Production has begun at rates deemed commercial by two US makers of cellulosic biofuel. Mute the trumpets, though. Volumes still won't be great enough to meet the Environmental Protection Agency's 2013 Renewable Fuel Standard requirement for the material, which is a fraction of what Congress envisioned for this year when it passed the Energy Independence and Security Act of 2007. If anything, the start-ups show how flawed the RFS truly is—and how greatly it needs to be scrapped.
INEOS Bio on July 31 said it had begun producing cellulosic ethanol at commercial scale at a plant in Vero Beach, Fla., and would make its first shipment in August. The plant can produce 8 million gal/year of ethanol-equivalent by converting plant waste—biomass—into syngas, which it ferments into ethanol with naturally occurring bacteria. At the beginning of 2013, EPA identified it as one of two US facilities likely to produce cellulosic biofuels commercially this year.
The other facility, operated by KiOR Inc. at Columbus, Miss., also is starting up. It uses a process similar to fluid catalytic cracking to convert biomass into "biocrude," which it upgrades into gasoline, diesel, and jet fuel. Capacity of the KiOR plant is about 11 million gal/year.
High expectations
When EPA set RFS levels for 2013, it projected more output from the plants than either will deliver. It assumed INEOS Bio would produce 6 million gal of ethanol-equivalent at Vero Beach. If the plant produced at capacity rates for the rest of the year, however, total production would be slightly more than half that amount.
For the KiOR plant, EPA estimated 2013 production of 8 million gal of ethanol-equivalent fuels. In a July 1 press release, the Pasadena, Tex., company said its Columbus plant had completed its first uninterrupted 30-day run and on June 28 made its first shipment of cellulosic gasoline, which was the first fuel shipment of any kind since March. KiOR said the June 28 shipment was the start of regular deliveries of gasoline and diesel. As with INEOS Bio, therefore, production by KiOR at capacity rates for the rest of the year would leave the total well below EPA's projection.
At either plant, continuous production at capacity rates is very unlikely. Because supply of cellulosic biofuel will fall far below the 14 million gal EPA requires this year, refiners and other obligated enterprises won't meet individual mandates and will have to buy waiver credits—an abomination that has encountered fully deserved problems in court.
Last year, a judge vacated the 2012 requirement for cellulosic biofuel and ordered EPA to use supply projections more realistic than it had used to that point. Obviously, the agency did not.
To be fair, EPA must implement a delusional law. If the requirement it set for cellulosic biofuels this year proves to have been twice or more the amount physically available, it's still a fraction of the 1 billion gal specified by EISA for 2013. And the statutory requirement rises to 16 billion gal in 2022. Supplying that much cellulosic biofuel in 9 years would require a technical miracle.
Indeed, the Energy Information Administration expects production of cellulosic biofuels in 2022 to be 500 million gal.
Miscalculations
Problems with the RFS program and the law underlying it don't end with injudicious requirements for nonexistent substances, of course. If production of cellulosic biofuel came close to meeting lawmakers' ingenuous expectations, the market wouldn't have room for the ethanol component of it. Although the RFS requirement for conventional ethanol hasn't yet peaked, the stagnant gasoline market has absorbed about all the ethanol it can under current blending limits. One miscalculation by Congress thus counteracts part of the damage caused by another. Both mistakes, however, are huge. Americans shouldn't tolerate them.
Commercial production of cellulosic biofuel is a landmark, to be sure. But it says far more about faulty governance than it does about energy supply. That's not something to cheer.
