Web exclusive posted April 22, 2009, at 3:06 p.m. CST

According to a new report released by the Biofuels Infrastructure Task Force, convened by the National Commission on Energy Policy, the U.S. must increase incentives for biofuels infrastructure investments in order to meet the federal renewable fuels goals.

The study examined the infrastructure implications of the RFS which mandates that the U.S. must produce 36 billion gallons of biofuels production by 2022; it is currently about 9 billion gallons. "To meet its timetable, approaches to biofuels infrastructure upgrades must also be ambitious. Whether it's vehicles, pipelines or pumps, new investment will be needed to meet the 36 billion gallon mandate," said Norm Szydlowski, task force chairman, who is also an NCEP commissioner and is former president and CEO of Colonial Pipeline.

Among the key issues identified by the task force:

• The RFS will require that the nation transition to a broad-based use of E10, as well as increased usage of higher-ratio blends, such as E85. Transporting and blending the larger quantity of ethanol will stress existing networks and require new infrastructure investment.


• It may be difficult for businesses to access capital and make large investments in new infrastructure to support increased national biofuels distribution due to the current economy.


• National E10 saturation may occur sooner than originally expected; however, there has been little progress in developing the E85 market necessary to absorb biofuel quantities beyond what can be blended in conventional fuels.

Based on the report's findings, the task force is recommending that the use of flex-fuel vehicles needs to grow to absorb biofuels; the number of different blends that fuel refiners must produce to meet state-level specifications needs to be reduced or limited to enable a more efficient biofuels transition; permitting processes need to be streamlined and simplified to reduce costs and lead times for infrastructure investment; and current public incentives and subsidies should be refocused to include a greater emphasis on biofuels transport, refueling infrastructure, and related vehicle technologies.

"U.S. biofuels policy to date has tended to emphasize production incentives and volume mandates," Szydlowski said. "Going forward, it will be increasingly important to focus on other aspects of the equation -- notably the need for safe, efficient and reliable infrastructure networks to transport, blend, and distribute biofuel. It is also important consumer demand for biofuels -- and especially for higher-ratio ethanol blends -- grows at a pace commensurate with RFS mandates."

The report is available online at www.bipartisanpolicy.org.