A Reality Check For Setting Goals For Advanced Renewable Fuels Use And Advanced Renewable Fuels Plant Capacity 

sklarBy Tim Sklar, special to The Digest

A series of articles that recently appeared in last month in Biofuels Digest addressing the continued struggle to increase renewable fuels plant capacity to support anticipated advanced renewable fuels requirements.

Also appearing in The Digest in late July were excerpts from a speech given by a CEO of a renewable fuels producer at a conference where she quantified the amount of “low carbon fuel” (a.k.a. advanced renewable fuel) that will be needed over the next 20 to 30 years to mitigate the adverse impact fossil fuel use is having on climate change. She also provided estimates of the advanced renewable fuels plant capacity that would be needed and the number of new plants that would have to be built.

More troubling, was the opinion she expressed that such an expansion of capacity was possible “if we have the will to do it”, as this opinion ignores all of the struggles renewable fuels project developers continue to encounter. And it contradicts much of what The Digest has been reporting about these struggles. It is also inconsistent with our own experiences and struggles in renewable fuels project development over the last seven-year period.

This article is designed to make the case as to why it will take more than will power and wishful thinking to install the amount advanced renewable fuels plant capacity that is being suggested and to provide a reality check on what to expect by Year 2050.

Low Carbon Fuel Estimates for Year 2050- what are they?

The following are “snippets” taken from the July 22nd Biofuels Digest, containing the remarks by Dr. Jennifer Holmgren, CEO of LanzaTech, on receiving the Rosalind Franklin Award for Leadership in Industrial Biotechnology, from the Biotechnology Industry Organization.

Here is what she has to say about what needs to be accomplished by Year 2050 to avoid catastrophes created by climate change. Also included is this author’s expansion of some of her remarks in order to paint a more complete picture of what is entailed in meeting her stated goal.

  • The overriding goal is “to keep the climate change effect to within two degrees by 2050” by reducing carbon emissions.
  • We have already used up 65 percent of the carbon we had budgeted to emit to stay within that 2 percent limit. If over this period, we do not stay within the remaining carbon budget, we are on a path to a climate change effect of 3-4 degrees, which could be catastrophic.
  • Through advances made in biotechnology we have the opportunity to walk a different path.
  • We must accept as true “that now and in the future, every carbon molecule matters” and “every one is a precious resource”.
  • We must find ways “to keep carbon fossil oil in the ground”, at the very least, “to keep it out of the air”.  And if we allow some carbon emissions to get into our atmosphere, we will need to recycle it.
  • To reduce carbon emissions to the targeted level, at least 30% all fuels produced should have a much lower carbon content than fossil fuels,
  • This would require significant increases in the availability and use of advanced renewable fuels.  The goal being set requires producing 350 billion gallons per year of advanced renewable fuels by Year 2050 in 1,750 biorefineries with an average production capacity 200-million gallons per year.
  • To build that many fuels plants over the next several years it will require both the will and cooperation of all affected parties.

What is Holding Us Back?

A Synopsis of Several Recent Biofuels Digest Articles That Address This Struggle

In the July 3rd issue of Biofuels Digest, it was reported that for almost a decade, progress being made in developing advanced renewable fuels as a significant part of the bio-economy, has been a struggle.

This article sheds light on what has been happening to slow the pace in developing advanced renewable fuels and what some of the causes have been. This article attributes some of lag being exacerbated by “the non-cooperative games people play”. The article tries to offer a partial explanation by turning to “Prisoner’s and Game Theory”, suggesting that the development of the market for advanced renewable fuels requires more than making the classic economic choices ” based on “supply and demand “.

It then fixes blame for the slow pace in developing the advanced renewable fuels market on the “actors” participating in this market, pointing to the fact that people participating in its development are not always responding rationally to choices they are being asked to make.

This article addresses the reasoning behind some of the most irrational choices and points to the distortions that are characterized as “nonsensical noise”, giving several recent examples, such irrational or false agri-crop use choices in providing food vs. fuel; and EPA’s backing away from the Renewable Fuel Standard (RFS) while subsidizing electric power cars and recharging them with power from coal fired power plants.

The article also cites instances of the non-cooperative games being played across the spectrum of renewable fuels project development including financing, clean energy policy, cost of carbon and carbon taxation, mandates, incentives, environmental impact assessment and remedies.

The bottom line in all of this is spelled out in the author’s concluding statement that “we may need to revise our standard model of how and why things work (if the pace of advanced renewable fuels project development and use is to be accelerated)”. It seem that “the non-cooperative games people play” will have to stop and “nonsensical noise” toned down a few decibels.

