U.S. House passes Energy Bill: boost to biofuels, CCS and renewables

Declaring a new direction in energy policy, the U.S. House of Representatives on Saturday passed the Energy Bill titled 'The New Direction for Energy Independence, National Security, and Consumer Protection Act'. In it, the American legislators approve US$16 billion in taxes on oil companies, while providing billions of dollars in tax breaks and incentives for renewable energy, biofuels and conservation efforts.

The bill establishes a renewable power standard requiring all electric utilities to produce 15% of their power from biomass, wind, solar or other renewable sources by 2020. It also contains strong support for research and development of biofuels, including new approaches such as the use of biogas in transport. A range of studies and research programs on biofuels infrastructure, biorefineries, the effects of biofuels on engines and new bioprocessing technologies will be carried out.

The development of technical biofuel standards is mandated, as is a study of the effect of oil prices on the feasibility of the renewable fuels, as well as feasibility studies on ethanol pipelines, the adequacy of railroad transportation of biomass and biofuels, and other logistical and infrastructural challenges.

The legislation further releases vast funds for the study of carbon capture and storage systems (CCS), which can in principle be used with biofuels to yield carbon-negative energy. So-called 'Bioenergy with Carbon Storage' (BECS), seen by scientists as one of the only feasible and effective systems to tackle climate change in drastic way, are the only radically carbon-negative energy systems - all other renewables as well as nuclear are all carbon-positive and thus contribute to climate change (previous post). For this reason, we track CCS developments.

Finally, the Farm Security and Rural Investment Act of 2002 is amended to contain a large section on energy, tying the development of bioenergy strongly to agricultural policy and legislation. New loan guarantees are established and inter-agency cooperation is enhanced. The section no longer speaks of 'commodities' used in the production of bioproducts and biofuels, but broadens the scope to 'feedstocks', in order to include all sources of biomass which can be converted into bioproducts by new technologies. It launches new research programs on biomass and forestry-based bioenergy.

Some highlights of the bill include the following:

Assistance to developing countries [Title II, Subtitle B, Sec. 2202]
The bill notes that more than $16 trillion needs to be invested in energy-supply infrastructure worldwide by 2030 to meet energy demand, and almost half of total energy investment will take place in developing countries, where production and demand are expected to increase the most.

The United States Agency for International Development will therefor support policies and programs in developing countries that promote clean and efficient energy technologies:

1. to produce the necessary market conditions for the private sector delivery of energy and environmental management services;
2. to create an environment that is conducive to accepting clean and efficient energy technologies that support the overall purpose of reducing greenhouse gas emissions, including: (a) improving policy, legal, and regulatory frameworks; (b) increasing institutional abilities to provide energy and environmental management services; and (c) increasing public awareness and participation in the decision-making of delivering energy and environmental management services; and
3. to promote the use of American-made clean and efficient energy technologies, products, and energy and environmental management services.

To carry out this section, the United States Agency for International Development is authorized to spen $200 million for each of the fiscal years 2008 through 2012.

Biofuels [Title IV, Subtitle E, Sec. 4402 - 4416]
Biofuels and biorefinery information center
The Secretary of Energy, in cooperation with the Secretary of Agriculture, shall establish a technology transfer center to make available information on research, development, and commercial application of technologies related to biofuels and biorefineries, including:

1. biochemical and thermochemical conversion technologies capable of making fuels from lignocellulosic feedstocks;
2. biotechnology processes capable of making biofuels with an emphasis on development of biorefinery technologies using enzyme-based processing systems;
3. biogas collection and production technologies suitable for vehicular use;
4. cost-effective reforming technologies that produce hydrogen fuel from biogas sources;
5. biogas production from cellulosic and recycled organic waste sources and advancement of gaseous storage systems and advancement of gaseous storage systems; and
6. other advanced processes and technologies that will enable the development of biofuels.

Biofuels and advanced biofuels infrastructure
A program of research, development, and demonstration will be carried out as it relates to existing transportation fuel distribution infrastructure and new alternative distribution infrastructure for biofuels. The program shall focus on the physical and chemical properties of biofuels and efforts to prevent or mitigate against adverse impacts of those properties.

