 The speakers that we will be hearing from today will include Mike McAdams, who is the president of the Advanced Biofuels Association, Tom Bias, who is the CEO of Growth Energy. They're not here yet, but we will also be hearing from Joanne. You know, I can never remember how to say it. Who is the executive director of Advanced Biofuels USA, and from Greg Dolan, who is executive director of the Methanol Institute, and also from Don Fenton, who is the director for policy for the Diesel Technology Forum. And again, people are coming from all sorts of different places in terms of different kinds of technologies, thinking about different kinds of feedstocks, and that's also one of the really, I think, fascinating, interesting things that is not well understood is in terms of the breadth of work and fuels and feedstocks and technologies that really are underway in the whole biofuels, or in terms of thinking about fuels that are derived from organic or from plant matter. So the first person in, are you ready, do you think? Or do you want to go? So this is ready or not? Then our first speaker up is Mike McAdams with Advanced Biofuels Association. Thanks for the lovely traffic downtown. Delighted to be with you this morning, Senator. We're good to see you. I have the honor to be the president of Advanced Biofuels Association. We're 38 second generation companies from all over the world who are making Advanced Biofuels today. That's the first point I want you to get. The second thing I want to do this morning very quickly is I want to talk to you about how to look at biofuels across the board. So you, each of you independently can make your own decision about which biofuel you like and why and what performance criteria they'll deliver for you, the customer, the environment, and for our nation. So I have a very simple model because wherever I go and wherever I talk around the world, people get confused as to what the various parameters of biofuels are. So the first question I want you to ask yourself about biofuels is, what is the machine? What's the process we're looking at? Is it dry milk corn ethanol? Is it gasification? Is it algae as a feedstock? Is it algae as a metabolic mechanism? Is it synthetic biology? Is it acid hydrolysis? What are we talking about? What's the machine we're using? The second thing I want you to look at is what do we put in the machine? We call that a feedstock. So is it the grass? Is it corn? Is it sugar? Is it some other material? But what goes in the machine? The third thing I want you to ask is what comes out of the machine? Pretty simple, right? So what's the machine? What's going in the machine? What's coming out of the machine? In the history of transportation fuels, we've only had four molecules ever put into our transportation liquid pool. We've had alcohols. The one we know best is ethanol. Now we have advanced alcohol such as butanol, which are totally fungible and deliver high energy density performance. We've had esters. We didn't like that too much. We had apartment ethers. And we didn't like that too much. It was called methyl tertiary butyl ethylene. We had esters, which we currently refer to as the trademark term biodiesel. And lastly, we've been using for over 100 years, we've used hydrocarbons. Hydrocarbon molecules, and by definition hydrocarbons do not have an oxygen molecule attached to them. Now what's neat about that is they don't denigrate over time. And they carry a lot of energy density so you can go a long way on a few gallons. So in a perfect world, if you were designing a biofuel for you, the consumer, and this nation for an environmental performance basis, you'd look at a set of metrics. So you take those three boxes and then you add the following five metrics. You ask yourself, what is the energy density of the molecule which the fuel coming out of the process is making? Is it 124,500 BTUs, which is what gasoline is from a barrel of oil? Or is it 76,600 BTUs, which is what ethanol is from a fermentation corn mill? Because there's a difference of the value for you, the consumer. The second thing you'd ask is, what is the sustainability component? What is the environmental component of the process, the feedstock, and the fuel? Now if I had the NRDC in here, the Sierra Club, they would have one set of components they would argue are the minimum. And if I had ExxonMobil on the other side, they would argue there should be a different set of components. This is a very active, very adipate for policy makers in terms of what are the minimum metrics we should have for environmental performance. And I'll let you think about those, but what I'm trying to do is have you analytically ask yourself, what do I want and why do I want it? The third thing you'd want it to do is you'd want to make a lot of it. Because currently in the United States we use about 240 billion gallons of transportation fuels. We use 138 billion, 500 million gallons of gasoline, and right now we have about 10% ethanol in the gasoline pool to extend it. The diesel pool, depending on how you pick the distillate pool, heating oil, jet, our diesel, 64 billion, which about 38 billion gallons is used by the American Trucking Association, pretty interesting little fact to wait. So you'd want to make a lot of the fuel to be able to back out foreign oil as a nation. Another thing you want to do is if you didn't have to build a bunch of infrastructure, you'd want to have a fuel that was fungible. So you could