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Next Generation Biofuels: Five Challenges and Five Positive Notes

Posted by Robert Rapier on July 2, 2010 - 7:14am
Topic: Alternative energy
Tags: algae, biofuel, biomass, cellulosic ethanol, ethanol, next generation biofuels, us department of agriculture report [list all tags]

The U.S. Department of Agriculture (USDA) has just issued a report detailing the outlook and challenges of next generation biofuels. I provided some input during the drafting of the report, which hopefully was of some use. Here I select five pessimistic projections and five optimistic projections from the report.

The report is: Next-Generation Biofuels: Near-Term Challenges and Implications for Agriculture

Here are five findings from the report that promise to strongly influence the country’s direction on next generation fuels.

1. Production and Capital Costs

 

 

“Estimated production and capital costs for next-generation biofuel production are significantly higher than for first-generation biofuels.” The report quotes costs for a 100 million gallon biochemical conversion plant (e.g., cellulosic ethanol) at $320 million, and the costs for a 100 million gallon thermochemical conversion plant (e.g., gasification and conversion to liquid fuels) at $340 million. The report states that this is “more than three or four times those for corn ethanol plants.”

2. Biomass Feedstock Costs

 

 

The report suggests that the presumed costs for purpose grown biomass have likely been underestimated. It cites POET, for instance, as assuming a $40 to $60 per ton price for corn cobs. But the report states

the range of prices may underestimate the cost of increasing biomass yields on marginal lands and the incentives required for harvesting, gathering, and delivering bulky material to the biorefinery

and

dedicated energy crops would need to compete with the lowest value crop such as hay which has had a price exceeding $100 per ton since 2007.

In a previous essay I identified this as one of the bad assumptions many biofuel producers today are making: That biomass costs will be low or even negative in the future as demand ramps up.

3. Algae Conversion Costs

 

 

The report repeats the mantra that you have heard from me many times:

Production cost estimates (net of capital costs) for growing and converting algae to fuel are significantly higher than for first- and next-generation biofuels, ranging from $9 per gallon to $35 per gallon.

As I have noted before, I think people confuse the ease of growing algae with the ease of growing it commercially and turning it into fuel.

4. Support for Cellulosic Ethanol May Be Short-Lived

 

 

The report suggests that support for cellulosic ethanol may be short-lived:

Given the limited market for ethanol as a gasoline additive (due to the E10 “blend wall”) and as a gasoline substitute (because of slow development of the E85 market), developers and investors may turn away from cellulosic ethanol in favor of production of another class of next-generation biofuels, petroleum substitute fuels. These so-called ‘drop in’ fuels can be used as gasoline or diesel substitutes in current vehicles without limit and distributed seamlessly in the existing transportation fuel infrastructure.

The report further states

There may be a shift in favored technologies underway. Several companies planning to be operational with some of the larger plants in the next several years plan to use thermochemical approaches or other processes that produce biobased petroleum-equivalent.

My position on this is clear: I believe that thermochemical approaches are more scalable and less energy intensive than most biochemical approaches.

5. Scale

 

 

Fiberight is forecast to be the leading cellulosic ethanol producer for 2010 – with a production capacity of 130 barrels per day. To put that into perspective, the very small oil refinery I used to work at in Billings, Montana had a capacity of 60,000 barrels per day.

The bits I extracted are all themes that I have addressed here many times. In a nutshell, they relate to the fact that many would-be next generation fuel producers are making unrealistic assumptions about things like feedstock costs. Thus, where they project falling costs based on their optimistic projections, the USDA report forecasts that their biomass costs will be much higher than expected.

Here are five positive notes from the report:

1. Renewable Diesel Plant Capacity

 

 

“Next-generation U.S. biofuel capacity should reach about 88 million gallons in 2010…” This is primarily a result of the expected start-up of a next-generation renewable diesel plant. I have reported on this technology before, as well as the efforts of first-generation biodiesel producers to slow it down and protect their own interests. My guess is that unlike the ConocoPhillips project that was killed after Congress voted to deny them the full tax credit, this project will receive the same tax credit as a conventional biodiesel producer. On a level playing field, I believe the hydrocracking approach is superior to first generation biodiesel, but our political leaders will need to stop playing games with the tax credits in order for next generation diesel to realize its potential. (For a complete explanation of the different kinds of renewable diesel, see my Renewable Diesel Primer).

2. Competitive Race

 

 

Companies are taking a number of different approaches to coming up with next-generation solutions, increasing the chances that a dark horse will arise as a contender: “There are about 30 next-generation companies in the United States developing biochemical, thermochemical, and other approaches, and experimenting with a variety of feedstocks, some of which are directly linked to agriculture..”

