The Future | biofuels

Bio-era (Bio Economic Research Associates), a private research and advisory firm, conducted more than two dozen studies of economic impacts of biofuels production and created a model to analyze the economic impact of increasing U.S. advanced biofuel production to 36 billion gallons per year by 2022.

“This analysis yielded the following conclusions:

Direct job creation from advanced biofuels production could reach 29,000 by 2012, rising to 94,000 by 2016 and 190,000 by 2022. Total job creation, accounting for economic multiplier effects, could reach 123,000 in 2012, 383,000 in 2016, and 807,000 by 2022.
Investments in advanced biofuels processing plants alone would reach $3.2 billion in 2012, rising to $8.5 billion in 2016, and $12.2 billion by 2022. Cumulative investment in new processing facilities between 2009 and 2022 would total more than $95 billion.
Direct economic output from the advanced biofuels industry, including capital investment, research and development, technology royalties, processing operations, feedstock production and biofuels distribution, is estimated to rise to $5.5 billion in 2012, reaching $17.4 billion in 2016, and $37 billion by 2022.
Taking into consideration the indirect and induced economic effects resulting from direct expenditures in advanced biofuels production, the total economic output effect for the U.S. economy is estimated to be $20.2 billion in 2012, $64.2 billion in 2016, and $148.7 billion in 2022.
Advanced biofuels production under the RFS scenario could reduce U.S. petroleum imports by approximately $5.5 billion in 2012, $23 billion in 2016, and nearly $70 billion by 2022. The cumulative total of avoided petroleum imports over the period 2010–2022 would exceed $350 billion.”

The expanded Renewable Fuel Standard (RFS-2) called for by the Energy Independence and Security Act of 2007 mandates that the United States increase the volume of biofuel that is blended into transportation fuel to 36 billion gallons by 2022, which is four times the 9 billion gallons in 2008. The United States energy policy aims to achieve greater energy security by reducing dependence on foreign petroleum. The RFS-2 will potentially provide economy-wide benefits, if biofuel production continues to advance with cost-reducing technology and petroleum prices continue to rise as predicted. (Citation T-7) In addition to gasoline, it applies to most transportation fuel used in the United States, including diesel fuel used in highway motor vehicles.

Another model was produced under the scenario that the U.S. biofuels production grows to 60 billion gallons by 2030, with 15 billion gallons of conventional biofuels production and 45 billion gallons of advanced biofuels production.

“This analysis concludes that:

Approximately 400,000 jobs would be directly created in the advanced biofuels industry, with total employment creation in the U.S. economy totaling 1.9 million jobs.
Direct economic output from advanced biofuels production would rise to $113 billion by 2030. The total economic output effect would be $300 billion.
Biomass feedstocks in this scenario could be provided by a mix of agricultural and forest wastes and dedicated energy crops, providing a total of 470 million dry tons of biomass by 2030 using existing crop and forest land.
The average cost of advanced biofuel production at the plant-gate in 2030 would be $1.88 including all operating costs, overhead, and capital recovery.”

Biofuels expert Jason Hill, an IonE program coordinator and resident fellow, talks about the second generation of biofuels and the potential they hold for the future of renewable energy.