To help this industry thrive, governments need to develop and implement a strategy that will last decades, argues ZeaChem CEO Jim Imbler.
After what initially looked to be a promising year for alternative energy in general and the advanced biofuels industry specifically,Congress has encountered significant barriers to realize a comprehensive, long-term energy bill or consensus on a pragmatic climate bill. In addition, the EPA for the second year significantly reduced targets for advanced biofuels production. Despite all this, the advanced biofuels industry is determined to commercialize and stand on its own two feet.
However, to facilitate private investment and make advanced biofuels a real alternative to fossil fuels, Congress needs to set long-term, technology-agnostic goals with built-in incentives. What we as an industry need is a hand up, not a handout. If the goal is ultimately to reduce our dependency on foreign oil, advanced biofuels represent the best near-term opportunity that can be implemented today.
Every president since Nixon has said the U.S. needs to reduce its increasing dependency on oil imports and fossil fuel consumption in general. However, despite occasional grandiose pronouncements, government support of renewables over the past 40 years has not been consistent enough to enable the broad-scale energy transformation that must take place. There have been minor achievements in this area, inevitably followed by setbacks. When oil prices soar, the country focuses its attention on renewable energy alternatives, and when oil prices fall, the goal is forgotten or at best set aside for another day. This yo-yo effect makes it extremely difficult for a nascent industry to set long-term financial goals and get through “the valley of death.”
The only way out of this valley and on to the promised land of commercialization is demonstrating to investors (venture capital partners, strategic partners, etc.) that your technology and long-term economics are not only feasible, but are viable in the long-term.
Sounds relatively simple enough: take a great idea, prove it works, raise funds, build a facility, and produce and sell product to a willing market. However, it’s not so simple in an industry such as advanced biofuels. While fossil fuel dependency may seem inexpensive in the short term, the long-term consequences are increased economic and environmental risk. If the mission is to reduce the need for fossil fuels, then the government must provide the industry and investors with clear long-term goals (such as the RFS2) accompanied by long-term incentives (such as investment and producer tax credits, and workable loan guarantees) for the production of advanced biofuels. Incentives that last for two to three years with no certainty of renewal do not provide enough confidence to the financial markets, making them unlikely to invest the large amounts of capital required, particularly in this current economic climate. Government needs to coordinate a 10-year to 20-year outlook similar to its commitment to the building of our national highway system, not the shortsighted three-year outlook that has unfortunately become standard operating procedure for our policymakers.
The EPA’s Renewable Fuel Standard (RFS2) calls for the production of 36 billion gallons of biofuels by 2022, which would replace approximately 30 percent of our nation's fuel supply, according to some estimates. Over 40 percent of the renewable fuel is to come from cellulosic biofuels. The RFS2 is a big step in the right direction, but the standard for 2011 was reduced from 250 million gallons to under 17 million. The reduction was unfortunately necessary from a regulatory standpoint -- the EPA is required to regulate according to actual production volumes -- but what signal does this send investors? Are we just playing the game, or are we in this to win?
We biorefiners are not without blame. Aside from the government providing the environment for our industry to flourish, we must do a better job of making the case that advanced biofuels are economically feasible. It is not enough to have a cool technology and slick PowerPoint presentations; we need to show we can eventually compete with oil, if given a helping hand to get started. This is why biorefiners’ commercialization plans need to demonstrate the technology, scalability and economics of each intermediary chemical step with independent third parties to “de-risk” their process.
Government needs to be careful it does not pick winners; the market, ultimately, is best at that. But the government can offer significant assistance to the industry as a whole by encouraging and incentivizing early movers while remaining focused on the ultimate goal of reducing fossil fuel demand. When developing a new technology, investors are extremely hesitant to be first movers but will become actively involved to be second and third participants. To achieve the goal of reducing fossil fuel consumption, the best policy is to set attainable long-term goals such as the RFS2, back them up with clear long-term incentives, and let the market sort out the winners and losers. Believe me, the market is very good at that!
Some might say the government shouldn’t be funding R&D for new technologies with unknown potential and that the markets should be able to pick a winner without incentives. While this approach may work for the high tech industry, it is not feasible for long-term, capital-intensive industries like fuel production. This argument also ignores the fact that many highly profitable industries today were initiated with government involvement and that the government still subsidizes many industries, including the oil industry, to this day, in the interest of the economy and national security.
Our industry does not need permanent support. Once these facilities are built, they operate for up to 100 years and continue to turn a profit. What is needed is long-term, consistent policy and incentives so that this emerging industry can successfully commercialize in the face of volatile oil prices. We need the hand up -- allowing us to provide proof of economics to strategic investors -- and then we’ll stand on our own two feet on the other side of the valley of death.
***
Jim Imbler is the CEO of ZeaChem, a cellulosic ethanol company.
