Study: Cellulosic ethanol a long shot
In March, the firm released a paper, titled "A Review of the Energy Independence & Security Act of 2007, and Its Impact on U.S. Grain and Oilseeds Production," which assessed whether the requirements of the act could be met and the impact of those requirements. Jim Murphy, principle author of the paper, said the review concluded that cellulosic ethanol is "a dead duck" and has little chance of becoming a major contributor to the biofuels market. "While there's high hopes for cellulosic ethanol, it's going to develop much more slowly than people think," he said.
The EISA's impact on grain and oilseed production was assessed in three time frames: short term (2008 to 2010), medium term (2011 to 2015) and long term (2016 to 2022). Murphy noted that only two cellulosic ethanol pilot plants are operating in the United States, and Range Biofuels is the only other company that has secured the necessary funding to move forward with a larger cellulosic ethanol plant. "Other developers will have to get their financing in place pretty quickly for there to be any chance of meeting the 2010 EISA cellulosic target of 100 million gallons," he said, adding that the short-term goals set by the EISA are virtually unattainable.
Medium- and long-term outlooks also failed to provide positive results for cellulosic ethanol. "It becomes a more chronic situation as time goes on," Murphy said. "The law mandates blending of 16 billion gallons (of cellulosic ethanol) by 2022. Our estimate is that, at best, we're going to reach somewhere around 3 billion."
Murphy suggested that legislation after 2015 may be more favorable toward cellulosic ethanol and could prompt an increase in production after 2020. He also noted that EISA mandates are for consumption, not production. Because of that, imports could play a substantially large part in U.S. biofuels consumption in the future.