MODERATOR, SEC. TOM DORR: Good morning. My name is Tom Dorr. I'm the under secretary for Rural Development here at the Department of Agriculture. I'm delighted that you could all join us. We are privileged this morning to be joined by both Secretary of Agriculture Ed Schafer, my boss, and his colleague and our good friend Secretary of Energy Sam Bodman, who collectively today will be presenting the National Biomass Action Plan.
Our time is quite limited this morning, so I'm going to be brief, but I would like to acknowledge a couple of other groups of people here today who are our colleagues from an innumerable number of agencies across the government who have collaborated with us in this effort, as well as our partners in the private sector from the Technical Advisory Committee, the TAC if you may, who have also made this possible. And I'd like to welcome these two groups particularly.
You know, I'd also like to take just a second this morning to acknowledge that I think what we're doing this morning should also be viewed a bit as a celebration. You know, 30 years ago this industry of biofuels was merely a gleam in the eyes of some farmers. Today all of you collectively in one manner or another have facilitated this build-out of a new energy industry, at times one that is very vibrant and at other times one that clearly struggles. But today we are clearly reaching a level of maturity that is indicated by the significance of the Bush Administration's commitment to this energy and national security component of our energy industry.
And I am of the view that this commitment will not be undone nor be significantly slowed over the long run. In the seven years that I've had the privilege of serving in Washington, this collaborative effort is probably the greatest example of constructive interagency cooperation that I've had the opportunity to witness. So to my deputy Doug Faulkner -- Doug stand up here in front - Doug has shouldered much of the burden both at USDA and prior to his service here as both the deputy assistant secretary for Energy Efficiency and Renewable Energy as well as the acting assistant secretary. And Doug has done a terrific job in this front.
In addition I would like to take just a moment to point out a gentleman who has become a good friend of mine, a colleague and peer in making this also a very strong success story - Andy Karsner. Andy, stand up. Andy left government service at the end of August, but there has been no greater advocate and focal point for the issue of renewable energy in this administration than Andy Karsner.
And then I'd like to make one final acknowledgement before we get into the program, and that is that this effort actually began eight years ago at the end of the previous administration in the form of a bipartisan initiative sponsored by both Senators Lugar and Harkin. The senators were invited but were not able to join us today, but they deserve a great deal of credit as well.
And yet I would be remiss if I did not mention all the members of Congress from the Midwest who have been heavily involved and engaged in this industry as well.
And finally, the one senator that I dare not forget, my other home state senator, Chuck Grassley, who I think was born with a can of ethanol in his hand.
But I am proud of the work this administration has done to advance renewable energy. The plan you are going to see today is the result of two years of work by a rejuvenated Federal Biomass Board. This will give our successors a solid foundation for carrying this mission ahead in the years to come.
And no one, absolutely no one has been a greater advocate for biofuels and biomass than my boss, Secretary of Agriculture Ed Schafer. He has been tireless in this effort, not only as secretary but also as a governor and a private sector person. So it is now a very great pleasure of mine to introduce Secretary Schafer to present the National Biomass Action Plan.
Secretary Schafer.
[Applause]
SEC. ED SCHAFER: Thank you. Thank you, Tom. Thanks for the great introduction. Thank you for the warm welcome this morning. My thanks to Secretary Bodman and Acting Secretary John Mizrock for joining us today. And welcome to all here this morning on USDA's patio. It's a great day in America, and it's great to have you all with us today.
We're here to share another important step in building a new energy future for our nation, a future that relies more on alternative energy sources and less on imported oil. The National Biofuels Action Plan we are releasing today is a product of more than a year of work with people of the United Sates Department of Agriculture, the Department of Energy, the Environmental Protection Agency, and the Departments of Transportation, Treasury, Defense, Interior, Commerce, the National Science Foundation, the President's Office of Science and Technology Policy, and the Federal Environmental Executive.
It represents the kind of essential behind-the-scenes work in government that must be done to reshape our national energy policy. I guess with the announcement today it's not so much behind the scenes anymore. But the Biofuels Action Plan identifies the obstacles and the barriers to increased biofuels production and breaks them down into manageable chunks. How we are going to grow and produce the feedstocks of the future, how to get those feedstocks we need from the farm and the forest to the refinery, how to convert them into fuel once they arrive, and how to get that fuel to places where the consumers can purchase it.
And it shows the way forward in each of those arenas. The plan also charges us to build new partnerships and search out solutions that are economically and environmentally sustainable. When it comes to biofuels production, we do have one advantage: Congress and President Bush have let us know where we need to end up. The Renewable Fuels Standard set out in last year's Energy Bill calls for this nation to produce 36 billion gallons of biofuels by the year 2022.
