The Saudi Arabia of Solar Power

Turns out it actually is Saudi Arabia:

Saudi Arabia positioned to become solar power

Sitting in the center of the so-called Sun Belt, the country is part of a vast, rainless region reaching from the western edge of North Africa to the eastern edge of Central Asia that boasts the best solar energy resources on Earth. With the cost of oil skyrocketing, this belt is attracting the attention of a growing number of European leaders, who are embracing an ambitious proposal to harvest this solar energy for their nations.

The irony is inescapable and the story a familiar one, as the developed world again turns to the less developed countries in hopes of powering their economies. More important, it highlights an unappreciated implication of a solar-powered economy: The end of the oil age will not necessarily bring an end to the ugly geopolitics, resource wars and national rivalries that oil created.

How much potential? A lot:

In Hassi R’mel, Algeria, construction has begun on a new power plant using a combination of solar and natural gas. The hope is to generate 150 megawatts of electricity by 2010, with 25 megawatts from a solar array stretching nearly 2 million square feet. The long-term goal is to export more than 6,000 megawatts of solar-generated power to Europe by 2020.

“Our potential in thermal solar power is four times the world’s energy consumption, so you can have all the ambitions you want with that,” Tewfik Hasni, managing director of New Energy Algeria, or NEAL, a company created by the Algerian government in 2002 to develop renewable energy, told the Associated Press last year.

This is why, barring a major technological breakthrough, the economics of solar energy may someday look much like the economics of fossil fuels. Energy security ultimately means more than access to energy; it means access to cheap energy. And like it or not, the Sun Belt has the cheapest solar energy in the world in vast quantities.

In other solar news, solar panel theft is on the rise:

Solar panels are hot for the stealing

East Bay law enforcement has been seeing a number of solar panel thefts. One industry expert said it was an uncommon crime, but there was a brief spree of thefts six weeks ago throughout the Bay Area.

“The solar panel thing is pretty new,” said Contra Costa County Sherriff’s Office spokesman Jimmy Lee of the thefts. “We’re seeing an increasing number of cases.”

“It’s simple mathematics,” Lee said of the thefts. “There’s money to be made.”

Next thing you know, wind turbines will be disappearing as thieves sell them for scrap. :^0

Palin a Friend of Big Oil?

Count me among those stunned by McCain’s pick for his VP candidate. It neutralizes the strongest argument he had against Obama: Not enough experience. Never again can he utter these words. Further, I can’t comprehend her as president (and with McCain’s age, I think we would have a fair chance of seeing that happen). I think the job is over her head, and I have witnessed the carnage several times when people step into a job over their heads. Imagine letting a first year medical school student do your heart transplant, and you start to get the picture.

I have also heard several people today refer to her as a friend of Big Oil. Ha! She has been called the Hugo Chavez of Alaska for her approach to oil companies (particularly her threats to tear up existing contracts). A story from CNN today explains:

Palin also raised taxes on oil companies after Murkowski’s previous tax regime produced falling revenues in 2007, despite skyrocketing oil prices. Alaska now has some of the highest resource taxes in the world. Alaska’s oil tax revenues are expected to be about $10 billion in 2008, twice those of previous year. BP says about half its oil revenues now go to taxes, when royalty payments to the state are included. Earlier this week, Palin approved gas tax relief for Alaskans, and paid every resident $1,200 to help ease their fuel-price burden.

Sure, she favors drilling in ANWR, but a friend of Big Oil? Please. A recent story in the Anchorage Daily News referred to her as “an anti-oil, tax-and-spend liberal with a nice smile and a pretty face.” With her on the ticket, now 3 of the 4 presidential/vice-presidential candidates are openly hostile to oil companies.

I have written about Palin previously, specifically highlighting the Hugo Chavez comparison (not that I originated it):

The Alaskan Gas Pipeline Controversy

I know some disagree (in fact, some of my closest friends – Republicans and Democrats – think the pick is brilliant), but I think after the dust settles this looks like Dan Quayle all over again. People are going to seriously question McCain’s judgment over this. The most important question to ask when picking a vice-presidential candidate is – Is this person ready to be president?

Of course Bush Sr. did get elected with Quayle on the ticket…

Hurricane Gustav Threatens

I have been so preoccupied lately, that I have barely noticed that there is a potentially very dangerous hurricane moving into the Gulf of Mexico. Furthermore, Tropical Storm Hanna is not far behind. Here are a couple of graphics I picked up from The Oil Drum, which in my opinion always has consistently the best hurricane coverage – particularly as it relates to energy infrastructure:

Not only is it forcing the evacuation of lots of oil infrastructure (as did Katrina in 2005), but it is also projected to strike landfall in the same general vicinity.

One interesting note is that the IEA announced that they were prepared to release oil stocks if necessary:

IEA Ready to Release Oil Stocks if Gustav Hits GOM

The International Energy Agency IEA is ready to release strategic oil stocks if Tropical Storm Gustav hits the Gulf of Mexico oil hub early next week, the energy adviser to 27 rich nations said on Thursday.

“It’s too early to think of any implications yet but we are closely following this with the U.S. government,” Aad van Bohemen, head of the emergency planning and the preparation division at the IEA, told Reuters.

The agency, which co-ordinates emergency measures in times of oil supply disruption, released oil products stocks in 2005 when hurricanes crippled U.S. oil operations in the area.

That struck me as a little peculiar, because the IEA is an organization that provides information. I was a little surprised to hear them talking of energy stocks. So I dug a little bit:

Fact Sheet on IEA Oil Stocks and Emergency Response Potential

What is the level of IEA Member countries’ oil stocks?

