USDA issues landmark plan for achieving 36 billion gallon Renewable Fuel Standard targets by 2022
In Washington, the USDA released its highly-anticipated “Regional Roadmap to Meeting the Biofuels Goals of the Renewable Fuels Standard by 2022.” In the 21-page document, which can be downloaded via biofuelsdigest.com, the USDA identified dedicated energy crops, primarily switchgrass, as the practical platform for achieving a 20 billion gallons of advanced biofuels production, and discussed the regions in which it believed biofuels feedstock production would be most viable, driving the location of bioenergy facilities.
The USDA projected in its report that the US, in order to meet its 2022 RFS target of 36 billion gallons of renewable fuel, would produce 13.4 billion gallons formed educated energy crops, including perennial grasses, energy cane, and biomass sorghum; 500 million gallons from oilseed crops, 4.3 billion gallons from crop residues (corn stover, straw), 2.8 billion gallons from woody biomass (logging residues only) and 15 billion gallons from corn starch ethanol.
The USDA projected a capital cost of $8 per gallon of capacity for the buildout of biorefineries, based on an average 40 Mgy capacity for cellulosic biofuels plants — while recognizing that initial capital costs will be higher — with a total capital requirement of $160 billion, and requiring the construction of 500 biorefineries by 2022.
The USDA report did not include projections on feedstock capacity from municipal solid waste, animal fats and yellow crease, or algae — although it reported that the EPA (in its own projections) has projected 100 million gallons from algae, 380 million gallons from animal residues, 2.6 billon gallons from municipal waste (MSW) and 2.2 billion gallons from imported fuels. The EPA’s work-up projected 7.9 billion gallons from perennial grasses and 5.5. billion gallons from crop residues, in other major variances from the USDA projections. Neither report projected gallonage from woody energy crops such as poplar.
The USDA report looked at five US regions – the Southeast, the Northeast, the Central East (including the Prairie states), the Northwest and the West.
From the Report:
1. SOUTHEAST REGION and HAWAII:
States. Alabama, Arkansas, Florida, Georgia, Hawaii, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas
Feedstocks. Soybean oil, Energy cane, Biomass Sorghum, Perennial grasses, Woody biomass
Potential Production Capacity. This region could produce 10.5 billion gallons of advanced biofuels per year, at 263 biorefineries producing 40 million gallons by year, costing $320 million per biorefinery. This will take an $83.8 billion cumulative investment, to build the 263 biorefineries with an average capacity of 40 million gallons. USDA estimated that a significant amount of volume, up to 50%, of the advanced biofuels, could come from this region because it has the most robust growing season in the United States.
Land Use: To produce the biofuels necessary from this region, an advanced biofuel production of 10.5 billion gallons from 9.5 million acres, 11.4% of the available cropland and cropland pasture acreage base, would be required for fuel use.
2. NORTHEAST REGION
States. Connecticut, Massachusetts, Maine, Michigan, New Hampshire, New Jersey, New York, Rhode Island, Vermont, West Virginia
Feedstock. Woody biomass, municipal waste potential
Potential Production Capacity. USDA estimates that 2.0% of advanced biofuel production (mostly woody biomass) will come from the Northeast. The region could produce 423.7 million gallons of advanced biofuels from 639,150 acres of dedicated bioenergy crops (perennial grasses) plus 1.7 million acres of harvested logging residue in a year. This will take 11 biorefineries, producing 40 million gallons by year, costing $320 million per biorefinery, for a total cost of $3.52 billion cumulative investment over time.
Land Use. In the Northeast there is an acreage base of 15.1 million acres of cropland and cropland pasture and 79.3 million acres of timber land. Approximately 4.5% of the available cropland and cropland pasture acreage base is used in meeting the advanced biofuel mandates.
3. CENTRAL EAST REGION
States. Delaware, Iowa, Illinois, Indiana, Kansas, Missouri, Ohio, Oklahoma, Maryland, Minnesota, Nebraska, North Dakota, Pennsylvania, South Dakota, Wisconsin, Virginia.
Feedstock. Perennial grasses, biomass sorghum, crop residues, soy beans, woody biomass.
Potential Production Capacity. USDA estimates that on a volume basis, 43.3% of the 20 billion gallons of advanced biofuel by 2022 will be produced in the Central East region. This will take $72 billion in cumulative investments to build 226 biorefineries with an estimated capacity of 40 million gallons per year.
Land Use. This region has an acreage base of 241 million of cropland and cropland pasture plus 109.8 million acres of timber land that could produce 9.1 billion gallons from 10.8 million acres of dedicated bioenergy crops plus 2.0 million acres of harvested logging residue in a year. Incremental advanced biofuel production will take up 4.5% of the available cropland and cropland pasture acreage base.
4. NORTHWEST REGION
States. Alaska, Idaho, Montana, Oregon, Washington
Feedstock. Woody biomass, oil seed, grasses, cereal crop residue.
Potential Production Capacity. USDA estimates that 4.6% of advanced biofuel production of the 21 billion gallons required by 2022 (primarily oilseed crops) will be from the Northwest region. This will take an $8.32 billion investment to build 27 biorefineries with an average capacity of 40 million gallons per year.
Land Use. Acreage base of 36.9 million acres of cropland and cropland pasture plus 86.4 million acres of forest land. To produce the 1 billion gallons from 2.5 million acres of dedicated bioenergy crops plus 911,500 acres of harvested logging residue in a year it will take 6.9% of the available cropland and cropland pasture acreage base.
5. WESTERN REGION
States. Arizona, California, Colorado, New Mexico, Nevada, Utah, Wyoming
Feedstock. Woody biomass, Oilseed crops (e.g. camelina, canola); potential for algae not included.
Potential Production Capacity. USDA assumes 0.3% of the 21 billion gallons of advanced biofuel by 2022 (this is only for dedicated energy crops and woody biomass from logging waste). Commercial scale algae production is not included.
Land Use. In this region there is an acreage base of 29.7 million of cropland and cropland pasture plus 48.9 million acres of forest land. While 64 million gallons from 49,800 acres of dedicated bioenergy crops plus 442,600 acres of harvested logging residue in a year (does not include potential from insect and disease damaged and dead trees that could be harvested) is a potential, it is not counted as part of the RFS2.
The USDA report also looked at distribution bottlenecks including the availability of flex-fuel vehicles and blender pumps.
The Digest’s Take: a monumental step forward in the planning of bioenergy, though biofuels industry insiders may wonder how 20 billion gallons of capacity will be built in 12 years, given that it took 30 months for the US government to publish rules and a plan for the RFS since its passage in 2007.
The decision to not include algae may well reflect the early stage of the technologies, but we also note the absence of woody biocrops such as poplar as well as MSW and animal residues in the plan. These feedstocks – plus imports – make up a 5 billion gallons variance (out of 20 billion gallons in new capacity) between the EPA and USDA view – too wide a divergence.
The $160 billion capital cost of the buildout of 500 biorefineries — not to mention the infrastructure costs — remind us that a financing strategies are a necessary component part of developing biofuels in a market where there is not enforced mandate or a price on carbon. More discussion and more craetive thinking about the money is needed. If you build them, they might come – but if you don’t build them, nothing happens.
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