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Wednesday, 27 October 2010
The next carbon capture tool could be new, improved grass
October 26, 2010 by Dan Krotz Enlarge
Miscanthus, a potential feedstock for biofuel, could pull double duty in the fight against climate change by sequestering carbon in the soil for thousands of years.
(PhysOrg.com) -- A blade of grass destined to be converted into biofuel may join energy efficiency and other big-ticket strategies in the effort to reduce atmospheric carbon -- but not in the way that you might think.
In addition to offsetting fossil-fuel emissions, a potential bioenergy plant such as the grass Miscanthus could also snare carbon from the atmosphere and trap it in the soil for millennia.
Sounds promising. But should scientists genetically engineer bioenergy crops to be better at ridding the atmosphere of the greenhouse gas? And can this strategy take place on the scale needed to mitigate climate change?
These questions are framed in a new analysis by Lawrence Berkeley National Laboratory scientist Christer Jansson and researchers from Oak Ridge National Laboratory. Their research, published in the October issue of Bioscience, explores ways in which bioenergy crops can become a big player in the drive to rein in rising levels of atmospheric carbon dioxide.
The authors hope to get others thinking about engineering plants to not only produce biofuel, but to also sequester carbon.
“We want to encourage discussion and research on this topic,” says Jansson, a senior staff scientist in Berkeley Lab’s Earth Sciences Division and lead author of the analysis. “We need to explore the extent to which plants, and specifically genetically engineered plants, can reduce levels of atmospheric carbon.”
At the heart of the scientists’ analysis is the idea that bioenergy crops can fight climate change in two ways. There’s the obvious way, in which a plant’s cellulosic biomass is converted into a carbon-neutral transportation fuel that displaces fossil fuels. And the not-so obvious way: bioenergy crops also take in atmospheric carbon dioxide during photosynthesis and send a significant amount of the carbon to the soil via roots. Carbon from plant biomass can also be incorporated into soil as a type of charcoal called biochar. Either way, the captured carbon could be out of circulation for millennia.
At stake is the urgent need to make a dent in the nine gigatons of carbon that human activities emit into the atmosphere each year (one gigaton is one billion tons). Natural processes such as plant photosynthesis annually capture about three gigatons of carbon from the atmosphere.
“We could double that in the next several decades,” says Jansson. “By 2050, we could get to five or six gigatons of carbon removed from the atmosphere by plants, and I think a major part of that could come from bioenergy crops like grasses and trees. They could make a big contribution in sequestering carbon, but other strategies will have to be used.”
As Jansson explains, to increase the capacity for plants to act as carbon sinks, scientists need to continue to develop bioenergy crops that are efficient in harvesting light energy and using the energy to convert carbon dioxide to biomass. Bioenergy crops should also have a high capacity to send the carbon it captures to its roots, where it has the best chance to be stored in soil for thousands of years.
Fortunately, top bionergy crop candidates, such as Miscanthus, are already better-than-average carbon sinks. The large root systems in perennials such as grasses make them better at sequestering carbon in biomass and soil than annual plants.
But can bioenergy crops become even better? Jansson and colleagues outline several possibilities in their analysis. A plant’s canopy can be altered to enhance its efficiency at intercepting sunlight. Another approach accelerates a plant’s photoprotection mechanisms, which would improve its ability to use light. And a plant’s tolerances to various stresses could be improved without compromising yield.
A game-changing success, Jansson explains, could be the design of a bioenergy crop that can withstand drought and which utilizes brine, saline wastewater, or seawater for irrigation to avoid having to tap into freshwater supplies. Jansson suggests that genetic engineering can play a key role in introducing these traits into a plant.
“Bionergy crops are likely to be engineered anyway,” he says. “It makes sense to also consider enhancing their ability to withstand stress and sequester carbon. This analysis will hopefully guide research and prompt people to think in new ways about bioenergy crops.”
More information: The article, “Phytosequestration: Carbon Biosequestration by Plants and the Prospects of Genetic Engineering” is published in the October issue of Bioscience
Provided by Lawrence Berkeley National Laboratory
Miscanthus, a potential feedstock for biofuel, could pull double duty in the fight against climate change by sequestering carbon in the soil for thousands of years.
(PhysOrg.com) -- A blade of grass destined to be converted into biofuel may join energy efficiency and other big-ticket strategies in the effort to reduce atmospheric carbon -- but not in the way that you might think.
In addition to offsetting fossil-fuel emissions, a potential bioenergy plant such as the grass Miscanthus could also snare carbon from the atmosphere and trap it in the soil for millennia.
Sounds promising. But should scientists genetically engineer bioenergy crops to be better at ridding the atmosphere of the greenhouse gas? And can this strategy take place on the scale needed to mitigate climate change?
