DOE Announces Grant Program for Bio-Oils Research to Produce Renewable Transportation Fuels

The Department of Energy (DOE) announced that it has $15 million available to award for the development and demonstration of biomass-based oil supplements, or bio-oils.  The grants will go toward research and development projects aimed at speeding the development of thermochemical liquefaction technologies to produce bio-oil feedstock from high-impact feedstock biomass or algal biomass.  Successfully produced bio-oils could then be blended with petroleum to produce transportation fuels, including gasoline, diesel, and jet fuels, without significantly modifying oil refining processes for conventional transportation fuels, existing fuel distribution networks, or engines.

DOE explained in the early April announcement that it expects to fund five to ten projects in 2012.  The projects will aim to produce bio-oil prototypes that can be used for testing in refineries and for research and development of bio-oil technologies and renewable fuels produced from bio-oils.  Projects may propose technologies using bio-oil produced from a variety of feedstocks, including algae, corn and wheat stovers, dedicated energy crops, or wood residues.

Projects must produce bio-oils using: (1) high-impact feedstocks with an agronomically and ecologically sustainable potential of at least 50 million dry tons per year in the United States, or (2) oils extracted from algae, if that algae is grown using a high-impact cellulosic biomass feedstock.  Grant eligible projects must propose bio-oils that can be used at one or more insertion points within an oil refinery, defined as any point after vacuum or atmospheric distillation where a feedstock may be inserted for further processing. Any American company, university, or laboratory may apply for a grant, which will be between $400,000 and $4 million each.

The DOE’s investments in renewable transportation fuels, explained Energy Secretary Steven Chu, are a “key part” of President Obama’s plan “to develop America’s domestic energy resources and reduce our nation’s dependence on foreign oil.” DOE’s biofuels grant announcement comes on the heels of another announcement that the DOE would revitalize its expired loan guarantee program for solar, wind, and geothermal energy projects by setting aside $170 million of its congressionally approved funds for such projects.