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The DOE Funding Recipients

I am so far behind on the things that I have been intending to write. It is hard to believe that it has already been over a week since the most recent US DOE biorefinery grants were announced. I have been meaning to list them and comment, but I have finally decided just to list them without too much comment. Let’s just say that some of these names have been around for a while and have issued a lot of press releases, but they haven’t produced any biofuel.

The reason for keeping my comments to a minimum is that I have potential conflicts of one sort or another with several of these companies or projects. Sometimes it is just that I know some of the people involved; in other cases it is more complicated than that. But I don’t want to be accused of possible conflicts of interest by getting into some of the names/technologies that I am surprised to see listed. I know that there were also a number of high profile companies (i.e., they issue a lot of press releases) who did not make the cut.

It is probably worth a future post to check into the six prospective cellulosic ethanol plants funded by the DOE in February 2007 (see the list at the bottom of my post here). As far as I know only one – Broin/POET – has completed a project from those funds that is producing cellulosic ethanol.

Below is the list of recent award recipients, from A(lgenol) to Z(eachem), as compiled by Biofuels Digest (the list/description is verbatim from the DOE announcement, but the original DOE link is offline right now). I embedded links to all of the companies. There were nineteen projects awarded, for a grant total of up to $564 million.

And if you ever wondered how the DOE determines the winners and losers, the New York Times did an interesting story on that a few days ago:

How DOE Dealt With a ‘Tsunami’ of Clean-Tech Applicants

The outpouring of grants — and the preponderance of unsuccessful applicants — has stirred curiosity and some complaints over the DOE rating process.

The review involved a series of screening steps that included technology capability, job creation, likelihood of success, and ability to generate matching funds, DOE says.

Rogers was asked whether DOE would make public the winners’ applications and the review teams’ analysis, to shed more light on the decision-making.

“Our plan is not to make that public. First off, all of the [private-sector] reviewers are doing this as a matter of public service, and we don’t need to draw them into getting interviewed about every application.”

The Winners

Bluefire Ethanol
DOE Grant: $81,134,686
Non-fed funding: $223,227,314

Fulton, MS: This project will construct a facility that produces ethanol fuel from woody biomass, mill residue, and sorted municipal solid waste. The facility will have the capacity to produce 19 million gallons of ethanol per year.

Demonstration Scale

BioEnergy International
DOE Grant: $50,000,000
Non-fed funding: $89,589,188

Lake Providence, LA: This project will biologically produce succinic acid from sorghum. The process being developed displaces petroleum based feedstocks and uses less energy per ton of succinic acid produced than its petroleum counterpart.

Enerkem
DOE Grant: $50,000,000
Non-fed funding: $90,470,217

Pontotoc, MS: This project will be sited at an existing landfill and use feedstocks such as woody biomass and biomass removed from municipal solid waste to produce ethanol and other green chemicals through gasification and catalytic processes.

INEOS New Planet BioEnergy
DOE Grant: $50,000,000
Non-fed funding: $50,000,000

Vero Beach, FL: This project will produce ethanol and electricity from wood and vegetative residues and construction and demolition materials. The facility will combine biomass gasification and fermentation, and will have the capacity to produce 8 million gallons of ethanol and 2 megawatts of electricity per year by the end of 2011.

Sapphire Energy
DOE Grant: $50,000,000
Non-fed funding: $85,064,206

Columbus, NM: This project will cultivate algae in ponds that will ultimately be converted into green fuels, such as jet fuel and diesel, using the Dynamic Fuels refining process.

Pilot and Demonstration Scale FOA – Pilot Scale

Algenol Biofuels
DOE grant: $25,000,000
Other funding: $33,915,478

Freeport, TX: This project will make ethanol directly from carbon dioxide and seawater using algae. The facility will have the capacity to produce 100,000 gallons of fuel grade ethanol per year.

American Process
DOE grant: $17,944,902
Other funding: $10,148,508

Alpena, MI: This project will produce fuel and potassium acetate, a compound with many industrial applications, using processed wood generated by Decorative Panels International, an existing hardboard manufacturing facility in Alpena. The pilot plant will have the capacity to produce up to 890,000 gallons of ethanol and 690,000 gallons of potassium acetate per year starting in 2011.

Amyris Biotechnologies
DOE grant: $25,000,000
Other funding: $10,489,763

Emeryville, CA: This project will produce a diesel substitute through the fermentation of sweet sorghum. The pilot plant will also have the capacity to co-produce lubricants, polymers, and other petro-chemical substitutes.

Archer Daniels Midland
DOE funding: $24,834,592
Other funding: $10,946,609

Decatur, IL: This project will use acid to break down biomass which can be converted to liquid fuels or energy. The ADM facility will produce ethanol and ethyl acrylate, a compound used to make a variety of materials, and will also recover minerals and salts from the biomass that can then be returned to the soil.