• IEA Member countries are holding some 4.1 billion barrels of public and industry oilstocks, of which, roughly 1.4 billion barrels are government controlled for emergency purposes.

• IEA net oil importing countries have legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports of the previous year.

• IEA net exporting countries are at present: Canada, Denmark, Norway and the United Kingdom; they do not have stockholding obligations under the IEP. Denmark and the United Kingdom do hold stocks under consumption-based EU regulations, as do other EU Member countries.

There is a lot of good information on that fact sheet, including the fact that they made 2 million barrels a day available in the wake of Hurricane Katrina.

I probably don’t have to tell people this as they learned a hard lesson following Katrina, but keep your gas tanks full – even if you are hundreds of miles from the Gulf Coast.

Hurricane Gustav Threatens

I have been so preoccupied lately, that I have barely noticed that there is a potentially very dangerous hurricane moving into the Gulf of Mexico. Furthermore, Tropical Storm Hanna is not far behind. Here are a couple of graphics I picked up from The Oil Drum, which in my opinion always has consistently the best hurricane coverage – particularly as it relates to energy infrastructure:

Not only is it forcing the evacuation of lots of oil infrastructure (as did Katrina in 2005), but it is also projected to strike landfall in the same general vicinity.

One interesting note is that the IEA announced that they were prepared to release oil stocks if necessary:

IEA Ready to Release Oil Stocks if Gustav Hits GOM

The International Energy Agency IEA is ready to release strategic oil stocks if Tropical Storm Gustav hits the Gulf of Mexico oil hub early next week, the energy adviser to 27 rich nations said on Thursday.

“It’s too early to think of any implications yet but we are closely following this with the U.S. government,” Aad van Bohemen, head of the emergency planning and the preparation division at the IEA, told Reuters.

The agency, which co-ordinates emergency measures in times of oil supply disruption, released oil products stocks in 2005 when hurricanes crippled U.S. oil operations in the area.

That struck me as a little peculiar, because the IEA is an organization that provides information. I was a little surprised to hear them talking of energy stocks. So I dug a little bit:

Fact Sheet on IEA Oil Stocks and Emergency Response Potential

What is the level of IEA Member countries’ oil stocks?

• IEA Member countries are holding some 4.1 billion barrels of public and industry oilstocks, of which, roughly 1.4 billion barrels are government controlled for emergency purposes.

• IEA net oil importing countries have legal obligation to hold emergency oil reserves equivalent to at least 90 days of net oil imports of the previous year.

• IEA net exporting countries are at present: Canada, Denmark, Norway and the United Kingdom; they do not have stockholding obligations under the IEP. Denmark and the United Kingdom do hold stocks under consumption-based EU regulations, as do other EU Member countries.

There is a lot of good information on that fact sheet, including the fact that they made 2 million barrels a day available in the wake of Hurricane Katrina.

I probably don’t have to tell people this as they learned a hard lesson following Katrina, but keep your gas tanks full – even if you are hundreds of miles from the Gulf Coast.

The Press on Obama’s Energy Plans

No time right now for editorial comment from me, just a sampling of the press on Obama’s energy plans following his speech tonight:

History echoes during Obama’s big speech

“For the sake of our economy, our security and the future of our planet,” he said, with a stern look on his face, “I will set a clear goal as president: In 10 years, we will finally end our dependence on oil from the Middle East.”

Critics slam Obama for being all rhetoric and no substance, but in a summer when Americans are paying nearly $4 a gallon for gasoline and fretting about high heating costs to come this winter, he vowed to end what he called “this addiction” to oil.

“Washington has been talking about oil addiction for the last 30 years, and John McCain has been there for 26 of them,” he said. “In that time, he’s said no to higher fuel-efficiency standards for cars, no to investments in renewable energy, no to renewable fuels. And today, we import triple the amount of oil as the day Senator McCain took office.

I don’t quite know what to make of that. Is it naivety? Pandering? Is he going to raise gasoline taxes by $5/gal (which would probably make the U.S. energy independent by crushing demand)? Or is the real meaning to be found in the phrase “dependence on oil from the Middle East” – since Canada is our #1 supplier?

US election: Obama shares a vision and plan to fulfill ‘America’s promise’

“Let me spell out exactly what that change would mean if I am president,” he promised. And he did… A pledge to make the United States energy independent of the middle east within 10 years (shades of John Kennedy’s equally improbable, but fulfilled, pledge to put a man on the moon in a decade). $150bn to be spent on renewable energy sources within the same decade. A look (but no specific pledge) on a new role for nuclear power.

Energy and tax proposals in Obama speech

Energy policy

- Ending U.S. dependence on oil from the Middle East in 10 years.

- Tapping U.S. natural gas reserves, investing in clean coal technology and finding ways to safely harness nuclear power. Further domestic drilling was just a stop-gap measure, he said.

- Helping U.S. auto companies re-tool so that fuel-efficient cars of the future would be built in America.

- Investing $150 billion over the next decade in affordable, renewable sources of energy, wind power and solar power and the next generation of biofuels. Obama said that would lead to new industries and 5 million new well-paying jobs.

Inside Obama’s green plan for energy and the economy

Obama says his “overarching goal” is to end U.S. reliance on Mideast and Venezuelan crude. Not much controversy there. Yet he’s not enamored of major U.S. oil companies either. He backs a windfall profits tax, and his aide Jason Grumet has spoken critically about the wave of mergers that gave us modern Big Oil.

Obama has several strategies to loosen oil’s vise. He has backed corn ethanol but now emphasizes cellulosic fuels made from materials no one eats, such as wood chips and switchgrass. A speculative solution, certainly, but indications of support could give a boost to big DuPont & Co., little Bluefire Ethanol Fuels Inc. and Verenium Corp., as well as private firms such as Mascoma Corp. and Range Fuels.

