More In This Article
What technical obstacles currently most curtail the growth of biofuels? What are the prospects for overcoming them in the near future and the longer-term?
The conversion and commercialization of cellulose inputs into fuel ethanol is a significant technology obstacle to the growth of the ethanol industry as a mainstream fuel. A number of companies are currently working on cellulosic technologies, and great strides have been made, but a gap remains between technology advances and full commercial deployment. Much of this challenge exists around two factors—scalability and cost. Science is no longer the primary gating issue—it's now a matter of investment and resource allocation.
A key issue is the conversion of existing corn ethanol and sugarcane ethanol facilities into integrated cellulose/starch/sugar production facilities. Along with the construction of new cellulose-only ethanol facilities, the conversion of existing plants would enable the production of commercial quantities of cellulosic ethanol by 2010, as mandated by the Renewable Fuel Standard.
Are there obstacles to scaling up biofuels to serve a larger national or global customer base?
In addition to capital, the availability of various renewable inputs and their transportation and storage may present a challenge for some producers, depending on their technology. AE Biofuels uses an enzyme-based approach to the production of cellulosic ethanol and has designed our process to be integrated with existing corn ethanol production, in addition to building cellulose-only plants. Existing ethanol plants already have feedstock management, distillation, ethanol distribution and other infrastructure in place.
Proximity to agricultural waste such as corn cobs, corn stalks, wheat straw and sugarcane bagasse provides the best source of lower-lignin renewable cellulosic biomass for the AE Biofuels process. Since transportation and storage of biomass add to the overall production cost if the materials aren't located near the biofuels facility, agricultural areas are the best location for renewable biomass to be used in ethanol production.
Integrating cellulose and traditional ethanol production from starch or sugarcane is the most rapidly scalable approach to the large-scale production of cellulosic ethanol.
Can the existing energy infrastructure handle growth in biofuels? Or does that, too, need further modification?
The distribution of ethanol via pipeline is a method to lower the cost of long-haul distribution compared to rail or truck transportation. However, more than 10 billion gallons of ethanol will be transported and blended in 2009, and the earlier limitations in ethanol distribution and blending are no longer the major factor in the growth of the industry.
Given the current economic crisis, can your industry get the necessary capital (from public or private sources) to adequately finance its growth?
Capital investment is the key to the large-scale commercial implementation of next-generation biofuels. Commercial debt financing is essentially nonexistent in the current marketplace, so in order for this industry to scale, a mix of sources will need to be developed in the next 18 months.
The U.S. government has a unique opportunity. In 2005 and 2007, energy legislation was passed that increased the Renewable Fuel Standard (RFS) and also created a number of Department of Energy and U.S. Department of Agriculture funding vehicles (grants and loan guarantees) to help the biofuels industry meet mandated production goals. Most of these programs reside at the Departments of Energy and Agriculture. The pace of implementing these programs has not followed the strong policy imperative set by lawmakers.
President Obama has a unique opportunity, through executive order or directive to his cabinet, to streamline the process of getting these funds to qualified companies. Without a strong commitment from government, renewable fuels will not keep pace with our nation’s stated energy independence goals.
From a strategic standpoint, which is the bigger competitor to biofuels: incumbent coal, oil and gas technologies or other alternative energy technologies?
All of these sources of energy are complementary, not competitive. A combination of resources and technologies will have to work in conjunction to reduce our dependence on foreign sources of energy.
Is there a cost target that you and others in your industry are aiming to achieve in, say, five years?
By reducing the amount of food-based inputs and energy required in the production of biofuels, the overall cost of production will be reduced. Next-generation biofuels will open and expand markets for additional agricultural products (wheat, barley, staws, grasses, corn stover, woody biomass). The production of biofuels at costs that enable retail prices of fuels below the comparable price of gasoline is the overall target, and the high volatility of crude oil prices has demonstrated the urgent need for a fuel alternative.