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US Governors Urge Aggressive Acceleration of Development, Production and Deployment of Ethanol
10 January 2007
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| Members of the GEC. |
The 37 gubernatorial members of the Governors’s Ethanol Coalition (GEC) have released a report that recommends mechanisms to accelerate the development, production and deployment of biofuels in the short- to medium-term with a focus on cellulosic ethanol.
Along with the report—Ethanol from Biomass: How to Get to a Biofuels Future—the governors called upon the President and the Congress to adopt their four primary recommendations. These include:
Expanding the Renewable Fuels Standard (RFS) to include a short-term target of 12 billion gallons a year of ethanol and biodiesel utilization by 2010. The current target is 6.8 billion gallons in 2010. This goal includes 500 million gallons a year from cellulosic ethanol by 2012.
For the longer term, GEC recommends British thermal unit (BTU)-based targets of 15% of total motor fuels consumption by 2015 and 25% by 2025, with equal incremental steps provided for each year in between.
Assigning a financial value to the RFS cellulosic ethanol 2.5:1 trading credit into a more practical credit. Under the current RFS, Congress included a 2.5:1 “trading credit” for cellulosic ethanol. This enhanced trading credit means that each gallon of cellulosic ethanol counts as 2.5 gallons for purposes of meeting the RFS requirements.
But with the rapid expansion of conventional ethanol production, there is no financial incentive for ethanol blenders to pay more for cellulosic ethanol, and therefore there is no incentive for producers to invest in cellulosic production.
The Coalition recommends that Congress convert the $0.51 Volumetric Ethanol Excise Tax Credit (VEETC) to a ten year Cellulosic Ethanol Production Tax Credit (CETOH PTC). With the CETOH PTC, cellulosic ethanol would be worth an additional $0.765 a gallon compared to conventional ethanol, or $0.765 plus the value of the regular ethanol VEETC at that time. Properly structured, the GEC argues, this would provide incentive for a range of new ethanol production technologies that reduce fossil fuel inputs and increase the competitiveness of domestically produced ethanol.
Establishing a timetable for delivering E85 (85% ethanol/15% gasoline)infrastructure on a regional basis within five years. Specifically, the Coalition recommends that Congress adopt performance standards for major gas station owners and branders (e.g., owners of 100 or more fueling stations, high-volume stations) that would provide at least one E85 pump at 95% of their stations in at least one region over five years.
The governors also are recommending adopting a timetable for the transition to uniform flexible-fuel vehicle standards that not less than 70% of new light duty vehicles sold in the United States be fuel flexible within 10 years.
Providing adequate funding for the Energy Policy Act of 2005 authorized biofuel research, demonstration and incentive programs. The Coalition recommends providing $213 million for the DOE Biomass Program’s research and demonstration activities in 2007.
The governors also recommend a one-time, five-year appropriation of $250 million for the Section 942 reverse auction production incentive authorized in the Energy Policy Act of 2005. Funding this incentive for cellulosic ethanol will provide needed market-pull to bring innovative production processes to both existing ethanol facilities and new facilities in other regions of the nation using an array of locally available feedstocks, according to the Coalition.
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| One of the scenarios (ETH60) for ethanol feedstock from the U. Tenn. study. Corn ethanol production peaks at around 12 billion gallons per year and then plateaus and declines (with sharper decline in other scenarios. Click to enlarge. Source: U. Tenn. |
In support of the study, the Coalition commissioned the University of Tennessee to conduct a study of the economic, environmental, and agricultural impacts of increasing levels of ethanol production and use.
That study concluded that further expansion of production—10 billion gallons in 2010, 30 billion gallons in 2020, and 60 billion gallons in 2030—is within the capability of the industry and farmers under conservative grain yield improvement assumptions and market entry of modest amounts of cellulosic derived ethanol production by 2012.
The growth of the bioenergy industry is closely tied to the availability of the cellulose-to ethanol technological path. A delay in the commercial introduction and wide spread adoption of this new technology would impose significant costs for the users of agricultural commodities and limit the contribution of agriculture to the energy needs of the country. To expedite commercial introduction of cellulosic ethanol technologies, adequate support of research and development activities and policies toward commercialization are merited.