Biodiesel: 2.5%
Biodiesel Study: a report on any research and development challenges inherent in increasing to 2.5% the proportion of diesel fuel sold in the United States that is biodiesel.
Materials for the Establishment of Standards: physical property data and characterization of biodiesel will be made publicly available in order to encourage the establishment of standards that will promote their utilization in the transportation and fuel delivery system.

Biogas for transport: 5%
A report will be produced on any research and development challenges inherent in increasing to 5% of the transportation fuels sold in the United States fuel with biogas or a blend of biogas and natural gas.

Bioresearch centers for systems biology
At least 5 bioresearch centers of varying sizes will be established that focus on biofuels development on the basis of fundamental biological research, of which at least 1 center shall be located in each of the 5 Petroleum Administration for Defense Districts, which shall be established for a period of 5 years, after which the grantee may reapply for selection on a competitive basis:
energy :: sustainability :: renewables :: efficiency :: conservation :: ethanol :: biodiesel :: biobutanol :: biomass :: bioenergy :: biofuels :: Energy Bill :: United States ::

Grants for biofuel production R&D
Grants worth a total $25 million for each of the fiscal years 2008 through 2010 will be given to eligible entities for research, development, demonstration, and commercial application of biofuel production technologies in States with low rates of ethanol production, including low rates of production of cellulosic biomass ethanol.

Biorefinery energy efficiency
A program of research, development, demonstration, and commercial application will be lauunched for increasing energy efficiency and reducing energy consumption in the operation of biorefinery facilities; another research program will be aimed at developnig the application of technologies and processes to enable biorefineries that exclusively use corn grain or corn starch as a feedstock to produce ethanol to be retrofitted to accept a range of biomass, including lignocellulosic feedstocks.

Study of increased ethanol consumption
The Energy Secretary, in cooperation with the Secretary of Agriculture, the Administrator of the Environmental Protection Agency, and the Secretary of Transportation, shall conduct a study of the methods of increasing consumption in the United States of ethanol-blended gasoline with levels of ethanol that are not less than 10 percent and not more than 40 percent. This study will include:

1. a review of production and infrastructure constraints on increasing consumption of ethanol;
2. an evaluation of the environmental consequences of the ethanol blends on evaporative and exhaust emissions from on-road, off-road, and marine vehicle engines;
3. an evaluation of the consequences of the ethanol blends on the operation, durability, and performance of on-road, off-road, and marine vehicle engines; and
4. an evaluation of the life cycle impact of the use of the ethanol blends on carbon dioxide and greenhouse gas emissions.

Study of optimization of flex-fuel vehicles
A study will be carried out on whether optimizing flexible fueled vehicles to operate using E-85 fuel would increase the fuel efficiency of flexible fueled vehicles.

Study of engine performance with biodiesel
a study will be initiated on the effects of the use of biodiesel on the performance and durability of engines and engine systems, with tests using 5% to 100% biodiesel.

Study of optimization of biogas in natural gas vehicles
a study of methods of increasing the fuel efficiency of vehicles using biogas by optimizing natural gas vehicle systems that can operate on biogas, including the advancement of vehicle fuel systems and the combination of hybrid-electric and plug-in hybrid electric drive platforms with natural gas vehicle systems using biogas.

Algal biomass
a report on the progress of the research and development that is being conducted on the use of algae as a feedstock for the production of biofuels. This report shall identify continuing research and development challenges and any regulatory or other barriers found by the Secretary that hinder the use of this resource, as well as recommendations on how to encourage and further its development as a viable transportation fuel.

Carbon capture and storage [Title IV, Subtitle F, Sec. 4501 - 4416]
We track developments on carbon capture and storage (CCS), because they can be applied to liquid, solid and gaseous biofuels, in which case they result in carbon-negative energy systems that are seen by scientists as the most feasible and effective large-scale approach to mitigate global warming in case we would be facing an "abrupt climate change" scenario. So-called 'Bio-energy with Carbon Storage' (BECS) systems are the only carbon-negative energy systems in existence. All other renewables and nuclear are all carbon positive and contribute to climate change.

