By JIM LANE, Editor & Publisher, Biofuels Digest
In many cases, there’s no need to wait for April to get into the questions — and the discussion isn’t so sensitive that a private briefing is necessary to foster a free dialog. So here are 15 burning questions as suggested by various Digesterati — divided for convenience into upstream, midstream, downstream, policy and finance sections, and some answers.
Policy
1. What is in the future for the Renewable Fuels Standard 2 (RFS2)? What does the industry need to get done with the RFS to make it a more effective policy instrument for advanced biofuels?
The Digest’s take: The battle over the RFS2?s future has shifted. Opponents now point to surging U.S. production in natural gas and oil, saying we don’t want to change the RFS2, we want to repeal it. It’s not needed: Corn ethanol is too damaging to food and oil interests, and advanced biofuels are not arriving in sufficient quantities.
Industry’s answer is likely going to have to be evidence of growing production — especially of advanced biofuels from non-food feedstocks.
“We’re late, but we’re here” is better than “we’re five years away.” If there is significant deployment activity in the U.S., at least in 2013 — with the likes of Beta Renewables, POET-DSM, DuPont, INEOS Bio, KiOR, Gevo and/or Butamax, and a host of other companies that are working up plans for first commercial projects — well, that certainly would be enough to prevent repeal.
2. Will the low-carbon fuel standard (LCFS) move beyond California?
The Digest’s take: As soon as the Supreme Court rules on the constitutionality of California’s LCFS, if it is not struck down, expect that it will be emulated elsewhere on a state level. The Northeast and elsewhere on the Pacific Coast would be areas to watch.
3. Are the corn and advanced cellulosic industries aligned or will they be opposed as time goes on, and what are the ramifications of this?
The Digest’s take: Aligned for now. Some in the corn world get tired of waiting for advanced biofuels to arrive, and some in the drop-in fuels area get tired of the food vs. fuel and market access controversies. Long-term, it will depend to the extent to which corn stover becomes an important feedstock. If wood, algae or energy crops become the dominant platform for advanced biofuels, you may find that corn and advanced biofuels interests may bifurcate.
4. Are opponents to renewable biofuels policy gaining traction? What is the public relations battle about and what are the strategies for influencing consumers? What impact are natural gas developments having on the development of biofuels/bioproducts?
The Digest’s take: On the environmental side, not much has changed — there continues to be broad support for biofuels, tempered by a heavy opposition from harder-line environmentalists that continue to be vexed by monoculture, genetically modified organisms (GMOs), water usage and internal combustion engines as a whole.
On the markets side, the emergence of shale gas and tight oil is a game-changer. Now, it is not easy or cheap to build a nat-gas vehicle infrastructure, so the vehicles are some ways off, and there’s range anxiety to contend with — many of the same issues that plug-in electrics contend with. But rising fossil fuel production tends to dampen enthusiasm for the energy security aspects of “home-grown” fuel, making it more of an economic development issue for rural areas, and that’s a tougher sell nationally.
5. What consequences will the fiscal cliff and less government spending have on biofuels investment?
The Digest’s take: The cliff is certainly preventing anyone from getting other things done — like tax extenders and 2013 government budgets in the short term. Long-term, to the extent that the inevitable compromise will produce a smaller government — expect that the U.S. will exit its financing of commercialization activities, and focus on research and development (R&D). But expect there to be a long discussion about the scope of R&D — to move beyond producing one-off alternative technologies that run into blend walls, valleys of death, infrastructure problems — and focus on producing alternative ecosystems.
Upstream Feedstocks
1. What’s in the works for wood and ag residue collection, and transportation equipment and practices?
The Digest’s take: On the woods side, the pulp and paper industry is pretty good at this already and there haven’t been so many concerns raised. On the ag residue side, there’s more of an issue in regard to tools, teams, training and costs.
DuPont’s Jim Collins says: “For now, we think that the group that owns the plant will own the equipment and work with growers to harvest. As a next wave, you’ll see specialists, and they will work their way across the country, to bale, stack and stage — or even some entrepreneurial growers that are willing to invest in the equipment, which requires heavier gauge balers than for wheat straw. Further down the line, we will see a lot of progress with John Deere on the development of a single-pass system for corn and stover harvest.”
Please tune into the Chemical Equipment Daily for part two of this two-part series. What’s your take? Please feel free to comment below! Copyright 2012; Biofuels Digest
