The United States has invested considerable amounts of taxpayer dollars to try to revive our economy. Too often, though, resulting jobs are being created overseas, as other countries invest in green technology deployment. As a result, the opportunity to improve our economic competitiveness is lost. Targeting our policies to help small U.S. technology producers is essential to keeping these jobs in the United States.
The United States is a leader in the research and development of green technologies, but to translate innovation into products for the market place, small businesses need private capital. Small companies introducing innovative new technology often face long odds in finding sufficient capital to fully develop new products and secure their place in the market. What government can do to help is encourage that private investment. If policies fail to do this, then innovation and jobs will likely go elsewhere.
We’ve seen this happen with long-established industries, such as petrochemicals and plastics manufacturing. These industries have shed hundreds of thousands of domestic jobs over the past two decades, as petroleum producing countries have attracted more capital investment. U.S. chemical and plastics companies have increased capital investment outside the United States by 32 percent over the past decade, while increasing investment within U.S. borders by only 2 percent. Let’s not make the same mistake with green jobs.
Recently, a number of small U.S. biofuel companies have pioneered production of chemicals and plastics from renewable resources. Chemical production is a natural fit as a co-product for biofuel producers, since it utilizes very similar biotechnology applications and equipment. Since many chemicals have a higher value in the market than fuels and many biobased chemicals and products are already cost competitive with petrochemicals, they can provide new product opportunities and revenue streams in times of fuel or feedstock price instability.
These innovations could help the United States further reduce reliance on imported petroleum while also cleaning up our environment. But these benefits can only be achieved if the companies can find the investment capital needed to expand production and create sufficient market space.
There are a number of success stories that illustrate the job creation and economic growth potential of a biorefinery strategy for co-production of biofuels and renewable chemicals:
Solazyme Inc. – a small California company – produces bio-crude oil from algae. Through biotechnology, the algae can be optimized to generate oils specifically for biofuels, chemicals and plastics, or even food ingredients. The company is retrofitting a mothballed pharmaceutical plant to produce algae for diesel fuel in Riverside, Penn., where the unemployment rate approached 10 percent in 2009. This revitalized production facility will employ 80 people and create more than 250 jobs in the community.
ZeaChem Inc. — a Colorado start-up, is building a facility in Boardman, Oregon, that will transform cellulose in trees to acetic acid, an organic chemical that can be converted into ethanol or used in plastics applications such as polyethylene bottles. In an area where the annual unemployment rate jumped from 6.2 percent in 2008 to 9.6 percent in 2009, this new facility will create as many as 300 jobs in the local economy.
Myriant Technologies, which employs 55 people in Massachusetts, will break ground this year in Lake Providence, La., on a plant that will convert sugars to succinic acid. The facility is expected to bring more than 250 jobs to a community that saw unemployment top 14 percent in early 2009. Myriant, which grew out of biofuel technology producer BioEnergy International, has a biorefinery strategy that includes production of plastics, specialty chemicals, and biofuels.
Products from a number of biobased product companies were displayed at the BIO International Convention in Chicago early in May. And executives from these companies will be presenting their business models and discussing industry milestones at the World Congress on Industrial Biotechnology and Bioprocessing, June 27-30 in Washington, D.C.
Companies producing advanced biofuels are projected to provide employment to 200,000 Americans by 2022, including about 12,000 research and development jobs. Collectively, small companies producing renewable chemicals and biobased plastics already directly employ some 5,700 Americans at more than 150 facilities around the country. Because these facilities create additional jobs in their communities, they generate work for as many as 40,000 Americans. But they represent only about 4 percent of all sales for the industry. Targeted production tax credits can help them to expand their share of the market and grow additional domestic jobs.
Because such biorefineries can be located anywhere in the country, making use of local renewable raw materials, they can create jobs anywhere. The United States is the largest chemicals and plastics market in the world, and much of the infrastructure for turning raw plastics and chemicals into finished products still exists here. The United States has a strong agricultural base, and we are a leader in developing biotechnology to convert renewable raw materials into usable products.
Innovations such as these are the most promising source of green jobs and economic growth for the future. Ensuring that small companies producing new technology can access and secure the investment capital necessary for success should be a high priority for the nation. Extending the production tax credit, construction loan guarantees, and research and development grants now being given to other renewable industries are small but necessary steps toward achieving that goal.
Brent Erickson is executive vice president in charge of the Industrial and Environmental Section at the Biotechnology Industry Organization (BIO). BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products.