Today voters across the United States cast ballots in the 2012 general election. At stake are a broad range of political offices, ranging from the presidency to local municipal roles. How will the election's outcomes affect energy policy, energy-related businesses, and consumers?
The presidential contest has drawn the greatest attention over the past year. Whether President Obama will retain his office or Governor Romney will take the White House is the largest question. Based on the candidates' past actions and current campaign platforms, voters have some sense of how each would exercise his presidential powers. On energy issues, both candidates appear to favor increased domestic production of natural gas and oil. The candidates differ in their philosophies on the role of governmental incentives and subsidies -- whether for fossil fuel production or for renewable electricity generation -- and on emissions regulations for coal-fired and other power plants. The candidates also disagree on specific energy projects and programs ranging from the Keystone XL pipeline to the Navy's Great Green Fleet biofuels initiative.
Beyond the presidency, federal elections will determine the composition of Congress. While energy policy is more sensitive to presidential changes than to individual congressional elections, the makeup of Congress drives federal energy policy in the aggregate. All seats in the House of Representatives are up for grabs, as are a third of Senate seats. Of the 33 Senate seats, Democrats need to win 21 seats to retain their majority while Republicans need to win 14 seats to take control. The senators elected in 2012 will participate in setting any national energy policy.
State elections will also shape energy policy for the coming years. Voters will select governors in 11 states, and state legislative offices are widely contested. While federal energy policy draws the most attention, the U.S. federalist system leaves significant authority to individual states to set their own policies on energy issues. For example, states may establish electric renewable portfolio standards or otherwise regulate the resource mix used to produce usable energy. The outcomes of state elections will also affect policies on energy efficiency, smart meters and smart grid infrastructure.
Voters in some states will also cast ballots on measures directly affecting energy policy, such as the Michigan citizens' initiative seeking to increase utilities' use of electricity produced by renewable resources.
It may be some time until all the ballots are finally counted, but by tomorrow night we will have a better understanding of the results for most of the races and ballot questions. Those who can translate the election results into an understanding of future policies - and business opportunities - will have a leg up on the competition.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label biofuels. Show all posts
Showing posts with label biofuels. Show all posts
POET ethanol plant declines DOE loan guarantee
Wednesday, January 25, 2012
Cellulosic ethanol producer POET LLC has declined a $105 million federal loan guarantee for its planned "Project LIBERTY" facility in Emmetsburg, Iowa, instead turning to private funding from Dutch company Royal DSM NV. This choice has implications both for energy policy and for the biofuels industry.
Last year brought an end to a US Department of Energy program to help fund innovative energy projects with loan guarantees. Before it ended in September 2011, DOE's Section 1705 loan guarantee program backstopped a total of $16 billion in loans for 28 projects ranging from nuclear power to solar, wind to transmission, biofuels to energy efficiency. Questions about the value and implementation of the loan program grew after the recipient of the first loan guarantee, solar panel maker Solyndra LLC, failed and went bankrupt.
Before the Section 1705 loan program ended, POET was awarded a guarantee for $105 million. POET is developing the Project LIBERTY plant, which aims to use cutting-edge enzymatic hydrolysis to produce fermentable sugars from corn crop waste, and then to use special yeasts to transform the sugar into usable ethanol. By 2013, the plant could be producing up to 25 million gallons per year.
This week POET announced that it was declining the DOE loan guarantee. Instead, POET will partner with Royal DSM, a private business that grew out of a former Dutch national coal-mining company. Together, the companies will invest up to $250 million in initial capital expenditures for Project LIBERTY.
What does POET's choice mean? For POET, the terms of the joint venture with Royal DSM are presumably more favorable than the alternative. Royal DSM's money is likely what made it most attractive to POET, but its experience and markets may have also played a role.
For Iowa, any financial arrangement that realizes $250 million in capital investments in the state is likely to be greeted with open arms.
For other ethanol producers, the deal may signal increased interest in ethanol from the investment community. The U.S. Environmental Protection Agency estimates that its renewable fuels standards will require 16 billion gallons of advanced cellulosic biofuel per year by 2022; using the Project LIBERTY plant as a model, this could mean up to 400 new biorefineries will be built by 2022 to meet these standards. By extension, other recipients of DOE loan guarantees may similarly partner with private-sector entities to complete project financing.
