The next generation of biofuels will create new revenue streams for producers near advanced biofuel plants, and rural communities could also see a boost due to job creation.
Within the next decade, the biofuel industry could be worth more than $60 billion, supporting 18,000 jobs, according to a recent analysis by Environmental Entrepreneurs (E2), a nonprofit focusing on building environmental policy that also builds economic prosperity.
According to E2, 82 advanced biofuel companies, refineries, and related operations are located in at least 27 states. By far, California leads the nation with 30 advanced biofuel companies. Illinois is second with eight, followed by Colorado with six, Texas with five, and Iowa with four. By 2015, an additional 26 bio-refineries are expected to open, according to E2.
Advanced biofuels are renewable, liquid transportation fuels that can replace traditional gasoline and diesel while reducing greenhouse gas (GHG) emissions by 50%. These fuels are made from agricultural resides like corn stover, municipal solid waste, woody biomass, or from crops like sugar cane, sugar beets, switchgrass, and wheatgrass.
"Forty percent of corn stover needs to lie on the field, but 60% can be repositioned," says Mary Solecki, clean fuels analyst at E2. She notes that Abengoa Bioenergia, based in Saint Louis, pays producers within a 50-mile radius of its plant near Hugoton, Kansas, $17 million per year for feedstocks.
Other producers who are practicing crop rotations are planting energy crops (sugar beets or sugar cane) at times of the year when their fields would have traditionally remained fallow, says Solecki.
"It’s a brand new source of revenue," She adds. "I see a lot of opportunities for producers to do what comes naturally to them—doing more with what they already have."
In a separate report, the U.S. Energy Information Administration (EIA) notes that several companies combined to produce about 20,000 gallons of fuels using cellulosic biomass (e.g., wood waste, sugarcane bagasse) from commercial-scale facilities in late 2012. EIA estimates this output could grow to more than 5 million gallons in 2013.
Although volumes of cellulosic biofuels are expected to grow significantly relative to current levels, they will likely remain well below the targets envisioned in the Energy Independence and Security Act of 2007. That law set a target level of 500 million gallons of cellulosic biofuels for 2012 and 1 billion gallons for 2013, growing to 16 billion gallons by 2022.
"To the extent that feedstock for these processes are waste products and little-to-no fossil inputs are required for their conversion, greenhouse gas emissions could be as much as 80% to 90% below those of petroleum products on a life-cycle basis," says EIA in its report.
The path to commercial biofuels has not been smooth, says EIA. A number of projects have been canceled before starting major construction, and many projects have been delayed due to difficulties obtaining financing, technology scale-up difficulties at startup companies, and strategic corporate shifts due to increased availability of low-cost natural gas.