Bozeman, Montana-based Sustainable Oils is working toward an important goal. They are working to produce advanced biofuels using sustainable methods and feedstocks. One of their prime energy crops is camelina, which has a naturally high oil content and relatively low input costs (the crop needs little water or fertilizer and is suited well to grow on marginal land). It is also an excellent rotation crop with wheat.
Sustainable Oils‘ focus is on the aviation market and they have partnered with Boeing Company as well as UOP, a Honeywell Company, to bring renewable aviation fuels to market. But the big question is can the renewable aviation fuels withstand the extreme pressures of both commercial planes as well as military jets?
To find out, the U.S. Navy and Air Force both selected Sustainable Oils, as did Japan Airlines, as a fuel partner for several tests and so far the results have been promising. Sustainable Oils President Scott Johnson told DF, “We’ve seen strong demand for camelina biojet and expect that demand to continue to grow in the coming years. The success of the 2009 Japan Airlines test flight, as well as with the 2009 Navy and Air Force test flights, demonstrate that our fuels meet the quality and performance requirements that these aircrafts demand. We’re going to continue to work closely with the U.S. military and commercial airlines to provide the next generation of domestically produced, renewable aviation biofuels that help reduce emissions and enhance energy security.”
Despite the promise that biojet fuels hold, there are grave concerns among the biofuels industry as to its future. The biodiesel tax credit expired at the end of 2009 and has not yet been extended. In addition, the DOE loan guarantee program, that was in part designed to ensure that advanced biofuels companies could have access to much need monies, has stalled with funds not dispersed to companies that have already been awarded the loans. These two issues have created a hesitancy among private investors to infuse much needed dollars into the industry to be used to go from pilot-scale projects to commercial scale production.
I asked Johnson how the lack of the biodiesel tax credit was affecting both his company and the industry. He replied, “Let’s be clear. The petroleum industry not only has a 100 year head start on the renewable fuels industry, but it also has received, and continues to receive billions of dollars in subsidies, incentives and other financial benefits.”
He continued, “Ironically, many of the arguments used by renewable fuels today (need to diversify energy sources, create domestic energy supply, etc.) were used by petroleum companies decades ago to justify massive federal support for exploration and R&D. We think the continued investment in domestic energy supplies from renewable fuels providers is some of the smartest money the government can spend, given the proven economic, national security and positive environmental impacts of biofuels.”
In terms of the problems with the DOE loan guarantee program, Johnson had this to say, “We support government policies and incentives, including loan guarantee programs, that can help leverage existing private investment and help build the infrastructure we need to produce and deliver clean, renewable fuels. Building refineries and production facilities is highly capital intensive – and the current economic environment makes it all the more difficult for project developers to secure capital. We believe that the DOE’s loan guarantee program is an important policy in facilitating the development of a 21st century fuel infrastructure.”
“I would also add that the USDA’s BioRefinery Assistance Program, which is designed to promote the development of new and emerging technologies for the production of advanced biofuels, is another important program that will be important to the development of our industry.” said Johnson.
Last week, the Senate Committee on Energy & Natural Resources held a hearing to determine why awarded funds were not being distributed. Unfortunately, the Budget Office no-showed and no real solutions to the problem were identified.
Knowing the challenges facing the biodiesel and ethanol industries, I asked Johnson if he thought biofuels programs could be more effectively promoted if both industries came together.
He answered, “In general we at Sustainable Oils support any policy that recognizes there is tangible value in renewable fuels – reduced emissions and pollution, decreased dependence on foreign oil and increased domestic jobs. We believe that smart energy policy would reward the production and consumption of the lowest carbon fuels, rather than specifying how they are made, or what feedstocks they are made from. Given that our camelina-based aviation fuel has been shown to reduce emissions by as much as 80%, we believe that we would perform well in this kind of incentivized environment.”
“In debates such as these,” continued Johnson, “it’s important to remember that the oil industry has been the largest recipient of government support – about $300 billion since 1950. In addition, we need to factor in the economic, environmental, and national security cost of petroleum fuels, which have been externalized for last 100 years. This has in turn made it all the more difficult for clean, renewable fuels to compete with petroleum fuels. Good energy policy must address this disparity and promote the fuels that provide the most environmental and economic benefit to the country.”
Regardless of these challenges facing the industry, there are plenty more opportunities to be realized. “Our nation needs a vibrant biofuels industry – including biodiesel, renewable jet fuel, ethanol, biobutanol – you name it. Our industry is creating jobs, creating exportable technologies and keeping billions of dollars of consumer income right here in the U.S. With dwindling oil supplies, increased risk and cost of new discoveries, and increased reliance on dictators and unstable governments, I believe it’s never been more important to have domestic fuel options,” explained Johnson.
He concluded on a positive note, “I can tell you that we see a really promising future and strong market for our camelina-based renewable fuels.”