The RFS- basket case, or just a few years ahead of it’s time?

When Congress established the Renewable Fuel Standard (RFS) through the 2007 Energy Independence and Security Act, one of the primary goals was to grow the fledgling cellulosic ethanol sector from laboratory scale up to an industry surpassing corn ethanol, via an exponentially-increasing national mandate.  But today, the fate of that policy hangs in the balance.  The RFS has been repeatedly challenged by competing industries and laissez-faire policymakers, challenges that are finally starting to make progress.  But even more fundamentally, the cellulosic standard has failed in stimulating any significant production of fuel to date.  While the program originally called for 85,000,000 gallons of cellulose-derived fuels to be produced through the end of 2012 (a highly optimistic target), Paul recently pointed out that actual RIN registration over that period indicates only 20,070 gallons of production.

Even though actual production has disappointed, the amount of capacity that is currently under construction or recently completed is cause for optimism, however.  I’m aware of five cellulosic biorefineries in the US that fit that category- steel in the ground, scheduled to come online within the next year or two (two are already complete and starting to produce fuels):

Company, Location Nominal capacity (Mgal/year)
Construction start Projected completion Source
KiOR, Columbus, MS 9.6 2012
Ineos, Vero Beach, FL 8 2012
Abengoa, Hugoton, KS 23 2011 2013
Poet, Emmetsburg, IA 20 2012 2013
Dupont, Nevada, IA 30 2012 2014

The production capacities scheduled to be available for 2013, 2014, and 2015 are added up and plotted along with the original and revised RFS targets below (note that it’s plotted on a log scale, so a straight line indicates exponential growth).   As you can see, the nominal cellulosic ethanol production capacity that is scheduled to be available in 2013 is right in line with the revised 2013 RFS target (I realize that at least one of the facilities above will be producing drop-in fuels rather than ethanol; I’m playing a bit fast and loose with the raw volumes rather than doing a more precise conversion to ethanol equivalents, but I think the resulting will be reasonaby small).  Even more interestingly, the planned 2015 capacity is very comparable to the original 2010 target.  So, we appear to be seeing an exponential ramp-up in cellulosic production capacity, consistent with the revised RFS and roughly 5 years out of phase with the original RFS targets.  Now, there’s no guarantee that these facilities are going to come online and produce exactly as currently advertised; even if successful they are likely to run at only partial capacity initially.  But, to the extent that the RFS was intended to inspire confidence in the industry to take risks and aggressively add production capacity, it appears to be succeeding, just a few years later than originally envisioned.

RFS capacity 2

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8 Responses to The RFS- basket case, or just a few years ahead of it’s time?

  1. Pingback: The blend wall and what we will do will all the cellulosic ethanol | Energy and the Future

  2. Pingback: The blend wall and what we will do with all the cellulosic ethanol | Energy and the Future

  3. John says:

    I see, so since the RFS mandates are nested, you could imagine a scenario where EPA/congress waives the cellulosic requirement but keeps the rest of the law intact, and thus cellulosic EtOH gets replaced with other more viable fuels while the overall mandate still achieves most of the original energy security and GHG mitigation goals (e.g. 50% GHG reductions for ‘advanced’ fuels vs. 60% for cellulosic). Makes sense.

    Either way, the point I was originally trying to make is a lot narrower than whether or not the RFS is feasible. Because the mandate ramps us EXPONENTIALLY over time (as you pointed out in your original post), it seems to me that people are making a fundamentally inaccurate comparison when they gripe that in year X we’re only going to meet Y% of the mandate. The nature of an exponential rise is that, if you get a late start, you’ll never catch up with your original targets even if you still achieve your target exponential growth rate (it’s the same logic about why its essential to start saving for retirement when you’re young). So it’s very possible to achieve TREMENDOUS exponential growth of the cellulosic ethanol industry yet still be locked into a position where you’re stuck only meeting a small fraction of the original targets for the entire next decade (until the mandate peaks).

    My own rather crude observation is that the cumulative nameplate cellulosic ethanol capacity of the facilities currently under construction is in fact showing exponential growth (i.e. shows up as a straight line on my log plot, assuming only that the projects that have already been started are completed), and at a similar exponential growth rate (i.e. similar slope of the line) to that called for in the RFS. Hypothetically, if that trend continues we’ll hit the aggressive 2022 targets about five years late, but every single year along the way detractors will be able to say “the RFS is a failure because we’re achieving <1% of the mandate this year."

    You have to think about it in exponential terms!!!!

  4. Pingback: Newest cellulosic biofuel facilities | Energy and the Future

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  7. Pingback: BD agrees- EISA targets were realistic, but timelines were crazy | Energy and the Future

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