Tell them Willie and Ike are Here

January 13, 2012 |

“A Fine for Not Using a Biofuel That Doesn’t Exist‎,” shouts the New York Times.

But what are the facts, the risks? Who’s betting that construction of 2012’s cellulosic biofuels capacity won’t be completed, and why?

The best-selling car in the United States, the Toyota Camry, comes in eight different configurations, with two transmission options, ten add-on features (ranging from heated seats to traction control), and nine different colors. Put it together, that’s 1,280 different combinations.

But it only runs one fuel – gasoline.

Would you prefer diesel’s mileage and value? Sorry. Fond of E85 ethanol’s performance, and contribution to energy security and local jobs? Tough luck. Are you a supporter of the Pickens Plan to expand natural gas vehicles in this era of low-cost gas? Too bad. Just like the idea of a free market and free choice for all, like the libertarian soul you are? Nyuk, nyuk, nyuk.

A Fine for Not Using a Biofuel That Doesn’t Exist‎.

Brooke Coleman, executive director of the Advanced Ethanol Council, turned attention to free market principles and market access, after the New York Times ran astory on cellulosic biofuels mandates, titled “A Fine for Not Using a Biofuel That Doesn’t Exist‎.”

“It is important to remember why the RFS is needed.” Coleman said. If the market operated based on free market principles, then we would not need blending requirements to force regulated parties to purchase renewable fuels. But instead, the market is controlled by one industry, and few players, who are increasingly reliant on OPEC to secure their product. In turn, we need forceful programs with the right incentives to introduce new fuels made by Americans. That’s what the RFS is, and it’s working.”

Willie and Ike ain’t gonna do it

Now, obligated parties are saying that cellulosic biofuels production capacity does not exist in the volumes, today, to meet the 2012 mandate. That is true in the narrow sense that the producers have not completed several commercial-scale facilities. But they have run complete, successful demonstrations of their technologies and are constructing the mandated capacity, as we speak.

Over at INEOS Bio, the project is now 60 percent complete and very much on track for opening in the first half of this year. That plant has a capacity of 8 million gallons per year – almost enough to fill a 10 million gallon mandate all by its onesey.

At all the projects in question? The science is done, the engineering is done, the permits are in place, the construction finance is set. It’s not about a bet against biofuels. It’s a bet against Willie the Welder, and Ike the Ironworker, they they won’t get their work done on time.

Ourselves, we have faith, here at the Digest, that Willie and Ike will get the job done. We’re backing good old American know-how.

Well, we could ask President Ahmadinejad very nicely

There are alternatives. Let’s see, how about we send Willie in a deep-sea suit and un-cap the Deepwater Horizon well, and get a few million gallons that way. Or, have Ike call Iran’s Mahmoud Ahmadinejad, buy 10 million gallons from him, and and hope to heck that the money will be used to promote peace, love and understanding.

Willie and Ike have had bigger challenges before. After 9/11, who figured out how to clear an unprecedented disaster area, and in a manner keeping with respect for fallen heroes? Willie and Ike. When President Jack Kennedy set a US goal of placing a man on the moon by the end of 1969, even though many of the materials and techniques didn’t even exist on paper, who got the job done? Yep, Willie and Ike. When the US took up a war against Japan in 1941 without nearly the water material to win, who made it happen? Willie, Ike, and Rosie the Riveter too.

The Times: Betting against good old American know-how

You see, it’s so darn easy to write a column called “A Fine for Not Using a (Fill in the Blank) That Doesn’t Exist‎.” PR people working for companies invested in the status quo — that is, a world made safe for Mahmoud Ahmadinejad instead of you — suggest them to editors and writers all the time.

“A Fine for Not Using an Airbag That Doesn’t Exist‎.” “A fine for not using Spam-reducing opt-in software that Doesn’t Exist‎.” “A fine for not using Safety Glass that doesn’t exist.” Those articles have been written about new technologies for years, when the technology was finished but capacity not yet ramped up. Concerns raised by the usual suspects for the usual reasons. Technologies that today save many lives.

It’s so easy to write them. It’s easy to bet against the future, against Willie and Ike.

A catastrophic financial risk to the obligated parties

Now, you might wonder, hmmm, can the obligated parties afford the hit, should Willie and Ike fail?

Profits at the three largest oil companies, last year: $58 billion.
Percentage of those profits needed for waiver credits to opt out of RFS compliance:  0.01

The catastrophic financial risk to you

But let’s say that all construction fails, and I mean completely fails. Every job collapses into disgrace. And, to make things worse, the industry passes the cost along to you. What’s that bailout check we gotta write?

It works out to an investment of less than five one-thousandths of one cent, per gallon. One hundred of those credits don’t even round up to a penny. So write that $0.000048 check, if the day of reckoning comes, and curse Willie and Ike for failing, and the government that believed in them.

As Coleman says, “These waiver credits represent a pittance compared to the billions of dollars in taxpayer subsidies enjoyed by oil producers. Yet, this provision maintains at least a base level incentive in the marketplace for the oil companies to facilitate rather than obstruct the deployment of advanced ethanol.”

“We must not let the crocodile tears of a few multi-national oil companies become a Trojan horse for second guessing ourselves on the RFS. The progress of cellulosic ethanol industry has been slower than anyone in the industry would like due to a number of factors outside of their control, but it is simply false to suggest that the technology is not working and the industry is not emerging.”

“Today, commercial scale facilities are being built and production is on the way to meet the adjusted requirement in 2012, and hopefully more aggressive requirements in the years to come,” Coleman added. “As crucial chokepoints of world oil supplies are being threatened, America cannot afford to back track on an RFS program that has already dramatically reduced foreign oil dependence and remains a linchpin for local bio-economies all over the country.”

Or, as we say here at the Digest: tell them Willie and Ike are here.

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