US advance biofuels to add $37bn to economy - study

25 February 2009 20:47  [Source: ICIS news]

HOUSTON (ICIS news)--A new report says next generation biofuels production will directly add 190,000 jobs and $37bn (€28.9bn) to the US economy by 2022, but sources said on Wednesday the forecast may be too optimistic.

The report by industry group Biotechnology Industries Organization (BIO) said the jobs will flow from the onset of the US renewable fuel standard (RFS), which calls for the production of 21bn gal of cellulosic ethanol and biomass-based biodiesel by 2022.

Brent Erickson, BIO’s executive vice president, said advance biofuels development had enough momentum to survive the current economic downturn and contribute more to the economy than conventional biofuels made from corn or soybeans.

“You would have many more process and facilities, so the job impact would be greater,” he said. “The economic impact could be very significant.” 

About 80% of the projected job growth would come in the agriculture, engineering, construction and procurement sectors, according to the report. It projected the number of cellulosic ethanol plants to grow to 272 in 2020 from three in 2009.

Also according to the report's forecast, cellulosic ethanol feedstock costs will decrease from $55/tonne (€43/tonne) in 2009 to $50/tonne in 2020. During the same period, the yield from a tonne of feedstock will increase to 92 gal from 77 gal.

Don Roose, an analyst at Des Moines, Iowa-based US Commodities, said the global financial situation was too voliatile for such studies to have much traction.

“What’s changed since those studies were completed is that the government is running on empty,” Roose said. “It’s going to be more selective of how they support what they support.”

James Newcomb, the BIO researcher who authored the report, said his work took the current economic situation into consideration and that his findings were “very much of the moment in terms of best estimates”. 

Biofuels consultant Will Thurmond said he agreed with the reports findings in general but thought the numbers might warrant a closer look.

Now that President Barack Obama’s administration has pledged nearly $17bn in renewable energy investment, every group with a stake in the industry will try to make its case for a piece of the pie, he said.

“We’re going to be caught in a snowstorm of plans and prescriptions for the next couple of months. If the Obama administration was receiving hundreds of them before, it’s going to get thousands now that the money is on the table,” Thurmond said.

($1 = €0.78)

Bookmark Simon Robinson’s Big Biofuels Blog  for some independent thinking on biofuels
For more information on biodiesel, visit ICIS chemical intelligence
To discuss issues facing the chemical industry, go to ICIS connect



By: Ben Lefebvre
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index