| February 2008 »
Critics that attack corn-based ethanol in favor of cellulosic ethanol need to develop a better understanding of how corn-based ethanol and cellulosic ethanol go hand-in-hand into the winner's circle. Corn-based ethanol has paved the way for the accelerated development of cellulosic ethanol. Ethanol has had to overcome several marketplace hurdles and had to develop the legislative support infrastructure, which if it were not in place, would create a much longer and riskier bridge to the commercialization of cellulosic ethanol. For example, corn-based ethanol has:
- Established automaker acceptance of gasoline/ethanol blends and alternative fuel vehicle production (i.e., FFVs and E85).
- Created a competitive fuel market for the first time in 100 years of gasoline dominance. Corn-based ethanol also helped establish laws to prevent major oil companies from stopping their distributors from selling ethanol.
- Helped our government leaders understand that federal and state legislative support is necessary to make it profitable and possible to sell ethanol.
- Paved the way to get government funding and support for cellulosic conversion technology.
- Has improved and proven the fermentation and drying processes that will be used by cellulosic ethanol plants.
- Paved the way to for the expansion of nation’s renewable fuel standard and requirements for cellulosic conversion technology in the Energy Independence and Security Act of 2007.
- Paved the way to for the expansion of state renewable fuel standard (e.g., MN) and requirements for federal RFS requirements.
- It is also paving the road for the cellulose feedstock collection and process which will likely first happen around large and established scale corn-based ethanol plants.
- Created the next likely line up of licensers for the new cellulosic technologies being developed today.
- Paved the way for the acceptance of the use by Indy race cars which can prove ethanol’s performance and lead to more acceptance by the public.
- Corn ethanol is a small part of corn growing strategy and markets – but makes it profitable to growers, saves government payments to farmers, and keeps food production acres and farmers in business.
The excitement over cellulosic ethanol is still about the success and potential of ethanol, which in any other form of production, is still ethanol.
If we choose to throw out corn-based ethanol in favor of cellulosic ethanol, what are our alternatives?
- Close down the $20 billion in economic activity currently being generated by corn-ethanol plants.
- Return to using more carcinogenic gasoline?
- Return to using more crude oil imports from unstable countries that hate us?
- Don’t use ethanol and accelerate the supply/demand imbalance for crude oil, and increase gasoline prices?
- Let farmers go back to relying on federal payments and force them to sell their land to corporate farms and accelerate urban sprawl?
- Cut government programs by $6 billion so we can get back to business of paying farmers not to grow crops?
What was done.
The recent Energy Independence and Security Act of 2007 addresses many concerns about corn by limiting its use and sets extra market based rewards for ethanol made from cellulose that can prove it uses less energy when compared to gasoline.
We did it.
The democratic process created new performance metrics for ethanol feedstocks based on public and scientific concerns. Entrepreneurs, universities, the federal government, and even General Motors are now taking financial risks to accelerate the cellulosic development process to reap the rewards of cleaner burning and cheaper transportation fuels. Congress has also protected the nation's $20 billion corn-based infrastructure that will soon prove to be an integral part of the success and rapid growth of cellulosic ethanol.
What I think we should we do next?
Corn-based ethanol brought cellulosic technology to the alternative fuels dance and we should all be doing the two step – first step ethanol, second step cellulose. Cellulosic ethanol will answer many of the concerns of critics over ethanol's ability to significantly and sustainably become an important component of our nation's energy strategy. We should all move forward with enthusiasm for corn-based ethanol, improvements in the process technology, the improved methods of growing of corn and other energy crops, and continue to develop cellulosic ethanol. Throwing out the corn-based ethanol before it reaches its full potential (e.g., cellulosic) is like turning off the old black and white TV before seeing HDTV. So stay tuned in to see more developments in ethanol and ethanol feedstocks.
What do you think we should do next?
We look forward to your comments and insights.
Director of Program Development
GM's recent announcement to partner with Coskata Energy to help accelerate the development of cellulose-based ethanol (cellulosic ethanol) should be welcomed news for consumers, environmentalists, policy makers, and all others concerned about the sad state of our nation's energy / economic / environmental and geopolitical affairs. GM is acting way outside the traditional automaker box with their decision to invest in developing cellulosic ethanol to accelerate the market place arrival of cleaner and cheaper transportation fuels. The announcement has been met with overwhelmingly positive reviews and widespread coverage, but has also seen some hopeful, well-intentioned skepticism. This is obviously a development we'll be covering closely in the future, but for now, let's review the Coskata cellulosic process and discuss the historical perspective that helped lead to this development:
CFDC welcomes Coskata Energy to the growing group of companies developing cellulosic ethanol technologies like Range Fuels, Mascoma, KL Design, Virent Energy Systems, Clear Fuels Technology, Blue Fire Ethanol, and Fuel Frontiers.