I don’t know how he could give much more of a boost than the current 36 billion gallon mandate. I guess he could throw a few more billion at the problem. While he’s at it, he may as well go ahead and mandate that we cure cancer. I still can’t figure out why nobody has thought of that.

The Myth of Election Year Price Manipulation

It seems that every election season, conspiracy theories arise that the oil companies are trying to bring down gasoline prices in order to influence elections. The thinking is that oil companies tend to favor Republicans (true) and that they bring prices down to help Republican candidates. When I hear this sort of talk, I try to explain to people that U.S. oil companies control so little of the world oil market that there isn’t much they can do to influence prices. They simply don’t have the stroke that people think they have.

But a poll in 2006 showed that nearly half of Americans thought Bush had successfully manipulated prices down as the election approached:

Almost half of all Americans believe the November elections have more influence than market forces. For them, the plunge at the pump is about politics, not economics.

Retired farmer Jim Mohr of Lexington, Ill., rattled off a tankful of reasons why pump prices may be falling, including the end of the summer travel season and the fact that no major hurricanes have disrupted Gulf of Mexico output. “But I think the big important reason is Republicans want to get elected,” Mohr, 66, said while filling up for $2.17 a gallon. “They think getting the prices down is going to help get some more incumbents re-elected.”

No doubt that incumbents like to see gas prices falling ahead of an election. But having any power to influence price is a different matter. Since gas prices are once again falling as we head toward an election, I thought I would try to put this myth to rest. So, I decided to tabulate the price behavior of gasoline stretching back over the past three presidential elections. I chose to track the price from the beginning of summer driving season – Memorial Day – until the first part of November when the elections take place.

The results are shown below:

Year	Memorial Day	November 1	% Change	Comments
1996	$1.32	$1.27	-3.8	Presidential election (PE)
1997	$1.26	$1.22	-3.2	No elections (NE)
1998	$1.11	$1.05	-5.4	Congressional elections (CE)
1999	$1.15	$1.27	10.4	NE
2000	$1.58	$1.57	-0.6	PE
2001	$1.74	$1.25	-28.2	NE; 9/11
2002	$1.43	$1.49	4.2	CE
2003	$1.53	$1.58	3.3	NE
2004	$2.09	$2.08	-0.5	PE
2005	$2.14	$2.42	13.1	NE; Hurricane Katrina
2006	$2.94	$2.25	-23.5	CE; refining capacity recovers
2007	$3.25	$3.06	-5.9	NE; gas prices set records
2008	$3.99	?	-?	PE; gas prices set records

Table 1. Comparison of Gasoline Prices Between Memorial Day and Elections Source: Energy Information Administration

Personally, I think one would be hard-pressed to find a pattern there. The biggest price drop happened in a non-election year, albeit it was an anomaly caused by 9/11. Of the thirteen years recorded, gasoline prices fell between Memorial Day and November during nine of the years. This is what I generally tell people: Prices fall for seasonal reasons, and do so even when there are no elections. The reason prices fall is that demand for gasoline falls after the summer. The price generally peaks in early summer, and following Labor Day in early September the price falls.

Of the presidential election years, the price fell in 1996 when President Clinton was running for reelection, was essentially unchanged in 2000 and 2004 when President Bush ran against Al Gore and then John Kerry, and will almost certainly fall this year as oil prices pull back from their record highs.

In fact, if you take out the major anomalies on the graph – the slowdown caused by the 9/11 attacks, and the 2005 run-up of price in the wake of Hurricane Katrina, followed by easing in 2006 as refineries recovered, the truth is that gas prices usually don’t change dramatically – election year or not.

So why does this myth persist? There are a couple of reasons I can think of, but I think they generally fall under the category of confirmation bias. There really isn’t a strong pattern of gas price behavior (other than a stair-step up year after year); people just notice it in an election year. In addition, because prices rise and fall over the course of any year, you can always point to a price drop in an election year to support your biases. But if you use objective analyses (e.g., start and stop the price check on the same date every year) the non-pattern becomes obvious. Had I allowed my dates to be variable, no doubt I could have shown prices falling during any election year. Or, I could have shown them rising.

As for the idea that the president has that much power, all he can really do is go with his hat in hand and beg the Saudis to pump more oil in an attempt to ease prices. OPEC has indeed had historical pricing power, but even that is eroding as spare capacity dwindles. But the idea that Bush can pull any strings and get Big Oil to manipulate gas prices demonstrates that people give him, and Big Oil for that matter, far too much credit. Besides, as Joanne Shore, an analyst at the EIA noted in the previously linked article “What company in their right mind would step forward to kill their profit?”

Tying Up Loose Ends on Coskata

While I am a skeptic by nature, I am a problem-solver as well. I always ask the people around me – and I try to practice this at all times – if you come across a problem, or envision that you will have a problem, try to envision a solution as well. Otherwise, you have simply created an obstacle. This is important in my current job, as we have commercialized a technology that had never been commercialized before. It’s sort of like chess: Envision where you are going, the potential problems as you make your journey, and how you will cope with that. The more contingencies you have planned for, the higher your chances of success. These are principles I live by. The reason I feel the need to point this out is that some read my skepticism in some quarters as a “can’t do” attitude.

With that preface, there are a couple of things that I left unresolved in my Coskata investigation. One was my questions on the energy balance. But I also wanted to do a mass balance – or at least a carbon balance – around the process to see if those claims of 100 gallons of ethanol per ton of woody biomass are realistic. I also want to look at the logistics to get a feel for the amount of biomass required to run a 100 million gallon a year plant.

