“Farm Bill energy programs are working and BIO member companies are beginning to put steel in the ground,” Greenwood said. He highlighted several companies that have biorefineries today as a result of these programs, including INEOS Bio New Planet Energy in Florida, Myriant in Louisiana, and ZeaChem in Oregon.
Greenwood urged the committee to reauthorize the Farm Bill energy programs, such as the Biorefinery Assistance Program, BCAP, and the Biobased Markets Program, with meaningful mandatory funding to allow them to continue to spur America’s energy and agricultural future.
Farm Bill energy programs have had a tremendous positive impact in revitalizing rural America, helping new agricultural markets emerge, and reducing the need for direct payments to farmers. These programs have unlocked private capital for construction of the nation’s first cellulosic and advanced biofuel biorefineries; put more than 150,000 acres of underutilized farmland in more than 150 counties into production raising next generation energy crops; and led to an explosion of renewable chemicals innovation, demonstration and early commercialization here in the United States. For a modest federal investment a high rate of return has been achieved in terms of viable projects funded and operating.
Renewable energy is cleaner, safer and healthier. We cannot afford to wait to fund renewable energy projects that can create permanent jobs in rural America. Now is not the time to abandon these forward-looking, high return programs.
Other panelists echoed Greenwood’s sentiments in their testimony that energy program funding is necessary to continue bringing these innovative technologies to market and are a vital component to the bipartisan all of the above energy strategy of the United States. Stroschein of the Agriculture Energy Coalition warned that not funding these programs leaves other countries poised to leap ahead in clean energy technologies undermining our national and economic security.
Greenwood added that these energy programs allow American farmers and foresters to play the role they can – and must – play in producing domestic energy and therefore improving national security and rural economic prosperity.
Goodyear Tire is working with Genecor to produce high quality synthetic rubber largely from renewable raw materials that would replace the seven gallons of crude oil required to produce a single passenger tire. They hope to have the tires on the commercial market in the next year, and David Benko, Goodyear’s Director, Materials Research & Development, said that while performance is still the top criteria for consumers, that the environmentally-friendly factor comes right after that as a huge selling point.
Robert Sturtz, Director of Strategic Sourcing for United Airlines, shared some staggering statistics on the airline industry’s fuel use related to cost. The industry uses 17.5 billion gallons of fuel in a given year and just a one-cent increase per gallon in the price of fuel can drive their costs up by $175 million. Speaking in terms of barrels of oil, a $1 increase per barrel increases costs by $420 million per year. While not all of these costs are passed on to the consumer, customers could certainly benefit just as the airlines could from a decreased dependence on the volatile petroleum market.
Scott Vitters, Coca Cola’s General Manager of their PlantBottle Packaging Platform talked about their PlantBottle technology, which is a packaging approach that replaces up to 30 percent of the PET in bottles with plant-based materials. The goal is to eventually create a bottle from 100 percent plant materials, and Coca Cola plans to replace its entire line of plastic bottles with PlantBottles by 2020.
Drivers behind this decision for Coca Cola are cost, trust and product differentiation. They hope to achieve a cost advantage by lessening their dependence on volatile fluctuations in petroleum prices, enhance customer trust with increased environmental performances and set themselves apart from other brands with this technology.
Vitters said they’ve had a terrific reception from customers so far including customers like Walmart and McDonalds where they’ve seen the conversation shift away from cost back to quality. End-use consumers have responded very positively as well. Heinz ketchup, who has partnered with them in using this packaging, placed a QR code on their bottles for more information on PlantBottle technology that received more than a million hits in its first month. He said that it’s important to create awareness of what they’re doing to really connect with consumers and differentiate their brand.
Moderator Don Schenk of ACA Associates called agriculture the foundation for green aviation and stressed the importance of sustainable, non-food feedstoks as well as utilizing the existing global agricultural research networks. He said North America consumes more than $50 billion worth of fuel per year so demand is not in question – making sure biofuels are cost competitive and can be delivered in a sustainable way is the issue.