—U. Tenn study
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January 10, 2007 in Cellulosic ethanol, Ethanol, Policy | Permalink | Comments (36) | TrackBack (0)
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Great news. Thanks.
Posted by: Hydrid+E85 | Jan 10, 2007 3:10:36 PM
Notice they don't project we will get much ethanol from corn. Perhaps because they figure it will become cheaper to produce ethanol from the other biomass.
But they urge celluosic be subsidized to compete with the corn ethanol. That may be a contradiction or it mean that since corn is cheaper now it is impeding celluosic progress.
Either way the graph says 'ded. energry crop' is going to be the big source - I guess that means switchgrass.
I don't get this push for E85. E5 or E10 can raise engine power, be used in existing cars, and would require all the ethanol we can make for a decade.
So why E85 when all the ethanol we make already has a market?
Posted by: K | Jan 10, 2007 3:35:29 PM
E85 is a feel good number. GM has pushed it for their big SUVs to get the CAFE loophole offset, so politicians just think it sounds good I guess. The average voter and taxpayer has heard about Brazil and thinks if they can do it we can do it. The energy independance phrase keeps coming back. I would rather see E10 nationwide at every pump than E85 in a few towns in the midwest. We can have both, but there are only 5 million cars out of more than 100 million that can take E85 and a lot of them are gas guzzling trucks and SUVs that get lower mileage on E85. It is like someone said, when it comes to politics, don't confuse them with the facts.
Posted by: SJC | Jan 10, 2007 3:56:30 PM
"K" has got it right. We should be mandating at least E5 in all states right now; to go into effect as soon as production levels can supply this level of demand. Then, move to E10 as soon as increased production levels can supply that level of demand. Similar efforts should also be implemented right now with Bio-diesel. Worry about E85 further down the road.
I use E10 exclusively in both a '97 Cherokee and an '04 Grand Caravan; but I have to search for it. Both vehicles start easier and run cleaner throughout the varying seasons here in southeast Michigan.
Posted by: Pete_P | Jan 10, 2007 4:10:29 PM
Geez! Is it all that much more difficult to produce butanol? I can't afford to replace all the fuel lines etc in my vehicle. What's with all this governmental support for ethanol and never a word abour butanol? Who's being paid off here? Certainly not the avaerage citizen paying taxes. Grr.
Posted by: Bob | Jan 10, 2007 4:37:11 PM
Bob:
The fact is that ethanol has a few decades head start on butanol, and it's currently easier to produce. However, I have seen butanol mentioned more and more often recently as an alternative fuel. Considering its superior energy content and full-replacement potential for gasoline, I hope that it's more than just talk. BP and DuPont are supposed to conduct some marketing experiments with butanol in the UK this year, I think.
Posted by: Cervus | Jan 10, 2007 4:42:38 PM
Mandate E10 and make the oil company worry about were to get it.there may be more than on soultion cellulosic,corn switchgrass alage. differnt parts of the country have different properties. we(USA) would have to produce 3 times the amount just to get to E10. worrying about E85 is silly.
Posted by: kevin | Jan 10, 2007 4:48:41 PM
I did a search for "butanol" in Google News and came up with this: "Unsung biofuel gets backers". It's a quickie and worth a read.
Posted by: Cervus | Jan 10, 2007 5:21:04 PM
"We should be mandating at least E5 in all states right now."
With corn ethanol barely breaking even on energy I don't see how it makes much sense to ship it 1,500 miles to Florida and Maine until every gallon of gas sold in the Midwest is E10.
Posted by: Planck | Jan 10, 2007 6:18:13 PM
K,
The trajectory of corn prices moving upwards, and increased C2H5OH production coming online in the next few years stoking even more demand. By 2009, half of US corn production could go towards ethanol. Thus, celluosic ethanol may become competitive with grain ethanol, by 2010, perhaps w/out subsidies.
_This assumes you go the enzyme route. If you go BTL (gasify), the breakeven is close at hand (in the US). The main obstacles to overcome are the very high initial capital investment costs for these plants, and to a smaller degree, setting up a supply and customer chain.