On July 7th, a related article by Brent Erickson appeared in Biofuels Digest. Titled; Why Is EPA Proposing to Continue Delaying the Arrival of Advanced Biofuels?” This article reports on “United Airlines significant investment in Fulcrum BioEnergy and an off take agreement for as much as 90 million gallons per year of renewable jet fuel by 2021. Erickson characterizes this deal as “a very significant development for the advanced renewable fuel industry and, hopefully, a harbinger of more good things to come.” He believes that this deal “demonstrates the potential for forward-leaning federal policy to guide investment, to speed commercialization of innovative alternative fuels, and to score a win for the environment.”

Erickson presents the details of the United-Fulcrum deal, explaining that United needs renewable fuels “as a hedge against volatile oil prices and future carbon emission standards”.  He then points out that he believes this deal bodes well for the renewable jet fuel market and although the Fulcrum renewable fuels plant being used “will provide 5 million gallons of jet fuel a year to United “is just one drop in the bucket”, Erickson alsonotes that it is a small step in the right direction.

However, Erickson is quick to criticize EPA for working in a conflicting manner, making the point that proposed rule for the RFS that would “shift this program into low gear”, by mandating less use of advanced renewable fuels.

On July 24th Biofuels Digest reported on testimony given by a scientist from the University of Minnesota to one of the committees of The House of Representatives, where he claimed there were pollution-related deaths due to cellulosic ethanol. He then opined that he believes the RFS mandates will lead to more pollution-related deaths. Because cellulosic ethanol “emits more of some pollutants than even gasoline”,

It should be remembered that critics are still taking cheap shots at of advanced renewable fuel, arguing that they are not carbon neutral. Likewise, the “nonsensical noise” is still ongoing by those critics that are in denial with respect to global warming, and by those critics that believe producing advanced renewable fuels is environmentally destructive and will lead to widespread drought.

What will it take?

The following is an enumeration of what I believe it may take to mobilize a massive effort for development of advanced renewable fuels plant capacity to make 350 billion gallons per year of advanced renewable fuel in 1,750 advanced renewable fuels plants. It based on our own experiences.

  • Those that undertake each project’s development must be skilled in fast-tracking techniques, as delays in scale-up to needed capacity will add to the costs.
  • The project team must include those qualified for providing the materials, equipment and technology that will be needed.
  • Those overseeing the project’s development, operation and financing will need the appropriate skills sets and expertise.
  • A commitment for community support will be needed, as will changes in regulations that would impede project viability.
  • Those that make initial commitments of time and resources to the project will need to demonstrate that such commitments can be sustained.
  • Project sponsors, developers, EPC contractors and operating managers must be skilled in coordinating and managing complex projects.
  • Those involved, as decision makers will have to be prepared take risks. They will also have to become better risk-takers and have the knowledge and experience in how best to mitigate technological, market and financial risks.
  • Participants in these projects must demonstrate that their organizations are substantial enough to withstand risks that they will be assuming.

Can This Goal Be Attained?

The above enumeration of what must be done assumes that it would be possible to mobilize a massive effort to develop the capacity. Dr. Holmgren believes that this goal is within reach, and advises that we not “listen to all the critics and their calls for inaction”. She then predicts,  “Nothing will happen without the will”. (Emphasis added). Even if she is right, based on the track record of project developers who are active in developing renewable fuels plants and are also aware of the impediments they have to overcome, it should be obvious that it will take more than just will power, to attain the goal that she suggests we meet.

The chances of attaining this goal could become more remote if one considers a major impediment that is often overlooked and has often proved to be a “deal breaker”. This impediment is the one associated with overcoming conflicts that are created by not accommodating inter organizational instincts that impede collaboration. Call it what you will, be it  “human nature” or “human instinct” or tribal instinct, it is real. Such instinctive conflicts are most often encountered when undertaking a complex project or set of projects where a large number of organizations are involved and a high level of cooperation, collaboration and coordination are needed.

Building 1,750 advanced renewable fuel plants and producing 200 million gallons per year of advanced renewable fuel is a good example of a complex undertaking that will require, cooperation, collaboration and coordination of all participating parties to make it happen.

Arguably, there is a high probability that changes in instinctive human behavior of the parties-in-interest to such a complex undertaking may be unattainable, as it is against our basic instincts to cooperate with others, especially if it involves the mobilization of a variety of individuals and organizations to coordinate our efforts to achieve a common goal. As one can expect, it will require each party to compromise their preferred positions, to make additional concessions and sacrifices and to assume risks or share in risks that are not directly of our own making.

Answering The Question Of Goal Attainment

Although the Goal being discussed appears improbable, there is much that can be done to increase ones chances. We need to better understand human nature; tribalism and tribal instincts before we can mitigate organizational conflicts that are induce by these instincts that arise in complex undertakings.  This topic is addressed in the next section

Resolving Instinct Driven Organizational Conflicts

Understanding Human Nature 

There is scientific research that supports the existence of human instincts and the role they play in creating conflict among us. This research provides evidence that our basic human instincts are biological in origin and have then evolved through Darwinian evolution.

