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ENGENDERING POLITICAL AND ECONOMIC SUSTAINABILITY FOR THE ENERGY AND CHEMICAL SECTOR OF THE BIOECONOMYTomas W. GreenUniversity of Kansas
AIChEWISE Program
Embracing Our Bioeconomic Future:
Overview: A Brief History of Biofuels and its
Politics An Overview of the Bioeconomy Political and Economic Challenges Strategic Priorities Policy Proposals
A Brief History of Biofuels and its Politics• History• Renewable Fuel Standard• Low Carbon Fuel Standard• Federal R&D
Ethanol “makes a beautiful, clean and efficient fuel … that can be
manufactured from corn stalks … we need never fear the exhaustion of our
present fuel supplies so long as we can produce and annual crop of alcohol to
any extent desired” -Alexander Graham Bell, 1917
A Brief History of Biofuels and its Politics:History
It is a “universal assumption that [ethyl] alcohol in some form will
be a constituent of the motor fuel of the future”
-Scientific American, 1920
“The fuel of the future” wouldn’t come from oilfields, but rather “fields of weeds”
-Henry Ford, 1925, NY Times
A Brief History of Biofuels and its Politics:History
1819: Glucose
produced from
Cellulose
1920’s: Biofuels receive acclaim
1973: Arab Oil Embargo
2005: Energy Policy
Act
1900: Rudolf Diesel exhibits
engine
WWI: Cellulosic Ethanol Plants
1990: Clean Air
Act
2007: Energy Independence
and Security Act
RVO set annually EPA using waiver authority
RINs generated and traded Fuels require GHG
reductions 20% total, 50% advanced,
60% cellulosic 36 billion gallons by 2022
21 billion gallons advanced
A Brief History of Biofuels and its Politics:Renewable Fuel Standard
Total Renewable Fuels
Advanced Biofuels
Cellulosic Biofuel
Cellulosic Diesel
Biomass-Based Diesel
Other Biofuels
LCFS passed in 2007, enacted in 2009 Three national bills introduced in 2007 by Obama, Boxer, Feinstein
Sets carbon intensity requirements for fuel each year Goal: 10% reduction by 2020
Compliance can be traded in credit system In 2012, found unconstitutional, overturned by 9th Circuit,
Supreme court did not take case Technology neutral, flexible, encourages investment, market
driven Emulated by Oregon, Washington, B.C. and considered by 20
other states
A Brief History of Biofuels and its Politics:Low Carbon Fuel Standard
A Brief History of Biofuels and its Politics:Federal R&D
Source: Bioenergy Technologies Office Multiyear Program Plan, US DOE, 2016.
An Overview of the Bioeconomy• The Potential Future of the
Bioeconomy• The Current State of
Technology• Codependence of Biofuels
and Biochemicals• Key Institutions• Future Legislation
An Overview of the Bioeconomy:
The bioeconomy is an “economic field which uses
novel biological knowledge for commercial and industrial
purposes.” (1997)
An Overview of the Bioeconomy:
“The knowledge-based production and utilization of biological
resources to provide products, processes and services in all sectors
of trade and industry within the framework of a sustainable
economic system”-German Bioeconomic Council
An Overview of the Bioeconomy:
Relates to: • pharmaceuticals• bioplastics
• composite materials• biofuels
• bio-based chemicals • cosmetics
• high-value foods
An Overview of the Bioeconomy: Significant energy and
chemical production currently taking place
Estimated to be $350 billion annually
In 2012, over $125 billion produced from biotechnology
For every bio-based products job, 1.64 more jobs are created
Biofuels account for over 5% of transportation energy
Source: Billion Ton Update 2016, Oak Ridge National Laboratory, US DOE, 2016.
An Overview of the Bioeconomy:
Source: Billion Ton Update 2016, Oak Ridge National Laboratory, US DOE, 2016.
