Kansas Renewable Energy Conference

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Kansas Renewable Energy Conference National
Biofuels Policy Update Ernie Shea 25x25
Project Coordinator September 24, 2008 Topeka,
Kansas
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ENERGY The Linchpin of Our Economy
Fundamental to our prosperity Contributes to our
quality of life Historically has been abundant
and affordable
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Fossil based energy systems are not sustainable
World oil reserves are limited in supply and
located in volatile parts of the
world Dependence on foreign oil is increasing
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Costs of oil, natural gas and electricity are
skyrocketing Emissions from burning of fossil
fuels are impacting the environment
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• The Reality
• Fossil fuel resources are finite and diminishing
• Global energy consumption is increasing (nearly
  60 by 2030)
• The world population is growing (9.1 billion by
  2050)
• Fast-developing economies like India and China
  are demanding more resources
• Greenhouse gas emissions are increasing (World
  carbon dioxide emissions expected to increase by
  1.9 annually between 2001 and 2025)

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Our Vision
By the year 2025, Americas farms, ranches and
forests will provide 25 percent of the total
energy consumed in the U.S. while continuing to
produce safe, abundant and affordable food, feed
and fiber.
25x25
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We will meet this goal by
Producing transportation fuels Harnessing wind
energy Converting biogas emissions Capturing
solar and hydro energy Providing biomass for
generating heat and power
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This is a food, feed, fiber and fuel vision, that
is economically viable for our society. With
emerging technology we can produce multiple
commodities.
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• Whats in it for ag and forestry?
• Increased farm income
• Added value uses
• Alternative enterprises
• More productive uses of marginal lands
• Assist in resolution of air, water and soil
  quality problems
• Reduced reliance on government payments
• Enhanced rural economies

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Over 750 partners including

• Kansas Dept. of Agriculture
• Kansas Corn Growers and Soybean Assoc.
• - Kansas Electric Power Cooperative
• - Forest Landowners Association
• - Deere Company
• - Ford, Chrysler and GM
• - American Wind Energy Association
• - National Wildlife Federation
• - Environmental Defense Fund

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Governors Endorsements
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State Legislature Resolutions
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State Alliance Activity
Active Alliances Forming Alliances Alliance
Planning Underway
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25x25 is now a national renewable energy goal!
Passed by Congress as part of HR6 Signed into law
by President Bush on December 19, 2007
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Phase IV Mission
Document and affirm the fact that Americas
working lands can secure 25 percent of its
energy needs from renewable sources.
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Critical Challenges Opportunities

• Biofuel pushback
• Sustainability issues
• Role of agriculture and forestry in a reduced
  carbon economy
• Woody biomass contributions

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Biofuel Pushback

• Net energy balance
• Soil erosion
• Water quality and quantity
• Direct and indirect land use impacts
• Increased GHG emissions
• Impacts on commodity prices
• Increased costs for livestock sector
• Food shortages and ??????

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Lifecycle Greenhouse Gas Emissions Associated
with Different Fuels
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Sustainability

• 25x25 Definition
• Renewable energy production must conserve,
  enhance and protect natural resources and be
  economically viable, environmentally sound and
  socially acceptable.

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Sustainability Principles

• Biodiversity
• Biotechnology
• Air Quality/Greenhouse Gas Emissions
• Invasive Species
• Land Use
• Public Lands
• Soil Quality and Quantity
• Water Quality and Quantity
• Wildlife Habitat and Health

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• Biofuels are an important part of our nations
  renewable energy portfolio

While not perfect, biofuels provide a critical
pathway to a sustainable, cleaner and more secure
energy future Technology is leading us to more
efficient, cleaner, less costly solutions
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The Opportunity Potential

• USES
• Fuels
• Bio/Renewable Diesel
• Ethanol
• Electricity and Heat
• Biobased Products
• Composites
• Specialty Products
• New Products
• Chemicals
• Traditional Products

Conversion Processes

• Biomass
• Feedstock
• Ded. Energy Crops
• Ag and Forest Residues
• Hazardous Fuel
• Treatments
• - Short Rotation
• Woody Crops
• - Wood Waste

• Manufacturing
• Co-firing
• Combustion
• Gasification
• Enzymatic Fermentation
• Gas/liquid Fermentation
• Acid Hydrolysis/Fermentation