Posted by: allen_Z | Jan 10, 2007 6:35:43 PM
This whole ethanol thing seems like a giant diversion to me. Many people have pointed out the shortcomings of trying to use corn to make ethanol, and the cellulosic stuff isn't even out of the laboratory yet.
In the meantime we *could* be making big strides in improving fuel economy of vehicles. A 10% increase in fuel economy buys us effectively the same amount as converting to E10 nationwide. But Detroit doesn't want to hear about anything like that - they want to keep pushing the same old fuel-hogs and use the CAFE loophole to put some green lipstick on those pigs.
Posted by: eric | Jan 10, 2007 6:57:05 PM
We went through the numbers and E5 takes about 25% of the corn crop and as Allen points out E10 would be about 50%. That seems more than a bit high to me, so if we can go from E5 to E10 with cellulose it, might be better. I like gasfication of stover, rice straw, wheat straw and such. The one thing there is consistency of feed stock. The process has to be tuned to consistent stock. But if you create a supply chain, this might not be a problem.
Posted by: SJC | Jan 10, 2007 7:10:23 PM
eric:
Even if you did raise fuel economy standards by 10%, that doesn't change the cars and SUVs that are already on the road. It takes a long time for such a changover to have much effect.
As for "Detroit doesn't want to hear it", given the Chevy Volt concept, increased hybrid offerings, and so forth, I think they've gotten the message loud and clear. It just takes years to develop new vehicles and drivetrains. Toyota and Honda have a head start, true. But if they want to stay in business, the Big 2.5 will have to catch up.
Posted by: Cervus | Jan 10, 2007 7:14:02 PM
The Chevy Volt and a couple of hybrid offerings from Detroit is only a sideshow. GM/Ford pocketbooks are banking on the marketing the fallacy of E85.
Posted by: FYI co2 | Jan 10, 2007 7:29:44 PM
The Chevy Volt and a couple of hybrid offerings from Detroit may be only a sideshow. GM/Ford and their friends in gov. are banking on marketing the fallacy of E85. (edit)
Posted by: FYI co2 | Jan 10, 2007 7:33:17 PM
GM may be faking it, but if they are, all it will take is one more good spike in oil prices to sink them.
I think we can be sure that Toyota and Honda are not faking it.
Posted by: Engineer-Poet | Jan 10, 2007 8:28:16 PM
ABCNews had a video on the car show. The take was that this is important and that they have to get it right. GM and Ford know their futures are on the line. They have been slackers before, changing their ways only to fall back to the same ol' same ol'. Who knows if the transformation will stick, but they are serious about making car people want to buy and not just trying to convince them to buy what they have.
Posted by: SJC | Jan 10, 2007 9:08:50 PM
Most matter is made of Carbon and Hydrogen. When we send our refuse as feedstock for Plasma breakdown you get a Syngas rich in CO and H2. F/T this to ethanol and you get a renewable fuel supply. NYC produces about 50,000 Ton of garbage a day. If we plasma F/T this feedstock it would power the entire city!!!
Posted by: Andy | Jan 10, 2007 10:04:50 PM
The State of California seems to be pursuing a more rational and science based path in this area. They are calling for reductions in co2 for fuels. However, it must be demonstrated that actual reductions are being made throughout the full cycle of these fuels. Instead of just blindly assuming that ethanol significantly cuts co2, California requires that companies show the reduction while considering all the fossil fuel inputs required to get that fuel to the wheel.
The Governors have chose to push ethanol in a manner intended to convince voters that they are really doing something meaningful about energy policy. It is just a feel good policy that will leave all us taxpayers paying the bag. And that includes those who drive very little or not at all.
I wondered how the politicians were going to subsidize cellulosic. They are hedging their bets. Instead of simply subidizing the technology that is supposedly the future of ethanol, they have decided to keep the subsidy on corn ethanol and subsidize cellulosic ethanol at even a greater rate.
Posted by: t | Jan 11, 2007 7:39:05 AM
Instead of spending 100+ $$billion a year on unjustified costly oil wars, USA has what it takes to put an end to all future oil driven wars by investing the same $100+ $$ billions/year for the next 10 to 20 years to:
1) Quickly develop and locally mass produce advanced quick charge affordable lower cost batteries.