use it in today's planes, trains, and automobiles. Well, of my 37 companies, 31 of them make a drop-in biofuel. That means you don't have to change the blender pumps, you don't have to build separate pipelines, you don't have to put separate things in the gas stations, 162,000 of them by the way. It's the same molecule as if it came out of a barrel oil through a refinery. It's the same exact molecule through this whole range of technology platforms. And lastly and most importantly, again from a consumer standpoint, you'd want it to be affordable. So when anybody walks into your office or anybody starts talking to you about a biofuel, ask them straight up, how much you're making this stuff per gallon for. And you will find right now today that corn ethanol guys have got a really good answer for that. And some of the more advanced technologies who are trying to come down the curve aren't quite there. But that'll allow you from a neutral objective standpoint to evaluate A versus B versus C versus D. And everywhere I go, people get confused with the various variables. So let me just say this in closing because I know it's one minute, okay? The advanced biofuel sector in the last four years has made tremendous strides. The synthetic biology guys, several of them have gone into private markets. They've publicly financed now. Codexus, Givo, Amherst Biotechnologies just two weeks ago, Solis-Ime. These are private monies. Some of these companies now have a market cap of over a billion dollars, which allows them to have their own equity to begin to build these first plants. In the cellulosic area and in the advanced area, we still need a partnership with the federal government. We do not have our tax code right yet. It's kind of split all over the board and it doesn't provide enough time and certainty for the commercial investment community to put the dollars needed to make those transitions to the future. There's lots of promise. There are lots of gallons. There are lots of technologies. And ultimately, you, the consumer and the environment, will benefit from them all. Thank you very much. Hi, I'm Joanne Ivansik with Advanced Biofuels USA. Advanced Biofuels USA is an educational organization where a non-profit organization, we're not a trade organization like Advanced Biofuels Association, we get each other's phone calls all the time. Like my colleagues here and the growth energy representative who isn't here just yet, we all advocate for the transition from non-renewable fossil fuels to a new world of bio-based renewable fuels used for transportation mostly, also heat and some other things. My question is why can't we buy them now? It makes a lot of sense. Mike made a great case. Why can't we buy these now? And part of the answer is you and your neighbors around the world aren't really demanding them. We don't really have the political will has not been created. And some people even work against their adoption. Advanced Biofuels USA, we believe that you and your neighbors would demand them if you knew about Advanced Biofuels and if you understood their benefits. You as representing members of Congress and Senator, you we believe need to really enhance that understanding, work on helping people understand that, provide the leadership to create and then to use that political will. Remember in the early 1960s, President Kennedy challenged the U.S. to land on the moon within the decade. Beyond his term as president, so should this administration and members of Congress look beyond the next election to rally the country to real energy independence. And challenge us, just like President Kennedy did, within the decade all vehicles in America will not use imported fossil fuel that they will run on homegrown renewables. Part of the problem is we've lost sight of the benefits that only renewable fuels can provide. For instance, oil is not used for electrical production in the U.S. So all the wonderful things that we need to do for electrical production is not really going to get us off imported fossil fuel oil. Importation of natural gas, the importation of any petroleum product, as you all know so well, has geopolitical consequences, not to mention the environmental consequences. Even importation of batteries or rare earth metals we need to look at, are we just exchanging one import for something else? Technical challenges, as Mike said, are being resolved. We can talk about biomass recalcitrance. We can talk about getting higher yields, making environmentally sound crops, growing things sustainably. Engines are being developed and fuel-injected engines can get basically the same mileage using a blend of ethanol of 30 to 50 percent. We don't have that mileage penalty that people experience using gasoline-optimized engines of the past. The technology in engine design is also moving forward. Mileage improvements in internal combustion engines are meeting and exceeding CAFE standards. At least for the next 30 to 50 years we're going to need liquid transportation fuels. They should be the cleanest, the most sustainable, and the most renewable that we can make. As Mike was talking about, we want to talk about efficiencies of converting biomass feedstock to a fuel. Ethanol is a very efficient, really good fuel, and then all of the drop-in folks that he represents need to fill in that other part of that gallon that's going to get you 50 or 60 miles on renewable fuels. Problem is, private funding is not available. In the advanced biofuel