[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]





                    A PATH TOWARD THE BROADER USE OF
                    BIOFUELS: ENHANCING THE FEDERAL
                 COMMITMENT TO RESEARCH AND DEVELOPMENT
                        TO MEET THE GROWING NEED

=======================================================================

                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON ENERGY AND
                              ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 14, 2007

                               __________

                           Serial No. 110-40

                               __________

     Printed for the use of the Committee on Science and Technology


     Available via the World Wide Web: http://www.science.house.gov

                                 ______



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                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                 HON. BART GORDON, Tennessee, Chairman
JERRY F. COSTELLO, Illinois          RALPH M. HALL, Texas
EDDIE BERNICE JOHNSON, Texas         F. JAMES SENSENBRENNER JR., 
LYNN C. WOOLSEY, California              Wisconsin
MARK UDALL, Colorado                 LAMAR S. SMITH, Texas
DAVID WU, Oregon                     DANA ROHRABACHER, California
BRIAN BAIRD, Washington              ROSCOE G. BARTLETT, Maryland
BRAD MILLER, North Carolina          VERNON J. EHLERS, Michigan
DANIEL LIPINSKI, Illinois            FRANK D. LUCAS, Oklahoma
NICK LAMPSON, Texas                  JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
JERRY MCNERNEY, California           JO BONNER, Alabama
PAUL KANJORSKI, Pennsylvania         TOM FEENEY, Florida
DARLENE HOOLEY, Oregon               RANDY NEUGEBAUER, Texas
STEVEN R. ROTHMAN, New Jersey        BOB INGLIS, South Carolina
MICHAEL M. HONDA, California         DAVID G. REICHERT, Washington
JIM MATHESON, Utah                   MICHAEL T. MCCAUL, Texas
MIKE ROSS, Arkansas                  MARIO DIAZ-BALART, Florida
BEN CHANDLER, Kentucky               PHIL GINGREY, Georgia
RUSS CARNAHAN, Missouri              BRIAN P. BILBRAY, California
CHARLIE MELANCON, Louisiana          ADRIAN SMITH, Nebraska
BARON P. HILL, Indiana               VACANCY
HARRY E. MITCHELL, Arizona
CHARLES A. WILSON, Ohio
                                 ------                                

                 Subcommittee on Energy and Environment

                   HON. NICK LAMPSON, Texas, Chairman
JERRY F. COSTELLO, Illinois          BOB INGLIS, South Carolina
LYNN C. WOOLSEY, California          ROSCOE G. BARTLETT, Maryland
DANIEL LIPINSKI, Illinois            JUDY BIGGERT, Illinois
GABRIELLE GIFFORDS, Arizona          W. TODD AKIN, Missouri
JERRY MCNERNEY, California           RANDY NEUGEBAUER, Texas
MARK UDALL, Colorado                 MICHAEL T. MCCAUL, Texas
BRIAN BAIRD, Washington              MARIO DIAZ-BALART, Florida
PAUL KANJORSKI, Pennsylvania             
BART GORDON, Tennessee               RALPH M. HALL, Texas
                  JEAN FRUCI Democratic Staff Director
            CHRIS KING Democratic Professional Staff Member
        MICHELLE DALLAFIOR Democratic Professional Staff Member
         SHIMERE WILLIAMS Democratic Professional Staff Member
         ELAINE PAULIONIS Democratic Professional Staff Member
          ADAM ROSENBERG Democratic Professional Staff Member
          ELIZABETH STACK Republican Professional Staff Member
                    STACEY STEEP Research Assistant

























                            C O N T E N T S

                             June 14, 2007

                                                                   Page
Witness List.....................................................     2

Hearing Charter..................................................     3

                           Opening Statements

Statement by Representative Nick Lampson, Chairman, Subcommittee 
  on Energy and Environment, Committee on Science and Technology, 
  U.S. House of Representatives..................................     6
    Written Statement............................................     7

Statement by Representative Bob Inglis, Ranking Minority Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................     8
    Written Statement............................................     9

Prepared Statement by Representative Jerry F. Costello, Member, 
  Subcommittee on Energy and Environment, Committee on Science 
  and Technology, U.S. House of Representatives..................     9

                               Witnesses:

Dr. Thomas D. Foust, Biomass Technology Manager, National 
  Renewable Energy Laboratory
    Oral Statement...............................................    11
    Written Statement............................................    13
    Biography....................................................    17

Mr. John Berger, President and CEO, Standard Renewable Energy; 
  CEO of BioSelect
    Oral Statement...............................................    18
    Written Statement............................................    20
    Biography....................................................    23

Mr. Robert Dinneen, President and CEO, Renewable Fuels 
  Association
    Oral Statement...............................................    23
    Written Statement............................................    25
    Biography....................................................    28

Mr. Michael J. McAdams, Executive Director, Advanced Biofuels 
  Coalition
    Oral Statement...............................................    28
    Written Statement............................................    34
    Biography....................................................    40

Mr. David Waskow, International Program Director, Friends of the 
  Earth, U.S.
    Oral Statement...............................................    40
    Written Statement............................................    42

Discussion
  Biofuels Infrastructure........................................    46
  Biorefinery Technologies.......................................    48
  Managing Biofuel Feedstocks....................................    48
  The Renewable Fuels Standard...................................    49
  Environmental and Food Supply Concerns.........................    49
  Bioenergy Research Centers.....................................    51
  Cellulosic Ethanol.............................................    52
  Environmental Concerns.........................................    53
  Does Research Need to Be Feedstock Specific?...................    54
  More on Bioenergy Research Centers.............................    55
  Biorefinery Energy Efficiency..................................    56
  Biofuel Feedstocks: Research, Development, and Establishing 
    Standards....................................................    56
  More on Environmental and Food Supply Concerns.................    59
  Pure Ethanol...................................................    62

             Appendix 1: Answers to Post-Hearing Questions

Dr. Thomas D. Foust, Biomass Technology Manager, National 
  Renewable Energy Laboratory....................................    66

Mr. John Berger, President and CEO, Standard Renewable Energy; 
  CEO of BioSelect...............................................    71

Mr. Robert Dinneen, President and CEO, Renewable Fuels 
  Association....................................................    73

             Appendix 2: Additional Material for the Record

Section-by-Section Analysis of Biofuels Research and Development 
  Enhancement Act ``Discussion Draft''...........................    78

Biofuels Research and Development Enhancement Act [Discussion 
  Draft].........................................................    79


























 
   A PATH TOWARD THE BROADER USE OF BIOFUELS: ENHANCING THE FEDERAL 
    COMMITMENT TO RESEARCH AND DEVELOPMENT TO MEET THE GROWING NEED

                              ----------                              


                        THURSDAY, JUNE 14, 2007

                  House of Representatives,
            Subcommittee on Energy and Environment,
                       Committee on Science and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 2:30 p.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Nick 
Lampson [Chairman of the Subcommittee] presiding.




                            hearing charter

                 SUBCOMMITTEE ON ENERGY AND ENVIRONMENT

                  COMMITTEE ON SCIENCE AND TECHNOLOGY

                     U.S. HOUSE OF REPRESENTATIVES

                    A Path Toward the Broader Use of

                    Biofuels: Enhancing the Federal

                 Commitment to Research and Development

                        to Meet the Growing Need

                        thursday, june 14, 2007
                          2:30 p.m.-4:00 p.m.
                   2318 rayburn house office building

 Purpose

    The House Committee on Science and Technology Subcommittee on 
Energy and Environment will hold a hearing entitled ``A Path Toward the 
Broader Use of Biofuels: Enhancing the Federal Commitment to Research 
and Development to Meet the Growing Need'' on June 14, 2007, at 2:30 
p.m. in Room 2318, Rayburn House Office Building.
    The purpose of this hearing is to examine the federal efforts on 
research, development and demonstration of technologies related to the 
production of biofuels, the development of biorefineries and 
demonstrations of those technologies. The hearing will further focus on 
legislative proposals to restructure and enhance the biofuels research 
and development programs of the Department of Energy and the Department 
of Agriculture under consideration in the House and Senate and how the 
provisions will help to enhance ongoing research in areas related to 
biofuels and promote a greater degree of coordination of research 
materials related to biofuels.

Background

    High gasoline prices, a desire to reduce our dependence on foreign 
sources of energy, and concerns over climate change have greatly 
increased interest in bio-based fuels as an alternative to petroleum 
for transportation fuel. Over the last several years, in part as a 
result of the Renewable Fuel Standard included in the Energy Policy Act 
of 2005, the use of biofuels--most notably corn-based ethanol--has 
grown significantly. Ethanol is most commonly blended with gasoline at 
a level of 10 percent or less. And, this still only represents a small 
portion (less than five percent) of the total gasoline sold.
    Recent proposals in Congress and by the Administration have called 
for significant increases in the use of biofuels over the next ten 
years. Currently biofuel supply relies almost exclusively on corn-based 
ethanol. Concerns have been raised about further expansion of corn-
based ethanol to meet the targets set for biofuel production. 
Competition with food and feed supply, water and nutrient demand 
associated with corn production, and continued questions about the 
energy balance of corn-based ethanol production all suggest that 
biomass sources for biofuel production must be diversified The majority 
of this focus has been development of fuels from cellulosic materials 
including grasses, wood, and waste materials. However, current 
technologies for the development of fuel from these sources continue to 
be expensive and not cost-competitive with corn-based ethanol.
    If we are going to move toward broader use of biofuels, technology 
will be necessary to create reasonably priced fuels from cellulosic 
materials. The Agricultural Risk Protection Act of 2000 (Title III), 
the Farm Security and Rural Investment Act of 2002, and the Energy 
Policy Act of 2005 created bioenergy research and development programs 
to focus federal research funding on the development of biofuels 
derived from cellulosic materials. This research is ongoing and 
operates under a Memorandum of Understanding between the Department of 
Energy and the Department of Agriculture.

Legislative Proposals/Discussion Draft

    The Committee on Agriculture marked up a title on Energy at the end 
of May. Their proposal amends the Sections of the 2002 Farm Bill that 
authorize joint USDA and DOE research and development programs on 
biofuels and amends the Biomass Research and Development Act of 2000, 
the other primary authorization for joint DOE and USDA biomass research 
and development programs.
    The Senate Energy and Natural Resources Committee reported energy 
legislation to amend and expand authorization for research and 
development programs on biofuels at the Department of Energy (S. 1419).
    Earlier today, Subcommittee Chairman Lampson released a 
``Discussion Draft'' of legislation entitled The Biofuels Research and 
Development Enhancement Act. The witnesses have been provided a copy of 
the draft and are being asked to include thoughts on the draft in their 
testimony. A copy of the draft and a section-by-section are attached. 
To quickly summarize, the draft would do the following:

          As it relates to Section 932 (Bioenergy Programs) of 
        the Energy Policy Act of 2005, discussion draft does several 
        things:

                1)  Creates a new research component to focus on 
                biofuels infrastructure.

                2)  Creates a new research component to focus on energy 
                efficiency in biorefinery facilities to reduce energy 
                consumption in the development of biofuels.

                3)  Increases the authorization levels for the 
                Bioenergy program. Specifically:

                          FY08--$377 million

                          FY09--$398 million

                          FY10--$419 million

          Creates an ``Information Center'' at the Department 
        of Energy to serve as a clearinghouse of information about 
        biofuels research and development.

          Creates a grant program for states with low levels of 
        biofuels production to work toward higher levels of production.

          The draft also conducts several studies:

                  Increasing consumption of mid-level (10-40 percent) 
                ethanol-blended gasoline

                  Optimization of Flex Fuel Vehicles while running on 
                E-85

                  Engine durability at differing blend levels of 
                biodiesel.

Witnesses

Robert Dinneen, President, Renewable Fuels Association. RFA is a 
national trade association for the domestic ethanol industry. RFA's 
membership includes a broad cross-section of businesses, individuals 
and organizations dedicated to the expansion of the U.S. fuel ethanol 
industry. Mr. Dinneen has presented testimony before the Congress and 
federal agencies on numerous occasions, and represented the ethanol 
industry's interests at State, national and international forums.

Thomas Foust, Biofuels Research Director, National Renewable Energy 
Laboratory. The National Renewable Energy Laboratory is the Nation's 
primary laboratory for renewable energy research and development. The 
Biomass Program supports NREL R&D focused on biomass characterization, 
thermochemical and biochemical biomass conversion technologies, bio-
based products development, and biomass process engineering and 
analysis. Dr. Foust manages these programs.

John Berger, Chairman and CEO, Standard Renewable Energy and the CEO of 
BioSelect. Standard Renewable Energy is a leader in renewable energy, 
serving commercial and residential customers with clean, renewable 
energy and energy efficiency technologies. BioSelect, a division of 
Standard Renewable Energy, is a developer and operator of biodiesel 
production facilities.

David Waskow, Friends of the Earth, U.S. Friends of the Earth, U.S. is 
part of a network of international groups in 70 countries. David Waskow 
is an international policy analyst and works on the environment, trade 
policy, and corporate accountability.

Michael J. McAdams, Executive Director, Advanced Biofuels Coalition. 
The Advanced Biofuels Coalition is a collection of companies who 
utilize advanced technologies or provide renewable-based feedstocks to 
produce renewable fuels--both biodiesel and gasoline compatible 
components.
    Chairman Lampson. I would like to extend a warm welcome to 
all five of our witnesses. Thank you for being here today and 
for testifying before the Subcommittee on Energy and 
Environment on the subject of biofuels and more specifically on 
the status of our biofuels research and development, and what 
steps we can take to enhance the efforts toward better 
commercialization of new technologies. I still say our old 
technologies. We are just dusting them off and using them 
again.
    I would like to make specific mention that we are joined 
today by Mr. John Berger, Chairman and CEO of Standard 
Renewable Energy. I recently joined Mr. Berger at the opening 
of his company's large scale biodiesel facility in Galveston, 
Texas, and I look forward to hearing more from him today about 
his experiences and continuing research and development 
challenges facing the industry.
    For sometime now, it has been clear to me and many of my 
colleagues that our nation's energy needs can no longer be met 
with fossil fuels, fully met at least. Our reliance on fossil 
fuels, and more specifically foreign sources of energy, 
jeopardizes our economy, our foreign policy, our national 
security, and most importantly our environment.
    The scale and complexity of addressing our energy and 
climate challenges cannot be overstated.
    And though I believe that fossil fuels still remain an 
important part of any viable, balanced energy strategy, we must 
continue and in many cases enhance our efforts to develop 
alternative energy sources, namely biofuels.
    All of the country ventures like Galveston Bay Biodiesel 
are emerging that demonstrate our country's strong commitment 
to producing reliable energy through the use of exciting and 
cutting-edge technologies. These projects are shining examples 
of the American innovative spirit.
    Further, they demonstrate how a strong federal commitment 
to research and development can spur our economic growth and 
result in real solutions to our energy problems.
    Though we have seen amazing growth in our country's 
biofuels development, mostly in the forms of corn-based ethanol 
and soy-based biodiesel, ethanol still represents only five 
percent of the total gasoline sold, and biodiesel is an even 
smaller portion of the total diesel market.
    Currently, biofuel supply relies almost exclusively on 
corn-based ethanol. Surely, we wouldn't be where we are today 
without the efforts of those who pioneered the development of 
our ethanol industry. Recognition of these efforts to build the 
ethanol industry and make current supplies of ethanol available 
is well deserved.
    However, concerns have been raised about further expansion 
of corn-based ethanol and its impact on food and feed supply 
and costs. And to meet some of the biofuels mandates that have 
been proposed, it would require nearly half of the current corn 
crop produced annually. Clearly this all suggests that biomass 
sources for biofuel production must be diversified.
    The majority of this focus to diversify feedstocks has been 
on cellulosic materials including grasses, wood, and waste 
materials. However, current technologies for the development of 
fuel from these sources continue to be expensive and not cost 
competitive with corn-based ethanol. If we are going to move 
toward broader use of biofuels, technology will be necessary to 
create reasonably-priced fuels from cellulosic materials.
    To realize this needed ``technological bump,'' we must 
increase our investment in research and development, focus our 
research on the most promising technologies, and ensure that 
the latest research information is readily available for those 
looking to either expand their biofuels production or embark 
upon the development of new facilities.
    Earlier this week the Committee staff released a discussion 
draft of a bill that I will author and the Committee plans to 
consider in coming weeks. The draft attempts to better 
coordinate and compile information from federal biofuels 
research programs, focus some of the biofuels research on 
infrastructure needs and efficiency of biorefineries, study 
some of the continuing challenges facing broader use of 
biofuels, and increase the funding levels for biofuels 
research.
    This draft will serve as a starting point to discuss what 
legislative efforts are needed to ensure that we maximize the 
federal funding spent on biofuels research and development. I 
am eager to hear from colleagues on the challenges that they 
see ahead and to, and I look forward to working with the 
Members of the Subcommittee as we move forward toward 
consideration of that bill.
    It is my hope that our witnesses today will share with the 
Subcommittee their thoughts on the state of biofuels research 
and development, the technological challenges that we continue 
to face, the efforts underway to commercialize the new 
technologies for biofuels development, and what steps can be 
taken to ensure that there is strong continued federal support 
for biofuels research, development, and commercialization of 
technologies.
    Their testimony will surely help guide us toward crafting 
sensible legislation that will help us realize the benefits of 
biofuels in years to come.
    [The prepared statement of Chairman Lampson follows:]
              Prepared Statement of Chairman Nick Lampson
    I would like to extend a warm welcome to all five witnesses. Thank 
you for being here today and testifying before the Subcommittee on 
Energy and Environment on the subject of biofuels, and more 
specifically on the status of our biofuels research and development, 
and what steps we can take to enhance those efforts toward better 
commercialization of new technologies.
    I would like to make specific mention that we are joined today by 
Mr. John Berger, Chairman and CEO of Standard Renewable Energy. I 
recently joined Mr. Berger at the opening of his company's large-scale 
biodiesel facility in Galveston, Texas and look forward to hearing more 
from him today about his experiences and the continuing research and 
development challenges facing the industry.
    For sometime now, it has been clear to me and many of my colleagues 
that our nation's energy needs can no longer be fully met with fossil 
fuels. Our reliance on fossil fuels, and more specifically foreign 
sources of energy, jeopardizes our economy, foreign policy, national 
security, and most importantly our environment.
    The scale and complexity of addressing our energy and climate 
challenges cannot be overstated.
    And, though I believe that fossil fuels still remain an important 
part of any viable, balanced energy strategy, we must continue, and in 
many cases enhance, our efforts to develop alternative energy sources--
namely biofuels.
    All over the country, ventures like Galveston Bay Biodiesel are 
emerging that demonstrate our country's strong commitment to producing 
reliable energy through the use of exciting and cutting edge 
technologies. These projects are shining examples of the American 
innovative spirit.
    Further, they demonstrate how a strong federal commitment to 
research and development can spur our economic growth and result in 
real solutions to our energy problems.
    Though we have seen amazing growth in our country's biofuels 
development, mostly in the forms of corn-based ethanol and soy-based 
biodiesel, ethanol still represents only five percent of the total 
gasoline sold, and biodiesel is an even smaller portion of the total 
diesel market.
    Currently, biofuel supply relies almost exclusively on corn-based 
ethanol. Surely, we would not be where we are today without the efforts 
of those who pioneered the development of our ethanol industry. 
Recognition of there efforts to build the ethanol industry and make the 
current supplies of ethanol available is well deserved.
    However, concerns have been raised about further expansion of corn-
based ethanol and its impact on food and feed supply and costs. And, to 
meet some of the biofuels mandates that have been proposed, it would 
require nearly half of the current corn crop produced annually. 
Clearly, this all suggests that biomass sources for biofuel production 
must be diversified.
    The majority of this focus to diversify the feedstocks has been on 
cellulosic materials including grasses, wood, and waste materials. 
However, current technologies for the development of fuel from these 
sources continue to be expensive and not cost-competitive with corn-
based ethanol. If we are going to move toward broader use of biofuels, 
technology will be necessary to create reasonably priced fuels from 
cellulosic materials.
    To realize this needed ``technological bump,'' we must increase our 
investment in research and development, focus our research on the most 
promising technologies, and ensure that the latest research information 
is readily available for those looking to either expand their biofuels 
production or embark upon the development of new facilities.
    Earlier this week, the Committee staff released a discussion draft 
of a bill that I will author and the Committee plans to consider in the 
coming weeks. The draft attempts to better coordinate and compile 
information from federal biofuels research programs, focus some of the 
biofuels research on infrastructure needs and efficiency of 
biorefineries, study some of the continuing challenges facing broader 
use of biofuels, and increase the funding levels for biofuels research.
    This draft will serve as a starting point to discuss what 
legislative efforts are needed to ensure we maximize the federal 
funding spent on biofuels research and development. I am eager to hear 
from colleagues on the challenges they see ahead, and look forward to 
working with the Members of the Subcommittee as we move forward toward 
consideration of this bill.
    It is my hope that our witnesses today will share with the 
Subcommittee their thoughts on the state of biofuels research and 
development, the technological challenges we continue to face, the 
efforts underway to commercialize new technologies for biofuels 
development, and what steps can be taken to ensure that there is strong 
continued federal support for biofuels research, development and 
commercialization of technologies.
    Their testimony will surely help guide us toward crafting sensible 
legislation that will help us realize the benefits of biofuels in years 
to come.

    Chairman Lampson. At this time I am pleased to recognize 
the distinguished Ranking Member from South Carolina, Mr. Bob 
Inglis, for his opening statement.
    Mr. Inglis. Thank you, Mr. Chairman. Appreciate the hearing 
this afternoon on how the Federal Government can encourage 
research and development of biofuels, a promising alternative 
energy source.
    One of the great advantages of biofuels is the regional 
diversity of feedstocks. Different parts of the country can 
``customize'' production based on their energy sources that 
make the most sense for their area. So while pines or sugar 
cane might make sense for ethanol production in South Carolina, 
the Chairman's State of Texas might benefit more from soybean 
or vegetable oils for biodiesel production. The advantage then 
is that every part of the Nation can take part in developing 
biofuels that will make economic and agricultural sense and, in 
turn, will yield commercial benefits.
    However, that versatility will also present a challenge 
when it comes to infrastructure development. While oil tankers 
and massive pipelines support our national gasoline industry 
and have the potential to support our biofuels industry, the 
regional availability of feedstocks may demand additional 
models for production and distribution. I hope that any biofuel 
legislation we discuss considers and accommodates this regional 
component.
    We are only in the beginning phases of what I hope will be 
a very profitable biofuel energy economy, promoting energy 
security, protecting the environment, and creating jobs for 
American workers. It is important that we not only encourage 
current technologies and methods of production but also 
facilitate the development of next generation systems that will 
make biofuels even more efficient and affordable.
    Thank you, again, Mr. Chairman, for holding this hearing. I 
look forward to hearing from our witnesses and welcome any 
suggestions they may have for how we can improve this proposed 
legislation.
    [The prepared statement of Mr. Inglis follows:]
            Prepared Statement of Representative Bob Inglis
    Good afternoon. Thank you, Mr. Chairman, for holding this hearing 
on how the Federal Government can encourage research and development of 
biofuels, a promising alternative energy source.
    One of the great advantages of biofuels is the regional diversity 
of feedstocks. Different parts of the country can ``customize'' 
production based on the energy sources that make the most sense for 
their area. So, while pines or sugar cane might make sense for ethanol 
production in South Carolina, the Chairman's State of Texas might 
benefit more from soybean and vegetable oils for biodiesel production. 
The advantage then is that every part of the Nation can take part in 
developing biofuels that will make economic and agricultural sense, 
and, in turn, will yield commercial benefits.
    However, that versatility will also present a challenge when it 
comes to infrastructure development. While oil tankers and massive 
pipelines support our national gasoline industry, and have the 
potential to support our biofuels industry, the regional availability 
of feedstocks may demand additional models for production and 
distribution. I hope that any biofuel legislation we discuss considers 
and accommodates this regional component.
    We are only in the beginning stages of what I hope will be a very 
profitable biofuel energy economy, promoting energy security, 
protecting the environment, and creating jobs for American workers. It 
is important that we not only encourage current technologies and 
methods of production, but also facilitate the development of next 
generation systems that will make biofuels even more efficient and 
affordable.
    Thank you again, Mr. Chairman. I look forward to hearing from our 
witnesses, and welcome any suggestions they might have for how we can 
improve this proposed legislation.

    Chairman Lampson. Thank you, Mr. Inglis. I ask unanimous 
consent that all additional opening statements submitted to the 
Subcommittee, submitted by Subcommittee Members be included in 
the record. Without objection it is so ordered.
    [The prepared statement of Mr. Costello follows:]
         Prepared Statement of Representative Jerry F. Costello
    Good afternoon. Mr. Chairman, thank you for calling today's hearing 
to receive testimony on the discussion draft of the Biofuels Research 
and Development Act.
    I support expanded use of biofuels to diversify America's energy 
mix. With the passage of H.R. 6, the Energy Policy Act of 2005, a major 
milestone in the development of a national market for renewable energy 
was achieved through a Renewable Fuels Standard (RFS). Further, the 
2002 Farm bill has awarded $58.1 million in grants to 55 projects in 27 
states and the District of Columbia under the Biomass Research and 
Development Initiative. Since the beginning of 2007, the Department of 
Energy (DOE) has announced nearly $1 billion in funding for biofuels 
R&D. On Tuesday, the U.S. Department of Agriculture (USDA) and the U.S. 
Department of Energy (DOE) announced a combined total of up to $18 
million will be available for research and development of biomass-based 
products, biofuels, bioenergy and related processes. These grants will 
fund essential research leading to the creation of new, sustainable 
energy sources, in addition to creating new uses and markets for 
agricultural products. Through the passage of critical energy 
legislation, biofuels production has exploded and will jump from the 
roughly four billion gallons produced in 2005 to 12 billion gallons by 
the end of this year.
    My home state of Illinois is already experiencing considerable 
growth in biofuels production. Currently in Illinois, there are 47 
proposed ethanol plants, eight in my district alone. Of those 47 
proposed plants, 19 have filed for air permits. Further, Illinois is 
operating four biodiesel facilities and three more are under 
construction. Illinois is perfectly located to build and operate 
ethanol and biodiesel facilities because of its access corn and soybean 
production and to transportation ranging from rail, barges, highways, 
and pipelines.
    In addition to helping satisfy our nation's growing appetite for 
energy, biofuels can assist greatly in rural development. Each ethanol 
plant represents the investment of tens of millions of dollars into 
local economies, construction jobs and permanent employment 
opportunities, new markets for grain producers, and an expanded tax 
base for local governments.
    While I support research into developing an efficient process for 
turning biomass into fuel, it is unclear why additional funding it is 
need to provide money to states with low rates of ethanol production, 
including low rates of production of cellulosic biomass ethanol, as 
stated in Section 6 of the discussion draft legislation.
    I look forward to hearing from our witness panel on this issue.

