President Obama Announces Steps to Boost Biofuels
President Obama announced on February 3 three actions the federal government is taking to boost U.S. biofuels production.
The measures include: a final rule from the U.S. EPA to implement the Renewable Fuels Standard (RFS) of 36 billion gallons by 2022; a proposed rule from the U.S. Department of Agriculture (USDA) for its Biomass Crop Assistance Program, which provides financing to increase the production of biomass for bioenergy (see article below); and the release of Growing America’s Fuel, the first report from the president’s Biofuels Interagency Working Group. The report lays out a strategy to advance the development and commercialization of a sustainable biofuels industry.
The primary measure is the change in the RFS program, required by the Energy Independence and Security Act of 2007, which mandates that biofuels production will grow from last year’s 11.1 billion gallons to 36 billion gallons in 2022.
The 2022 goal requires 21 billion gallons to come from advanced biofuels, defined as those that cut lifecycle greenhouse gas (GHG) emissions by at least 50% and that are not derived from cornstarch.
For the first time, all renewable fuels must also achieve lifecycle GHG emission reductions of 20%, compared to the gasoline and diesel fuels they displace, in order to be counted towards compliance with volume standards. Most existing biofuel plants are exempt from the GHG standard, but new plants will need to meet it.
In establishing the final rule, the EPA continued to include indirect GHG emissions caused by land-use changes, but used updated data on ethanol production to conclude that most new ethanol plants will produce fuel with a lower GHG impact than gasoline, thereby allowing corn ethanol to count toward the volume standards. According to the EPA, meeting the 2022 goal could reduce U.S. dependence on oil by more than 328 million barrels per year.
The EPA final rule sets the RFS for 2010 at 12.95 billion gallons of renewable fuel, all of which must be used in transportation fuels over the course of the year. For the first time, the EPA also set volume requirements for specific categories of renewable fuels. For 2010, the cellulosic biofuel standard is 6.5 million gallons, and the total volume of advanced biofuels must be at least 950 million gallons.
Biomass-based diesel is expected to contribute 650 million gallons of that total, but because a regulatory structure was not implemented to achieve the 2009 requirement of 500 million gallons of biomass-based diesel, the new rule combines the two years, requiring a total of 1.15 billion gallons of biomass-based diesel for 2009 and 2010. See the full EPA rule.
The Obama Administration also released Growing America’s Fuel, the first report from the Biofuels Interagency Working Group, which was created by the president last May and led by DOE, the USDA, and the EPA.
The report concludes the US – which now produces 12 billion gallons per year of biofuels – is not on the road to reach the goal of 36 billion gallons by 2022. To address the potential shortfall, the report suggests strategies such as strategic public-private partnerships to develop the biofuels supply chain, further R&D on feedstocks, and accelerated development of "drop-in" biofuels, such as bio-based gasoline, diesel fuel, and aviation fuel.
The report also calls for increased government consumption of biofuels along with an integrated management approach, relying on the oversight of a small centrally-located team accountable to the new president’s Biofuels Interagency Working Group. See the DOE press release and the Growing America’s Fuels report (PDF 165 KB).
Biomass Crop Assistance to Spur Renewable Energy Production
The USDA proposed new regulations for the Biomass Crop Assistance Program (BCAP), designed to boost production of non-food biomass crops for renewable energy.
Authorized in 2008 by the Food, Conservation, and Energy Act, BCAP provides incentive payments for investments in first-generation energy crops that displace fossil fuels. The BCAP program has begun to provide matching payments for the collection, harvest, storage, and transportation of biomass to eligible biomass conversion facilities. The proposed rule terminates those payments and as of February 8, the USDA is no longer accepting applications for matching payments. The program will start up again when the final rule is in place.
BCAP funds two main activities, one of which provides up to two years of matching payments for eligible biomass materials sold to qualified biomass conversion facilities that produce heat, power, biobased products, or advanced biofuels. The new rule offers three potential options for structuring payments, all of which are aimed at reducing payments to facilities that already use biomass and providing incentives for new uses of biomass (see page 6285 of the Federal Register, or page 23 of the PDF file).
BCAP will also provide payments to producers of eligible biomass crops for up to 75% of the cost of establishing the perennial crops, followed by annual payments for up to 15 years of crop production. These crops must be located in designated project areas, which can be proposed by biomass conversion facilities or by groups of biomass producers. Annual payments are limited to five years for annual crops and non-woody perennial crops.
The USDA intends to cap the cost of the BCAP program at $2.6 billion, including $2.1 billion for matching payments for biomass materials over the next four years, $306 million for crop establishment over the next three years, and $219 million for annual payments over the next 17 years. The funds come via the Commodity Credit Corporation, a government-owned and operated entity that was created to stabilize, support, and protect farm income and prices. The proposed rule was published in the Federal Register on February 8 and is open to public comment until April 9. See the USDA press release, the BCAP Web site, the CCC Web site, and the proposed rule (PDF 185 KB).
U.S. Wind Energy Industry Installed Nearly 10,000 MW in 2009
The U.S. wind industry installed nearly 10,000 MW of new wind turbines in 2009, increasing its generating capacity by 39%, according to the American Wind Energy Association (AWEA). The industry group credited the Recovery Act for the record-breaking year, which topped 2008 by nearly 19%. AWEA’s fourth quarter report, released on January 26, places wind power neck-and-neck with natural gas as the leading source of new electricity generation for the country. Together, the two account for about 80% of new capacity added last year. The new wind capacity is enough to serve more than 2.4 million homes.
