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Linn Energy, LLC (LINE) Message Board

  • rlp2451 rlp2451 Feb 10, 2013 1:49 PM Flag

    The Renewable Fuel Standard works - Dupont

    By JEREMY MARTIN and JIM COLLINS | 2/7/13 10:13 PM EST
    The fuels of the future are here today, and we can thank Congress for enacting the Renewable Fuel Standard. This bedrock policy has brought us to the point where the first commercial facilities producing cellulosic renewable fuels are up and running, and several more are under construction. As a result of this innovative policy, the United States is a world leader in the development of this renewable energy source and has attracted billions of dollars of private-sector investment.

    DuPont and the Union of Concerned Scientists share a commitment to science-based solutions. We come at this commitment in different ways but we are united in our support for cellulosic renewable fuels. We believe it is essential for the emerging industry to flourish — and to do so, it needs the policy stability provided by the RFS. As the cornerstone of our biofuels policy, it provides industry with a predictable market signal, rewards innovation and investment in the development of new renewable fuel technologies, the steady improvement of their environmental benefits and the expansion of domestic fuel production in rural America.

    Unfortunately, the oil industry associations argue that the RFS is a failed policy and that we should abandon it. They are wrong. And the U.S. Court of Appeals for the D.C. Circuit agrees. While the court recently ordered the Environmental Protection Agency to be more neutral in setting annual cellulosic requirements, what’s more important is that the court upheld the EPA’s overall approach and the requirements for advanced biofuels.

    The fact is that ending or reopening the RFS would simply delay the realization of the energy, climate and economic goals a strong bipartisan congressional majority committed to five years ago and leave us back where we started — dependent on fossil fuels for our transportation needs. Perhaps that is what the oil lobbyists want, but it is clearly not what America wants or needs.

    The first chapter of the RFS has seen renewable fuels grow to play a substantial role in our fuel supply. The next chapter of the RFS is about the commercialization of advanced and especially cellulosic renewable fuels made from residues such as agricultural and wood waste and trash. That commercialization is under way, and well-established companies like DuPont are investing their own money to build the first commercial production facilities, such as the more than $200 million facility the company recently broke ground on in Iowa.

    Across the United States and around the world, innovative companies are investing heavily — to the tune of over a billion dollars of private capital — to build the first wave of commercial scale facilities. Ineos is starting up a plant in Florida, and Kior is operating a plant in Mississippi. Abengoa is constructing a cellulosic renewable fuel plant in Kansas, and POET and DSM are constructing in Iowa. Farmers are preparing to supply these plants with the cellulosic materials they will convert to fuel. Steel is going into the ground, and construction workers and farmers are on the job. These plants hold the promise of producing clean, renewable fuel at large scale and improving energy and economic security while achieving significant environmental benefits. Over the next several years, cellulosic renewable fuel will grow into a sizable commercial industry.
    In essence, using domestically produced raw materials to make renewable fuel works for America — and puts Americans to work. The RFS has brought us cutting-edge renewable energy technologies that will help make American energy cleaner and more secure while creating jobs in rural America. Cellulosic biofuels have made the transition from the laboratory to commercial production and are a key element of the Union of Concerned Scientists’ plan to cut half of projected oil use over the next 20 years. These fuels could contribute the equivalent of more than 1.5 million barrels of oil per day by 2035, and, combined with improvements in fuel efficiency and advancements in electric vehicles, could enable the United States to cut half of projected oil use and avoid the associated problems for our economy, environment and security.

    Opening the RFS would send a chilling signal to the marketplace, just as companies are making significant private investments in cellulosic biofuels deployment. Now is the wrong time to create business uncertainty by changing policy.

    We must remain committed to the policy bedrock of the RFS if we are serious about maximizing the potential of these homegrown fuels and reducing our reliance on oil. Congress should maintain the RFS to sustain these private-sector investments that are building a more secure energy future for the United States.

    Jeremy Martin is a senior scientist with the Union of Concerned Scientists. Jim Collins is president of DuPont Industrial Biosciences.