Additional scientific evidence indicates that as Homo sapiens we have acquired a set of “learned” traits or instincts, through social interactions with other human beings, and that all of these instincts be they biological or learned, are “hard wired into our brains”.

The biologists, neuroscientists and psychologists who have contributed to the body of knowledge that addresses understanding of human instincts, understand our evolution as human beings. The philosophers and social scientists that have contributed to the study of our social behavior and those related learned traits that are thought to be the root cause of conflict, understand why we often do not get along with one another, either as individuals or as groups.

Understanding Tribal Instinct as The Root Cause of Conflict

The instincts that are believed to be the troublemakers and most often lead to conflicts are associated with the tribal instincts that are part of our human nature. A subset of our  “tribal instincts” are the ones that are believed to cause conflict between ourselves as individual and others in the same group and between groups that we belong to and those that we do not.

Before commitments are made to undertaking aggressive advanced renewable fuels development programs it is worth taking a hard look at what should be considered as the major impediment to undertaking such a massive program. We must be willing to accept the fact that overcoming conflicts between participating organizations that are induced by tribal behavior, are part of human nature.

The following excerpts were taken from the synopsis of Wilson’s book. It contains a lengthy discussion of tribalism, and tribal instincts as being part of human nature and how conflict that is induced by tribalism is instinctive and for the most part unavoidable. Here is what Wilson has to say-

All of us have a basic need for belonging to groups. We look to group membership, as a source of happiness as well as for survival. We select specific groups that facilitate our bonding with others on two or more “group bonding commonalities”.

These commonalities often include: genetic kinship; a common language; a common set of beliefs; a place with which we all identify; the place where we are from (a.k.a., a geographic place of origin); and a shared set of social purposes.

We al have tribal instincts.Tribal instincts makes good people do bad things, not the moral tenets and humanitarian thoughts.

When tribal organizations that are collaborating on a joint undertaking, they also compete with one another for power, control and survival.

In such situations, conflicts can be expected over such issues as: philosophical and technical preferences; political ideologies; strategies and tactics; amounts required and at risk; sharing of risks and rewards; and, exit strategies and terminal valuations.

Tribal Impairment of Renewable Fuels Plant Development

The types of organizations that would be needed in development of a typical commercial scale renewable fuel plant are easy to envision. Among the participating organizations, that such projects will require are:

  • Those that specialize in testing varieties of feedstock;
  • Those that procure feedstock and/or processes it; for use
  • Those that offer renewable fuels processing technology;
  • Those that offer engineering, procurement and construction (EPC) services;
  • Those capable of managing and operating fuels plants;
  • Those that are able to secure project financing;
  • Those that are able to market renewable fuels;
  • Those that can blend, store and deliver fuel blends; and
  • Those that blended fuels buyers, is they end-users or resellers.

According to Wilson, “bonding commonalities” are established by individual members of each participating organization with other members. And based on role that that each organization is expected to play in such ventures, an added set of group bonding commonalities that each member possesses would in all likelihood come into play, that would make joining these organizations even more tribal. Theoretically, the list of “added commonalities” would include: a common set of skills; a common field of endeavor: and a common set of needs, goals and objectives. And consistent with Wilson’s theories, each such organization would have their own list of needs, goals and objectives.

However, we all have to find a way to work with one another if we have a chance at attaining our Group’s goals without undermining what other participating organizations need as well.

Unfortunately, when things do not go as planned, one should expect to see conflicts between these organizations as each would respond to tribal instincts for survival and act out of self interest, offering fewer compromises and concessions to other organizations participating in the project. This could adversely impact the overall viability of the joint undertaking, leading to everyone suffering losses, while leaving some of the participating organizations permanently impairment.

Should We Get Real and Move The Goal Posts?

The short answer is yes! In light of all of the impediments that face those that are anxious to fast-tract the development of large numbers of advanced renewable fuels plants, it serves no useful purpose to estimate what our requirements will be and also suggest that the goal could be met if we will it. Clearly, to make this happen we will have to do more than ask potential participants to cooperate with one another on massive undertaking over such a long period.

Such a plan is unrealistic, given human nature, what we know about tribalism and tribal instincts and causes of conflict, let alone the lack of consensus among those participants in the proposed complex undertaking, with respect to the economics, resource constraints, all the other known unknowns and the efficacy of the goals being sought.

At best, we ought to move the posts back, to reflect the realities of attaining any proposed goal.

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Note 1: The article uses this author’s synopsis of Dr. Edward O. Wilson’s compact 187-page volume titled “The Meaning of Human Existence” as its source of reference. It is a 19-page document titled ”Understanding The Root Causes of Conflict” and is available upon request.

Note 2: Dr. Edward O. Wilson is one of the world’s preeminent biologists and naturalists, and a Pulitzer Prize winning author of more than twenty books. His latest book grapples with a number of existential questions that he believes are fundamental to understanding what makes human beings different from all other species in an attempt to find the meaning of human existence. It is a must read/

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