An Overview of the Bioeconomy:Potential Future
“The bioeconomy takes simple and safe raw materials – the carbohydrates in plants – and converts them into fuels, polymers,
fabrics, and other chemicals. Every function now served by petrochemicals can
also be served by biochemicals – more simply, safely, and sustainably.”
- Future 500 Partners
An Overview of the Bioeconomy:Potential of the Bioeconomy One Billion Tons
2005, 2011, 2016 Bioeconomy has potential to grow
by $100 billion by 2030, with the creation one million jobs, particularly in rural areas
Biofuels account for 3% of world road transport fuel, expected to grow to 27% by 2050 Would cut 2.1 gigatonnes of CO2
per year
Source: Billion Ton Update 2016, Oak Ridge National Laboratory, US DOE, 2016.
An Overview of the Bioeconomy:Potential of the Bioeconomy
Source: Billion Ton Update 2016, Oak Ridge National Laboratory, US DOE, 2016.
An Overview of the Bioeconomy:State of Technology: Ethanol US Produced 57% of world’s ethanol In 2015, US produced 14.7 billion gallons
Supported 85,967 direct jobs and 271,440 indirect and induced jobs The USDA reports 5.2 billion bushels of corn were consumed in 2014 to
produce ethanol Ideal octane enhancer E10 sold almost everywhere E85 sold in 2,795 stations E15 sold in 180 stations
Source: 2016 Ethanol Industry Outlook: Fueling a High Octane Future, Renewable Fuels Association, 2016.
An Overview of the Bioeconomy:State of Technology: Cellulosic Fuels Low production for RFS history In 2014, the EPA reported 728,000 gallons Three large cellulosic ethanol facilities are coming online with the
combined capacity of 75 million gallons of cellulosic fuel: Abengoa’s facility in Hugoton, Kansas, DuPont’s biorefinery in Nevada, Iowa, POET-DSM’s project in Emmetsburg, Iowa
In 2014, EPA reported 29,000 gallons of cellulosic renewable gasoline blendstock, 12 million gallons of naphthas (a liquid hydrocarbon blend), and 5,000 gallons of cellulosic diesel
An Overview of the Bioeconomy:State of Technology: Algal Biofuels Expanding and growing industry Greatest challenges:
Scale-up & economization Understanding synthetic biology Establish industrial standards & best practices
Promising signs: Included in 2016 Billion Ton Update Provision in Clean Power Plan Algal oil converted to jet fuel and biodiesel, passing ASTM standards and high
fuel performance in test trials
An Overview of the Bioeconomy:State of Technology: Bioproducts Can be: high-value chemicals, bio-reagents, bio-materials, fuels, or bio-
based intermediates Breakthroughs with synthetic biology “Bioproducts … hold strong promise to reduce this petroleum use and
serve as the backbone of an emerging bioeconomy” –White House Subcommittee on Advanced Manufacturing
U.S. revenues from industrial biotechnology (fuels, enzymes, and materials) reached at least $125 billion in 2012
US chemical industry is worth $3 trillion per year, $812 billion from petroleum derived chemicals
An Overview of the Bioeconomy:State of Technology: Biogas In 2014, EPA reported 53 million gallons of biogas and
renewable natural gas, 20 million gallons of biogas, 15 million gallons of renewable
compressed natural gas, and 17 million gallons of renewable liquefied natural gas
Growing number of anaerobic digesters, landfill gas plants,
Source: Biogas Energy Solutions, http://www.besch4.com/processes_high.html
An Overview of the Bioeconomy:Codependence of Biofuels and Biochemicals
