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Advanced Biofuels: Why We Want Them. How We Get Them.
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Transcript of Advanced Biofuels: Why We Want Them. How We Get Them.
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Amy DavisJuly15,2015
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Agenda
WhoisNovozymes?
WhatistheRenewableFuelStandard?
Whydowehaveit?
Wherearewenow?
Casestudy:USandBrazil
WhereareUSinvestmentsinbiofuelsnow?
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Introducing nature's problem solvers
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Everywhere you need us
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Novozymes in numbers
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Novozymes in 2014
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Novozymes’ world map
Our biological answers, near you
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What is the Renewable Fuel Standard?
• Passedin2005aspartoftheEnergyPolicyAct,expandedin2007aspartofEnergyIndependenceandSecurityAct
• Requiresobligatedpartiestoblendupto36Bgallonsofrenewablefuelby2022
• Setslifecyclegreenhousegasemissionreductionrequirementsforqualifyingrenewablefuels–firstandonlyfederalclimatemitigationpolicyintheUS
• EPAconductsannualrulemakingsettingobligationsandcanwaivestandardduetoeconomicharmorlackofsupplyofrenewablefuel
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Why do we have it?
Reduce dependence on foreign sources
of crude oil.
Reduced price of domestic
transportation fuels.
Reduced GHG
emissions.
Increased U.S. farm income,
subsidy reduction.
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Where are we now?
• TheUnitedStatesconsumed18.6millionbarrelsperday(MMbd)ofpetroleumproductsduring2012,makingustheworld'slargestpetroleumconsumer
• TheUnitedStatesimported11.0MMbdofcrudeoilandrefinedpetroleumproductsin2012
• TheUnitedStatesreliedonnetimports(importsminusexports)forabout40%ofthepetroleum(crudeoilandpetroleumproducts)thatweconsumedin2012
• U.S.dependenceonimportedoilhasdeclinedsincepeakingin2005
Theeconomicdownturnafterthefinancialcrisisof2008
Improvementsinefficiency
Changesinconsumerbehavior
Patternsofeconomicgrowth
Gainsindomesticproductionofcrudeoilandnaturalgas
Increaseduseofdomesticbiofuels(ethanolandbiodiesel)
o Over200plantsinoperationin29states
o Morethan15Bgallonsofcapacity,512millionbarrelsofcrudeoil—morethantheamountofoilimportedannuallyfromSaudiArabia,theRFScallsfor20Bmoregallons
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Case study
1973US
No immediate policy reaction to 1973
U.S. approach to energy policy has been sporadic and piecemeal reacting to calm and crisis
1970s - Price controls, reduced speed limit, rationing
1980s - substantial deregulation of the energy sector
Great rush of global investment in alternative fuels in US
Petroleum (crude and products) import dependence peaked at 60% in 2005, but was just 28% in 2014.
Petroleum import dependence would have been 35% without 14.3 bg of ethanol in 2014.
Fighting over fictional 10% “blend wall”
BrazilImmediate priority = Domestic biofuel and oil production, steady 30+ year policy put in place and maintained
Majority flex fuel cars
• Seriesofenergycrisesbetween1967and1979
• Mostsignificantstartedin1973• BoycottAmericaandpunishthewest
inresponsetosupportforIsraelintheYomKippurwaragainstEgypt
• Followingthiscrisis,theUSandBrazilbothworkedatdecreasingtheirenergydependenceonforeignoil
• Thedivergentpolicydecisionshaveproducedvastlydifferentresults
• OrganizationofArabPetroleumExportingCountries(OAPEC)oilproducersimposedanembargo
• Priceofcrudequadrupled,notb/cofsupply/demand,political
• PresidentRichardNixon:“[l]etthisbeournationalgoal:Attheendofthisdecade,intheyear1980,theUnitedStateswillnotbedependentonanyothercountryfortheenergyweneedtoprovideourjobs,toheatourhomes,andtokeepourtransportationmoving.”
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Where are US investments in biofuels now?
• AglobalrecessionandnearconstantinstabilitysurroundingtheRFShasgreatlyimpactedinvestmentinadvancedandcellulosicbiofuels.
• ThethreatofCongressionalaction(hearings,repealandreformamendmentsandstandalonebills)arehardtoexplaininboardroomsandinvestormeetings.
• Proposedmismanagementoftheannualvolumeobligationsettingsincelate2013hasturnedthefutureprospectsofanadvancedbiofuelmarketplaceintheUStoacapped,shrinkingandsaturatedmarketbytakingintoaccountwhetherornottheoilindustryhasmadeinvestmentstosupplyrenewablefuelstotheUSconsumer.
• NoinvestmenthasmaterializedforanadvancedbiofuelfacilityintheUSsincetheEPAfirstleakedit’snewproposedmethodologyfortheRFS.
• EPAhasbeenunabletofinalizeanyrulewiththisnewmethodologysincefirstattemptingin2013.
• EPAhasnowproposedajointrulemakingfor2014,2015,and2016usingthesameflawedmethodologythathassentinvestmentoutsidetheUSforadvancedbiofuels.WearecurrentlyinthecommentperiodforthatproposalandhavebeentoldtoexpectafinalrulebyNovember30,2015.
• ThebiofuelindustrywillworkwithEPAonthisproposal,wedonotsupportanylegislativeactiononthepolicy.Weneedstabilitymorethananythingelseatthisstageofcommercialdevelopment.