President Obama To Advance Biofuels Production
President Obama announced that his administration is taking several steps to advance biofuels research and commercialization. He signed a Presidential Directive to help preserve biofuel industry jobs and to establish the Biofuels Interagency Working Group, which will develop the nation’s first comprehensive program for advancing the biofuels market.
Obama also announced that DOE will release $786.5 million in Recovery Act funds to accelerate advanced biofuels research, development, and deployment, and that the U.S. EPA has released a Notice of Proposed Rulemaking for the federal Renewable Fuels Standard (see separate articles below). The EPA proposal outlines its strategy for increasing the supply of renewable fuels.
The new Biofuels Interagency Working Group will be co-chaired by the Secretaries of Energy and Agriculture and the EPA Administrator, and it will work with the National Science and Technology Council’s Biomass Research and Development Board. It will use existing authorities and identify new policies to support development of next-generation biofuels, increase the use of flexible-fuel vehicles, and assist in retail marketing efforts. The group will also coordinate policies for the infrastructure needed to produce and deliver biofuels and will work toward the sustainable production of biofuel feedstocks, taking into consideration land use, habitat conservation, crop management practices, water efficiency, water quality impacts, and lifecycle assessments of greenhouse gas emissions.
The president also directed Agriculture Secretary Tom Vilsack to preserve employment in the renewable fuels industry by immediately refinancing existing federal investments. The U.S. Department of Agriculture (USDA) will also make financing from the 2008 farm bill (the Food, Conservation, and Energy Act of 2008) available within the next 30 days, including loan guarantees for commercial-scale biorefineries, grants for demonstration-scale biorefineries, expedited funding for installing biomass energy systems at biorefineries, and expedited funding to encourage the production of next-generation biofuels.
The Renewable Energy Systems and Energy Efficiency Improvements Program, which will be renamed the Rural Energy for America Program, will be expanded to offer guarantees for larger loans and to include energy audits and hydropower projects. Obama also tasked Secretary Vilsack with developing a comprehensive approach to accelerating the investment in and production of biofuels. See the press releases from the White House and the USDA.
DOE to Invest $786.5 Million in Recovery Act Funds in Biofuels
President Obama announced that DOE plans to invest $786.5 million from the Recovery Act to accelerate advanced biofuels R&D and to provide additional funding for biorefinery demonstration projects. The funding for biorefineries will include a $480 million solicitation for pilot- and demonstration-scale "integrated" biorefineries, which produce advanced biofuels, biobased products, and heat and power in a single integrated system. DOE anticipates making 10 to 20 awards for refineries at various scales and designs, all to be operational in the next three years.
The DOE funding ceiling is $25 million for pilot-scale projects and $50 million for demonstration-scale projects. In addition, $176.5 million will be used to increase the DOE funding ceiling on two or more demonstration- or commercial-scale biorefinery projects that were selected and awarded within the last two years. The funds are expected to expedite the construction phase of these projects and ultimately accelerate the timeline for start up and commissioning.
An additional $130 million in funds will support biofuels R&D including $25 million to further support the Bioenergy Research Centers that were established last year and to establish a small-scale integrated biorefinery pilot plant that will be available as a DOE user facility. The remaining funds will be distributed through three competition solicitations, including $20 million to evaluate the impact on conventional vehicles of gasoline blends containing more than 10% ethanol, to optimize the performance of flex-fuel blends running on E85 (a blend of 85% ethanol and 15% gasoline), and to upgrade existing refueling infrastructure to be compatible with fuels containing up to 85% ethanol.
An additional $50 million solicitation will support a consortium to develop algae-based biofuels, while a $35 million solicitation will support a consortium to develop other third-generation biofuels, such as green gasoline and green diesel, both of which are biobased hydrocarbon fuels. See the DOE press release and the DOE e-Center notice of the upcoming Funding Opportunity Announcements for the refueling infrastructure upgrades and the advanced fuel consortiums.
EPA’s Proposed Renewable Fuel Standard Tackles GHG Emissions
President Obama and the U.S. EPA announced the issue of a Notice of Proposed Rulemaking for the federal Renewable Fuel Standard (RFS). The Energy Independence and Security Act of 2007 (EISA) requires the national supply of renewable fuels to reach 36 billion gallons by 2022, causing a significant expansion of the current RFS. In keeping with the EISA, the proposed revision to the RFS program specifies the volume of cellulosic biofuel and biomass-based diesel that must be used in transportation fuel each year. The program classifies these fuels as "advanced biofuels," defined as fuels other than corn-based ethanol and with greenhouse gas (GHG) emissions half that of the fuel they replace.