    Chairman Lampson. At this time I would like to introduce 
our distinguished panel of witnesses. Dr. Thomas Foust is the 
Biomass Technology Manager for the Department of Energy's 
National Renewable Energy Laboratory in Golden, Colorado. John 
Berger is the Founder of Contango Capital Management, a Venture 
Capital firm, focused on renewable energy and CEO of Standard 
Renewable Energy. Mr. Berger also served as an advisor to the 
Federal Energy Regulatory Commission in 2002 and 2003. Mr. Bob 
Dinneen is the President and CEO of the Renewable Fuels 
Association, the National Trade Association for the U.S. 
ethanol industry. Mr. David Waskow is an International Policy 
Analyst with Friends of the Earth, U.S., and works on 
environment trade and corporate accountability issues. And at 
this time I would yield to our distinguished Ranking Member of 
the Full Committee, Representative Hall, to introduce our final 
witness, Mr. Michael McAdams.
    Mr. Hall. Thank you, Mr. Chairman, and I am honored to 
introduce Mike McAdams. He is presently Executive Director of 
Government Affairs of Hart Downstream Energy Services. He has 
been involved, he doesn't look old enough, I know, to say this, 
but he has been involved in every major federal energy and 
environmental initiative over the last 25 years.
    I came here in 1981, and Mike, to the best of my 
recollection, was the very first employee that I had. I 
inherited him from Rayburn, Sam Rayburn's organization through 
Ray Roberts, who was the Congressman then at that time, and he 
actually took care of Ray Roberts' boat, and I had bought Ray 
Roberts' boat. It is a 52 footer. I was going to live on it 
until my wife told me that that wasn't going to happen. I asked 
him if he would stay on and work with me. I really wanted him 
to run the boat for me. He said, well, he did want to stay, but 
he believed he was worth more as an energy advisor, and I don't 
know, he was 19 or 20 years old then, something like that. He 
would be better as an energy advisor than he would as a boat 
boy, and he was a great energy advisor and has really done me 
great service since that time. In his current capacity he 
spearheads governmental advocacy efforts for Hart's clients 
including the Advanced Biofuels Coalition. Prior to joining the 
firm he spent 14 years with British Petroleum acting as Vice 
President of Federal Affairs and Environment and Associate 
Group Policy Advisor while there. Before joining BP, of course, 
Mr. McAdams served on staffs of several Members of Congress, 
and I was honored that he worked with me for a lot of years. He 
holds a B.A. in political science from Virginia Tech. I think 
he played quarterback for that football team. He has a J.D. 
from the Washington College of Law. His father was the first 
Governor's Rep as Texas was one of the early states to have a 
Washington office, and his father was the man for the Governor 
of Texas at that time and represented him here. He grew up on a 
Texas ranch, and was educated at Virginia Tech. He is a bright 
young man, good friend of mine. I am honored that he is going 
to testify before this committee.
    I thank you, Mr. Chairman, my fellow Texan, for allowing me 
this long, extended introduction that Mike helped me write.
    Chairman Lampson. I was going to ask. You didn't, I wasn't 
sure you knew all of that on your own.
    Well, we are proud to have him and thank you for that 
introduction.
    Mr. Inglis.
    Mr. Inglis. Mr. Chairman, speaking of Mr. McAdams, may I 
have unanimous consent to substitute two slides that were 
previously submitted that need to be replaced with two new 
slides in his presentation?
    Chairman Lampson. Is there any objection? Seeing none, it 
is so ordered.
    Okay. You will each have five minutes to present your 
spoken testimony. Your testimony, your written testimony will 
be included in the record for the hearing, and when all five of 
you have completed your testimony, we will begin with 
questions. Each Member will have five minutes to question the 
panel, and Dr. Foust, would you please begin?

 STATEMENT OF DR. THOMAS D. FOUST, BIOMASS TECHNOLOGY MANAGER, 
              NATIONAL RENEWABLE ENERGY LABORATORY

    Dr. Foust. Thank you, Mr. Chairman. Thank you for this 
opportunity to discuss important issues related to our nation's 
energy policies as we move to reduce our dependence on foreign 
oil, maintain a healthy environment, and fully meet the energy 
demands of the future.
    I am the Biomass Research Director of the National 
Renewable Energy Laboratory (NREL) in Golden, Colorado. NREL is 
the U.S. Department of Energy's primary laboratory for research 
and development of renewable energy as well as energy 
efficiency technologies.
    Biomass, as you know, is very abundant in the U.S. and the 
production potential is quite large. One recent study estimated 
that the U.S. has the potential to produce 1.3 billion tons of 
biomass annually without impacting food production. That amount 
of biomass converted to biofuels could potentially supply over 
50 percent of our nation's fuel needs.
    However, to use these and other resources we need to 
perfect new technologies that convert this material into fuels 
economically. Clearly this is an area that has great promise, 
but it must be done correctly.
    Let me start with ethanol. To move the ethanol industry to 
where we need it to be we would have to move corn grain as a 
primary feedstock resource, and we have to move into biomass. 
Production of ethanol from corn grain is a well-established 
technology. It is a good technology, but corn grain is also an 
important food and feed commodity in the U.S., and most believe 
that we cannot produce more than about 12 to 15 billion gallons 
a year from corn without having significant impacts on the 
economics of other critical corn grain products.
    Ethanol from plant biomass, or bioethanol as it is commonly 
referred to, promises to meet these ethanol capacity hurdles by 
utilizing feedstocks as biomass which are abundant and do not 
compete with other needs.
    However, the technology is relatively immature and not yet 
competitive with corn ethanol or gasoline. At NREL our biofuels 
focus is almost entirely on advancing this bioethanol 
technology to enable competitively-priced ethanol from a 
variety of feedstocks. The current goal is to attain $1.31 
production cost via 2012 via both a biochemical and a 
thermochemical route in order to make this bioethanol 
competitive with corn ethanol and, more importantly, gasoline.
    Based on current and expected future progress we believe 
that there is significant growth potential for ethanol beyond 
the 2012, timeframe. Given the high-expected future demands for 
biofuels as a major component of our nation's fuel supply, we 
believe that bioethanol will not replace today's corn ethanol 
industry. Rather, it will evolve and grow from it, making the 
potential for ethanol encouraging from both an economic and 
large-volume perspective.
    Now, let me switch gears and talk about diesel fuels, 
specifically biodiesel and renewable diesel, which can be made 
from either plant oils or animal fats, as well as biomass 
itself.
    Biodiesel production is a currently commercial technology 
which takes oil or fatty feedstocks and converts them into a 
diesel fuel through a fairly straightforward process called 
transesterification.
    Another process that shows a lot of promise for producing 
renewable diesel use is a process referred to, hydrogenation, 
to convert the same oil or fatty feedstock into a diesel fuel.
    Although these processes are straightforward, the problem 
with these approaches is the general consensus that the 
production volumes can only ultimately reach two to four 
billion gallons a year because of the very limited ability to 
produce these feedstocks in the U.S. Approaches for producing 
renewable diesel at volumes capable of supplying a significant 
portion of our diesel demand will require technologies that can 
utilize more available feedstocks, specifically biomass.
    Fortunately, two such approaches do exist. The first 
approach is biomass gasification, followed by a process called 
Fischer-Tropsch synthesis to produce a renewable diesel. 
Another longer-term approach is to develop an entirely new 
feedstock source for producing oils at large volumes. Algae 
shows considerable promise in this regard and is potentially 
capable of producing oils at rates up to 10,000 times soybeans.
    Although this is very encouraging and should be pursued, 
this technology needs significant work before achieving 
commercial viability. Together these two approaches for 
producing renewable diesel, combined with the current biodiesel 
production show considerable promise for producing renewable 
diesel economically and large volumes, similar to ethanol.
    Finally, let me address the need for biofuels 
infrastructure. Specifically the Department of Energy has 
sponsored studies on infrastructure needs for large-scale 
production and utilization of biofuels. These studies have 
specifically looked at two key components of infrastructure; 
distribution from the biorefinery to the refueling station, and 
then equally as important vehicle needs.
    These results have shown that the current biofuel 
distribution infrastructure is inadequate to handle large 
volumes of biofuels. To reach our goals of producing these 
fuels at a significant scale of gasoline and diesel, these 
areas need to be addressed.
    Additionally, the same issues hold for vehicles. Although 
current generation flex-fuel vehicles are capable of utilizing 
up to 85 percent ethanol, they suffer from significantly 
reduced fuel economy when utilizing the E-85 compared to 
conventional gasoline. Vehicles specifically developed to take 
advantage of the high octane and other desirable fuel 
properties of E-85 could potentially not suffer from this 
decreased fuel economy and allow us to utilize the ethanol more 
efficiently.
    Thank you for the opportunity to address this committee on 
these important issues.
    [The prepared statement of Dr. Foust follows:]
                 Prepared Statement of Thomas D. Foust
    Mr. Chairman, thank you for this opportunity to discuss important 
issues related to the Nation's energy policies as we move to reduce our 
dependence on foreign oil, maintain a healthy environment and fully 
meet the energy demands of the future. I am the Biomass Technology 
Manager of the National Renewable Energy Laboratory (NREL) in Golden, 
Colorado. NREL is the U.S. Department of Energy's primary laboratory 
for research and development of renewable energy and energy efficiency 
technologies. I am honored to be here, and to speak with you today.
    We applaud the Committee for its examination of alternative 
transportation fuels to reduce our dependence on imported petroleum. 
Researchers at NREL have been working on biofuel technologies since our 
laboratory was founded in 1977. However, it only has been recently that 
public policy has looked to biofuels as a way to reduce our dependence 
on petroleum use in the near-term.
    Recent studies have shown that there is sufficient biomass 
potential in the U.S., and worldwide, to produce significant amounts of 
transportation fuels without impacting food production--enough to 
displace a major portion of the petroleum we use today. Clearly, this 
is an area that has great promise; but it must be done correctly.
    The Committee has asked what our nation's R&D focus should be in 
addressing the technical barriers to developing biofuels from diverse 
feedstocks. Let me address this question first.

Biomass: A Plentiful Resource

    While much remains to be done, we as a nation start with some 
significant strength. The biomass resource in the country is huge, and 
the potential for it to grow is significant.
    The Department of Agriculture and the Department of Energy looked 
at the question of whether the Nation's biomass resource could foster a 
biofuels industry large enough to meet a significant portion of our 
nation's future fuel needs. The report, now commonly referred to as 
``The Billion Ton Study,'' for the first time confirmed that the U.S. 
could yield more than a billion tons of biomass annually for energy 
needs. And, importantly, we could do this without negatively affecting 
the Nation's ongoing needs for food or fiber. This is significant 
because the 1.3 billion tons of biomass that was forecasted contains as 
much energy as 3.5 billion barrels of oil.
    I should emphasize that such a transition to biofuels will not 
happen overnight. It will take a significant and sustained national 
effort to get us there. Still, ``The Billion Ton Study'' clearly 
demonstrates the biomass resource is real, and large enough to 
ultimately replace a large fraction of the petroleum-derived fuels we 
depend on today. DOE is in the midst of developing a vision for 
replacing 30 percent of current motor gasoline with ethanol by 2030 and 
this should help guide us in realizing the potential of biofuels.
    Moreover, the resource is regionally diverse. We envision that 
every state in the Nation could produce biomass and could benefit 
economically from an expanding biofuels industry.
    We also are encouraged by the fact that there already exists a 
strong and growing ethanol fuels industry in this country. The U.S. 
currently produces more than five billion gallons a year of ethanol, 
almost exclusively from corn grain, and the industry is growing 30 
percent annually.
    To understand where we are today and where we need to go, we need 
to see ethanol technology issues and biomass resource issues as 
interrelated. To move the ethanol industry to where we need it to be, 
we have to move beyond corn grain as the primary biomass resource. One 
of the most abundant potential resources we have is corn stover, the 
non-food parts of the corn plant, including the stalks, leaves and 
husks. Other resources are forest thinnings, hardy grasses like 
switchgrass, and fast growing trees.
    To use these and other resources we need to perfect new 
technologies that convert the cellulosic materials of the plants into 
fuel.

Current and Future Biofuels

    First, let's start with ethanol. Production of this alcohol fuel 
from the starches of corn grain is a well established technology, and 
accounts for almost all of the current 5.5 billion gallons per year 
(bgy) U.S. capacity. Additional plants that are planned or currently 
under construction are estimated to put our capacity close to 12 bgy 
within a couple years. The limiting factor is, of course, the feedstock 
itself--corn grain. It is an important food and feed commodity in the 
U.S., and most believe that we cannot produce more than 12-15 bgy of 
ethanol from corn grain without having significant, unacceptable 
impacts on the economics of the other critical corn grain products.
    There are no other realistic starch or sugar-based crops in the 
U.S. from which to ferment alcohol in quantity. The Brazilians use 
sugar cane and in other parts of the world, sugar beets are used as a 
feedstock, but these sugar crops can probably never be widely grown in 
the U.S. because of climate differences. One or two bgy in the U.S. is 
possible from sugar crops in the next decade, but significant growth 
beyond this amount from this resource will likely never be a major 
factor for us.
    Cellulosic ethanol promises to leap these ethanol capacity hurdles 
by utilizing feedstocks which are abundant and do not compete with 
other needs. However, the technology is relatively immature and we have 
little more than a few pilot plants on the ground. At the National 
Renewable Energy Laboratory, our biofuels focus is almost entirely on 
advancing the cellulosic ethanol technologies to enable competitively 
priced ethanol from a variety of feedstocks. The current goal is to 
attain a $1.31/gallon production cost by 2012 in order to make this 
ethanol pathway competitive with the corn grain pathway. However, to 
get the production ball rolling, DOE has recently awarded cost-shared 
contracts with industry to establish six cellulosic ethanol 
biorefineries which can each process approximately 700 tons/day of 
feedstock, each plant potentially producing 15-20 million gallons per 
year (mgy) of ethanol.
    But, we still need to significantly improve the technology and 
reduce the costs for industry to begin major cellulosic biorefinery 
construction efforts. For that reason, our projections--even with 
significant incentives for the ethanol refiners and the feedstock 
growers--puts our national capacity at 2-5 bgy in 10 years. By 2022 or 
2023, however, the cellulosic biorefinery construction rate will be on 
a steep upward slope, with a significant growth potential for 
cellulosic biofuels beyond 2017. This, then, is undoubtedly our most 
promising pathway to meet an aggressive national alternative fuels 
standard.

Integration of Biorefineries into Existing Industries: The R&D Role

    Another exciting area of work is in the development of 
``biorefineries.'' Our scientists at NREL, together with those at other 
DOE national laboratories, universities and corporations, are leading 
the development of fully integrated refineries that use biomass, 
instead of petroleum, to produce fuels, chemicals, synthetic 
materials--virtually all of the products we use from a conventional oil 
refinery today. It is envisioned that biorefineries will utilize a 
complex array of processing technologies to break down, convert and 
recombine a wide range of biomass components into fuels and chemicals, 
in a manner similar to how petroleum refineries convert petroleum crude 
oil. We envision that future biorefineries will utilize a wealth of 
resources that we currently either underutilize or don't use at all 
today. That includes agricultural residues, forestry residues, 
dedicated energy crops, municipal solid waste, algae and byproducts of 
the food and grain industry.
    A range of biorefinery R&D is underway in partnership with 
industry. DOE's biomass program is partnering with a number of the 
major ethanol technology providers and ethanol producers, including 
Abengoa, ADM, Broin and Cargill, to increase the yield of ethanol from 
existing corn ethanol facilities and expand the slate of feedstocks. In 
many ways, a cellulosic biorefinery can be viewed as an expansion of a 
corn ethanol facility. That's why we believe tomorrow's cellulosic 
ethanol industry will not replace today's corn grain ethanol industry, 
it will evolve from it.
    At the same time, DOE is partnering with chemical industry leaders, 
such as DuPont, to develop new opportunities for producing both fuels 
and chemicals from biomass. DOE is partnering with the forest products 
industry to explore and develop biorefinery concepts that can integrate 
into existing forestry operations. And, most recently, NREL is 
partnering with oil industry technology developers to explore novel 
options for integrating biomass streams into existing petroleum 
refineries. These and other partnerships are speeding the progress of 
new technologies to the marketplace, and may uncover new options for 
producing fuels from biomass.
    Thermal technologies such as gasification, pyrolysis and 
hydrothermal systems are all worthy of further research and development 
to determine how these technologies and the respective biofuel products 
impact the cost, efficiency and integration into existing fuels 
infrastructure.
    Before we leave the alcohol fuels family, let me mention at least 
one other of these potential fuels--butanol. This higher alcohol has 
certain advantages over ethanol. In particular, its energy content is 
significantly higher than ethanol (but still not that of gasoline) and 
it is has fewer water miscibility challenges than ethanol. However, it 
is more difficult to ferment, and the economics and technology are well 
behind that of ethanol. You have probably heard that BP and DuPont are 
beginning a bio-butanol program in the United Kingdom. However, at 
least in the nearer-term in the U.S., butanol is not out of the 
starting gate and will assuredly be a minor contributor compared to 
ethanol. In addition, the challenges of establishing a fuel 
infrastructure for one new major fuel, and the vehicle and engine 
implications, are daunting enough. To throw a second alcohol fuel into 
that challenge, I would propose, is not a good decision or investment 
in terms of moving up the alternative fuel path as quickly as possible.

Biodiesel and Green Diesel Fuels

    Diesel-like fuels--biodiesel and green (or renewable) diesel--can 
be made from plant oils or animal fats and greases as well as biomass 
itself. For biodiesel, the oil or fatty feedstock is chemically reacted 
with methanol in a process called transesterification, which splits the 
fuel portion of the feedstock from the non-fuel, glycerol co-product. 
This is a fairly straightforward process and the technology is proven 
and mature. Essentially this process is used to produce the entire non-
petroleum diesel in the U.S. today. The problem is that our current 
capacity is only around 500 mgy, primarily due to feedstock 
limitations. If we would, for example, use every acre of the annual 
U.S. soybean crop to produce soy oil and then use that to make 
biodiesel, our capacity would be only around three bgy. Remember that 
on-road we burn 40 bgy in the U.S. today.
    Green or renewable diesel is an emerging technology which uses the 
same oil or fats feedstock, but instead of the transesterification 
process, subjects the plant oils or fats to hydrotreating, as is done 
in the hydrocrackers of a petroleum refinery. The advantages are that 
we can potentially utilize existing refinery assets and not have to 
build new transesterification plants, and that the green diesel is 
essentially identical to petroleum diesel and does not require a unique 
or new fuel handling infrastructure, nor vehicle or engine 
modifications. Another process that shows considerable promise for 
producing renewable diesel is biomass gasification followed by Fischer 
tropsch synthesis to produce a renewable diesel. This process has 
considerable long-term promise since it utilizes biomass as a feedstock 
and is not subject to the feedstock limitations of plant oils or animal 
fats of the other processes. I will say that, from a technical 
standpoint, all of these pathways produce a diesel fuel which is not 
petroleum dependent and reduces CO2 emissions.
    Another longer-term approach for producing a renewable or green 
diesel that gets considerable press is to develop an entirely new 
feedstock source which has a higher gallons-of-oil-per-acre yield and 
can be produced on otherwise non-arable lands. Algae shows considerable 
promise in the long-term--beyond 2017. Whereas soybeans can only 
produce about 50 gallons of oil/acre, micro-algae might produce 
significantly higher yields on a per acre basis. Unfortunately, this 
technology needs significant work and will not contribute materially to 
the alternative fuels standards under discussion, but in the longer-
term may be a dominant component of our alternative diesel and jet fuel 
markets.

Biofuels Infrastructure: Research Needs

    The Committee has also asked the panel to address the need for 
research in the area of biofuels infrastructure.
    DOE has sponsored studies that have examined infrastructure needs 
for large-scale production and utilization of biofuels (i.e., 20 bgy 
and greater). These studies have specifically looked at the two key 
components of the infrastructure; distribution of the biofuel from the 
biorefinery to the refueling station, and vehicle needs. The results 
have shown that the current biofuel distribution infrastructure is 
inadequate to handle large volumes of biofuels, thus an improved 
distribution infrastructure is needed.
    Two options are available for accomplishing this; utilizing the 
existing gasoline and diesel distribution infrastructure for the 
distribution of biofuels, or developing a dedicated biofuels 
distribution infrastructure. Although utilization of the existing 
gasoline and diesel distribution infrastructure would theoretically 
facilitate a quicker, less costly approach toward addressing this 
issue, technical challenges exist--such as the miscibility of 
corrosiveness of ethanol. These challenges could be addressed by a 
dedicated infrastructure; however the triggering mechanism to drive 
investment in this dedicated infrastructure in not clear.
    The vehicle issue is more easily addressed. Currently, all U.S. 
cars are capable of utilizing 10 percent ethanol and studies are 
underway to see if these vehicles can handle higher ethanol blends up 
to 20 percent. Flexible Fuel Vehicles (FFVs), in contrast, are capable 
of utilizing up to 85 percent ethanol. FFV sales are growing rapidly 
and this growth rate is expected to increase in the future. Current 
projections show that the vehicle infrastructure will be more than 
adequate to utilize all the ethanol being produced.

Fuel Fungibility

    The Committee has asked whether standardization of biofuels, 
whether ethanol or biodiesel, is needed to ensure fuel fungibility, and 
whether the standard should focus on blended stock optimization.
    When a fuel is produced, either fossil fuel or biofuel, it must 
meet standards established for its sale for it to be truly fungible. 
Ethanol and biodiesel already have fuel quality standards established 
through the American Society for Testing and Materials (ASTM). These 
standards have been created to partially match the current production 
methods from corn starch and vegetable oil respectively. They help to 
establish what will and will not be compatible with the gasoline to 
which they will be blended. If the predominant process for making 
ethanol changes (i.e., to lignocellulosic conversion from starch 
conversion), an ASTM committee will likely want to examine the 
``typical'' fuel produced to determine if there are any minor 
components that could potentially be present that wouldn't be otherwise 
using today's technology, especially if they might be harmful to the 
engine performance.
    The standard in question should also focus on gasoline blend stock 
optimization. For the example of E-10, the Reformulated Blendstock for 
Oxygenate Blending (RBOB) must have certain properties so that the 
blend does not exceed Reed Vapor Pressure (RVP) maximums. For E-85 
there may be an opportunity for refiners to blend in low octane, high 
RVP gasoline materials and still comply with the overall 
specifications.

Workforce Requirements for Biofuels Technology Innovation

    The Committee has asked the panel to comment on the need for 
trained personnel to form the biofuels workforce of the future. Others 
on the panel may comment on that, but let me address the topic from a 
research and development standpoint.
    You are all aware that, in general, the U.S. is not producing the 
numbers of scientists and engineers that we need to stay at the 
forefront of global technology innovation. This is especially true in 
the energy field, as well as in the particular area of biofuels and 
bioenergy.
    The National Renewable Energy Laboratory partners with many 
universities and colleges, and we bring their undergraduate and 
graduate students and their post-doctoral students to NREL to support 
our research and to influence them towards a career in this important 
field. But that is not enough. We need a concerted national effort to 
encourage and stimulate our young men and women to become energy 
scientists and engineers. Just as a national space goal dramatically 
grew the numbers of aeronautics and space scientists in the 1960's, we 
need to elevate our energy challenge to that level such that our young 
people acknowledge and respond to the call. There is, perhaps, no more 
important undertaking we face as we move into the 21st century--
ensuring that we have skilled and motivated energy researchers to meet 
the Nation's challenges.

Making Biofuels Information Available to the Public

    The Department of Energy's Office of Energy Efficiency and 
Renewable Energy is funding NREL in late FY07 to create an on-line 
Biomass Data Center, which will provide current, relevant data about 
ethanol and other biomass-derived fuels to support informed decisions 
by industry, policy-makers, researchers, and the public. The Data 
Center will be an extension of the widely recognized Alternative Fuels 
Data Center (www.eere.energy.gov/afdc) managed by NREL for DOE since 
1991, which provides information about availability and utilization of 
biofuels and other alternative fuels.
    The new Biomass Data Center will gather and provide centralized 
access to information on biofuels resources, production, and 
infrastructure issues, and will link to existing information from DOE 
and other agencies to minimize costs and duplication of effort. The 
project to develop the Biomass Data Center will begin in FY07, will 
proceed in phases, and will entail ongoing maintenance and enhancements 
in future years. The Data Center will provide easy access to 
information from both government and the private sector on feedstocks, 
production technologies and facilities, incentives and regulations, 
infrastructure and fuel retailing, and market opportunities.

