BP says US holds advantage in advanced fuels as long as mandate
remains
Washington (Platts)--4Apr2012/342 pm EDT/1942 GMT
By tinkering with the US renewable fuel mandate before it runs its
course, Congress would squander the global competitive edge in advanced
biofuels that the law has helped the country quickly and unexpectedly
acquire, the chief executive of BP Biofuels said Wednesday.
CEO Philip New said the US biofuel industry has "responded incredibly
powerfully" to the push provided by the Environmental Protection
Agency's Renewable Fuel Standard. The program requires refiners to blend
36 billion gallons a year of plant-based fuels into the nation's
transportation fuel supply by 2022.
"Only in this country do we see the combination of farming and
technology at a scale that puts anything that's happening anywhere else
in the world to shame," New told the Advanced Biofuels Leadership
Conference in Washington. "I speak as a European, and I regret
enormously the contrast between what is happening in Europe at the
moment -- and the confused state of regulatory support and incentive
there that means there is effectively no robust, clear investment going
into advanced fuels -- with what I see happening here."
The US tripled its ethanol exports last year to 28.5 million barrels,
surpassing even sugarcane giant Brazil as the world's top supplier of
biofuel, according to Energy Information Administration data.
New said the federal mandate created a market that gave investors
certainty and confidence that will be key to developing next-generation
fuels.
While producers have churned out more than enough ethanol to meet the
law's rising target, they have fallen short in the more advanced
category of cellulosic biofuel. The law called for 6.6 million gallons
last year, but the industry made none on a commercial scale.
For 2012, the EPA has required the blending of 8.65 million gallons of
cellulosic biofuel, a target the American Petroleum Institute called
unachievable in a lawsuit it filed against the agency this month.
BP's New said he finds it "bizarre" that anyone should be surprised the
industry has not yet met the cellulosic goals.
"Coming from a big energy background, we're used to seeing big, big
energy solutions take 10 or more years to come to fruition," he said.
"The fact [is] that in the next 18 months to two years, we are likely to
see the first of the new cellulosic commercial plants come to life,
something like seven years from the time the Energy Independence and
Security Act is adopted."
New added that Silicon Valley timelines have created unrealistic
expectations on the industry.
"Anyone who ever thought that you can resolve significant energy
challenges as though it was a dot-com analog is nuts," he said. "This is
about big energy solutions. It needs serious money, serious players,
serious technology. That's what we're starting to see happening around
cellulosics."
New added that BP remains "very skeptical" that vehicles powered by
batteries, electricity or natural gas would become anything more than a
niche market for the foreseeable future, because of the extreme
difficulty of shifting infrastructure away from liquid fuels.
"Infrastructure has a huge retarding effect on the introduction of new
energy types," he said. "That is why we believe that we are going to be
in a paradigm of liquid fuels with internal combustion engines for as
far forward as we can see. It is why we believe that biofuels are a
central part of the mix because they represent the only realistic
alternative to crude."
BP plans to break ground this year on a cellulosic plant in central
Florida that will produce 36 million gallons a year. The company's
nearby 20,000 acre farm will feed the facility with energy cane and
other grasses.
--Meghan Gordon,
meghan_gordon@platts.com
Creative
Commons License
To subscribe or visit go to:
http://www.platts.com |