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U.S. Biofuel Goals

• 2012- Cost-competitive cellulosic ethanol
• - 3 billion gallons of cellulosic biofuels
• - 16 billion gallons cellulosic biofuels
• 2030 - Displace 30 of U.S. gasoline
  consumption

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National Policy Drivers

• Renewable Fuel Standards
• Excise and Production Tax Credits
• Import tariff
• Investments in RDDD
• Loans and loan guarantee programs

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U.S. Renewable Fuel Standard 2007
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Renewable Fuel Standard GHG reduction
requirements, EISA 2007

• Facilities that begin construction after
  December, 2007, must achieve the following GHG
  emissions reduction, as compared to the baseline
  lifecycle GHG emissions
• Corn Starch Ethanol 20
• Biomass-based fuel (biodiesel, renewable diesel)
  and advanced biofuel 50
• Cellulosic biofuel 60
• These percentages are subject to a 5-year review
  by the EPA Administrator.

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RFS Waiver

• EISA 07 authorizes the Administrator of EPA to
  waive the renewable fuels mandate if the
  Administrator determines that implementing the
  requirement would severely harm the economy or
  the environment, or that there is inadequate
  domestic supply to meet the requirement. 

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Transforming Feedstocks into Renewable Fuels

• Natural Oils
• Sugars Starches
• Cellulosic Biomass

• Diesel substitute
• Biodiesel
• Renewable diesel
• Dimethyl furon (DMF)
• Gasoline
• Diesel
• Jet fuel
• Hydrocarbons
• Ethanol
• Butanol
• Biogasoline

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VEETC VOLUMETRIC ETHANOL EXCISE TAX CREDIT

• Blenders credit created October 2004 as part of
  the American Jobs Creation Act of 2004.
• Provided for a 0.51 per gallon refund or credit
  for each gallon of ethanol used
• Modified in 2008 Farm Bill to 0.45 per gallon
• Set to expire December 31, 2010
• Under pending PTC legislation VEETC would be
  extended until December 31, 2011

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Cellulosic Biofuels Credit

• New, temporary cellulosic biofuels production tax
  credit for up to 1.01 per gallon
• Authorized in the 2008 Farm Bill
• Designed to help accelerate the commercial scale
  production of cellulosic biofuels
• Available through December 31, 2012

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Biodiesel Production Tax Credit

• Biodiesel production tax credit was passed as
  part of the Energy Policy Act of 2005.
  Producers receive 1 per gallon of biodiesel
  produced small biodiesel producers receive 0.10
  per gallon production tax credit.
• Senate renewable energy PTC package, which passed
  93-2 on September 23, 2008, contains an extension
  of all of the above credits. The package awaits
  reconciliation with the House PTC bill.
• Senate-passed package also broadens the types of
  biodiesel eligible for such credits, eliminating
  process-based restrictions.

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Import Tariff

• U.S. charges a 0.54 per gallon tariff on
  imported ethanol.
• Tariff was extended in the Food, Conservation,
  and Security Act of 2008 (Farm Bill) through
  1/1/2011.

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DOE RDD Solicitations

• Commercial-Scale Biorefineries (up to 385
  million)
• 6 cost-shared, integrated biorefinery
  demonstration projects
• 10-Scale Biorefinery Validation (up to 200
  million)
• Cost-shared, integrated biorefinery
  demonstrations at one-tenth projected scale for
  first-of-a-kind commercial facilities
• Ethanologen Solicitation (up to 23 million)
• Five selected research teams working on
  microorganisms
• Enzyme Solicitation (up to 33.8 million)
• Creating commercially available, highly
  effective, inexpensiveenzyme systems for biomass
  hydrolysis
• Thermochemical Conversion (up to 7.75 million)
• Integration of gasification and catalyst
  development
• Joint DOE-USDA Solicitation (18 million)
• 21 biomass research, development, demonstration
  projects in 2008
• Next years solicitation to be announced soon
• University Solicitation (up to 4 million)
• Feedstock Logistics Solicitation (up to 9
  million)

