks, renewable jet fuel and renewable diesel blendstocks. In addition to fuels, Gevo says its technology enables the production of a wide variety of chemicals and plastics such as polyacrylates and PETE from renewable resources.
“To have one of the world’s largest oil and gas companies invest in Gevo is significant validation of the potential of our technology and products,” said Patrick Gruber, Gevo’s CEO. He said Total joins an investment syndicate roster that includes Khosla Ventures, Virgin Green Fund, Burrill & Company, and Malaysian Life Sciences Capital Fund.
Jean-Michel Gires, Total’s Senior Vice-President Sustainable Development and Environment, said, “We are very pleased with this opportunity to contribute to next steps of Gevo’s development, with its promising bio-fuels and chemicals intermediates platform produced from renewable resources.” Gires is also president of Total Energy Venture International.
Gevo’s commercialization approach includes retro-fitting existing ethanol facilities to produce hydrocarbon products readily used in the refining and chemical industry. Later this summer, Gevo will bring a 1 million gallon per year semi-works plant in St. Joseph, Missouri on line and start developing its customer base for the commercial facility scheduled to come on line in early 2011.
EIF takes over Watertown Renewable Power
Energy Investors Funds, a Boston-based private equity fund manager that invests in the U.S. energy and electric power sector, said its United States Power Fund III, L.P. acquired Watertown Renewable Power LLC, a 30-megawatt biomass power project currently under development in Watertown, Conn. from Tamarack Energy Inc.
As usual in deals of this sort, the financial details and terms of the transaction were not disclosed.
Lucas Missong, an EIF vice president, said the project “provides a new source of clean electricity in a state with limited renewable resources.
“We believe investments in renewable power projects such as WRP will generate a solid return on investment for our investors as well as help our nation become less dependent on fossil fuels for the creation of electricity.”
Once completed, WRP will be capable of generating enough clean electricity to power roughly 30,000 area homes. The plant will run on small tree branches, stumps, old cargo pallets and trees taken down as part of forestry management programs.
Tamarack launched the Watertown project more than two years ago. Since then, the WRP team has secured numerous local zoning, air and wetlands permits and guided the project through a rigorous state siting process. As a successful applicant to Connecticut’s Project 150 program, WRP was able to negotiate an agreement with Connecticut Light & Power for the purchase of energy from the plant.
EIF was founded in 1987 as the first private equity fund manager dedicated exclusively to the independent power and electric utility industry. The firm says it has mobilized more than $3.4 billion in capital raised in seven funds, and currently manages four private equity funds from its offices in Boston, New York, and San Francisco.
These funds have made more than 100 diversified investments with a combined underlying asset value exceeding $7 billion, it adds. EIF controls 4,000 MW of operating power assets with another 2,200 MW of power assets under development or construction.
EIF has made numerous investments in the clean power sector, including investments in 16 hydroelectric facilities and a portfolio of 19 landfill gas-fired facilities across the United States. The landfill projects turn waste methane into electricity and pipeline-quality renewable natural gas.
The firm also owns or is funding the development of biomass projects in New England, California and Florida as well as a geothermal project in Nevada. The company has also invested in California-based Solar Power Partners, Inc., a leading national solar energy services provider. In addition, EIF owns 70 percent of the Detroit Resource Recovery Facility, an electric power generation and steam facility fueled by municipal refuse.
“We found that a number of well-funded investment groups were interested in discussing the purchase of the Watertown project,” said Tamarack Project Manager Mark Mirabito. “EIF emerged as the successful buyer because of their significant experience in raising capital for clean energy projects. EIF is ideally positioned to lead WRP to a rapid and successful completion.”
In January Tamarack’s parent company, Haley & Aldrich Inc. decided to exit the renewable energy development business: As of April 6, the operations of Tamarack ceased.
EIF said it expects that some project management staff from Tamarack will remain active in the development of the WRP project. Nearly two-dozen jobs will be created at the plant. Another 100 workers will be needed to harvest, process, and transport the wood fuel material to the project site and hundreds of construction jobs will also be created during the 24-month period building the plant.
There’s algae and switchgrass – now add camelina to the roster of second generation biofuel crops.
Camelina could become a major player in the realm of aviation fuels. The Bozeman, MT renewable fuel company Sustainable Oils says the results of a life cycle analysis of jet fuel derived from camelina seeds shows that the fuel reduces carbon emissions by 84 percent compared to petroleum jet fuel.
