Distribution May Be A Key to Alternative Energy

Alernative energy distribution lobbying - Cansler ConsultingWal-Mart is one of the largest, most profitable companies in the world enjoying reasonable margins on everyday commodity and household items. How? Efficient Distribution!

Wal-Mart maintains one of the best distribution systems in the world which in turn makes their products more affordable to consumers globally. Can alternative energy learn a lesson from the retail giant?

To date, little emphasis has been placed on transportation and logistics issues moving advanced biofuel feedstocks to biorefineries for fuel production.  These issues were raised in a report by the US Department of Energy and the US Department of Agriculture (May 2010) and both agencies highlighted the lack of a logistics system capable of handling and delivering sufficiently high volumes of biofuel products as a significant barrier to the expansion of a sustainable domestic biofuels industry. Some solutions raised in their report included:

  • Involve distribution considerations earlier in the development processes.
  • Increase Department of Transportation involvement to integrate end-user properties of new biofuels and overlooked distribution issues with attributes of the new fuels.
  • Adopt best practices from international partners with experience in transporting richer mixtures of ethanol – enhance this research.
  • Better understand optimal distribution scenarios available depending on regional characteristics and transport distance thresholds associated with respective feedstocks.
  • Use GIS to address distribution route optimization, extracting trends and for visual analysis.  Better identify multimodal distribution solutions.  Advances needed include awareness of availability of GIS, costs of using GIS and necessary workforce to adapt to ever-changing technologies.
  • Work collaboratively with industry enabling end use of biofuels by all transportation modes: align research, distribution needs, identify commercialization opportunities.

The US Department of Transportation maintains a Federal Biofuels Distribution Infrastructure Interagency Working Group that is reviewing and assessing:

  1. The feasibility of pipeline use for biofuels transport.  Currently, the pipeline is used infrequently and biofuels are mostly transported by rail (2 million gallons per train)
  2. Identifying short and long term multimodal infrastructure bottlenecks inhibiting biofuels development, and
  3. Documenting existing federal Geographic information Systems (GIS) that may be integrated to link biofuels transportation infrastructure, demand, feedstock locations, water and other resources.

Currently, 66 percent of biofuel distribution is by rail, 29 percent by truck and 5 percent by barge. As of May last year ethanol, the most prevalent biofuel used for surface transportation in the U.S.  It is distributed from production sites by:

  1. Tank rail cars (29,400 gallons capacity each, over 2 million gallons per train);
  2. Tank trucks over highways (8,000 gallons capacity each); and
  3. Tank ships and barges (420,000 gallons capacity each).

Besides optimizing transportation & distribution, there are a number of ways for the U.S. to advance biofuel feasibility, including, but not limited to:

  • Conduct research on richer mixes of ethanol and varying classes of advanced biofuels.
  • Identify and analyze transportation considerations impacting the supply chain from feedstocks used to produce advanced biofuels including woody biomass, grasses, municipal solid waste, algae and other non-food crop feedstocks.
  • Continue Department of Transportation support of land grant universities working through Sun Grants Initiative to catalogue best locations of various ethanol and advanced biofuel feedstocks.

The technology of alternative energy needs to be improved in order to make it more profitable and therefore more attractive to business. But in the meantime, the ‘business’ of alternative energy can be improved and made more commercial, starting with how we manage, transport and distribute biofuels.

Cansler Consulting is an experienced lobbying firm in agricultural, transportation, and energy policies, and able to our relationships to help you influence the policy makers on Capitol Hill. You can contact us at info@canslerconsulting.com or at (202) 220-3150.

Tim Cansler