Why would an automaker support cellulosic ethanol?
The auto/oil conspiracy against alternative fuels has been dead since the Clean Air Act Amendments of 1990 (at least on the auto side) when U.S. automakers helped environmentalists and alternative fuel advocates change the composition of gasoline to include cleaner burning oxygenated fuels like ethanol. EPA announced this week that the reformulated gasoline/clean fuel program is exceeding their expectations to meet clean air and water goals. The historic and successful clean air/clean fuel legislation of 1990 spawned the first renewable fuel standard (RFS) in the Energy Policy Act of 2005 -- and the U.S. automakers helped. The successful RFS program in 2005 resulted in expanding the RFS in the new Energy Independence and Security Act of 2007 from 7.5 billion gallons to its current goal of 36 billion gallon per year -- and the U.S. automakers helped. Automakers, and especially GM, have continued to show leadership and support for ethanol by first approving of ethanol's use and performance in their vehicle warranties in the 1980's, producing more cars that run on 85% ethanol (i.e., FFVs) in the 1990's, and now supporting the development of new legislation, technologies, and public/retail E85 refueling infrastructure.
General Motors: pioneering business model and role model
What's in it for GM? Each time the price of gasoline goes up automaker stocks goes down and car sales go down with it. This historic trend does not seem to mirror oil company profits. The high cost of changing emission and mileage technology has the same impact on sales, but automakers have evolved, compromised, and advocated and paid for change on a much larger scale compared to oil companies (e.g., catalytic converters, seat belts, air bags, 30+ 30 MPG models, Flexible Fuel Vehicles FFVs, etc.). While mandating smaller cars with smaller engines in order to get higher mileage has been a difficult challenge in Washington, D.C. -- changing consumer preferences via Detroit has been even tougher. Changing the automobile refueling choice to one that is cleaner burning, domestic and has a lower carbon footprint for alls cars, not just the new ones, will have a much bigger impact on protecting the environment and stimulating the economy. An ever growing majority of industry and government leaders and the public agree with this approach – and energy, the economy, and the environment remain on the top of the Congressional to do list.
GM, Ford and Chrysler have been producing cars capable of running on flexible mixtures of gasoline and up to 85% ethanol since 1990's. There are now six million FFVS on the road that combined could use all of the ethanol produced in the United States. After waiting 30 years for the oil companies to correspond with an alternative fuel chicken to complement the auto's alternative fuel vehicle golden egg, GM has now taken their vehicle's fuel destiny in their own hands and is investing in the development of alternative fuels. Role model and business model all wrapped up in one. The public did their part by making sure Congress did their part by passing the Energy Independence and Security Act of 2007. GM is fulfilling their corporate stewardship and self-preservation role, as well as stepping in an playing the role of some missing stakeholders. GM's decision to accelerate the development of cellulosic ethanol sets a great example for others in corporate American that are trying to go green -- spend some green and get results.
Clean Fuel Development: Whose job is it?
Who do you think should be responsible for making sure fuels are clean, consumers have choices of ample supplies of transportation fuels, a competitive "free" market is maintained, and technologies to reduce fossil fuel use and crude oil imports are developed?
Consumers were greeted this New Year with a drop in their 401Ks from a stock market reacting to crude oil surpassing hitting the record $100 per barrel mark, visions of $4 per gallon gasoline – and The Energy Independence and Security Act of 2007 (EISA07). Ring out the old [news] and bring in the new [news]!
The EISA07 was passed with the help of both mainstream political parties and was supported by the President – only after undergoing the scrutiny of hundreds of hours of public hearings, debates, and the completion of millions of dollars in private and government studies. The law was passed in the face of roaring negative public relations pressure from many in the oil industry and other sectors that feared hardship from a law that would require a new renewable fuel standard. Many critics of ethanol tried to dissect and piece meal the energy bill issues to drive doubt and concern into the minds of law makers and consumers. Yet the Administration and Congress set legislation in motion that will displace nearly all of the Nation's $1 billion dollar per day imported crude oil habit by 2030. New and developing ethanol and automotive technologies are the center pieces of this historic legislation and they will be the focus of this blog during the coming years. We believe in total this law is progressive, fair, and was created with open dialog and honest debate.
The U.S. currently consumes about 190 billion gallons of gasoline and diesel fuel annually to meet its transportation fuel needs. Of this volume, about 65% or 124 billion gallons is derived from foreign sources. – U.S. Department of Energy.
