Advanced Biofuels’ Beltway Crusader

Mike McAdams discusses work on Capitol Hill, founding of the Advanced Biofuels Association and the importance of engaging in the ongoing public debate about renewable fuels.
By Tim Portz | October 30, 2014

“We’re the people you hire to protect you from the people you elect.”


Anyone who has spent time around Mike McAdams has likely heard his tongue-in-cheek description of the role of industry associations. Jokes aside, McAdams has established himself as the voice in D.C. for companies producing drop-in fuels and platform chemicals that would otherwise find themselves without a voice or advocate in the beltway. McAdams’s member companies benefit from a network that he has built over a career best measured in decades. Still, he would be the first to say that the most powerful voice in Washington is yours.


Is it fair to say you’ve spent the bulk of your professional life in Washington, D.C.?



Yes. My father and mother met in 1953 while working on Capitol Hill for two senators, and I began as a house page at age 16 in 1972. After graduating from Virginia Tech, my first job was working for a Texas member of Congress.  This year is my 35th consecutive year working either in government or in government affairs in Washington, D.C.



Who founded the Advanced Biofuels Association and why?



In 2007, the Congress was considering renewable fuel standard 2 (RFS) reform legislation, and at the time I was representing Amyris and Neste. We all recognized that drop-in fuels were not clearly represented by any of the current associations. Additional conversations with Tyson and ConocoPhillips led to the four companies essentially forming the Advanced Biofuels Association, and I have had the honor of running the organization since its inception.


In a recent Biomass Magazine column, you outlined a number of disappointments for the industry from a 2014 policy perspective. Which policy shortfall do you think will be the most difficult for the industry to overcome?


I am concerned with two policies in particular. First, the tax policy has been on-again, off-again, since its inception. Tax policy can play a significant role in assisting the development of a new industry. It helps buy down the cost of bringing a new industry into the market.  Over the long haul, I expect more scrutiny on the tax front as we seek to reform the nation’s overall tax policy.  Moving to a technology-neutral, performance-based system will be difficult to construct, but I believe in the end it will create a more even playing field for all concerned. 


Second, under the statute, RFS program was asked to create a system to certify new technologies, feedstocks and fuels under the RFS.  This part of the program is referred to as pathway approval.  It is complicated, and many of the current stakeholders simply don’t want new competition, but that was the intention of the authors of the legislation.  It is essential that the U.S. EPA expedite the process and get these innovative companies participating in the RFS program as soon as possible.


You closed the aforementioned column by suggesting that if the Republican Party should gain majority in the Senate, the RFS may well be one of its first priorities. What makes you feel that way? 


First of all, America is tired of a Congress that points fingers at each other instead of addressing the country’s issues on a more consistent basis. If the legislative branch of government is controlled by one party, they will most likely have to put out a clear and concise agenda, which differentiates itself from the other branches of government. Given the consistent debate on the RFS over the last two years, reforming it, at a minimum, would most likely make that list.



Just over two years ago, you were aboard the USS Nimitz for the most ambitious test of renewable fuels in military ships and planes in history.  How would you characterize the momentum for the advanced biofuels industry within the defense community since then? 


First, I want to give high praise and gratitude to the Secretary of the Navy, Ray Mabus.  He has been a visionary and seminal leader in this effort. As for the day on the USS Nimitz, it was a bucket list day for me to be with the men and women of the U.S. Navy. This effort has laid the groundwork for the importance of a portfolio approach in the use of biofuels for our military and society in general. In addition, the recent announcement of $210 million to construct three commercial plants moves the commercial ball forward in a most significant manner.  Procurement efforts are also a significant factor in aiding the development of the advanced drop-in biofuels industry.



Two members of your organization, Velocys and Honeywell/UOP, were part of the teams awarded funding under the Defense Production Act.  What does a funding award like this mean for these organizations? 



For both organizations, funding under the Defense Production Act is an opportunity to demonstrate their technologies on a commercial scale. For the advanced biofuels community, it means more gallons toward the targets under the renewable volume obligation process, and more momentum for the industry as a whole. These are large facilities. Moreover, the gallons and projected average cost by the Navy at less than $3.50 per gallon prove that these fuels can, for the long haul, compete with the existing industry. Congratulations to all the organizations that won these opportunities—Red Rock Biofuels, Emerald Biofuels and Fulcrum BioEnergy.


 
Will there ever come a time when participants in the biofuels industry won’t have to wonder about the long-term future of important policy mechanisms like the RFS?



Public policy works best when it is a partnership between the business community and a government with the vision to create new options for our country that move us favorably forward.  The RFS is such a policy, one that seeks to stand up a clean fuels industry that adds to the nation’s options for energy and economic security by augmenting our current energy base.  If that vision succeeds, it will make itself irrelevant. On the business side, that means that the industry will need to deliver competitively priced products and market participation in a manner that can be independently sustained over the long term.   



The Energy Independence and Security Act of 2007 established the RFS and garnered strong bipartisan support, with 95 house Republican votes. Has the pendulum for biofuels brought it back to being a very partisan issue? 



Energy policy has never been partisan; it is regional and about consumers and producers.  Biofuels give a broader opportunity for all areas of the country to participate in the production of advanced and cellulosic biofuels. No matter who runs the White House, or the Congress, biofuels will remain part of the public policy discussion, there are simply too many winners, including consumers, for it not to be.

 


With all the brake tapping on the policy front, what keeps your members pressing forward with their commercialization efforts?


The opportunities moving forward and investment made to date keep our industry pressing forward.  In the last 10 years, we have seen more than $13.6 billion deployed in the U.S. alone, to stand up the advanced and cellulosic industry. The sad part is that, given recent uncertainty surrounding both tax policy and the RFS, there has been a significant decline in the rate of the deployment of money in this sector over the past 18 months. My members remain committed and focused on delivering the value proposition for renewable fuels and renewable bioproducts moving forward, which will not end anytime in the near future. 


At nearly every industry event you attend, you conclude your remarks beseeching the audience to get involved in the political process and directly contact their representatives.  It’s hard for people outside the beltway to believe it makes a difference. What have you witnessed that affirms the importance of engagement for you?


 
As a young legislative director for Congressman Ralph Hall, I watched as former President Reagan called on the American people to write their congressman about supporting a tax bill early in his term.  Before his speech, all the senior staff and members said there wasn’t a chance on the tax bill.  But following the speech, our office received 10,000 cards and letters in one week asking him to support the tax bill.  It passed.  Members and their staff need to hear from the people they represent, so they can represent them. Get involved.