space, investors need to look beyond the next quarter, just like you all need to look beyond the next election. They need to look beyond the two to three-year exit strategy. It's not Viagra. They need to look at long-term, socially responsible, sustainable investment. How likely is that? So that's where you all come in. Government needs to invest in this. Government needs to invest in the future. They have to take up the slack from that private investment just isn't going to do, and provide for that non-monetizable value of this renewable energy. And of a lot of the renewable energies that a lot of you are talking about today, this will decrease our imports of petroleum, oil, and gas, and it will increase jobs here in the state. So what is the future if Congress doesn't create the political will and doesn't provide the leadership, increased imports, renewable technology owned by China and India and other places, not the U.S.? U.S. caught up even more in wars over resources. So let's move beyond that. Let's create an understanding of what these fuels can be, and let's create and use that political will. Great. So now we're going to move to a different fuel, hearing from Greg Dolan. Yes, methanol, the other alcohol. What the methanol is to, which serves as the global trade association for the methanol industry from offices in Alexandria and Singapore, are members of the world's leading methanol producers, distributors, and technology companies. Last year alone, the U.S. consumed about 1.75 billion gallons of methanol. Methanol is used primarily as a key chemical building block for making things like furniture, plastics, car parts. You have it in your car. We call it blue and call it windshield wash fluid as well. These downstream products create thousands of jobs across the U.S. economy with total economic impact of $3.5 billion a year. And methanol is also a reemerging energy fuel. On a global basis, about 16 billion gallons of methanol is consumed each year. There's a diverse range of feedstocks for methanol production. Most methanol is made from natural gas, but it also can be made from coal, from biomass, even waste CO2. There are technologies being developed to literally strip CO2 from the atmosphere to produce methanol. As recently as 1998, there was 3.2 billion gallons of annual methanol production capacity here in the U.S., and we were the world's largest methanol producer and consumer at that time. Today, only four plants operate in the U.S. and have a total capacity of 500 million gallons. China now holds the distinction of being the largest producer and distributor in the methanol industry. The reason we saw the domestic methanol industry decline was because of high natural gas prices, but that's changed. Recently, Methanex reopened a medicine plant in Canada. Another methanol plant is being reopened in Beaumont, Texas. So we're seeing low natural gas prices today bring the domestic methanol industry back. Last week, an MIT study identified methanol as the liquid fuel that can be most efficiently and made from natural gas. Last November, another MIT study suggested that methanol from natural gas and coal can provide a bridge to renewable methanol. They noted that thermal chemical production of methanol from biomass is both energy efficient and the technology is very mature. One ton of biomass can be used to produce 165 gallons of methanol. So if we were to look to produce 10 billion gallons of renewable methanol, it would require 60 million tons of biomass, or less than 5% of current biomass production in the United States. Several companies are now producing commercial volumes of renewable methanol or gearing up to do so. One of our member companies in the Netherlands, BioMCN, is operating a commercial plant producing 66 million gallons of biomethanol per year from crude glycerin, which is a byproduct of biodiesel production. BioMCN is now the world's largest advanced second generation biofuels producer. In Sweden, Chemrec is producing biomethanol and bioDME, another alternative fuel, from black liquor, from pulp and paper mill. Later this month, one of our member companies, Carbon Recycling, is opening its first renewable methanol plant in Iceland. They cited it next to a geothermal plant. They're using waste CO2 and renewable electricity to make renewable methanol. ExxonMobil has also developed technology for producing gasoline from methanol, the gasoline technology, or MTG, where methanol is converted to a sulfur-free gasoline with a 92 octane. This is a drop-in fuel that requires no further upgrading. You can put it right in today's car. MTG was first developed by mobile in New Zealand in the 1980s, while a commercial MTG plant using the latest exxonMobil technology opened in Shanxi Province, China in June of 2009. Talking about China, estimates vary considerably, but last year, China used as much as 2.3 billion gallons of methanol as a transportation fuel, with methanol now representing about 5% of China's transportation fuel pool. China has adopted national standards for M85, a neat methanol, and they're completing work on standards for M15. A number of provinces have also adopted their own methanol fuel standards. And now both Chinese domestic and international automakers are building cars to accommodate up to 15% methanol fuel blends, as well as introducing methanol-flex fuel vehicles in China. In Europe, the EU fuel standard allows for blending up to 3% methanol and an equal co-solvent in