Now this year we expect to produce about 9 billion gallons of ethanol here in the United States, essentially based on corn starch. This is three times the amounts that we produced just five years ago. But now we need to quadruple that level of biofuel production to create a more diverse set of feedstocks to draw upon. To succeed in this effort we must marshal the scientific and technical resources of the federal government and also of all the private sector folks, many of whom are here with us today. And we need to help in that partnership as well.
Not one department, not even the entire federal government nor the private sector companies in the biofuels arena can get this job done on its own. The Renewable Fuels Standard gives us some pretty clear guidelines on what needs to be done. It caps our production of corn-based ethanol at 15 billion gallons a year, and it requires us to get to the rest of the way to the 36 billion gallon goal with advanced biofuels as those that rely on cellulosic feedstocks or biomass production.
And this means that we must move forward with the next generation of biofuels made from waste materials like crop residues and woody biomass, dedicated energy crops also like switch grass, poplar trees and algae and maybe even orange peels one day. We all know that there are still logistical and infrastructure challenges to be overcome. And scientific and technological barriers are there that must be broken down. This plan is not the final word on how to build our biofuels industry, but it gives us a very useful roadmap of what must be done to overcome the challenges and an outline of the more detailed studies that we will need to generate to get there.
Under the leadership of Tom Dorr here at USDA and Andy Carsner and John Mizrock at DOE, the Biomass Research and Development Board has been giving people throughout the federal government some very challenging assignments. The board has called for a series of interagency reports on feedstocks, on conversion technologies, and on distribution infrastructure.
The first of these, which we expect to be ready for release in just a few weeks, is being prepared by an interagency group led by USDA's Economic Research Service, and it will look at the economics of different farm and forest feedstocks.
The 2008 Farm Bill, as you know, provided a very important boost to renewable energy by committing $1 billion in funds over the next five years to support research and development, particularly of cellulosic fuels. Getting those funds out of here and working in the field is one of the highest Farm Bill implementation priorities that we have here at USDA.
One of the best new programs in that group will provide loan guarantees of up to $250 million to bio-refineries that pioneer new cellulosic production technologies. We are working on implementing that program right now, and we'll have more to say about that in the weeks ahead. So stay tuned for that effort.
And with that little teaser, I will now turn the podium back to John Mizrock. Thank you.
[Applause]
SEC. JOHN MIZROCK: Thank you very much, Secretary Schafer. Good morning. I'm John Mizrock. I'm the acting assistant secretary for Energy Efficiency and Renewable Energy at the Department of Energy. And it has been my distinct pleasure really to work with the Biomass Research and Development Board over about the past 18 months to define the federal role in accelerating next generation biofuels development and deployment. As you've heard, former Assistant Secretary Andy Carsner and I got together with Tom Dorr and Tom's deputy Doug Faulkner to assemble and work with this fantastic group of board members, many of whom are here today, across 10 federal departments and agencies, to work on this serious issue.
So I'm proud to be here today with these great people because the report and the work done under it represent a milestone of our efforts. But I'm also especially proud to be here today to introduce Secretary Bodman. Secretary Bodman's support has made possible much of our progress today. In his leadership with the Department of Energy he combines really a unique background as a scientist, a professor, a successful businessman, venture capitalist, and an outstanding public servant. He has leant an urgency to this problem we face, but he's also brought a focus and a wisdom to it. So he's been a role model of leadership at the Department of Energy and the federal government. So I'm very proud to introduce the Secretary of Energy Sam Bodman.
[Applause]
SEC. SAM BODMAN: Thank you, John. It's very good to be here with my friend Tom Dorr and in particular with Secretary Schafer. You know, our two departments' collaboration on biofuel development, it really began years ago. And it's only strengthened over time in large measure due to his personal attention and leadership.
I'm pleased to be here with all of you to unveil the National Biofuels Action Plan, which as Secretary Schafer just said is a strategic blueprint laying out the way to meet the President's goal of meaningful biofuels production by the year 2022, and to do it in a cost-effective, environmentally responsible way that utilizes a science-based approach to ensure the next generation of biofuels which will be made primarily from feedstocks -- and they will be made primarily outside the food supply. In other words, we expect those feedstocks to be produced sustainably.
Two years ago the President challenged America to end its addiction to oil. Through his 20 and 10 Plan, he has asked us to reduce our gasoline consumption by 20 percent in 10 years. While that sounds like quite a tall order, the reality is quite different. We can, and in fact we are, displacing some of the transportation fuels used every day with alternative fuels like corn-based ethanol and biodiesel. The challenge is to find ways to go farther and to go even faster than we have gone in the past.