Finally, I will offer some advice to someone thinking of investing into Coskata, or any energy startup. I am not going to offer up solutions to potential problems simply because I would require quite a bit more information to do so. But what I can do is flag various areas that a prospective investor should investigate.

Mass Balance

Let’s take the mass balance first. Woody biomass contains around 50% carbon. I have that from personal conversations with Roger Rowell, one of the world’s foremost wood experts and my part-time room-mate in the Netherlands. But if that’s not good enough, here’s another source that indicates that 50% carbon is a reasonable estimate. Therefore, in a ton of dry, woody biomass there is a half ton of carbon. The atomic weight of carbon is 12, and there are 454 grams in a pound, so the number of moles of carbon (remember freshman chemistry?) is 1,000 pounds * 454 grams/(12 grams/mole) = 37,833 moles of carbon.

Each ethanol molecule has two carbons, so if you had 100% conversion of the woody biomass to syngas and then to ethanol (of course you won’t, but I want to get the maximum theoretical yield) you would have 37,833/2, or 18,917 moles of ethanol. The molecular weight of ethanol is 46, so if we convert the ethanol into pounds we get (18,917 moles * 46 grams/mole)/454 grams/pound = 1917 pounds of ethanol. That’s the absolute maximum theoretical yield based on carbon, and assumes that we have added enough oxygen to the mix (during the gasification step). The density of ethanol is about 6.6 pounds per gallon, so this leads to 1917 lb/(6.6 lb/gal) = 290 gallons of ethanol per ton of woody biomass. (Note that in reality, depending on the specific metabolic pathway, there may be CO2 produced whenever a molecule of ethanol is produced, lowering the theoretical yield).

Conclusion from that exercise? Some of the available carbon will go into microbe production, and some will end up as carbon dioxide. Some will be lost as tail gas in the process. But if 100 gallons is converted to ethanol, that means only 34% of the carbon in the starting biomass ended up as ethanol. Therefore, claims of 100 gallons (or more) per ton of woody biomass are consistent with the chemistry.

Energy Balance

This is where I feel like there is a problem. Let’s put all of the energy inputs and outputs out there and see.

Here is a reference for the BTU content of woody biomass. As you can see, the energy value varies quite a bit depending on moisture content and type of wood. The numbers are clustered around 12.5 million BTUs/ton, so I will use that as a standard. Coskata reports that a ton of woody biomass will produce 100 gallons of ethanol. As noted in the previous section, that is a believable statement. This much ethanol contains 8.4 million BTUs (based on the higher heating value, as was the case with woody biomass). The problem though with calculating an energy return is that there are energy inputs that go into producing the oxygen for the gasifier. And air separation units suck up a lot of energy (and capital).

But I can do a different exercise. If I have a solution that is 3.5% ethanol, as Wes told me their fermentation broth is, how much energy does it take to get it out? If I had access to a process simulator – and I don’t have one here in the U.S. (but I do in the Netherlands), then we could actually determine the break even point; that is the point at which the energy I put into the separation is equivalent to the energy of the ethanol I am separating.

But I can do a crude illustration. If I have a pound of fermentation broth, then there are 0.965 pounds of water and 0.035 pounds of ethanol. The amount of energy in that much ethanol is 0.035 lb * 1 gal/6.6 lb * 76,000 BTUs/gal = 403 BTUs. The heat of vaporization for water is 970 BTUs/lb, so if you were going to vaporize the mostly aqueous mixture (which you would do in a conventional distillation) it would take around 940 BTUs – more than twice what you could get back in the form of purified ethanol.

In a corn ethanol plant, the fermentation broth comes off at 16% ethanol or so. For our same exercise above, there are 1840 BTUs of ethanol in the mix, which is well more than enough to justify vaporizing the mixture. That should roughly illustrate the mountain that a 3.5% ethanol mixture has to climb.

Of course that implicitly assumes that the value of the BTUs that are being used to separate the ethanol are roughly equivalent in value to those in the ethanol. That may not be the case, and there may be times where there is an economic justification. For instance, let’s say you had a bunch of waste heat that you can use. It might make sense. But as always, I would ask the question whether boiling water is the most efficient usage of those BTUs.

Coskata says they have addressed the energy problem in the distillation by using membrane technology. The claim is that it takes half the energy of distillation. This is somewhat hard to believe, as I would expect ethanol plants across the country to rush to adopt the technology. And it isn’t brand new. Here is a 2001 article talking up the benefits: Pervaporation comes to age.

Yet there have been numerous ethanol plants built since 2001. Why aren’t they being built with membrane separation technology? Without going in and checking their claims, I can’t say for a fact whether that claim of lower energy usage is valid. But there are question marks all around it. (Note: I don’t dispute the technology, because I know that it works. I would just make sure – if I were about to invest in Coskata – that I had a very close look at their claims around this area.)

Finally, what of their claims that they get “up to 7.7 times more energy than what is used in making the ethanol.” In my conversation with Wes, I had asked if this was from Michael Wang. He said yes, which then put that claim into context for me. Michael Wang has created a model that has been widely misused. The number above – 7.7 – will refer not to the energy that is used in the process but rather to the overall fossil energy used. This is the same way Brazilian sugarcane can claim an 8/1 energy return, despite the energy intensive process step of separating ethanol from water. This is a valid metric as long as the context is clear. But the context isn’t usually made clear.

Here is an illustration of the potential problems with the metric. Let’s take an extreme example, as I think they are very useful in illustrating concepts. Let’s say that I have a million BTUs of biomass. But let’s say I have a conversion process that is terribly inefficient. I use that biomass in an inefficient process to produce a trifling amount of liquid fuel: 100 BTUs. In the process, 999,900 BTUs – 99.99% of what we started with – are lost in the process because they are used to drive the process.

