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Alternative Fuels Final Report The Senate Interim Committee on Natural Resources Interim Report to the 78th Legislature Opportunities for Alternative Fuels and Fuel Additives: Technologies for Converting Waste into Fuel August 2002 Senate Interim Committee on Natural Resources Report to the 78th Legislature Opportunities for Alternative Fuels and Fuel Additives: Technology to Convert Existing Waste into Tomorrow's Fuel TABLE OF CONTENTS INTRODUCTION ............................................................. 3 INTERIM CHARGE .......................................................... 4 ETHANOL .................................................................. 5 FUELS FROM ANIMAL WASTES ............................................. 16 CREATING ENERGY WITH BIOMASS ......................................... 24 RECOVERING ENERGY FROM SOLID WASTES ............................... 33 GRAVITY PRESSURE VESSEL .............................................. 38 RECOMMENDATIONS ...................................................... 43 ACRONYMS AND ABBREVIATIONS .......................................... 44 APPENDIX A: properties of fuels .............................................. 45 APPENDIX B: landfill gas recovery projects in Texas ............................ 46 2 Senate Interim Committee on Natural Resources Report to the 78th Legislature Opportunities for Alternative Fuels and Fuel Additives: Technology to Convert Existing Waste into Tomorrow's Fuel Necessity first mothered invention. Now invention has little ones of her own, and they look just like grandma. E.B. White1 INTRODUCTION In the last few decades, we have recognized new “needs” as we discuss what we want from the way we produce and use fuel in Texas. Alternative fuels has been brought to the table as a potential solution to problems in issues as diverse as air quality, national security, water quality, waste disposal, and rural development. In each case, the solutions are inextricably intertwined with the technology that produces newer kinds of energy. As our country has come to grips with 21st century challenges, it has become clear that studying alternative fuels forces us to consider energy policy as part of a greater whole. Because the charge is focused on alternative fuels from wastes, this report will cover topics relating to ethanol, which can be made from agricultural waste, anaerobic digesters, which can collect methane gas from animal wastes into a usable fuel stream, biomass technologies, which can put to use any waste vegetation, landfill gas collection systems, and the gravity pressure vessel, which turns any waste into ethanol. These technologies offer a means to manage wastes or waste by-products which would have to be processed anyway. They also can creatively convert a waste stream into a renewable fuel. Not only do waste-to-energy programs solve energy and waste issues, they can improve air and water quality problems, and as previously 1E.B. White In Writings from the New Yorker 1927-1976, ed. Rebecca M. Dale (1991). ““The Old and the New,”” New Yorker (June 19, 1937). 3 Senate Interim Committee on Natural Resources Report to the 78th Legislature Opportunities for Alternative Fuels and Fuel Additives: Technology to Convert Existing Waste into Tomorrow's Fuel mentioned, can act as drivers in development. Waste-to-energy programs have the potential to solve a myriad of problems and save money at the same time. INTERIM CHARGE Study and make recommendations on the research and use of alternative fuels and fuel additives in Texas. The Committee shall assess the cost-benefit of innovative technology in converting solid and agricultural waste into fuel and fuel additives. 4 Senate Interim Committee on Natural Resources Report to the 78th Legislature Opportunities for Alternative Fuels and Fuel Additives: Technology to Convert Existing Waste into Tomorrow's Fuel ETHANOL We have a recent legislative history of Ethanol is an alcohol-based alternative interest in producing ethanol in this fuel produced by fermenting and state. However, at the time of writing this distilling starch crops that have been report, we see that a deeper exploration converted into simple sugars. of the issues surrounding the production of ethanol in Texas is being pursed elsewhere. The State Energy Conservation Office is conducting a study on the feasibility of creating an ethanol industry in Texas. Furthermore on the national front, H.R. 4, the Energy Policy Act of 2002 is being considered by conference committee. Here, we have attempted a brief summary of issues surrounding ethanol, as we acknowledge the difficulty in forecasting what will come of the negotiations. If a bill does emerge, there is potential that it will significantly impact ethanol production. Joseph DiPardo’s study