The simple fact is that we cannot sustain the level of biofuels production needed to meet our future energy requirements if we continue to rely solely on ethanol derived from foodstocks like corn. We must progress to the next level. That means we must accelerate the development and deployment of the next generation of biofuels, fuels made from cellulose or from algae or from other nonfood products, as well as fuels compatible with our existing energy infrastructure including renewable diesel, green gasoline, and bio-butanol.
The reality is that world energy demand, according to the International Energy Agency, the IEA, will increase by about 50 percent by the year 2030. To ensure America's energy security at the time of 2030 or about that time, we must have a robust and a vibrant and sustainable next generation biofuels industry thriving here in the United States. This is why the National Biofuels Action Plan is so important. It shows us the way to enhance our energy security and to prepare for tomorrow's energy challenges.
Today we are issuing this blueprint as we continue to take direct action through a three-pronged approach that engages the Department of Energy's network of national laboratories. It also engages the academic community and the private sector to advance biofuels deployment and development.
In addition to the Biofuels Action Plan, we are releasing today the first report on 'The Potential Impacts of Intermediate Ethanol Blends on Conventional Vehicles and Other Gasoline Engines.' Currently U.S. consumers can use E-10; that is to say, gasoline that is blended with 10 percent ethanol. However, the E-10 market will likely reach saturation in a few years. There are some parts of the United States, like the Midwest, where that is already occurring.
Our report, developed jointly by the Department of Energy's National Renewable Energy Laboratory in Colorado and the Oak Ridge National Laboratory in Tennessee, provides the results of tests using E-15 and E-20 on 13 popular late-model vehicles as well as 28 small, non-road engines including lawn equipment and generators.
The initial data indicates that regulated emissions and exhaust temperatures in cars running on E-15 and E-20 do not change substantially from those running on currently available fuels. While additional studies are needed on a wider range of vehicles and engines, these data in my judgment are very encouraging.
Another significant development for biofuels is the agreement that I am announcing today with POET, LLC, which is a large ethanol production company, and our agreement is to construct and operate a commercial scale biorefinery that will be collocated at the Emmetsburg, Iowa, ethanol plant that will use corn cobs and eventually corn fiber or corn stover to increase plant production of ethanol by 25 million gallons per year.
This is only the second major cellulosic ethanol biorefinery construction award, and it is one of the largest that the department has ever made in renewable energy. In total, the department's investment in this cost-shared project approaches $80 million out of a total expected project cost of nearly $200 million.
Finally, the Department of Energy is announcing an investment of up to $7 million in five cost-shared advanced biofuels projects that are seeking to develop technologies to convert nonfood feedstocks into stabilized pyrolysis oil. Now you might ask what pyrolysis oil is; at least I did when I visited with my colleagues. I found that it is a bio-oil closely resembling a combination of gasoline and diesel fuel that can be used to produce cost-effective, greenhouse-gas-neutral, renewable fuels in existing petroleum refineries. The five projects undertaken in partnership with the private sector will be located at ULP, which is a Honeywell company. ULP is, I have to tell you, a very famous company in the history of chemical engineering, my particular field. It also will be located at Virginia Polytechnic Institute and State University, at Iowa State University, at RTI International, as well as the University of Massachusetts at Amherst.
These announcements are part of more than $1 billion that the Department of Energy has invested since the beginning of 2007 to develop a sustainable next-generation biofuels industry. Our investments support the development of integrated bio-refineries, efforts to advance biomass conversion technologies, and research and development on a wide range of cellulosic feedstocks including those that move beyond ethanol.
For example, we have committed close to $400 million over five years to establish and operate three cutting edge bio-energy research centers where the great strides that we've made in human genomics are now being applied to our energy challenges. And I am pleased to tell you that after only about one year in operation these centers are already showing very significant signs of progress.
All of these investments are designed to make sustainable, mass-produced, commercially available, advanced biofuels a reality for the American consumer. In my judgment, America has begun its journey toward meeting these goals. We can achieve the production of cost-effective, environmentally responsible, renewable and sustainable transportation fuels on a mass scale. The National Biofuels Action Plan that Secretary Schafer just described is a critically important step in that direction.
Again I would like to conclude this brief presentation this morning by thanking all of you for joining us. I believe this is truly an extraordinary day in which we've had the opportunity to announce the culmination of a lot of work on the National Biomass Action Plan, the interim report that we've received on the blended ethanol issues, along with the announcement of the POET facility.
I do know that the secretaries have a very limited schedule, but they have agreed to take some of your questions from the press up here off to the left side of the stage when we're done here.
So again, thanks to both the secretaries for this event, and thank you all for joining us.
