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By J.B. Wogan August 10, 2012

Far, far behind 2 billion-gallon target

Cellulosic biofuel received a lot of attention before Barack Obama became president. Congress gave it a special producer tax credit and loan guarantee program and set new, annual industry-wide production targets. Why? Because cellulosic biofuel is said to emit less greenhouse gases than traditional biofuels.

So it's no surprise that Obama singled out cellulosic biofuel in a campaign promise: He said he would work to get it into our national supply as soon as possible. Specifically, he would aim to have 2 billion gallons in the market by 2013.

Cellulose is the chief part of cell walls in plants, and cellulosic biofuel is transportation fuel converted from these plants. Wood chips, switchgrass, and other plant matter can serve as the source of cellulosic ethanol, the most prominent form of cellulosic biofuels and the focus of Obama's promise. It can also come from the green fibrous parts of corn stalks and leaves.

Obama's 2 billion-gallon goal looked lofty as early as 2007 -- that's when the Congress published its annual goals for producing cellulosic biofuel, with a 1 billion-gallon target by 2013.  Other biofuels get a hard mandate each year, but for cellulosic biofuel the Environmental Protection Agency can waive the annual targets if they seem unrealistic; that's because it is an emerging fuel requiring emerging technology and techniques to produce large-scale volumes.

So far, the agency has reduced its target every year leading up to 2013. For instance, 2010 was supposed to be 100 million gallons, but it became 6.5 million. The 2011 target was 250 million gallons, but it became 6 million. This year 1 billion gallons became 8.65 million.

A report by Congressional Research Services called the original timetable a "prodigious challenge to the biofuels industry" because so few commercial production plants exist in the United States. As of January 2012, the Environmental Protection Agency could only find six facilities producing cellulosic biofuel for transportation uses.

Converting cellulose to fuel requires a trigger such as heat or chemicals to break down the cells and it takes more time to convert than with starches or sugars. A 2005 report from the Energy Department found that cellulosic ethanol's production cost ($1.21 per gallon) was about 2.3 times more expensive than corn-based ethanol.

"It is expensive and it's difficult to do and it's relatively untried on a commercial scale," said Ned Stowe, policy associate for the pro-renewable energy think tank, the Environmental and Energy Study Institute. "For private investors, it's seen as a risky venture because of the technological unknowns."

Stowe added that the down economy in the last four years made private investors even more skittish about betting on cellulosic production facilities.

We don't expect candidate Obama to have known the Great Recession was coming, but he did know this was a non-existent industry depending on new, untested technology. Why did he make such an ambitious and seemingly unrealistic pledge?

We asked Brooke Coleman, executive director of the Advanced Ethanol Council, a trade group of advanced ethanol producers and cellulosic biofuel producers.

"It wasn't really his promise," Coleman said. "There was an aggressive trajectory signed into law (in 2007) before he took office and he pretty much was saying, 'yeah, I want to go that way, too.'"

Congress underestimated how long it takes for a young industry to bloom, said Jim Imbler, CEO of ZeaChem, an advanced biofuels and chemical producer making cellulosic ethanol out of poplar trees in Oregon.

"They talk about that infamous hockey stick, but the question is how long is the handle?" Imbler said. In this case, the handle has remained relatively flat for Obama's entire four years in office.

Obama also had promised to leverage federal resources to help usher in more cellulosic biofuel. In general, he has maintained the level of support set by President George W. Bush. These include tax credit, loan and grant programs. Among them: a cellulosic producer tax credit, a 50 percent tax write-off for the first year of production facility costs, a loan guarantee and grant program for building commercial-scale bio-refineries, and a rewards program that pays companies per volume of cellulosic biofuel produced each year.

As far as we could tell, Obama has played the role of steward, not champion, of cellulosic biofuel. One exception was an infusion of $786.5 million in economic stimulus money for the Energy Department's advanced biofuel programs and ethanol research, though that was temporary. (His track record is stronger on supporting the broader biofuel industry, but we're not evaluating that here.)

We acknowledge that outside forces often conspire to thwart presidents' campaign promises. A down economy and technological difficulties were two clear obstacles preventing the president from meeting his 2 billion-gallon goal. That said, the administration hasn't reached even 1 percent of Congress' annual production targets and we grade Obama based on outcomes, not efforts and extenuating circumstances. This is a Promise Broken.