Sustainable’s research was done in collaboration with UOP, a Honeywell company, at Michigan Tech University. The study was based on camelina grown in Montana and processed into biojet fuel using UOP’s hydroprocessing refining technology.
(Click here for a description of the UOP Renewable Jet Process.)
“The quickest way to reduce carbon emissions from aviation is to begin replacing petroleum fuel with fuel made from renewable and sustainable camelina oil,” says Scott Johnson, general manager of Sustainable Oils. “The acreage that we have contracted for 2009 will be used primarily to continue to develop the promising biojet market.”
He adds that the company has planted “thousands of acres” of camelina “specifically for this use.” This will “prepare us to supply the hundreds of millions of gallons of fuel we will need within five years. No other potential feedstock can provide as much fuel in as short a horizon.”
So what is camelina? It’s it’s a plant that produces seeds that are apparently well-suited as a sustainable biofuel crop. The seeds naturally contain high oil content. Also ithe oils are low in saturated fat, the plant is drought resistant and requires less fertilizer and herbicides.
Most importantly, it is an excellent rotation crop with wheat, and it can grow in marginal land.
Camelina does not displace other crops or compete as a food source. It is estimated that the state of Montana alone could support between 2 and 3 million acres of camelina, generating 200 to 300 million gallons of oil each year.
“Camelina is one of the most promising sources for renewable fuels that we’ve seen,” said Billy Glover, managing director, Environmental Strategy, Boeing Commercial Airplanes. “It performed as good if not better than traditional jet fuel during our test flight with Japan Airlines earlier this year, and supports our goal of accelerating the market availability of sustainable, renewable fuel sources that can help aviation reduce emissions. It’s clear from the LCA results that camelina is one of the leading near-term options and, even better, it’s available today.”
Professor David Shonnard, Robbins Chair Professor of Chemical Engineering at MTU says, “Camelina green jet exhibits one the largest greenhouse gas emission reduction of any agricultural feedstock-derived biofuel I’ve ever seen.
“This high number is the result of the unique attributes of the crop – its low fertilizer requirements, high oil yield and the use of co-products, such as meal and biomass, for other uses.”
Two years after Gov. Schwarzenegger issued an executive order requiring low carbon fuel standards, the California Air Resources Board (ARB) voted Thursday by an overwhelming margin to adopt a regulation implementing the governor’s initiative.
It calls for a 10 percent reduction of greenhouse gas emissions from California’s transportation fuels by 2020.
This appears to give a big boost to alternative fuel production and distribution in the state. Regulators said they expect the new generation of fuels to come from the development of technology that uses algae, wood, agricultural waste such as straw, common invasive weeds such as switchgrass, and even from municipal solid waste.
ARB, a department of the California Environmental Protection Agency, says the new reg is aimed at “diversifying the variety of fuels used for transportation,” and will boost the market for alternative-fuel vehicles and achieve 16 million metric tons of greenhouse gas emission reductions by 2020. (ARB by the way is also commonly referred to as CARB, but since the agency refers to itself as ARB that’s what we’ll use.)
“The new standard means we can begin to break our century-old dependence on petroleum and provide California with greater energy security” said ARB Chairman Mary D. Nichols.
ARB’s analyses say that to produce the more than 1.5 billion gallons of the biofuels needed, more than 25 new biofuel facilities will have to be built and will create more than 3,000 new jobs, mostly in the state’s rural areas.
The regulation requires providers, refiners, importers and blenders to ensure that the fuels they provide for the California market meet an average declining standard of ‘carbon intensity.’ This is established by determining the sum of greenhouse gas emissions associated with the production, transportation and consumption of a fuel, also referred to as the fuel pathway.
“Economic mechanisms will allow the market to choose the most cost-effective clean fuels (those with the lowest carbon intensity) giving California consumers the widest variety of fuel options,” the agency says.
Seeking to enhance private sector and federal investment into alternative fuel production and distribution, California is also providing funding to assist in the early development and deployment of the most promising low-carbon fuels. The Alternative and Renewable Fuel and Vehicle Technology Program, managed by the California Energy Commission, will provide approximately $120 million dollars per year over seven years to deploy the cleanest fuels and vehicles.
That comes to $840 million, a very decent chunk of change.
Arnold issued the executive order requiring the low carbon fuel standard (LCFS) in early 2007. The standard does not become binding until Jan. 1, 2011.
