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Next-generation biofuels — fuel that can be easily swapped for gas or diesel — are being produced in ever-greater quantities. They offer a reduced carbon impact, economic benefits to the sectors that produce the main ingredients and often a lower price tag to the end user.

 

Oregon and the Northwest are positioned to benefit from an increasing demand for advanced biofuels.

 

In September, the U.S. Department of Agriculture doled out $80 million in grants to Northwest companies and universities to study, develop and advance biofuels technology. Oregon and Washington were two of just 11 states to be funded by the USDA under this program.

 

The movement toward advanced biofuels is driven in part by policies such as low-carbon fuel standards. Following a similar policy in California, the Oregon Legislature passed a low-carbon fuel standard in 2009. It requires that the state’s transportation fuel sources be 10 percent cleaner in 10 years — a goal that can be reached through any combination of electric vehicles and alternative fuels being put to work. Clean energy advocates will look to clarify and extend the low-carbon fuel standard in next February’s short legislative session.

 

“Oregonians spend $5 billion on gas and diesel — not including aviation fuels — every year,” said Jana Gastellum, global warming program director at Oregon Environmental Council. “We send that money out the door and we don’t reap any benefits.”

 

But Gastellum and others see a big opportunity for Oregon in the movement toward — and investment in — advanced biofuels.

 

The Cleantech Group, a research firm, forecasts that the market for low-carbon fuels will reach $33.4 billion by 2020.

 

A report on the advanced biofuels market released in August by the group E2 Environmental Entrepreneurs identified cellulosic biomass as one of the main feedstocks for cleaner fuels.

 

“The most promising regions for woody biomass are likely to be private forest lands developed for the pulp and paper industry,” the report reads.

 

The report concludes that although California will be a significant market for low-carbon biofuels, it doesn’t have access to the feedstocks necessary to produce biofuels to meet its needs. Both factors set up Oregon, California’s neighbor to the north, to be a significant player in this emerging industry.

 

Companies playing in the space include Albany-based Beaver Biodiesel and Salem-based SeQuential-Pacific Biodiesel.

 

Meanwhile, Greenwood Resources of Portland and ZeaChem Inc., a Colorado company that’s building a biorefinery facility near Boardman, are both benefitting from the USDA grant. As a way to help illustrate the next-generation biofuels opportunity for Oregon, we took a close look at the operations of both.

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