entitled, “Outlook for Biomass Ethanol Production and Demand” addresses many of our interests. Ethanol has been used as fuel in the United States since at least 1908. Ethanol production in the United States grew from 175 million gallons in 1980 to 1.4 billion gallons in 1998, with support from Federal and State ethanol tax subsidies and the mandated use of high-oxygen gasolines. In March 1999, Governor Gray Davis announced a phase out of the use of MTBE in gasoline by 2002 in California, which uses 25 percent of the global production of MTBE. [However, in March, Governor Davis postponed that ban by a year, stating, that the current production, transportation and distribution of ethanol is insufficient to allow California to meet federal requirements and eliminate use of MTBE on Jan. 1, 2003.2 ] It is unclear, however, whether the U.S. Congress will eliminate 2 Schoch, Deborah and Morain, Dan. “Davis Delays Ban of MTBE” Los Angeles Times. March14, 2002. <http://www.grac.org/LATimesArticle.pdf> 5 Senate Interim Committee on Natural Resources Report to the 78th Legislature Opportunities for Alternative Fuels and Fuel Additives: Technology to Convert Existing Waste into Tomorrow's Fuel the minimum oxygen requirement in reformulated gasoline (RFG), an action that would reduce the need for ethanol . At present, extending the volume of conventional gasoline is a significant end use for ethanol, as is its use as an oxygenate. To succeed in these markets, the cost of ethanol must be close to the wholesale price of gasoline, currently made possible by the Federal ethanol subsidy; however, the subsidy is due to expire in 2007, and although the incentive has been extended in the past, in order for ethanol to compete on its own merits the cost of producing it must be reduced substantially. Background Interest in ethanol was renewed in the 1970s, when oil supply disruptions in the Middle East became a national security issue and America began to phase out lead (an octane booster) from gasoline. The American Oil Company and several other major oil companies began to market ethanol as a gasoline volume extender and as an octane booster. Ethanol was blended directly into gasoline in a mix of 10 percent ethanol and 90 percent gasoline, called gasohol. In 1978, Congress approved the National Energy Act, which included a Federal tax exemption for gasoline containing 10 percent alcohol.3 The Federal subsidy reduced the cost of ethanol to around the wholesale price of gasoline, making it economically viable as a gasoline blending component. The growth of ethanol was enhanced substantially by State tax incentives to ethanol producers. By 1980, 25 States had exempted ethanol from all or part of their gasoline excise taxes in order to promote consumption. Ethanol production jumped from just over 10 million 3 At various times, different alcohols (e.g., methanol, isopropyl alcohol, and tertiary-butyl alcohol - TBA) exhibited commercial interest for gasoline blending because of market conditions or special performance properties. Oxygenated Fuels Association. “What is MTBE and why is it used?” <http://www.ofa.net/whatmtbe.htm> 6 Senate Interim Committee on Natural Resources Report to the 78th Legislature Opportunities for Alternative Fuels and Fuel Additives: Technology to Convert Existing Waste into Tomorrow's Fuel gallons in 1979 to 175 million gallons in 1980. Federal and State tax incentives made ethanol economically attractive in the Midwest, but the difficulty and high cost of transporting ethanol precluded consumption in other markets . Currently, fuels blended with ethanol cannot be shipped in multifuel pipelines, because the moisture in pipelines and storage tanks is absorbed by the ethanol, causing it to separate from gasoline. Rather, the petroleum-based gasoline components have to be shipped separately and then blended with ethanol at a terminal as the product is loaded into trucks. The ethanol program received a boost from Congress in 1990 with the passage of the Clean Air Act Amendments. Congress mandated the use of oxygenated fuels (with a minimum of 2.7 percent oxygen by volume) in specific regions of the United States during the winter months to reduce carbon monoxide. The two most common methods to increase the oxygen level of gasoline are blending with MTBE and blending with ethanol. Because ethanol has a higher oxygen content than MTBE, only about half the volume is required to produce the same oxygen level in gasoline. This allows ethanol, typically more expensive than MTBE, to compete favorably with MTBE for the wintertime oxygenate market. Ethanol’s high volatility, measured by Reid vapor pressure (RVP), limits its use in hot weather, where evaporative emissions can contribute to ozone formation. .4 Although most ethanol consumption is
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