March 1, 2006

DOE Supports Biorefinery Construction

It is my opinion that the amount of funds being allocated to spur R&D and deployment of renewable liquid fuel energy falls far short of the "Manhattan Project" urgency and scale America's "oil addiction" deserves. Still, it is reassuring to see that some headway is being made to stimulate investment in this area by the Department of Energy.


DOE Announces $160 Million for Biorefinery Construction and Highlights New Agricultural Program to Promote Biofuels
Funding Paves the Way for Diversifying America’s Energy Mix

Energy Secretary Samuel W. Bodman, today announced $160 million in cost-shared funding over three years to construct up to three biorefineries in the United States. The Secretary made the announcement while visiting the Archer Daniels Midland Ethanol Plant, his second of four stops to promote the Advanced Energy Initiative announced by President Bush in his State of the Union address. Secretary Bodman also highlighted the United States Department of Agriculture’s announcement today of almost $188 million in loan guarantees and grants for renewable energy and energy efficiency projects.

“This funding will support a much-needed step in the development of biofuels and renewable energy programs,” Secretary Bodman said. “Partnerships with industry like these will lead to new innovation and discovery that will usher in an era of reduced dependence on foreign sources of oil, while strengthening our economy at home.”

The $160 million solicitation is part of President Bush’s Biofuels Initiative which will lead to the use of non-food based biomass, such as agricultural waste, trees, forest residues, and perennial grasses in the production of transportation fuels, electricity, and other products. One of the goals of this initiative is to accelerate research and make “cellulosic ethanol” cost-competitive by 2012, offering the potential to displace up to 30 percent of our nation’s current fuel use by 2030. The goal of the solicitation announced today is to demonstrate that commercial biorefineries can be profitable once initial construction costs are paid. There is a $100,000,000 cap on any single-demonstration award, and projects are required to show a 60/40 (industry/government) cost share.

Secretary Bodman also highlighted Agriculture Secretary Mike Johanns’s announcement today in Las Vegas, of $176.5 million available in loan guarantees and almost $11.4 million in grants to support investments in renewable energy and energy efficiency improvements by agricultural producers and small businesses. For more information on the Department of Agriculture’s nearly $188 million in loan guarantees and grants for renewable energy and energy efficiency projects, visit:



DaveM said...

The science involved in converting cellulose to ethanol can't be nearly as challenging today as the Manhattan Project was in its time, so arguably a comparable level of government investment would be inappropriate.

In this case, we do want private industry to pick up the ball quickly. However if government goes ahead and does absolutely all the research needed for commercial production, the technology will end up in the public domain with limited scope for proprietary technology and privately-held patents that may be the basis of profitability attractive to large corporations.

C. Scott Miller, EDP said...

You have a great point. Californians blithely passed a $3 Billion stem cell research bond initiative a couple years ago which totally stunned me. Billion? Where did that come from? All it will do is stifle the very competitive forces that make solutions elegant. Look at MIG fighters vs. American jets of the Cold War - totalitarian brute technology vs. relatively free enterprise elegant design.

I hear that not much is really happening yet with all that stem cell money because of the need to set up checks and balances (make that BIG checks requiring HUGE balances).

However, I would still like to see the government prime the pump of innovation with incentives, tax credits, and loosening of regulations. The D.O.E., through Argonne, NREL, and ORNL seem to lean in favor of that approach. They can also help promising pilot technologies (and there are many) scale up commercially by providing funding and guarantees like they have announced here. Time will tell.