But let’s say I have to input a small amount of fossil fuels; say in the form of electricity to run a pump. If I used 13 BTUs of fossil fuel to produce the 100 BTUs, then the energy return based on Wang’s metric is 100/13, or 7.7. So, I could claim to have a high energy return despite the fact that almost all of the available BTUs are wasted. This is the ‘opportunity cost‘ of those BTUs. Had we used the starting biomass to produce electricity, for instance, we would have had far more BTUs at the end of the process.

Now I am not for a moment suggesting that Coskata loses most of their BTUs in the process of making their ethanol. But without a real energy accounting – which the 7.7 number is not – it is difficult to determine whether this process makes better use of the available BTUs than a competing process. A proper energy accounting should take into account the overall BTUs consumed in the process, and not just the fossil fuel usage.

Logistics

David Henson, President of Choren USA (another company involved in biomass gasification), once commented to me “You know, most people just don’t understand that biomass isn’t very energy dense.” David was absolutely correct, but what does that mean? The lower the energy density of a substance, the closer it needs to be to the factory. Imagine hauling potatoes from New York to California in order to convert them into ethanol, and you get the picture. You would certainly burn more fuel transporting the potatoes than you could make from processing them into ethanol.

I believe this issue of low biomass density, which I have referred to as the logistics problem of cellulosic ethanol, is a killer for cellulosic ethanol. In fact, I recently calculated that to keep a medium-sized cellulosic ethanol plant running would consume the biomass equivalent of almost 900,000 mature Douglas firs every single year.

However, the Coskata process is not a cellulosic ethanol process. I don’t consider any gasification process to be cellulosic (I explained why here). The consequence is that a gasification process can have a higher yield because it converts lignin and hemicellulose in addition to cellulose. In Coskata’s case, they promise 100 gallons (+) per ton. How much biomass then to run a 100 million gallon per year facility? A million tons per year. How much biomass is this? If we return to the Douglas fir example, it is the biomass equivalent of around 1.2 million mature Douglas firs per year.

That’s still hard to wrap my head around, but I can put that in context from my current job. In our wood acetylation plant in the Netherlands, our nameplate capacity is 30,000 cubic meters of wood per year. A cubic meter weighs half a metric ton, so we run 15,000 metric tons per year through our plant (about 17,000 short tons). Coskata proposes to process about 60 times as much biomass through their 100 million gallon per year facility. That is the sort of logistical challenge that boggles my mind, when I try to scale up our process by a factor of 60.

To put in the context of rail cars, the coal cars lined up outside of a coal-fired power plant are a familiar site. According to this, each car carries about 100 tons of coal. For a million tons of coal a year, you would have to have 1 million/(100 tons per car) = 10,000 cars per year coming into and leaving the plant. That’s more than a car an hour, 24 hours a day, 365 days a year. And of course coal is quite a bit denser than biomass, so more cars would be required in the case of biomass.

I won’t say that’s impossible, but it is going to be a significant challenge. All I can say is Coskata better have hired some very good logistical experts. They are going to need them.

Conclusions

So what’s the bottom line? Let’s say you are an investor with a billion dollars burning a hole in your pocket. You contact me and ask if Coskata is for real. I want to see your billion dollars invested wisely, so here is what I would tell you.

The plasma gasification piece and the membrane separation piece both need a very good technical vetting from someone who has signed a secrecy agreement and has access to the experimental data. Whether a technology works in the lab is one thing. After all, if I can kill cancer cells in the lab, have I cured cancer?

You need to know to what extent it works in conditions close to what Coskata is proposing. Has it been tested under these conditions? For how long? What were the results? What were the key challenges? How accurately were the energy inputs measured? In fact, I would probably want to park myself in their labs for a few days, and spend a lot of time talking to technicians. I would want to know – outside of the tours – what’s really going on.

Second, I would really focus in on the logistics issue. I would want some serious details on how they are proposing to handle the logistics. How is the biomass going to come into the plant? Has a calculation been done on how far away something can be transported before it becomes break even on the energy? If it is waste biomass already coming into a point source, then it isn’t as big an issue. But then I would ask if there is any location in the U.S. that is handling a million tons of waste biomass at a point source (which the gasification plant would be). I would want to see actual examples of someone handling this much biomass.

Finally, I would go over that $400 million capital estimate with a fine-toothed comb. I would ask for an example of any technology that has been piloted in the lab, and then had an accurate capital estimate done at a scale of tens of thousands of times larger than the lab scale. As I have said before, you have different problems at a pilot scale than you had at the lab scale, and the problems become even bigger at commercial scale. The capital estimate is already $400 million for a 100 million gallon per year plant – $61,000 per daily barrel. That puts it at a disadvantage to GTL or corn ethanol. Why wouldn’t I expect that capital estimate to climb as they gain piloting experience? Why would I expect them to stick with biomass, when the logistics of gasifying (partially oxidizing) natural gas are trivial when contrasted with biomass logistics?

At least that’s what I would do. But then again, I am notoriously frugal with money, and perpetually skeptical on top of that. If you are a gambler, then you may want to adopt a different strategy.

Note: As always, if you spot an error, let me know and I will gladly correct it.

Tying Up Loose Ends on Coskata

While I am a skeptic by nature, I am a problem-solver as well. I always ask the people around me – and I try to practice this at all times – if you come across a problem, or envision that you will have a problem, try to envision a solution as well. Otherwise, you have simply created an obstacle. This is important in my current job, as we have commercialized a technology that had never been commercialized before. It’s sort of like chess: Envision where you are going, the potential problems as you make your journey, and how you will cope with that. The more contingencies you have planned for, the higher your chances of success. These are principles I live by. The reason I feel the need to point this out is that some read my skepticism in some quarters as a “can’t do” attitude.