Summary

    Significant potential exists in the next decade and a half to 
reduce petroleum use in the transportation sector under an aggressive 
scenario for technology development and public policies to encourage 
deployment. The biofuels potential for a maximum petroleum reduction 
scenario in the next decade is large and, if fully realized, will 
position biofuels for accelerated growth beyond 2017, putting our 
nation on the path towards energy security with reduced CO2 
emissions.

                     Biography for Thomas D. Foust
    Dr. Thomas Foust is the Research Director of the Biofuels Research 
Program at the National Renewable Energy Laboratory (NREL). In this 
role he guides and directs NREL's research efforts to develop biomass 
conversion technology to fuels via both biochemical and thermochemical 
conversion routes. This research is focused on developing the necessary 
science and technology for converting biomass to biofuels in an 
economical manner and covers the gamut of fundamental to applied. NREL 
is recognized as a world leader in developing biomass conversion 
technologies and has won many prestigious awards recognizing our 
accomplishments.
    Dr. Foust recently led an effort as the lead author of a team of 
biomass experts to perform a detailed assessment of a scenario in which 
30 percent of the United States demand for light vehicle transportation 
fuels are met by biofuels by 2030. This landmark study investigated all 
aspects of the supply chain from feedstock growth to vehicle needs and 
is in process of being published.
    Dr. Foust's research has focused on complex fluid flow and heat and 
mass transfer processes it relates to fundamental biomass conversion 
issues for both biochemical and thermochemical processes. The focus of 
this research has been on identifying areas for process improvement 
that are heat and mass transfer limited. Prior to joining NREL, he 
spent seven years with the Idaho National Laboratory (INL) where he was 
the research lead for the biomass feedstocks program. His primary area 
of research was in complex multi-phase flow analysis as it related to 
physical fractionation of biomass. Dr. Foust has over 20 years of 
research and research management experience specializing in biomass 
feedstocks and conversion research. He has over 100 publications in the 
biomass field covering all aspects of biofuels technology.
    He has a Ph.D. in Mechanical Engineering from the University of 
Idaho, a M.S. in Mechanical Engineering from the Johns Hopkins 
University, and a B.S. in Mechanical Engineering from the Pennsylvania 
State University. He also is a licensed Professional Engineer.

    Chairman Lampson. Thank you, Dr. Foust.
    Mr. Berger.

   STATEMENT OF MR. JOHN BERGER, PRESIDENT AND CEO, STANDARD 
               RENEWABLE ENERGY; CEO OF BIOSELECT

    Mr. Berger. Chairman Lampson, Members of the Subcommittee, 
my name is John Berger, and I am President and CEO of Standard 
Renewable Energy. We are a global leader in renewable energy, 
serving commercial and residential customers with clean, 
renewable energy and energy efficiency technologies. Standard 
provides one-stop shopping for solar, wind, biofuels, hydrogen 
fuel cells, and energy conservation devices on a nationwide 
scale. We are headquartered in the global energy city of 
Houston, Texas.
    BioSelect Fuels is a division of Standard Renewable Energy 
and is a developer and operator of biodiesel production 
facilities, offering the highest quality biodiesel fuel to the 
global marketplace. The initial BioSelect plant is located in 
Galveston, Texas, as the Chairman recently just pointed out in 
the introduction, and began operations the last few weeks in 
May of 2007. BioSelect Galveston currently produces over 20 
million gallons annually; however, expansion is already 
underway to take the site to over 190 million gallons by the 
first quarter of 2009.
    Mr. Chairman, I am pleased to be here to discuss the future 
of our nation's biodiesel industry and how the Biofuels 
Research and Development Enhancement Act can help our country 
achieve its energy security goals, protect our environment, and 
foster economic development through the expansion of renewable 
fuels.
    America relies on imports for 60 percent of its petroleum 
needs. Rising crude oil prices and political uncertainties in 
strategically-sensitive regions of the world are focusing the 
public's attention on the need to enhance our nation's energy 
security. U.S. produced biodiesel expands domestic refining 
capacity. Every gallon of domestic, renewable biodiesel reduces 
the need for imported oil because it replaces diesel fuel 
refined from imported crude oil.
    The biodiesel industry is made up of small businesses and 
has shown steady growth over the last 15 years. In 2006, the 
industry produced 250 million gallons of biodiesel. Today there 
are 142 plants in operation with more than 50 new plants under 
construction or expansion, which will add an estimated new 
capacity of 1.7 billion gallons. The industry is on track to 
create at least 40,000 new jobs and add 24 billion at least to 
the U.S. economy.
    Biodiesel is and will continue to be a strong partner in 
the growth of the biofuels industry and can be a substantial 
tool in the Nation's overall move towards energy security as 
it: directly replaces crude oil that is imported to produce 
diesel fuel, opens up much needed U.S. refining capacity, 
decreased greenhouse gas emissions, contributes to cleaner 
burning diesel fuel, and creates jobs and stimulates rural and 
urban economies.
    Standard applauds the Subcommittee for its comprehensive 
approach to policies that will lead to increased education and 
exchange of information on research, development, and 
demonstration of technologies related to the production of 
biofuels, the development of biorefineries and the 
demonstration of these technologies. The Subcommittee's 
Discussion Draft emphasizes the importance of active research, 
communication, and development of a solid infrastructure 
towards building a strong biodiesel industry.
    Our industry is witnessing a period of dramatic change in 
how Americans create and consume energy. The overlapping public 
concerns of national security, increased domestic energy 
independence, global climate change, and rural economic 
development have led to dramatically increased production of 
renewable fuels.
    BioSelect believes it is imperative for the biodiesel 
industry to secure a targeted fuel standard that sets an 
ambitious, yet achievable goal for the future production of 
biodiesel in this country. Standards should be designed to 
support existing biodiesel capacity and be progressive to 
encourage continued capacity growth. A biodiesel standard will 
aid to ensure short-term growth and long-term development of a 
sustainable domestic biodiesel market. We are confident that a 
federal biodiesel fuel standard that seeks to displace five 
percent of current domestic diesel consumption within the 
decade should be a principle policy objective for current 
legislative action. Such a goal will stimulate the demand for 
soybean oil and other oils, will help spur the development of 
new domestically-produced feedstocks, will promote the 
development of production facilities in all regions of the 
country, and will encourage automakers to increase production 
of diesel-powered passenger cars for the U.S. car market.
    BioSelect Fuels provides safe and superior renewable energy 
to consumers in a clean and efficient manner. We are led by a 
seasoned team and supported by strong partnerships with 
companies such as Chevron Corporation and highly-regarded 
academic institutions like Texas A&M University. The future of 
biofuels, however, and the means by which to create a viable 
source is highly dependent on the continuous innovation, 
research and development in both private and public sectors.
    Support for longer-term clean energy goals will come by 
focusing on and funding a portfolio of research, development, 
and commercialization activities. Standard would like to see 
Congress focus on solving technical problems to overcome 
barriers to biofuels growth, including infrastructure, through 
forgoing or forging strategic cost-shared partnerships with 
private industry, collaboration among relevant federal 
agencies, and working with partnerships in the different 
regions of the country to bring the promise of biofuels to 
fruition. In addition, we believe that the next generation of 
feedstocks and production technologies should receive 
particular attention as they are the foundation of the future 
of the biofuel industry.
    With feedstocks accounting for approximately 60 to 80 
percent of the entire cost to produce biodiesel, BioSelect and 
our allied entities are focused on moving away from traditional 
edible oils and existing arable land currently used for the 
cultivation of food crops such as corn and soybeans. Together, 
with the Engineering and Agricultural expertise of our partners 
at Texas A&M, we are actively pursuing the development of 
biofuel specific crops and lesser-known seeds that can be grown 
in arid lands that currently lie in idle in regions of West 
Texas. Specific areas of research that would benefit our 
industry include harvesting techniques for new feedstocks where 
manual labor costs are problematic and on longer-term feedstock 
envelopment projects such as oil-rich strain of algae and other 
new sources that have been long recognized as abundant possible 
feedstock sources for biodiesel.
    Several barriers exist before existing biofuels can be 
realized from these diverse new feedstocks, but there is a lot 
of work enabled to be done including looking at how to, you 
know, form these arid lands.
    I think I have--have I run out of time?
    Chairman Lampson. You have.
    Mr. Berger. Okay.
    [The prepared statement of Mr. Berger follows:]
                   Prepared Statement of John Berger
    Good morning, Chairman Lampson and Members of the Subcommittee. My 
name is John Berger and I am President and CEO of Standard Renewable 
Energy, (``Standard''). We are a global leader in renewable energy, 
serving commercial and residential customers with clean, renewable 
energy and energy efficiency technologies. Standard provides one-stop 
shopping for solar, wind, biofuels, hydrogen fuel cells and energy 
conservation devices on a nationwide scale. We are headquartered in 
Houston, Texas.
    BioSelect Fuels is a division of Standard Renewable Energy and is a 
developer and operator of biodiesel production facilities, offering the 
highest quality biodiesel fuel to the global marketplace. The initial 
BioSelect plant is located on Galveston Island, Texas, and began 
operations in May 2007. BioSelect Galveston currently produces 20M 
gallons annually; however expansion is already underway to take the 
site to over 190M gallons by the first quarter of 2009.
    Mr. Chairman, I am pleased to be here to discuss the future of our 
nation's biodiesel industry and how the ``Biofuels Research and 
Development Enhancement Act'' can help our country achieve its energy 
security goals, protect our environment and foster economic development 
through the expansion of renewable fuels.

Background

    America relies on imports for 60 percent of its petroleum needs. 
Rising crude oil prices and political uncertainties in strategically 
sensitive regions of the world are focusing the public's attention on 
the need to enhance our nation's energy security. U.S. produced 
biodiesel expands domestic refining capacity. Every gallon of domestic, 
renewable biodiesel reduces the need for imported oil because it 
replaces diesel fuel refined from imported crude.
    The biodiesel industry is made up of small businesses and has shown 
steady growth over the last 15 years. In 2006, the industry produced 
250 million gallons of biodiesel. Today, there are 142 plants in 
operation with more than 50 new plants under construction or expansion, 
which will add an estimated new capacity of 1.7 billion gallons. The 
industry is on track to create at least 40,000 new jobs and add $24 
billion to the U.S. economy.
    Biodiesel is and will continue to be a strong partner in the growth 
of the biofuels industry and can be a substantial tool in the Nation's 
overall move toward energy security as it:

          Directly replaces crude oil that is imported to 
        produce diesel fuel;

          Opens up much needed U.S. ``refining'' capacity;

          Decreases greenhouse gas emissions;

          Contributes to cleaner burning diesel fuel; and

          Creates jobs and stimulates rural and urban 
        economies.

    Standard applauds the Subcommittee for its comprehensive approach 
to policies that will lead to increased education and exchange of 
information on research, development and demonstration of technologies 
related to the production of biofuels, the development of biorefineries 
and demonstrations of those technologies. The Subcommittee's Discussion 
Draft emphasizes the importance of active research, communication and 
development of a solid infrastructure toward building a strong 
biodiesel industry.
    Our industry is witnessing a period of dramatic change in how 
Americans create and consume energy. The overlapping public concerns of 
national security, increased domestic energy independence, global 
climate change and rural economic development have led to the need to 
dramatically increase domestic production of renewable fuels.
    BioSelect believes that it is imperative for the biodiesel industry 
to secure a targeted fuel standard that sets an ambitious, yet 
achievable, goal for the future production of biodiesel in this 
country. Standards should be designed to support existing biodiesel 
capacity and be progressive to encourage continued capacity growth. A 
biodiesel standard will aid to ensure short-term growth and long-term 
development of a sustainable domestic biodiesel market .We are 
confident that a federal Biodiesel Fuel Standard (BFS) that seeks to 
displace five percent of current domestic diesel consumption within the 
decade should be a principal policy objective for current legislative 
action. Such a goal will stimulate the demand for soybean oil and other 
oils, will help spur the development of new domestically produced 
feedstocks, will promote the development of production facilities in 
all regions of the country, and will encourage automakers to increase 
production of diesel-powered passenger cars for the U.S. market.

Biofuel feedstock research

    BioSelect Fuels provides safe and superior renewable energy to 
consumers in a clean and efficient manner. We are led by a seasoned 
team and supported by strong partnerships with companies such as 
Chevron Corporation, and highly regarded academic institutions like 
Texas A&M University. The future of biofuels however, and the means by 
which to create a viable fuel source, is highly dependent on the 
continuous innovation, research and development in both private and 
public sectors.
    Support for longer-term clean energy goals will come by focusing on 
and funding a portfolio of research, development, and commercialization 
activities. Standard would like to see Congress focus on solving 
technical problems to overcome barriers to biofuels growth, including 
infrastructure, through forging strategic cost-shared partnerships with 
private industry, collaboration among relevant federal agencies, and 
working with the different regions of our country to bring the promise 
of biofuels to fruition. In addition, we believe that next generation 
feedstocks and production technologies should receive particular 
attention as they are the foundation of the future of the biofuel 
industry.
    With feedstocks accounting for approximately 60 to 80 percent of 
the entire cost to produce biodiesel, BioSelect and our allied entities 
are focused on moving away from traditional edible oil feedstocks and 
existing arable land currently used for the cultivation of food crops 
like corn and soybeans. Together with the Engineering and Agricultural 
expertise of our partners at Texas A&M, we are actively pursuing the 
development of biofuel specific crops and lesser known seeds that can 
be grown in arid lands that are currently idle in regions such as West 
Texas. Specific areas of research that would benefit our industry 
include harvesting techniques for new feedstocks where manual labor 
costs are problematic and on longer-term feedstock development projects 
such as oil-rich strains of algae which have long been recognized as a 
potentially abundant source of feedstock for biodiesel production.
    Several barriers exist before realizing biofuels from diverse 
feedstocks, including but not limited to; access to more exotic seed 
crops, laboratory and equipment availability, open land and amenable 
farmers, length of time to conduct research and development and overall 
cost of implementation.

Information and data sharing

    Although the public market is becoming more aware of biodiesel as a 
fuel, additional education is still necessary for business leaders to 
invest capital and advocate for future biodiesel production facilities 
and distribution infrastructure. A great deal of ambiguity exists in 
the renewable fuel marketplace today due to the fact that there is very 
little concrete factual data assigned to specific individual fuels; 
i.e., ethanol, biodiesel and renewable diesel.
    Although we as an industry are diligently working towards uniform 
testing and standardized fuel criteria, federal monitoring could help 
avoid inconsistencies. To date, uncertainty in the industry, negatively 
impacted biodiesel sales and the integration of biodiesel fuel 
strategies in public and private fleets, and inhibited progress towards 
meeting national renewable fuel goals.
    The EPA is currently developing a complete emissions profile for 
biodiesel. As leaders in the renewable energy sector however, we ask 
that the Federal Government do more with the creation of a centralized 
database benchmarking and comparing all renewable fuels independently 
to a baseline conventional diesel fuel. We as an industry will benefit 
tremendously from factual data which compares biodiesel to conventional 
diesel. In addition, we believe it would be useful to have a scientific 
and factual description of renewable diesel and a comparison of 
biodiesel to renewable diesel and a comparison of renewable diesel to 
conventional diesel.
    Federal coordination and cataloging of information from federal 
research on biofuels development processes as well as other aspects of 
the industry and related industries will be essential to the longer-
term goal of creating mainstream renewable fuel. Demystifying the fuels 
themselves will not only provide the general public with more 
information and confidence about utilizing renewables but also assist 
both federal and State bodies in defining credit structures, future 
industry incentives, and other programs to promote renewable fuels.

Research in Infrastructure

    Standard Renewable Energy's mission is to make it easy to use 
renewable energy, and for BioSelect, infrastructure is essential. We 
have located our first facility in the refining center of the United 
States because we believe in the logistical and distribution advantages 
that come along with our regional location. Our vision for BioSelect 
fuel is that of a low concentration blend of quality biodiesel into 
conventional fuel to be distributed on a nationwide scale. In support 
of this goal, Standard would like to see a number of infrastructure 
activities pursued on a federal level, most likely through coordinated 
work from government agencies such as Department of Energy, the 
Department of Transportation, the Federal Regulatory Energy Commission, 
and the Environmental Protection Agency. Our primary focus at this time 
is the continued research and development of low blend biodiesel 
pipeline batch movements. Successful pipeline analysis testing has 
already been done, on several different pipelines, on several different 
occasions, yet we as an industry ought to be more involved in the 
process. BioSelect is eager to assist with this exciting project and 
offer assistance to the Committee and relevant federal agencies to 
advance this type of necessary testing. Additional specific research 
needs currently facing the industry include but are not limited to: 
feasibility studies on tankage, pipe and pump options, cold flow 
properties, water issues, stability testing of fuel samples and 
advanced vehicle technologies. In addition, we believe there is a clear 
need for an overall general economic study of capital requirements to 
bring biodiesel to local retail pumps nationwide.
    The goal of this extensive research is to produce the data 
necessary to gain the acceptance and approval from environmental 
agencies, engine manufacturers, public and private sectors and most 
importantly develop consumer confidence from the refinery to the retail 
level where you and I buy our fuel each day.

Standardization

    Standardization of all biofuels, is imperative to ensure 
fungibility into conventional fuel pool and towards longer-term 
acceptance as mainstream fuel. Biodiesel producers and marketers are 
primarily concerned with two American Society for Testing and Materials 
Standards (ASTM) International standards, ASTM D-975, which covers 
diesel fuels and may soon include biodiesel blends up to B5, and ASTM 
D-6751, which sets the minimum standards for B100.
    Implementation of these standards and continued growth of the 
industry requires top engineers, the same individuals that we must 
compete against high paying large Oil and Gas companies to recruit. In 
our Galveston facility we have been fortunate to find strong talent 
that were instrumental in taking us from construction to start-up but 
we are already finding more difficulty in identifying qualified workers 
for our expansion. BioSelect views market stability, and targeted 
education and outreach about biodiesel as keys to attracting good 
talent.
    As the biodiesel industry develops, the demand for highly skilled 
trained labor is on the rise. Industry professionals have observed that 
safety concerns have been raised when smaller start-up plants have 
shortcuts out of ignorance or to cut time and cost. In October 2006, 
the National Renewable Energy Laboratory (NREL) released a report 
showing that out of 32 biodiesel samples collected nationally, half 
failed to meet ASTM quality requirements. BioSelect believes that each 
and every U.S. biodiesel manufacturer is responsible for knowing what 
can go wrong in their manufacturing processes and how that can lead to 
impurities in the finished product. As a large-scale producer however, 
we at BioSelect know that compliance costs money, and we have focused 
substantial time, energy and a great deal of capital on the 
implementation of first-class safety and quality assurance on all 
aspects of our facility, from the people all the way through the 
process. In addition to the training of operators and other industry 
personnel, BioSelect enforces compliance with our own codes and have an 
internal team that act as a forum for exchanging safety suggestions, 
violations, remediation and investigative reports, as exists in the 
chemical industry. With over 300 years of experience in the 
petrochemical and refining industries, BioSelect knows that a unified 
approach to train workers while also adopting best safety practices is 
nothing more than being on par with similar industries. This process 
has prepared both our facility and operators to meet the industry 
standards set forth by ASTM. BioSelect is currently in the process of 
obtaining our BQ9000 certification from the National Biodiesel 
Accreditation Commission (NBAC.)
    According to the National Biodiesel Board, there are currently 17 
accredited biodiesel producers and six certified biodiesel marketers, 
which account for 40 percent of the biodiesel production capacity in 
the United States. In addition, half of the states in the country have 
implemented the ASTM D-6751 specification as part of their fuel quality 
regulations, and an additional 13 states are either planning to accept 
the specification or studying it. Ten states now proactively test 
biodiesel or biodiesel-blended fuels.

Conclusion

    Thank you for the opportunity to speak with you today and for your 
continued commitment to expand the use of renewable fuels. Promoting 
innovation and proactive leadership to create new energy sources, like 
the added domestic refining capacity at BioSelect Galveston, is 
critical to meet the growing energy demand of the future and in 
securing our nation's energy security. Standard Renewable Energy looks 
forward to working with you to further develop this important 
legislation.

                       Biography for John Berger
    Four years ago, at a time of extremely low energy prices, Mr. 
Berger foresaw the looming global shortage of traditional energy 
sources and knew that the country would inevitably be forced to turn to 
renewable sources of energy to serve our vast energy needs. Given his 
background in the traditional energy sector, he recognized that the way 
to turn renewable energy into a successful enterprise was to build an 
integrated platform that could readily be built to scale. As a result, 
he created Standard Renewable Energy.
    Prior to Standard, Mr. Berger founded Contango Capital Management, 
a venture capital firm focused on renewable energy. In addition to 
Standard, Berger is currently Chairman of Trulite Inc, a portable fuel 
cell company that is majority-owned by Standard. He has more than 
eleven years of experience in the energy industry.
    In 2002 and 2003, Mr. Berger served as an advisor to the Federal 
Energy Regulatory Commission (FERC) on distributed generation, demand 
response, information gathering and application issues, investigations 
and trade clearing/credit issues in the North American energy markets.
    Mr. Berger graduated cum laude from Texas A&M University with a BS 
in Civil Engineering and earned an MBA from Harvard Business School.

    Chairman Lampson. And we will get back with you and you can 
put some more of that stuff in, and certainly you can submit 
all of your written testimony for the record.
    Mr. Berger. Thank you, Chairman Lampson.
    Chairman Lampson. You are welcome, Mr. Berger, and Mr. 
Dinneen.

 STATEMENT OF MR. ROBERT DINNEEN, PRESIDENT AND CEO, RENEWABLE 
                       FUELS ASSOCIATION

    Mr. Dinneen. Good afternoon, Mr. Chairman and Members of 
the Committee. Thank you for the privilege of being here again 
today.
    I want to thank you for the opportunity to discuss the 
growth in the domestic ethanol industry, the increasingly 
important role of continued research and development for our 
nation's biofuels industry, and the Committee's Discussion 
Draft legislation, the Biofuels Research and Development 
Enhancement Act.
    The ethanol industry today is on the cutting edge of 
technology, pursuing new processes, new energy sources, and new 
feedstocks that will make tomorrow's ethanol industry 
unrecognizable from today's. Ethanol companies are already 
utilizing cold start fermentation, corn fractionation, and corn 
oil extraction. Companies are pursuing more sustainable energy 
sources, including biomass gasification and methane digesters. 
And there is not an ethanol company that I represent that 
doesn't have a very aggressive cellulose-to-ethanol research 
program underway.
    The Science and Technology Committee, the Energy and 
Environment Subcommittee in particular, can play an important 
role in accelerating these efforts by promoting and targeting 
research and development funds and resources appropriately. 
Support through research and development to promote the 
commercialization of cellulosic ethanol and to continue to 
build upon the existing industry's advancements in technologies 
will be critical to the future growth of the biofuels industry.
    The Discussion Draft clearly reflects a concerted effort to 
identify the research needs that must be addressed to 
facilitate the rapid expansion of domestically-produced 
renewable fuels such as ethanol, bio-butanol, and biodiesel. It 
recognizes that challenges remain, not just in biofuel 
production, but in developing biofuel markets as well. The 
Committee is to be commended for its commitment to meeting the 
challenge of imported energy, recognizing the potential 
benefits of biofuels, and motivating the research community 
through this bill to provide a pathway that will provide a more 
stable and sustainable energy future for all Americans. The RFA 
supports this effort but would offer the following suggestions 
to enhance the bill's effectiveness, particularly given the 
unfortunate budgetary constraints this effort will likely face.
    With respect to the Biofuels and Biorefinery Information 
Center, if the center is intended just to be a clearing house 
for technical and commercial information about biofuels 
development, I would suggest that there may already be federal 
and private resources for that mission. If you envision the 
Center's role to coordinate multiple, and at times conflicting, 
federal research efforts on renewable energy, it could well 
serve a very useful purpose in streamlining federal efforts.
    Clearly, many of the concerns raised in the Discussion 
Draft as issues with the transportation and storage of biofuels 
do not apply to ethanol when used as a blend component in 
today's gasoline. Other biofuels that do not have the record of 
successful use and experience that ethanol enjoys will 
certainly want to evaluate their physical and chemical 
properties and how they will fare in the transportation 
network.
    And as ethanol moves beyond just being a blend component in 
gasoline and into E-85 markets where far more than today's 
ethanol is being used, there will be other transportation 
issues that will likely arise as well.
    These analyses should be focused on the physical transport 
of the products and provisions requiring an access of 
environmental impacts should rightfully be left to the U.S. 
Environmental Protection Agency.
    The RFA supports the Draft Bill's Biofuels Grant Program, 
and we would recommend expanding funding in this area if at all 
possible. As Dr. Foust mentioned earlier, we need to move 
beyond grain and the production of ethanol. The industry is 
working hard to do so, but more work clearly needs to be done. 
Federal efforts to help that would be very, very useful.
    The RFA also strongly supports amending Section 932 of the 
Energy Policy Act of 2005, to create a biorefinery energy 
efficiency program. This will be particularly important as 
State and federal fuel policy gravitates towards a carbon 
matrix for fuel policy.
    With respect to higher levels of ethanol blends, EPA has 
already largely defined the scope of the analysis necessary to 
approve such new fuels for commercial use. EPA's testing needs 
are focused on the drivability, durability, materials 
compatibility, and emissions of these blends. The study 
envisioned in the draft bill goes beyond what EPA would require 
to approve new fuels, creating a new and higher standard for 
ethanol fuel blends than other fuels that may enter the market 
soon. The RFA would suggest, therefore, that the bill track EPA 
protocols for a review of higher ethanol blends and provide 
sufficient funding to expedite such a test.
    Mr. Chairman, increasing America's energy and national 
security by reducing our dependence on foreign oil and 
continuing to expand domestic renewable fuels is among the most 
important challenges facing our country today. We at the RFA 
look forward to working with you and this Congress to develop 
the appropriate federal policies that will help us achieve 
those goals.
    Thank you.
    [The prepared statement of Mr. Dinneen follows:]
                  Prepared Statement of Robert Dinneen
    Good afternoon, Mr. Chairman and Members of the Subcommittee. My 
name is Bob Dinneen and I am President of the Renewable Fuels 
Association (RFA), the national trade association representing the U.S. 
ethanol industry.
    This is an important and timely hearing, and I am pleased to be 
here to discuss the growth in the domestic ethanol industry, the 
increasingly important role of continued research and development for 
our nation's biofuels industry, and the Committee's Discussion Draft 
legislation, the ``Biofuels Research and Development Enhancement Act.''
    The ethanol industry today is on the cutting edge of technology, 
pursuing new processes, new energy sources and new feedstocks that will 
make tomorrow's ethanol industry unrecognizable from today's. Ethanol 
companies are already utilizing cold starch fermentation, corn 
fractionation, and corn oil extraction. Companies are pursuing more 
sustainable energy sources, including biomass gasification and methane 
digesters. And there is not an ethanol company represented by the RFA 
that does not have a cellulose-to-ethanol research program.
    The Science and Technology Committee, the Energy and Environment 
Subcommittee in particular, can play an important role in accelerating 
these efforts by promoting and targeting research and development funds 
and resources appropriately. Support through research and development 
to promote the commercialization of cellulosic ethanol and to continue 
to build upon the existing industry's advancements in technologies will 
be critical to the future growth of the biofuels industry.

