Testimony of William C. Holmberg, President, Biorefiner, before the Environment and Public Works Committee of the United States Senate in the State of New Hampshire on Monday, April 27, 2001

 

My name is Bill Holmberg. I am a resident of Bow, New Hampshire. I have been involved in environmental issues, renewable energy, as well as biofuels and other transportation fuels, since 1971. My involvement includes government service at EPA, FEO/FEA and DOE, president of energy-oriented associations, and start up companies promoting the biorefinery concept in the private sector.

 

Thank you Mr. Chairman for the opportunity to present thoughts which I believe are of importance to Northern New England and the nation in terms of energy, the environment and economic well being. First, I want to congratulate you for your position on ANWAR. I believe it wise, and will briefly explain why later in this testimony. I also want to thank you for attending and speaking at the Environmental Inaugural Ball in the nation’s capital this past January. You helped make the Ball a great success.

 

The primary issue before you today is the fate of MTBE. I agree that MTBE should be banned and phased out of the gasoline pool. But, I ask that you consider a phase out schedule that accommodates the reality of the problem and the economic consequence of such action. May I also suggest that leaving the decision up to the states has merit because of the different perceptions of the problem in the separate states? This is primarily due to the status of leaking underground storage tanks, the movement of ground water and its relationship to the aquifer, the amount of MTBE used in a state, and the focus of public relations attacks by those benefiting from the demise of MTBE.  I appreciate the distribution problems of providing different fuel formulations to individual states; but, perhaps the states in a region (New England, for example) could coalesce in the best interests of the environment, water quality, and the economics of the region. 

 

It is interesting to note that MTBE is still widely used in many parts of the country, but complaints have subsided appreciably. Again, dealing with the underground storage tank problem is likely the primary reason. In addition, I believe the relaxation of the public relations attack is also a contributing factor. I ask that you consider the possibility that the forces that covertly orchestrated those attacks are the same forces that failed to support your MTBE legislation that was successfully reported out of the Environment and Public Works Committee during the last Congress. That failure is geared to the reality that these forces are determined to control the ethanol market, and have little interest in seeing the industry expand into the routine use of cellulosic biomass as a feedstock to produce ethanol.

 

The advance of the biorefinery concept (the conversion of cellulosic biomass to biofuels, bioenergy and biochemicals) is of vital importance to the Northern New England states. These state essentially have little significant fossil fuel reserves  -- oil, gas or coal. They have, however, vast reserves of cellulosic biomass – agriculture and forestry residues, rights-of-way, park, yard and garden trimmings, and the clean biomass portion of municipal wastes that go to landfills. Those biomass reserves are renewable and represent the sustainable economic and energy security of New Hampshire, Vermont and Maine, other New England states, and large regions elsewhere in the nation.

 

Mr. Chairman, two dollar gasoline prices, and perhaps higher, are being predicted for this summer. This situation could only worsen in future years. But, a reasonable transition to an ever increasing reliance on biofuels made from feed grains and cellulosic biomass as well as Biodiesel made from oil-seed, animal fats, tallow and used cooking oil, will slow the rise in cost of fossil-based transportation fuels and also bring healthy, new competition to the marketplace and a new industrial base to the region.

 

This long sought-after transition requires action on two fronts:

 

·       A steadily expanding market for biofuels. The Renewable Fuels Standard that was included in your legislation last year, S. 2962, as reported out of your Committee, can best achieve this goal. I seek your consideration of again including that provision in your new legislation, or as an alternative, cosponsoring S.670, the Renewable Fuels Act of 2001.

·       New, “out-of-the box” thinking and action to commercialize the emerging biorefinery concept through concentrated, aggressive and coordinated government actions at the federal and state levels. Studies on the value of including biomass as feedstocks to produce biofuels, bioenergy and biochemicals, and accompanying research, have been going on for more than half a century. Hundreds of millions of dollars of public funds have been spent. The American Petroleum Institute sites a number in excess of $7 billion. This year alone, the President’s budget calls for well over a hundred million dollars to be spent by DOE and USDA. Only biopower (electricity and thermal energy) have achieved a modest level of success. There are increasing levels of biochemicals entering the marketplace, but this technology was well developed before the advent of petrochemical feedstocks. The first gallon of cellulosic biomass ethanol has yet to enter the marketplace.

 

The nation needs a “man on the moon” type priority approach to truly launch the Biorefinery concept. The Northern New England States need a cooperative and aggressive program to take advantage of their most promising energy resource -- biomass – and to put it to work to the benefit of New Hampshire, Vermont and Maine. The technologies to launch the process are in hand today. The bureaucratic and political will to harness these technologies come up short. I seek your support for a “man on the moon” approach to overcome these shortcomings and I would be pleased to work with your staff to develop a plan. Perhaps a good place to start this planning is in the Conservation Center of the Society for the Protection of New Hampshire Forests. You saw their innovative approach to energy on Monday. Thank you for speaking at their Earth Day event.

 

 

In terms of ANWAR -- given available data, it is possible to calculate that, with passage of last year’s S. 2962, or this year’s S.670, there will be more gallons of finished fuel entering the transportation market by 2010 than if exploratory and production drilling at ANWAR proceeds.

 

Furthermore, if the increased ethanol production were reacted with isobutylene to produce ethyl tertiary butyl ether (ETBE), the amount of non-petroleum based automotive fuels would be twice the amount of finished product that could be produced at ANWAR. ETBE is being used in Europe in increasingly large volumes as a clean-burning gasoline additive with great success, with no reported problems.  In addition, butane, the feedstock used to produce isobutylene, is in surplus supply because of the need to reduce the vapor pressure of gasoline sold in several parts of the nation during summer months. The phase out of MTBE (also containing isobutylene) will exacerbate that surplus, as will the increased production of natural gas that frequently contains natural gas liquids that include butanes.

 

Therefore, with the passage of S.670, the need for oil from ANWAR is marginalized.

Add ETBE to the process and the need for ANWAR is further diminished.

 

You have expressed concern over the ozone forming potential of ethanol in

gasoline. This concern is well founded in ozone non-attainment areas during the summer

months. This is caused by the increased vapor pressure of the fuel when ethanol is added

to gasoline in small amounts. There are two available solutions to the problem and two on

the horizon:

 

gasoline. This is done in the Chicago/Milwaukee region.

 

The solutions to the automotive fuel problems are in hand. Aggressive, concerted and

regional actions are needed to release them into full commercialization.

 

You expressed concern about the importation of ethanol into states like New Hampshire.

Two considerations:

 

 

 

I am taking advantage of your offer to modify my testimony based on what we learned or

heard at your hearing. Several points:

 

 

It’s important to understand that the vast renewable biomass reserves of New England and the nation (that go beyond forest and wood-lot residues and include waste streams identified above) represent unwanted competition to the most powerful industries in the world. To the most powerful -- they are very profitably processing fossil hydrocarbons (domestic and foreign), and we are proposing to process local, renewable, living carbohydrates. To the powerful carbohydrate processing businesses -- they can command the starch and sugar feedstocks, and we are proposing to process the yet uncontrollable cellulosic fraction of biomass – including massive carbohydrate waste streams. Complicated, but just bringing up the issues can be an important first step leading to a better understanding of the difficulties in birthing the biorefinery industry.

 

Thank you, Mr. Chairman, for this opportunity to express my thoughts and to be of 

service to Northern New England and the nation.