With 4,041 MW completed, the fourth quarter was the strongest in the year but still lower than the fourth quarter of 2008. Overall, the 9,922 MW installed in 2009 brought the total wind power generating capacity in the US to more than 35,000 MW.
Texas strengthened its position as the top state for wind power, installing 2,292 MW, and Indiana, a relative newcomer, followed in second place by installing 905 MW. Indiana also featured the largest wind project of the year, the 600 MW Fowler Ridge Wind Farm. See the AWEA press release and the AWEA 2009 report (PDF 842 KB).
Globally, wind power capacity grew by 31% in 2009, adding 37.5 GW, according to the Global Wind Energy Council (GWEC). A third of new capacity went online in China, growing from 12.1 GW in 2008 to 25.1 GW in 2009. That’s an increase of 13 GW, about 31% greater than the growth in the US. China is now in third place for total installed wind capacity, falling just behind Germany, but still about 10 GW behind the US. See the GWEC press release and supporting tables (PDF 2.1 MB).
U.S. Geothermal Capacity Grew 6% in 2009
Geothermal capacity expanded 6% in the US in 2009 – six new geothermal plants came online, adding 176.68 MW. Three projects are in Nevada, and one in California, Oregon, and Utah. Total US capacity reached 3,152.72 MW as of August 2009, according to the Geothermal Energy Association (GEA).
GEA has identified 6442.9 MW of new U.S. geothermal power plant capacity under development, though some projects may not go forward. Seven projects with an estimated 125 MW of capacity have drilling and facility construction underway in California, Florida, Nevada and Oregon.
One of those projects-at Jay Oil Field in Florida-will use hot water produced by oil and gas wells to generate power. Two such projects started up in Louisiana and Mississippi in 2009, and more are planned for Louisiana, Nevada, and Wyoming. See the GEA press release (PDF 25 KB), the GEA report update (PDF 394 KB), and the Web site for DOE’s Geothermal Technologies Program.
GM Invests $246 Million in Electric Motors, Components
General Motors announced it will invest $246 million in its facilities in Baltimore, Maryland, for manufacturing electric motors and electric drives.
A high-volume electric drive production facility at the Baltimore Transmission plant will produce electric motors for GM’s rear-wheel-drive hybrid technology starting in 2013. The factory will be the first electric motor manufacturing facility in the US to be operated by a major automaker. In August, DOE selected GM for a $105 million grant from the Recovery Act for the construction of U.S. manufacturing capabilities to produce electric motors and related electric drive components. See the GM press release.
At the Washington Auto Show, which ran from January 27-31 in Washington, D.C., GM announced the D.C. area will be one of three initial launch markets (along with Michigan and California) for the Chevrolet Volt extended-range electric vehicle (EV).
GM also announced a development and demonstration vehicle charging program with two D.C.-area utilities. The project is part of DOE’s Transportation Electrification Initiative, using $30 million in Recovery Act funds.
The company also unveiled the North American production version of the high-efficiency Chevrolet Cruze, which goes on sale later this year. The Cruze features a new Ecotec 1.4-liter turbocharged engine that delivers up to 40 miles per gallon on the highway.
Wheego Electric Cars unveiled the full-speed Wheego Whip LiFe, which runs on lithium-ion batteries and is expected to be available by mid-year. The show also featured ethanol produced from paper, the result of a partnership between enzyme maker Novozymes and Fiberight, which developed the technology and used it to power two flex-fuel vehicles. See the GM press releases on the Chevy Volt and the Chevy Cruze and the press releases from Wheego, and Novozymes.
Florida Company Donates Solar Lights to Haiti
Sol Inc., a Florida manufacturer of solar outdoor lighting, is helping relief efforts in Haiti, pledging more than $300,000 in equipment and aid. The company’s product combines a small solar panel and a battery pack to provide power for a high-intensity lamp that uses LEDs.
Sol employees have been in Haiti since January 19, working to install solar-powered light systems. Workers have helped bring sun-powered illumination to hospitals, relief camps, and food distribution centers in Port-au-Prince. The company is continuing to work with U.S. officials and agencies to get more of the solar lights to Haiti.
Sol assisted with solar lighting in other disaster recoveries, including efforts for victims of Hurricane Katrina in 2005, Hurricane Rita in 2005, Peruvian earthquakes in 2007, and tornadoes in Chapman, Kansas. Sol will provide additional lights through a special ongoing Solar Lights for Haiti matching program it has established. See the latest Sol press releases, Sol’s Web site for community outreach, and the "Dispatch from Haiti" on the Sol USA home page.
SEC: Businesses Should Disclose Climate Change Impacts
The Securities and Exchange Commission (SEC) issued "interpretive guidance" to companies on January 27 to indicate how companies should handle the impacts of climate change in their financial disclosures.
While the SEC guidance does not create new legal requirements, it points out where companies could be liable if they fail to disclose potential climate change impacts. Specifically, the SEC directs companies to consider the impacts of existing laws and regulations regarding climate change, and in certain circumstances, the potential impact of pending legislation or regulation. Companies should also consider the impacts of international accords, the indirect consequences of climate change regulation or business trends (which might create new opportunities or risks), and the actual and potential physical impacts of climate change on their businesses. See the SEC press release.
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EREE Network News is a weekly publication of the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy (EERE).
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