Early reaction to the regulation was a little mixed, especially from ethanol producers concerned with ARB’s controversial calculations surrounding the emission impact of its ‘indirect land use change’ on sugar and corn ethanol.
The Brazilian Sugarcane Industry Association (UNICA) said sugarcane ethanol “passed a critical test” when ARB passed the LCFS. While UNICA “continues to provide evidence that sugarcane ethanol’s carbon intensity is even lower than initially calculated” by ARB, the decision “means sugarcane ethanol will be in greater demand in California in the years to come.
“The verifiable 90 percent greenhouse gas reduction delivered by sugarcane ethanol provides a source of low carbon fuel that achieves the goals of California’s ambitious regulation, with room to spare,” said UNICA President & CEO Marcos Jank following the vote in Sacramento.
“We congratulate California for leading the world in encouraging low carbon fuels. But any realistic evaluation of carbon emissions from sugarcane farming in Brazil must reflect the strict policies being implemented and action already taken to phase out sugarcane burning, increase mechanical harvesting and expand cogeneration output,” said Joel Velasco, UNICA’s chief representative in North America.
Velasco says that with CARB determined to push forward with indirect land use calculations, the best available data and research should be considered before rushing to conclusions. “Indirect land use changes must accurately represent the dynamics of Brazilian agriculture today. We are confident that a data driven analysis will conclude that indirect land use change from sugarcane cultivation in Brazil is marginal at best,” he added.
Growth Energy, a group comprised of U.S. ethanol producers, said meanwhile that ARB “voted to enact a standard that unfairly penalizes biofuels as compared to other fuels, including gasoline.”
General Wesley Clark, co-chairman of Growth Energy, said, “We’re disappointed with the board’s vote. This was a poor decision, based on shaky science, not only for California, but for the nation. It is unfair to selectively single out the indirect effects of one fuel pathway while ignoring the significant indirect effects of all other fuels, including petroleum. Today’s decision puts another road block in moving away from dependence on fossil fuels and stifles development of the emerging cellulosic industry.”
Growth Energy said ARB unfairly penalizes biofuels by adding the “indirect land use change” figure to the carbon intensity of biofuels.
It argued that applying indirect effects only to biofuels set an unequal standard since other fuels also have indirect greenhouse gas emissions effects. However, Growth Energy said it is “pleased the ARB has agreed to continue its study of indirect effects, including indirect land use change as well as the indirect effects of all other transportation fuels.”
“The inclusion of an indirect land use change penalty against ethanol is not based on universally accepted science, puts our industry at an unfair disadvantage and would likely lead to increased dependence on foreign oil and stall efforts to create a greener economy,” said Tom Buis, Growth Energy’s CEO. “We’re very supportive of a low carbon fuel standard because ethanol is a low carbon fuel. Corn ethanol can thrive if all fuel pathways are calculated on a level playing field.”
My admittedly unscientific and perhaps naïve reaction to the above is that this is huge: Finally there is a decision that gives all types of biofuel some real direction and impetus. Calculating the “indirect” impact of land use on fuel pathways strikes me as inherently inexact and will always be subject to interpretation and debate. The bar has to be set somewhere and ARB has done this.
To view the regulation, all 374 pages of it, click here.
Pearson, based in San Diego, is developing a network of renewable fuels filling stations in the state. In fact the company built the first E85 fuel station in California six years ago.
As usual, financial details of the deal were not disclosed. The companies only disclosed that under the terms of the agreement, the Cupertino-based AE Biofuels (stock ticker: AEBF) will supply Pearson with cellulosic ethanol “and other biofuels” for distribution through renewable fuels filling stations in California. They will also use available government programs to develop additional renewable fuels filling stations in the state.
Also, AE recently signed an agreement with Merrick & Company to commercially implement AE Biofuels’ “patent-pending enzyme based technology for the conversion of non-food biomass into ethanol and other materials through the design of new biofuels facilities or the conversion of existing biofuels facilities.”
Merrick, based in Golden, CO, is an $85 million provider of engineering and architectural design-build, procurement, construction management, and geospatial services.
Under this agreement, which also features no financial disclosures, AE and Merrick will “work to deploy AE’s next-generation biofuels technology to address the significant demand for cellulosic ethanol created by the revised Renewable Fuels Standard (RFS).”
The Energy Independence and Security Act of 2007 increased the RFS to 36 billion gallons of renewable fuels, the majority of which must be advanced biofuels, such as cellulosic ethanol.