Posts tagged “advanced biofuels”
Deja Vu All Over Again
A couple of weeks ago the US Department of Energy’s (DOE’s) Office of Inspector General released an audit report on how well taxpayer money has been utilized in the pursuit of commercializing integrated biorefineries:
The results are not pretty. In the opening section, the report notes:
“In our prior audit, Financial Assistance for Biomass-to-Ethanol Projects (DOE/IG-0513, July 2001), we reported that the Department had not met its goal to build a full-scale commercial biomass production facility by the year 2000, and provided recommendations for improving Program performance.”
Turns out that a dozen years later, it’s deja vu all over again. CONTINUE»
Ask and Ye Shall Receive
Last week, The Economist posed the following question: “What happened to biofuels?” The biofuels in question are so-called second generation biofuels that are produced from trees, grasses, algae, — in general, feedstocks that don’t also have a use as food. The appeal is obvious to anyone concerned about the world’s dependence on petroleum, and further worried that a major shift to biofuels will cause food prices to rise. So let’s address that question.
Entrepreneurs Revive a Century-Old Idea
About a decade ago, a number of entrepreneurs began to use their political influence to convince the US government that the only things keeping the US from running our cars on advanced biofuels was lack of government support, and interference from oil companies. These advocates eventually won over enough political support that state and federal governments began to funnel large amounts of taxpayer dollars into advanced biofuel ventures. President Bush spoke of running cars on switchgrass in his 2006 State of the Union address.
The federal government sought to deal with supposed oil company intransigence with a mandate requiring gasoline blends to contain growing volumes of corn ethanol initially, but starting in 2010 advanced biofuels as well. The federal government mandated that by the year 2022 the fuel supply had to use 36 billion gallons of biofuels, with 21 billion gallons coming from advanced biofuels. CONTINUE»
Chemicals and Fertilizer Industries
In last week’s post Who Wins from Rising Natural Gas Prices?, I discussed the sectors that would benefit from rising natural gas prices. This week, let’s talk about the potential losers.
Natural gas is an important feedstock for the chemicals and fertilizer industries, so higher prices could pressure those sectors. Oil companies with significant chemical operations could also see this business segment take a hit, but based on ExxonMobil’s (NYSE: XOM) advocacy of liquified natural gas (LNG) exports, it clearly believes the net effect of rising natural gas prices on the company would be positive.
Dow Chemical (NYSE: DOW), on the other hand, has come out strongly against LNG exports because of the potential cost to its own business and that of other heavy users of natural gas. Ironically, last week the Department of Energy granted a permit to a facility called Freeport LNG — in which Dow owns a 15% stake. Dow’s answer to that is that they invested in the facility when it was supposed to be an LNG import facility.
But the risks to the chemicals and fertilizer industries are well-known. What isn’t as well-known is the risk from higher natural gas prices to the biofuels sector. This may be counterintuitive, since renewables like wind and solar power become more competitive as natural gas prices increase. CONTINUE»
I just finished writing the 4th chapter in my book tonight. This chapter was a primer on renewable energy, covering biomass, hydropower, wind, solar, geothermal, and ocean energy technologies. Interesting tidbit from this chapter: The world’s largest producer of geothermal power is the U.S. oil company Chevron. How many people would have guessed that? The chapter kept me busy this week, but fortunately I have a timely guest post available. The following guest post from OilPrice.com addresses last week’s announcement of a potential half billion dollar investment by several government agencies to develop advanced biofuels. ————————– On 16 August President Obama announced that the U.S. Departments of Agriculture, Energy and Navy will invest up to $510 million by 2014 in… Continue»