With that preface, there are a couple of things that I left unresolved in my Coskata investigation. One was my questions on the energy balance. But I also wanted to do a mass balance – or at least a carbon balance – around the process to see if those claims of 100 gallons of ethanol per ton of woody biomass are realistic. I also want to look at the logistics to get a feel for the amount of biomass required to run a 100 million gallon a year plant.

Finally, I will offer some advice to someone thinking of investing into Coskata, or any energy startup. I am not going to offer up solutions to potential problems simply because I would require quite a bit more information to do so. But what I can do is flag various areas that a prospective investor should investigate.

Mass Balance

Let’s take the mass balance first. Woody biomass contains around 50% carbon. I have that from personal conversations with Roger Rowell, one of the world’s foremost wood experts and my part-time room-mate in the Netherlands. But if that’s not good enough, here’s another source that indicates that 50% carbon is a reasonable estimate. Therefore, in a ton of dry, woody biomass there is a half ton of carbon. The atomic weight of carbon is 12, and there are 454 grams in a pound, so the number of moles of carbon (remember freshman chemistry?) is 1,000 pounds * 454 grams/(12 grams/mole) = 37,833 moles of carbon.

Each ethanol molecule has two carbons, so if you had 100% conversion of the woody biomass to syngas and then to ethanol (of course you won’t, but I want to get the maximum theoretical yield) you would have 37,833/2, or 18,917 moles of ethanol. The molecular weight of ethanol is 46, so if we convert the ethanol into pounds we get (18,917 moles * 46 grams/mole)/454 grams/pound = 1917 pounds of ethanol. That’s the absolute maximum theoretical yield based on carbon, and assumes that we have added enough oxygen to the mix (during the gasification step). The density of ethanol is about 6.6 pounds per gallon, so this leads to 1917 lb/(6.6 lb/gal) = 290 gallons of ethanol per ton of woody biomass. (Note that in reality, depending on the specific metabolic pathway, there may be CO2 produced whenever a molecule of ethanol is produced, lowering the theoretical yield).

Conclusion from that exercise? Some of the available carbon will go into microbe production, and some will end up as carbon dioxide. Some will be lost as tail gas in the process. But if 100 gallons is converted to ethanol, that means only 34% of the carbon in the starting biomass ended up as ethanol. Therefore, claims of 100 gallons (or more) per ton of woody biomass are consistent with the chemistry.

Energy Balance

This is where I feel like there is a problem. Let’s put all of the energy inputs and outputs out there and see.

Here is a reference for the BTU content of woody biomass. As you can see, the energy value varies quite a bit depending on moisture content and type of wood. The numbers are clustered around 12.5 million BTUs/ton, so I will use that as a standard. Coskata reports that a ton of woody biomass will produce 100 gallons of ethanol. As noted in the previous section, that is a believable statement. This much ethanol contains 8.4 million BTUs (based on the higher heating value, as was the case with woody biomass). The problem though with calculating an energy return is that there are energy inputs that go into producing the oxygen for the gasifier. And air separation units suck up a lot of energy (and capital).

But I can do a different exercise. If I have a solution that is 3.5% ethanol, as Wes told me their fermentation broth is, how much energy does it take to get it out? If I had access to a process simulator – and I don’t have one here in the U.S. (but I do in the Netherlands), then we could actually determine the break even point; that is the point at which the energy I put into the separation is equivalent to the energy of the ethanol I am separating.

But I can do a crude illustration. If I have a pound of fermentation broth, then there are 0.965 pounds of water and 0.035 pounds of ethanol. The amount of energy in that much ethanol is 0.035 lb * 1 gal/6.6 lb * 76,000 BTUs/gal = 403 BTUs. The heat of vaporization for water is 970 BTUs/lb, so if you were going to vaporize the mostly aqueous mixture (which you would do in a conventional distillation) it would take around 940 BTUs – more than twice what you could get back in the form of purified ethanol.

In a corn ethanol plant, the fermentation broth comes off at 16% ethanol or so. For our same exercise above, there are 1840 BTUs of ethanol in the mix, which is well more than enough to justify vaporizing the mixture. That should roughly illustrate the mountain that a 3.5% ethanol mixture has to climb.

Of course that implicitly assumes that the value of the BTUs that are being used to separate the ethanol are roughly equivalent in value to those in the ethanol. That may not be the case, and there may be times where there is an economic justification. For instance, let’s say you had a bunch of waste heat that you can use. It might make sense. But as always, I would ask the question whether boiling water is the most efficient usage of those BTUs.

Coskata says they have addressed the energy problem in the distillation by using membrane technology. The claim is that it takes half the energy of distillation. This is somewhat hard to believe, as I would expect ethanol plants across the country to rush to adopt the technology. And it isn’t brand new. Here is a 2001 article talking up the benefits: Pervaporation comes to age.

Yet there have been numerous ethanol plants built since 2001. Why aren’t they being built with membrane separation technology? Without going in and checking their claims, I can’t say for a fact whether that claim of lower energy usage is valid. But there are question marks all around it. (Note: I don’t dispute the technology, because I know that it works. I would just make sure – if I were about to invest in Coskata – that I had a very close look at their claims around this area.)

Finally, what of their claims that they get “up to 7.7 times more energy than what is used in making the ethanol.” In my conversation with Wes, I had asked if this was from Michael Wang. He said yes, which then put that claim into context for me. Michael Wang has created a model that has been widely misused. The number above – 7.7 – will refer not to the energy that is used in the process but rather to the overall fossil energy used. This is the same way Brazilian sugarcane can claim an 8/1 energy return, despite the energy intensive process step of separating ethanol from water. This is a valid metric as long as the context is clear. But the context isn’t usually made clear.