Background

    Today's ethanol industry consists of 120 biorefineries located in 
19 different states with the capacity to process 2.2 billion bushels of 
grain into 6.2 billion gallons of high octane, clean burning motor 
fuel, and more than 12 million metric tons of livestock and poultry 
feed. It is a dynamic and growing industry that is revitalizing rural 
America, reducing emissions in our nation's cities, and lowering our 
dependence on imported petroleum.
    Ethanol has become an essential component of the U.S. motor fuel 
market. Today, ethanol is blended in 50 percent of the Nation's fuel, 
and is sold virtually from coast to coast and border to border. The 
almost five billion gallons of ethanol produced and sold in the U.S. 
last year contributed significantly to the Nation's economic, 
environmental and energy security. According to an analysis completed 
for the RFA\1\, the approximately five billion gallons of ethanol 
produced in 2006 resulted in the following impacts:
---------------------------------------------------------------------------
    \1\ Contribution of the Ethanol Industry to the Economy of the 
United States, Dr. John Urbanchuk, Director, LECG, LLC, December, 2006.

---------------------------------------------------------------------------
          Added $41.9 billion to gross output;

          Created 163,034 jobs in all sectors of the economy;

          Increased economic activity and new jobs from ethanol 
        increased household income by $6.7 billion, money that flows 
        directly into consumers' pockets;

          Contributed $2.7 billion of tax revenue for the 
        Federal Government and $2.2 billion for State and local 
        governments; and,

          Reduced oil imports by 206 million barrels of oil, 
        valued at $11.2 billion.

    There are currently 77 biorefineries under construction. With eight 
existing biorefineries expanding, the industry expects more than 6.4 
billion gallons of new production capacity to be in operation by the 
end of 2009.

Biofuels Research and Development Enhancement

    The Discussion Draft clearly reflects a concerted effort to 
identify the research needs that must be addressed to facilitate the 
rapid expansion of domestically produced renewable fuels such as 
ethanol, bio-butanol and biodiesel. It recognizes that challenges 
remain, not just in biofuels production, but in developing biofuels 
markets as well. The Committee is to be commended for its commitment to 
meeting the challenge of imported energy, recognizing the potential of 
biofuels, and motivating the research community, through this bill, to 
provide a pathway that will provide a more stable and sustainable 
energy future for all Americans. The RFA supports this effort, but 
would offer the following suggestions to enhance the bill's 
effectiveness, particularly given the unfortunate budgetary constraints 
this effort will likely face.

Section 1--Biofuels and Biorefinery Information Center

    While we certainly agree Biorefinery Information needs to be more 
widely available, we believe this function is more appropriately met by 
private industry, and that limited federal dollars can be better 
utilized in other areas. Trade associations and industry-led promotion 
councils have traditionally fulfilled the role of clearinghouses for 
information related to the research and development, and the 
commercialization and deployment of technologies. Certainly, with 
respect to ethanol, numerous organizations offer information related to 
the technology, financing, permitting and construction of ethanol 
plants.\2\ In addition, careful consideration should be given as to how 
to best coordinate and consolidate the work already being done by 
various federal agencies on biofuels research and development before 
creating additional layers of bureaucracy. The RFA recommends a 
thorough review by the Secretary of Energy of the existing public and 
private resources before determining the need for a new information 
center.
---------------------------------------------------------------------------
    \2\ For example, BBI International publishes an ``Ethanol 
Development Handbook'' that has proven to be an invaluable resource to 
companies and individuals looking to invest in ethanol production 
technology.
---------------------------------------------------------------------------

Section 2--Biofuels and Advanced Biofuels Infrastructure

    The U.S. transportation fuel market has been blending ethanol into 
our fuel supply for more than 30 years. Ethanol is now blended in 50 
percent of gasoline nationwide. Indeed, over the past several years the 
ethanol industry has worked to expand a ``Virtual Pipeline'' through 
aggressive use of the rail system, barge and truck traffic. As a 
result, we can move product quickly to those areas where it is needed. 
Many ethanol plants have the capability to load unit trains of ethanol 
for shipment to ethanol terminals in key markets. Unit trains are 
quickly becoming the norm, not the exception, which was not the case 
just a few years ago. Railroad companies are working with our industry 
to develop infrastructure to meet future demand for ethanol. The 
biofuels industry is working closely with terminal operators and 
refiners to identify ethanol storage facilities and install blending 
equipment. We will continue to grow the necessary infrastructure to 
make sure that in any market we need to ship ethanol there is rail 
access at gasoline terminals, and that those terminals are able to take 
unit trains.
    Clearly, many of the concerns raised in the Discussion Draft as 
issues with the transportation and storage of biofuels do not apply to 
ethanol when used as a blend component in today's gasoline. Other 
biofuels that do not have the record of successful use and experience 
that ethanol enjoys will certainly want to evaluate their physical and 
chemical properties and how they will fair in the transportation 
network, however. These analyses should be focused on the physical 
transport of the products and provisions requiring an assessment of 
environmental impacts should rightfully be left to the U.S. 
Environmental Protection Agency if necessary and appropriate.
    With respect to ethanol, the most significant infrastructure-
related research and development need to advance cellulose and other 
bioenergy feedstocks for biofuels production is on improved collection, 
storage and handling systems for those feedstocks. The RFA would 
encourage the Committee to expand this provision to include research, 
development and demonstration of the transportation and distribution 
needs of the emerging cellulosic ethanol industry.

Section 4--Bioresearch Centers for Systems Biology Program

    As mentioned previously, there is, and will be for the foreseeable 
future, limited available funding, so an increase in the number of 
Bioresearch Centers to 11 from the Energy Policy Act of 2005's three is 
unnecessary. Perhaps five Bioresearch Centers--one for every Petroleum 
Administration for Defense Districts--would be more appropriate. There 
is already a great amount of regionally-focused research being 
conducted at universities, federal laboratories and other public and 
private institutions nationwide. Increasing the pool of research 
entities that would compete for limited funds may further dilute 
efforts to commercialize and deploy these new and emerging 
technologies.

Section 5--Grants for Biofuels Production Research and Development in 
                    Certain States

    The RFA strongly supports the Draft bill's biofuels grant program, 
and we would recommend expanding funding in this area if at all 
possible. A wide variety of energy crops and agricultural waste 
products such as switchgrass, myscanthis, wood chips and corn stover 
from many regions of the country must all be researched, developed and 
commercialized as additional ethanol feedstocks to realize the annual 
production levels envisioned in the many proposals already introduced 
by this Congress. New biorefineries are being built in new regions of 
the country everyday--the East Coast, the Gulf Coast, the Pacific 
Northwest and even Hawaii. Grant programs that promote geographical 
dispersion, such as those included in the Discussion Draft, will help 
to commercialize cellulosic ethanol quickly and continue the trend just 
beginning to expand ethanol production beyond the traditional corn 
belt.

Section 6--Biorefinery Energy Efficiency

    The RFA also strongly supports amending Section 932 of the Energy 
Policy Act of 2005 to create a Biorefinery Energy Efficiency program. 
This will be particularly important as State and federal fuels policy 
gravitates toward a carbon matrix for compliance. Opportunities for 
both grain and cellulosic ethanol production will be enhanced by 
technologies that allow biorefineries to decrease energy costs by 
diversifying energy sources. Advances in research on the development of 
processes to produce alternative energy at biorefineries such as 
biomass co-generation and biomass gasification, and methane production 
through anaerobic digestors, will be critical to increase energy 
efficiency and reduce the energy consumption of biorefineries.

Section 7--Study of Higher Levels of Ethanol Blends

    Ethanol today is largely a blend component with gasoline, adding 
octane, displacing toxics and helping refiners meet Clean Air Act 
specifications. But the time when ethanol will saturate the blend 
market is on the horizon, and the industry is looking forward to new 
market opportunities. As rapidly as ethanol production is expanding, it 
is possible the industry will saturate the existing blend market before 
a meaningful E-85 market develops. In such a case, it would be most 
beneficial to allow refiners to blend ethanol in greater volumes, e.g., 
15 percent. The ethanol industry today is engaged in testing of higher 
blend levels of ethanol, beyond E-10. There is evidence to suggest that 
today's vehicle fleet could use higher blends. An initial round of 
testing is underway, but more test programs will be needed. It should 
be noted, however, that EPA has already largely defined the scope of 
the analysis necessary to approve such new fuels for commercial use. 
EPA's testing needs are focused on the drive-ability, durability, 
materials compatibility and emissions. The study envisioned in the 
Draft bill goes beyond what EPA would require to approve new fuels, 
creating a new and higher standard for ethanol fuel blends than for 
other fuels that may soon enter the market. The RFA would suggest, 
therefore, that the bill track EPA protocols for a review of higher 
level ethanol blends and provide sufficient funding to expedite such a 
test.
    Higher blend levels would have a significant positive impact on the 
U.S. ethanol market, without needing to install new fuel pumps and wait 
for a vehicle fleet to turn over in the next few decades. It would also 
allow for a smoother transition to E-85 by growing the infrastructure 
more steadily.

Section 8--Study of Optimization of Flexible Fuel Vehicles

    As flexible fuel vehicle (FFV) production is ramped up, it is 
important to encourage the use of the most efficient technologies. Some 
FFVs today experience a reduction in mileage when ethanol is used 
because of the differences in BTU content compared to gasoline. But the 
debit can be easily addressed through continued research and 
development. For example, General Motors has introduced a turbo-charged 
SAAB that experiences no reduction in fuel efficiency when E-85 is 
used. There is also technology being developed that utilizes ``variable 
compression ratio engines'' that would adjust the compression ratio 
depending on the fuel used. Thus, if the car's computer system 
recognized E-85 was being used, it would adjust the compression ratio 
to take full advantage of ethanol's properties. The RFA supports the 
further study of how best to optimize technologies of alternative 
fueled vehicles to use E-85 fuel as included in the Discussion Draft. 
The study of new technologies could dramatically improve E-85 economics 
by eliminating or substantially reducing the mileage penalty associated 
with existing FFV technology.

Conclusion

    Increasing America's energy and national security by reducing our 
dependence on foreign oil and continuing to expand our domestic 
renewable fuels industry is among the most important challenges facing 
our country. We look forward to working with you in the 110th Congress 
to develop the appropriate federal policies that will achieve those 
goals.
    Thank you.

                      Biograph for Robert Dinneen
    Bob Dinneen is the President and CEO of the Renewable Fuels 
Association (RFA), the national trade association for the U.S. ethanol 
industry. As such, he is the ethanol industry's lead lobbyist before 
the Congress and Administration.
    Mr. Dinneen joined the RFA in 1988 as Legislative Director, and 
became President in July of 2001. In this capacity he has led the 
Association's effort to build coalitions with the industry's petroleum 
customers as well as transportation and environmental groups in order 
to provide for marketplace growth for the industry. These coalitions 
have resulted in an historic Renewable Fuels Standard (RFS) fuels 
agreement and passage of the Volumetric Ethanol Excise Tax Credit 
(VEETC).
    Mr. Dinneen has presented testimony before the Congress and federal 
agencies on numerous occasions, and represented the ethanol industry's 
interests at State, national and international forums.
    Prior to joining the RFA, Mr. Dinneen worked on Capitol Hill for 
various Members of Congress and Congressional committees. Mr. Dinneen 
graduated from the Catholic University of America with a Bachelor's 
Degree in Political Science.

    Chairman Lampson. Thank you, Dr. Dinneen, Mr. Dinneen.
    Mr. McAdams.

   STATEMENT OF MR. MICHAEL J. MCADAMS, EXECUTIVE DIRECTOR, 
                  ADVANCED BIOFUELS COALITION

    Mr. McAdams. Thank you, Mr. Chairman. Chairman Lampson, 
Ranking Member Inglis, Members of the Committee, my name is 
Michael McAdams. I serve as Executive Director of Hart Energy 
Government Affairs Group. I am testifying on behalf of the 
Advanced Biofuels Coalition.
    It is a great privilege and responsibility to appear before 
you today and to share how the members of the Advanced Biofuels 
Coalition are contributing to meeting our energy and 
environmental goals. I am delighted to join such a 
distinguished panel, some of whom I have worked with for years 
in the area of fuels policy.
    The Advanced Biofuels Coalition is a group of companies 
whose second and third generation technologies hold great 
promise. The companies, working with the Federal Government, 
have the potential to provide the American public with abundant 
values, volumes of high-quality, no-compromise renewable fuels. 
The fundamental objective of the coalition is to educate 
policy-makers on the ability of these technologies to deliver 
significant volumes of lower carbon fuels today and in the near 
future. For these companies to be able to achieve this goal 
they need your support in adopting policies at the federal 
level which are technology and feedstock neutral.
    We applaud your efforts to provide a path to broaden the 
use of advanced biofuels. The legislation before us today we 
believe can make a significant contribution to America's fuels 
marketplace. Our members recognize the tremendous contribution 
and the path traveled which first generation fuels have already 
made and will play in the future of this effort. But we believe 
that the future of energy policy will require contributions 
from many sources. As one Governmental official recently 
suggested, this is a matter of ``silver buckshot, not a silver 
bullet.''
    Members of the coalition have reviewed your legislation and 
agree that many of the provisions would be helpful in moving 
the marketplace forward. Specifically, we are most interested 
in your section regarding infrastructure and would encourage 
that you consider the benefits that second-generation fuels 
would have in terms of reducing the overall infrastructure 
costs to the country and to consumers.
    If a picture is worth a thousand words, then with the 
remaining portion of my five minutes I want to present the 
Committee several slides that illustrate the potential of 
second and third-generation technologies which use existing 
biofuel feedstocks.




    The first slide depicts various technology pathways and 
potential fuels which they can produce. This is the slide 
version of the oral version that Dr. Foust gave.




    The second slide presents a suite of technologies currently 
available or under development. As you can see, there are a 
range of different technologies on the slide, all of which are 
renewable.




    The third slide briefly depicts where many of these 
technologies are currently being deployed around the world. To 
the extent we do not make technology-neutral policy choices in 
the current energy legislation, many of these technologies may 
never find their way to the United States.




    The fourth slide is a comparison of biodiesel product 
quality as it compares to several different technologies. You 
can see from this slide that there are significant quality 
differences, not to mention fungibility benefits associated 
with second and third-generation technologies. The fact that 
the basic chemistry of these products is fundamentally 
different from first-generation biodiesel provides the 
opportunity that jet fuels may actually be produced from these 
new processes in the future.




    The fifth slide attempts to show the potential of 
scalability of the various technologies. As you can see, the 
second-generation fuels which are sugar-based and biomass-based 
give the country significant opportunity for large volumes.




    The last slide depicts several second-generation alcohol 
products as they compare on energy density, volatility, and 
octane with the current first-generation ethanol.
    The last point I would wish to make to the Committee 
concerns the desire by many in Congress to develop a Low Carbon 
Fuel Standard. Depending on its specific process, feedstocks, 
and products, an individual biorefinery may have a wide range 
of life cycle carbon emissions. Should the Congress seek to 
mandate a specific biofuels target, it should provide 
sufficient flexibility to allow both the objective of hitting a 
renewable gallon target and the objective of having a low 
carbon fuel supply to both be achieved and not be in conflict 
with each other. To do so would put the consumer at risk.
    In conclusion, we appreciate the opportunity to testify 
before you today, and we stand ready to work with the Committee 
on the legislation before us.
    Thank you.
    [The prepared tatement of Mr. McAdams follows:]
                Prepared Statement of Michael J. McAdams
    Mr. Chairman, Ranking Member, and Members of the Committee, my name 
is Michael McAdams, and I serve as Executive Director of Hart Energy's 
Government Affairs Group. I am testifying on behalf of the Advanced 
Biofuels Coalition.
    It is a great privilege and responsibility to appear before you 
today to share how the members of the Advanced Biofuels Coalition are 
contributing to meeting our energy and environmental improvement goals. 
I am delighted to join such a distinguished panel, some of whom I have 
worked with for years in the area of fuels policy.
    The Advanced Biofuels Coalition is a group of companies whose 
second and third generation technologies hold great promise. These 
companies, working with the Federal Government, have the potential to 
provide the American public with abundant volumes of high quality, no-
compromise renewable fuels. The fundamental objective of the coalition 
is to educate policy-makers on the ability of these technologies to 
deliver significant volumes of lower carbon fuels today and in the near 
future. For these companies to be able to achieve this goal, they need 
your support in adopting policies at the federal level which are 
technology and feedstock neutral.
    We applaud your efforts to provide a path to broaden the use of 
``advanced biofuels.'' The legislation before us today we believe can 
make a significant contribution to America's fuels market place. Our 
members recognize the tremendous contribution and the path traveled 
which first generation fuels have made already and will play in the 
future of this effort. But we believe that the future of energy policy 
will require contributions from many sources. As one Governmental 
official recently suggested this is a matter of ``silver buckshot not a 
silver bullet.''
    Members of the Coalition have reviewed your legislation and agree 
that many of the provisions would be helpful in moving the market 
forward. Specifically, we are most interested in your section regarding 
infrastructure, and would encourage that you consider the benefits that 
second generation fuels would have in terms of reducing overall 
infrastructure cost to the county.
    If a picture is worth a thousand words, then with the remaining 
portion of my five minutes I want to present to the Committee several 
slides that illustrate the potential of second and third generation 
technologies which use existing biofuel feedstocks. The first slide 
depicts various technology pathways and the potential fuels which they 
could produce.
    The second slide presents the suite of technologies currently 
available or under development. As you can see, there are a range of 
different technologies on the slide, all of which are renewable.
    The third slide briefly depicts where many of these technologies 
are currently being deployed around the world. To the extent we do not 
make technology neutral policy choices, many of these technologies may 
not find their way to the United States.
    The fourth slide is a comparison of biodiesel product quality as it 
compares to several technologies. You can see from this slide that 
there are significant quality differences, not to mention the 
fungibility benefits, associated with the second and third generation 
technologies. The fact that the basic chemistry of these products is 
fundamentally different from first generation biodiesel provides the 
opportunity that jet fuels may be produced in the near future from some 
of these renewable based processes.
    The fifth slide attempts to show the potential of scalability of 
the various technologies. As you can see, the second generation fuels 
which are sugar-based and biomass-based give the country significant 
opportunity for large volumes.
    The last slide depicts several second generation alcohol products, 
as they compare on energy density, volatility and octane with ethanol.
    The last point I would wish to make to the committee concerns the 
desire by many in this Congress to develop a Low Carbon Fuel Standard. 
Depending on its specific process, feedstocks, and products, an 
individual biorefinery may have a wide range of life cycle carbon 
emissions. Should the Congress seek to mandate a specified biofuels 
target, it should provide sufficient flexibility to allow both the 
objective of hitting a renewable gallon target and the objective of 
having a lower carbon fuel supply to both be achieved and not be in 
conflict.
    In conclusion we appreciate the opportunity to testify before you 
today and stand ready to work with the Committee on the legislation 
before us.



APPENDIX

    Questions from the Committee:

1.  Is a greater federal investment needed in biofuels research? Are 
there specific areas that are in need of greater research focus? What 
feedstocks are presenting the greatest long-term potential for 
development of biofuels? What are the technical barriers to realizing 
biofuels from diverse feedstocks?

    Answer: Currently many of the new second and third generation 
technologies have begun in the laboratories from colleges and 
universities around the country. We would encourage the Committee to 
continue to encourage and foster public private-partnerships with 
industry and governments to make the new discoveries in this area.
    The type of technology and choices of feedstocks utilized by a 
specific processes determine their specific interest in any given 
research focus. In addition, the types of process will have a direct 
bearing on the view of which feedstocks may hold the greatest long-term 
potential for the development of fuels. Clearly for a company like 
Amyris, which leverages sugar containing feedstocks to create 
hydrocarbon fuels, the ability to utilize forms of low cost sugars from 
cellulosic processes may hold great promise. As for a company such as 
Velocys, which is developing a Fischer-Tropsch process, woody biomass 
or slash from trees provides a great opportunity forward.
    Your last question inquires as to the technical barriers to 
realizing biofuels from diverse feedstocks. In most cases, whether it 
is gasification or biotechnology, scaling up the technology is one of 
the primary challenges. The government's ability to provide support for 
the demonstration of technology and the assistance in the testing of 
fuels to meet the specification for different engines could be 
particularly helpful to the smaller companies involved in this space. 
Additionally, food oils have a distinct tendency to make different 
products from different process applications and have different quality 
aspects even within the same process. This creates technical barriers 
to transportation and engine use of various technological applications 
and feedstocks for biofuels.

2.  How will the business community benefit from better federal 
coordination and cataloging of information from federal research on the 
biofuels development process? Should databases and a centralized 
clearinghouse be created to make this information readily available?

    Answer: To the extent the Federal Government is conducting its own 
research and development, and it would catalogue and provide 
transparent access to a wide variety of stakeholders, this could 
potentially lead to partnerships and shared technology developments 
that might not otherwise be forthcoming. Putting this information into 
the marketplace at a time of high investment in these types of areas 
does provide for the potential that new technologies may be picked up, 
combined and moved forward in a more expeditious fashion.

3.  Can you comment on the need for research in the area of biofuels 
infrastructure? What should be included in such research?

    Answer: There are many new technologies that hold the promise to 
bring fungible high quality diesel and gasoline components to the 
market on a cost effective basis. The legislation should explore the 
timeframes for these alternatives and include these fuel options in the 
studies for infrastructure requirements. It might be in the Nation's 
best interest to sequence the requirements for certain volumes of 
renewable fuels until after the completion of these studies to afford 
the potential of significantly lowering any large investments which 
could be required to move massive volumes of first generation fuels.

4.  Is standardization of biofuels, whether ethanol or biodiesel, 
needed to ensure fuel fungibility? Should this standard focus on blend 
stock optimization?

    Answer: Various technologies make differing qualities of biofuels 
and as a result require different infrastructure. As a result of the 
biofuels' properties, the quantity of renewable fuel that can be added 
as a component to either diesel or gasoline also varies. This is 
further magnified by the warranty requirements of various engine 
manufacturers.
    In the past we have seen certain technologies utilize standard 
requirements at state levels to attempt to block advanced biofuels with 
great potential from entering the marketplace.
    The Committee should be very cautious to not preclude the 
development of newer higher quality options for consumers in the market 
place. We appreciate the interest to creating a standard to optimize 
blend stock for those fuels with highly variable quality. However, 
depending on the technology and the product involved, the level and 
requirements needed to create a fluid system to deliver consistent 
finished product to an end point are extremely complicated and could 
have unintended consequences. For example, requiring U.S. refining in 
the system to make changes to their blends could require significant 
changes to the base stock and lower the optimization of the current 
refining system.

5.  Is the current workforce adequate to meet the growing needs for 
trained personnel to develop and operate biofuels facilities? Is a 
comprehensive workforce training program needed?

    Answer: Depending on the technology involved governs the type of 
workforce required. For most of our members, the existing personnel 
from either the ethanol or refining industries have provided adequate 
personnel requirements. However, support in working training programs 
is something we would welcome as a way to increase the supply of 
workers in the future with the knowledge to operate these new 
technologies.

                    Biography for Michael J. McAdams
    Michael McAdams, Executive Director, Government Affairs of Hart 
Downstream Energy Services, has been involved in every major federal 
energy and environmental initiative over the last 20 years. In his 
current capacity, he spearheads governmental advocacy efforts for Hart 
clients including the Advanced Biofuels Coalition. Prior to joining the 
firm, he spent 14 years with British Petroleum (BP), acting as Vice 
President, Federal Affairs and the Environment, and the Associate Group 
Policy Advisor while there. Before joining BP, Mr. McAdams served on 
the staffs of several Members of Congress, including the current 
Ranking Minority Member of the House Science and Technology Committee, 
the Honorable Ralph Hall. He holds a BA in political science from 
Virginia Tech and a JD from the Washington College of Law.

