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7
Overall Conclusions and Recommendations
Alternative liquid transportation fuels from coal and cellulosic biomass have the
potential to play an important role in helping the United States to address a variety of
issues—including energy security, supply diversification, and greenhouse-gas
emissions—with technologies that could be commercially deployable by 2020. Several
options are available for increasing domestic fuel supply while using either
thermochemical conversion of coal, biomass, or both or using biochemical conversion of
biomass. Different options have different potential supplies and greenhouse-gas effects;
the choice will most likely depend on U.S. carbon policy.
• Biomass supply—The panel projects the amount of cellulosic biomass that can
technically be produced and harvested sustainably for biochemical or thermochemical
conversion (or other energy uses) to be 550 million dry tons per year by 2020.
• Coal-to-liquid fuels by thermochemical conversion—At an estimated cost of
about $70/bbl of gasoline equivalent (that is, less than $60/bbl of oil equivalent), gasoline
and diesel can be produced from the abundant U.S. coal reserves to have life-cycle
carbon dioxide (CO2) emission similar to that of petroleum-based gasoline in 2020 or
sooner if existing thermochemical technology is combined with carbon capture and
storage (CCS). CCS, however, would have to be demonstrated on a commercial scale and
implemented by then. The supply will be limited by the amount of coal that can mined to
meet the needs of a growing coal-to-liquid fuels industry.
• Biomass-to-liquid fuels by thermochemical conversion—The estimated 550
million tons of dry biomass can be converted by thermochemical conversion to up to
about 30 billion gallons of synthetic gasoline and diesel at an estimated cost of about
$140/bbl of gasoline equivalent. The CO2 life-cycle emission will be close to zero
without CCS.
• Biomass-to-liquid fuels by biochemical conversion—The estimated 550 million
tons of dry biomass can be converted by biochemical conversion to up to about 45 billion
gallons of ethanol (equivalent on an energy basis to about 30 billion gallons of gasoline),
at about $115/bbl of gasoline equivalent. The CO2 life-cycle emission will be close to
zero.
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• Coal-and-biomass-to-liquid fuels by thermochemical conversion—The estimated
550 million tons of biomass can be combined with coal at a ratio of 40:60 (on an energy
basis) to produce up to 60 billion gallons of liquid fuels per year on a gasoline-equivalent
basis by thermochemical conversion at an average estimated cost of about $95/bbl
gasoline equivalent without CCS and $100/bbl of gasoline equivalent with CCS. The CO2
life-cycle emissions of the fuels produced without CCS would be comparable with those
of petroleum-based fuels without CCS and zero or slightly negative with CCS.
Although alternative liquid fuel technology can be deployable and supply a
substantial volume of clean fuels for U.S. transportation at a reasonable cost, it will take
more than a decade for the fuels to reach full market penetration. The supply of 30-60
billion gallons of clean fuels per year will require the design, permitting, and construction
of hundreds of conversion plants and associated fuel transportation and delivery
infrastructure.
Recommendation 7-1
Detailed scenarios of market penetration rates of biofuels, coal-to-liquid fuels, and
associated biomass and coal supply options should be developed to clarify hurdles
and challenges to achieving substantial effects on U.S. oil use and CO2 emissions.
The analysis will provide policy-makers and business leaders with the information
needed to establish enduring policies and investment plans for accelerating the
development and penetration of alternative-fuels technologies.
In thermochemical conversion of coal or combined coal and biomass to produce
transportation fuels, CCS is critical for reducing CO2 emission. The $10-15 estimated
cost of CCS used in this study’s analyses represents preliminary engineering costs.
Ultimate requirements for design, monitoring, carbon accounting procedures, liability,
and associated regulatory frameworks, are yet to be developed, and there is potential for
unanticipated delay in initiating demonstration projects and later, in licensing individual
commercial-scale projects. Uncertainty about the regulatory environment arising from
concerns of the general public and policy-makers have the potential to raise storage costs.
Hence, the full cost of CCS is difficult to determine without some commercial-scale
experience with geologic CO2 storage. Large-scale demonstration and establishment of
procedures for long-term monitoring of CCS have to be pursued aggressively in the next
few years if thermochemical conversion of biomass and coal with CCS is to be ready for
commercial deployment by 2020.
Recommendation 7-2
The federal government should continue to partner with industry and independent
researchers in an aggressive program to determine the operational procedures,
monitoring, safety, and effectiveness of commercial-scale technology for geologic
storage of CO2. Three to five commercial-scale demonstrations (each with about 1
million tonnes CO2 per year and operated for several years) should be set up within the
next 3-5 years in areas of several geologic types.
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The demonstrations should focus on site choice, permitting, monitoring, operation,
closure, and legal procedures needed to support the broad-scale application of geologic
storage of CO2. The development of needed engineering data and determination of the
full costs of geologic storage of CO2—including engineering, monitoring, and other costs
based on data developed from continuing demonstration projects—should have high
priority.