While the Energy Independence and Security Act of 2007 (EISA07) did not address growing the demand for renewable electricity and a few other important energy matters, it does address the most important and volatile energy issue facing our nation – the ever growing and detrimental economic, environmental and national security costs paid by our country and its citizens by continuing to rely on crude oil as a primary source of energy for transportation. The provisions in the EISA07 will reduce crude oil categorically, imported crude oil specifically, and gasoline use emphatically. Gasoline will be reduced in two ways. The increase in corporate average fuel economy (CAFE) standards will eventually reduce gasoline by about 1.1 million barrels per day in new cars and inserting 36 billion gallons per year of renewable fuels like ethanol will reduce gasoline use in all cars. All things considered, the government hit the nail on the head and successfully addressed the priority energy issue. A challenge that industry and consumers have not been able to resolve on their own for the past 30 years.
In the face of all the anti-ethanol articles during the past year – is the new law good news? Yes! But if you don’t believe me read the new law (H.R.6.ENR). The Administration and Congress addressed the apprehension of the honest debaters and the trepidation of objective researchers that were truly concerned about the sustainable development of "clean/renewable/domestic fuels" – and ignored those trying to protect the status quo market share of gasoline. In the past year many of you have read and/or written about the thousands of anti-ethanol stories claiming the upcoming choice between food production or fuel production, negative energy balances, greenhouse gas emission increases, not enough gallons to make a difference in oil imports, the government shouldn’t pick winners, and what if things go wrong, just to name a few. If you were one of the honestly concerned, you should be happy to see all of your concerns were addressed in the new law.
Below are a few examples of how the EISA07 created an ambitious yet cautious and fair goal for ethanol production and use.
Is 36 Billion Gallons Enough to Make a Difference? If it is not enough to make a difference it sure is enough to make a point.
- The U.S. imports about 17.5 BGPY of gasoline and gasoline blending components. Maybe doubling the supply of finished transportation entering our country will drive own some gasoline prices?
- To simplify and make a comparison, in 2006 the United States imported 33.9 billion gallons per year (BGPY) from the Persian Gulf -- the worlds’ largest proven reserves of crude oil and home of multiple and long term diplomatic conflicts (e.g., 8.4 BGPY from Iraq, 1.3 Libya BGPY, 21.7 BGPY from Venezuela just to name a few).
- While the U.S. has already addressed Iranian crude oil imports with sanctions, when the energy security contribution of CAFE increases by automakers are added to the expanded RFS, the RFS/CAFE crude oil reductions may exceed Iran’s contribution to the world crude oil energy supply.
The Government is Not Picking Winners
- Two subcategories have been added to the national Renewable Fuel Standard. The first is Advanced Biofuels, which is defined as any renewable fuel other than ethanol derived from corn starch that meets life cycle greenhouse gas emissions at least 50 percent less than the baseline.
- The RFS is not limited to ethanol as it includes biomass-based diesel, biogas, butanol, and other alcohols and other fuels derived from cellulosic biomass. The new law also does not allow many of the coal-to-liquid or other petroleum-based technologies to slip in under the "renewable" definition. It also does not stop their development. Everyone gets a fair shot at this new clean fuels market and developing new technologies – including oil companies.
Ethanol Should Have a Positive Energy Balance and Reduce Greenhouse Gases
- While the majority of recent studies show modern ethanol plants have a positive energy balance, the new law makes sure of it. A second category in the RFS is called Cellulosic Biofuels is defined as a renewable fuel from cellulose reduces the life cycle greenhouse gas emission (i.e., energy use) of 60 percent less than the baseline. The baseline will be created on a comparison to gasoline or diesel fuels sold in the year 2005. Gasoline production does not have a positive energy balance, so the hurdle for renewable fuels will be higher than the current standard.
- The legislation creates a new grant program for the research and production of advanced biofuels and programs as well as extra incentives to reduce fossil fuel energy consumption in ethanol plants.
Protecting Food Supplies: Food vs. Fuel Production
- The EISA07 caps the amount of corn that can be used for ethanol at 15 billion gallons beginning in the year 2015. There is also considerable amount of attention paid to studying the impacts on virtually every sector of the economy, including food production and prices, as a result of complying with the new RFS legislation.
- The EISA07 also contains several economic and environmental safeguards (e.g., RFS waivers and suspensions) should the government feel the need to reduce the RFS requirement based on their requirements to continually study the impact of increased ethanol/cellulose/renewable fuel production and use.
Consumer Protection & Increased Market Competition
- EISA07 prohibits major oil companies from restricting the sale of renewable fuels in gasoline retail "franchise agreements." This part of the law prohibits the restriction of installing retail renewable fuel dispensers, converting existing gasoline tanks or pumps to renewable fuel blends, advertising renewable fuels, purchasing renewable fuels from persons other than the franchiser, listing renewable fuel availability on signs or dispensers, and allowing the use of credit card payment.