    Chairman Lampson. Thank you very much, Mr. McAdams.
    Mr. Waskow.

STATEMENT OF MR. DAVID WASKOW, INTERNATIONAL PROGRAM DIRECTOR, 
                   FRIENDS OF THE EARTH, U.S.

    Mr. Waskow. Chairman Lampson and Members of the Committee, 
thank you very much for the opportunity to appear today to 
discuss research and development priorities related to the 
environmental impacts of biofuels production. My name is David 
Waskow, and I am the International Program Director at Friends 
of the Earth, which is a national environmental advocacy 
organization and also the U.S. arm of an international 
federation, Friends of the Earth International, that has groups 
in 70 countries around the world.
    In the U.S. and abroad, as you know, biofuels are often 
viewed as an essential solution to the linked challenges of 
global warming and our dependence on oil. If done right and at 
the appropriate scale, biofuels can indeed make an important 
contribution to reducing greenhouse gas emissions, while also 
improving agricultural sustainability, protecting natural 
resources, and strengthening rural economies. However, these 
results are by no means guaranteed, and we must be vigilant in 
ensuring that the potential of biofuels is, in fact, achieved. 
Without a serious consideration of environmental impacts, 
increased biomass production could have unintended consequences 
for water, air, and soil quality, water availability, and 
sensitive ecosystems and potentially could provide only minimal 
benefits or even negative outcomes in terms of greenhouse gas 
emissions.
    As biofuel production and use rapidly increases, a robust 
research and development program addressing environmental 
impacts is urgently needed. Perhaps the most important task for 
research in coming years is to more thoroughly understand the 
environmental impacts of biofuels production on a life cycle 
basis. Particularly, to determine the actual greenhouse gas 
emissions associated with production. Life cycle analyses 
should estimate the greenhouse gas emissions associated with 
the entire chain of production and end use of a fuel, including 
impacts associated with land use, feedstock production, fuel 
processing facilities, transport, consumer end use, and more. 
This research need is even more critical now given that pending 
legislative proposals create greenhouse gas performance 
standards for renewable and alternative fuels. Indeed, getting 
these analyses wrong could end up, upend the entire policy 
framework and fundamentally undermine greenhouse gas reduction 
goals.
    Unfortunately, however, the current generation of life 
cycle analyses including the well-known GREET model out of 
Argonne National Laboratory, contain important uncertainties 
and land use-related impacts in particular are poorly 
characterized in these life cycle analyses. The land use 
impacts of expanded biofuels production will include shifting 
marginal, unused, or ecologically-sensitive land into biofuels 
production. These impacts could change fundamental assumptions 
about greenhouse gas emissions for biofuels both domestically 
and internationally.
    Indeed, the recent surge in corn ethanol production in the 
United States underscores the importance of examining these 
greenhouse gas issues closely. Based on estimates from the 
Argonne National Lab, the per acre greenhouse gas benefits from 
corn ethanol production compared to conventional gasoline 
amount to 0.6 metric tons of carbon dioxide equivalent.
    By contrast, clearing an acre of grassland would produce 45 
to 80 tons of carbon dioxide equivalent and converting an acre 
of forest will commonly release 200 to 300 metric tons. The 
implications are substantial. In essence, to make back all the 
greenhouse gas emissions from an acre of land converted from 
grasslands, one would have to grow corn on that acre for 
approximately 100 years.
    Careful analysis of the greenhouse gas impacts of land 
conversion is also relevant for biofuels feedstocks other than 
corn, including biofuels production outside the United States, 
partly intended for export. In southeast Asia, for example, the 
palm oil industry which has devastated rainforests and 
wetlands, is increasingly shifting production to biofuels for 
export. Similarly, in Brazil rapidly-expanded production of 
biofuels is likely to increase land use pressures in ways that 
could influence the greenhouse gas profiles of those fuels.
    In addition to the critical task of analyzing greenhouse 
gas emissions, life cycle analyses should also be expanded to 
address a full range of potential environment impacts, 
including some of the issues I described earlier, soil quality, 
water use, water quality, and so forth. Broader research on 
these issues is especially needed for feedstocks other than 
corn.
    In addition, if we hope to continue the growth of a 
sustainable biofuels industry in the United States, we must 
also find ways to steer the sector in directions that will be 
more compatible with our environmental goals. Research into 
best practices for the cultivation and harvesting of feedstocks 
will be especially important, and the research agenda should 
permanently include issues involving crop diversification, 
including mixed perennial grasses.
    Sustainable practices for biofuel processing facilities and 
research into the impacts of biofuel processing facilities, 
particularly involving energy use and water use, should be a 
priority. And research and development for production 
alternatives is also vital, especially for small-scale 
production and local and on-farm use of biofuels.
    Let me conclude by saying that we appreciate this 
opportunity to address the Subcommittee and look forward to 
working with you to address the critical research and 
development agenda needed to deal with the environmental 
impacts of biofuels. An intensive research program can help 
insure that biofuels provide the benefits we want while also 
avoiding the environmental harm that would undermine our 
fundamental objectives.
    Thank you.
    [The prepared statement of Mr. Waskow follows:]
                   Prepared Statement of David Waskow
    Chairman Lampson and Congressman Inglis, thank you for the 
opportunity to appear today before the House Science and Technology 
Subcommittee on Energy and Environment to discuss research and 
development opportunities and priorities related to the environmental 
impacts of biofuels expansion. My name is David Waskow, and I am the 
International Program Director at Friends of the Earth. Friends of the 
Earth is a national advocacy organization in the United States founded 
in 1969 and the U.S. arm of Friends of the Earth International, the 
world's largest environmental federation, with groups in more than 70 
countries worldwide.
    In the United States and abroad, biofuels are often viewed as an 
essential solution to the linked challenges of global warming and our 
dependence on oil. If done right and at the appropriate scale, biofuels 
can indeed make an important contribution to reducing greenhouse gas 
emissions, improving agricultural sustainability and protection of 
natural resources, and strengthening rural economies. However, these 
results are by no means guaranteed, and we must be vigilant in ensuring 
that the potential of biofuels is in fact achieved. Without serious 
consideration of environmental impacts, increased biomass production 
could harm water, air and soil quality, decrease water availability, 
and increase loss of biodiversity, wildlife habitat, and sensitive 
ecosystems, while providing only minimal benefits or even negative 
outcomes in terms of greenhouse gas reductions.
    Recent data regarding increases in the scale of biofuels 
production, as well as current policy proposals aimed at significantly 
increasing the levels of biofuels production, make the consideration of 
environmental benefits even more of a pressing concern. According to 
Department of Energy data, U.S. ethanol production increased from 3.4 
billion gallons in 2004 to an annual rate of six billion gallons at the 
beginning of 2007, and annual biodiesel production expanded from 28 
million gallons to approximately 287 million gallons from 2004 to 2006. 
Meanwhile, annual imports of biofuels have also steadily increased. 
More than 10 percent of fuel-grade ethanol came from abroad in 2006, 
despite the current 54-cent per gallon tariff on ethanol, and there has 
been an upswing in the construction of plants, such as a 100-million 
gallon per year facility in Washington State, designed to import palm 
oil for biodiesel. Legislative proposals to dramatically increase the 
use of biofuels in the United States to more than 30 billion gallons 
annually would accelerate these already existing trends both for 
domestic production and imports.
    As biofuel production and use rapidly increases, a robust research 
and development program is urgently needed to ensure that we understand 
the full scope of the environmental implications of biofuel production 
and that investment in promising technologies results in significant 
greenhouse gas reductions and the best environmental outcomes possible. 
Greenhouse gas emissions and environmental impacts vary enormously by 
feedstock and the full life cycle of the production process. Moreover, 
the increased scale of biofuels production itself raises important 
questions of environmental sustainability, especially in terms of land 
use impacts. Research and development efforts should consider these 
impacts thoroughly and help steer future biofuels production in a way 
that can maximize benefits and minimize environmental harm.

Life Cycle Analysis

    Perhaps the most important task for research in coming years is to 
more thoroughly examine the environmental impacts of biofuels 
production on a life cycle basis, particularly to determine the actual 
greenhouse gas emissions associated with biofuel production. At their 
best, life cycle analyses for greenhouse gas emissions estimate the 
emissions associated with the entire chain of production and end-use of 
a particular biofuel, including impacts associated with land use, 
feedstock production, fuel processing facilities, transport, and 
consumer end-use. The greenhouse gas evaluation of renewable fuels on a 
life cycle basis can help provide the underlying technical foundation 
for policy options, particularly when the life cycle emissions are 
compared to the life cycle emissions from conventional fossil fuel-
based fuel. Particularly given recent legislative proposals that would 
base renewable fuel mandates and other fuel policies on the greenhouse 
gas profile of specific fuels, it is imperative that life cycle 
analyses are comprehensive and accurate. Indeed, getting these analyses 
wrong could upend the entire policy framework.
    The current generation of life cycle analyses, including the well-
known GREET model developed at Argonne National Laboratory, examine a 
wide range of life cycle contributors to greenhouse gas emissions 
(including not only carbon emissions, but also gases such as methane 
and nitrous oxide). Unfortunately, however, even the GREET model, which 
is considered the pace-setter for greenhouse gas modeling, is 
inadequate and contains important uncertainties that must be addressed. 
Many in the scientific community have echoed our concern that life 
cycle analyses must be improved to address the full scope of greenhouse 
gas emissions related to biofuels production.
    Land use-related impacts, in particular, are poorly characterized 
in current life cycle analyses, and broader and deeper research is 
needed to quantify the full range of parameters affecting greenhouse 
gas emissions. In their recent technical analysis of California's Low 
Carbon Fuel Standard for the California Air Resources Board, University 
of California professors Alexander Farrell and Daniel Sperling noted 
the limitations of the GREET model in terms of land use change. The 
land use impacts of expanded biofuels production will include shifting 
marginal, unused or ecologically sensitive land into biofuels 
production, potentially changing the underlying assumptions about 
greenhouse gas emissions for biofuels produced both domestically and 
internationally. The scale of land use conversion for biofuels 
production, the types of land being converted, and the land intensity 
of various biofuel feedstocks will likely have significant impacts on 
greenhouse gas outcomes in ways that current models do not fully 
account for.
    The recent surge in corn ethanol production in the United States 
underscores the importance of examining these greenhouse gas issues 
closely. USDA estimated that corn acreage in the United States would 
increase by 15 percent, or 12 million acres, during the spring 2007 
planting season. Legislative proposals currently under consideration 
would further increase pressure on land, expanding corn ethanol 
production to as much as 15 billion gallons annually, an amount that 
would require using land equivalent to half the current corn acreage in 
the country, or 45 million acres.
    The greenhouse gas implications of this land use will depend on the 
types of land that are used for such biofuels production, including 
whether protected lands such as those in the Conservation Reserve 
Program are retired from that program and placed into ethanol 
production. Yet even if the land put into biofuels production is 
currently farmed with other crops, the use of that land is likely to 
displace some level of existing agricultural production, including to 
production on vulnerable lands outside the United States. Other, 
indirect impacts that might occur due to the use of corn for ethanol 
could also be considered in a comprehensive life cycle analysis. For 
example, when an acre of corn is diverted for ethanol, livestock 
operations around the world will replace most of the corn in some other 
way, which on a worldwide basis could result in the conversion of 
additional land to agricultural production.
    The greenhouse gas emissions related to the increased use of land 
for corn ethanol production could be quite substantial. Based on 
estimates by the Argonne National Laboratory, the per-acre greenhouse 
gas benefits from corn ethanol production compared to conventional 
gasoline amount to 0.6 metric tons of carbon dioxide equivalent. By 
contrast, the Intergovernmental Panel on Climate Change estimates that 
clearing an acre of grassland would produce 45 to 80 tons of carbon 
dioxide equivalent greenhouse gases and converting an acre of forest 
will commonly release 200 to 300 metric tons of carbon dioxide 
equivalent greenhouse gases. The implications of these data are 
substantial. Even small increases in the use of land converted from 
grasslands or forests would undo the greenhouse gas benefits from corn 
ethanol production on an acre of land. While it would be reasonable to 
amortize the greenhouse gas impacts from land conversion over a limited 
number of years, doing so would not limit the quite significant 
immediate impacts of the land conversion.
    Careful analysis of the greenhouse gas impacts of land use 
conversion is also relevant for biofuel feedstocks other than corn, 
including for production outside the United States. In Southeast Asia, 
for example, palm oil production is increasingly shifting from a focus 
on food inputs to production as a biodiesel input. Unfortunately, 
despite palm oil's high energy content, the production of palm oil is a 
major source of destructive land use patterns, particularly due to 
deforestation and wetland conversion. Nearly 50 percent of currently 
productive palm oil plantations in Southeast Asian countries is planted 
on land that was recently converted from forest, releasing substantial 
quantities of greenhouse gases. Meanwhile, a quarter of all palm oil 
plantations in Indonesia are established over converted peatlands, 
which have been drained and often then burned to make way for palm 
production. Wetlands International estimates that peatland drainage and 
burning in Indonesia contribute two billion tons of carbon dioxide 
emissions annually, or eight percent of worldwide carbon emissions.
    Similarly, in Brazil, rapidly expanded production of biofuels is 
likely to increase land use pressure in ways that could influence the 
greenhouse gas profiles of those fuels. In the case of sugar cane 
production for ethanol, which already occupies 13 million acres in 
Brazil, expanded sugar cane production could take place on the 
country's significant quantity of degraded and fallow land. However, 
many observers believe it is likely that expanded production will also 
increasingly move into the Brazilian cerrado, the biodiverse tropical 
savanna. In addition, sugar cane production in Brazil frequently 
encroaches on previously occupied lands, which often results in crop 
and livestock production relocating to land converted from savanna or 
rainforest. Meanwhile, although soybean cultivation for biodiesel 
production in Brazil is still relatively undeveloped, the potential for 
pressure on sensitive lands is significant. Soybean production 
currently occupies more than 22 million acres and frequently drives 
widespread deforestation.
    In addition to conducting more comprehensive analysis of the 
greenhouse gas impacts of land use changes, other elements of 
greenhouse gas life cycle analyses should also be strengthened. For 
example, one of the most significant remaining uncertainties in life 
cycle analysis is the impact of nitrous oxide emissions, an important 
greenhouse gas related to agricultural production. Several potential 
sources of nitrous oxide emissions, including the use of crop residues, 
are not included in any major life cycle analysis. In addition, 
greenhouse gases emissions related to energy use for irrigation are not 
included in the GREET life cycle analysis.
    Beyond the critical task of analyzing the greenhouse gas emissions 
associated with renewable fuels, life cycle analyses should also be 
expanded to address a full range of potential environmental impacts 
from biofuels production. This will be especially important in order to 
compare the impacts of various biofuels in terms of their relative 
impacts on soil quality, water use, water quality (including such 
critical issues as nitrogen and pesticide run-off), air quality, and 
protection of native ecosystems, habitats and biodiversity. As next-
generation renewable fuels, such as cellulosic ethanol, become 
increasingly viable both technologically and commercially, it will be 
critically important to be able to compare the entire range of impacts 
of those fuels with conventional biofuels. In addition, analysis of the 
aggregate and cumulative environmental impacts related to the growth of 
the entire biofuels sector, both domestically and internationally, 
should be developed.
    Finally, one of the most significant gaps in research on the 
environmental impacts of biofuels is the extremely limited set of 
feedstocks that have been analyzed in any detail. Broader research on 
environmental impacts and the development of comprehensive life cycle 
analyses are needed for a number of feedstocks other than corn--
including soy, sugar cane, palm oil, canola, native grasses, various 
wood sources, straight vegetable oil (including waste vegetable oil), 
and crop residues. In some instances, greenhouse gas life cycle 
analyses have been conducted for those feedstocks, but broader and 
deeper analysis would add significantly to the understanding of the 
greenhouse gas and other environmental impacts from those fuel sources. 
In addition, most studies of biofuel production use broad averages for 
analyzing impacts and land-use intensity, rather than geographically-
specific data. Variability across regions of the United States and the 
world can be significant and should be included in these analyses.

Research and Development for Best Practices and Advanced Biofuels

    It is increasingly clear that our domestic demand for biofuels far 
exceeds our supply of corn for conversion to corn-based ethanol, 
currently our major source of biofuels in the United States.
    Meanwhile, the recent rapid expansion of corn-based ethanol 
production has helped stir increased concern about the environmental 
sustainability of biofuels production more broadly. If we hope to 
continue the growth of a sustainable biofuels industry in the United 
States, we must find ways to steer the sector in directions that will 
be most compatible with our fundamental environmental goals. Research 
and development must tackle the challenge of promoting best practices 
for biofuel production and facilitating the development of improved, 
advanced biofuels sources.
    Research into best practices for the cultivation and harvesting of 
feedstocks will be especially critical to the environmental 
sustainability of biofuels production. Examples of the issues that 
research need to address include harvest timing and quantities; crop 
rotations; fertilizer requirements; use of appropriate and safe 
chemicals for cellulosic crops; impacts of crop residue utilization; 
potential integration of no-till and organic farming to provide the 
greatest possible greenhouse gas and soil benefits; use of single-pass 
harvesting; and feedstock processing and handling methods for woody 
biomass and perennial grasses. The research agenda for best practices 
should also prominently include issues involving crop diversification 
and appropriate mixes (including cultivation techniques for mixed 
perennial crops). A recent University of Minnesota study showed that 
diverse perennial grass mixes are more beneficial in reducing 
greenhouse gas emissions and other environmental impacts than is the 
case with other approaches, including monocropping of switchgrass.
    In addition, a research and development program for conventional 
plant breeding of cellulosic and other feedstocks could help develop 
biofuels that are less land-intensive and promote environmental 
sustainability in other ways. Pursuing conventional breeding, rather 
than using an approach involving transgenic engineering, would avoid 
significant controversy and trade-related disputes and would avoid 
contamination of the food supply from genetically engineered biofuel 
feedstocks.
    Sustainable practices for biofuel processing facilities, 
particularly for energy and water use, should also be a research and 
development priority. Research on the most effective ways to use 
biomass for powering biofuel processing facilities could be 
particularly important to creating greenhouse gas and air quality 
benefits. In addition, research on minimizing water use by ethanol 
processing plants, which currently use more than four gallons of water 
to every gallon of ethanol produced, will be critical to limiting the 
potentially intense pressure that biofuels production could place on 
water resources.
    Research and development for improved fuel types is also critical. 
Potential alternative biofuel sources such as straight vegetable oil 
and algae have received too little attention and should be made more 
central to a research and development strategy. Straight vegetable oil 
(including waste vegetable oil) can be used in modified diesel engines 
without processing into biodiesel, thereby reducing the life cycle 
greenhouse gas emissions that would otherwise come from a biodiesel 
production process. However, in order to make straight vegetable oil 
technologically and commercially viable, research and development will 
be needed for vehicle engine modifications. Another promising fuel 
source is algae, which can likely be produced in substantial quantities 
for biodiesel with significant greenhouse gas reduction benefits and 
limited environmental impacts. It would be valuable to support a 
research and development program to facilitate production of 
environmentally-sound and commercially viable algae biodiesel.
    Finally, it will be vital to support a research and development 
agenda for small-scale production and local and on-farm use of 
biofuels. Distributed technologies that can be used to provide local 
co-generation of electricity and heat and to produce biofuels, 
particularly biodiesel, for on-farm use, should be priorities of this 
research and development program. Small-scale gasification technologies 
for conversion of cellulosic biomass also offer significant 
opportunities that should be explored. These approaches are important 
not only in the United States, but can also be developed for use in 
developing countries so that local communities in those countries can 
produce biofuels for their own consumption and economic benefit.

                               Discussion

    Chairman Lampson. Thank you, Mr. Waskow. I will now move 
into our first round of questions, and the Chairman will 
recognize himself for five minutes.

                        Biofuels Infrastructure

    Mr. Dinneen, surely the ethanol industry should be 
commended for insuring adequate supply of ethanol available to 
all parts of the country. The virtual pipeline through multiple 
modes of transport has done an exceptional job in quickly 
moving product.
    However, the discussion of significant growth in the use of 
biofuels generally, I am concerned that we will reach a point 
when the virtual pipeline will meet capacity. With the 
introduction of larger quantities of biofuels wouldn't it be 
more economical for the producers, the blenders, and consumers 
to move the product through pipelines if we know it is safe and 
effective?
    Mr. Dinneen. Potentially. Let me first say that I think 
analyses have been done by CSX Railroad as to how much 
additional rail traffic it would take to move as much as 35 
billion gallons of ethanol, and their assessment is that that 
is 14,000 unit trains a year that would be necessary. That 
certainly looks like a really big number until you put it in 
some context. It is actually less than four percent of the 
total number of trains in this country. So if moving more 
biofuels into the motor fuel market is going to be a national 
priority, I think finding four additional percent, you know, 
rail traffic is certainly feasible.
    But your question was more on the economics than on, you 
know, the logistics. And certainly it could potentially be far 
more economic to move product by pipeline. The question will be 
how is the ethanol industry going to develop. Is it going to 
develop as the oil industry has been, where much of the 
production is highly centralized in one region? Because now the 
pipeline system has been built to accommodate gasoline 
production in the Gulf Coast, and the pipelines flow from there 
out to the population centers. Well, already you have seen the 
ethanol industry expanding beyond just the traditional Midwest. 
We have got plants today that are being built in California. 
They are actually in operation, four plants in operation in 
California. There are more plants under construction in Texas 
today than are under construction in Illinois, and as our 
industry develops, you will see, I think, expanding production 
capacity in all regions of the country. So you might not have a 
concentration of production that would make pipeline shipments, 
you know, feasible or more economic. I think you are just going 
to have to see.
    Chairman Lampson. If we are ultimately planning to displace 
a large amount of petroleum-based products with biobased 
products, shouldn't we explore using some of that petroleum 
infrastructure that becomes less utilized in order to move 
ethanol?
    Mr. Dinneen. Absolutely, Mr. Chairman. We should explore 
that and indeed, it is feasible to do. It has been a 
marketplace issue thus far. There may be some technical issues 
that need to be addressed, and this bill I think will help to 
identify those.
    Chairman Lampson. You were nodding your head, Mr. McAdams. 
Do you want to make a comment about it, and then I would like 
for Dr. Foust to comment on it.
    Mr. McAdams. Yes, Mr. Chairman. I think it is a very 
intuitive question, because as you move forward and you look at 
the bills in both the House and the Senate that are currently 
proposed, the Congress is trying to change the fundamental 
balance of where the energy comes from in the future, and so we 
are looking at 36 billion gallons of renewable fuels in the 
Senate, somewhere around 30 billion, 35 billion in the House. 
And those bills sequence the time in which the renewable fuels 
come into the marketplace. If you look at the second slide that 
I laid down on the right hand of the slide you would have seen 
all the timeframes that these second and third-generation 
technologies could come into play. They are totally fungible in 
the existing pipeline system. They are totally fungible with 
existing fuels. Some of the fuels, the gasoline slide I showed, 
some of those fuels could actually work in conjunction with 
ethanol and be blended with ethanol.
    So I think it is a very intuitive question, and I think 
your legislation and the section in your legislation that talks 
about how you would blend these fuels and what the properties 
are and what the benefits of those properties are, is 
particularly on target and timed to show the benefits of those 
fuels being merged.
    Chairman Lampson. These aren't cost competitive yet just 
because they are available?
    Mr. McAdams. Some of them if, some of them would be very 
cost competitive. Yes, sir.
    Chairman Lampson. Dr. Foust.
    Dr. Foust. I would highly agree with what my colleagues 
say. I think it depends on if the ethanol industry develops 
more decentralized than the petroleum industry, it does 
complicate the petroleum model for ethanol. However, with that 
said, I think there, clearly economic studies show it is a 
fraction of the cost to move fuel via pipeline than it is by 
rail or truck, and that is significant, and I think it needs to 
be investigated.
    As Mr. Dinneen said, there are technical challenges with 
putting ethanol in existing pipelines, but those are 
predominantly due to practices. Currently hydrocarbon fuels are 
separated by a water slug within the pipelines, which works 
well for hydrocarbon fuels, gasoline, diesel, jet fuel, et 
cetera, but ethanol has a high affinity for water, so it will 
absorb the water, so that doesn't work. That would have to be 
investigated. Corrosivity would have to be investigated, but I 
think those issues are solved and the economics do justify it.
    As far as the vehicles go, I commend the section in the 
bill for looking at optimizing vehicles on E-85. I think really 
to, that there is one vehicle out there made by Saab, it is 
marketed in Europe, it is not available in the United States, 
but actually gives higher performance on ethanol. And there is 
a lot of data that shows----
    Chairman Lampson. Ethanol blend?
    Dr. Foust. E-85. Actually, E-85. So predominantly ethanol. 
And there is a lot of data out there that shows that we would 
not have to pay the one-third penalty on current gas mileage 
penalties on fuel-flexible vehicles that are optimized to run 
on gasoline octane in the high 80s, if we did specifically look 
at these vehicles and how to develop them and what the public 
incentive, policy incentives would be to automobile 
manufacturers to make these vehicles.
    Chairman Lampson. Thank you very much. The Chairman's time 
has expired, and at the request of the Subcommittee Ranking 
Member, I will recognize the Full Committee Ranking Member for 
five minutes. Mr. Hall.

