By Holly Jessen

To meet the renewable fuels standard goal of 21 billion gallons of advanced biofuels, 527 biorefineries averaging 40 MMgy will need to be built at an estimated cost of $168 billion, according to a USDA report released in June. The “Regional Roadmap to Meeting the Biofuels Goals of the Renewable Fuels Standard” is intended to provoke discussion and further work on what the report calls an issue that “may prove to be one of the most important of the 21st century.”

The objectives of the 21-page report are to identify challenges and opportunities for the biofuels industry as well as to come up with solutions. Job creation is one benefit from biofuels, with the USDA estimating 40 direct jobs created for each 100 MMgy ethanol facility. In order to build biorefineries in areas of economic distress, the USDA suggests regional strategies will allow for proper leveraging of transportation, labor and feedstock resources. “USDA recognized that different regions of the country have a comprehensive advantage to the type of feedstock that can be produced and utilized in biofuel production,” the report states.

The report begins by acknowledging the role of corn starch ethanol in approaching the 15 billion gallon goal set by the renewable fuels standard (RFS2) for conventional biofuels. “The current ethanol industry provides a solid foundation to build upon and reach the 36 billion gallon goal,” USDA Secretary of Agriculture Tom Vilsack said. “I am confident that we can meet the threshold of producing 36 billion gallons of biofuel annually by 2022.”

The USDA roadmap examines the regional potential for producing the additional 21 billion gallons of advanced biofuels. It identifies the Southeast states and Hawaii, including Alabama, Arkansas, Florida, Georgia, Hawaii, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee and Texas, as having the greatest potential with up to 50 percent of the advanced biofuels volume coming from these states due to their long, robust growing seasons. The east central region, which includes Delaware, Iowa, Illinois, Indiana, Kansas, Missouri, Ohio, Oklahoma, Maryland, Minnesota, Nebraska, North Dakota, Pennsylvania, South Dakota, Wisconsin and Virginia, is right behind at 43.3 percent of potential advanced biofuels production. The Northwest and Western regions trail far behind, with only 4.6 percent and less than 1 percent respectively of expected biofuels volume.

The report notes that the U.S. EPA and USDA differ on the expected gallons from various feedstocks. By 2022, the EPA expects switchgrass to provide 7.9 billion gallons; soy biodiesel and corn oil, 1.34 billion gallons; crop residues, 5.5 billion gallons; woody biomass, 100 million gallons; other, such as municipal solid waste, 2.6 billion gallons; algae, 100 million gallons; and imports, 2.2 billion gallons. The USDA, on the other hand, estimates dedicated energy crops at 13.4 billion gallons, oilseeds at 500 million gallons, crop residues at 4.3 billion gallons and woody biomass (logging residue only) at 2.8 billion gallons.

The report concludes that in order to meet cellulosic ethanol targets, a rapid build-up and substantial investment will be needed. U.S. farms are capable of producing many types of feedstocks to make the biofuels industry a true national effort, but there are multiple infrastructure needs. “A process for identifying bottlenecks and barriers related to locating biorefineries involving the federal government, Congress, states, the industry and interested stakeholders can help facilitate a biorefinery system that is national in scope,” the report says. “While we expect the market to respond to the infrastructure needs of a growing industry, we recognize that the path from production to actual consumption presents challenges that will need to be anticipated and addressed.”

Among the bottlenecks is the limited numbers of flex-fuel vehicles (FFVs) that are primarily located in the Midwest. In addition, those FFVs actually use more gasoline than E85 or other ethanol blends due to their limited availability. The USDA suggests that California, Texas and Florida should be the primary targets for blender pumps and FFVs in the future. Blender pumps infrastructure is one area where USDA could provide immediate assistance the report adds, citing the anticipated EPA decision on a higher blend waiver.

Another infrastructure challenge is the need for rail and truck transportation of ethanol, blending terminals and storage, all factors that can affect decisions on where biorefineries are built. The EPA has projected that 40 unit train rail receipt facilities will be needed, with a cost of more than $12 billion, to distribute the additional volumes of ethanol targeted in the RFS2. This equals 6.9 cents per gallon of additional costs for shipping ethanol. “Developing unit train destinations is a time-consuming process, usually taking three to five years,” the report says. “The industry has responded to this challenge by developing rail-to-truck transloading facilities for smaller-than-unit train shipments of ethanol.”