March 02, 2010
On Biofuels and Their Infrastructure
There is a common refrain (maybe more common in D.C. than elsewhere) that there is a chicken and egg problem with some alternative energy varieties and their infrastructure. This is often cited in reference to the slow emergence of hydrogen and electric vehicles and more widespread use of biofuels, along with their requisite fueling stations. If you build it they will come, so the argument goes.
Fueling stations are of course a necessary prerequisite, but progress will also involve confronting logistical challenges beyond the availability of infrastructure. We’re not just talking fueling stations or pumps here, but also various aspects of production and blending, the time it takes to offload fuel from trains when transported by those means, and storage capacity, among other factors. We had the luck to speak with an expert who worked on this (pdf) report, “Status and Issues for Ethanol (E85) in the United States,” at the National Renewable Energy Lab (NREL) last week in Colorado. It offers a good overview of where things are happening, what is not happening, what the technical and policy issues are and why tackling these issues can be challenging.
For example, it turns out that fueling stations offering E85 have more than doubled in about the past three years. But numbers are still low, and the stars must still be aligned for distributing, storing (when possible) and pumping biofuel in order to allow any major increase in biofuel use in this country. The distribution of vehicles also needs to align roughly with availability of the fuel. The report notes that today most E85 fueling stations are in the Midwest, in proximity to production facilities: “E85 station locations tend to be close to ethanol supply areas, instead of being driven by demand (where FFVs [flexible fuel vehicles] are located).”
This month’s EPA rules updating the Renewable Fuel Standard program set a goal of “E85 offered at one-third of refueling stations by 2025.” If you’re feeling bold, see the Final Regulatory Impact Analysis, a very large pdf, which also states the following: “we accounted for the fact that, as an alternative fuel, it is unlikely that E85 will ever be available nationwide…the greatest access we anticipate FFV owners will have to E85, is one-in-four stations offering the fuel. And that will likely only be in select areas of the country.”
Are we going to be saying the same about the infrastructure needed for more advanced biofuels once they are beyond the R&D phase? Is nationwide availability even important? Standardization has its benefits to be sure, but some vulnerabilities involving other energy sources also stem in part from the fact that so many entities demand the same products that rely on the same infrastructure and logistical systems. Maybe some regionalization is ok – and maybe not. This is a debate I hear stirring more and more, often in the context of providing reasons not to invest in alternative fuels and their infrastructure. I’m curious what all you readers think about this. And in the meantime, I am a little less worried knowing that the good folks at NREL are providing useful analyses on the issue.