Cantwell: Pacific NW Poised to Lead in Job-Rich Aviation Biofuel Industry

Source: Press Release of Senator Cantwell, July 28, 2011.

WASHINGTON, D.C. – Today while chairing an Aviation Subcommittee hearing on the emerging jet biofuel industry, US Senator Maria Cantwell (D-WA) said that with the right investments, the biofuel industry could create thousands of jobs – and that the Pacific Northwest is poised to be a leader in this growing industry.  Washington state companies Imperium Renewables, AltAir Fuels, and Boeing testified at today’s hearing.

Washington state is uniquely poised to lead the nation in its transition to cleaner, sustainable aviation fuels, Cantwell said.  From its fertile farmland and world-class agricultural research institutions in the east to its leading advanced biofuel research labs in the central part of the state to aviation industry leaders in the west driving commercialization and demand, Washington state is well positioned to seize this great economic opportunity for America.

“With the rising cost of jet fuel and the thriving American biofuel industry, we have an opportunity to help aviation by keeping costs down for the future,” Cantwell said at today’s hearing.  (Watch a video of Cantwell’s remarks.)  “The production of green jet fuel will mean real economic opportunity.  I know that in my state it can create an important industry; obviously aerospace is already an important industry.  We obviously need to make sure that the supply chain and the delivery of this fuel can be done.”

John Plaza, President and CEO of Imperium Renewables, said in his prepared testimony that the Seattle-based company is planning to construct a facility next to its existing site in Grays Harbor that will produce renewable jet fuel and create over 300 construction jobs and 50 permanent jobs. But in order to obtain the financing needed to construct the facility, Plaza said the company needs to secure long-term contractual commitments to purchase the fuel.  The Department of Defense is ‘ideally situated to purchase these fuels,’ said Plaza, but current law limits the DOD to five-year contracts with biofuel producers.  Cantwell has introduced legislation that would extend this limit to 15 years.

Plaza said, “The Department of Defense is ideally situated to purchase these fuels, which will facilitate the ability to raise the capital required to build advanced biofuel facilities.  We have been in discussions with the Department of Defense concerning supplying multiple renewable jet fuel solutions to meet the military’s needs in the Pacific Northwest region.  …The best path forward for advanced biofuels such as renewable jet fuel would be to enable the Defense Department to enter into 15-year contracts for fuel supplies to meet the demands of its facilities in the Pacific Northwest and around the nation.  The commitment of the Defense Department to renewable fuels will drive the entire renewable aviation fuel industry for the nation.  It will also provide the Department of Defense a critical and important path forward in obtaining operational security right here at home.”

Cantwell, along with Senator Patty Murray (D-WA), recently introduced legislation to extend the length of contracts between the Department of Defense and biofuel producers from the current limit of 5 years to 15 years.  Allowing for longer-term contracts with the largest single consumer of energy in the country would help companies in Washington state like Imperium Renewables obtain the financing they need to grow their operations.

“Renewable aviation fuel is a reality,” said Tom Todaro, CEO of Seattle-based AltAir Fuels.  “There are no technological barriers for either the production or use of these domestic, renewable fuels.  This homegrown energy is fueling our jetfighters and commercial airplanes in the US today.”

Washington state has the diverse biofuel feedstocks, fuel-delivery infrastructure and political will needed to create viable aviation supply chains, according to a recent study released by Sustainable Aviation Fuels Northwest (SAFN), the nation’s first regional stakeholder effort to explore the pathway to creating an aviation biofuels industry in the Pacific Northwest.  SAFN is comprised of Boeing, Alaska Airlines, the operators of the region’s three largest airports – Port of Seattle, Port of Portland, and Spokane International Airport – and Washington State University.  In addition to SAFN, there are several other ongoing efforts to utilize biofuels in the Pacific Northwest, including a commercial arrangement between AltAir and Seattle-Tacoma International Airport to produce jet fuel from camelina crops.

A study by Bio Economic Research Associates finds significant national economic benefits from producing 21 billion gallons of advanced biofuels annually by 2022, as mandated by Renewable Fuel Standard 2.  With the right investments in advanced biofuels, the study projects the creation of 190,000 direct jobs and just over 800,000 indirect jobs as well as a direct economic impact of $37 billion and indirect impact of nearly $150 billion over the next 12 years.  The study also estimated cumulative industry investment of $122 billion from 2009 through 2022 and cumulative savings on oil imports of $350 billion between 2010 and 2022.

Billy Glover, Vice President of Environmental Strategy and Aviation Policy, Boeing Commercial Airplanes, The Boeing Company, said in his prepared statement, “Over the next 20 years, we expect the global aircraft fleet to more than double, from the current fleet of 17,000 airplanes to more than 35,000. This rapid growth not only presents economic opportunity, but also environmental concerns if that growth is not offset by emission reductions.  …At Boeing, our focus is on sustainable alternatives [to conventional jet fuel] that have the potential to provide greatly reduced lifecycle greenhouse gas emissions and greater economic benefits associated with increased fuel availability.  …Obtaining safe, reliable and environmentally preferred aviation fuels sustains not only the aviation industry, but also builds new agricultural and fuel processing economies as well, all the while providing an important national security hedge against political instability in oil producing regions.”

Earlier this week, on July 26, the US Department of Agriculture (USDA) announced it is partnering with AltAir Fuels to boost production of aviation biofuel with non-food crops grown by Washington state farmers.  Through the Biomass Crop Assistance Program (BCAP), participating Washington state farmers will receive financial assistance with planting camelina, a non-food feedstock grown in rotation with dry wheat used in the production of biofuel.  Farmers interested in participating can apply beginning August 8.  The BCAP project award will provide funding to support the growing of the feedstock for a refining facility that AltAir is planning to build in Tacoma, Washington.  The refinery is scheduled to open its doors in early 2014.  Once operational in 2014, the facility will have the capacity to produce up to 100 million gallons of renewable jet and diesel fuel per year from camelina, which will replace approximately 2.38 million barrels of oil per year.  According to AltAir, the program is expected to create up to 265 full time jobs, as well as spur an overall economic impact of more than $35 million in the three project areas.

Cantwell, chair of the Energy Subcommittee of the Senate Energy and Natural Resources Committee and member of the Senate Finance Committee, has long supported the development and commercialization of biofuel to help reduce our nation’s dependence on petroleum-based fuels and better protect the environment.  Starting in 2004, Cantwell has brought together Washington businesses, farmers, investors, and fuel consumers to help create a Washington biofuels industry.  In 2005, Cantwell brokered a landmark agreement for the Port of Seattle and its clients to buy one million gallons of biodiesel per year.  In addition, Senator Cantwell helped facilitate the construction of one of the biggest biodiesel facilities in the United States in Grays Harbor, as well as secured funding to help Washington state ferries figure out if they could use locally-produced biofuels.  In 2007, she helped author the Renewable Fuels Standard, which, along with increasing vehicle fuel economy standards, are the only two policies proven to reduce our nation’s dangerous overdependence on foreign oil.

Click here to watch a video of Cantwell’s remarks at today’s hearing, and click here to watch her Q&A with witnesses.