Last year brought an end to a US Department of Energy program to help fund innovative energy projects with loan guarantees. Before it ended in September 2011, DOE's Section 1705 loan guarantee program backstopped a total of $16 billion in loans for 28 projects ranging from nuclear power to solar, wind to transmission, biofuels to energy efficiency. Questions about the value and implementation of the loan program grew after the recipient of the first loan guarantee, solar panel maker Solyndra LLC, failed and went bankrupt.
Before the Section 1705 loan program ended, POET was awarded a guarantee for $105 million. POET is developing the Project LIBERTY plant, which aims to use cutting-edge enzymatic hydrolysis to produce fermentable sugars from corn crop waste, and then to use special yeasts to transform the sugar into usable ethanol. By 2013, the plant could be producing up to 25 million gallons per year.
This week POET announced that it was declining the DOE loan guarantee. Instead, POET will partner with Royal DSM, a private business that grew out of a former Dutch national coal-mining company. Together, the companies will invest up to $250 million in initial capital expenditures for Project LIBERTY.
What does POET's choice mean? For POET, the terms of the joint venture with Royal DSM are presumably more favorable than the alternative. Royal DSM's money is likely what made it most attractive to POET, but its experience and markets may have also played a role.
For Iowa, any financial arrangement that realizes $250 million in capital investments in the state is likely to be greeted with open arms.
For other ethanol producers, the deal may signal increased interest in ethanol from the investment community. The U.S. Environmental Protection Agency estimates that its renewable fuels standards will require 16 billion gallons of advanced cellulosic biofuel per year by 2022; using the Project LIBERTY plant as a model, this could mean up to 400 new biorefineries will be built by 2022 to meet these standards. By extension, other recipients of DOE loan guarantees may similarly partner with private-sector entities to complete project financing.
November 11, 2010 - Veterans Day, and US military energy
Thursday, November 11, 2010
Happy Veterans Day. In honor of the day, let's peek at what the US military is doing on one energy issue: preparing for changes in fuel availability.
[Photo: a reminder of summer, Monhegan Island, Maine.]
Did you know that this year, the US Navy successfully completed tests in Norfolk on a 49 foot-long riverine command boat powered by a 50/50 mix of diesel and algae-derived biodiesel? In the wake of this spring's Joint Operating Environment report noting possible future scarcity of oil (as in "peak oil"), the military is predicting that it may need to have assets that can run on a variety of fuels. This spring's report predicted the possibility that the the world's surplus oil production capacity might be sucked up within two years, resulting in a potential excess demand of nearly 10,000,000 barrels a day within the next five years. In addition to ships, the Navy's interest in adding flexible fuel capacity has also led to biofuels and coal-derived synthetic fuels to power jet engines as well.
Military applications add a national security aspect onto the basic arguments in favor of biofuels as part of a fuel portfolio. While initial algae-derived biofuels delivered to the military were relatively expensive (reportedly $424 per gallon), the price has already fallen significantly as production capacity responds to the increased demand. Will the predictions in the Joint Operating Environment report come true? If so, being able to run on a variety of more cost-effective fuels including biofuels may prove invaluable.
Did you know that this year, the US Navy successfully completed tests in Norfolk on a 49 foot-long riverine command boat powered by a 50/50 mix of diesel and algae-derived biodiesel? In the wake of this spring's Joint Operating Environment report noting possible future scarcity of oil (as in "peak oil"), the military is predicting that it may need to have assets that can run on a variety of fuels. This spring's report predicted the possibility that the the world's surplus oil production capacity might be sucked up within two years, resulting in a potential excess demand of nearly 10,000,000 barrels a day within the next five years. In addition to ships, the Navy's interest in adding flexible fuel capacity has also led to biofuels and coal-derived synthetic fuels to power jet engines as well.
Military applications add a national security aspect onto the basic arguments in favor of biofuels as part of a fuel portfolio. While initial algae-derived biofuels delivered to the military were relatively expensive (reportedly $424 per gallon), the price has already fallen significantly as production capacity responds to the increased demand. Will the predictions in the Joint Operating Environment report come true? If so, being able to run on a variety of more cost-effective fuels including biofuels may prove invaluable.
August 23, 2010 - nonethanol gasoline gone from Maine; loss of biofuel tax credit
Monday, August 23, 2010
In Maine, regulatory and market changes have led to the end of nonethanol gasoline's availability. While many vehicle engines can run on gasoline cut with ethanol like E10 (10% ethanol, 90% gasoline), certain engines like aircraft cannot handle the ethanol mix. Ethanol-gasoline mixes tend to absorb water (and then burn poorly), and can break down fiberglass fuel tanks and lines. Federal and state policies have required ethanol to be added to gasoline for a variety of reasons including economic support for domestic agrifuels production and the need for an alternative to toxic MTBE as a fuel oxygenator.