3. Open for Business

 

 

The first next-generation plants are expected to come online in 2010: “Range Fuels and Dynamic Fuels are expected to complete the first commercial next-generation biofuel plants in 2010.” I have certainly given Range Fuels a hard time over their public statements – especially in light of recent reports which this USDA report also flagged:“According to the EPA, however, the plant’s initial capacity has been reduced from 10 million to 4 million gallons per year and initial output will be methanol.” However, readers should not mistake my position as hoping that they fail. To the contrary, I hope they succeed, because we are going to need a lot of successes. I am just skeptical that they will achieve commercial (unsubsidized) success, and unhappy that they sucked up a lot of taxpayer funds based on their initial promises that clearly did not materialize.

I would further note, however, that Range Fuels and Dynamic Fuels may be the first U.S. plants that could be classified as next-generation commercial plants (although as I have pointed out, we had commercial cellulosic ethanol plants in the U.S. by 1920), but such plants do already exist overseas. Neste Oil, in fact, has built several plants based on the same sort of technology that Dynamic Fuels is employing. There are also other overseas companies doing gasification (the Range approach) that are further along than Range is.

4. Algae Research

 

 

Just as there are many different approaches to next-generation fuels, there are many companies taking many different approaches to producing fuel from algae: “More than 30 U.S. companies currently are experimenting with different approaches to producing algae-based fuels.” Some of these approaches are unconventional: “Although the majority of algae-to-biofuel companies are focusing on producing algae oil for traditional biodiesel production, some companies are using algae to produce ethanol (Algenol), or petroleum-equivalent fuels (UOP and Sapphire).”The challenge of course will be to drastically reduce production costs, but the potential is too great to ignore.

5. Production Costs Decrease

 

 

Both production and capital costs for cellulosic ethanol are falling. The report noted “POET recently reported it had lowered production costs for cellulosic ethanol, including capital expenses, from $4.13 to $2.35 per gallon in a year as of November 2009 at its South Dakota pilot plant.” The report further notes that estimates for a 100 million gallon cellulosic ethanol facility have fallen from the $650 million to $900 million range (2004 estimate) to $320 million (2009 estimate). However, the report notes that these estimates should still be considered speculative, since“there are no actual cost data for commercial operations since none are yet operational.”

As a body of work, I highly recommend you read the USDA report if you are interested in the status of next generation biofuel facilities. It is a sober, objective assessment of the challenges and opportunities that lie ahead as next generation fuel technologies continue to develop.

Climate Science 2009A Summary by Joe Romm
www.climateprogress.org

2009 was the year the scientific literature caught up with what top scientists have said privately for years. Key aspects of our climate are changing faster than expected. If we stay on our current emissions path, we face incalculable catastrophe.In 2009, the scientific literature caught up with the expert grapevine. Many predicted impacts of human-caused climate change are indeed occurring much faster than anybody expected, and all across the planet — particularly ice melt.
If we stay anywhere near our current emissions path, we are facing incalculable catastrophes by century’s end, including rapid sea level rise, massive wildfires, widespread dust-bowlification, large oceanic dead zones, and 9°F warming. Much of it will be all but irreversible for centuries. The consequences for human health and well being are going to be extreme. 

That’s not a  surprise to anybody who has talked to leading climate scientists in recent years. But it's a scientific reality only about 2% of people fully grasp. Here, then, I will review the past year of peer-reviewed climate science literature.

Heat-trapping greenhouse gases are at unprecedented levels, and the paleoclimate record suggests that even slightly higher levels are untenable:

* World carbon dioxide levels jumped 2.3 ppm in 2008. 
* CO2 levels are the highest for 15 million years, when it was up to10°F warmer and seas were up to 120 feet higher.
* World Meteorological Organization & NOAA; 2000-2009 was hottest decade on record.
* Antarctica has warmed significantly over past 50 years 
* EAST Antarctica is losing mass, and may soon contribute significantly to sea-level rise. 
* Dynamic thinning of Greenland and Antarctic ice-sheet ocean margins is pervasive & enduring.
* A major Antarctic glacier is being lost at accelerating exponential rate like nothing else in the natural world.
* The North Pole is poised to be largely ice-free by 2020.* Bolivia’s 18,000 year-old Chacaltaya glacier completely disappeared. 
* The world’s glaciers shrank for the 18th successive year. 

Given this unexpectedly fast ice melt, seas level rises will be much higher & faster than previously thought:

* Sea levels may rise 3 times faster than IPCC estimated, hitting 6 feet by 2100. 
* Faster Greenland ice sheet melting could raise U.S. East Coast sea levels >6 feet by 2100. 
* West Antarctic ice sheet collapse would be catastrophic for U.S. coasts. 

Dangerous positive carbon-cycle feedbacks threaten to amplify human-caused GHG effects:

* “Clouds Now A Big, Bad Player in Global Warming” — an amplifying feedback. 
* So many amplifying methane feedbacks; so little time to stop them all. 
* Global warming is killing U.S. trees, another dangerous carbon-cycle feedback. 

