The Conversation

By Susan Pond, AM

"We are fortunate to be alive at this moment in history. Never before has our nation enjoyed, at once, so much prosperity and social progress with so little internal crisis and so few external threats."

With these words, William J. Clinton introduced his State of the Union Address on 27 January 2000.

In the aftermath of 9/11, George W Bush began with:

"As we gather tonight, our nation is at war; our economy is in recession; and the civilized world faces unprecedented dangers".

In contrast to his first Address in 2001, in which the word "security" was not mentioned once, Bush used it 17 times – in the contexts of national security, economic security, price of security, air travel security, homeland security, airport and border security, sense of security, health security and retirement security.

He voiced his concerns about energy independence and urged action to increase domestic production and decrease reliance on foreign oil.

These concerns were not new, having been raised repeatedly since the 1973 Arab oil embargo.

They were based on the economic and strategic vulnerability created by US reliance on imports for 50% of its oil. By 2002, with 5% of the world's population, the US was consuming 25% of the world's oil supply.

9/11 refocused attention on energy security. It has remained one of the three foundations of US energy policy in the decade thereafter, the others being economic competitiveness and reduction of greenhouse gas emissions. The influence of each changes over time but the three are linked inextricably.

The decade since 9/11 has seen substantial development in US energy policy. Because transport accounts for 70% of oil consumption, it was the obvious sector to target for petroleum oil replacement.

The Energy Policy Act of 2005 established the renewable fuel standard (RFS) for automobiles. It required fuel suppliers to blend nine billion gallons of ethanol and biodiesel in transportation fuel in 2008 and to increase this volume annually to 36 billion gallons by 2022.

The Energy Independence and Security Act of 2007 confirmed the 2022 target of 36 billion gallons but capped the RFS volume of ethanol to 15 billion gallons because of concerns about the impact of corn feedstocks on food prices.

Advanced biofuels take up the 21 billion gallon gap. These are fuels that are produced from non-corn (non-food) feedstocks and reduce greenhouse gas emissions by at least 50% compared to petroleum.

A final set of rules for the expanded RFS, the RFS2, was issued by the US Environment Protection Agency in December 2010. They include methods to categorize fuels as advanced biofuels, and for credit verification and training.

RFS2 volumes are not mandates. The incentives to reach them are provided by Renewable Identification Number (RIN) transactions which are used to obtain credits and trade and track volumes.

In his first Address in 2009, President Obama took the view that "to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy."

This kind of energy included advanced biofuels, mentioned by him for the first time in any Address in 2009 and then again in 2010 and 2011. Specific funding for advanced biofuels was provided in the American Recovery and Reinvestment Act of 2009.

Several Federal Government Departments, including Agriculture, Transportation and Energy administer the grants or loans for projects across the entire supply chain from feedstock production to fuel refining.

At Georgetown University on 30 March 2011, in his "Blueprint for a Secure Energy Future", President Obama set the goal for 2025 of reducing U. oil imports by one third from the 2010 figure of 11 billion barrels a day.

He issued a Presidential Memorandumon 24 May 2011 directing the federal government agencies to convert government vehicle fleets, the largest in the country, to 100 percent alternative fuel vehicles by the end of 2015 and to cut their consumption of petroleum by 30 percent by 2020.

On 16 August 2011, he announced that "the US Departments of Agriculture, Energy and Navy will invest up to $510 million over three years in partnership with the private sector to produce advanced drop-in aviation and marine biofuels to power military and commercial transportation".

The US Navy aims to convert 50% of its energy requirements to fossil fuel alternatives by 2020. By 2016, the Navy will sail a "Great Green Fleet" powered by 8 million barrels of advanced biofuels, including bio-jet fuel.

9/11 was a catalyst for development of advanced biofuels industry in the US.

The challenge will be to maintain policy certainty across election cycles. The industry needs time to reach commercial scale and manufacture advanced biofuels at parity pricing to oil.