Source: Bioproducts to Enable Biofuels Workshop Summary, Bioenergy Technologies Office, US DOE, 2015
An Overview of the Bioeconomy:Codependence of Biofuels and Biochemicals
Economic viability Chemical market
growing faster than GDP
Fuel market shrinking
Potential for “platform chemicals”
Source: Bioproducts to Enable Biofuels Workshop Summary, Bioenergy Technologies Office, US DOE, 2015
An Overview of the Bioeconomy:Key Institutions White House:
2012 Blue Print US Department of Energy:
Bioenergy Technologies Office (BETO) Sun Grant Initiative Biorefinery Support
US Department of Agriculture Biomass Research and Development Initiative (BRDI) BioPreferred Biomass Crop Assistance Program (BCAP) Value Added Producer Grant (VAPG) Biofuel Infrastructure Partnership (BIP)
An Overview of the Bioeconomy:Key Institutions National Laboratories
National Renewable Energy Lab Oak Ridge National Lab (Billion Ton) Lawrence Berkeley National Lab (Agile BioFoundry)
Department of Defense Advanced Drop-in Biofuel Production Project Living Foundries
Federal Aviation Administration Farm to Fly Program
An Overview of the Bioeconomy:Future Legislation MLP Parity Act 2019 Farm Bill
Largely funding Highly dependent on Senate leadership
2022 Renewable Fuel Standard Does not actually expire Reform likely
Political and Economic Challenges• Challenges with the RFS• The “Blend Wall”• Challenges with the LCFS• Regulatory Approval Process• Oil Markets• Young Technology• Tiring Environmental Battle
Political and Economic Challenges:Challenges with RFS Repeal bill introduced in 112th, 113th, and 114th Congress (top priority of
American Petroleum Institute) Debatable GHG reduction of corn ethanol (20% necessary)
Indirect Land Use Change (ILUC) at center of debate. Searchinger et al: worse than petroleum, Plevin et al: models highly sensitive
EPA did not release RVO on time 5 of 8 times
Other environmental concerns Marginal Decrease on Foreign Oil
Source: Fueling a Clean Transportation Future: Smart Fuel Choices for a Warming World; Martin, Jeremy, Union of Concerned Scientists. 2016.
Political and Economic Challenges:Challenges with RFS Inflation of Corn Prices
Called human rights abuse in some parts of world Hurts poor families the most Peaked in 2012
Source: Fueling a Clean Transportation Future: Smart Fuel Choices for a Warming World; Martin, Jeremy, Union of Concerned Scientists. 2016.
Source: Fueling a Clean Transportation Future: Smart Fuel Choices for a Warming World; Martin, Jeremy, Union of Concerned Scientists. 2016.
Political and Economic Challenges:The Blend Wall Liability of blends higher than E10
Bill introduced to limit to 9.7% (H.R.5180) EPA set to push past blend wall to 10.4% of fuel consumption
Higher ethanol fuel blends: 2,795 fueling stations for E85 (51-83% ethanol blend) 17,400,000 cars can take E85 (”flex fuel vehicles” or FFVs) Lower energy density, but higher efficiency
Break-even at 25-40%?
Political and Economic Challenges:Challenges with LCFS Called overly ambitious Could hurt jobs Raises fuel prices
Greatest burden on low socio-economic class Pathway approval process is expensive and
complicated Many lifecycle analyses to conduct
Political and Economic Challenges:Regulatory Approval Process Pathway Approval
2014 review process by EPA to reduce wait and costs Bioproduct Regulation
Food or chemical? Corn ethanol faced complications because it was unclear
whether it qualified as a part of the food or chemical industry Jurisdiction?
