Advanced Biofuels – Increasing Domestic Economic Growth and Reducing Greenhouse Gas Emissions

Biofuels & Climate Change

Last week the Members of the Energy and Commerce Subcommittee on Energy and Environment in the House of Representatives held hearings on “The American Clean Energy and Security Act of 2009” (“ACES”). ACES is a draft climate change bill including language for a renewable electricity standard, carbon capture and sequestration, a low carbon fuel standard, development of a smart electricity grid, energy efficiency, and allowances and offsets of a cap and trade program for greenhouse gas emissions and global warming pollution reduction. This legislation, if and when it is signed into federal law, will be pivotal for the environment, the US economy and international trade among other impacts. Making sure the legislation is written correctly in order to achieve its goals is an enormous task for the Committee and for Congress as a whole.

One of the panels testifying at the hearing was titled “Green Jobs and Economic Benefits” on Wednesday, April 22 and included testimony from the American Wind Energy Association, Blue Green Alliance, the Union of Concerned Scientists, the Environmental Defense Fund and the Stockholm Environment Institute. Both Republican and Democratic Representatives expressed concern over the economic impact a cap and trade regime could have on the American economy and job creation/loss, particularly at a time when our economy is not at its strongest.

A study by Bio Economic Research Associates found that 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 and 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 807,000 by 2022.

Ensuring that any climate legislation that is signed by President Obama is technology and feedstock neutral, provides incentives for producing the lowest carbon fuels, electricity, manufacturing processes and products to allow for technologies such as advanced biofuels, is imperative in order to achieve 1) reducing greenhouse gas emissions and 2) jump starting our economy in the next great innovative areas, clean renewable energy and manufacturing. The statistics above along with the proven greenhouse gas reduction benefits of advanced biofuels (Sandia National Laboratories found that producing 60B gallons of biofuels annually could provide annual greenhouse gas savings of 260 million tons of CO2 per year, the equivalent to 45 coal-fired power plants) clearly show that advanced biofuels can and should play an important role in our goal of significant global warming pollution reduction.

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