10 February 2009 23:15 [Source: ICIS news]
NEW YORK (ICIS news)-The US can sustainably produce 90bn gal/year (341bn litres/year) of ethanol, enough to replace 60bn gal/year of gasoline by 2030, an official from a US national security laboratory said on Tuesday.
At the Biotechnology Industry Organization (BIO) CEO & Investor conference, Sandia National Laboratories and General Motors (GM) released a study about the feasibility and challenges of using cellulosic ethanol to replace more than 60bn of the estimated 180bn gal/year of gasoline that the US would need by 2030.
“We did not find fundamental barriers to large-scale production of cellulosic ethanol assuming the technology matures as projected,” said Robert Carling, director of the Transportation Energy Center at Sandia National Laboratories.
“However, multiple actions such as continued R&D support, multi-decade energy policy and supportive biofuel policies should be taken to enhance the successful build-out of the cellulosic biofuels industry,” he added.
Carling said the study assumes 75bn gal would be ethanol made from non-food cellulosic feedstock and 15bn gal from corn. He noted that the US Renewable Fuel Standard (RFS) sets a target of producing 21bn gal of advanced biofuels by 2022.
“Large capital investments are challenging considering the present volatility of the oil and capital markets and the amount of regulatory risk,” Carling said. “The capital required for the biofuels supply chain is significant but still, developing new oil supplies is also equally capital intensive.”
According to the study, the capital expenditures for biofuels needed to achieve 60bn gal/year are around $250bn (€193bn) while the capital expenditures for petroleum-related investments are $250bn-370bn.
For cellulosic ethanol to be cost competitive with gasoline without government incentives, crude oil price would need to be $70-90/bbl, depending on the accelerated development of feedstock and processing technology, according to Sandia.
“Government policy incentives have the ability to mitigate the risk of oil market volatility, reducing the risk and increasing the attractiveness of cellulosic biofuels investment,” Carling said.
“However, these policy incentives would have to protect cellulosic biofuels against low priced petroleum-based competitors for an extended period to attract significant capital investment,” Carling added.
The study analysed land use, water availability, energy used to produce cellulosic biomass, transportation of feedstock and other potential leverage points for the development and use of cellulosic biofuels.
($1 = €0.77)
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