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    • But imagine the following scenario. A number of companies claim that they are developing unicorns, and in 3 years they will be commercially available. The Environmental Protection Agency (EPA) thinks “Hey, this is a great idea. It would be a more environmentally friendly method of transport. Let’s force automakers to start selling these unicorns in 3 years. We will base our projections on how many unicorns these unicorn companies say they will produce. After that we will increase the number the automakers must sell in each subsequent year, and then force the automakers to pay up if they don’t meet these quotas.”
      The automakers naturally cry foul and point out that the unicorn industry is hypothetical, and that there is no evidence that they can deliver on their claims. In response, the unicorn companies say “Of course the automakers would say that. They are afraid that we are going to put them out of business.” The government agrees and starts giving taxpayer money to the unicorn companies in order to turn the hypothetical into reality. The unicorn companies start hiring people and issuing press releases indicating just how awesome they are going to be.

      Now imagine that the unicorn companies fail to produce the unicorns, and instead of waiving the unicorn mandate the EPA merely reduces the number of unicorns that the automakers must sell. The unicorn companies that over-promised get a free pass on their inflated claims, while the automakers are still penalized for not selling enough non-existent unicorns.

      • 1 Reply to norrishappy
      • Cellulosic Ethanol Mandate

        Consumers are at least scientifically literate enough to recognize the absurdity of this scenario. Even if they hate the auto industry, they understand that since unicorns don’t exist it would be unfair to punish the auto industry for not selling them. But replace the auto industry in this scenario with the oil industry, and unicorns with cellulosic ethanol — and this is an accurate description of what the EPA did.

        I explained this situation in a 2011 column — Cellulosic Ethanol Targets: Mandating the Nonexistent. In 2007 the EPA expanded the Renewable Fuel Standard (RFS) to include cellulosic ethanol. They mandated that starting in 2010 gasoline blenders must put increasing volumes of cellulosic ethanol into the fuel supply. The EPA based the mandated volumes on what potential cellulosic ethanol producers claimed they would be able to produce. Producers had incentives to overstate their claims in order to drive more financial support toward their industry.

        But if producers failed to deliver on their overstated claims, it wasn’t the producers who would be punished for their failure to deliver. As in the unicorn/auto industry example, the gasoline blenders were fined for failing to sell fuel which wasn’t commercially available because producers didn’t deliver on their claims.

        For example, in 2010 the EPA was counting on 100 million gallons of cellulosic fuels based on claims primarily from two companies: Range Fuels and Cello Energy. They then assumed that this industry — which didn’t exist when the mandate was put in place — would rapidly grow. The EPA tallied up the various claims from people like Vinod Khosla — the outspoken backer of Range Fuels and an investor in Cello Energy — and they put some aggressive mandates in place. The first three years of the mandates, starting in 2010, required oil companies to blend 100 million, 250 million, and then 500 million gallons of cellulosic ethanol into the fuel supply.

        In 2010, both Range Fuels and Cello failed to delivery any cellulosic ethanol, nor did they ever produce any qualifying cellulosic ethanol. Qualifying production for 2010 and 2011 was zero gallons across the cellulosic ethanol “industry” (Source). In 2012 the first qualifying batch of cellulosic ethanol was produced — 20,069 gallons by Blue Sugars Corporation. The ethanol was produced in April 2012, and no more was produced for the rest of the year.

        Thus, in the first three years of the cellulosic ethanol mandate, the percentage of qualifying fuel that was produced was 0%, 0%, and finally 0.004% in 2012 of the originally mandated volumes.

        The EPA did roll back the mandated volumes as the cellulosic industry failed to materialize. They subsequentlyreduced the 2010 mandate to 6.5 million gallons — but still required gasoline blenders to go buy this fuel that didn’t commercially exist.

        The American Petroleum Institute (API) thought it somewhat unfair that gasoline blenders would be fined for the failure on the part of producers, so they sued. Last week, the United States Court of Appeals for the District of Columbia agreed, stating that the EPA’s quotas were based on wishful thinking.

    • Besides this:
      Cellulosic biofuels....which is interesting since it uses plant material & waste.

      Does that "fuels of the future are here today".... include making hydrogen from solar-electric powered electrolisis of water?

 
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