November 24, 2014

Florida Biotech

Biomass Energy: Fueling a backlash

Delays in construction of biofuel plants fuels critics' appeals to dismantle Florida's Renewable Fuel Standards

| 2/27/2012

In Washington, several members of Congress have filed or signed onto bills that would ease or eliminate those requirements. In Florida, Republicans Sen. Greg Evers of Crestview and Rep. Matt Gaetz of Fort Walton Beach tried this legislative session to repeal the Florida Renewable Fuel Standard Act. If they are successful, Florida gas distributors would no longer be required to sell fuel containing 9% to 10% ethanol.

Gaetz describes Florida's standard as a "feel-good" remnant of the Crist era. Brazil's success at blending ethanol with gasoline refutes Gaetz's claim that ethanol damages car engines, but environmental issues remain a matter of debate. A recent National Academies report indicates that the federal standards may be ineffective in reducing greenhouse gas emissions and could have mixed economic and environmental impacts: Biofuels can have both negative and positive effects on water, air and land; impacts are highly dependent on local factors such as the type of feedstock and water availability.

Florida's ethanol champions plead for more time. Doing away with either the state or national standards would strike a huge blow to the Florida industry just as public investments are beginning to pay off, they say. "The industry can survive without a tax credit," says Krohn. "But all biofuels — corn and sugar and cellulosic and everything else — are dependent on that renewable fuel standard."

Craig Smith
"Only a fraction of those that take the risk will be successful, and many companies will fall flat on their face. But they frankly are doing a great service too," says Algenol COO Craig Smith.[Photo: Algenol]
Some public investment is indeed becoming tangible: Florida's first industrial-scale cellulosic ethanol plant fired up in January: The University of Florida-Buckeye-Myriant research and development plant in Taylor County intends to demonstrate professor Lonnie Ingram's technology for cellulosic ethanol, made from the inedible parts of plants. The technology also has non-fuel applications, such as in creating sustainable plastics that can break down in a landfill.

The industry "has tremendous potential in Florida, and the agriculture community is sitting here waiting for us to tell them what to grow and how to grow it and how we will transition the economy," says Joe Joyce, associate vice president at UF's Institute of Food and Agricultural Sciences, which built the plant with $20 million from the Legislature.

In Indian River County, California's New Planet Energy and global chemical giant INEOS broke ground last year on its vegetable-waste to ethanol plant, which is on track to achieve the first commercial-scale production in the state. The company got $50 million in Recovery Act funds, $2.5 million from Florida and a $75-million loan guarantee from the federal Department of Agriculture to build the plant. Now that it has begun construction and hired local workers, supporters say, the state and federal governments shouldn't turn their backs on the plant or the industry.

America's shift from petroleum to more sustainable fuel will take patience, Joyce and other advocates say, pointing to the time, subsidies and tax breaks that were given to develop the then-risky oil and gas business beginning in the 1920s.

At the Florida Biofuels Association, Executive Director Jeremy Susac says even if ethanol turns out to have ecological impacts similar to fossil fuels — which he disputes — we should still support them so we don't have to rely on foreign nations for fuel. "By 2030, 90% of your oil will come from either an oil field that does not exist now or from a foreign nation," Susac says.

"This is cleaner; it's readily available; and it's starting to break ground," he says. "Let's give it a chance."

At Algenol, COO Craig Smith compares the risk-reward profile of alternative energy with that of his previous industry, biopharmaceuticals. "If you're doing something that's never been done before and requires development of significant new technologies, that is going to take five or 10 years. Only a fraction of those that take the risk will be successful, and many companies will fall flat on their face."

Florida Agriculture Commissioner Adam Putnam, who took over the state's Office of Energy from DEP earlier this year, wants to deflate the hype while supporting an industry he calls "the potential sweet spot for rural economic development in Florida." He says he wants to move the state away from "picking winners and losers" and toward a policy that will best help private investors succeed in Florida.

Putnam hasn't decided whether to support Gaetz's bill. Analysts in his office say the federal standards — not Florida's — are the ones that will make or break the industry. Meanwhile, he's ordered an internal audit of all biofuels grants doled out by the state to help rebuild confidence and "figure out exactly what I've inherited."

"Legislators and myself are ready to go to a ribbon-cutting," Putnam says. "We've been to enough groundbreakings."

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