Yesterday US President Obama announced that the US will invest half a billion dollars over the next 3 years to develop advanced aviation and marine biofuels for military and commercial transportation.

The plan is for the U.S. Departments of Agriculture, Energy and Navy to partner with private industry to jointly construct or retrofit existing biofuel plants and refineries, with the goal of accelerating output of renewable jet and diesel fuels. The hope  is to create biofuels that can be produced in the same facilities as petroleum-based fuels and transported through existing pipelines.

“Biofuels are an important part of reducing America’s dependence on foreign oil and creating jobs here at home,” Obama said in a statement.

Most US biofuels are created from corn and vegetable oils which have affected food prices (eg. ethanol). Manufacturers are now trying to develop “next generation” fuels from non-food crops, agricultural waste, wood chips, algae and other feedstocks that don’t impact the food supply.

Recently, the US Department of Energy said that the country could produce one billion tons of biomass by 2030.  The department examined the potential for producing biomass without impacting existing food, feed and fibre crops and concluded that with new biorefinery capacity and technology, the US could produce around 85 billion gallons of biofuel a year – enough to cover around 30% of current petroleum consumption.

You can access the report here.

Energy Efficiency News notes that this report does not include algae which by itself has the potential to replace 17% of imported oil.

Scientific American has a different, more sanguine view of the promise of biofuels. In an article entitled The False Promise of Biofuels it reminds us that the breakthroughs needed to replace oil with plant-based fuels are proving difficult to achieve.

Despite extensive research, biofuels are still not commercially competitive. The breakthroughs needed, revealed by recent science, may be tougher to realize than previously thought.

Corn ethanol is widely produced because of subsidies, and it diverts massive tracts of farmland needed for food. Converting the cellulose in cornstalks, grasses and trees into biofuels is proving difficult and expensive. Algae that produce oils have not been grown at scale. And more advanced genetics are needed to successfully engineer synthetic micro­organisms that excrete hydrocarbons.

Some start-up companies are abandoning biofuels and are instead using the same processes to make higher-margin chemicals for products such as plastics or cosmetics.

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