High emissions levels + positive feedbacks = climate catastrophe:

* M.I.T. doubles its 2095 warming projection to 10°F — with 866 ppm and Arctic warming of 20°F 
* Definitive NOAA-led report on U.S. climate impacts warns of scorching 9 to 11°F warming over inland U.S. by 2090 — and that 's just business as usual!” 
* Ocean dead zones to expand and “remain for thousands of years” 
* The worst-case IPCC scenario trajectories are being realised” — 1000 ppm 
* Climate change expected to increase Western wildfire burn area as much as 175% by 2050 
* Climate change “largely irreversible for 1000 years,” with permanent Dust Bowls in Southwest and around the globe 

Seriously bad news for human health and welfare:

* The Lancet : Cutting greenhouse gas emissions has major direct health benefits 
* NRC: Fossil fuels cost the U.S. $120 billion/year 
* "Global Warming Is A Medical Emergency”
* Half world’s population could face climate-driven food crisis by 2100 

The time to act is most certainly now. 

Let's end this summary with the best piece of scientific news; one that suggests it is not too damn late to act! A NOAA-led study found we have not yet activated strong climate feedbacks from permafrost and methane hydrates. So far that most dangerous of all feedbacks — Arctic and tundra methane releases — does not appear to have been fatally triggered.

The anti-science crowd use smoke and mirrors to distract as many people as possible, but the rest of us need to listen to the science and keep our eyes on the prize — reversing greenhouse gas emissions trends as quickly and rapidly as possible.      
In 2009, Time Magazine named American physicist and climate expert Joe Romm one of itsHeroes of the Environment. The son of a newspaper editor, he is now the Web's most influential blogger in the field of climate and energy. Romm gained his PhD from MIT. When working for the Rockefeller Foundation, he identified energy & climate change as 'sleeper issues' that would dominate the coming decades. He then became assistant secretary at the Clinton Department of Energy. His 2006 book on global warming, Hell & High Water, is essential reading in the field. 

 

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OTHER THINGS ARE POLITICAL COMMENTARY IN THE NEWS RELEASE BELOW:

 

JUNE, 2008 {SOCIALIST ASSEMBLIES}I agree with scholar Haynes that the IRS should police the pews for partisan politics to remove tax exemptions. First the Alliance Defense Fund should not be called 'Christian' and second those houses should not be called places of 'Worship'. By definition Christianity cannot exist without 'Church' and what we have today in evangelical ministries is not 'Church' nor is the activity 'Worship'. Church is Orthodox. A socialist assembly beamed electronically is neither Orthodox nor 'Church'.These televised socialist assemblies can be as sweet as Joel in Houston or as sour as Reverend Wright- but neither are 'Churches' and none conduct 'Worship'.Orthodox is Catholic (East and West) and includes the America variants of Mormon, German Baptist, Amish, Mennonite Jehovah's Witness and a few others. None of these are or can be promoted as socialist electronic assemblies. If they are - then they are not. There is no future in pastors.To put it simply: If it comes from the tube- it ain't Christian.Fundamentally, America needs to re-think its road.Rance DeWitt
JULY 2008Letter to the Editor

One thousand militarized bully pulpits have replaced a God-fearing Congress and Senate. Our very government has been compromised. It all began with Billy Graham and television.

Protestantism evolved as anti-Church. Mother Church like Mother Earth and Mother Nature became disposables- anything but sacred. Evangelicals and Fundamentalists cite C.S. Lewis but Lewis cites them as rebels- men without chests- who should lay down their arms. Will they?

Archimedes put the mathematics of Pythagoras into words.

Give me a fulcrum and with a lever I will move the world, he said. Not change the world- but move. For what changes cannot move and what moves need not change. America now changes everything and moves nothing.Those men saw Jesus coming and straightened a path for Him. Peter and Paul marched to Rome for that purpose too. The fulcrum-rock is Christ and the Church is the lever above. Without the Church there is no Christ nor leverage of good over evil.

Today, electronic tube religion separates man from the Church. All that is left is a multitude of loose cannons shouting Jesus for money. He said, you will shout my name from every street corner but I do not know you and you are not mine.

Christianity is no religion.

Salvation is a solution based upon His completing the human genome from Alpha to Omega. The accounting combines Heaven and Earth in a co-operative agreement between mankind and Him. The path is both ontological and apostolic. That is the definition of Orthodoxy. Consequently, there is no salvation outside the Church- and Protestantism is not a church. It is an apostasy (rebellion) against the Church.The Mormons had good cause for digging a new well.I became Catholic because I saw the Orthodox banner like our flag being lifted over Iwo Jima. I saw Pope John Paul fitting the description of Christ who said: I will send you a Comforter and a Paraclete. President Ronald Reagan recognized this and acted in that vision. Our very Liberty today survives for a this and a that. Our truths should not be given over as fodder for loose cannons. For if nothing is sacred- none are worthy.

 

http://www.concertpark.us/rich_text.html   12 MONTHS OF LETTERS