The next generation of biofuels is entering commercial production which offers farmers and others new income opportunities while reducing the U.S. dependence on foreign oil.
Advanced biofuels are high-energy liquid transportation fuels derived from low-nutrient input, high-yield crops including switchgrass, miscanthus, and others; agricultural and forestry waste; and other sustainable biomass feedstocks including algae.
These renewable biomass sources are converted through various processes which break down the cellulose in plant cells to produce cellulosic ethanol and other products.
Advanced biofuel joins corn-based ethanol and bio-diesel from soybean oil - the first generation of biofuel - in the ongoing U.S battle to reduce foreign energy imports. Corn ethanol refineries today produce about 14 billion gallons of conventional ethanol annually which curbs U.S. oil imports by about 300,000 barrels per day.
The U.S. imports about half of its petroleum needs. Americans spend about $2 billion a day overseas to purchase imported oil to convert to fuel.
A handful of advanced biofuel refineries in the U.S. are either in production or in the construction phase. Company leaders shared the latest details on their cutting-edge ventures during the 2012 Biomass Conference held in Washington, D.C. in July.
About 700 advanced biofuel industry members, scientists, academia, and others attended the event, sponsored by the U.S. Department of Energy (DOE). More than 80 speakers shared the latest in advanced biofuel developments.
Christopher Standlee, Abengoa Bioenergy’s executive vice-president, said the company will complete construction of its first U.S. cellulosic ethanol commercial refinery in Hugoton, Kan., next year. The refinery will shift into commercial production in 2014.
The advanced biofuel refinery will produce about 25 million gallons of cellulosic ethanol annually from biomass, plus generate 20 megawatts of electricity.
The Abengoa plant will produce the ethanol from corn stover primarily, plus wheat straw, milo stubble, switchgrass, and prairie grasses.
The company will purchase about 390,000 tons of dry biomass annually from farmers located within 50 miles of the refinery. Abengoa will pay farmers about $17 million annually for the biomass.
Standlee says the “key driver” for Abengoa’s entrance into advanced biofuels is the Energy Independence and Security Act of 2007 passed by Congress and signed by President George W. Bush. The law calls for the production of 36 billion gallons of renewable transportation fuels annually by 2022. About half of the mandate is for cellulosic ethanol.
“This is the legislation that says if we build bio-refineries there will be a market,” Standlee said. “If we make the fuel, there will be a market for the fuel.”
Standlee also credited DOE loan guarantees to companies for bringing the advanced biofuels market to fruition. Abengoa invested $200 million of its own money before the DOE put up its first dollar. Abengoa will repay its DOE note in full, plus interest, the company leader said.
Abengoa has 15 grain ethanol refineries in the world including six in the U.S. The refineries produce nearly one billion gallons of conventional biofuel annually.
Across the U.S., about 25 advanced biofuel refineries are under development. David Danielson, DOE Assistant Secretary for energy and efficiency and renewable energy, expressed excitement over the industry’s developments.
“Construction is underway, steel is in the ground, jobs are created, and new technologies are being validated,” Danielson told the crowd.
“We are making strong progress toward our national biofuel goal. By replacing imported fossil fuels with renewable, home-grown biofuels, we’re working to ensure our economic security, our national security, and the safety of our air and water.”
Many of the first wave of advanced biofuel refineries will be located in the Midwest. The DOE says refineries will eventually be built coast to coast. This will require biomass production nationwide which will offer crop diversity and profit potential for farmers.
The USDA Farm Service Agency’s (FSA) voluntary biomass crop assistance program (BCAP) offers farmers financial assistance to produce biomass crops. FSA funds offset many production-related costs. Most BCAP programs give farmers six months to enroll. BCAP is available in 11 areas of the country, funded by the 2007 farm law.
A BCAP program offered in the West in 2011 fell short of its acreage sign-up goal. Producers in California, Montana, Oregon, and Washington were asked to grow 51,000 acres of the weed camelina, camelina sativa, for conversion to cellulosic ethanol for jet fuel. The FSA project sought 30,000 acres in California alone.
Under the western BCAP program, camelina would be grown as a rotational crop with cereal grains on marginally productive land with limited available water under a multi-year FSA contract.
At the Biomass Conference, FSA biomass crop assistance manager Kelly Novak addressed the federal government’s efforts to enroll biofuel acreage. She said about 3,000 acres were enrolled in the four-state camelina program including 2,000 acres in California.
Novak says the lower-than-expected farmer participation was based on a shorter sign-up period (less than two months), reduced overall federal funds, insufficient production information about camelina, and a difficulty to answer farmers’ questions during the brief sign-up period.
Congress will decide in the next farm bill whether BCAP biomass programs will be available in the future.
Algae is one of the most talked about potential feedstock sources for advanced biofuels. Scientists are developing various algae strains which could be grown in different regions of the country.
A potential hotbed for algae production could run from San Diego, Calif., to West Texas due to the region’s abundant sunshine and hot summer temperatures.
“The cost of algae production has come down dramatically to make it cost competitive,” said Valerie Reed, the DOE’s acting biomass program director. “We are probably looking at a 10-year time frame for the commercial production of algae.”
The road to commercial advanced biofuel production has been a slow ride. One reason is the difficulty to gain investors to financially support new energy development. In addition, financial challenges caused by the Great Recession slowed industry progress.
“Its success depends on the work of a diverse stakeholder group – farmers, agronomists, lab scientists, engineers, investors, entrepreneurs, industry groups, environmental organizations, academics, lawmakers, and government officials,” Reed said.
In retrospect, the grain ethanol industry took 40 years to mature to its current high production efficiencies.
The stars appear lined up for advanced biofuels. The next generation of renewable energy has arrived.