2. New Administration, old plans?

The incoming Administration has already made a strong commitment to re-orienting the economy toward using more sustainable energy, rather than the conventional major sources of oil, natural gas and coal. However it appears to have already run into a little resistance in trying to get this through Congress. Many of the folk over there, particularly the old style Democrats, have their own ideas about how best to stimulate the economy. At the same time when President-elect Obama went and talked to the State Governors he had talked to them about using a quick infusion of money to get infrastructure projects accelerated.

The governors want about $136 billion to use for what they call "ready-to-go projects," like water and sewer projects or building roads and bridges. They want another $40 billion to go toward Medicaid programs.

Pennsylvania Gov. Ed Rendell, who is chairman of the National Governors Association, says that for every $1 billion the states get from the federal government, the governors believe they can create 40,000 jobs.

The jobs in the energy field associated with the transportation infrastructure (bridges etc) have also raised something of a philosophical problem:

But environmentalists and their allies view old-fashioned highway construction as encouraging longer commutes and increasing the energy-consumption crisis of the past year. "They're going to put a bunch of money through a broken system to stimulate the economy. That doesn't make sense to me," said Colin Peppard, a transportation expert for Friends of the Earth.

Of the highway funds, for example, one group found that much of the new investment would be in highways on the edges of the suburbs, thus encouraging the longer commutes from the communities hardest hit by the current financial downturn. However the more critical issue for this site will be what the new plan will be for ethanol.

The new Administration has called for an increased investment in ethanol. Forming what has been called a dream team for ethanol, the team acknowledges the strength of corn-based ethanol with the appointments of the former Governor of Iowa, Tom Vilsack to head Agriculture, while the incoming Secretary of Energy, Dr. Chu, has been an advocate for cellulosic ethanol.

We are thus returning to the same major focus for sustainable energy of the current Administration. In that game plan corn-based ethanol would provide the initial supply to get the change started. But, to give the heavy lifting that will take the country from using 5 or 10% ethanol in the fuel mix, to E-85 where almost all the fuel is ethanol, the additional supply has to come from cellulosic sources. The availability of that supply is much less certain.

Robert Rapier has noted many of the problems that this transition will face.

The Renewable Fuels Standard of a year ago mandates 36 billion gallons of ethanol usage by 2022, with 16 billion gallons coming from cellulosic ethanol. As I said at the time, those numbers didn't appear to be remotely credible. The EIA report indicates that we won't have reached that level by 2030

There are more problems with the technology than just gearing up the supply. Back in 2007 DOE announced $385 million in funding for six refineries which, over the next four years would gear up to providing 130 million gallons of ethanol a year. Now while that sounds a lot, if one divides by 365 to get the amount per day, and then by 42 to bring it into barrels, then one gets 8,480 barrels a day, not so much. It would be a start, however toward the planned contribution of 20% of the gas consumption by automobiles in ten years. To get there cellulosic ethanol was expected to be cost-equivalent to gasoline by 2012. In a later post I will explain why that is not going to happen. However, since we are still building a foundation for future posts, let me just list the initial six projects:

Abengoa Bioenergy Biomass of Kansas. This plant will produce 11.4 million gal/year from a daily feed of 700 tons of corn stover, wheat straw, milo stubble, switchgrass and other feedstocks.

ALICO, Inc. of LaBelle, Florida. This plant will produce 13.9 million gal/year of ethanol, 6,255 kW of power, 8.8 tons of hydrogen and 50 tons of ammonia a day. This will be produced from a feedstock of 770 tons of yard, wood and vegetative waste. The effort was discontinued in June 2008.

Bluefire Ethanol, Inc of Irvine, California. This plant will produce 125 million gal/year of ethanol, though only 25% will come from cellulosic sources. For that portion of the product, the plant will use 842 tons/day of corn fiber, cobs and stalks.

Brion Companies of Sioux Falls, South Dakota, now referred to as POET with the plant in Iowa. It will produce 18 million gal/year of ethanol from 842 tons of corn fiber, cobs and stalks. This will be an addition to their current production of corn-based ethanol.

Iogen Biorefinery Partners, of Arlington, VA for a plant in Shelley, IA. The plant will produce 18 million gal/year. It will use 700 tons of agricultural residues including wheat straw, barley straw corn stover, switchgrass and rice straw. The company has, since the DOE announcement suspended their plans for the Idaho plant, but will continue with a current operation in Canada.

Range Fuels of Broomfield, Colorado, though the plant will be in Soperton, Georgia. The plant will produce about 40 million gal/year of ethanol, and 9 million gal/year of methanol. The feedstock will be 1,200 tons/day of wood residues and wood based energy crops.

One of the hills that the technology must surmount is shown in the basic comparison table between corn-based ethanol and cellulosic ethanol produced by the Chief Economist of the Department of Energy, and which was presented at the Sustainable Energy Conference in St. Louis in 2006.



It will be interesting to see how the new team at the Department of Energy, and in the White House, moves to improve productivity and encourage the evolution of the technology, since there are still some serious hurdles to get over. However, in the interim, the number of plants planned has increased. The additional sites are as follows:

Verenium to build a 1.4 million gal/year plant in Jennings, LA. This will also be funded by DOE , though just this month the company was contacted by NASDAQ about being out of compliance with one of the NASDAQ rules in regard to capitalization.

Dupont Danisco Cellulosic Ethanol LLC has partnered with the University of Tennessee, and have broken ground for a pilot plant with the first full-scale plant being anticipated for 2012.

Mascoma has added MIT faculty its Scientific Board, and was initially funded by Khosla Ventures. The demonstration plant will be in Rome, NY. It will be looking to convert woodchips into ethanol and the first production plant, following a grant of $23.5 million from the State of Michigan, will be in Kinross in the Upper Peninsula of Michigan. It will be run by a new company, known as Frontier Renewable Resources.

Coskata, in Maddison, PA with a 40,000 gal/year demonstration facility. The goal is to generate 100 gal of ethanol for every ton of feed , using a synthesis gas process.

Zeachem, with a research lab in Menlo Park, CA is currently based in Lakewood, CO. They will work with wood chips, with an initial plant size aimed at 2 million gal/year.

Qteros which used to be Sunethanol, based in Hadley MA. Their plans include a pilot plant to be built next year, followed by a demonstration plant in 2010, and a commercial plant in 2011.

Note that the national renewable fuels standard mandates that fuel producers use one billion gallons of cellulosic ethanol by 2013 and at least sixteen billion gallons by 2022. We shall see how that goes.