Emerging US energy independence threatens bio-industry

13 November 2012 19:36  [Source: ICIS news]

PHILADELPHIA, Pennsylvania (ICIS)--Newly abundant supplies of cheap natural gas and renewed expansion of US oil production pose a serious risk to bio-based technology development in the years ahead, industry officials told a biotech conference on Tuesday.

Douglas Cameron, co-president and director at FirstGreen Partners in Minneapolis, Minnesota, pointed to the report issued earlier this week by the International Energy Agency (IEA) that predicted that by 2020, the US essentially will be energy self-sufficient and a net exporter of natural gas, and that by 2035 the US will be a net exporter of crude oil.

Cameron, whose firm provides venture capital to the biotech industry, said that it may become increasingly difficult for alternative fuel technologies and other bio-based projects to get funding because of the broad availability and near-historic low prices for natural gas.

He said that some producers have already switched from biomass feedstocks to gas-based raw materials.

Speaking at the inaugural International Forum on Commercialising Global Green, he said that the US appears to be on the verge of meeting the stated goals of the Energy Independence and Security Act (EISA) of 2007, but on the basis of unconventional oil and gas production and supply, rather than biofuels.

EISA was passed by Congress specifically to stimulate domestic development of biofuels and other alternative energy products.  That statute expanded the role of the renewable fuel standard (RFS), which was created by the 2005 Energy Policy Act.

The RFS mandates a minimum level of biofuels consumption by US refiners, with the level increasing annually.

“But with the US moving to energy independence within a few years, according to IEA, the question is whether we have reached the goals of EISA,” Cameron said.

Carl Wolf – business development manager for LanzaTech, a bio-technology provider in Roselle, Illinois – said that with US energy seemingly secured through shale gas and unconventional oil developments, the prospects for biofuels are dim.

“Without the security issue, renewables will be in trouble,” Wolf said.

Federal tax subsidies for biofuels, wind and solar energy projects are already losing support on Capitol Hill in Washington, DC.

Tim Brown – vice president for corporate strategy at Renmatix, a cellulosic sugars producer in King of Prussia, Pennsylvania – noted that in addition to the fading energy independence and security rationale, the alternative energy industry has been hurt by the collapse of major taxpayer-funded undertakings, such as Solyndra.

The two-day conference runs through Wednesday this week.

The event was organised by the Society for the Commercial Development of Industrial Biotechnology (SCDiBIO), an affiliate of the Society of Chemical Manufacturers and Affiliates (SOCMA).

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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