NEW YORK (AP) — The first trickle of fuels made from
agricultural waste is finally winding its way into the nation’s energy supply,
after years of broken promises and hype promoting a next-generation fuel source
cleaner than oil.
But as refineries churn out this so-called cellulosic fuel,
it has become clear, even to the industry’s allies, that the benefits remain, as
ever, years away.
The failure so far of cellulosic fuel is central to the
debate over corn-based ethanol, a centerpiece of America’s green-energy
strategy. Ethanol from corn has proven far more damaging to the environment than
the government predicted, and cellulosic fuel hasn’t emerged as a replacement.
“A lot of people were willing to go with corn ethanol
because it’s a bridge product,” said Silvia Secchi, an agricultural economist at
Southern Illinois University.
But until significant cellulosic fuel materializes, she
said, “It’s a bridge to nowhere.”
Cellulosics were the linchpin of part of a landmark 2007
energy law that required oil companies to blend billions of gallons of biofuel
into America’s gasoline supply. The quota was to be met first by corn ethanol
and then, in later years, by more fuels made with nonfood sources.
It hasn’t worked out.
“Cellulosic has been five years away for 20 years now,” said
Nathanael Greene, a biofuels expert for the Natural Resources Defense Council.
“Now the first projects are up and running, but actually it’s still five years
Cellulosic makers are expected to turn out at most 6 million
gallons of fuel this year, the government says. That’s enough fuel to meet U.S.
demand for 11 minutes. It’s less than 1 percent of what Congress initially
required to be on the market this year.
Corn ethanol is essentially as simple to make as moonshine,
but requires fossil fuels to plant, grow and distill. For that reason, it has
limited environmental benefits and some drastic side effects.
Cellulosic biofuels, meanwhile, are made from grass,
municipal waste or the woody, non-edible parts of plants — all of which take
less land and energy to produce. Cellulosics offer a huge reduction in
greenhouse gases compared with petroleum-based fuels and they don’t use food
In Vero Beach, Fla., for example, agricultural waste and
trash are being turned into ethanol. In Columbus, Miss., yellow pine wood chips
are being turned into gasoline and diesel.
In Emmetsburg, Iowa, and Hugoton, Kan., construction is
nearly complete on large refineries that will turn corncobs, leaves and stalks
But despite the mandate and government subsidies, cellulosic
fuels haven’t performed. This year will be the fourth in a row the biofuels
industry failed by large margins to meet required targets for cellulosic
“Has it taken longer than we expected? Yes,” acknowledged
Agriculture Secretary Tom Vilsack.
The Obama administration’s annual estimates of cellulosic
fuel production have proven wildly inaccurate. In 2010, the administration
projected 5 million gallons would be available. In 2011, it raised the
projection to 6.6 million.
Both years, the total was zero.
The administration defended its projections, saying it was
trying to use the biofuel law as a way to promote development of cellulosic
fuel. But the projections were so far off that, in January, a federal appeals
court said the administration improperly let its “aspirations” for cellulosic
fuel influence its analysis.
Even with the first few plants running, supporters
acknowledge there is almost no chance to meet the law’s original yearly targets
that top out at 16 billion gallons by 2022.
“It’s simply not plausible,” said Jeremy Martin, a biofuels
expert with the Union of Concerned Scientists. “2030 is the soonest you can
anticipate it to be at that level.”
The EPA is weighing how deeply to reduce targets for
cellulosic fuels for next year and beyond. Biofuel supporters want higher
targets to spur investment in new facilities. Opponents want low targets to
reflect what’s available in the market and the chronic underperformance of
Cellulosic’s great promise will likely be enough to keep it
in the Obama administration’s favor.
“There seems to be recognition among the administration that
cellulosic fuels haven’t met the targets, but there’s still support for them,”
said Timothy Cheung, an analyst at ClearView Energy Partners, a Washington
research and consulting firm.
Cellulosic fuels have lagged expectations for several
reasons. For one, expectations were simply set too high.
To attract support from Washington and money from investors,
the industry underestimated and understated the difficulty of turning cellulose
Cellulose is the stuff that makes plants strong, and it has
evolved over several hundred million years to resist being broken down by heat,
chemicals or microbes. That makes it difficult to produce these fuels fast
enough, cheap enough or on a large enough scale to make economic sense.
The industry was also dealt a setback by the global
financial crisis, which all but stopped commercial lending soon after the
biofuel mandates were established in 2007.
Hundreds of companies failed that had attracted hundreds of
millions of dollars from venture capitalists and government financing.
Sometimes the microbes or chemical treatments used to break
down the plant matter were too expensive or didn’t work fast enough.
Other times, the problems were more prosaic. Range Fuels,
based in Colorado, failed because money dried up before it could fine-tune the
machine that fed wood chips into a gassifier.
KiOR, a Texas company making cellulosic gasoline and diesel
in Mississippi, was delayed recently by a power failure, sending its stock price
plummeting. The company has since fixed the problem, and is shipping fuel.
To supporters, these setbacks are neither surprising nor
evidence of failure. Companies are trying to deliver enormous amounts of fuel
using a complex, expensive process that has never been tried before.
“We may be three years late, but it doesn’t make any
difference globally over the long term,” said Manuel Sanchez Ortega, chief
executive of Abengoa, a Spanish engineering firm building a cellulosic ethanol
plant in Kansas.
“The first deepwater oil platform was not profitable. The
first airplane was not profitable. The important thing is that it is working.”
At 25 million gallons of annual output per plant, it would
take the construction of 640 of these biorefineries to meet the law’s original
Before investors trust the technology enough to finance
construction of new facilities, several plants must work consistently at or near
full capacity and show that they can make money for a year or more.
To Martin, cellulosic fuels are too important to stop trying
to perfect them.
“The transition to looking beyond food for biofuels is as
important today as it was in 2007,” he said. “If we can’t do it as fast as we thought we could, it
doesn’t mean we should give up.”
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