Biofuel Bonanza
The energy bill signed this week will have an enormous impact on biofuels.
David Rotman 12/21/2007
- 9 Comments
In case you were a bit busy this week and didn't have time to examine the 822 pages of the Energy Independence and Security Act of 2007, it is a big deal. And in particular, it is a big deal for biofuels.
The numbers speak for themselves. The legislation, which was signed by President Bush on Wednesday, creates an enormously ambitious Renewable Fuel Standard (RFS) that mandates the production of 36 billion gallons of renewable fuels by 2022; included in that is 21 billion gallons of advanced biofuels (most of which will be cellulosic biofuels). At such levels, biofuels will account for more than 20 percent of total road-transportation fuels in the United States by 2022. To give a sense of the ambition of such a mandate, it is worth noting that total biofuel production in 2007 was only 4.7 billion gallons, and almost all of that was corn-derived ethanol. There is still no commercial production of cellulosic ethanol.
The biofuel industry is, of course, thrilled. Bio, the biotechnology trade association that counts among its members numerous companies involved in various aspects of biofuels, predicts that the new mandates will mean nearly 300 new biofuel plants, including 75 new corn ethanol plants and 210 new cellulosic ethanol plants. Bio estimates that the RFS could mean $170 billion invested in advanced technology development, biofuel production, and new infrastructure to handle biofuels.
Overall, the federal mandate for biofuels appears to be a good thing. It will finally give industry and academic researchers confidence that biofuels are really going to play an important role in the country's energy future. But it is worth keeping in mind that there are still huge technology challenges in ramping up production of advanced biofuels. Achieving the ambitious standards of the new energy law will require an equally ambitious effort in researching and developing advanced biofuel technologies. (See "The Price of Biofuels.")
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javs
97 Comments
Time to Transform the Prevailing System of Management?
In the introduction of the revised edition of the Fifth Discipline, the author, MIT senior lecturer Peter Senge, writes about the "prevailing system of management as Deming understood it." One of the eight basic elements he eventually settled on is "Managing outcomes," in which "people are held accountable for meeting management targets (regardless of whether they are possible within existing system and processes)." .-.-.-.-.-. One such outcome is the Biofuel Bonanza that "mandates the production of 36 billion gallons of renewable fuels by 2022; included in that is 21 billion gallons of advanced biofuels (most of which will be cellulosic biofuels)." That is supposed to be a "right answer" (another basic element), so that systemic problems are discounted. "Uniformity" (still another basic element), gets conflict supressed in favor for a superficial agreement. .-.-.-.-.-. From a systemic point of view, is that “enormous impact on biofuels” possible within the existing system? Or, is a real paradigm shift required to change the system to first learn about what it possible? .-.-.-.-.-. The former question contrasts with Deming letter to Senge, which states "Our prevailing system of management has destroyed our people... " Is it about time to start the "transformation of the prevailing system of management” to enable the latter?” .-.-.-.-.-. One candidate for such a transformation is the paradigm shift from today’s prevailing electric system to the electricity without price controls paradigm (EWPC) that emerged in the past two years. One example of the cultural shift required can be found in the EWPC article Nanosolar Breakthrough and the Old Paradigm. .-.-.-.-.-. It seems that a generative dialogue on the emergent paradigm of biofuels is advised, in line with the limits to growth inherent in the paradigm itself.
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devassocx
111 Comments
Re: Time to Transform the Prevailing System of Management?
I sure haven't studied this energy plan in detail
but if it distorts our free economy via subsidies, etc then I see that as very bad gov't policy. There is so much wrong with the current corn/ethanol effort as to be laughable.
Usually, in a truly free economy, consumers voting with their purchasing $ will guarantee a proper and efficient outcome.
It seems that the people that like subsidies are
the ones that are recieving them...not the ones paying them.
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jaggspb
10 Comments
Re: Time to Transform the Prevailing System of Management?
Subsities do have their place in a market's infancy. Without these solar and wind will never be viable solutions to the large energy grid. Even residential applications need them to stay competitive.
It is after a market has been established that substities should be phased out when the true price is balanced.
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javs
97 Comments
Re: Time to Transform the Prevailing System of Management?
Under the prevailing system of management, devassocx is correct if there is no need for an infant market development. Subsidies have a dark side to help financial capital.
But, the question is whether the time has arrived to change the prevailing system with a paradigm shift. In the example, under the new paradigm jaggspb is correct to open and develop the resources of the infant demand market of the power industry.
The new paradigm is about shifting long run contracts for central stations, where the subsidies end up for financial capital, to enable wholesale and retail competition of production capital under EWPC in a more stable environment. Such environment results, as central stations sales go to the competitive market, and part of them are displaced to the demand side, while boom bust system volatility gets mitigated by increasing demand elasticity.
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sharring
1 Comment
Re: Time to Transform the Prevailing System of Management?
Keep in mind that the oil we currently use is subsidized.i.e we would not be spending a trillion dollars in Iraq if there were no oil there. The Defense department does not just defend our borders, it also defends our oil supply.
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javs
97 Comments
Re: Time to Transform the Prevailing System of Management?
Happy New Year! Dark oil subsidies (pun intended) are a good example of the dark side of the symptomatic solution to the energy and environmental crisis. As the vicious cycle gets reinforced, the fundamental solution gets weakened. In the case of electricity, the fundamental solution requires a paradigm shift which I suggest is to electricity without price controls (EWPC). However, as EWPC goes against most people mental models – powerful unquestioned assumptions that shape how we act – the symptomatic solution keeps going and going. If you part of the minority that wants to help the case of the fundamental solution, please try to answer the question: Does EWPC have a “Bystander Problem”?
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RD
212 Comments
Wrong Premise
This bill is premised on two issues: The US doesn't have the oil; and man-made CO2 causes global warming. Both are wrong. The US has 800 billion barrels of high-quality recoverable shale oil in the Rockies. And new findings point to man-made global warming as a misunderstanding. Per the NYT 1/3/08 , "Astrophysics knows two solar activity cycles, of 11 and 200 years. Both are caused by changes in the radius and area of the irradiating solar surface. The latest data, obtained by Habibullah Abdusamatov, head of the Pulkovo Observatory space research laboratory, say that Earth has passed the peak of its warmer period, and a fairly cold spell will set in quite soon, by 2012. Real cold will come when solar activity reaches its minimum, by 2041, and will last for 50-60 years or even longer." Congress is wasting $92 billion of taxpayer money subsidizing this effort. Better to put it into battery technology.
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