In 2007, the state gave the University of Tennessee $70 million to pioneer a way to turn switchgrass crops into biofuel for cars. Now the exact payoff could rest in the hands of oil companies.
The state chipped in $40 million before the recession to build a plant-based ‘bio-refinery,’ and tens of millions more for things like farmers growing thousands of acres of tall switchgrass. With that money now spent, a committee of lawmakers asked Tuesday what the state has to show for it.
They made clear they’re not impressed with pure research. Rather, they’re looking for commercial success, turning the talk to who might pay for biofuel technology. The likely answer is fuel companies, which are federally required to blend in more and more ethanol—Not that they’re thrilled about that, says Steve Mirshak, with UT’s industry partner, the chemical company Dupont.
Mirshak says right now fuel companies with “deep pockets” are campaigning against the Environmental Protection Agency rule, but he expects they’ll come to accept it, and could end up at the bargaining table.
“Once it becomes clear to everyone that the Renewable Fuel Standard is going to stay in place, then people will be looking at that and deciding what’s the best investment for them to make.”
Mirshak says that could lead to Tennessee’s chance to expand its business in biofuels. In the meantime, he’s careful to say he hardly blames oil companies for looking after their interests.
With lawmakers pressing as to what extent the state’s investment has paid off, Mirshak (pronounced MERE-shack) and his colleague from the UT switchgrass spinoff company Genera, Dr. Kelly Tiller, noted the returns already include Dupont spending some $70 million of its own in Tennessee, while attracting millions more in private funds, as well as federal money from the Department of Energy.
The work also proved a feather in the cap of nearby Oak Ridge National Laboratory, which received roughly a quarter of a billion federal dollars. Tiller says while the switchgrass effort can’t claim all the credit for that, she’s been told it was a major selling point.
Moving forward, the federal requirement for fuel blends to include increasing amounts of ethanol could prove a sizable boon to producers, in time. Dupont just spent a couple hundred million opening a commercial-size bio-refinery in a town called Nevada (Ne-VAY-da) north of Des Moines, Iowa. Mirshak says the current EPA requirements would spur numerous similar facilities over the next decade—many billions of dollars worth, all told. He says that’s part of the reason the financial muscle of the oil industry is instrumental.
Tiller says in terms of the requisite switchgrass crops to support such facilities, Tennessee has room for ten or twenty refineries.
From the Vault: Gas From Grass Gets a Big Boost, by WPLN’s Christine Buttorff, 20 August 2007