CCS R&D and demonstration program
An existing CCS program will be expanded with efforts to expedite and carry out large-scale testing of carbon sequestration systems in a range of geological formations that will provide information on the cost and feasibility of deployment of sequestration technologies.

Fundamental science and engineering R&D
Science and engineering research will be carried out (including laboratory-scale experiments, numeric modeling, and simulations) to develop and document the performance of new approaches to capture and store carbon dioxide, or to learn how to use carbon dioxide in products to lead to an overall reduction of carbon dioxide emissions.

This program will be integrated: to include (1) development of new or advanced technologies for the capture of carbon dioxide; (2) development of new or advanced technologies that reduce the cost and increase the efficacy of the compression of carbon dioxide required for the storage of carbon dioxide; (3) modeling and simulation of geological sequestration field demonstrations; (4) quantitative assessment of risks relating to specific field sites for testing of sequestration technologies; and (5) research and development of new and advanced technologies for carbon use, including recycling and reuse of carbon dioxide.

Field validation and testing: in order to promote, to the maximum extent practicable, regional carbon sequestration partnerships to conduct geologic sequestration tests involving carbon dioxide injection and monitoring, mitigation, and verification operations in a variety of candidate geological settings, including: (1) operating oil and gas fields;(2) depleted oil and gas fields; (3) unmineable coal seams; (4) deep saline formations; (5) deep geologic systems that may be used as engineered reservoirs to extract economical quantities of heat from geothermal resources of low permeability or porosity; (6) deep geologic systems containing basalt formations; and (7) high altitude terrain oil and gas fields.

The objectives of tests conducted under this program are:

1. to develop and validate geophysical tools, analysis, and modeling to monitor, predict, and verify carbon dioxide containment;
2. to validate modeling of geological formations;
3. to refine storage capacity estimated for particular geological formations;
4. to determine the fate of carbon dioxide concurrent with and following injection into geological formations;
5. to develop and implement best practices for operations relating to, and monitoring of, injection and storage of carbon dioxide in geologic formations;
6. to assess and ensure the safety of operations related to geological storage of carbon dioxide;
7. to allow the Secretary to promulgate policies, procedures, requirements, and guidance to ensure that the objectives of this subparagraph are met in large-scale testing and deployment activities for carbon capture and storage that are funded by the Department of Energy; and
8. `(viii) to support Environmental Protection Agency efforts, in consultation with other agencies, to develop a scientifically sound regulatory framework to enable commercial-scale sequestration operations while safeguarding human health and underground sources of drinking water.

Large-scale sequestration testing
Not less than 7 initial large-volume sequestration tests will be carried out, not including the FutureGen project, for geological containment of carbon dioxide (at least 1 of which shall be international in scope) to validate information on the cost and feasibility of commercial deployment of technologies for geological containment of carbon dioxide.

A variety of geological formations across the United States will be studied, and require characterization and modeling of candidate formations.

Large-scale sequestration demonstration
In the process of any acquisition of carbon dioxide for sequestration demonstrations preference will be given to to purchases of carbon dioxide from industrial and coal-fired electric generation facilities. To the extent feasible, test projects from industrial and coal-fired electric generation facilities will be selected that would facilitate the creation of an integrated system of capture, transportation and storage of carbon dioxide. Until coal-fired electric generation facilities, either new or existing, are operating with carbon dioxide capture technologies, other industrial sources of carbon dioxide should be pursued.

'Large-scale' means the injection of more than 1,000,000 metric tons of carbon dioxide annually, or a scale that demonstrably exceeds the necessary thresholds in key geologic transients to validate the ability continuously to inject quantities on the order of several million metric tons of industrial carbon dioxide annually for a large number of years.

Large scale demonstration of carbon capture technologies
At least 3 and no more than 5 demonstrations will be carried out for the large-scale capture of carbon dioxide from industrial sources of carbon dioxide, at least 2 of which are facilities that generate electric energy from fossil fuels. Candidate facilities for other demonstrations include facilities that refine petroleum, manufacture iron or steel, manufacture cement or cement clinker, manufacture commodity chemicals, and ethanol and fertilizer plants. Consideration may be given to capture of carbon dioxide from industrial facilities and electric generation carbon sources that are near suitable geological reservoirs and could continue sequestration.