2) Quickly develop and mass produce affordable PHEVs with 100 mpg instead of the current ICE 20 mpg to reduce fuel consumption by up to 80%.
3) Quickly develop and locally mass produce affordable alternative fuels such as cellulosic ethanol and biobutanol in sufficient quantities to stop all Oil imports by 2020.
4) Quickly develop and install lower cost alternative electrical energy sources such as wind, solar, waves and state of the art nuclear power plants to the level required to operate 200+ million PHEVs and EVs and to replace some of the most polluting coal fired power plants.
A progressive but meaningful carbon tax (+ an end to costly Oil wars) could easily finance this national job creation, environment protection, local production, economic program. However, the current adminstration seems to go the other (wrong) way with more and more budget and trade deficits and bigger oil wars.
Posted by: Harvey D. | Jan 11, 2007 7:49:25 AM
I'm getting a bit of a sinking feeling about all of this. It seems with ethanol, governments and groups are betting on a technology that really isn't ready yet. Cellulose-based ethanol reminds me of fusion, a technology that was supposed to be ready in 30 years---thirty years ago. Once we can make a full-scale CE plant, then I'm game.
And, I'm sorry, but demands to "quickly develop" makes me giggle. Working in a laboratory as long as I have, I know that technological improvement is not proportional to the amount of money or politics involved....unless I'm on a funding round, of course.
Posted by: tthoms | Jan 11, 2007 8:45:37 AM
Harvey D.,
I said it once and I'll say it again. Yes Iraq is very expensive, but Afghanistan is underfunded and undermanned. Even if Iraq were to right itself tomorrow, and 50% (~65,000) of our forces came home fall 2007 (nevermind the surge), we will need to rectify the deteriorating situation on the Afghan front. We need lots of men, money and equipment to stabilise the southern and eastern areas. Some of the additional forces/spending would be from NATO, and other OEF allies. Ultimately, we need to continue to build up the Afghan National Army, the police, and national/provincial govts. It will take lots of time (beyond 2010), money (>$100 billion) and effort. 20+ years of war and opium poppies have, and are stunting peace and development.
_Points 1-4 are good, though 200 million PHEV might stretch global lithium supply. Perhaps carbon ultracapacitors may fill in, when they become cheap, and capable enough. As for carbon tax, raise the gas tax to the point that it covers actual govt road spending. Currently, the federal gasoline and diesel taxes cover roughly half of the DOT highway spending. The rest is from elsewhere (debt). It may be part of a PayGo (pay as you go) spending bill. Beyond covering this shortfall, "A progressive but meaningful carbon tax" might take a different legislative approach to get through. It might not survive in Congress right now, but it might in, or pass after 2008. That is unless we get a hurricane season like 2004, '05, 1933, '38, or '50.
Posted by: allen_Z->allen_xl_Z | Jan 11, 2007 9:00:07 AM
tthoms: Quickly was met to be 10 to 20 years. With hundreds of billions $$$ a year you can go to Mars, build Atomic bombs, have 10 Marshall plans etc in the same time frame. Why would it be impossible to finance a 10 to 20 year clean energy program instead? Call it a post-industrial revolution if you have do, but it will have to be done sooner or latter. USA could be the leader. Europe, Japan, China will do it.
Don't forget that private industry would contribute many times more. The government/public contributions is to get the projects started/going and offset the initial high cost differentials.
We would be well on the way if oil wars billions $$$ had been used for such projects for the last 6 years.
Posted by: Harvey D. | Jan 11, 2007 9:02:35 AM
Yes, the $500 billion spent in Iraq would have bought us great investments in renewable energy instead of wasteful deadly spending half way around the world. Just be careful who you vote for next time.
Posted by: SJC | Jan 11, 2007 9:54:16 AM
SJC: Plus another $500 billions from a progressive carbon tax, many of us would be driving GM-Ford-Chrysler US made PHEVs powered by 20 000 new wind mills + cellulosic ethanol/butanol today.
Bad governance has been responsible for the downfall of many strong countries (and even empires) before.