Trinidad. Two of our members are working with the Trinidadian government and refiners on developing a methanol fuel demonstration program. In Australia, another one of our members, Cougi Energy, is talking with government officials about methanol fuel blending in Australia. We're also seeing interest in methanol fuels in Mexico, Malaysia, Indonesia, India, Iran, Iceland, and Sweden. Now here in the U.S. Congress, the methanol suit has been a strong supporter of the Open Fuel Standard Act, which would acquire automakers to introduce ethanol-methanol gasoline-flex fuel vehicles, or other alternative fuel and technology-capable vehicles. The bill was recently introduced in the House by John Schimpkis, and Elliot Engel is HR 1687. And today methanol fuel pricing for our industry is relatively high at $1.10 a gallon on a spot market. Now when you add 15% methanol to get to M85, tax distribution costs, you're looking at a total price for M85 at the pump on a volume base of $1.84 per gallon. Methanol does have a lower energy content than gasoline, so a gasoline equivalent price for methanol today would be $3.20 a gallon. When I checked yesterday, AAA had the average unleaded retail price at $3.69 per gallon. So methanol can be a significant value. You can find a lot more on our website at methanol.org or visit us next door at the exhibit booth. Thanks. Thanks. And now we will hear from Don Denton, who is with the Diesel Technology Forum. Good morning. My name is Don Fenton, and I'm the Director of Policy for the Diesel Technology Forum. And hopefully there should be enough handouts for everybody. The Diesel Technology Forum is a nonprofit educational association that works to increase awareness about clean diesel technologies. Our nation's approach to energy policy has been driven by concerns about energy security and the need to reduce our reliance on imported oil, and certainly more recently to try and reduce our emission of greenhouse gases. There's many different ways to do that, but when we look in the transportation sector, it's been focused on improving vehicle efficiency and diversifying our transportation fuels so that we're using ones that are more domestically available that are more efficient and that are renewable. The clean diesel technology, I would argue, is uniquely positioned to help in these two areas of improving energy efficiency and using more renewable fuels while minimizing the environmental impacts of our economic activity. And I'm going to give you three reasons why today. The first is that diesel is the most energy-efficient internal combustion engine that exists. Compared with gasoline, diesel vehicles are roughly 30% more fuel efficient, which translates also into roughly 20% less CO2 emissions. So if we were to change our passenger car fleet to running more on diesel, we would have significant savings in fuel usage. In fact, for example, the EPA itself has said that if one-third of our passenger car fleet were diesel or running on diesel engines, we would save as much energy as we currently import from Saudi Arabia. It's because of this deficiency that diesel technology is used to power more than 94% of all goods movement around the world. And even because diesels are so prevalent, even small gains in energy efficiency can have huge implications for fuel savings. Just to give you an example, in the trucking industry, the U.S. trucking industry uses about 52 billion gallons of fuel each year. Fortunately, diesel trucks that are made after 2010 and beyond are virtually emissions-free, in part meeting EPA regulations, and it's been transformed significantly over the last decade. So they have virtually zero emissions of particulate matter and of nitrogen oxide. But they also are finding 5% improvement in fuel economy. And this fuel economy is continuing to improve through ongoing research that's going on with DOE, through their super truck program and private industry, with a goal to try and improve this efficiency 50% more through greater engine efficiency, through aerodynamics, light-weighting materials, idle reduction technologies. And it's estimated that the integrating these technologies, which offer even short three-year payback periods in the U.S. heavy-duty long-haul fleet over the next 10 years, could save 3 billion gallons of fuel. Okay, I mentioned three reasons. Second reason is strong fuel efficiency performance can even be further enhanced by adding hybridization technologies. If you apply a hybrid drivetrain to medium and heavy-duty trucks, and this is already happening, and these are being used in, there's over 4,000 in the United States right now, but using heavy-duty hybrid technology, you can improve fuel economy anywhere from 20% to 50%. And this is, you also get a corresponding reduction in greenhouse gas emissions. And not only are these hybrid technologies important for the environment and for fuel savings, it's also important for our economy, because this is an area where the United States is still a leader, a technology leader. Third reason, and this gets to what my preceding colleagues had talked about, and this is why I'm good as the last speaker here, because I'm transitioning you into the next section, which is on fuel efficiency, which I've talked a lot about. But also the third reason is that diesel is a great platform for using renewable fuels made from a variety of feedstocks. Diesel, the first diesel engine actually ran on peanut oil, and so it's a natural