RETECH 2012: Policy and Planes
by Josh Rathod (Advanced Biofuels USA) RETECH 2012, an international conference on the business, policy, and technology of renewable energy, took place this year in DC at the regal Omni Shoreham hotel in Washington, DC.
Under the luxurious chandeliers and in the stately presentation rooms, the addresses from the boldest and brightest in solar, wind, thermal, and chemical energy were the most impressive pieces in the hotel (and probably the most practical).
Amidst the conclusive research results and innovative designs for future technology, a common cloud covered the whole of the conference. This would be the ‘cloudy indecision’ of policy makers, and it has successfully made investors and Renewable Energy companies alike uneasy when laying business plans for the near future.
From solar to biomass businesses, this sentiment was shared across the board. Robert Cleaves, of The Biomass Power Association, related to a frustrated audience how fickle energy policy impeded the growth of a pilot stage refinery in Massachusetts and wasted tens of millions in private investments. To paraphrase Cleaves’ view, ‘the Government cannot set up an incentive program, have investors invest hundreds of millions of dollars and then pull out their Federal support.’
Not only did I share Cleaves’ remorse about this and other examples that discourage private investors, but all invested in alternative fuels are anxious to see what will happen to one of the largest federal incentives targeted at biofuels, the Renewable Fuels Standard (RFS).
The RFS, introduced in 2005, mandates the use of 36 billion gallons of renewable fuel by 2022. This policy has heavily affected the speed of alternative energy growth in the US, and relays to investors that the government has committed to making industries that support this goal successful (because there is no other option). There has been some debate in Congress on whether it should be repealed or not, and biofuels companies are emphatic that this must not happen. If the RFS were to be appealed, as hard as it is now to get funding, private investors will see even less security in the industries’ lack of Federal support.
Concern about the continuation of the RFS at RETECH ’12 inspires an unpleasant sense of déjà vu in me. One year ago, at this same conference, I remember panelists voicing these exact needs for stable policy, with the RFS, with tax credit parity and support through elongated government contracts. Back then, it seemed that some Federal hesitation might be warranted: there were no refineries past the pilot scale of production, ethanol and most alternative fuels were only available at prices above the market price of petroleum based products, and prototype tests using these fuels didn’t have a wide pool of data to make conclusive decisions.
However, now that there are multiple companies internationally that have vaulted these hurdles, achieving improved efficiency and emissions with biofuels compared to petroleum counterparts, reluctance to support alternative fuels seems foolish, archaic and truly irresponsible.
A positive message I took with me as I left the Omni Shoreham, is that the possible opportunities for alternative fuel production are only slightly short of limitless.
Once again, technological advances have created the unique opportunity for us to watch fantasy and science fiction become a thriving reality.
For instance, classically we’ve seen scientists, like Doc Brown from the Back to the Future movies, throwing banana peels and other refuse into their time-machines/space ships whenever they need to top off the tank. This year at RETECH, I met three panelists and entrepreneurs (VP Moinuddin Sarker -Natural State Research inc, CEO Robert Do – Solena Fuels, and David Hitchcock – Virent) who are using renewable feedstocks; two of them using municipal waste as their main source.
As Eddie Sturman, NASA design guru and CEO of Sturman Industries, said during his presentation on the future of engine design, what biomass companies need to do to be successful is “use waste first” to feed their refineries. One of the attending innovators I spoke of earlier, who’s immersed himself in this resource, is Dr. Robert T. Do, President and CEO of Solena Fuels, a London-based, renewable jet fuel company.
During his presentation, Dr. Do addressed two issues with US alternative fuels mentality and how his European clientele differ on these issues. First, Do challenges the reasons our federal government has stated for hesitating to commit to an alternative fuels policy. He did this by putting forth a successful company model, which uses a low-cost and plentiful feedstock (in this case, Solena is paid to dispose of hundreds of tons of waste), while solving the environmental/social problem of waste build-up and producing a price-competitive, low-emission jet fuel. Not a bad first point. The second achievement of Do’s address was a framing of how European policy has enabled Solena to thrive.
In order to enter Europe via plane, the EU Emissions Trading System requires an airline to pay an emissions tax proportionate to the flight’s carbon footprint. This, along with the International Air Transport Association’s (IATA) mandate for a carbon neutral air travel industry by 2020, has created a demand for clean burning jet fuel that can only be achieved by using petroleum alternatives. These policies, combined with European subsidies specifically for fuel produced from non-food feedstocks, enabled Solena to raise over $500 million from British Airways and other private investors with relative ease. Solena has also had the full cooperation of the city of London in using the city’s municipal waste for their new processing plant.
With similar international progress being seen in all branches of renewable energy, it’s hard not to be optimistic about a plentiful and green-hued future.
As a U.S. citizen, though, it’s equally as easy to feel discontent with how our legislative body is tackling the topic of our nation’s energy portfolio. Michael Cyrus, CEO of solar energy company, Sunlight, made a good point while presenting at one of the RETECH panels: the reason Germany has become one of the biggest names in solar power isn’t because of its constant sunshine, but because the government heavily subsidized the industry. The same point was made for China’s domination of photovoltaic cell production and it is just common sense that if policy makers truly have an interest on providing cheap, clean energy to the citizens it will be reflected in their policy.
That being said, the policy needs of the renewable energy industry are these: retain the RFS and other similar mandates, provide tax credits to companies using readily available and efficient sources, have a carbon footprint tax to make alternative energy more attractive, provide longer term contracts to lure venture capitalists out of their dens, and keep incentive programs stable. It has been done before and it can be done again.