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Major DOE Biofuels Project Locations
Geographic, Feedstock, and Technology Diversity
Key Company Process Feedstock (Location)
Mascoma Biochemical Various (Lebanon, NH)
Cargill Inc Biochemical Various (Minneapolis, MN)
Pacific Ethanol Biochemical Wheat
Straw/Corn Stover (Boardman, OR)
Stora Enso North America Thermochemical Wood
Chips (Wisconsin Rapids, WI)
Iogen Biochemical Wheat
Straw (Shelly, ID)
DSM Innovation Center Biochemical Various (Parsipp
any, NJ)
DOE Great Lakes Bioenergy Research
Center (Madison, WI)
DOE Joint Bioenergy Institute (Berkeley, CA)
Dupont Biochemical Various (Wilmingt
on, DE)
Iowa State Thermochemical Switchgrass (Ames, IA)
Poet Biochemical Corn Stover (Emmetsburg, IA)
Novozymes Biochemical Various (Davis, CA)
Emery Energy Thermochemical Corn Stover (Salt
Lake City, UT)
Lignol Biochemical Wood Residues (Commerce City,
CO)
Purdue University Biochemical (West Lafayette,
IN)
Research Triangle Institute Thermochemical Woody
Biomass (Research Triangle Park, NC)
ICM Biochemical Switchgrass, Corn Stover (St.
Joseph, MO)
Genencor Biochemical Various (Palo Alto, CA)
Abengoa Biochemical/ Thermo Ag Waste,
Switchgrass (Hugoton, KS)
Blue Fire Biochemical Municipal Solid
Waste (Corona, CA)
DOE Bioenergy Science Center (Oak Ridge, TN)
Southern Research Institute Thermochemical Various
(Birmingham, AL)
Range Fuels Thermochemical Wood Chips (Soperton,
GA)
Verenium Corp Biochemical (2) Various (San
Diego, CA)
Alico Thermochemical/Bio Citrus Waste (LaBelle,
FL)
Six Commercial-Scale Biorefinergy Projects up to
385 million Four Small-Scale (10) Biorefinery
Projects up to 114 million (first round) Three
Bioenergy Centers up to 405 million Four
Thermochemical Biofuels Projects up to 7.7
million Four Improved Enzyme Projects up to
33.8 million Five Projects for Advanced Ethanol
Conversion Organisms up to 23 million
Regional Feedstock Partnerships South Dakota
State Univ., Brookings, SD Cornell University,
Ithaca, NY Univ. of Tennessee, Knoxville,
TN Oklahoma State Univ., Stillwater, OK Oregon
State Univ., Corvallis, OR
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Loans and loan Guarantees

• Biorefinery Assistance Program- 320 million for
  commercial and pre-commercial advanced biofuel
  refineries
• Bioenergy Program for Advanced Biofuels- 300
  million for payments to support production of
  advanced biofuels
• Rural Energy for America Program (REAP)- 250
  million in grants and loan guarantees for
  renewable energy and energy efficiency projects
  undertaken by producers and small businesses

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America needs a new energy future that is
cleaner improves national security strengthens
the economy contributes positively to the
quality of life of all
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America needs a comprehensive, long-term energy
plan that will
accelerate the production of all forms of
renewable energy create new renewable energy
markets deepen our commitment to conservation of
natural resources, sustainability and protection
of the environment
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The 25x25 Alliance calls on the Congress and
next President to take the steps necessary to
achieve the 25x25 National Goal and set the
nation on the path to a clean, prosperous and
secure energy future.
25x25
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25x25s Overarching National Energy Plan
Recommendations
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Recommendations
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Public Policy

• Increasing production
• Delivering renewable energy to markets
• Expanding renewable energy markets
• Improving energy efficiency and productivity
• Strengthening conservation and protecting the
  environment

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Critical Questions

• What is the Kansass vision for the role of
  biofuels in Americas energy future?
• How will you participate?
• What has to happen for your vision to be
  realized?
• Who is at the policy table representing your
  interests?

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• The 25x25 Vision
• Is achievable
• Provides a positive impact on the national and
  rural economies
• Reduces our reliance on foreign oil and improves
  national security
• Creates important environmental benefits

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Why now?
We have the technology, capacity and leadership
to offer new energy solutions. These solutions
will enhance farm income and strengthen rural
communities. The public and policy makers are
behind us.
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Please Join Us!
www.25x25.org