Cheap Oil Could Kill Off Cellulosic Ethanol
The plunge in oil prices, accelerated by a recent OPEC decision to maintain production targets, will deal a new blow to efforts to commercialize advanced biofuels such as ethanol made from woody plant waste, or diesel made from plant oils. Lower oil prices may also help strengthen the case for scaling back the federal regulations requiring the use of biofuels.
Progress in commercializing advanced biofuels such as cellulosic ethanol has been slow despite federal rules mandating the use of such fuels. Earlier this year a few large-scale cellulosic ethanol plants, including ones operated by Poet-DSM, DuPont, and Abengoa, became operational. All were planned when oil was above $100 a barrel. A number of other projects were canceled even before the recent oil price plunge.
Now that oil is below $70 a barrel, down from a high of $115 earlier this year, new plants simply won’t get built, says Wallace Tyner, an agriculture and energy economist at Purdue University.
Federal biofuel mandates were created with an energy bill passed by the U.S. government in in 2005. Signed into law by President Bush, the standards were meant to promote energy independence, requiring ever-increasing numerical gallon requirements for the use of ethanol and advanced biofuels in transportation fuels.
In 2013, the U.S. Environmental Protection Administration scaled back requirements for the total volume of biofuels that must be added to transportation fuels. The EPA cited market saturation due to lower-than-expected demand for gasoline, limiting the amount of ethanol that can be blended (see “Oil Companies Happy, Biofuels Companies Distraught Over New EPA Rules”).
Updated requirements are expected from the EPA early next year. If the mandates are repealed, says Tyner, “then cellulosic biofuels and biodiesel would cease to exist.”
Cheap oil’s effects elsewhere in clean-tech are likely to be more limited. “Very little oil is used in the production of electric power, so the plunge in oil prices primarily impacts the transportation sector,” says Massoud Amin, director of the Technological Leadership Institute at the University of Minnesota, and a former executive at the Electric Power Research Institute, a utility-funded research group.
Keep Reading
Most Popular

The big new idea for making self-driving cars that can go anywhere
The mainstream approach to driverless cars is slow and difficult. These startups think going all-in on AI will get there faster.

Inside Charm Industrial’s big bet on corn stalks for carbon removal
The startup used plant matter and bio-oil to sequester thousands of tons of carbon. The question now is how reliable, scalable, and economical this approach will prove.

The hype around DeepMind’s new AI model misses what’s actually cool about it
Some worry that the chatter about these tools is doing the whole field a disservice.

The dark secret behind those cute AI-generated animal images
Google Brain has revealed its own image-making AI, called Imagen. But don't expect to see anything that isn't wholesome.
Stay connected

Get the latest updates from
MIT Technology Review
Discover special offers, top stories, upcoming events, and more.