Washington, U.S.A. — The American Fuel & Petrochemical Manufacturers (AFPM) submitted a letter in response to the July 10 hearing by the House Subcommittee on Energy and Power on the challenges and opportunities of alternative fuels and vehicles. In the letter, AFPM President Charles T. Drevna states:

“Free markets, not mandates, should and can drive sensible integration of alternative fuels into the consumer marketplace. AFPM members have been significantly affected by the increasing amounts of alternative fuels mandated under federal law. The challenges the federal Renewable Fuels Standard (RFS) are posing highlight the problems with government mandates and highlight the need for a different approach to alternative fuel development and commercialization.”

“One challenge is the increasing amounts of biofuels refiners must blend into the fuel supply. The current size and scope of the ethanol mandate is costly, unworkable, and could make refiners less competitive in a growing global marketplace. The breadth of these challenges show that the RFS needs to be repealed, or at the very least, significantly reformed.”

AFPM also mentioned exploration of natural gas: “In addition to the problems with the RFS, AFPM has concerns with proposals to create massive subsidies and mandates for further use of natural gas as a transportation fuel. A recent IHS CERA report found that low natural-gas prices make natural gas powered vehicles economical in the transportation sector without federal incentives, and that any upfront investment costs could be recovered in three years.

Moreover, natural gas is an important feedstock for petrochemical manufacturing, power generation, and many other products such as fertilizer. Distorting the market through mandates and subsidies will have unintended consequence, much like the RFS. Markets, not mandates and subsidies, should determine the highest and best use of our natural resources.”

AFPM, the American Fuel & Petrochemical Manufacturers (formerly known as NPRA, the National Petrochemical & Refiners Association) is a trade association representing high-tech American manufacturers of virtually the entire U.S. supply of gasoline, diesel, jet fuel, other fuels and home heating oil, as well as the petrochemicals used as building blocks for thousands of vital products in daily life.

AFPM members claim to make modern life possible and keep America moving and growing as they meet the needs of our nation and local communities, strengthen economic and national security, and support 2 million American jobs.

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Research from SRI International has identified a promising new way to produce liquid transportation fuels from coal without consuming water or generating carbon dioxide. Based on data from bench-scale tests, SRI engineers estimate that the capital cost for a full-scale plant using SRI’s process would be less than half that of a conventional coal-to-liquids plant that uses a process called Fischer-Tropsch synthesis. FTS produces only a small fraction of the hydrocarbons needed for fuel and requires extensive recycling.

SRI’s new process uses natural gas to provide the hydrogen needed to convert coal to syngas (a mixture of carbon monoxide and hydrogen). Syngas is first converted into methanol, which can then be efficiently processed to make transportation fuels.

Using natural gas eliminates the need to add water as a source of hydrogen, reduces the need to add energy to drive the gasification reaction, and results in the use of a smaller gasifier. In conventional CTL approaches, energy is supplied by burning a portion of the coal feed, which then produces carbon dioxide. SRI’s approach makes it economical to use carbon neutral electricity, such as nuclear, hydro, or solar as a source of additional energy.

“The implications of this research are expansive, including enhancing U.S. energy security through the use of domestic carbon sources,” said Robert Wilson, Ph.D., director, Chemical Science and Technology Laboratory, SRI International. “The process can also dramatically reduce the environmental footprint associated with alternative transportation fuels.”

SRI performed a series of analyses to examine the environmental impact of the technology under several scenarios. Based on these analyses, if diesel were produced using biogas as the source of methane, the resulting product would qualify as an alternative fuel under the revised Renewable Fuels Standard of the Energy Independence and Security Act of 2007. The Act requires alternative fuels to meet a standard of 50 percent reduction of greenhouse gas emissions compared to other fuels.

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