Correction: We have corrected the spelling of Jim Imbler's name. 

Our Sources

Interview with Jim Imbler, CEO of ZeaChem, Aug. 9, 2012

Interview with Ned Stowe, policy associate for the Environmental and Energy Study Institute, Aug. 8, 2012

Interview with Brooke Coleman, executive director of the Advanced Ethanol Council, Aug. 7, 2012

Interview with Doug Kaplow, founder of Earth Track, Aug. 7, 2012

110th Congress, Energy Independence and Security Act of 2007

Environmental Protection Agency, Regulation of Fuels and Fuel Additives: 2011 Renewable Fuel Standards; Final Rule, Dec. 9, 2010

Environmental Protection Agency, Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program; Final Rule, March 26, 2010

Environmental Protection Agency, Regulation of Fuels and Fuel Additives: 2012 Renewable Fuel Standards; Final Rule, Jan. 9, 2012

Senate Finance Committee, Summary of the Family and Business Tax Cut Certainty Act of 2012 as Approved by the Finance Committee, Aug. 2, 2012

U.S. Department of Agriculture, Agriculture Secretary Vilsack Announces Support for a New Advanced Biofuel Production Facility in Oregon, Jan. 26, 2012

U.S. Department of Agriculture, Bio-refinery Assistance Program Guaranteed Loans, accessed on Aug. 7, 2012

Environmental Protection Agency, National Center for Environmental Economics, Economics of Biofuels, accessed on Aug. 7, 2012

Department of Energy, Alternative Fuels Data Center, Cellulosic Biofuel Producer Tax Credit, accessed on Aug. 7, 2012

Congressional Research Services, Cellulosic Biofuels: Analysis of Policy Issues for Congress, January 13, 2011

Ethanol Producer Magazine, EIA issues 2012 cellulosic biofuel predictions, Nov. 16, 2011

Ethanol Producer Magazine, EPA cuts 2012 cellulosic biofuel target, June 21, 2011

Ethanol Producer Magazine, Who's on the List? The U.S. EPA pegs a handful of cellulosic producers to contribute to next year's RFS goal, July 22, 2011

Department of Energy, Alternative Fuels Data Center, Small Ethanol Producer Tax Credit, accessed on Aug. 7, 2012

Internal Revenue Service, Fuel Tax Credits and Refunds, Cellulosic Biofuel Producer Credit, accessed on Aug. 7, 2012, Barack Obama's plan to make America a global energy leader, accessed on Aug. 7, 2012

By Catharine Richert December 2, 2009

Stimulus money, renewable fuel standard boost cellulosic ethanol

President Barack Obama talked about renewable fuels a lot on the campaign trail, among them cellulosic ethanol, an advanced biofuel that uses organic waste, such as wood chips and grasses, to make energy.
The fuel is arguably cleaner than corn ethanol, which can be land- and fossil fuel-intensive, so Obama is trying to expand the nation's renewable fuel portfolio.
Already, between funding from the stimulus package to advance the market and grants from the Department of Energy, Obama has made some headway in promoting the alternative fuel.
Perhaps his biggest push, however, came in May 2009, when Obama announced that he would expand the Renewable Fuel Standard, an existing mandate that requires gasoline to be blended with ethanol or diesel with biodiesel, from 9 billion gallons of blended fuel to 36 billion gallons by 2022. He also said he would expand the requirement to include cellulosic ethanol. For example, by 2016, gasoline will be blended with 4.25 billion gallons of cellulosic ethanol and that amount would increase to 5.5 billion gallons in 2017.
That said, the updated rule would require only 1 billion gallons of the fuel by 2013. Not until 2015 would the cellulosic mandate exceed 2 billion gallons, according to the notice of proposed rulemaking on the Environmental Protection Agency Web site.
So, Obama has fallen 1 billion gallons short of his goal of creating 2 billion gallons of cellulosic ethanol by 2013. But the updated renewable fuels standard is not yet on the books. In the meantime, he has clearly lived up to his promise of investing federal resources into developing cellulosic ethanol. We'll keep an eye on this pledge, but for now, we'll move it to In the Works.

Our Sources

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