Straight talk about the battle over the RFS
Stephan Tanda, a member of DSM's managing board, is excited about the future of cellulosic ethanol. As most of you are already well aware, Poet LLC and DSM are working together to build Project Liberty, a cellulosic ethanol plant currently under construction in Emmetsburg, Iowa. Poet-DSM Advanced Biofuels is scheduled to begin operations in early 2014, with an initial capacity of 20 MMgy but ramping up to 25 MMgy at a later date.
“Cellulosic has been long in coming,” he said. “This is every leading-edge technology. It is kind of moon shot type territory. To now see it come to fruition and see that technology put in use, that is very exciting.”
The two companies don’t plan to stop there. “We fully expect to license the technology, and that goes from collection to pretreatment, the enzymes, the yeast, the whole operating system,” Tanda told me. Obviously Poet’s 26 other ethanol plants are “obvious targets” for co-locating first and second-generation plants, but licensing discussions are also ongoing with other parties. “We are already talking to potential investors who are interested in putting plants in,” he said.
In his travels to many other areas of the world, Tanda always brags about the renewable fuel standard (RFS) and how the forward-thinking policy has created the biofuels industry. “Of course, the second generation wouldn’t be there without the first generation,” he said, “and it has created a completely different energy equation.”
Obviously, there are those, such as the American Petroleum Institute, who would like to modify or even repeal the RFS. In fact, when Tanda and I talked, he was actually in Washington, D.C., speaking to legislators about the importance of maintaining the energy policy. Clearly, the RFS must be defended in order to protect the industry. “I think in the long run, we believe cellulosic will be very competitive with any other liquid fuel for automotive transportation,” he said. “Now that the first commercial scale plants are being built, about a dozen, I think API realizes, ‘Hey this is for real and we’ve better step on those shoots as they come out of the ground, otherwise we can’t catch them anymore.’ Which of course is very sad, it’s the wrong thing to do for the country.”
Ultimately, however, Tanda strongly believes the RFS will stand firm against its attackers. It has the support of the President as well as the U.S. Senate. Even oil companies such as Shell and BP have stated they support the RFS, when properly administrated. The groups that are fighting the hardest against the RFS have a vested interest in seeing it fail, for selfish reasons. “API of course has also sovereign interests from outside the United States and they want to make sure that the oil machinery keeps going,” he said. “… Once you understand the very, self-serving argument of the API, it’s pretty quickly debunked.”
The current fight to cripple or kill the RFS looks like a last ditch effort, especially considering the fact that the advanced biofuels industry is on the verge of successful commercial-scale production. Tanda just doesn’t see critics winning the fight this year, especially with large-looming issues like Syria on the table, nor next year, an election year. And, once the industry is better established, which will be quite soon, why stamp it out? Especially since it’s very popular with farmers, who benefit from the estimated $20 plus million in revenue that is paid out for biomass feedstock to supply each cellulosic ethanol facility in production.
But that doesn’t mean DSM is sitting back, waiting for critics to fail. Remember where he was when we talked? That’s right, in Washington, D.C., educating lawmakers. He feels there’s really no way biofuel industry supporters could spend too much time talking to their elected representatives, making sure they understand the benefits of biofuels. “We have to admit this is kind of a David and Goliath battle,” he said. “The oil industry spends, I think around $120 million a year to lobby Congress and I think the renewable fuel industry spends about $4 million a year.”
That’s why biofuels’ positive story needs to be told, over and over. Such as the 90 percent reduction in greenhouse gas emissions for every gallon of cellulosic ethanol produced. Biofuels reduces the nation’s dependence on foreign oil, brings in new revenue for farmers and creates direct and indirect jobs. “This is good for rural America, it’s good for farmers, it’s good for the country and it’s good for the environment,” he said.