Delays in construction of biofuel plants fuels critics' appeals to dismantle Florida's Renewable Fuel Standards
Biofuel projects "are essentially science projects at the expense of the taxpayers," says Nick VandenBrekel, CEO of Agrisys, which initially tried to turn algae into fuel but became convinced the process cannot make a profit and cannot compete with petroleum. [Photo: Jeffrey Camp]
Bonita Springs-based Algenol says it has developed a process to turn carbon dioxide into ethanol using algae. Fueled by a $25-million grant from the federal government and another $10-million incentive from Lee County to build a plant near the Southwest Florida International Airport, the company's executives had predicted Algenol would be producing fuel at a pilot-scale biorefinery by last August.
The company didn't break ground on the plant until October, however, and now predicts the facility will begin operating sometime this year. Elsewhere in Florida, several other biofuel facilities that were supposed to be operating in 2011 — from global companies such as BP to determined Florida players such as Bradley Krohn and his Highlands EnviroFuels — remain delayed.
The past five years have seen generous policies, incentives and grants to jumpstart the business of turning biological materials — corn, sugar cane, yard and forest waste, algae — into ethanol or other fuels. Yet despite millions in state grants and many millions more provided by the federal government as part of the stimulus package, here's what Florida has to show:
Among several dozen biofuel plants that have been proposed across Florida, about a dozen have received a final permit to operate, according to the Department of Environmental Protection. Only one — a University of Florida demonstration plant — is running. None is producing biofuel yet.
Florida's biofuel push began under Gov. Charlie Crist in 2006. He and many others saw in ethanol the promise of lower greenhouse gas emissions, reduced dependence on foreign oil and a boost for Florida's agriculture industry, which might grow any number of fuel crops, from cane and sweet sorghum to jatropha and switchgrass.
But the fledgling industry was hammered when private investment dried up in the economic downturn. Algenol, for example, struggled to raise the money it needed to keep planning, hiring and building despite its government backing and partnership with Dow Chemical — at least in the U.S. Executives say they ultimately secured $100 million from foreign investors.
|"The industry can survive without a tax credit," says Bradley Krohn of Highlands EnviroFuels. "But all biofuels — corn and sugar and cellulosic and everything else — are dependent on that renewable fuel standard."|
The state also terminated a $2.5-million grant to Vecenergy because of a lack of progress on its Port Manatee project and let expire without funding a $2.5-million grant to Clewiston-based Citrus Energy, which also had financing troubles.
The industry's slow progress, its reliance on subsidies and other issues are fueling a backlash nationally and here in Florida.
Even some biofuel entrepreneurs doubt the industry's viability.
Nick VandenBrekel founded Orlando-based Agrisys with a business plan focused on turning algae into fuel. But he's since dropped the idea of producing fuel and now plans to use algae to make food products. VandenBrekel says he's convinced that algal biofuel can't make a profit and can't compete with petroleum in today's market. Most biofuel projects, says VandenBrekel, "are essentially science projects at the expense of the taxpayers."
Critics are increasingly vocal about federal support for the industry, which includes a 54-cent-a-gallon tariff on ethanol imports and a subsidy of 45 cents a gallon for blending ethanol into gasoline. Sweeping federal legislation passed in 2007 requires the nation to gradually increase its use of renewable fuels, from 15 billion gallons this year to 21 billion by 2015 and 36 billion by 2022.