These questions are framed in a new analysis by Lawrence Berkeley National Laboratory scientist Christer Jansson and researchers from Oak Ridge National Laboratory. Their research, published in the October issue of Bioscience, explores ways in which bioenergy crops can become a big player in the drive to rein in rising levels of atmospheric carbon dioxide.
The authors hope to get others thinking about engineering plants to not only produce biofuel, but to also sequester carbon.
“We want to encourage discussion and research on this topic,” says Jansson, a senior staff scientist in Berkeley Lab’s Earth Sciences Division and lead author of the analysis. “We need to explore the extent to which plants, and specifically genetically engineered plants, can reduce levels of atmospheric carbon.”
At the heart of the scientists’ analysis is the idea that bioenergy crops can fight climate change in two ways. There’s the obvious way, in which a plant’s cellulosic biomass is converted into a carbon-neutral transportation fuel that displaces fossil fuels. And the not-so obvious way: bioenergy crops also take in atmospheric carbon dioxide during photosynthesis and send a significant amount of the carbon to the soil via roots. Carbon from plant biomass can also be incorporated into soil as a type of charcoal called biochar. Either way, the captured carbon could be out of circulation for millennia.
At stake is the urgent need to make a dent in the nine gigatons of carbon that human activities emit into the atmosphere each year (one gigaton is one billion tons). Natural processes such as plant photosynthesis annually capture about three gigatons of carbon from the atmosphere.
“We could double that in the next several decades,” says Jansson. “By 2050, we could get to five or six gigatons of carbon removed from the atmosphere by plants, and I think a major part of that could come from bioenergy crops like grasses and trees. They could make a big contribution in sequestering carbon, but other strategies will have to be used.”
As Jansson explains, to increase the capacity for plants to act as carbon sinks, scientists need to continue to develop bioenergy crops that are efficient in harvesting light energy and using the energy to convert carbon dioxide to biomass. Bioenergy crops should also have a high capacity to send the carbon it captures to its roots, where it has the best chance to be stored in soil for thousands of years.
Fortunately, top bionergy crop candidates, such as Miscanthus, are already better-than-average carbon sinks. The large root systems in perennials such as grasses make them better at sequestering carbon in biomass and soil than annual plants.
But can bioenergy crops become even better? Jansson and colleagues outline several possibilities in their analysis. A plant’s canopy can be altered to enhance its efficiency at intercepting sunlight. Another approach accelerates a plant’s photoprotection mechanisms, which would improve its ability to use light. And a plant’s tolerances to various stresses could be improved without compromising yield.
A game-changing success, Jansson explains, could be the design of a bioenergy crop that can withstand drought and which utilizes brine, saline wastewater, or seawater for irrigation to avoid having to tap into freshwater supplies. Jansson suggests that genetic engineering can play a key role in introducing these traits into a plant.
“Bionergy crops are likely to be engineered anyway,” he says. “It makes sense to also consider enhancing their ability to withstand stress and sequester carbon. This analysis will hopefully guide research and prompt people to think in new ways about bioenergy crops.”
More information: The article, “Phytosequestration: Carbon Biosequestration by Plants and the Prospects of Genetic Engineering” is published in the October issue of Bioscience
Provided by Lawrence Berkeley National Laboratory
Profiting from a green bond - Ecotricity
Ecotricity is offering an ethical bond that could bring a 7.5% return on your loan
Miles Brignall The Guardian, Saturday 23 October 2010
If you have been looking for an ethical investment that also pays a healthy return, green energy company Ecotricity may have come to your aid. This week it invited people to sign up for its new four-year bonds paying up to 7.5% interest.
The Stroud-based firm, which was the first UK company to offer consumer electricity produced entirely from renewable sources, is hoping to raise £10m with its EcoBonds.
The company is raising the money so it can expand its operations by building new wind farms and solar parks, and creating more renewable gas sources.
The fixed-rate bonds, which have an initial four-year term, will pay an annual rate of interest of 7% gross, or 7.5% if you are an Ecotricity customer. That is a substantially better return than the vast majority of savers are getting from their bank or building society accounts, but you need to be aware that Ecotricity's bonds are riskier than fixed-rate savings bonds offered by high street institutions. You would not be covered by the Financial Services Compensation Scheme in the unlikely event the company went bust.
The bonds are open to UK-based individuals aged 18 or more, as well as charities, companies and trusts. The minimum investment is £500. Interest is payable every six months. At the end of the initial four-year term investors can take their money out by giving six months' notice. If they do not, their money is automatically reinvested for another 12 months on the same terms.
The company says it can offer a 7% return because this is close to the rate it would have to pay if it had to borrow the money from the banks. It says the minimum investment has been deliberately set at £500 in an effort to attract small investors.
Dale Vince, Ecotricity's managing director, says: "People are increasingly looking for ways to invest ethically and get involved in the green energy revolution. Our EcoBonds enable both. The funds we raise will be used to build the projects that we already have consented, enabling us to speed up the rate at which we build these new sources of green energy – something the UK badly needs. And in the process we'll create new green jobs and help develop a strong independent green British economy."