Here is an illustration of the potential problems with the metric. Let’s take an extreme example, as I think they are very useful in illustrating concepts. Let’s say that I have a million BTUs of biomass. But let’s say I have a conversion process that is terribly inefficient. I use that biomass in an inefficient process to produce a trifling amount of liquid fuel: 100 BTUs. In the process, 999,900 BTUs – 99.99% of what we started with – are lost in the process because they are used to drive the process.

But let’s say I have to input a small amount of fossil fuels; say in the form of electricity to run a pump. If I used 13 BTUs of fossil fuel to produce the 100 BTUs, then the energy return based on Wang’s metric is 100/13, or 7.7. So, I could claim to have a high energy return despite the fact that almost all of the available BTUs are wasted. This is the ‘opportunity cost‘ of those BTUs. Had we used the starting biomass to produce electricity, for instance, we would have had far more BTUs at the end of the process.

Now I am not for a moment suggesting that Coskata loses most of their BTUs in the process of making their ethanol. But without a real energy accounting – which the 7.7 number is not – it is difficult to determine whether this process makes better use of the available BTUs than a competing process. A proper energy accounting should take into account the overall BTUs consumed in the process, and not just the fossil fuel usage.

Logistics

David Henson, President of Choren USA (another company involved in biomass gasification), once commented to me “You know, most people just don’t understand that biomass isn’t very energy dense.” David was absolutely correct, but what does that mean? The lower the energy density of a substance, the closer it needs to be to the factory. Imagine hauling potatoes from New York to California in order to convert them into ethanol, and you get the picture. You would certainly burn more fuel transporting the potatoes than you could make from processing them into ethanol.

I believe this issue of low biomass density, which I have referred to as the logistics problem of cellulosic ethanol, is a killer for cellulosic ethanol. In fact, I recently calculated that to keep a medium-sized cellulosic ethanol plant running would consume the biomass equivalent of almost 900,000 mature Douglas firs every single year.

However, the Coskata process is not a cellulosic ethanol process. I don’t consider any gasification process to be cellulosic (I explained why here). The consequence is that a gasification process can have a higher yield because it converts lignin and hemicellulose in addition to cellulose. In Coskata’s case, they promise 100 gallons (+) per ton. How much biomass then to run a 100 million gallon per year facility? A million tons per year. How much biomass is this? If we return to the Douglas fir example, it is the biomass equivalent of around 1.2 million mature Douglas firs per year.

That’s still hard to wrap my head around, but I can put that in context from my current job. In our wood acetylation plant in the Netherlands, our nameplate capacity is 30,000 cubic meters of wood per year. A cubic meter weighs half a metric ton, so we run 15,000 metric tons per year through our plant (about 17,000 short tons). Coskata proposes to process about 60 times as much biomass through their 100 million gallon per year facility. That is the sort of logistical challenge that boggles my mind, when I try to scale up our process by a factor of 60.

To put in the context of rail cars, the coal cars lined up outside of a coal-fired power plant are a familiar site. According to this, each car carries about 100 tons of coal. For a million tons of coal a year, you would have to have 1 million/(100 tons per car) = 10,000 cars per year coming into and leaving the plant. That’s more than a car an hour, 24 hours a day, 365 days a year. And of course coal is quite a bit denser than biomass, so more cars would be required in the case of biomass.

I won’t say that’s impossible, but it is going to be a significant challenge. All I can say is Coskata better have hired some very good logistical experts. They are going to need them.

Conclusions

So what’s the bottom line? Let’s say you are an investor with a billion dollars burning a hole in your pocket. You contact me and ask if Coskata is for real. I want to see your billion dollars invested wisely, so here is what I would tell you.

The plasma gasification piece and the membrane separation piece both need a very good technical vetting from someone who has signed a secrecy agreement and has access to the experimental data. Whether a technology works in the lab is one thing. After all, if I can kill cancer cells in the lab, have I cured cancer?

You need to know to what extent it works in conditions close to what Coskata is proposing. Has it been tested under these conditions? For how long? What were the results? What were the key challenges? How accurately were the energy inputs measured? In fact, I would probably want to park myself in their labs for a few days, and spend a lot of time talking to technicians. I would want to know – outside of the tours – what’s really going on.

Second, I would really focus in on the logistics issue. I would want some serious details on how they are proposing to handle the logistics. How is the biomass going to come into the plant? Has a calculation been done on how far away something can be transported before it becomes break even on the energy? If it is waste biomass already coming into a point source, then it isn’t as big an issue. But then I would ask if there is any location in the U.S. that is handling a million tons of waste biomass at a point source (which the gasification plant would be). I would want to see actual examples of someone handling this much biomass.

Finally, I would go over that $400 million capital estimate with a fine-toothed comb. I would ask for an example of any technology that has been piloted in the lab, and then had an accurate capital estimate done at a scale of tens of thousands of times larger than the lab scale. As I have said before, you have different problems at a pilot scale than you had at the lab scale, and the problems become even bigger at commercial scale. The capital estimate is already $400 million for a 100 million gallon per year plant – $61,000 per daily barrel. That puts it at a disadvantage to GTL or corn ethanol. Why wouldn’t I expect that capital estimate to climb as they gain piloting experience? Why would I expect them to stick with biomass, when the logistics of gasifying (partially oxidizing) natural gas are trivial when contrasted with biomass logistics?

At least that’s what I would do. But then again, I am notoriously frugal with money, and perpetually skeptical on top of that. If you are a gambler, then you may want to adopt a different strategy.