- The law also allows a franchisee (gasoline retailer) to remove one grade of gasoline, even if three are required by the franchise (major oil company) contract. This allowance is extremely important as many new E85 distributors would need to replace either premium or mid-grade with E85.
True Alternative Fuels Not Just a Gasoline Blend
- The law requires the Department of Energy to issue a report within 24 months on the feasibility of requiring E85 fuel dispensers in regions where Flexible Fuel Vehicles (i.e., FFVs, or vehicles that can burn up to 85 volume percent of ethanol) comprise at least 15 percent of all motor vehicles.
- The EISA07 requires the government to perform an ethanol pipeline study and implement a number of other small programs that will address and solve retail, technical, and marketing issues relating to marketing and distribution of ethanol and E85.
Increased Production and Use of Alternative/Flexible Fuel Vehicles
- Our government even had the foresight to extend the corporate average fuel economy credits (i.e., CAFE credits) designed to help automakers produce and sell Flexible Fuel vehicles (FFVs). This is a declining credit beginning in the year 2014 and remains in effect through 2019. While some organizations have historically criticized "CAFE credit" for FFVs, this credit is single-handedly responsible for adding the six million FFVs that are on the road today. As a result of those CAFE credits, U.S. automakers have already pledged to make 50% of their vehicles FFVs by 2012. Existing and new FFVs will provide crucial support for a nation trying to meet new RFS requirements and consumers demanding relief from crude oil imports.
- Do as I do. The EISA07 also contains some progressive "petroleum reduction requirements" (i.e., crude oil) for federal government agencies, most of which could be met by biofuels in hundreds of fleets across the country.
On many other levels, the EISA07 sets a great example of the nation trying to meet its core mission of protecting democracy, capitalism and diplomacy. This law is a great start to a much brighter energy future. Our "new energy" law and ethanol specifically, has undergone and will continue to under go more scrutiny than any issue our nation has faced. Deploying the components of the Energy Independence and Security Act of 2007 and the new Renewable Fuel Standard may not be easy, but it should easily be considered a very proud moment for our country. We all need to play a role in making sure it meets all of our expectations. The public demanded change, Congress created the vehicle for change, and the President signed change into law. The majority of people in this country will benefit from a very important public battle that was won over the nation’s future energy policy. Game – Set – Match, let’s move forward.
The Energy Independence and Security Act of 2007 Renewable Fuel Standard
(Billion Gallons Per Year)
||Total Volume of Renewable Fuels
||Advanced Biofuel Requirement
||(Resulting Cap on Corn Ethanol)
There is also the first ever renewable diesel requirement under the following schedule:
Happy "New Energy" Year! Do you have any energy related resolutions?
Director of Program Development
My name is Burl Haigwood and on behalf of the Clean Fuels Development Coalition (CFDC), I’d like to welcome you to the new Clean Fuels Development Blog. I’m excited by the opportunity to start this blog and be the host of what I hope will be an active and engaged community of interested readers looking to further the discussion on issues impacting the development of alternative transportation fuels in the United States.
The history of alternative fuels in this country is a complex and interconnected story complete with economic, environmental, political, and scientific challenges to its success. I’ve been working to advocate alternative fuels for over 25 years and will provide my insight on the ways these challenges contribute to – and in some cases detract from – the real and important value that renewable fuels like ethanol offer our country.
The objective of this blog is to generate discussion on alternative transportation fuel issues as they relate to energy, environmental, economic, national, and personal security. We want to give you new analysis and fresh perspectives that may not be offered as widely in other research outlets. In addition, this blog will provide the public with valuable context to the real issues that can impact the development of clean burning and domestically produced fuels. Specific attention will be given to ethanol, other renewable transportation fuels, flexible fuel vehicles (FFVs), emerging cellulosic technologies, as well as the related consumer and public policy issues that will be discussed in the media for years to come.
Energy and environmental issues, especially issues concerning transportation fuels, are multifaceted and complex. They are highly charged and emotional topics for industry, government and consumers – and therefore the media. We believe the creation and passage of the Energy Independence and Security Act of 2007 (EISA07) is a tremendous and positive political feat for our nation and a significant economic development opportunity for every region of the country. The passage of the EISA07 serves as the impetus for CFDC to start this blog and publicly log the hurdles and achievements of this historic legislation.
EISA07 represents a great success story for democracy, capitalism and diplomacy – and our Nation’s energy future. With this legislative achievement behind us, the real work still lies ahead. I’m excited about the potential for 2008 and feel we’re now at a point where the promise of creating real change is finally at hand and truly attainable.
Now you know where I stand. I invite you to take part in our conversation by offering your opinions and insights into the national debate on alternative fuels discussed in our Clean Fuels Development Blog.