Where is the Cellulosic Ethanol?

by Brian McGraw on August 17, 2011

in Blog

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Last month the EPA released its proposed 2012 cellulosic ethanol “mandate.” It suggests that there will be somewhere between 3.45-12.9 million gallons of qualifying cellulosic ethanol produced in 2012, though the number will be finalized in November. Note, as discussed previously, the industry has still not produced any qualifying cellulosic ethanol, and the EPA has consistently lowered the ‘mandate’ by over 90% in previous years. (A recently announced cellulosic plant claims it will produce cellulosic ethanol from, wait for it,  corn waste. So much for being a bridge fuel to the future).

In comments on the proposed 2012 production volumes, the ethanol industry begged the EPA to use the higher end of the standard:

In contrast, Brooke Coleman, executive director of the Advanced Ethanol Council, urged the EPA to continue its aggressive goals regarding cellulosic biofuels, stating that the agency’s mandated volume directly affects the industry’s ability to produce fuel. “There is this funny thing going here where you guys have to go out and measure capacity, but the numbers you come out with and the amount of capacity that you put into the Federal Register will have a giant effect on how much capacity we actually create,” he said.

The EPA has been quite vocal about its interest in enforcing the mandate, despite an unfortunate bump with reality. The rest of Congress might be less enthused. I suspect uncertainty is over the future of the Renewable Fuel Standard and the expiration of the cellulosic ethanol tax credit. And contra the AEC claim, there is a downside to optimistic requirements, as when they cannot be met, they are a tax as the refining industry is required to buy fake credits to ‘meet’ the apparent goal of sending $6 million dollars to the EPA. Of course, it would be sensible for the EPA to waive this requirement, but no government agency has ever turned down money.

It seems clear now that the tax credit and tariff will terminate at the end of the year. It also seems quite obvious that no-time soon will cellulosic ethanol be commercially viable with petroleum, and there isn’t much more room for increasingly large blends of ethanol in the fuel supply that can’t compete on cost. It’s time to discuss ending the renewable fuel standard. I suspect their will be much less support from establishment politicians for such a move (admitting they made a giant mistake).

We must avoid, what Robert Rapier points out, allowing corn ethanol to fill the entire renewable fuel standard. The corn ethanol industry is now lobbying to gain access to the rest of the mandate, as corn ethanol has hit its quota and will continue to easily exceed it:

Corn ethanol producers — in another move that I have long predicted –  have a different solution. They want an end to “corn-discrimination.” They would like to step into that void and supply the missing ethanol, thus raising the 15 billion gallon corn ethanol mandate that they currently enjoy to potentially 36 billion gallons by 2022.

More than doubling the amount of ethanol production will have a significant effect on food prices, among other questionable effects of massive ethanol production on the environment. This recent study suggests that increases in ethanol emissions might negatively effect human health (though note that this should be compared with potentially similar effects from petroleum).

John R T August 17, 2011 at 10:06 pm

Paper chemists have dedicated centuries to this endeavor: talk to them. Separating cellulose from what makes wood durable takes a lot of energy, dissolving the product of eons of evolution. Solar radiation provides the power to convert carbon into plants.

Charlie Peters August 17, 2011 at 11:17 pm

Will the genetically modified (GM) corn fuel ethanol welfare for Big oil refiners and Government Motors affect the beef?

BobRGeologist August 18, 2011 at 1:46 pm

When ethanol is produced from food grains I draw the line on an ethical basis. It is not nice to starve millions of poor people the world over particularly when the necessity for doing so is vanishingly small as a gleam in our environmentalist’s eyes.

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