Ethanol’s Future Won’t Wait

By Bob Dinneen | February 22, 2012

Let’s be perfectly candid: the progress of cellulosic and advanced ethanol production has been far slower than everyone in the ethanol industry had hoped to see. Prior to the 2008 economic collapse and the attendant finance freeze, such promising progress was being made that the oft-repeated line of cellulosic ethanol being just five years away seemed overly pessimistic. 

The slower rate of commercialization has created confusion, consternation and calls for an end to efforts to help America’s ethanol industry evolve. These feelings, as reasonable as some may seem, ignore a very real truth: failing to fully harness the potential of turning American biomass into American renewable fuel will greatly impale, if not mortally wound, the nation’s ability to end our addiction to fossil fuels. That means that we must push through, ignoring the pitfalls of falling back on old fossil fuel technologies just because we are comfortable and familiar with them. We must recommit our innovative spirit to shepherding promising new technologies over the finish line.

To claim that the wait for cellulosic ethanol production is over, or nearly over, would be misleading and undermine the credibility of American ethanol producers who have met the challenges put before them. It is fair to say that the wait for proven technologies in the market is shorter today than it was just a few years ago.

To wit, companies across the nation are building commercial-scale facilities to turn feedstocks other than grain starch into renewable fuel. Abengoa Bioenergy is building a 25 MMgy biorefinery in western Kansas that will produce ethanol and power from both grain and nongrain feedstocks. ZeaChem just received a USDA loan guarantee to build a biorefinery in Oregon that will turn wood into a variety of renewable products, including fuel. Likewise, projects in states as diverse as Iowa and Alabama, Florida and Illinois, are redefining what it means to produce ethanol in the United States.

These investments, and future investments once these technologies are proven efficient, would not be possible without consistent public policy. America must keep in place critical public policy initiatives that will help drive the evolution of American ethanol production.

Before year’s end, Congress should pass a multi-year extension of the Producer Tax Credit for cellulosic ethanol production as well as the Accelerated Depreciation Allowance for Cellulosic Biorefineries. These vital tax incentives provide the kind of security private companies and investors need to bring demonstrated ethanol technologies out of the lab and into the real world. Congress must also resist calls from the oil and gas patches, as well as from the angry birds and mad cows, to reopen, revamp, or repeal the renewable fuel standard. While cellulosic ethanol production has yet to meet the mandates called for by Congress, this standard is the lifeline keeping investments in cellulosic and advanced biofuels alive. Through the power provided to the U.S. EPA, shortfalls in cellulosic biofuel availability in the near term can be met through commonsense discussions with all stakeholders. Such shortfalls should not be the rationale to end the RFS, as it has proven to be the most effective tool the U.S. has implemented to directly replace imported oil with domestic, renewable alternatives.

Congress should also get out of the way of emerging technologies by eliminating century-old subsidies for very mature fossil fuel industries that dramatically distort the market. Right now, renewable fuels are the gamblers in the oil industry’s casino, and we all know the house always wins.

Finally, continued investments in ethanol and alternative fuel infrastructure must be made. Taking a long-term view of America’s energy needs necessarily requires investment in technologies that will give a diverse consumer base the ability to choose the fuel and fuel blend that is best for them. Blender pumps, flexible-fuel vehicles, and other common-sense technologies give the power of choice, and the purse, back to consumers. 

America’s energy future, and that of its growing and evolving renewable fuel industry, will not wait. A failure to act with vision will squander the gains America has made in energy security and cutting edge renewable fuel technology. Our answer to our grandchildren’s questions about what we did to make America great should not be we further embedded the status quo.

Author: Bob Dinneen
President and CEO of the
Renewable Fuels Association
(202) 289-3835