The program requires a volume of advanced biofuels that is greater than the combined requirements for cellulosic biofuel and biomass-based diesel, thereby allowing some competition among these and other advanced biofuels. By 2022, the proposed RFS program will require the annual use of 16 billion gallons of cellulosic biofuel, at least 1 billion gallons of biomass-based diesel, and a total of 21 billion gallons of advanced biofuels, leaving 4 billion gallons unspecified (although the EPA may require greater volumes of biomass-based diesel after 2012, which would leave fewer gallons unspecified).
To allow for conventional biofuels, such as corn-based ethanol, the program sets an even greater volume requirement for all renewable fuels. To qualify as renewable fuels, biofuels produced at new facilities must achieve a 20% reduction in GHG emissions compared to the fuels they replace. By 2022, the proposed RFS program requires 36 billion gallons of renewable fuel altogether, which leaves room for up to 15 billion gallons of conventional biofuels, such as corn ethanol. Despite the many changes, the proposed program builds on the programmatic structure of the original RFS, including the use of tradable credits to track compliance with the program.
To determine which fuels qualify as advanced biofuels and new renewable fuels, the proposed program is the first federal program to assess the lifecycle GHG emissions associated with each fuel, including indirect emissions from land use changes, to determine which fuels qualify for the fuel standards.
Lifecycle emissions include the emissions from growing, harvesting, and transporting the biomass and from producing and transporting the fuel. With land use changes included, the EPA proposes to allow only the five most sustainable process pathways for producing ethanol from corn starch to qualify as renewable fuels, while ethanol produced from sugar in a biomass-fueled facility can qualify as an advanced biofuel. Likewise, biodiesel from virgin plant oils qualifies as a renewable fuel, while biodiesel from waste grease and oils, animal fats, and non-food grade corn oil qualify as advanced biofuels.
Recognizing the controversial nature of such analyses, the EPA plans to conduct peer reviews of the key components of its analysis and will hold a public workshop on the lifecycle analysis. The EPA will accept comments on the proposal for 60 days after its publication in the Federal Register, and the agency proposes to have the revised RFS program take effect on January 1, 2010. See the EPA press release and the full notice of proposed rulemaking, particularly pages 314-328 and 491-493 (PDF 3.0 MB).
While the EPA is focusing on the RFS regulations, the ethanol industry is concerned about having a distribution channel for all that ethanol. In early March, the industry group Growth Energy and 54 ethanol producers submitted a waiver application to the EPA, asking to allow conventional blends of gasoline to include up to 15% ethanol by volume, a blend that would be referred to as E15.
Since 1978, the limit has been set at 10% ethanol (E10) for conventional blends of gasoline. However, the amount of ethanol required by the RFS will soon hit market constraints imposed by the 10% limit and by the relatively small market for ethanol-rich blends known as E85 (a blend of 85% ethanol and 15% gasoline). A 15% blend limit would expand the potential ethanol market by nearly 50%. The EPA published the waiver request in the Federal Register on April 21 and is accepting public comments on the request until May 21. Current statute calls for EPA to make a decision within 270 days of receipt, which is December 1. See the EPA and Growth Energy press releases and the Federal Register notice.
DOE to Invest $93 Million in Recovery Act Funds in Wind Power
DOE announced it plans to provide $93 million from the Recovery Act to support further development of wind energy in the U.S. The funding will support projects that draw on the innovations of DOE’s national laboratories, universities, and the private sector to help improve reliability and overcome key technical challenges for the wind industry. These projects will create green jobs, promote economic recovery, and provide the investments needed to increase renewable energy generation.
DOE will also invest over $100 million in Recovery Act funds for facility and infrastructure improvements at its National Renewable Energy Laboratory (NREL), including $68 million for the nation’s most energy efficient office building, the Research Support Facility, as well as $13.5 million for the Integrated Biorefinery Research Facility and $19.2 million for other infrastructure improvements, such as renewable energy systems to help power the laboratory. The Research Support Facility is currently under construction at NREL; see the NREL construction update.
Of the $93 million in wind energy funding, $10 million will go toward DOE’s National Wind Technology Center (NWTC), which is part of NREL, to enhance the testing of wind turbine drivetrains and to upgrade the electrical distribution system, allowing NREL to feed power from two new utility-scale wind turbines into the grid. Under previous agreements, the two new turbines will be installed at the NWTC for testing and evaluation.