Note: As always, if you spot an error, let me know and I will gladly correct it.

Oil Watchdog on Fuel from Algae

I have gotten out of the habit of visiting Oil Watchdog whenever I want a bit of energy-themed comic relief. They are so ‘over the top’ and transparent that it really hasn’t been necessary to debunk them. As I have documented before, on the one hand they accuse oil companies of not supporting alternative energy or donating any of their profits. Yet where oil companies are funding alternative energy and donating to colleges, they are accused of ‘greenwashing’ and attempting to control university research. You can see some of the articles I have written documenting their intellectual dishonesty and inconsistent ‘reporting’ here. As you can see, they will even take a rumor (“I absolutely can’t vouch for the truth of this story…”) and attempt to spread it.

While it has been six months since I have been there, I thought I would check in to see what kind of negative spin they would put on falling gas prices. I was expecting “it’s an attempt to control the election”, which seems to be a common theme during election years (even though the price also falls in non-election years). Instead, Judy Dugan was again proudly putting her ignorance on display:

Show us your algae!

I was reading up today on research about turning pond scum into biodiesel. One promising thread is that algae can be fed the carbon dioxide emitted by power plants, multiplying their oil production on a waste greenhouse gas. Algae may also thrive on ground garbage. It’s a concept that needs intensive, expensive research to prove if algae are an energy savior, a false promise, or something in between. Then I came across a paragraph in a Science Daily article from a few days ago that stopped me cold:

This was ‘above the fold.’ Below the fold, I knew without even looking what kind of story it must have been to stop Dugan cold. She had obviously made the shocking discovery that oil companies are involved in this research!

“Some of these pragmatic issues may have been tackled already by the various private companies, including oil industry giants Chevron and Shell, which are already researching algae fuel, but a published scientific report on these fundamentals will be a major benefit to other researchers looking into algae biofuel.”

Uh-oh! Time to put on the ‘Big Oil is greenwashing and trying to control our energy supplies’ hat:

If Big Oil is doing this research and keeping even interim results to itself, we can’t trust oil companies with anything surrounding our desperate need for a better energy future.

It’s the same reason that universities shouldn’t be taking big bucks from oil companies in return for letting the companies shroud research results in delay, secrecy and proprietary rights.

So, Dugan wants 1). Oil companies taxed into submission (previous posts); 2). Oil companies to put some of their ‘ill-gotten gains’ into research on new energy supplies; 3). But if they do, she wants the results to be publicly available to all. Now, remind me again what the incentive would be for a publicly traded company to do this research if there was no profit to be gained? And wouldn’t other companies – and other countries for that matter – love to sit back and reap the rewards of Chevron’s research?

Here Dugan puts her ignorance up on a pedestal:

But if Chevron is funding the research, it will control the result and can just as easily bury it, calling the effort a disappointing failure.

I don’t guess Dugan is aware of the U.S. DOE Aquatic Species Program. You can read the 328 page close-out report here. You can also read a guest post from John Benemann, the man who co-authored that report:

Algal Biodiesel: Fact or Fiction?

You see Dugan, despite the ignorance that you seem to wear like a badge of honor, the oil companies don’t have a monopoly in this area. The US government studied it for many years, but concluded in their close-out report that costs were too high, and many technical challenges remain. So if Chevron does decide to shelve it, I am sure that you will conclude that they were ‘burying it’ (after all, you are programmed to put the negative spin on). And in my opinion, they will eventually shelve it, for the very reasons that were laid out in the close-out report.

Despite that, Greenfuel Technologies (not an oil company, Dugan) has been making some pretty big claims in this area (claims that violate thermodynamics, according to Krassen Dimitrov). And because there is so much misinformation around the subject of algal fuels, it isn’t surprising that a massive fraud has already been perpetrated on gullible investors. Sorry, Dugan, no oil companies to blame on that one. But if you know a little about the history of the algal biodiesel program, you could have smelled that fraud coming from a mile away.

Speaking of Geothermal

In the previous post I stated the geothermal – a very promising and cost-competitive source of alternative energy – doesn’t get the same kind of press coverage as wind or solar power. Ironically, I hadn’t realized that Google has just announced a >$10 million investment in advanced geothermal technology. It even got quite a bit of press coverage (probably due more to the ‘Google’ factor than anything). Scientific American has one of the better articles I have seen:

Drilling for Hot Rocks: Google Sinks Cash into Advanced Geothermal Technology

Some excerpts:

For $1 billion over the next 40 years, the U.S. could develop 100 gigawatts (a gigawatt equals one billion watts) of electricity generation that emits no air pollution and pumps out power to the grid even more reliably than coal-fired power plants, according to scientists at the Massachusetts Institute of Technology. Now Google.org—the charitable wing of the search engine giant—has chipped in nearly $11 million for this renewable resource: so-called geothermal power, or tapping the Earth’s heat to make electricity.

Amazingly, this is more money than the U.S. government spends on this technology:

That makes Google.org the largest funder of enhanced geothermal research in the country, outspending the U.S. government. The Australian government has pledged $43.5 million for such projects and already has several in the works, as do Europe and Japan.

While there are still technical challenges for advanced geothermal, geothermal itself has been producing cost-competitive electricity for many years in places where surface magma is readily available. In fact, as I have pointed out before, the U.S. is the world’s leader producer of geothermal electricity at around 3 gigawatts of capacity. The difference in advanced geothermal is that they are going after magma that is far beneath the surface, which would greatly increase the geographical area over which geothermal technology could be applied. Therein lies the technical and economic challenges: Drilling rigs are expensive and in short supply, and you use a lot of electricity pumping water down the drill hole.