Tuesday, November 2, 2010

US Dept of Energy cuts forecast for cellulosic ethanol

The U.S. DOE's Energy Information Administration has completed its predictions for next year's cellulosic biofuels production and estimates that actual production levels will be much lower than anticipated. Earlier this year, the U.S. EPA proposed a reduction in the cellulosic biofuels portion of the 2011 renewable fuel standard (RFS) to between 5 and 17.1 million gallons, down drastically from the 250 million gallons initially called for in the 2007 RFS. But according to an Oct. 20 letter sent from EIA Administrator Richard Newell to EPA Administrator Lisa Jackson, the EPA's reduced target is still too high. The EIA suggests that a more likely 2011 production total for cellulosic biofuels is approximately 3.94 million gallons. Additionally, the EIA said half of the facilities on the EPA's list won't produce biofuels next year.

According to Newell's letter, the EIA focused its cellulosic biofuels analysis on currently producing facilities and facilities that are expected to be complete by the end of this year. Facilities that are not mechanically complete this year are not expected to produce next year, according to the EIA. For that reason, several companies that appeared on the EPA's expected producer list were removed by the EIA, including cellulosic ethanol producers AE Biofuels and Agresti Biofuels. The two companies were expected by the EPA to produce a combined 1.5 million gallons of cellulosic ethanol in 2011. Diesel-feedstock producers Bell Bio-Energy, expected by the EPA to produce 11.5 million gallons of fuel, and Cello Energy, expected by the EPA to produce 8.5 million gallons of fuel, were also removed from the EIA's list. While the agency did not elaborate on its decision to omit Bell Bio-Energy from the list, it voiced skepticism regarding Cello's operations. "The Cello Energy facility faces important financial, legal and technological issues that have yet to be resolved and that cast significant doubt on its ability to sell or introduce any cellulosic biofuel into commerce in 2011," Newell stated in his letter.

Iogen Corp. was singled out in the EPA's proposal as the sole Canadian exporter of cellulosic biofuels next year. The company, however, said it has no intentions of exporting saleable amounts of cellulosic ethanol to the U.S. in 2011 and therefore the EIA did not include Iogen on its list.

Range Fuels Inc., which was excluded from the EPA's proposal, is expected by the EIA to provide 1 million gallons of methanol next year. The plant's Soperton, Ga., capacity is 4 million gallons, however, "we assumed a 25 percent utilization rate due to its repeated inability to meet stated production goals," Newell wrote.

The largest anticipated cellulosic biofuels producer next year continues to be Fiberight LLC. The EPA said in July it expects the company to produce 2.8 million gallons of MSW-based cellulosic ethanol in 2011. The EIA, however, said it received confirmation from Fiberight that it plans to operate its 6 MMgy Blairstown, Iowa, facility at a 46 percent utilization next year. Therefore the EIA lowered Fiberight's contribution slightly to 2.76 million gallons. KL Energy Corp. and Dupont Danisco Cellulosic Ethanol LLC should produce the remaining 180,000 gallons of cellulosic biofuels needed to make the EIA prediction. KL Energy will produce 150,000 gallons of cellulosic ethanol from its demonstration plant in Upton, Wyo. Meanwhile, DDCE, which the EPA said should produce 150,000 gallons of cellulosic ethanol, is only expected to contribute 30,000 gallons, according to the EIA's analysis.

The EPA is scheduled to finalize its 2011 RFS standards by Nov. 30.



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Biofuels are a wide range of fuels which are in some way derived from biomass.

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