                        Biorefinery Technologies

    Mr. Hall. Thank you, Mr. Chairman. That is me, isn't it?
    Mr. McAdams, your slide, I was fascinated, I guess, with 
your first slide, and we all look for production dates and 
facts about them and time and what is the time certain, and of 
course, you may not be able to give that, but could you give me 
a couple of examples of actual companies and the timeframes 
which they are going to be able to produce these new higher-
quality fuels?
    Mr. McAdams. Yes, Mr. Hall. And coming back to Chairman 
Lampson's point, let me name two companies that are very 
fascinating. The first company would be Amyris Biotechnologies, 
which was a company originally founded by Bill Gates, a grant, 
to try to solve the world malaria problem. They created a yeast 
molecule that has made a quantum collapse in the price of 
making artemisinin, which is the drug that kills malaria in 
eight hours. They took it from a price of about $2.50 a pill 
down to 24 cents. Well, the technology they developed is the 
same technology that is, frankly, used in my colleague's, Mr. 
Dinneen's, ethanol plants every day. And so instead of using a 
yeast molecule that he would use today, you would simply plug 
and play, pardon the phrase, like a new software in a computer. 
You would simply put their new and improved yeast molecule in 
one of Mr. Dinneen's plants, and it will make a diesel fuel 
with all of the characteristics of the second-generation fuels 
down to 30 degrees below. It will make a jet fuel, or it will 
make a gasoline additive.
    It would, therefore, give all of Mr. Dinneen's clients an 
opportunity to have a complete product slate rather than just 
one product slate going forward. And they believe that they 
will be able to bring it fully to market in three years.
    Real quickly, one other company, Neste, out of Finland, on 
May 31 introduced a 60 million gallon stand-alone hydro-
processing summarization plant that is, that can take 100 
percent tallow and turn it into 99 cetane, no sulfur diesel, 
high-quality diesel. They are doing it today. They are looking 
in the United States to see whether there might be a place, 
Texas, Louisiana, or a place where it might fit with the 
products.

                      Managing Biofuel Feedstocks

    Mr. Hall. Thank you. And I go to Dr. Foust at this time. 
Doctor, in your testimony you mentioned the forest products 
industry, and I have a lot of that in the northeast part of the 
State of Texas and my district. I understand that they have a 
concern with sustainability. If, when a biomass is extradited 
from forests that are not sustainably managed, they feel that 
it is not carbon neutral, it adds to the atmospheric carbon and 
it is, therefore, not renewable energy. So I guess I would have 
to ask you, would you agree that forest lands should be managed 
in a sustainable way to ensure forestry replacement, forest 
health, and adequate supply for existing and future generations 
and uses in order to be considered renewable?
    Dr. Foust. I would absolutely agree with that statement. I 
think Mr. Waskow summed up that very well, that that, for this 
whole, I would extend your comment even beyond forestry into 
agriculture and all sources of biomass. In order for this to be 
sustainable, the feedstock has to be managed in a sustainable 
manner. Carbon, storage, the health of the soils, the health of 
the forest, that all has to be considered.
    I think on the positive side as many studies have shown, 
that can be done, and we can have sustainable biofuels with 
carbon neutrality, but it is a challenge, and public policy, I 
think, has to guide that towards carbon neutrality.

                      The Renewable Fuels Standard

    Mr. Hall. Thank you. My last question is to Mr. Berger. I 
noticed in your testimony that you suggest a mandatory 
biodiesel standard of five percent be instituted so as to 
insure a sustainable domestic biodiesel market. Is the type of 
biodiesel BioSelect Fuels produces not eligible under the 
current renewable fuel standards as included in the Energy 
Policy Act we passed in 2005?
    Mr. Berger. Mr. Hall, no, it is not. Most of the renewable 
fuel that is being standardized under that Act is ethanol, and 
biodiesel or at least the market participants who sell the 
petroleum products, whether they would be unleaded or diesel, 
are not forced to blend or do not blend biodiesel by mandate 
into the petroleum diesel currently.
    Mr. Hall. Then can you tell me how much biodiesel has 
contributed to meeting the required volumes under the renewable 
fuel standard?
    Mr. Berger. I can't give you that exact number, but you can 
see through the small amount of consumption that is actually 
consumed in the United States and reported by the National 
Biodiesel Board, that it is quite a small amount of the 
petroleum diesel consumed in the United States, which is about 
60 billion gallons.
    Mr. Hall. I may have follow-up questions, but I see the red 
light on, and I am, Mr. Chairman, will be allowed to submit 
questions with some expectation of getting back----
    Chairman Lampson. Well, and if you have----
    Mr. Hall.--in a reasonable time?
    Chairman Lampson. Yes, and if you have time to hang on, we 
are, I am sure, going to have more than one round.
    Mr. Hall. Thank you, sir.
    Chairman Lampson. Thank you. The gentlelady from 
California, Ms. Woolsey.

                 Environmental and Food Supply Concerns

    Ms. Woolsey. Thank you, Mr. Chairman. As we are here, I am 
here listening, I can't help but comment that as we get started 
on this really huge, huge endeavor to become independent of 
petroleum-based products, products in an economy that we are 
learning has been disastered for our national security, and for 
our environment, while we address this and going to biodiesels 
and all the other alternatives we have for generating energy in 
this country, I have to ask a question. Is carbon neutral 
enough? I mean, don't we want to make improvements? Because the 
measurements we are comparing with have not been very healthy. 
So I think we should be addressing that because the tradeoffs 
are big here, and as long as this effort is going to be so 
gigantic, and it is going to be. Let us not leave out some very 
important steps and some standards and measurements that we are 
going to need to be addressing down the line anyway, so we 
might as well do it up front.
    So my first question is to Mr. Waskow. Thank you for being 
here, and I am particularly concerned when we talk about 
ethanol and corn ethanol about the land use issues. I have, you 
see, everything becomes personal when we start talking about 
anything around here. It starts being part of what does it mean 
to our districts. But what does, this is going to mean, is 
meaning already? We are subsidizing corn on all these acres all 
over the Nation for ethanol, and my dairy farmers can't afford 
to feed the cows, and we know that the Mexicans can't afford to 
make their tortillas.
    Well, would you comment on that? I mean, are we finding 
alternatives? Is this a tradeoff that is even worth it? The 
corn part of it.
    Mr. Waskow. Let me first take the question about carbon 
neutrality, and my answer would be that absolutely we have to 
do better than carbon neutrality. If we are, in fact, going to 
tackle the very serious challenge of global warming, we have to 
do much better than carbon neutrality. I think that low carbon 
fuel standard that California has adopted, in fact, points in 
the direction of tackling that challenge in a serious way in 
terms of moving past carbon neutrality.
    I would just, with apologies for referring to the other 
chamber, I would just note that the bill that is on the Senate 
Floor this week has some helpful language on this question. It 
requires that renewable fuels would have to reduce greenhouse 
gas emissions compared to conventional fuels by 20 percent. We 
have been pushing for an even higher target for the fuels 
referred to in the Senate Energy Bill as advanced biofuels. We 
think that those should have to meet a target of 50 percent 
greenhouse gas reductions.
    So in sum, yes, we need to push the envelope on this 
question, especially given that renewable fuels will only be 
limited percentage of the overall fuel supply. If we are going 
to make good on their promise, they need to have substantial 
reductions.
    On the land use question I think it is going to continue to 
be a growing dilemma, and I would just note that in addition to 
the kinds of dynamics you have pointed to and that I mentioned 
earlier, we are concerned about some of the indirect effects, 
some of the ripple effects. For instance, if corn continues to 
be used for biofuels, the world supply of corn for feed will 
diminish as you noted. It is likely that that will stimulate 
soybean production in Brazil, and soybean plantations in Brazil 
have been closely linked to rainforest destruction. They have 
put incredible pressure on the rainforest in Brazil, and so 
although obviously there are some uncertainties about whether 
this dynamic that I just described would play out, I think we 
do need to keep our eyes very closely on these questions. And I 
think it points to the need to think about biofuels options 
that, in fact, are less land intensive. I think perennial 
grasses, for example, are an important example of that and also 
I think sources such as algae could be particularly useful in 
this regard.
    Ms. Woolsey. Thank you. I have, yes, Mr. Dinneen.
    Mr. Dinneen. As a representative of the existing corn 
ethanol industry, let me assure you that I agree that carbon 
neutrality is not adequate, and indeed, I would suggest to you 
that the renewable fuel standard that was passed in the 2005 
Energy Bill created, in effect, a surrogate low carbon program, 
because according to the GREET model that Mr. Waskow referred 
to earlier, the ethanol industry that is producing today 
realizes about a 20 to 25 percent reduction in carbon. And I 
would suggest that probably underestimates the carbon benefits 
of the existing industry because it was based off of an energy 
survey that was done on the industry in 2002. The industry's 
getting better all the time, but I think absolutely we need to 
do a lot more, and we are.
    With respect to the land use issues, again, those are 
critical issues. The industry itself recognizes there are 
limits to what we are going to be able to do from grain, which 
is why we are pursuing a cellulosic industry as hard. Corn is, 
indeed, being driven up today because of the expanded market 
opportunities for ethanol, and markets are, indeed, having to 
adjust. The fact that farmers responded to the marketplace and 
planted 90 million acres of corn this year suggests we are 
going to see the largest corn crop in history. And I believe 
that there is certainly going to be adequate supplies of grain 
to satisfy the demand in this country for feed, for fiber, and 
for fuel.
    Ms. Woolsey. Thank you.
    Chairman Lampson. Thank you, Ms. Woolsey. I now recognize 
for five minutes the Ranking Member, Mr. Inglis.

                       Bioenergy Research Centers

    Mr. Inglis. Thank you, Mr. Chairman. Perhaps Dr. Foust or 
Mr. Dinneen could answer this and others if they want to take a 
shot. As I understand it we have three bioenergy research 
centers established under EPACT. The Draft Bill contemplates 
the addition of 11 centers as I understand it. I am wondering 
what would be the focus of those centers, or what would they 
add to the mix of the three. And do they at some point get too 
many, or is it the more the merrier? From three to 11 makes 
more the merrier or we start losing, becoming then, creating 
then a coordination challenge between three to, actually, I 
guess it would be 14.
    Mr. Dinneen. Congressman, I sort of wish Dr. Foust would 
take this, but I will jump into it, what the heck. I noted in 
my testimony that, you know, there is value to these 
facilities. I do sort of agree with the premise of your 
question that 11 may be a bit overkill, and I think our 
testimony suggests that one in each petroleum district might 
satisfy the needs. There are going to be different feedstocks 
in different parts of the country. The northeast, northwest is 
largely going to be a woody biomass opportunity. There would be 
other feedstocks perhaps for other fuels as Mr. Berger had 
referenced with respect to some biodiesel feedstocks that might 
be available in Texas. So there are benefits to some regional 
centers like that, but 11 might be more than what the current 
budget situation would suggest might be feasible.
    Dr. Foust. I think Mr. Dinneen summed it up quite well. I 
also agree that three going to 14 does seem excessive. I think 
Mr. Dinneen's point is well taken that there is all, as the old 
saying goes, all biomass is regional but expandable to 
national, or whatever the statement is. I forget. But as far as 
different feedstocks in different regions and different 
technologies are suitable for different feedstocks and enzymes 
have to be tailored to different feedstocks, there is, market 
conditions are different. I would agree with Mr. Dinneen's 
point that geographically locating these per petroleum district 
makes sense or geographical region. Fourteen does seem 
excessive.
    Mr. Inglis. How many petroleum districts are there?
    Mr. Dinneen. Five.
    Mr. Inglis. What is a petroleum district? I don't know.
    Mr. Dinneen. Now there is a good question. It was 
determined by the Department of Energy many years ago. It was 
just typically the way that motor fuels travel in a given 
region, and it is a term that is used an awful lot by the 
refining industry because each petroleum district will have 
perhaps separate and distinct fuel quality standards. Mike is 
probably actually a better person----
    Mr. Inglis. And I guess it has to do with pipelines, too.
    Mr. McAdams. Within a specific region.
    Mr. Inglis. All right. So what would the centers do? 
Somebody want to tackle that? Are they into commercialization, 
are they into the scientific breakthroughs needed for, say 
cellulosic ethanol development? What is their focus? Is it 
basic research, or is it more applied?
    Dr. Foust. I will take a stab at that, answering that. I 
think it is more applied. I think the existing national 
laboratories, universities that are focused on the basic 
research, understanding the fundamental challenges to 
economical production of cellulosic biofuels, whether that be 
ethanol, biodiesel, or these higher alcohols, is done in, 
currently done, probably more resources are needed, but 
currently done better in a focused effort where there is a 
group of consolidated scientists. But as far as the applied, 
applying, understanding the market factors, understanding the 
feedstock diversity, understanding the regional issues, citing 
issues, the density and the logistics, those issues could 
appropriately be addressed by these regional centers. And that 
would be a good usage of those centers to take the macro 
technology and apply it regionally.

                           Cellulosic Ethanol

    Mr. Inglis. And my time is almost up, but I wonder we are 
going to have the breakthroughs in cellulosic ethanol. Is that 
what we are, we got a high degree of confidence in that?
    Mr. Dinneen. Congressman, absolutely. I had the privilege 
of visiting a cellulosic ethanol plant that is currently under 
construction just a few weeks ago. It is being built in Spain, 
but the company operates four ethanol facilities here in the 
United States today and is building a similar facility here in 
Nebraska as well that is likely going to be open before the end 
of the year. I can report to you that commercial cellulosic 
ethanol production is closer than conventional wisdom would 
suggest. There are a lot of companies that are looking at this. 
As our industry has grown and as new capital has come into the 
industry, new intellectual capital has come into the industry 
as well, and there are more companies that are looking at this 
today from a different point of view than ever before. And 
there are a range of technologies, whether it is enzymatic 
conversion, which is what we are most familiar with, or 
gasification, which is what they have been doing a lot of in 
Europe, and we are just starting to get behind now, or some 
other technology. I can assure you that cellulosic ethanol 
production is very close.
    Chairman Lampson. You are welcome. And Dr. Bartlett, five 
minutes.

                         Environmental Concerns

    Mr. Bartlett. Thank you very much. I bought the first Prius 
car in Maryland. I bought the first Prius car in the Congress. 
I have an off-the-grid home. Its only energy comes from solar 
and wind. So please accept what I am going to say in that 
light. I am an enormous fan of renewables. But having said that 
I think that unrealistic expectations are really hurting us, 
and they are permitting those who don't believe what we believe 
to relegate us to the lunatic fringe.
    Let me, for example, talk just for a moment about corn 
ethanol. I am sure you all saw the article in the Washington 
Post about three weeks ago. I had done those back of the 
envelope calculations a long time ago, and I didn't sign onto a 
single corn ethanol bill, because it was, I was afraid going to 
be a cruel hoax as it turned out to be. If we used all of our 
corn for ethanol, all of it, and discounted it for fossil fuel 
input, it would displace 2.4 percent of our gasoline. And they 
noted correctly, if you tuned up your car and put air in the 
tires you would save that much. So we have made essentially no 
contribution to relieving our dependence on fossil fuels.
    And I would submit that maybe we have gone backwards 
environmentally, because what we are going to do is to take 
land out of agriculture reserves that shouldn't be farmed, and 
we are going to put it into farming because there is a 
potential profit to be made by growing corn. Remember, there is 
an 80 percent of all the energy you get out of corn is 
represented by fossil fuels you put into growing the corn. So 
we may have gone backwards environmentally while we are making 
essentially no contribution to displacing our reliance on 
fossil fuels.
    And I am concerned that we are going to be in this same 
place on biomass. And our first testimony was said that we 
could do this, that is get this more than a billion tons 
without negatively affecting the Nation's ongoing needs for 
food or fiber. I would like to see those analyses.
    Our top soils are not increasing in quantity and quality, 
and there is such a thing as tilth and the need for organic 
material in soil, because it doesn't have that, it isn't top 
soil, it won't hold water, it won't hold nutrients. And I am 
very concerned that that switchgrass that we salivate over is 
growing this year because last year it died. Now, maybe 
switchgrass is kind of unique, because I think most of the 
nutrients are transported back into the roots, but most other 
crops are not that way. And this year's crop that is growing, 
of weeds is growing because last year's crop of weeds died and 
is fertilizing it. So I think that what we are going to get out 
of biomass is going to be considerably less than we anticipate.
    And I am just concerned that these exaggerated expectations 
make us look silly, and I don't want to go there.
    Our first presenter noted that if we took all of our 
soybeans and converted it into biodiesel, it would displace 
less then eight percent, and I am sure that is gross and net, 
maybe that shrinks to four percent. Am I right? So if we took 
all of our soybeans and made biodiesel out it, we would 
displace four percent of the diesel fuel that our across-the-
road trucks use.
    I am just, am I wrong, Mr. Waskow, that we may, in fact, be 
going backwards environmentally? You know, we are very much 
like the pioneer in our country who worried about the worm 
eating the tassels on his corn, while the wolf was eating all 
of his cows. There is nothing you shouldn't worry about, about 
fertilizing his corn, but he really should worry about that 
wolf eating the cows, shouldn't he? And I just think that we 
are focusing on the wrong thing here. We need to do it, but it 
is just have you done enough to have left the other undone. Am 
I wrong?
    Mr. Waskow. Well, I think we certainly have the potential 
to go backwards. I think we are at a critical moment where we 
have to decide, in fact, how we are going to pursue the 
biofuels sector and industry, and I think we do have an 
opportunity now to place environmental safeguards on the sector 
in such a way that it can propel us forward. But I think our 
concern is that some of the legislative mandates may be running 
out ahead right now of some of the science and also almost all 
of the safeguards that we are going to need to insure that this 
does bring us to the potential we are hoping it will.
    I would just add that establishing targets like a five 
percent of all diesel requirements, one of the concerns we have 
actually has to do with imports. If you establish targets that 
can't be met with productive inside the United States, the 
likelihood is that we will start importing significant 
quantities of feedstock and biofuels themselves, and in many 
cases the ways in which those feedstocks are produced is quite 
damaging. Indonesia and Malaysia with palm oil is the most 
extreme example, but I think other instances are going to be 
problematic as well. And so I think when setting very high 
targets for use we need to think about not only where it is 
going to come from in the United States but where it may come 
from on a global level.
    Mr. Bartlett. Thank you. I yield back, Mr. Chairman.
    Chairman Lampson. Thank you, Dr. Bartlett. I will now yield 
five minutes to Ms. Biggert.
    Ms. Biggert. Thank you, Mr. Chairman, and I am sorry I 
missed the testimony, but I do have a couple of questions.

              Does Research Need to Be Feedstock Specific?

    First of all, does our research on the efficient production 
of ethanol from the cellulosic material need to be feedstock 
specific?
    Dr. Foust. Yes, that is true to a degree, however, you can, 
you don't have to go through feedstock by feedstock. You can 
group them. For the enzymatic conversion fermentation, yes, the 
enzymes themselves are feedstock specific. However, agriculture 
grasses, corn, wheat, switchgrass tend to behave very 
similarly, as do the wood. So it is not as onerous as it might 
sound that you have to develop the technology feedstock by 
feedstock. And once those enzymes are developed, they are 
fairly easily tailored. For the gasification approaches, no. 
Those are not feedstock specific. Those are general 
technologies that work across the feedstock resource base.
    Ms. Biggert. Well, once we figure that out then will it 
take a markedly different or marginal, different process to 
make the cellulosic ethanol from other feedstocks? I mean, will 
it be so necessary that we would have to have a different 
center do that?
    Dr. Foust. I don't think, I would say as far as tailoring 
the enzymes to the specific feedstock and the mix of those 
enzymes, that would be the companies' proprietary advantage 
that deployed that technology. So as far as centers developing 
that and under government funding, no, I don't think that would 
be necessary.

                   More on Bioenergy Research Centers

    Ms. Biggert. Well, the DOE is currently evaluating 
proposals to spend 250 million over five years to establish and 
operate two new bioenergy research centers to accelerate the 
basic research of, and development of cellulosic materials and 
ethanol and other biofuels.
    So if the cellulosic ethanol is really feedstock neutral, 
do we really, and I know it was discussed about whether five 
should be or 11 was too many, couldn't we just do it in those 
two research centers that the Department of Energy is 
developing?
    Dr. Foust. Those research centers are actually looking at 
very fundamental biological breakthroughs, what they refer to 
as systems biology, where you take the current three-step 
process that we are talking about that Mr. Dinneen talked about 
as near-term commercially ready to a single-step process that 
produces the ethanol at rates two to three times what current 
processes are, about half the cost. And what they are really 
looking at is advanced technologies to get down to processes as 
simple as corn or even sugar-based ethanol.
    So they are really far-reaching basic research, which I 
think is good. They are not specifically looking at tailoring 
specific enzymes to regional feedstocks. They are not near that 
applied type of research.
    Ms. Biggert. Well, it sounds like you are saying that the 
research that Mr. Dinneen was talking about is more advanced 
in, as long as it is specific feedstock, but the, what the DOE 
is looking at is making feedstock neutral but more advanced 
basic research which will lead to be able to do probably the 
same thing at different centers? Am I simplifying that too 
much, or is that----
    Dr. Foust. I think in general that is a true statement. I 
mean, there is, I guess the best way to put that in context is 
what Mr. Dinneen and what I were, what I was talking about in 
my testimony is this cellulosic ethanol technology, the first 
generation is competitive with crude oil prices at about 
gasoline, crude oil prices about $55 a barrel. If you look at 
projections, Department of Energy's as well as the National 
Petroleum Refinery's projection, crude oil prices are expected 
to drop into, if you truly believe those projections, into the 
$40 range. And what that, those advanced technologies really 
enable the cellulosic ethanol not to go uncompetitive as crude 
oil prices would drop into that range, as well as higher 
yields, higher efficiencies with reduced environmental impacts.
    I think that is a long-winded answer to your question, but 
I guess what I was trying to differentiate is there is a near-
termness and long-termness to those different----

                     Biorefinery Energy Efficiency

    Ms. Biggert. Then my other question would be does it make 
sense to create the stand alone biorefinery energy efficiency 
program rather than to incorporate it into the research, this 
research into the integrated biorefinery demonstration projects 
that were authorized in EPACT? It seems like we are trying to 
do the same thing when we have already authorized this in 2005.
    Dr. Foust. The way I understood it is the EPACT 2005, 
especially the Section 932 provisions.
    Ms. Biggert. 932D.
    Dr. Foust. Okay. We're to incentivize near-term deployment 
to address the risk of capital and investor ease and cellulosic 
ethanol. However, those plants that are being, that were 
selected by DOE, although they are good technologies as past 
peer review, they are really, you know, sub-optimal as far as 
competing long-term competitiveness with gasoline.
    So all sections of the EPACT, the 932 and all sections 
address both issues; the commercialization, the need to 
development to risk, to overcome the risk hurdle for financial, 
as well as the research needed to make the technology 
competitive in the long run. So I would think based on the 
economic analysis that my lab has done and others, that both 
aspects are necessary to really move this industry to long-term 
potential.
    Ms. Biggert. Thank you, Mr. Chairman.