Political and Economic Challenges:General Capricious oil markets
History repeats itself Young technology in bioeconomy
Lack of trust, barriers to entry Tiring environmental battle
Clean Power Plan used political capital
Strategic Priorities• Economic Stabilization via
Bioproducts and Specialization
• Target Mutually Beneficial Investments
• Regional Specialization • Develop Consensus and
Framework
Strategic Priorities:Economic Stabilization via Bioproducts and Specialization Some activities that federal agencies (particularly the DOE, USDA, FAA, and
EPA) can expand upon are:1. Research, development, and demonstration projects for bioproducts2. Collaboration with biorefineries to develop waste utilization 3. Devoting resources to hasten bioproduct approval processes
Where possible, federal agencies (particularly the DOE, EIA, FAA, and National Laboratories) should:1. Consider markets that will be especially receptive to green technologies when
making RD&D investments in bioproduct synthesis2. Expand the presence of and investment in modeling capabilities that predict the
market viability for new biotechnology 3. Identify and promote technologies that can compete with petroleum
alternatives based on performance merits
Strategic Priorities:Target Mutually Beneficial Investments
To grow and support feedstock development, federal agencies (particularly the USDA and DOE) should:1. Further the partnership with farmers to grow localized feedstocks2. Invest in infrastructure that collects, processes, and distributes feedstocks3. Support cogeneration projects in both financing and regulatory measures
such as the EPA did for algal fuels in the Clean Power Plan To promote downstream biorefinery technologies, federal agencies
(particularly the DOE) should: 1. Further support for biorefinery grant and loan programs2. Partner with the petroleum industry to support conversion of refinery
capabilities to co-process biomass
Strategic Priorities:Regional Specialization Actions that federal agencies (particularly the DOE and USDA) take into
consideration are:1. Weigh grant and loan proposals by their merits of leveraging regional
advantages and collaborations 2. Promote the use and reliance on the Billion Ton Report for business to
model the use of biomass in future planning3. Provide networks to collaborate with stakeholders and find regionally specific
partnerships
Strategic Priorities:Develop Consensus and Framework
Develop comprehensive studies on: 1. Land use concerns2. Economic projections (especially as they relate to job creation) for RFS policy
alternatives such as the LCFS3. The potential for E15 and E85 market penetration4. Auxiliary environmental concerns related to a bioeconomic transition.
Establish more formalized policy and regulatory framework for the bioeconomy Canada (Growing Forward) Germany (Policy Strategy BE) European Union (Innovating for Sustainable Growth)
Policy Proposals• Reform the RFS• Modify FFV Incentives • Low Carbon Fuel Standard• Price Carbon
Policy Proposals:Reform the RFS End food-based fuel standard
Only regulate ”advanced biofuels” Pushing past blend wall should happen on demand side, not supply
Proportional, not volumetric, standards Emulates LCFS, does not require predicting evolving transportation market
Annual update to carbon intensity of petroleum Oil is getting dirtier
Extend advanced fuels tax credit
Policy Proposals:Modify FFV Incentives FFVs largely made due to “loop hole” in Corporate Average Fuel
Economy (CAFE) standards Many who drive FFVs do not know Change incentive to consumer side
Creates demand for higher blends of ethanol fuel
Policy Proposals:Low Carbon Products Standard Encourage use of bio-based produced in similar way as LCFS
Set carbon intensity requirements Target chemicals widely used with able bioproduct alternatives
Technology neutral Flexible compliance Encourages investment Helps make economic viability for biofuels, implicitly Greatest challenge is in lifecycle analyses
Policy Proposals:Price Carbon Gibson (R-NY 19) Resolution Bipartisan Climate Solutions Caucus, established by Rep. Curbelo (R-FL
26) and Rep. Deutch (D-FL 21) Carbon Fee and Dividend
Price carbon at source (e.g. well, mine, border), increase steadily over time Give dividend check back on equal basis to families Revenue neutral, abides by Norquist pledge Expected to add 2.8 million jobs over 20 years
Thank You!Steve Smith, Dr. Marcus, Senator Pat Roberts (KS), Kevin Stockert (Rep. Murray), Adam York (Rep. Jenkins), Dr. David Daniels (EIA), Dr. Eric Larson (Princeton University), Dr. Kimberly Ogden (Arizona University), Dr. Bala Subramaniam (University of Kansas), Scott McKee (Senate Energy and Commerce Committee), Jeremy Martin (Union of Concerned Scientists), Steven Kopecky (EOP Center for Environmental Quality), and all of Citizen’s Climate Lobby!
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