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The US Department of Energy and the US Department of Agriculture will jointly spend $35 million in research toward developing biomass-based oil supplements (bio-oils) that could eventually be mixed with petroleum, as the world struggles with increasing food prices as a result of biofuels production.
The DOE describes the bio-oils as "precursors for fully renewable transportation fuels" that could be integrated into the oil refining processes for conventional gasoline, diesel and jet fuels.
The Biomass Research and Development Initiative (BRDI) will fund a number of projects to develop bio-oil prototypes for testing at oil refineries. The potential biomass products to be used include algae, corn, wheat stovers and wood residues.
Domestic industry, universities, and laboratories are all eligible to apply for the grants, and projects will have to demonstrate a combination of science and engineering research and one of three technical areas: feedstock development, biofuels and bio-based products development, and biofuels development analysis.
All biofuels currently produced in the world come from feedstocks that would otherwise be used for the production of food or animal feed, or are produced on land that would otherwise be used for food production. That said, according to the Center for Agricultural and Rural Development at Iowa State University, there are other factors contributing to increasing food prices, particularly the increase in wheat and rice consumption worldwide over the past years.
Still, the link between increasing food prices and increasing biofuels production is there and cannot be ignored. The answer is to find alternative ways to produce biofuels without diverting feedstock and land from food production to biofuels production.
According to the Iowa university research center, the most straightforward way to "de-link" biofuels from the food chain is to "capture biomass that is currently treated as either waste or that is a co-product of existing production processes with very low or negative current economic value." Potential waste streams for biofuels production include "a portion of municipal trash and garbage, crop residues, wood pulp residues, and forest residues."
One recent project towards this end is the USDA's funding of a biogas anaerobic digester for Western Plains Energy in Oakley, Kansas. The digester will run on animal, food and municipal waste. The government says the project will reduce the amount of fossil fuels created by Western Plains by nearly 90%, while producing more than 100Btu of renewable energy hourly.
The BRDI project lists algae as one potential biomass material that could be further developed for use in biofuels production. Algae, a third-generation biofuel, can be produced in ponds or in algae-producing facilities that are not located on land that could be used for food crops.
According to the Iowa research center, US policy only "partly" recognizes the problem with diverting food crops to biofuels production. Furthermore, US policy does not clearly differentiate between biofuels that use feedstocks and affect food prices and biofuels that do not.
The Center recommends that Congress "place a hard cap on ethanol made from corn and on biodiesel made from refined vegetable oil" to ensure that future production does not increase beyond intended levels. The Center also recommends that Congress "better target tax credits and fuel standards by basing them on the impact each biofuel feedstock has on food prices".
The world got it wrong when it stood behind the mass production of biofuels as a way to diversity energy, and in some parts of the world, particularly South America, this resulted in a major food crisis as food crops were diverted to biofuels production. That was a very unfortunate part of the learning process. That does not, however, mean that there is not a significant future for biofuels. De-linking biofuels from the food chain is the next step, which must be more clearly recognized in policymaking.
When Republican Newt Gingrich lashed out at the Obama Administration's "algae" campaign and referred to it as "cuckoo land", attempting to summon images of Americans stuffing algae in to their gas tanks, it was trite and unhelpfully political as opposed to rational. Algae, along with other third-generation biofuels possibilities, could end up being a critical contributor to energy diversification if its development can be managed without diverting feedstock land.
By Charles Kennedy
Charles is a writer for Oilprice.com More