      Biofuel Feedstocks: Research, Development, and Establishing 
                               Standards

    Chairman Lampson. You are welcome, Ms. Biggert. I now 
recognize myself for five minutes as we start our second round 
of questioning.
    For Dr. Foust, there has been a great deal of discussion 
both in Congress and in the research community about other 
possible feedstocks with a growing focus on algae biomass. You 
noted that algae shows considerable promise long-term, but the 
technology still needs considerable work, and I was hoping that 
you would elaborate on this point to help give the Committee a 
better idea of what technological barrier exists and where 
research should be focused to see the greatest improvement in 
the algae-related technologies.
    Dr. Foust. Thank you, Mr. Chairman. That was actually a 
good question. I look forward to answering that.
    I think the real challenge is developing these algae 
strains. The strains that have been developed are native 
strains, and they are biological organisms, which to get them 
to express oils, which is basically fats, you have to starve 
them. They will only express oils when they are starved, and 
they will only grow when they have plenty of nutrients. And the 
challenge to get this to be economically viable is to get them 
to do both. So you have to get them to express oils, fats, 
while they are also growing. And that is a significant 
biological challenge. The scientific, the microbiology 
community of which a lot of those people are at my laboratory, 
believe that can be done and believe that we can get these 
yields, 1,000, 10,000 times of the soybeans or other oilseed 
crops.
    However, they realistically put that at about a five to 
ten-year effort, and then once that is done, then they are 
grown in these shallow-water ponds, and you have to develop, it 
is an easier challenge but it is an engineering challenge--ways 
to harvest them and crush them so you can get the oil out at 
pennies per gallon to compete with diesel fuels at the $1, 
$1.50 gallon range.
    Chairman Lampson. You noted that there are already fuel 
quality standards in place for ethanol and biodiesel and these 
standards have been created to match the current production 
methods. Once we get past the technological hurdles to the 
broad use of cellulosic ethanol, surely we will be producing 
ethanol from a variety of feedstocks. How will we insure that 
fuels derived from diversed feedstocks are fungible? Will we 
need a better system for establishing standards since we will 
no longer be able to rely on production methods of one item, 
corn starch, and how will we be able to insure conformance with 
the standard, when multiple feedstocks are use for fuel 
development?
    Mr. Dinneen. Dr. Foust may want to jump in.
    Chairman Lampson. Okay.
    Mr. Dinneen. But just with respect to ethanol, ethanol is 
ethanol no matter what the feedstock is. There may be some 
feedstock-related issues with some of the other renewable 
fuels, but you can produce ethanol from corn. It is the same 
product as if it is produced from sugar or from cellulosic 
material or from, you know, whatever. And the specifications 
that has been developed have been developed for its performance 
characteristics along, you know, through a process with the 
refineries and the automakers through the American Society for 
Testing and Materials (ASTM). So there really aren't standards 
issues with respect to ethanol, but Dr. Foust or Mr. McAdams 
may want to comment on some of the other renewables.
    Mr. McAdams. I would say, Mr. Chairman, that if you look at 
the second and third generation, particularly renewable diesel 
technologies, that the standard they hit is D975, which is the 
standard currently for diesel. It is one of the real confusing 
nomenclature problems we have in this debate between a 
biodiesel which is a coined term that comes out of the tax law, 
and now you have a new term renewable diesel, which is another 
coined term coming out of the tax law, and then their third 
term is green diesel.
    But most of the second, third, and fourth-generation 
processes that make diesel whether it is Fischer-Tropsch or 
whether it is the Amyris technology or whether it is Neste, 
they make a D975 diesel spec, which is through the tier one 
process of EPA, and they are very comfortable with going 
through that process.
    Dr. Foust. I would agree with what my colleagues said. Mr. 
Dinneen is right. One of the beauties of ethanol is that it is 
a single molecule fuel, so whether you make it from corn, 
sugar, or cellulose, it will be the same. However, there will 
be trace contaminants that when it is distilled and standards 
to control the contaminant levels, the water levels, pipeline 
issues would be desirable, especially for blending as one 
section of the Bill specifically addresses, the lower ethanol 
blends greater than E-10 but less than E-40. As those blends 
come into play, the gasoline standards and the ethanol 
standards for those various different blends will need to be 
controlled. It will be more of an issue.
    Chairman Lampson. Thank you very much. I now call on Mr. 
Inglis for his five, extra five minutes.
    Mr. Inglis. Thank you, Mr. Chairman. Dr. Foust, it is very 
exciting what you were just talking about, about an organism 
that may create or express oils at a faster rate. That is 
pretty exciting. What is the best thing government can do to 
help facilitate that, or is it going to happen because the 
marketplace is pushing us to that? Which would be a fine 
answer. We are from the government. We are here to help, but 
if, you know, if we can help by not helping so much, maybe that 
is what we need to do.
    Dr. Foust. No. Thank you. That was a good question. I think 
because that is far from being a commercially-viable technology 
unlike corn ethanol or biodiesel where there really isn't a 
rule for the government beyond standards, it is commercially 
viable so it is appropriate rule for industry to develop and 
deploy those technologies as they are currently doing. Right 
now it clearly would be economically unfeasible to deploy this 
algae technology without these improved strains.
    So I think the government's role would be kind of, again, 
as was accentuated in this bill, to increase the funding for 
the field of biofuels in general of a significant portion of 
this to go in these high-potential, high-risk, high-payoff, but 
not near commercially viable type technologies.
    Mr. Inglis. Mr. Berger.
    Mr. Berger. I would echo those sentiments, and I think, you 
know, one thing to really sit back and kind of think about here 
is that you got to start someplace, and I think you have heard 
that consistently across the panel. And moving, just speaking 
from a for-profit company such as Standard Renewable, we are 
starting in what is economically feasible right now, at least, 
you know, with the existing tax credits, and then we are more 
than happy to invest our profits in these new technologies and 
be able to move them into the marketplace. Nothing would please 
us more and our shareholders to have the kind of numbers that 
Dr. Foust spoke about. Those are the kind of numbers where, you 
know, people in the oil business would get a little bit nervous 
to say the least.
    But at the end of the day what is that really going to 
require from companies like ours to the government? We want 
consistent policy. We want to know that over the next few years 
that biodiesel in whatever form it is or ethanol, whatever form 
it comes in, is going to have a place here to stay so that we 
can go in and take those profits and put them into these new 
technologies and deploy those new technologies.
    Mr. Inglis. I suppose that the fluctuation in the price of 
gas, is that a larger determinant of that question than what we 
are talking about there, that research or, I mean, in other 
words, if gas is $3 a gallon, you have got a business. Right? 
If gas is $1.80 a gallon, I guess you don't have a business. 
Right? I mean, don't answer that question. It might upset your 
shareholders but----
    Mr. Berger. No, no. I am very happy to answer that. 
Actually, you know, from, speaking from the biodiesel business, 
and I will let the other, Mr. McAdams and others talk about 
their respective battlefields, it really depends upon just as 
it does in the crude oil business. You know, what is the 
profitability from taking a barrel of oil, whether it is 
vegetable oil, whether it is crude oil, and converting that 
into a product, and what is that product trading for. So as 
soybean oil, for instance, is a very-well traded commodity, and 
I would also like to point out that the U.S. is one of the 
largest exporters and in some cases the largest exporter in the 
world for soybean oil. The world. And so what we are talking 
about here is we are going to keep more of our bean oil here at 
home. We are not the importation of oils back into this country 
in a massive way. At least we don't anticipate that to be the 
case any time soon. So from our standpoint as long as it is 
fluctuating with that bean oil price and in looking at the 
product price, it doesn't necessarily mean that crude oil has 
to be, you know, or crude oil-based products have to be $3, a 
buck 80, two bucks, four bucks, whatever it is. It is really 
more of a market-based approach to profitability.
    Mr. McAdams. I would say across the whole fleet of the 
technologies I represent whether it is Fischer-Tropsch or 
Invomatic, these people are trying to, they look at the price 
of crude, and they are trying to develop a range of 
technologies that can compete across $40, $50, $60 crude 
ranges. And a $60 crude solves a lot of technology problems 
because it gives them some headroom.
    In terms of your specific question about what not to do if 
the Congress chooses a standard and says, okay. To hit the RFS 
target, you have got to be ASTM D-6751, then that means all 
those companies that make a D-975 fuel don't count against that 
standard, and you remove the certainty and the investment that 
all those companies want to put in the marketplace to develop 
these fuels. And that is why my coalition was formed to just 
try to request technology neutrality across all of these 
frames, either the RFS and others.
    Mr. Inglis. Thank you, Mr. Chairman.
    Chairman Lampson. Ms. Woolsey.

             More on Environmental and Food Supply Concerns

    Ms. Woolsey. Thank you for the second round, Mr. Chairman.
    Mr. Waskow, in your testimony you point out that we need to 
improve the model for evaluating the impact of biofuels on the 
environment. How much funding do you think Congress would need 
to dedicate to improve this model and get the results, get good 
results? I mean, real results. And do you know if there is any 
work being done anywhere? I am creating a new model.
    Mr. Waskow. That is an excellent question. I don't know 
what would be required in terms of funding to address those 
needs. There are a number of researchers around the country, 
not only at Argonne but at other institutions and I am sure 
with federal funding backing many of them doing some of this 
work. But it is clear that we have to step up the pace. We need 
to be able to do this work not only for corn, which has been 
analyzed in some detail now but also for a number of other 
feedstocks to be able to make adequate comparisons, and we need 
to be able to look better, as I was saying, at sections such as 
land use changes.
    I am happy after this to explore with colleagues and others 
what the cost would be. I am sure it is not extravagant.
    Ms. Woolsey. You know, I had a thought for any and all of 
you if you wanted to. As we talk about the different forms of 
biofuels, what happens when a farmer invests in say, I will use 
corn because that is where I am today, and all of the sudden 
there is a much better way to make ethanol, and this, what 
happens to that corn production? I mean, it is a real gamble, 
isn't it?
    Mr. Dinneen. Well, the marketplace is going to do what the 
marketplace is going to do, and if, indeed, farmers can make 
more money producing miscanthus grass than corn, I mean, that 
is what the, you know, they will do. It is a risk certainly 
but, you know, I think the marketplace hasn't yet figured out 
what the next generation of renewable fuels is going to be. 
There is a lot of talk about bio-butanol and bio-butanol could 
be produced from agricultural feedstocks as well, and that 
might be something that farmers would grow their feedstocks 
for.
    Ms. Woolsey. But, I mean, we cut down forests, we put 
berries out of business, we make it impossible for the Mexicans 
to have corn tortillas, and then we decide corn is not it or 
one of these other feedstocks you had talked about. Risks?
    Mr. Dinneen. You mentioned the tortilla issue a couple of 
times, and I appreciate that that has----
    Ms. Woolsey. I worry about that obviously.
    Mr. Dinneen.--been one of those things that has been in the 
media, but it is, there is a lot of analysis out there that 
would suggest a three-cent per pound increase in the price of 
yellow corn is not responsible for an 80-cent increase in the 
price of white corn in Mexico. There are lots of reasons why 
the Mexican market is doing the things that it is doing and the 
relationship to the increased demand for ethanol from corn 
production is not a really strong relationship. But I 
understand your point that, you know, we are putting a lot of 
stock right now in ethanol from grain, but I would say to you 
and to Congressman Bartlett as well that corn ethanol, the 
existing ethanol industry is not the end of this road. It is 
the beginning. This industry is providing the foundation upon 
which we can grow a more sustainable and more economic 
renewable industry in the future.
    And I appreciate that there are concerns with the existing 
industry today, but don't lose sight of the fact that it is 
just the beginning, and it is not a cruel hoax. It is the 
foundation upon which this nation is going to become more 
energy secure.
    Ms. Woolsey. Mr. Berger.
    Mr. Berger. I would like to echo. Here are some numbers to 
think about, and they are quite scary. If you look at the 
energy issues that we face, they are more grave than the 
potential issues, and I think than anything that can come about 
in the agricultural space at this point in time. There are 
about a million and a half barrels per day of biofuels produced 
in the world, and there is about two and a half million barrels 
a day of crude oil spare capacity estimated because the people 
who love us so dearly produce much of the oil in this world, 
and I mean that sarcastically, do not give us data on that. But 
that is probably pretty close to that. If you were to basically 
eradicate biofuel usage and the U.S. is a big producer of those 
biofuels, you would take about a million and a half barrels of 
capacity off the market. Even if you did it over a slow few 
month's period of time.
    Crude oil, I don't know where it is going to trade, but it 
is not going to trade $66 a barrel. It is going to trade north 
of 100 and quite a bit north, and the reason is is that 
commodities are priced on the margin, and when you take that 
kind of, what may even seem to be four percent or five percent, 
it is just small, I can tell you from experience you will see 
exponential moves in commodity prices such as crude oil, 
natural gas, et cetera.
    So the energy problem is very dire, and what we are 
representing here today is, it is not the silver bullet. It is 
not the end all, be all. It certainly has problems. But it is a 
start, and it is an American start to solve this problem.
    Ms. Woolsey. Well, thank you. You are preaching to the 
choir with this one. Don't think for a minute I am sitting here 
trying to defend the fossil fuel abusers of the world. Believe 
me. But I want to do it right. I mean, we have a chance. This 
is new. We don't have to, you know, shortcut and then later 
say, oh, it is going to cost 100 times more because we didn't 
do it right in the first place. That is my point.
    Thank you, Mr. Chairman.
    Chairman Lampson. You are welcome. Mr. Bartlett.
    Mr. Bartlett. Thank you. You mentioned our biofuels 
contribution. You need to discount that by the fossil fuel 
contribution to the production of those biofuels, and if we 
hadn't turned the corn into ethanol, we would have four-fifths 
as much fossil fuel. So the real biofuels contribution is 
fairly trifling.
    You are exactly right that we are on the verge of not 
having enough oil. One of you mentioned that the Energy 
Information Agency is suggesting crude oil prices will drop to 
$40 a barrel. I think you are far, far more likely to see $100 
a barrel oil than you are $40 a barrel oil.
    I would take the prognostications of the Energy Information 
Agency with a lot of caution. They are basing their 
prognostications on a series of computer simulations that USGS 
has run. They did these in about 2000. They have been tracking 
since then, and the actual data points don't begin to follow 
what they said was the main, there is a very strange transition 
from F, which is frequency in the USGS slides, to P, which I 
guess is probability. I have no idea what has happened in those 
two agencies. And I have talked with the chief statistician 
from the Congressional Research Service because I thought I was 
losing my mind, and he assured me that I wasn't, but there is 
just another rational explanation of the way statistics are 
used or misused by these two agencies. So I would be very 
jaundiced as to how much reliance I placed on, by the way, EIA 
does a really credible job of tracking what has happened. They 
have a bunch of economists who do a very poor job of 
predicting, in my view, what will happen.
    And, you know, they are, they believe like many of my 
colleagues, I am a very conservative Member of the Congress, 
but I try not to behave so that I might be considered an idiot. 
And many of my colleagues worship the market. They believe that 
it is both omniscient and omnipotent, that it will take care of 
everything. Where are resources infinite? I might tend to agree 
with them.
    I talked to you on this analogy, worrying about the worm 
that ate the silks on your corn while ignoring the wolf that 
was eating your cows, and I need to explain who the wolf and 
the cows are. We use 21 million barrels of oil a day. All of 
these biofuels you are talking, and I am a huge proponent of 
these things. I am the greenest guy in the Congress probably. 
But, you know, we use 21 million barrels of oil a day, 70 
percent of that in transportation. We are making really quite 
insignificant contributions with these biofuels, and if you are 
wildly optimistic about the productivity from these are going 
to, in the future, make trifling contributions. What we really 
need to be focused on is a lot of conservation and a lot of 
efficiency. I wish I could show you a slide that shows our oil 
consumption up through the Carter years. Every decade we use as 
much oil as had been used in all of previous history. Boy, have 
we changed that since then. Have that exponential occurred when 
extrapolated, we would be through the--what that means, of 
course, is that when you are half out, when you have used half 
the world's oil, you have ten years remaining at the current 
use rates.
    Now, we were about halfway through the age of oil. We have 
been 150 years in the age of oil. We got about another 150 
years to go. We are not running out. We are running out of our 
ability to get oil as quickly as we would like it, and it is 
going to be more expensive and harder to get in the future.
    When I said we were nibbling at the margins, what I meant 
was we have an enormous problem, and we need to begin with an 
aggressive conservation program.
    I led a group of nine people to China over the Christmas 
holidays. I spent New Year's Eve in Shanghai, and they begin 
their discussion of energy by talking about post-oil. Wow. I 
wish our guys got it. They are talking about post-oil with a 
great five-point program. Conservation is where it begins. 
Diversify. Do as much of that at home as you can. Be kind to 
the environment. That may shock you. That is the number four 
point. They recognize they have a problem, and the fifth one is 
international cooperation. I don't see us reaching out.
    I want to thank you all very much for what you are doing, 
but I think we need a huge wake-up call in America, and if you 
are counting on $40 oil, you are probably counting on winning 
the lottery to solve your personal economic problems. I think 
the odds are about the same.
    Thank you.
    Chairman Lampson. Wow. Thank you, Roscoe. Interesting 
thoughts and I have to agree with some of what you said.
    I am not sure we have got time to go----
    Mr. Bartlett. Some of it? What don't you agree with?

                              Pure Ethanol

    Chairman Lampson. I am not sure I can repeat it all.
    I am curious about one thing, and I am not sure, unless Mr. 
Inglis wants to go for another round of questioning, but would 
any of you or all of you, however you want to do it, comment on 
when, if we will, when will we reach the point of not blending 
fuels, but actually using 100 percent of a biofuel for either 
transportation or the generation of electricity?
    Mr. Dinneen. Well, it is going to take some time. I mean, 
we have a fleet of vehicles on the road today that will take a 
fair amount of time to turn over. Ford, General Motors, 
Chrysler have already committed to producing 50 percent of 
their vehicle fleet that they will produce as flex-fuel 
vehicles in 2012.
    So, I mean, we have about 17 million vehicles a year that 
we purchase, about 45 percent of those are from the domestic 
market. That suggests about four and a half to five million in 
flexible-fuel vehicles coming on the road----
    Chairman Lampson. It is flex-fuel. That is a blend.
    Mr. Dinneen.--by 2012.
    Chairman Lampson. What is it going to take to get past 
that?
    Mr. Dinneen. It is a blend of 85 percent ethanol. So, I 
mean, it is a good amount of petroleum displacement.
    Mr. McAdams. Price.
    Chairman Lampson. Price?
    Mr. McAdams. Price. And the reason I say that, if you just 
take the current economic model, there are a number of 
technologies that could make, let us take the diesel fuel. That 
could make 100 percent diesel fuel that could run in and 
existing engine so you don't have to have a new infrastructure, 
go through the current pipelines. They could make that kind of 
fuel 100 percent renewable, but it wouldn't be at today's 
current price.
    Chairman Lampson. I was just curious. Anybody else wanted 
to make the comment. I believe that has got to be one of our 
goals as well.
    Does anyone want to--Roscoe, you want to make----
    Mr. Bartlett. Mr. Chairman, I would like to note that a day 
will come when we are not blending. Geology will assure that. 
We are going to transition from fossil fuels to renewables. My 
concern is it is not going to be on our terms but on the terms 
of geology, and I think that is going to be a really rough 
ride.
    Chairman Lampson. Thank you very much. I have more 
questions, and I am sure some of you do as well, so if you all 
will allow us to, we will submit these questions in writing and 
get them over to you, and if you wouldn't mind getting back to 
us, we would appreciate it.
    I want to thank all of you for appearing before our 
subcommittee this afternoon. Your testimony has been very 
helpful. I believe that the legislation we have discussed today 
moves us forward in our effort to develop a more diverse supply 
of energy.
    And under the rules of the Committee the record will be 
held open for two weeks for Members to submit additional 
statements and any questions, additional questions that they 
might have for the witnesses, and this hearing is now 
adjourned. Thank you very much.
    [Whereupon, at 4:16 p.m., the Subcommittee was adjourned.]
                              Appendix 1:

                              ----------                              


                   Answers to Post-Hearing Questions




                   Answers to Post-Hearing Questions
Responses by Thomas D. Foust, Biomass Technology Manager, National 
        Renewable Energy Laboratory

Questions submitted by Chairman Nick Lampson

Q1.  You mentioned that the technology for the development of 
cellulosic ethanol is ``relatively immature.'' You went on to say that 
the goal for the production cost price point on a gallon of cellulosic 
ethanol is $1.31. If the price of corn continues to rise, how will this 
affect this target price point? And more importantly, what are the 
major technological barriers to realizing a cellulosic based fuel that 
is competitive with corn-based ethanol?

A1. The $1.31 production cost price point on a gallon of ethanol is 
based on competitiveness with corn ethanol at historical corn prices of 
$2.50/bushel. Since corn costs represent almost 50 percent of the total 
costs for corn ethanol production, corn ethanol production costs will 
increase significantly with the rising costs of corn. Equally, if not 
more important for long-term economic viability of ethanol as a 
transportation fuel, the $1.31/gal production cost price point is also 
based on competitiveness with gasoline on an energy adjusted basis at a 
crude oil price of $55/barrel. Therefore, both corn prices and crude 
oil prices will directly affect the economic viability of cellulosic 
ethanol at the production price point of $1.31/gal. As corn prices and/
or crude oil prices increase above historical levels, the 
competitiveness of cellulosic ethanol will increase and accelerate its 
deployment in the marketplace.
    The National Renewable Energy Laboratory (NREL), DOE, and the 
biofuels research community at large have had numerous discussions 
about whether we should periodically adjust our cellulosic ethanol 
price point targets based on current market realities. The collective 
decision was to update on an annual basis the $1.31/gal production cost 
price point target to reflect the latest inputs such as cost of steel, 
feedstock costs, and labor costs. NREL has spent considerable effort in 
developing rigorous technical and economic models that allow us to 
directly relate technical and scientific targets to production cost 
targets. This allows us to give our scientists and engineers technical 
targets to achieve and allows us to track and report progress and 
research spending towards the targets accurately to DOE.

Q2.  There seems to be universal recognition that the current 
distribution system and infrastructure for biofuels is inadequate to 
handle large volumes of fuel. Noting that you mentioned two options--
either using the existing petroleum infrastructure or developing an 
alternative infrastructure--I wanted to focus on the existing 
infrastructure. What research is still needed to determine if this is a 
viable option? What changes, modifications, treatments or even 
cleansing would be needed to use this infrastructure to carry biofuels? 
Do you believe it would be possible to use some of the pipelines for 
multiple uses, carrying both biofuels and petroleum based products at 
different times?

A2. Distribution of fuels is accomplished by several methods, including 
barge, tanker truck, rail, and especially pipeline. Infrastructure 
refers to the larger set of equipment and processes, including storage 
capacity necessary to utilize the fuel, tanks, pumps at filling 
stations, etc.
    Research is needed to determine if utilization of the existing 
distribution system is a viable option. The issues of concern for 
ethanol in pipelines are 1) corrosion, 2) water miscibility and phase 
separation, and 3) solvency of ethanol. Ethanol-related corrosion 
problems can result from the particular attributes of the fuel and how 
it behaves in pipelines. There is evidence that ethanol in high 
concentrations can lead to various forms of corrosion including 
internal stress corrosion cracking that is difficult to detect. Fuels 
in pipelines tends to pick up water along the way, and ethanol 
accentuates that problem because it is hydrophilic and low-
concentration ethanol blends have a tendency to phase separate with 
gasoline in the presence of a small amount of water. Because ethanol 
acts as a solvent, it will tend to clean out the existing pipelines of 
tars, gums, and other impurities that can degrade the quality of the 
fuel product. Although some research is currently being conducted to 
find solutions to these issues and to help determine what changes need 
to take place in order to leverage the existing systems, it is 
minimally supported. To truly address this important issue critically 
important to the ultimate success of the biofuels industry, a 
comprehensive research and testing program to address these issues need 
to be initiated. This research program needs to involve pipeline owners 
and current users to ensure that rigorous testing programs are put into 
place to address these issues so that this area moves forward. We 
understand that in Brazil ethanol is shipped via pipelines and we need 
to better understand how the technical issues have been resolved there.

Q3.  Addressing issues related to readily available information on 
biofuels technologies, you noted that the Department plans to fund the 
creation of a Biomass Data Center later this fiscal year. I have 
several questions related to this effort:

Q3a.  When was the announcement made that the Department would pursue 
this effort?

A3a. An announcement has not yet been made because the Biomass Data 
Center (BDC) concept was just recently developed. DOE decided to 
initiate and fund the BDC following a February 2007 visit to NREL, 
during which we reviewed the existing information on the use of 
biofuels already contained in DOE's Alternative Fuels Data Center 
(AFDC) (www.eere.energy.gov/afdc), which is produced and maintained by 
NREL. The AFDC is one of the most extensive alternative fuel databases 
and a widely-used website by stakeholders across the country. It 
currently contains extensive information on fuel availability, 
retailing, nationwide station locations, federal and State incentives 
and laws, and available vehicles with information from across 
government and industry. The new BDC is envisioned as an extension of 
the AFDC that will capture similar information related to feedstocks, 
fuel production, distribution infrastructure, and relevant federal and 
State programs. The focus will be on supporting the decisions within 
the private sector and State and local governments that are required to 
accelerate the production and use of biofuels in the near-term. The 
R&D-related data sets which are proposed in Section 2 of the 
Committee's bill would be of significant value to the BDC and could 
readily be included in the current planning.

Q3b.  You stated this would be done in phases. Can you give us more 
detail about time period for development of the Center and when the 
information will begin to be available?

A3b. We expect the site to be available with links to existing 
information in the fall of 2007. Initial activities will focus on a 
comprehensive inventory of available data and information from 
government and industry sources, and providing a central clearinghouse 
for these resources. Gaps identified during the inventory will be the 
focus of the next stage over the remainder of FY08 with targeted data-
gathering activities where appropriate. Maintenance and updating of the 
data, along with development of data mining and analytical tools, will 
be the focus of subsequent years.

Q3c.  What will be the process of getting information from the private 
sector?

A3c. Existing methods of working with industry representatives and 
associations for the AFDC will be replicated and expanded. NREL has a 
long and successful history in forming and capitalizing on these 
interfaces. The focus will be on publicly available data and 
information, and information provided voluntarily by the private 
sector. We put significant effort into gathering accurate information 
and updating it regularly. We verify data independently so that the 
data center contains unbiased, factual information that can provide the 
basis for sound decisions by individuals and businesses in the private 
sector. The biofuels R&D information that the Committee proposes could 
readily be included because NREL is the home of the National Bioenergy 
Center and the focal point for significant biofuels R&D knowledge of 
other laboratory, industry, and academia progress; and technology 
transfer to the marketplace.

Questions submitted by Representative Ralph M. Hall

Q1.  In regard to the six cellulosic ethanol biorefineries,

        a.  Where are they to be located?

        b.  When will they be operational?

        c.  **Do we need the technology before the biorefinery or is 
        the biorefinery part of the research?

        d.  What feedstock will they be using? Will it be different at 
        each one?

A1. Below is the list of the awardees from the EPACT 2005 Section 932 
solicitation, there location, the feedstock they will be using and when 
they will be operational. **In all cases additional research is needed 
as part of the overall effort. Each of these companies is using its 
existing technology in order to demonstrate, at this point in time, the 
viability of their approach and to advance the overall understanding of 
the opportunities and issues in terms of cellulosic ethanol. Much work 
still needs to be done to advance the overall technology available to 
the Nation in order to improve efficiencies, lower costs, and 
accommodate a wide range of feedstocks.

    BlueFire Ethanol

        a.  Southern California

        b.  Construction start: 2008. Completion: End of CY 2009

        d.  Sorted green waste and wood waste from landfills

    Poet (Broin)

        a.  Emmetsburg, Iowa

        b.  Construction start: CY 2007. Completion: 30 month timeline.

        d.  Wheat straw, barley, corn stover, rice straw, switchgrass

    Iogen

        a.  Shelley, Idaho

        b.  Construction start: 2008. Completion: End of CY 2010

        d.  Wheat straw, barley, corn stover, rice straw, switchgrass

    RangeFuels

        a.  Treulten County, Georgia

        b.  Construction start: CY 2007. Completion: CY 2011

        d.  Wood residue and wood energy crops

    Abengoa Bioenergy

        a.  Colwich, Kansas

        b.  Construction start: Late 2008. Completion Late CY 2011

        d.  Corn stover, wheat straw, milo (sorghum)

    Alico Inc.

        a.  LaBelle, Florida

        b.  Construction start: CY2008. Completion Late CY 2010

        d.  Wood, ag residues

Q2.  In talking about infrastructure, you say that ``the current 
biofuel distribution infrastructure is inadequate to handle large 
volumes of biofuels.'' Please explain the inadequacies.