Technologies: carbon capture technologies are precombustion capture, post-combustion capture, and oxycombustion.

These demonstration programs will receive the following amount of funding: $100 million per year (2008-2011) for the general program, $140 million per year (2008-2011) for carbon sequestration and $ 180 million per year for carbon capture.

Safety and review of large-scale programs
a review and research program will be carried out to determine procedures necessary to protect public health, safety, and the environment from impacts that may be associated with capture, injection, and sequestration of greenhouse gases in subterranean reservoirs. This receives $5 million for each fiscal year (2008-2011).

Training and university research
An interdisciplinary science & research training program will be established that unites the fields of geology, engineering, hydrology, environmental science, and related disciplines. This will be offered as undergraduate and graduate education, especially to help develop graduate level programs of research and instruction that lead to advanced degrees with emphasis on geological sequestration science. The development of this program receives $1,000,000 for fiscal year 2008.

Agriculture and Energy [Title V]
Amendments to the Biomass Research and Development Act of 2000
New provisions include measures to enhance cooperation and coordination in biomass research and development between the Secretary of Agriculture and the Secretary of Energy, in order to promote the production of biobased fuels and biobased products. Both departments will each designate an officer as a point of contact between the departments.

Biomass Research and Development Board
A new Biomass Research and Development Board will be established to supersede the Interagency Council on Biobased Products and Bioenergy, to coordinate programs within and among departments and agencies of the Federal Government for the purpose of promoting the use of biobased fuels and biobased products.

Biomass Research and Development Technical Advisory Committee
This new advisory committee that will inform the agriculture and energy secretaries as well as their contact points will consistt of a large range of stakeholders (a representative of the biofuels industry, of the biobased industrial and commercial products industry, of an institution of higher education who has expertise in biobased fuels and biobased products, two prominent engineers or scientists from government or academia who have expertise in biobased fuels and biobased products, a representative affiliated with a commodity trade association, two individuals affiliated with an environmental or conservation organization, an individual associated with State government who has expertise in biobased fuels and biobased products, an expert in energy and environmental analysis, an individual with expertise in the economics of biobased fuels and biobased products, and an expert in agricultural economics.

Biomass Research and Development Initiative
The Secretary of Agriculture and the Secretary of Energy will establish and carry out a Biomass Research and Development Initiative under which competitively awarded grants, contracts, and financial assistance are provided to, or entered into with, eligible entities to carry out research on, and development and demonstration of, biobased fuels and biobased products, and the methods, practices and technologies, for their production.

The objectives of the Initiative are to develop:

1. technologies and processes necessary for abundant commercial production of biobased fuels at prices competitive with fossil fuels;
2. high-value biobased products: (1) to enhance the economic viability of biobased fuels and power; and (2) as substitutes for petroleum-based feedstocks and products
3. a diversity of sustainable domestic sources of biomass for conversion to biobased fuels and biobased products.

The purposes of the initiative are:

1. to increase the energy security of the United States;
2. to create jobs and enhance the economic development of the rural economy;
3. to enhance the environment and public health; and
4. to diversify markets for raw agricultural and forestry products.

The research will be directed towards the following technical areas:

1. feedstock production through the development of crops and cropping systems relevant to production of raw materials for conversion to biobased fuels and biobased products, including: (1) development of advanced and dedicated crops with desired features, including enhanced productivity, broader site range, low requirements for chemical inputs, and enhanced processing; (2) advanced crop production methods, (3) feedstock harvest, handling, transport, and storage; and (4) strategies for integrating feedstock production into existing managed land;
2. overcoming recalcitrance of cellulosic biomass through developing technologies for converting cellulosic biomass into intermediates that can subsequently be converted into biobased fuels and biobased products, including: (1) pretreatment in combination with enzymatic or microbial hydrolysis; and (2) thermochemical approaches, including gasification and pyrolysis;
3. product diversification through technologies relevant to production of a range of biobased products (including chemicals, animal feeds, and cogenerated power) that eventually can increase the feasibility of fuel production in a biorefinery, including: (1) catalytic processing, including thermochemical fuel production; (2) metabolic engineering, enzyme engineering, and fermentation systems for biological production of desired products or cogeneration of power; (3) product recovery; (4) power production technologies; and (5) integration into existing biomass processing facilities, including starch ethanol plants, sugar processing or refining plants, paper mills, and power plants;
4. analysis that provides strategic guidance for the application of biomass technologies in accordance with realization of improved sustainability and environmental quality, cost effectiveness, security, and rural economic development, usually featuring system-wide approaches.

Funding for this program looks like this: $25 million for fiscal year 2008; $50 million for fiscal year 2009; $75 million for fiscal year 2010; $100 million for fiscal year 2011; and $100 million for fiscal year 2012.

Forest bioenergy research program
The Secretary of Agriculture, working through the Forest Service, in cooperation with other Federal agencies, land grant colleges and universities, and private entities, will conduct a competitive research and development program to encourage new forest-to-energy technologies. The Secretary may use grants, cooperative agreements, and other methods to partner with cooperating entities on projects that the Secretary determines shall best promote new forest-to-energy technologies.

Priority will be given to projects that:

1. develop technology and techniques to use low value forest materials, such as byproducts of forest health treatments and hazardous fuel reduction, for the production of energy;
2. develop processes for the conversion of cellulosic forest materials that integrate production of energy into existing manufacturing steams or in integrated forest biorefineries;
3. develop new transportation fuels that use forest materials as a feedstock for the production of such fuels; or
4. improve the of growth and yield of trees for the purpose of renewable energy and other forest product use.

Funding: $4 million for fiscal year 2008; $6 million for fiscal year 2009; $7 million for fiscal year 2010; $9 million for fiscal year 2011; and $10 million for fiscal year 2012.

Ethanol pipelines [Subtitle C, Part 2, Sec. 8311]
Feasibility studies
The energy and transportation secretaries will conduct feasibility studies for the construction of pipelines dedicated to the transportation of ethanol.

Feasibility studies funded under this part shall include consideration of

1. existing or potential barriers to the construction of pipelines dedicated to the transportation of ethanol, including technical, siting, financing, and regulatory barriers;
2. market risk, including throughput risk;
3. regulatory, financing, and siting options that would mitigate such risk and help ensure the construction of pipelines dedicated to the transportation of ethanol;
4. ensuring the safe transportation of ethanol and preventive measures to ensure pipeline integrity; and
5. such other factors as the Secretary of Energy considers appropriate.

These studies receive $1,000,000 for each of the fiscal years 2008 and 2009, to remain available until expended.

Renewable Fuel Infrastructure
Several initiatives and mandates for studies are included in the bill that speed up the analysis of infrastructural, logistical and technical barriers to the large-scale use of biofuels for transport.

When it comes to the distribution of biofuels, it is now prohibited to restrict franchise agreements related to renewable fuel infrastructures; likewise, there is a prohibition on the restriction of the installation of renewable fuel pumps.

A study analysing the adequacy of railroad transportation of domestically produced biofuels will be launched.

Grants for concrete cellulosic ethanol production projects will be increased to $500 million for fiscal year 2009 and $500 million for fiscal year 2010. In awarding grants, priority will be given to applications that promote feedstock diversity and the geographic dispersion of production facilities.

Amongst several other studies and initiatives, the Secretary of Energy will conduct a study to review the anticipated effects on renewable fuels production if oil were priced no lower than $40 per barrel.

Image: the U.S. House passes a new energy bill, focusing heavily on the promotion of the bioeconomy. Idealized representation of the bioenergy and bioproducts cycle.

References:
H.R.3221: Moving the United States toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs, protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure. Sponsor: Rep Pelosi, Nancy [CA-8] (introduced 7/30/2007), 8/4/2007 Passed/agreed to in House. Status: On passage Passed by recorded vote: 241 - 172.