Recommendation 7-3
The government-sponsored geologic CO2 storage projects need to address issues
related to the concerns of the general public and policy-makers about geologic CO2
storage through rigorous scientific and policy analyses. As the work on geological
storage progresses, any factors that might result in public concerns and uncertainty in the
regulatory environment should be evaluated and built into the project decision-making
process because they could raise storage cost and slow projects.
The amount of cellulosic biomass that could potentially be produced sustainably
with today’s technologies and management practices is estimated to be about 400 million
dry tons per year. Production could potentially be increased to about 550 million dry tons
by 2020. The panel believes that that quantity of biomass can be produced from dedicated
energy crops, agricultural and forestry residues, and municipal solid wastes without
affecting U.S. food and fiber production or having adverse environmental effects. The
supply of cellulosic biomass is limited by the amount that can be grown and harvested in
a sustainable manner on marginal lands or agriculturally degraded lands. Improved
agricultural practices and improved plant species and cultivars will be required to
increase the sustainable production of cellulosic biomass and to achieve the full potential
of biomass-based fuels. A sustained research and development effort in increasing
productivity, improving stress tolerance, managing diseases and weeds, and improving
nutrient-use efficiency would help to improve biomass yields. To use biomass as a
resource for energy in a sustainable manner, the effect of biomass production or
harvesting on soil, water, and air quality; food, feed, and fiber production; carbon
sequestration; wildlife habitat and biodiversity; rural development; and other issues and
the resulting supply of energy have to be assessed in a holistic way so that multiple public
and private concerns are addressed simultaneously. Incentives and best agricultural
practices will probably be needed to encourage sustainable production of biomass for
biofuel production. Producers need to grow biofuel feedstocks on degraded agricultural
land to avoid direct and indirect competition with the food supply and need to minimize
land-use practices that result in substantial net greenhouse-gas emissions.
Recommendation 7-4
The federal government should support focused research and development
programs to provide the technical bases of improving agricultural practices and
biomass growth to achieve the desired increase in sustainable production of
cellulosic biomass. Focused attention should be directed toward plant breeding,
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agronomy, ecology, weed and pest science, disease management, hydrology, soil physics,
agricultural engineering, economics, regional planning, field-to-wheel biofuel systems
analysis, and related public policy.
Cellulosic ethanol is in the early stages of commercial development; a few
commercial plants are expected to begin operations in the next several years. Over the
next decade, process improvements in this generation of technology are expected to come
from evolutionary developments and knowledge gained through commercial experience
and increases in scale of operation. Incremental improvements in biochemical conversion
technologies can be expected to reduce nonfeedstock process costs by about 25 percent
by 2020 and 40 percent by 2035. Because of lack of commercial experience, costs might
be higher than estimated during initial commercialization but decrease thereafter as
experience is gained. Future improvements in cellulosic technology that entail invention
of biocatalysts and biological processes could produce fuels that supplement ethanol
production in the next 15 years. In addition to ethanol, advanced biofuels (for example,
lipids, higher alcohols, hydrocarbons, or other products that are easier to separate than
ethanol) should be investigated because they could have higher energy content, would be
less hydroscopic than ethanol, and therefore could fit more smoothly into the current
petroleum infrastructure than ethanol.
Recommendation 7-5
The federal government should ensure that there is adequate research support to
focus advances in bioengineering and the expanding biotechnologies on developing
advanced biofuels. The research should focus on advanced biosciences—genomics,
molecular biology, and genetics—and biotechnologies that could convert biomass
directly to produce lipids, higher alcohols, and hydrocarbons fuels that can be directly
integrated into the existing transportation infrastructure. The translation of those
technologies into large-scale commercial practice poses many challenges that need to be
resolved by R&D and demonstration if major effects on production of alternative liquid
fuels from renewable resources are to be realized.
Without CO2 sequestration, technologies for the indirect liquefaction of coal to
transportation fuels are commercially deployable today and can produce gasoline and
diesel at an estimated cost of about $60/bbl of gasoline equivalent, but life-cycle CO2
emission will be over twice that of petroleum-based fuels. The coal-to-liquid plant
configuration produces a concentrated stream of CO2 that has to be removed before the
fuel-synthesis step even in nonsequestration plants. Requiring carbon storage would have
a relatively small effect on cost and efficiency. Thus, with CCS, indirect liquefaction
processes can have essentially the same CO2 life-cycle emission as petroleum-based
liquid fuels, or less, and still produce fuels at an estimated cost of about $65/bbl of
gasoline equivalent.
Cogasification of biomass and coal to produce liquid fuels would have similar
CO2 life-cycle emissions as processing of the same amount of biomass and coal
separately for liquid fuels. Cogasification, however, allows a larger scale of operation
than would be possible with biomass only and reduces costs per unit capacity. However,
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penalties associated with the preprocessing of the biomass and the technical problems in
feeding biomass to high-pressure gasification systems have to be taken into account.
Successful feeding of raw biomass to high-pressure gasification systems could pose a
challenge because biomass, unlike coal, is soft and fibrous and therefore difficult to
reduce to the sizes necessary for efficient gasification. CCS has yet to be demonstrated
and implemented for this alternative.
