The federal government has offered one billion dollars in the form of a loan to a Texas company that could build several factories to turn wood chips into a substitute for petroleum-based gasoline and oil. The main advantage appears to be a 70 percent reduction in climate change emissions. Additionally, it does not require the same kinds of extraction methods petroleum does, like offshore and land-based drilling. Another advantage is that it can be blended with existing fuels to reduce their emissions and will work in currently used vehicles, with no modifications. Their fuel can be mixed with conventional gasoline, jet fuel, and diesel. A biofuel like ethanol requires vehicles with engines that can burn it. Renewable crude can also be distributed using the current network of gas stations people are already using, so no modifications or new infrastructure needs to be added.
In August the same company, Kior, Inc. received an interest-free loan from the government for $75 million to build five conversion facilities in Mississippi. One thousand jobs are expected to be created by the construction and running of the biofuel factories.
“This partnership with the State of Mississippi will help us to rapidly scale our technology while creating quality jobs and spurring economic development in the State. We’re excited about making a meaningful and near-term contribution to easing our country’s dependence on foreign oil, reducing greenhouse gas emissions and providing a boost to rural economies,” said Kior, Inc. CEO Fred Cannon in August. (Source: Greenjobsready.com)
The company heats wood chips in a chamber, and then applies catalysts in the presence of oxygen which creates liquids and gases that can be converted to fuel. They have worked on some pilot facilities, but so far have not reached a production level on an large-scale industrial level. Just 15 barrels a day have been produced at their Houston facility. Daily motor consumption of gasoline in the United States is almost nine million barrels.
The two main goals of the biofuel production are reducing climate change emissions and dependence on foreign oil. If the loan goes through, it would be the largest in the bioenergy sector ever in the United States.