A2. Ethanol is currently distributed by rail, tanker truck, and barge. 
Several studies have shown the inadequacies of the existing 
distribution system to handle larger volumes of biofuels. For example, 
at issue with barge transportation is inter-coastal waterways traffic. 
Locks along the major rivers are advanced in age and undersized for 
even current transportation load. This already causes long delays 
during peak months.
    Regarding rail transport, equipment capacity has been tight for 
several years, and additional rail cars and rail lines are necessary to 
handle the increased biofuels production. Tanker trucks for gasoline 
and diesel are only typically used for short leg distribution, 
typically from pipeline terminal to local refueling station. For 
ethanol tanker trucks are commonly used for longer leg distributions. 
Although the additional truck traffic on highways is not necessarily 
problematic for the current 5 billion gallons per year of ethanol 
shipped, the additional tanker truck traffic for large ethanol volumes 
(> 20 billion gallons per year) would put significantly higher truck 
traffic on highways.
    Additionally, pipelines are a much more energy efficient and cost 
effective way to ship fuels so hence significantly less energy is used 
and cost added in transport as opposed to the current ethanol method of 
barge, rail and truck.

Q3.  You mention the NREL is creating an on-line Biomass Data Center. 
Based on this and the function of the Data Center, do you feel that 
Sec. 2 of the discussion draft, ``Biofuels and Biorefinery Information 
Center,'' is needed? Do you have any other thoughts or suggestions 
about the discussion draft?

A3. The Biofuels and Biorefinery Information Center section is still 
needed. This section puts a focus on the inclusion of biofuels R&D and 
technology transfer information into the center, which is an important 
and value-added concept. This needs to be fully integrated with the 
Biomass Data Center (BDC) that we discussed, although the exact 
architecture is still being planned. In addition, this section of the 
bill would ensure that the Congressional appropriators recognize the 
importance of this provision and provide funding to enable its full 
development and maintenance.
    The Biofuels and Biorefinery Information Center will allow DOE and 
NREL to present accurate and up-to-date information about the status of 
various biorefinery and biofuels production technologies. Providing 
credible, unbiased information on these technologies will enable 
informed analysis by technology companies as well as energy and 
environmental policy-makers. The focus of the BDC and the Biofuels and 
Biorefinery Information Center will be complementary, and together will 
provide reliable information about the present and future biofuels 
industry.
    In addition, the toll-free telephone assistance included in the 
bill will complement the on-line resources. NREL has extensive 
experience providing this sort of assistance. We operated the National 
Alternative Fuels Hotline for a decade with consistently outstanding 
customer feedback. For the last two years, this service has taken a 
more narrow focus as the Technical Response Service, which fields the 
more detailed technical questions on alternative fuels and advanced 
vehicles that enter through the central DOE/EERE Information Center. 
With additional funding associated with the Biofuels and Biorefinery 
Information Center, this existing Technical Response Service could be 
extended to biofuels and biorefinery topics. Past experience has shown 
that this sort of personal assistance can be extremely valuable to key 
stakeholders and technology implementers in the private sector.

Questions submitted by Representative Bob Inglis

Q1.  Section 3 of the draft legislation seems to limit infrastructure 
research, development, and demonstration to existing fuel distribution 
infrastructure. Since biofuels will vary by region, should we also be 
promoting research, development and demonstration in alternative 
infrastructure solutions that could prove to be cheaper and more 
efficient?

A1. Yes, biofuels production will be regionally specific primarily due 
to the regional nature of biomass and local fuel needs. For example due 
to the large feedstock production potential of the Midwest, it is 
likely that this region could be a net ethanol exporter beyond what 
could be used locally. Whereas for the east and west coasts it is 
unlikely that they would have enough biomass production potential to 
supply their high fuel demand needs. Hence dedicated pipelines or rail 
lines from the Midwest to the coasts might prove to be a feasible cost 
effective approach.
    This would contrast to areas such as the Southeast where the 
biomass production potential aligns well with fuel demand needs. Hence 
in this case more localized distribution infrastructures might be a 
better option.

Q2.  Does this draft legislation encourage a departure from food 
related feedstocks and toward high-yielding non-food related 
feedstocks?

A2. Yes this legislation by supporting the rapid and focused 
development of cellulosic ethanol that is price competitive with corn 
ethanol does support departure from food related feedstocks towards 
high-yielding non-food related feedstocks. The market will naturally 
favor the lower cost production route and currently that is corn 
ethanol. Unfortunately corn ethanol is inherently limited in potential 
with most experts estimating that the ultimate potential for corn 
ethanol being 12-15 billion gallons before serious impacts on other 
uses of corn for food and feed occur. Cellulosic ethanol and other 
biomass derived fuels can leapfrog this limitation by significantly 
increasing the ultimate potential by utilizing the much more plentiful 
biomass feedstock. Cellulosic ethanol technology has the long-term 
potential to be significantly lower in cost than corn ethanol because 
it can utilize the much lower cost biomass than corn for its feedstock.
    However, because of its immature state it is currently higher cost 
than corn ethanol and not proven at the commercial scale. This 
legislation, by supporting ongoing DOE supported research at NREL and 
other institutions to develop and demonstrate cost competitive 
cellulosic ethanol by 2012 will facilitate the market place switch form 
corn to cellulosic ethanol. This transition will stop if not greatly 
slow the growth of corn based ethanol and reduce the upward pressure on 
corn and food prices while still affording our nation the opportunity 
to increase our energy security via domestic production of ethanol.

Question submitted by Representative Jerry F. Costello

Q1.  On Tuesday, the U.S. Department of Agriculture (USDA) and the U.S. 
Department of Energy (DOE) announced a combined total of up to $18 
million will be available for research and development of biomass-based 
products, biofuels, bioenergy and related processes. They will fund 
essential research that not only will lead to the creation of new, 
sustainable energy sources, but also will create new uses and markets 
for agricultural products. Clearly money is being allocated to look at 
R&D of biomass. What will this legislation accomplish from an R&D 
prospective that is not already being done?

A1. The combined USDA and DOE program for the research and development 
of biomass-based products, biofuels, bioenergy and related processes 
has been a very successful program since its inception in FY02. Many 
good projects over the years have been awarded to universities, 
national laboratories and industrial companies that have addressed many 
aspects of biofuels and bioproducts technology development. With the 
many significant challenges that still face the biofuels and 
bioproducts industry, this funding can be wisely administered by the 
USDA and DOE to fund meritorious projects to develop needed technology 
and to address important issues as well as educate scientists and 
engineers in the biomass area.
    Although this is a good cross agency program, it is by no means 
adequate by itself to address the daunting challenges that face the 
biofuels industry. The projects awarded by this program tend to be 
small and limited in duration to three years. Hence, these projects 
tend to address very specific regional challenges or small individual 
aspects of the feedstock or environmental issue. These projects are 
also good at building local support and interest in biofuels but do not 
address national biomass issues.
    The legislation in this bill expands upon this existing individual 
project effort by supporting comprehensive research and analysis in 
many areas critical to the ultimate success of biofuels. For example 
this legislation will accomplish the following key aspects that need 
support: facilitate a critical investigation of the infrastructure 
issues associated with large-scale deployment of biofuels; support core 
research programs at NREL, Oak Ridge National Laboratory (ORNL), 
Argonne National Laboratory (ANL), Pacific Northwest National 
Laboratory (PNNL) and Idaho National Laboratory (INL), industry, and 
universities to develop all aspects of cellulosic ethanol technology 
from feedstocks through biochemical and thermochemical conversion; and 
allow comprehensive analysis of critical biofuels issues such as 
sustainability, greenhouse gas emissions, water use impacts and food 
price impacts. Additionally this legislation will stimulate the 
development of a much needed biofuels information clearing house that 
will be invaluable in delivering the latest accurate information on 
biofuels technology and other critical issues.
                   Answers to Post-Hearing Questions
Responses by John Berger, President and CEO, Standard Renewable Energy; 
        CEO of BioSelect

Questions submitted by Chairman Nick Lampson

Q1.  In your testimony, you noted that there is ``A great deal of 
ambiguity. . .in the renewable fuel marketplace'' because ``there is 
very little concrete factual data assigned to specific individual 
fuels.'' Do you have a solution to this problem? Is there a need for 
better coordination of information and materials about the fuels and 
the process for developing fuels? Would a central federal clearinghouse 
help remedy this problem?

A1. The EPA is currently working closely with the National Biodiesel 
Board as well as many government agencies such as the Department of 
Energy's National Renewable Energy Lab, to create a complete emissions 
profile for biodiesel. As leaders in the renewable energy sector 
however, we ask that the Federal Government do more with the creation 
of a centralized database benchmarking all renewable fuels 
independently to a baseline conventional diesel fuel. We as an industry 
will benefit tremendously from factual data outlining what is biodiesel 
and why is it superior to conventional diesel? In addition, we would 
like to see information explaining what is renewable diesel and how 
does it compare to biodiesel and separately how does it compare to 
conventional diesel? These are the types of questions that need to be 
researched.
    Federal coordination and cataloging of information from federal 
research on biofuels development processes as well as other aspects of 
the industry and related industries will be essential to the longer-
term goal of creating mainstream renewable fuel. Demystifying the fuels 
themselves will not only provide the general public with more 
information and confidence about utilizing renewables but also assist 
both federal and State bodies in defining credit structures, future 
industry incentives, etc.

Q2.  You mentioned the need for federal coordination of information and 
cataloging of research as essential to the long-term goal of creating 
mainstream biofuels. Without such efforts, do you envision a climate 
where the industry can consistently grow and develop a fungible biofuel 
supply?

A2. In order for the industry to grow and develop, the marketplace will 
need to focus and work together towards creating a fungible and quality 
biodiesel supply. In addition, federal coordination is key in order to 
foster such an effort, create standards, assist with phase by phase 
implementation, and lastly to support with necessary funding. 
Specifically, Standard would like to see a number of infrastructure 
activities pursued on a federal level, most likely through coordinated 
work from government agencies such as Department of Energy, the 
Department of Transportation and the Environmental Protection Agency. 
Our primary focus at this time is the continued research and 
development of low blend biodiesel pipeline batch movements. Successful 
pipeline analysis testing has already been done, on several different 
pipelines, on several different occasions, yet we as an industry have 
been removed from the progress. BioSelect is eager to assist with this 
exciting project and offer assistance to your committee and/or all 
government agencies interested in working on moving the testing 
forward. Additional specific research needs currently facing the 
industry include but are not limited to; feasibility studies on 
tankage, pipe and pump options, cold flow properties, water issues, 
stability testing of fuel samples and advanced vehicle technologies. In 
addition, we believe there is a clear need for an overall general 
economic study of capital requirements to bring biodiesel to local 
retail pumps nationwide.

Q3.  In your testimony, you mentioned that one of the barriers to 
realizing biofuels from diverse feedstocks was laboratory and equipment 
availability. I was hoping that you would clarify a bit. Is the problem 
better collaboration among corporate entities with research capability, 
better access to federal research facilities, better access to 
university research facilities, or the need for a better understanding 
of where research is taking place and on what specific subject matters?

A3. The issues you have outlined are all contributors to the research 
and development of the biofuel industry. There are very few private 
laboratories available that are deemed acceptable by both federal and 
State environmental agencies which have already caused our industry a 
great deal of backlogging for new testing. Universities nationwide have 
extensive capability but are either understaffed or under funded, which 
causes research and development with great promise to be defeated.

Q4.  Currently, what are your fuel transport plans? What is the cost of 
transport and how does it impact the price of your products? Is this 
the most efficient and economical way to transport your fuel? If there 
is a significant increase the in the use of biofuels, what will be the 
impact on the cost of transporting the fuel if we continue to use the 
same mode of transport we are currently using? Is it important that we 
find other ways, including the use of pipelines, to transport biofuels?

A4. Given the reality of constrained railroads and high cost truck 
movements, BioSelect will be moving the majority of both inbound and 
outbound movements via barge transport. Accessibility to water is an 
advantage we possess over the interior U.S. facilities, however barges 
and ships are increasingly in high demand themselves and corresponding 
costs are also on the rise. As broad biofuels use increases, these 
already existent issues will escalate. Finding other modes of 
transportation, i.e., national pipelines, is imperative in order for 
biofuels to become mainstream fuel.

Q5.  You mentioned that standardization of all biofuels is imperative 
to ensure fungibility. If we do not have clear standards that provide 
for homogeneous fuel that is fungible, what do you believe will be the 
impact on our long-term biofuel supply?

A5. Without clear standards the result would be off-spec, low quality 
fuel entering the marketplace. Bad fuel could cause damage to engines 
in all sectors and would seriously hinder customer confidence.

Q6.  You briefly mention that as the biodiesel industry develops, the 
demand for highly skilled trained labor will rise. Are you already 
finding that there is a shortage of trained skilled workers to meet 
your needs? And, do we need a specialized workforce training program 
geared to biofuels production?

A6. Education is key. Training and instruction focused on biofuels must 
find its way into academic curriculum for America's youth nationwide. 
Offering a tailored chemical engineering skill set to young potential 
operators would help create a specialized workforce and make the 
transition into biofuels a streamlined process universally.
                   Answers to Post-Hearing Questions
Responses by Robert Dinneen, President and CEO, Renewable Fuels 
        Association

Questions submitted by Chairman Nick Lampson

Q1.  Clearly, there is agreement from many stakeholders that there is a 
need for better coordination and centralization of biofuels research 
materials. In your testimony, you noted that it would be more 
appropriate for industry to serve as a clearinghouse of this 
information than the Federal Government. And though I understand the 
value in having industry very involved in this process, with so much 
research going on with the Federal Government, it seems only logical 
that the government would coordinate a centralize systems for 
organizing all these materials. And, a reasonable use of federal funds. 
So, would an industry advisory group be a good part of an information 
center to ensure strong industry participation?

A1. An industry advisory group to assist in the coordination of 
research activities is a good idea and would certainly help to ensure 
there is as little redundancy in research and development efforts of 
both the public and private sectors as possible.

Q2.  As you noted in your testimony, the discussion draft creates a new 
Biorefinery Energy Efficiency program. With significant resources 
already being dedicated to general research, we thought it appropriate 
to enhance the existing programs with some more focused mission 
specific efforts. With that in mind, are there other focused research 
areas that the Committee should consider as we move toward 
consideration of the bill?

A2. As I stated in my testimony, advances in research on the 
development of processes to produce alternative energy at biorefineries 
such as biomass co-generation and biomass gasification, and methane 
production through anaerobic digestors and waste gasifiers, will be 
critical to increase energy efficiency and reduce the energy 
consumption of biorefineries. Encouraging alternative energy sources is 
an important step toward enacting policies for a more diverse, domestic 
energy resource portfolio. Other areas where additional research could 
prove quite helpful would be in co-products, enhancing the feed value 
of distiller's dried grains and identifying new uses for the proteins, 
minerals and oils that remain after the starch is converted into fuel 
at ethanol plants. Finally, research into future market opportunities 
for ethanol, such as fuel cells, will be important to continued growth.

Questions submitted by Representative Ralph M. Hall

Q1.  I am curious about a statement in your testimony. You state, ``And 
there is not an ethanol company represented by RFA that does not have a 
cellulose to ethanol research program.'' Are these research programs 
supported with federal dollars? Are these research programs done 
independently by the companies? If every ethanol company you represent 
has a program how many programs are there? If every ethanol company you 
represent has a program, whether it be privately or publicly funded, do 
we need more?

A1. It is certainly true that virtually every ethanol company in the 
country is looking into the possibilities of producing ethanol from 
cellulosic feedstocks. First, all of these plants already have 
cellulosic feedstocks coming into the plant in the form of corn fiber. 
But, more importantly, every company recognizes that the future of 
ethanol lies in the ability to convert non-grain feedstocks into fuel. 
Certainly, some of these research efforts have received government 
support. Recently, the U.S. Department of Energy awarded six grants 
totaling $385 million to six different companies spread across the 
country and using a variety of feedstocks and technologies. Federal 
efforts such as this are invaluable to moving the commercialization of 
cellulosic ethanol technology further as quickly as possible. Other 
research is clearly occurring without Federal Government support, and 
is supported by state grants, foundations, academic institutions or 
private funds. It all will help. We ought not limit any of these 
important efforts.

Q2.  It is my understanding that, as you mention in your testimony one 
of the challenges of using more ethanol is a lack of storage capacity. 
Is the same true if we are to use cellulosic ethanol as a feedstock? If 
the cellulosic ethanol is not transportable via pipeline, what storage 
challenges do you foresee? Is it tankage? What are the challenges to 
collection, storage, and handling of feedstocks other than corn 
ethanol?

A2. Actually, I do not believe storage capacity will be a major barrier 
to expanded ethanol production and use. I believe the market will 
respond with expanded infrastructure as needed, including potentially 
shipping ethanol via pipeline if the marketplace demand supports it. 
There will be new challenges as ethanol is produced from new 
feedstocks, however; none are insurmountable. Because there will be new 
feedstocks needed for many of these new cellulosic ethanol facilities, 
growers will need an opportunity to experiment with what will likely be 
new crops for many of them. Programs to familiarize growers with all 
aspects of new cellulosic crops will be essential. These programs 
should include research and development, management, harvest, 
transport, and storage techniques, and collection of data relevant to 
new cellulosic feedstocks. Such programs will allow growers to 
experiment with other crops, and incentivize farmers to plant cellulose 
crops, and continue U.S. agriculture's investment in our domestic 
biofuels industry.

Q3.  Mr. Dinneen, you mention in your testimony that the ethanol 
industry has worked to expand a virtual pipeline. That virtual pipeline 
consists of rail, barge and truck traffic. Are you saying the ethanol 
industry does not believe there is a need to study the impact of 
ethanol on pipeline infrastructure? Are you not supportive of research 
and development that would enable ethanol, or for that matter the 
finished motor fuel containing ethanol, to be shipped via pipeline?

Q3.  As I stated in my testimony, the ethanol industry has worked to 
expand a ``Virtual Pipeline'' through aggressive use of the rail 
system, barge and truck traffic. As a result, we can move product 
quickly to those areas where it is needed. Many ethanol plants have the 
capability to load unit trains of ethanol for shipment to ethanol 
terminals in key markets. Unit trains are quickly becoming the norm, 
not the exception, which was not the case just a few years ago. 
Railroad companies are working with our industry to develop 
infrastructure to meet future demand for ethanol. We are also working 
closely with terminal operators and refiners to identify ethanol 
storage facilities and install blending equipment. We will continue to 
grow the necessary infrastructure to make sure that in any market we 
need to ship ethanol there is rail access at gasoline terminals, and 
that those terminals are able to take unit trains.
    That said, many stakeholders in the biofuels industry are beginning 
to look at the practical issues involved with shipping ethanol via a 
dedicated pipeline. Shipping ethanol in pipelines is done today in 
Brazil, and it has been done at times in the U.S., as well, in 
dedicated pipelines. If the marketplace demands it, as it does in 
Brazil, and there is enough ethanol demand to warrant the investment in 
the infrastructure for dedicated pipelines, such a system will develop 
in the U.S. Studying the feasibility of transporting ethanol by 
pipeline from the Midwest to the East and West coasts will be very 
helpful.

Questions submitted by Representative Bob Inglis

Q1.  Section 3 of the draft legislation seems to limit infrastructure 
research, development and demonstration to existing fuel distribution 
infrastructure. Since biofuels will vary by region, should we also be 
promoting research, development, and demonstration in alternative 
infrastructure solutions that could prove to be cheaper and more 
efficient?

A1. In my testimony, I noted that programs that promote geographical 
dispersion will help to commercialize cellulosic ethanol quickly and 
continue the trend just beginning to expand ethanol production beyond 
the traditional corn belt. A wide variety of energy crops and 
agricultural waste products such as switchgrass, myscanthis, wood chips 
and corn stover from many regions of the country must all be 
researched, developed and commercialized as additional ethanol 
feedstocks to realize the annual production levels envisioned by 
Congress.

Q2.  Does this draft legislation encourage a departure from food 
related feedstocks and toward high-yielding non-food related 
feedstocks?

A2. To date, the U.S. ethanol industry has grown almost exclusively 
from grain processing. As a result of steadily increasing yields and 
improving technology, the National Corn Growers Association (NCGA) 
projects that by 2015, corn growers will produce 15 billion bushels of 
grain. According to the NCGA analysis, this will allow a portion of 
that crop to be processed into 15 billion gallons of ethanol without 
significantly disrupting other markets for corn. Ethanol also 
represents a growing market for other grains, such as grain sorghum. 
Ethanol production consumed approximately 26 percent of the Nation's 
sorghum crop in 2006 (domestic use). Research is also underway on the 
use of sweet and forage sorghum for ethanol production. In fact, the 
National Sorghum Producers believe that as new generation ethanol 
processes are studied and improved, sorghum's role will continue to 
expand.
    In the future, however, ethanol will be produced from other 
feedstocks, such as cellulose. Ethanol from cellulose will dramatically 
expand the types and amount of available material for ethanol 
production, and ultimately dramatically expand ethanol supplies. 
Further, biotechnology will play a significant role in meeting our 
nation's future ethanol needs. Average yield per acre is not static and 
will increase incrementally, especially with the introduction of new 
biotech hybrid varieties. According to NCGA, corn yields have 
consistently increased an average of about 3.5 bushels per year over 
the last decade. Based on the 10-year historical trend, corn yield per 
acre could reach 180 bushels by 2015. For comparison, the average yield 
in 1970 was about 72 bushels per acre. Agricultural companies like 
Monsanto believe we can achieve corn yields of up to 300 bushels per 
acre by 2030. It is not necessary to limit the potential of any 
feedstock--existing or prospective.
    Ultimately, the marketplace will determine which feedstocks are the 
most economically and environmentally feasible. While there are indeed 
limits to what we will be able to produce from grain, cellulose ethanol 
production will augment, not replace, grain-based ethanol. The 
conversion of feedstocks like corn stover, corn fiber and corn cobs 
will be the ``bridge technology'' that leads the industry to the 
conversion of other cellulosic feedstocks and energy crops such as 
wheat straw, switchgrass, and fast-growing trees. Even the garbage, or 
municipal solid waste, Americans throw away today will be a future 
source of ethanol.
    To continue this technological revolution in cellulosic ethanol, 
the biomass, bioresearch, and biorefinery research and development 
programs included in H.R. 2773 will be essential to developing these 
new technologies and bringing them to commercialization.
                              Appendix 2:

                              ----------                              


                        Material for the Record




                     Section-by-Section Analysis of

                   Biofuels Research and Development

                  Enhancement Act ``Discussion Draft''

                             June 12, 2007

Section 2--Biofuels and Biorefinery Information Center

    Directs the Secretary of Energy, in cooperation with the Secretary 
of Agriculture, to establish an information center to serve as a 
clearinghouse of information related to the research, development, and 
commercial applications of technologies related to biofuels and 
biorefinery technologies. This section will help make readily available 
to interested parties the latest information on methods for biofuels 
development to help support the rapid growth and deployment of 
biofuels.

Section 3--Biofuels and Advanced Biofuels Infrastructure

    Recognizing the inherent problems with transporting and storing 
biofuels in the existing petroleum fuels infrastructure, this section 
establishes and program of research, development, and demonstration for 
modifications and treatments to existing infrastructure and development 
of new infrastructure.

Section 4--Biodiesel

    The Secretary is directed to submit a report to Congress on any 
research and development challenges in increasing to five percent the 
amount of biodiesel, as compared to the current level, the amount of 
all diesels sold nationally.

Section 5--Bioresearch Centers for Systems Biology Program

    The Bioresearch Center program created in the Energy Policy Act of 
2005 is amended to establish at least 11 regionally located centers.

Section 6--Grants for Biofuels Production Research and Development in 
                    Certain States

    Establishes a research and development grant program in states with 
low rates of Biofuels production, as is determined by the Secretary of 
Energy.

Section 7--Biorefinery Energy Efficiency

    Adds a new subsection the Section 932 of the Energy Policy Act of 
2005 (Bioenergy Program) to establish a program of research, 
development, demonstration and commercial application of technologies 
to increase the energy efficiency and reduce the energy consumption of 
biorefinery facilities.

Section 8--Study of Increase Consumption of Ethanol-Blended Gasoline 
                    with Higher Levels

    Directs the Secretary of Energy to conduct a study, in cooperation 
with the Secretaries of Agriculture and Transportation and EPA, on the 
feasibility of increasing the consumption of ethanol-blended gasoline 
at blend levels between 10 and 40 percent.

Section 9--Study of Optimization of Flexible Fueled Vehicles to Use E-
                    85

    Directs the Secretary of Energy to conduct a study to determine if 
optimizing flexible fuel vehicles to operate using E-85 would increase 
the fuel efficiency while using E-85.

Section 10--Study of Engine Durability Associated with the Use of 
                    Biodiesel

    Directs the Secretary of Energy to conduct a study on the effects 
of the use of biodiesel, at varying blend levels, on engine durability.

Section 11--Authorization for Appropriation

    This section makes the following authorizing changes:

          Extends the authorization of Section 931 (Renewable 
        Energy) Energy Policy Act of 2005 through 2010 (currently 
        expires in 2009) and funds the programs at $963 million.

          Increases the authorization levels for Section 932 
        (Bioenergy Programs) of the Energy Policy Act of 2005 to:

                  FY08--$377 million

                  FY09--$398 million

                  FY10--$419 million


                
                


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