Will history repeat itself again? Oil barons may see to it.
Posted by: Harvey D. | Jan 11, 2007 10:58:11 AM
There is only one good possible result from billions spent on oil wars - the failure of them. It seems clear that the sudden rush to ethanol, HEV, wind, etc. is because us regular folks are sick of petroleum wars and the catastrophic effect on people and planet. Don't forget that only a couple years ago all this activity did not exist.
Opportunities for a renewable energy industry that equitably replaces the monolithic petro industry are abundant. There is business and cleaner living in all the alternatives including FCs. So the real issue is not E85, E10 or BEV - it is to encourage all these solutions on a leveling field (leveling because subsidies must be rethought). Cost of cellulosic, algae and battery/cap start-ups should be incentivised with loan guarantees, tax deferment and credits.
The carbon tax issue may be addressed by the losses in petro market share raising the price of production and per gallon cost. Lower demand will raise prices to compensate for accelerated depreciation and unrecoverable drilling expenses.
Finally, let's try this idea - automakers become razor makers - give away the razor - sell the blades. They sell a car once and service it over its extended life with energy sales. This will likely be the model as we move through biofuels to BEVs. Or another analogy: alliances of hardware and software. Build the car AND the energy to drive it.
Posted by: gr | Jan 11, 2007 11:31:03 AM
With the complete lack of leadership (on all fronts) from the top, NOTHING is going to change until American's elect someone who has at least a clue as to what is going on. Sure, hydrogen may be the ultimate solution but lets not continue to ignore the possibilities that our current infrastructure and technology can do RIGHT NOW! Unfortunately everyone should just hold on till 2008 and hope that by then those not on board can catch up, because the administration's nose is so far up in Iraq that they have no clue (or interest) in changing energy policy. This should be abundantly clear to all on this site..."wringing of hands" over now...
Posted by: ed | Jan 11, 2007 11:54:16 AM
Can someone explain this to me. Why do people pretend that the cost to solving problems in Afghanistan will be insignificant? The $500 billion, if not spent in Iraq, would have been spent by continuing operations in OEF. Whether it be fuel or reconstruction, there are many needs to be met. Those helicopters, needed for mountain ops, are fuel hungry.
_Lets say, we did not launch OIF in 2003. The reminants of te Taliban and Al-Qaeda flee to Pakistan's FATA after Tora Bora. Pakistan does not have full control of these tribal areas. They then use it as a staging ground and rear area to attack from, as they have. At least 100,000 allied soldiers is needed to secure southern and eastern areas. Another 200,000 Afghan National Army and police is needed to hold the cleared sectors. Federal/national/provincial/local security and defense forces may ultimately need to number 500,000, to a million, for stabilization purposes. Add on top the 20+ years of war, and the need to recontruct the country the size of Texas, with ~30 million people.
_Granted, we could have eliminated the need for oil imports with $500 billion, by constructing xTl plants. Yes, might have created 500,000 to a million middle class jobs. However, we should not trivialise the costs of other endeavors, and obligations.
Posted by: allen_Z | Jan 11, 2007 12:18:58 PM
I wonder how may of these states have Net Metering to match there gusto for E-85. Missouri does not.
Posted by: dave | Jan 11, 2007 1:42:49 PM
Please no more e10,e20 mandates. They do NOTHING to lower our dependence on OIl.
E85 is a TRUE alternative to Gasoline.. E10,E20 is simply a white wash .
What are you going to do when the middle east turns off the spicket ? Your E10 and E20 GASOLINE will sky rocket in price, if you can even find fuel because it is mostly gasoline
E85 on the other hand is an ALTERNATIVE fuel ..
It is not a total answer, not a total soultion .. it is meant to be an alterntive.. maybe in 10 years it can have 30% of the auto fuel market , maybe hydrogen has 4% , plug in electrics 12% , propane 1% and gasoline products the other 53% .
That diversity forces each Industry to be as efficient as possible because each Industry is then required ot compete , actually compete for the consumers dollar.
When the consumers have choices they get the best prices .
Right now E85 only represent 1% of all Ethanol production! the rest goes to the OIL COMPANIES! that should be outlawed NOT promoted.