DOE will also award $14 million to support the development of lightweight, advanced materials for wind turbine components and the development of process controls for the manufacture of wind turbine blades. DOE will also offer $69 million through two competitive solicitations: a $24 million solicitation for the development of up to three university and industry consortia, which will focus on critical wind energy challenges, and a $45 million solicitation to support the design and construction of a new drivetrain testing facility for large wind turbines. See the DOE press release, the NREL feature articles on the new funding and the two new wind turbines, and the notices on the DOE e-Center Web site of the upcoming Funding Opportunity Announcements for the university and industry consortia and the drivetrain testing facility.
New Hospital Energy Alliance to Promote Clean Energy in Healthcare
DOE announced the launch of the Hospital Energy Alliance (HEA), an industry-led partnership between national healthcare leaders and DOE to promote the integration of advanced energy efficiency and renewable technologies in hospital design, construction, retrofit, operations, and maintenance.
U.S. hospitals use 836 trillion Btu of energy annually and have more than 2.5 times the energy intensity and CO2 emissions of commercial office buildings. The total annual energy bill for U.S. hospitals is more than $5 billion, often equaling 1%-3% of a hospital’s operating budget or an estimated 15% of profits.
The HEA Steering Committee includes representatives from eight healthcare networks operating in 32 states and the District of Columbia, as well as representatives from the U.S. Department of Veterans Affairs; the American Society for Healthcare Engineering; the American Society of Heating, Refrigerating and Air-Conditioning Engineers; the Global Health and Safety Initiative; and the Illuminating Engineering Society of North America.
HEA is the third energy alliance launched by DOE as part of its Net-Zero Commercial Building Initiative, which aims to achieve market-ready, zero-energy commercial buildings by 2025. In 2008, DOE joined with large retail stores to form the Retailer Energy Alliance, and in early April, DOE joined with commercial real estate companies to launch the Commercial Real Estate Energy Alliance (CREEA).
The energy alliances are designed to connect building owners and operators with research, advanced technologies, and analytical tools emerging from DOE and its national laboratories. The alliances serve as forums for creating and sharing evidence-based strategies and best practices, thus ensuring greater consistency in energy-efficiency program design and delivery. Each alliance’s collective buying power will also encourage the production of more energy-efficient equipment by providing manufacturers greater clarity on the business needs for that sector. See the DOE press release and the HEA Web page on the DOE Building Technologies Program Web site.
BLM to Invest Recovery Act Funds on Renewable Energy Permitting
The Bureau of Land Management (BLM) will invest $41 million in Recovery Act funds in reducing the backlog of pending applications for wind and solar power projects on BLM-managed land. The investment is part of a $305 million investment announced by the Interior Department last week.
The $41 million will also support the regional planning and siting of future wind, solar, geothermal, and biomass energy projects, and the transmission lines needed to deliver that renewable energy to market. Coordinating the development and transmission of renewable energy on a regional scale will accelerate the approval of projects and the creation of jobs associated with the projects. BLM will invest an additional $1.2 million to install solar power systems at 16 BLM fire stations in Nevada. The BLM is also investing $143 million to upgrade its facilities throughout the United States, and a portion of that funding will go toward energy efficiency improvements. See the Interior Department press release.
The Interior Department also announced it will further expedite the production of renewable energy on public lands by creating four new Renewable Energy Coordination Offices, while forming five smaller renewable energy teams. The new offices will be located in Arizona, California, Nevada, and Wyoming, while the smaller teams will be in Colorado, Idaho, New Mexico, Oregon, and Utah. The renewable energy offices and teams will cut red tape by expediting applications, processing, reviews, and permitting of renewable energy projects. See the Interior Department press release.
Study: Climate Targets Greatly Limit the Near-Term Use of Fossil Fuels
In the absence of technologies to capture and sequester CO2, the path to avoid dangerous levels of climate change requires that less than 25% of the world’s proven fossil fuel reserves can be burned between now and 2050, according to a new study. The study, published in the journal Nature last week, finds that the world can have a reasonable chance of keeping global warming within 2°C above pre-industrial levels, but only if the world’s nations collectively limit their total emissions to one trillion metric tons of CO2 between 2000-2050. That may sound like a lot, but the world has already burned through a third of that allowance in only nine years.
On its current course, the world will reach the one trillion ton limit within 20 years, rather than 40, and the prospect of controlling the global temperature rise will be bleak. The study confirms the need to achieve substantial reductions in global greenhouse gas emissions soon, as any delays could add tremendous economic costs and technological challenges to the goal of limiting the global temperature rise. That conclusion echoes the findings of a report from McKinsey & Company that was reported in this newsletter in late February. See the press release from the Potsdam Institute of Climate Impact Research.
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Kevin Eber is the Editor of EREE Network News, a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE).
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