The U.S. Department of Agriculture (USDA) recently released a Biofuels Strategic Production Report, which details how national renewable biofuel production can meet the Renewable Fuels Standard (RFS2) goal of 36 billion gallons (bg) per year by 2022.
Of the 36 bg RFS2 goal, USDA estimates that 15 bg can rapidly be obtained from current or planned production capacity of cornstarch ethanol. In fact, 2009 ethanol production in the U.S. was already at 10.75 bg of primarily cornstarch-based ethanol. According to the Renewable Fuel Association (RFA), 201 ethanol facilities are already operational and have the capacity to produce 13.5 bg per year. Facilities currently under development are projected to add another 1.2 bg in capacity per year.
The RFS2 goals mandate that the remaining 21 bg of biofuel production come from biodiesel (1 bg minimum) and cellulosic and other advanced biofuels 20 bg by 2022. USDA notes that the industry is well on its way to being able to produce the 1 bg of biodiesel. Production in 2009 was already at 550 million gallons (mg) of biodiesel per year, and 29 companies have plants currently under construction, which are projected to create an additional 427.8 (mg) capacity by next year.
The remaining 20 bg requirement for cellulosic and other advanced biofuels was one of the challenges identified by USDA. Part of the solution relies on strategic partnerships between USDA and the private sector in which they hope to expedite the deployment of research and development, facilitate the placement of biorefineries through loan guarantees and other existing programs and identify potential barriers to meeting transportation and distribution needs.
Infrastructure development is the other major roadblock targeted in the report. USDA estimated that if an average biorefinery produces 40 million gallons of biofuels per year, 527 biorefineries, at a cost of $168 billion, will need to be built. USDA plans to accomplish this development by adopting tailored, diversified regional strategies to place new biorefineries in areas of economic distress.
Finally, USDA targeted the infrastructure barriers in the ethanol and other advanced biofuel supply chain. One of these challenges is the “blend wall.” The current vehicle fleet in the U.S. is not yet able to accept ethanol blends higher than 10 percent. EPA is currently evaluating the feasibility of raising the blend up to 15 percent.
Other supply-chain challenges are the availability of flex-fuel vehicles (FFVs), which can run on E85, as well as the availability of the infrastructure to supply E85. Solutions USDA employed were to develop a national analysis of current FFV usage and to begin developing programs to assist in ramping up supply-chain infrastructure in those regions first.
According to USDA, while the bulk of FFVs are located in the Midwest, states outside the Midwest also have a higher ethanol demand. The top five states in terms of FFV usage are Texas, Florida, California, Michigan and Ohio. High usage states were identified by USDA as the primary targets for blender pumps and FFV distribution.
Other projects in the USDA’s plans for supporting the biofuel supply-chain infrastructure included the development of 40 unit train rail receipt facilities to create more ethanol corridors on the rail network. Because unit train destination development can take anywhere from three to five years, the industry has already begun responding to this challenge by increasing the number of rail-to-truck loading facilities.
In addition, USDA’s analysis outlines a number of opportunities to help rebuild the economy as a large number of direct and indirect jobs will be created to construct and operate the biofuel production and supply-chain infrastructure.