Want proof that regulatory uncertainty places a chilling effect on businesses? Here's a story from Vermont about how the loss of a biofuel production tax credit has led to the closing of a business, placing state money at risk. Biocardel Vermont LLC, located in Swanton, Vermont, had been pitched as being able to produce up to 8 million gallons of biodiesel a year from soybean and other oils. Biocardel had been eligible for a tax credit of $1 per gallon produced, and had received $645,000 in low-interest loans from the Vermont Economic Development Authority. Vermont also gave Biocardel tax credits potentially worth up to $534,522 if it completed its buildout and commenced full hiring and production. With the loss of the federal tax credit, the operation has now closed.
Massachusetts continues to deal with issues of how to site wind turbines. This article describes the tensions between those who want merchant-scale wind power in Massachusetts, and those who do not want to see that kind of development. Overlaid onto this mix, Governor Deval Patrick has pushed a bill through the state legislature to streamline the permitting process for wind projects.
Want to see tidal power generation in action? Get yourself to Eastport, Maine. Tomorrow, dignitaries will celebrate Ocean Renewable Power Company's announcement that its 60-kilowatt turbine-generator has successfully produced commercially marketable electricity. ORPC will us the 60 kW turbine-generator for a 60-day demonstration project at the Coast Guard's Eastport Station, and plans install a grid-tied 150 kW system next year.
Want proof that regulatory uncertainty places a chilling effect on businesses? Here's a story from Vermont about how the loss of a biofuel production tax credit has led to the closing of a business, placing state money at risk. Biocardel Vermont LLC, located in Swanton, Vermont, had been pitched as being able to produce up to 8 million gallons of biodiesel a year from soybean and other oils. Biocardel had been eligible for a tax credit of $1 per gallon produced, and had received $645,000 in low-interest loans from the Vermont Economic Development Authority. Vermont also gave Biocardel tax credits potentially worth up to $534,522 if it completed its buildout and commenced full hiring and production. With the loss of the federal tax credit, the operation has now closed.
Massachusetts continues to deal with issues of how to site wind turbines. This article describes the tensions between those who want merchant-scale wind power in Massachusetts, and those who do not want to see that kind of development. Overlaid onto this mix, Governor Deval Patrick has pushed a bill through the state legislature to streamline the permitting process for wind projects.
Want to see tidal power generation in action? Get yourself to Eastport, Maine. Tomorrow, dignitaries will celebrate Ocean Renewable Power Company's announcement that its 60-kilowatt turbine-generator has successfully produced commercially marketable electricity. ORPC will us the 60 kW turbine-generator for a 60-day demonstration project at the Coast Guard's Eastport Station, and plans install a grid-tied 150 kW system next year.
2/5/10
Friday, February 5, 2010
Following up on the old elm tree "Herbie" that recently died in Yarmouth, Maine: turns out Herbie was 217 years old. It will be interesting to see what Herbie's growth rings show about how the climate in Maine has changed since 1793.
Here's a logic puzzle for you. Maine : "Saudi Arabia of wind" :: Texas : ________? How about "net loser of jobs in a clean energy economy"? A study by Navigant Consulting commissioned by the renewable-energy group RES Alliance for Jobs, concludes that a federal renewable energy standard of 25% renewable by 2025 would lead to 274,000 new jobs nationwide -- but that under current state policies on renewable energy, Texas would lose jobs while other states like California would be the big winners.
The Obama administration is pushing biofuels. The administration has renewed its commitment to getting the country to produce (and use) 36 billion gallons of biofuels by 2022, a goal originally set by Congress in 2007.
Here's a logic puzzle for you. Maine : "Saudi Arabia of wind" :: Texas : ________? How about "net loser of jobs in a clean energy economy"? A study by Navigant Consulting commissioned by the renewable-energy group RES Alliance for Jobs, concludes that a federal renewable energy standard of 25% renewable by 2025 would lead to 274,000 new jobs nationwide -- but that under current state policies on renewable energy, Texas would lose jobs while other states like California would be the big winners.
The Obama administration is pushing biofuels. The administration has renewed its commitment to getting the country to produce (and use) 36 billion gallons of biofuels by 2022, a goal originally set by Congress in 2007.
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