Most of my work at the Union of Concerned Scientists centers on meeting the Billion Gallon Challenge. Getting cellulosic biofuels up to commercial scale is the key next step on the road to biofuels that deliver the oil savings and climate change benefits that have long been promised. A billion gallons would be 10-20 commercial scale biorefineries, and getting there would provide investors, scientists, policy makers, and everyone else a concrete sense of what technologies are ready for prime time, start developing supply chains for new feedstocks (from garbage to corn stover to new energy crops), and show what hidden challenges require attention.
I used to make computer chips for about a decade before I got involved in biofuels (it’s a long story), first in research, then development, and finally manufacturing and reliability. When you are doing research and development, there are no end of interesting problems and potential solutions. But when someone puts real money into actually building a manufacturing facility (say half a billion dollars for a commercial scale cellulosic biorefinery, maybe two billion for a new chip plant) it tends to focus the mind. The problems that seemed most pressing in R&D turn out to be readily resolved, and new problems arise at commercial scale that were hidden in pilot scale.
Right now there are a handful of companies just about ready to break ground on the first cellulosic biorefineries (Abengoa, Bluefire, Coskata, Enerkem, Fiberight, Fulcrum, INEOS, KiOR, Mascoma, POET, RENTECH, Vercipia). Each of these companies has different technologies, and faces different circumstances. They will certainly face plenty of technical challenges as they scale up to commercial scale, but right now the primary challenge facing the industry as whole is breaking through the financing logjam. Nervous investors are ready to finance the second commercial facility, but it has been very tough to line up financing for the first commercial facilities. This is the so-called valley of death that stands between promising technologies and the scale to compete in commercial markets.
There are a variety of different policy mechanisms that can build a bridge across this valley of death, but the key is encouraging early investments. Loan guarantees and investment tax credits are a couple of ideas I describe in my report. I will come back to these topics later in more detail, but today I just wanted to explain why we are focused on meeting The Billion Gallon Challenge.
Photo: /charlene