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
non-food sources.
It hasn't worked out.
"Cellulosic has been five years away for 20 years now," said
Nathanael Greene, a biofuels expert at the Natural Resources Defense
Council. "Now the first projects are up and running, but actually
it's still five years away."
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 sources.
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 into ethanol.
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 biofuels.
"Has it taken longer than we expected? Yes," acknowledges
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
at 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 makers.
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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 into fuel.
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," says Manuel Sanchez Ortega, chief
executive of Abengoa, a Spanish engineering firm building a
cellulosic ethanol plant in Kansas. "The first deep-water 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 bio-refineries to meet the law's
original goal.
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 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."
[Associated
Press; JONATHAN FAHEY]
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