to use renewable fuels. Biodiesel blends of B20 are commonly used today in long-haul trucks and buses and other heavy-duty vehicles, and that's important because not only does that biodiesel replace, displace 20% of the petroleum fuel, but it also reduces CO2 emissions by 15%. And then you get to the next generation renewable diesel fuels that Mike and Joanne have talked about, and those can bring between a 60% and 80% reduction in greenhouse gas emissions. And what's maybe even more important, which is what was mentioned before, is that these are drop-in fuels, so that they will be used more readily, more easily, and getting out to all folks across the country who are using heavy-duty and light-duty diesel vehicles. And these are going to be, they're already available, but they're growing significantly, and they'll be really available in commercial quantities in the not-too-distant future. So with that, thank you very much. Since our final speaker has not arrived, we do have a little bit of time for a couple questions if there aren't any for our panel. Have any questions? Go ahead. There we go. I'm sorry, the one other thing I forgot to mention is that we are hosting an event tomorrow in B338 in the Rayburn House Office Building, and it's going to talk about reducing fuel consumption on the road and at the job site. So it's a luncheon briefing from 12 to 130, B338 in the Rayburn Building. So I invite you to come to that. We're also in the exhibit hall, and we have a flyer there about it as well. Thank you. That's fine. We have a lot of exhibits, and so we encourage you to visit them also. Any other questions? Okay, one in the back. I just wanted to ask a lot of controversy about the total life cycle carbon cost of biofuels. Is there a definitive report that you recommend that outlines the relative life cycle cost? I would really encourage you to directly call the EPA. He's going to hate me for doing this, and he talked to Vince Combreco, who works for Sarah Dunham. The only federal law on the books today that regulates greenhouse gases is the renewable fuel standard which assigns reduction requirements, including indirect land use, for every single biofuel made in the United States. So if you're corn ethanol and you're building a new plant, you have to deliver a full-range life cycle reduction of 20%, including indirect land use. If you're an advanced biofuel, you have a 50% reduction, a biomass-based diesel, a 50% reduction, or to qualify for the cellulosic pool, a 60% reduction. These are bright lines. If you do not hit the standards, you default to a lower pool. The difference between the RIN credit, which is incredibly important to the people in the commercial markets, of ethanol right now, a RIN credit for ethanol, because we produce so much, it was about 65 cents a gallon. A RIN credit for the cellulosic pool is about $1.30. Now, when you multiply that times the energy density and equivalency provisions in the RFS-2, now you can see there's a real significant federal boost for all biofuels under the RFS-2, which is why five of the major biofuels associations, including RFS, ABFA, Bio, all came out and said, the one thing that we would advocate Congress not to do this year, is tinker with the RFS. It's the one program, the most important program for biofuels in the United States, and it's the only program that regulates greenhouse gases on the federal books. Any advance biofuels USA website, if you put in as a word search, food and fuel, or if you go down and click on the category sustainability, we have links to articles and studies from a variety of perspectives on that. The latest stuff out of the World Bank and out of what FAO have indicated that biofuel, production of biofuels has not had nearly the impact that the general public seems to believe and it has and a lot of the cost of food is due to the cost of transportation which gets to the cost of crude oil, that also impacts the cost of your fertilizer, the cost of your packaging, and all of that needs to also be looked at when you're talking about how much do I pay at the grocery store, how much does anybody pay anywhere in the world. I think we need to understand that every piece of land in the world although we might want to think as good hearted people that every piece of land that could possibly be used for growing food is, otherwise how could we let people go hungry. But I think we need to realize that it's not the case and that land use laws culture cultural norms are also a big part of what is produced high and why and who gets paid what for it. I think there are a whole variety of studies that are being done internationally and by a variety of academic institutions here in the US as well as by federal agencies and obviously not all land is created equal here or in other places in terms of the kinds of use and we should also remember how much acreage is gobbled up in this country every year in terms of urban and suburban development which takes a lot of prime agricultural land and so it's something that we need to think about a very holistic way. So I always feel like I'm a train conductor kind of rushing everybody through this but hopefully you've all gained something and you will follow up with our speakers. There's a wealth of information. There are a lot of different approaches and so we really encourage you to pursue all of this and thank you all very very much and we're just going to move right to the next panel on energy efficiency.