The FINANCIAL — The energy industry, government laboratories, research facilities, private industry, academic institutions, agricultural groups and entrepreneurs are all racing to deliver biofuels cost effectively to consumers.
Petroleum producers are also striving to meet targets set out by the U.S. Renewable Fuel Standard, which calls for 16 billion gallons of a special kind of biofuel, called “advanced cellulosic” to be blended into transportation fuel annually by 2022. As biofuels are measured in gallons, and oil is measured in barrels, 16 billion gallons a year is the equivalent of about 1 million barrels per day.
Currently, the U.S. energy industry produces well under one million gallons of advanced cellulosic biofuel per year. Clearly, we have a long way to go to meet the 16 billion gallon mandate. It’s going to take substantial innovation and technology breakthroughs to grow, harvest, gather, transport, and transform extensive volumes of biomass into a fungible liquid fuel that is economic and affordable at such scale. Although a lot of hard work, creativity and significant investment are being applied to making these advanced biofuels today, there are currently no technology pathways that can deliver the volumes required by the current or future year mandates. The gap between policy and technology is huge.
Biofuels are a vital part of the energy equation and will continue to play an increasingly significant role over the next several decades. Today, the U.S. consumes roughly 1 million barrels each day of “conventional biofuels” and the world consumes nearly 2 million barrels of conventional biofuels per day. Over the next 20 to 30 years that number is likely to double or triple. This growth will help meet global transportation energy use, which is currently 50 million barrels per day, and is projected to grow by 40% by 2030. However, today, most conventional biofuels require extensive government subsidies — meaning that they are not economically sustainable. Only ethanol from Brazil is currently economic without subsidy – where the combination of sunshine, rainfall, fertile soil, long growing season and efficient harvesting methods – make it the rare exception.
