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Cellulosic, sugarcane, and biodiesel all get bigger bumps as well

For environmentalists and those pushing for oil independence the U.S. Environmental Protection Agency delivered mixed results, in its newly published 2012 alternative fuels targets.

I. New Mandatory Fuel Targets Land

The EPA has been granted the power by Congress to push alternative fuel targets under the Energy Independence and Security Act of 2007 (EISA), signed into law by President Bush.  The EISA set a hard target of reaching 36 billion gallons of production by 2022.

The EPA's proposed changes are seen below:

Biofuels

Yep, that's right the EPA is quietly bumping its corn ethanol production targets.  

II. Corn Ethanol Bump Sure to Produce Controversy

Of course the EPA also contains much larger increases for cellulosic ethanol/butanol (derived from woody plant waste); biomass-based diesel (e.g. refined spent cooking oil); and "advanced biofuel" (sugarcane ethanol, algal oil, etc.).  

It’s broadly known that corn ethanol both increases greenhouse gas emissions and increases food prices.  On the other hand it does provide a small shred of domestic security by removing some dependence on volatile foreign sources.

Corn ethanol
Corn ethanol is a contentious proposition. [Image Source: Cagle Cartoons]

Generally the mood is shifting against corn ethanol.  The EPA appears to be in the minority of remaining federal supporters.  Congress recently finalized the cut to corn ethanol's tax subsidy.

However, the corn ethanol industry will likely push the issue by simply raising prices to recoup their lost subsidy.  After all, for now the EPA has the right to force importers and refiners to use a certain amount of corn ethanol, regardless of how expensive it is.

III. Numbers Show Hope for Cellulosic Ethanol, Rising Promise of Algal Fuel

One interesting thing in the above figures to note is just how small the cellulosic ethanol market still is.  When the EISA was first proposed, the intended target for this type of biofuel was 250 million -- it's now orders of magnitude smaller.

Cellulosic ethanol
[Image Source: ASPO USA]

Cellulosic ethanol startup companies like Coskata seemed promising, but difficulty in establishing a solid food-chain to deliver biomass stock and finding the funding to scale laboratory work to production-scale designs has led to the great cellulosic ethanol fizzle.

That said, there's still hope for this novel technology, which generally earns praise for turning non-viable biomaterial (woody waste) into fuel.  Unlike the last few years, in 2012 the EPA is actually increasing the cellulosic ethanol target from the prior year (the last few years have been a series of declines).  That could signal the industry is turning the corner.

The steep rise in advanced biofuel also may be coming thanks to the U.S. Navy's deep investment in algal fuel, which cut costs from $424 USD/gallon last year to $26.67 USD/gallon this year.

Looking ahead, there's likely to be a brewing fight over the very large remaining corn ethanol requirement.  One can only hope that Congress doesn't throw out the baby with the bathwater and ditch all of the requirements, including those that foster more fundamentally sound alternative fuel technologies like algal biofuel.

Sources: EPA [2012], [2011]



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By Cerin218 on 1/1/2012 10:22:25 AM , Rating: 2
If you understand how business and economy functions, you will realize that business does things for profit. If there isn't a profit, no point. With ethanol, the Fed is paying 6 BILLION dollars a year. If they didn't pay, this wouldn't be done because business has already realized that ethanol is a loss. The environment doesn't win either because ethanol is barely break even on it's environmental impact, most cases it's actually worse then gas. There is NO energy source that has the energy potential, cost, or portability of gas. Period. All of you alt energy people need to realize, that alt energy works great in small things, but is too cost prohibitive large scale. Yes it's fun to experiment, but that's all you are doing is playing around. The business sector has already realized that there isn't a profit in alt energy. You already said that the market and demand will choose. It already has, ethanol is a failure. if it weren't for the 6 billion they get, it would be dead and buried already. When the market wants it, and can sustain it, then we will see alt fuels. Ask Solyndra about alt energy. Alt energy should be explored, but not mandated like the government is doing. You can't artificially create demand for an inferior product.


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