Americans are spending 20 percent of their income on transportation. Big Oil and Big Ag are fighting for their share of that money by trying to control the EPA and pass new legislation. The Environmental Protection Agency (EPA) has finalized a rule to implement the long-term renewable fuels standard of 36 billion gallons by 2022 established by Congress. The U.S. Department of Agriculture has proposed a rule on the Biomass Crop Assistance Program (BCAP) that would provide financing to increase the conversion of biomass to bioenergy.
It is a buyer’s market for those developing large wind, solar, bioenergy, biofuel, and other renewable energy projects. In 2009, land is less expensive, equipment cost less, deliveries are faster, and warranties longer. It is a buyer’s market if you have cash, yet it continues to be a difficult time to secure debt financing. Demand for renewable energy is at a record high as U.S. utilities in about 30 states struggle to meet RPS (renewable Portfolio Standards). These utilities want to sign PPA (Power Purchase Agreements) for 5 to 20 years of wind power, solar, and bioenerg.
Across the nation, ranchers, farmers, landfill operators, and all that generate agricultural waste, forest residue, and municipal waste can increasingly become energy independent. Through anaerobic digestion much of their biological waste can be converted into biogas which can run electrical generators, turbines, or fuel cells to generate electricity. Biogas can also be converted to cleaner biomethane for cleaner electricity and renewable fuel. These operations can generate their own electricity and fuel their own vehicles.
Scientists know how to make fuel from prairie grasses growing on marginal land. They know how to make fuel from fast growing trees with root systems that extend 25 feet into the ground, sequestering carbon emissions and enriching the soil. The problem is making cellulosic and algal fuel in large quantities at costs that compete with fuels from petroleum such as gasoline, diesel, and jet fuel.
Companies that were once darlings of Wall Street have gone bankrupt. Dozens of ethanol plants have closed as oil prices dropped. Many promising second generation plants cannot get built due to lack of project financing. People with the money see the risk as too high. There continue to be zero commercial scale (20-million gallon per year and bigger) cellulosic ethanol plants, despite past glowing press releases that declared that they would now be running.
Three major clean-energy sectors — solar photovoltaics (PV), wind power, and biofuels — grew 53 percent from $75.8 billion in 2007 to $115.9 billion in revenues in 2008, according to the Clean Energy Trends 2009 report. By 2018, Clean Edge forecasts that these three sectors will have revenues of $325.1 billion.
We must move past fuel from food and haste to fuels from wood and waste. Although the economics do not yet favor major production, pilot plants are taking wood and paper waste and converting it to fuel. Other cellulosic material is even more promising. Some grasses, energy crops, and hybrid poplar trees promise zero-emission fuel sources. These plants absorb CO2 and sequester it in the soil with their deep root systems.
Just over a year ago, ethanol manufacturer VeraSun Energy Corp. was one of biofuels’ fastest-rising stars. The company is the largest publicly traded ethanol producer in the United States. Valero’s Day said. “As an oil company, we buy up a good amount of ethanol,” he said. “We believe ethanol is here to stay as part of our fuel mix — we don’t believe the renewable fuel standard will go anywhere but up — and we thought it was a good time to make a bid for those plants.”
In 2006, Detroit held high hopes of being profitable by selling millions of flexfuel vehicles. The vehicles delivered sub-par fuel economy and zero profits. Although millions of electric vehicles will displace cars with gasoline engines, the internal combustion engine will be with us for decades in hybrids, plug-in hybrids, and heavy-duty trucks. Biofuels are not a panacea; rather, they are part of the energy security solution. The big story is the shift to electric drive.
On September 24, Congress approved a $25 billion bailout for GM, Ford, and Chrysler.Congress would do well to have some national goals for the $50 billion, not goals set by auto lobbyists. Goals include America’s need to become competitive with the world if we hope to create more jobs and end this recession. Workers need help by either keeping their jobs or by getting new jobs. Americans need cars that cost less at the pump and better alternatives to always using a car. America needs to be energy secure, not desperately dependent on oil.