What will the biofuel industry get from the new energy bill?
No one knows when the energy bill moving through the American Congress, with all its CAFE revisions and more, will make it to the president's desk and then into law (maybe) and we certainly don't know exactly what it will look like when it does get there. But not knowing just means it's time to predict what's coming down the pipe.
So, the folks at Kiplinger got out their crystal balls and they think that "the biofuel industry will clearly come up with the aces." These aces will likely include:
- A new Renewable Fuel Standard (RFS) of 35 billion gallons -- roughly 20% of the estimated U.S. motor vehicle fuels market -- by 2022.
- An additional 50¢-a-gallon federal tax credit for cellulosic ethanol, made from switchgrass, sawdust, farm waste or other lignin sources ... on top of the current 51¢-a-gallon credit for all ethanol.
- A new $1.10-a-gallon tax credit for biobutanol made from cellulosic sources will also get the nod.
A biobutanol tax boost would certainly get some of our readers excited and that extra 50 cents per gallon benefit for cellulosic seems to me to be the most forward-thinking of all these possibilities. It's a safe bet that we see a further jump in Toyota hybrid sales if there was some extra tax benefit to buying one now that most of the tax help has been reduced.
[Source: Kiplinger / Jim Ostroff]
Reader Comments (Page 1 of 1)
1985 Gripen 7:42PM (7/06/2007)
I'm a big proponent of biobutanol, so I'm pleasantly surprised to see it included in the legislation. As we all know, legislators rarely include things into bills without some sort of lobbying (payoffs in the form of campaign contributions and other "perks"), so I wonder who lobbied for its inclusion. I'm guessing it was DuPont, who along with BP (formerly British Petroleum) has been working on bringing biobutanol to market.
http://www2.dupont.com/Biofuels/en_US/index.html
Unfortunately in the nearly a year since the partnership was announced there has been no news on any outcome. When do they plan to start selling biobutanol commercially? This partnership is the only one I know of currently working on biobutanol. Anyone know of any other companies planning on making a biobutanol plant, rather than bioethanol one?
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Joseph 2:43AM (7/07/2007)
"$1.10-a-gallon tax credit for biobutanol made from cellulosic sources"
Who makes Bio-butanol? How about from cellulosic sources? And a $1.10 a gallon tax credit sounds like an awful lot; I'm assuming that if this is included in the energy bill, that must mean the gov't has done research about bio-butanol.
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Tim 9:49AM (7/07/2007)
I agree with Gripen here but we need to keep in mind that there are problems with “non-food” biofuels too. Biofuels are transitional because, biomass only captures about 0.4% of the full light spectrum. Subtract inefficiencies in planting, watering, fertilizing, harvesting, processing, shipping, and combusting and one quickly discovers that liquid biofuels are very wasteful http://www.smartenergyshow.com/?p=24
The resulting destruction of ecosystems along with their flora and fauna can only end in Catastrophic Species Extinction! So much for that cancer cure in the Amazon…
Electricity on the other hand can be moved and stored using existing infrastructure. Renewable sources like wind, wave tidal, etc are working, however their main (R.O.I.) disadvantages, cost, scale and maintenance.
Solar PV however is between 10% and 15% full wavelength efficient and unlike wind, wave etc. there are NO moving parts. http://en.wikipedia.org/wiki/Solar_cell This is magnitudes better than biofuels. Research & Development should concentrate on (1) reducing the costs associated with distributed (home rooftop) PV Solar, http://www.nanosolar.com/economic.htm (ROI is one month) and (2) the most efficient means of storing and using electrons for transportation. GM knows the future is electric and that’s why the started with the premature EV-1 and have now chosen a series format for e-flex with a “range extender” security blanket. They know that most will not use their “range extender” and will become comfortable with all electric cars. One step at a time.
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gsolman6 1:49PM (7/09/2007)
I hope everyone realizes that these tax credits for these non-renewable fuel sources(they require coal for processing, natural gas for fertilizers, and diesel for running the combines) will cost taxpayers billions of dollars and do nothing to address the demand side of the equation. All that and 25-30% less mpg - what a bargain.
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