To have thermochemical conversion of coal or coal and biomass to liquid fuels
ready for deployment by 2020, the development of coal or coal and biomass gasification
technology combined with fuel synthesis and CCS technology would have to be
accelerated and proceed simultaneously so that the technologies can be implemented as a
package. As a first step, a few coal-to-liquid plants and coal-and-biomass-to-liquid plants
could serve as sources of CO2 for a small number of CCS demonstration projects.
However, so-called capture-ready plants that vent CO2 would create liquid fuels with
higher CO2 emission per unit usable energy than petroleum-based fuels; their
commercialization should not be encouraged unless those plants are integrated with CCS
at their startup. It is critical for construction of demonstration plants integrated with CCS
to start as soon as possible so that commercial-plant and CCS design data can be
collected.
Thermochemical and biochemical conversion approaches for the production of
clean fuels both entail practical and technical challenges. The supply of biomass could
limit plant size and influence the cost of fuel products from any plant that use it as a
feedstock irrespective of the conversion approach. The supply of available biomass will
probably be limited to within 40 miles of the conversion plant because biomass is bulky,
expensive, and difficult to transport. The density of biomass (quantity per acre) will vary
considerably from region to region across the country, ranging from a supply of less than
1,000 tons/day to 10,000 tons/day. Technologies that increase the density of biomass in
the field to decrease transportation cost and logistic issues should be developed. The
density associated with such technologies as field-scale pyrolysis could facilitate its
transportation to larger-scale regional conversion facilities. Thermochemical-conversion
plants require larger capital investment than biochemical-conversion plants, so the former
benefit to a greater extent than the latter from economies of scale.
Finding 7-1
A potential optimal strategy for producing biofuels in the United States could be to
locate thermochemical conversion plants that use coal and biomass as a combined
feedstock in regions where biomass is abundant and locate biochemical-conversion
plants in regions where biomass is less concentrated. Thermochemical plants require
larger capital investment per barrel of product than biochemical-conversion plants and
thus benefit to a greater extent from economies. This strategy could maximize the use of
cellulosic biomass and minimize the costs of fuel products.
Recommendation 7-6
The U.S. Department of Energy and the U.S. Department of Agriculture should
determine the spatial distribution of potential U.S. biomass supply to provide better
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information on the potential size, location, and costs of conversion plants. The
information would allow determination of the optimal size of conversion plants for
particular locations in relation to the road network and the costs and greenhouse-gas
effects of feedstock transport. The information should also be combined with the logistics
of coal delivery to such plants to develop an optimal strategy for using U.S. biomass and
coal resources for producing sustainable biofuels.
Because ethanol cannot be transported in pipelines used for petroleum transport,
an expanded infrastructure will be required to replace gasoline with a larger proportion of
ethanol produced via biochemical conversion. Ethanol is currently transported by rail or
barges and not by pipelines, because it is corrosive in the existing infrastructure and can
damage seals, gaskets, and other equipment and induce stress-corrosion cracking in high-
stress areas. If ethanol is to be used in fuel at concentrations higher than 20 percent (for
example, E85, which is a blend of 85 percent ethanol and 15 percent gasoline), the
number of refueling stations will have to be increased to support alternative-fuel vehicles.
The transport and distribution of synthetic diesel and gasoline produced via
thermochemical conversion will be less challenging because they are compatible with the
existing infrastructure for petroleum-based fuels.
Recommendation 7-7
The U.S. Department of Energy and the biofuels industry should conduct a
comprehensive joint study to identify the infrastructure system requirements of,
research and development needs in, and challenges facing the expanding biofuels
industry. Consideration should be given to the long-term potential of truck or barge
delivery vs the potential of pipeline delivery that is needed to accommodate increasing
volumes of ethanol. The timing and role of advanced biofuels that are compatible with
the existing gasoline infrastructure should be factored into the analysis.
Finding 7-2
The deployment of alternative liquid transportation fuels aimed at diversifying the
energy portfolio, improving energy security, and reducing the environmental
footprint by 2035 would require aggressive large-scale demonstration in the next
few years and strategic planning to optimize the use of coal and biomass to produce
fuels and to integrate them into the transportation system. Given the magnitude of
U.S. liquid-fuel consumption (14 million barrels of crude oil per day in the transportation
sector) and the scale of current petroleum imports (of the petroleum used in the United
States is imported), a business-as-usual approach is insufficient to address the need to
find alternative liquid transportation fuels, particularly because development and
demonstration of technology, construction of plants, and implementation of infrastructure
require 10-20 years per cycle.
Recommendation 7-8
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The U.S. Department of Energy should partner with industry in the aggressive
development and demonstration of cellulosic-biofuel and thermochemical-
conversion technologies with carbon capture and storage to advance technology and
to address challenges identified in the commercial demonstration programs. The
current government and industry programs should be evaluated to determine their
adequacy to meet the commercialization timeline required to reduce U.S. oil use and CO2
emissions over the next decade.
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