Not everyone applauds new U.S. biofuel research centers

In a move not everybody agrees with, the U.S. Department of Energy (DOE) has announced plans to invest more American taxpayer money to accelerate the cellulosic ethanol industry.

The agency has earmarked $375 million for three new Bioenergy Research Centers to be located in Oak Ridge, Tennessee; Madison, Wisconsin and near Berkeley, California.

The centers are intended to accelerate basic research in the development of cellulosic ethanol and other biofuels, using regional plants and crops. The DOE plans to fund the centers for their first five years of operation (2008-2013).

A major focus of the centers is to be on understanding how to reengineer biological processes to develop new, more efficient methods for converting the cellulose in plant material into ethanol or other fuels that serve as a substitute for gasoline.

The centers are to bring together teams of researchers from 18 of the nation’s leading universities, seven DOE national laboratories, at least one nonprofit organization and a range of private companies.

The Department’s three centers will include:

• The DOE BioEnergy Science Center led by the DOE’s Oak Ridge National Laboratory in Oak Ridge, Tennessee. Collaborators will include Georgia Institute of Technology in Atlanta, Georgia; DOE’s National Renewable Energy Laboratory in Golden, Colorado; University of Georgia in Athens, Georgia; Dartmouth College in Hanover, New Hampshire; and the University of Tennessee, in Knoxville, Tennessee.
• The DOE Great Lakes Bioenergy Research Center will be led by the University of Wisconsin in Madison, Wisconsin, in collaboration with Michigan State University in East Lansing, Michigan. Collaborators include DOE’s Pacific Northwest National Laboratory in Richland, Washington; Lucigen Corporation in Middleton, Wisconsin; University of Florida in Gainesville, Florida; DOE’s Oak Ridge National Laboratory in Oak Ridge, Tennessee; Illinois State University in Normal, Illinois; and Iowa State University in Ames, Iowa.
• The DOE Joint BioEnergy Institute will be led by DOE’s Lawrence Berkeley National Laboratory. Collaborators include Sandia National Laboratories; DOE’s Lawrence Livermore National Laboratory; University of California - Berkeley; University of California - Davis; and Stanford University in Stanford, California.

The only private company identified in the DOE's announcement is molecular biology developer Lucigen.

Well-funded cellulosic ethanol companies Abengoa, Verenium (formerly Celunol/Diversa), BlueFire Ethanol, Mascoma, Poet, Range Fuels and others were conspicuously missing from the announcement

The DOE channeled funds to many of the above earlier this year. In February, it gave hundreds of millions of dollars to six biorefinery projects (see the Cleantech Group's U.S. government granting $385M to six cellulosic ethanol plants.)

Then it gave out more in March (U.S. gov't doles out another $23m for cellulosic ethanol) and in May, it announced up to a further $200 million over five years to support the development of small scale bio-refineries that produce liquid transportation fuels such as ethanol.

Not everyone in the industry thinks the U.S. government should be investing in R&D centers.

Biodiesel developer Imperium Renewables CEO Martin Tobias called such moves "stupid."

"Generate demand in the market and the capitalism system will take care of itself. All the investments will happen," he said in an interview with the Cleantech Group earlier this year.

"The right thing for the federal government to do is to set long term policy in a way that allows people to make long term investment. When you have a 10 year stair-step of demand, an investor can look at that and say 'this is a no-brainer. I know there’s going to be a market for this, so we’re going to make the investment.'"

The petroleum industry, which itself is criticized for receiving high levels of government subsidy (see the Cleantech Group's Oil industry subsidies for dummies), is fond of pointing to the ever-increasing levels of government subsidy of biofuels.

The libertarian Cato Institute claims the heavy subsidies the ethanol industry receives are not actually intended to level the playing field, move the country closer to energy independence or reduce greenhouse gases.

"These are flimsy rationales for the real purpose of the program: to convince urban voters and their representatives to willingly hand over their money to corn farmers and the rapidly growing ranks of investors in ethanol plants," it wrote in a recent newsletter (see the Cleantech Group's Ethanol a boondoggle, says Milken.)

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