Developments Bode Well for Biofuel Sector

Wednesday, 25 January 2012

Background

Developments in, and growth of, “second generation” biofuels have provided increased viability for the sector. The Pilbara region has an existing capability to support projected growth in the industry. Scope, however, exists for the region to also play an enhanced role in both the consumption and production of biofuels.

Comment

According to a mid-January 2012 article appearing in Science, American bioengineers have devised a way to produce ethanol from seaweed. If viable, the work led by Yasuo Yoshikuni and his colleagues at the Bio Architecture Lab in Berkeley, California, is an important milestone, creating a biofuel without the need to sacrifice food crops.

Viability of biofuels was further bolstered in January, with the announcement of a biofuel partnership between Maersk and the United States Navy (USN). Initial developments between the world’s two largest shipping fleets bode well, with large cargo vessels and warships having been successfully powered by oil derived from genetically modified algae. Currently, ships are primarily powered by bunker oil, a highly polluting, asphalt-like material. According to a 2009 Guardian article, shipping causes between three and four per cent of global greenhouse gasses, with a single container vessel emitting the equivalent of 50 million cars.^[1]The push by Maersk and the USN for renewable marine fuels will likely be replicated globally by other large fleets as they seek to reduce their carbon footprints.

A particular benefit of recent biofuel developments is the growth of the “second generation” biofuel industry. Demand for first generation biofuels, produced primarily from sugar cane or maize, has been cited as a key catalyst for the rise in global food commodity prices, a contributing factor to unrest in the Middle East and Africa. In addition, biofuels using food stock are land-intensive, requiring large tracts of arable land.

The most significant issue facing a large-scale biofuel industry remains scalability. To power Maersk’s fleet of vessels, it is estimated that it would require an area half the size of Denmark. Northern Australia, particularly areas in the Pilbara region of north-west Australia, presents an opportune solution to such concerns. Large areas of the region’s hinterland are marginalised, unable to support other economic prospects. Biofuel projects, such as Aurora’s algae farm in Karratha, have the potential to provide clean energy and diversify the regional economic profile.

Further synergies exist with established industries within the region. The Pilbara serves as an export hub, with ore and gas carriers transiting from Dampier and Port Hedland to markets throughout Asia. Scope exists for these vessels to use Maersk and USN-inspired algal fuels, supplied by farms in the Pilbara.

For a Pilbara biofuel industry to reach commercialisation, however, it is important that current government initiatives are supported by the region’s energy sectors. In the United States, Chevron and ExxonMobil have provided research and investment to support the biofuel sector. In addition to supporting environmental initiatives, this support has provided alternate streams of revenue. Financially strong, as a nation the biofuel industry would rank sixteenth in global oil production, above the United Kingdom and Libya and slightly below Norway and Nigeria.

Demand for biofuels will continue to grow, particularly as the efficiency and viability of the commodity is realised. Accordingly, Australia, which boasts significant biofuel potential, should seek to capitalise on its energy credentials. To maximise these opportunities, it is imperative that current government-supported initiatives seek support from established energy enterprises, which can provide the requisite marketing and technical expertise that the public sector may lack.

Liam McHugh

Manager

Northern Australia & Energy Security Research Programmes

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