Chris Tindal, U.S. Department of Navy, highlighted some of the Navy’s lofty goals involving energy including increasing alternative energy use. By 2020, 50 percent of the Navy’s total energy consumption will come from alternative sources. He stressed that oil dependency degrades our national, energy and economic security. Total Navy fuel consumption amounts to 30 million barrels per year compared to 582 million barrels per year used by the U.S. jet fuel consumption on commercial airlines. While that may be a small portion, he said, it is big enough to make a difference and showcases the opportunity and importance of partnerships between the Navy and the commercial sector. Tindal talked about the unique partnership established in a memorandum of understanding (MOU) between the U.S. Department of Energy, U.S. Department of Agriculture and the Navy to help establish commercial advanced, drop-in biofuel refineries.
Nancy Young of Airlines for America (A4A) echoed Tindal’s sentiments about the importance of increasing energy security and reducing dependence on oil. She also highlighted the environmental benefits of cleaner energy and said when it comes to biofuels, “for airlines, the future is now.” United Airlines and Alaska Airlines both flew commercial flights powered by biofuels in 2011. She called aviation the perfect candidate for biofuels because of the concentrated demand as fewer airports than gas stations exist across the country; drop-in fuels require no new infrastructure; and unlike other modes of transportation, aviation doesn’t have alternatives beyond liquid fuels. Young said that the airlines are ready for biofuels and they know how to do it, they just need to make it commercially viable and cost-competitive to become reality and believes we are on our way to accomplishing that.
Greenwood compared the bioeconomy to a whole pie made up economic activity fueled by biological sciences and called the biobased economy a large and growing wedge of that pie. Through this Blueprint, he said, the U.S. government is recognizing the potential of the bioeconomy to unleash the promise of biotechnology.
The Blueprint, Greenwood continued, is a great step forward, but there are other steps to take. BIO has identified several important areas to focus on to spur continued growth of the biobased economy. Reauthorizing the Farm Bill energy title is key to continue the tremendous positive impact these energy programs have had in revitalizing rural America and helping new agricultural markets emerge. In addition to putting more than 150,000 acres of underutilized farmland in over 150 counties into production raising next generation energy crops, these programs have led to an explosion of renewable chemicals innovation, demonstration and early commercialization here in the U.S.
Also important is maintaining the integrity of the Renewable Fuel Standard (RFS), which is the bedrock policy encouraging continued investment in production of biofuels. In addition, tax policy should focus on driving innovation to reduce our dependence on foreign oil, lower gas prices, and create high quality U.S. based career opportunities. This means an extension of current advanced biofuels tax credits and an expansion to include renewable chemicals tax credits as well, supporting the full range of biorefinery opportunities and leveling the playing field for U.S. companies.
New of BP Biofuels talked of BP’s excitement about biofuels. BP believes there will be a 20-25 percent increase in energy needs for transportation in the coming years and thinks that biofuels will be the answer to meet those needs.
O’Brien talked about the USDA’s efforts to strengthen the USDA BioPreferred Program. In effect since 2002, he said, they have sought to provide greater definition to the program to substantially increase purchases of biobased products, driving new job growth and innovation. A recent presidential memorandum directs the program to increase the number of both designated categories of and individual biobased products eligible for preferred purchasing by 50 percent within one year. It also included provisions to establish a web-based registration system for biobased products, increased reporting of biobased product purchases and implemented solutions to increase the visibility of biobased products and the BioPreferred program.
The panel also focused on the recently approved $510 million memorandum of understanding (MOU) between the U.S. DOE, USDA and the Navy to help establish commercial advanced, drop-in biofuel refineries. The Navy is very serious about adopting green technologies, Sarisky-Reed said, and the MOU is a mechanism that draws the three agencies together to help accomplish this. The USDA can find the feedstocks, the U.S. DOE can help find and build biorefineries by selecting successful projects to fund and the Navy plays a critical role in being the first buyer of that technology.