Ethanol and Oil should be forced to COMPETE not encouraged into making deals selling ALL the ethanol to the OIl companies ..which is exactly what is going on .
By buying up all the ethanol production the Oil Companies are working to keep E85 off the market ..
They dont want any ALTERNATIVE fuels (like E85) on the market that directly competes gallon for gallon against their Gasoline product.
Posted by: Dan | Jan 11, 2007 5:42:51 PM
Allen Z,
The answer to your question goes way back before 911. Petroleum was what got Bush Sr. into Iraq in Desert Storm, stationing a lot of troops in Saudi, and intefering with the Saudi gov. in a way that caused a repulsion in the fundamentalist Arab youth, but mostly Saudi's youth, of which Osama bin Laden is the chief instigator. Had Petroleum been not so important, 911 would not have happened, and there would be no Afghan war, nor Iraq 1 or Iraq 2 wars. In a round about way, the USA is sustaining its profligate way of living with the blood of its soldiers, and the sweat of its future workers paying off the war debt. Shoulda follow thru with previous energy policies of conservation and development of alternative energy after the first and the second oil embargo...But somehow, complacency sets in, or was it the work of the oil cartel and other interest groups(?) hi-jacking America's well-intended alternative energy and conservation and flew them to the ground.
Must we now suffer thru another ill-advised energy policy (ie. corn ethanol) that will do nothing to solve our petroleum dependency?
Posted by: Roger Pham | Jan 11, 2007 8:01:27 PM
Wake up, Roger, it is not what we do, it is what they are…
Posted by: Andrey | Jan 12, 2007 2:45:16 AM
This whole Ethanol thing is getting souped up in politics I agree. Its going to damage it in the long run. Don't forget that Hydrogen Fuel Cells, ultra-capacitors and even the Nickel Metal Hydrite batteries in today's HEVs could be highly developled in a few years and subdue the political will as well as the desire and need for bio-fuels. Especially when their production costs are myopic.
I'd go with E10 right now, get into the market and secure a strong position. Look to compliment other developments as they roll in. Ethanol and other bio fuels are not the stars of alternative energy like fuel cells and ultra-capacitors. But it could pick up a backwater farmer's position and live on.
Posted by: AZ | Jan 12, 2007 7:35:51 AM
It was estimated that hybrids will make up about 1-2% of the car fleet and level out. I don't know if anyone believes that, but if these cars get 40% better mileage then E5 is a better bet. Corn is not good to use and sugarcane is better, we know that.
Hawaii and Florida had sugarcane industries until ADM came up with high fructose corn syrup. Let's push for cellulose between E5 and E10 and at the same time look for more efficiency and behavior modification. Less commuting would be good. That is one of the reasons Bob Lutz of GM gave for the Volt 16kWh of battereis, to communte to an from work 20 miles each way. That is why they made the Volt E85 capable.
Posted by: SJC | Jan 12, 2007 8:22:08 AM
One way to avoid future costly oil wars and greatly reduce terrorism potential would be for all industrial countries (oil consumers) to do as Brazil and Canada are doing, i.e. produce their own liquid fuel and completely stop importing OIL from the middle-East. Some kind of progressive embargo and/or a very large carbon tax on imported fossil fuel from the middle-east may be necessary.
Without the hundreds of $billions/year in oil revenues, the 200+ million people in that area would spend more time praying for better days and have less time and resources left to try to destroy us. By not using their oil, the main (apparent) reason to fight/kill us would cease to exist. They may even have to go back to work to survive.
Simultaneously, we should introduce ways to reduce liquid fuel consumption by 50%+ with PHEVs/EVs/FC etc while reducing GHG.
The progressive transition from the old petroleum based economy to a new alternative cleaner energy economy is part of the coming unavoidable post-industrial revolution. The leading countries will benefit most (USA/EU/China/Japan/etc) but others would follow.
We could even apply special import tarifs and/or quota on imported goods made with middle-east oil. This would discourage cheaters.
Posted by: Harvey D. | Jan 12, 2007 9:02:03 AM
FYI
Posted by: ed | Feb 5, 2007 6:30:49 AM