Since its start in 1995, Ecotricity has grown steadily each year. It now supplies energy to more than 42,000 customers from 51 wind turbines at 15 wind parks. It offers two electricity tariffs – one from 100% renewable sources, and one where 41% of the power comes from its wind turbines, and the remainder is conventionally sourced power.
The company says it has planning consent for a further 12 wind turbines, with 78 more at various stages in the planning process, which together would almost treble Ecotricity's electricity generation capacity over the next few years. It aims to supply more than 500,000 customers within the next 10 years. It also intends to increase its investment in other green energy technologies, including solar and gas made from organic waste.
So what's the catch? There is always a risk you could lose your money – any company you buy shares in could go to the wall. However, these are not shares: EcoBonds "represent a loan to the company for a fixed period with a fixed rate of interest".
The firm's prospectus says: "EcoBonds are an unsecured debt of the company, and there is no certainty or guarantee that the company … will be able to repay them." Put bluntly, if the company goes bust, you would probably lose some or all of your money. There is no compensation scheme as there are for failed banks. However, the banks are not paying 7%.
Investors can reassure themselves that Ecotricty has been in business for 15 years. In 2008-09 the company turned over £38.3m and posted gross profits of £15.4m. It says the bonds will go ahead provided it gets at least £1m of the £10m sought. Potential investors should note that the EcoBonds are not transferable and cannot be traded.
For more information and to download a prospectus, go to ecotricity.co.uk. The closing date for applications is 10 December.
Miles Brignall The Guardian, Saturday 23 October 2010
If you have been looking for an ethical investment that also pays a healthy return, green energy company Ecotricity may have come to your aid. This week it invited people to sign up for its new four-year bonds paying up to 7.5% interest.
The Stroud-based firm, which was the first UK company to offer consumer electricity produced entirely from renewable sources, is hoping to raise £10m with its EcoBonds.
The company is raising the money so it can expand its operations by building new wind farms and solar parks, and creating more renewable gas sources.
The fixed-rate bonds, which have an initial four-year term, will pay an annual rate of interest of 7% gross, or 7.5% if you are an Ecotricity customer. That is a substantially better return than the vast majority of savers are getting from their bank or building society accounts, but you need to be aware that Ecotricity's bonds are riskier than fixed-rate savings bonds offered by high street institutions. You would not be covered by the Financial Services Compensation Scheme in the unlikely event the company went bust.
The bonds are open to UK-based individuals aged 18 or more, as well as charities, companies and trusts. The minimum investment is £500. Interest is payable every six months. At the end of the initial four-year term investors can take their money out by giving six months' notice. If they do not, their money is automatically reinvested for another 12 months on the same terms.
The company says it can offer a 7% return because this is close to the rate it would have to pay if it had to borrow the money from the banks. It says the minimum investment has been deliberately set at £500 in an effort to attract small investors.
Dale Vince, Ecotricity's managing director, says: "People are increasingly looking for ways to invest ethically and get involved in the green energy revolution. Our EcoBonds enable both. The funds we raise will be used to build the projects that we already have consented, enabling us to speed up the rate at which we build these new sources of green energy – something the UK badly needs. And in the process we'll create new green jobs and help develop a strong independent green British economy."
Since its start in 1995, Ecotricity has grown steadily each year. It now supplies energy to more than 42,000 customers from 51 wind turbines at 15 wind parks. It offers two electricity tariffs – one from 100% renewable sources, and one where 41% of the power comes from its wind turbines, and the remainder is conventionally sourced power.
The company says it has planning consent for a further 12 wind turbines, with 78 more at various stages in the planning process, which together would almost treble Ecotricity's electricity generation capacity over the next few years. It aims to supply more than 500,000 customers within the next 10 years. It also intends to increase its investment in other green energy technologies, including solar and gas made from organic waste.
So what's the catch? There is always a risk you could lose your money – any company you buy shares in could go to the wall. However, these are not shares: EcoBonds "represent a loan to the company for a fixed period with a fixed rate of interest".
The firm's prospectus says: "EcoBonds are an unsecured debt of the company, and there is no certainty or guarantee that the company … will be able to repay them." Put bluntly, if the company goes bust, you would probably lose some or all of your money. There is no compensation scheme as there are for failed banks. However, the banks are not paying 7%.
Investors can reassure themselves that Ecotricty has been in business for 15 years. In 2008-09 the company turned over £38.3m and posted gross profits of £15.4m. It says the bonds will go ahead provided it gets at least £1m of the £10m sought. Potential investors should note that the EcoBonds are not transferable and cannot be traded.
For more information and to download a prospectus, go to ecotricity.co.uk. The closing date for applications is 10 December.