Clearfuels Technology
DOE funding: $23,000,000
Other funding: $13,433,926

Commerce City, CO: This project will produce renewable diesel and jet fuel from woody biomass by integrating ClearFuels’ and Rentech’s conversion technologies. The facility will also evaluate the conversion of bagasse and biomass mixtures to fuels.

Elevance Renewable Sciences
DOE funding: $2,500,000
Non-Fed funding: $625,000

Newton IA: This project was selected to complete preliminary engineering design for a future facility producing jet fuel, renewable diesel substitutes, and high value chemicals from plant oils and poultry fat.

Gas Technology Institute
DOE funding: $2,500,000
Non-Fed funding: $625,000

Des Plaines, IL. This project was selected to complete preliminary engineering design for a novel process to produce green gasoline and diesel from woody biomass, agricultural residues, and algae.

Haldor Topsoe
DOE funding: $25,000,000
Non-Fed funding: $9,701,468

Des Plaines, IL. This project will convert wood to green gasoline by fully integrating and optimizing a multi?step gasification process. The pilot plant will have the capacity to process 21 metric tons of feedstock per day.

ICM
DOE funding: $25,000,000
Non-Fed funding: $6,268,136

St. Joseph, MO. This project will modify an existing corn ethanol facility to produce cellulosic ethanol from switchgrass and energy sorghum using biochemical conversion processes.

Logos Technologies
DOE funding: $20,445,849
Non-Fed funding: $5,113,962

Visalia, CA. This project will convert switchgrass and woody biomass into ethanol using a biochemical conversion processes.

Renewable Energy Institute International
DOE funding: $19,980,930

Non-Fed funding: $5,116,072

Toledo, OH. This project will produce high quality green diesel from agriculture and forest residues using advanced pyrolysis and steam reforming. The pilot plant will have the capacity to process 25 dry tons of feedstock per day.

Solazyme
DOE funding: $21,765,738
Non-Fed funding: $3,857,111

Riverside PA. This project will validate the projected economics of a commercial scale biorefinery producing multiple advanced biofuels. This project will produce algae oil that can be converted to oil based fuels.

Honeywell’s UOP
DOE funding: $25,000,000
Non-Fed funding: $6,685,340

Kapolei, HI. This project will integrate existing technology from Ensyn and UOP to produce green gasoline, diesel, and jet fuel from agricultural residue, woody biomass, dedicated energy crops, and algae.

ZeaChem
DOE funding: $25,000,000
Non-Fed funding: $625,000

Boardman, OR: This project will use purpose grown hybrid poplar trees to produce fuel-grade ethanol using hybrid technology. Additional feedstocks such as agricultural residues and energy crops will also be evaluated in the pilot plant.

December 14, 2009 Posted by | Amyris, DOE, solazyme, zeachem | 31 Comments

John Benemann Responds to Green Algae Strategy Review

I recently published a review of Mark Edward’s book Green Algae Strategy: End Oil Imports And Engineer Sustainable Food And Fuel. Following this review, I published a response from Mark Edwards. In that response, Professor Edwards mentioned Dr. John Benemann, who was Principal Investigator and main author of the U.S. DOE Aquatic Species Program (ASP) Close-Out Report:

Skeptics abound in the algae space and the leading skeptic, Dr. John Benemann, speaks at all the algae conferences and stands in stark contrast to many other equally experienced scientists who do not share his natural pessimism. John revels in his reputation for pessimism. Other scientists engaged in the Aquatic Species Report have a completely opposite view. Several are working for companies that are producing algae for fuel. Professor Milton Sommerfeld at ASU and a co-author on the Report, has been producing algal oil for jet fuel in the laboratory and a field setting for several years.

Dr. Benemann had been following the exchange, and has e-mailed me a response to Professor Edward’s response, which I post in full below.

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I had only glanced at Prof. Edwards book last year, but not read it as it has little or no technical content, and thus not of great interest to me. From what I recall, what Robert Rapier wrote in his review, seems quite reasonable, actually rather mild.

In his response, Prof. Edward wastes no time to bring up my name, for which I am honored, calling me the “leading skeptic” who “speaks at all the algae conferences” and “revels in his reputation for pessimism”. Well, I admit that I talk at way too many conferences (“all algae conferences” would be impossible), which I should give up as it seems to do little or no good. But I must correct Prof. Edwards, I am neither a skeptic nor a pessimist. I am an incurable optimist and promoter of algae technology R&D, even for biofuels. I must be, to work in this difficult, if not dismal, field. I am, however, also a realist, about such little matters as, for two examples only, engineering head loss calculations and the limits of photosynthetic efficiencies, which are of no concern to Prof. Edwards, whose avocation is marketing. And, I am afraid, are of no concern either to many, even most, practitioners in this field, who should know better but blithely ignore such realities. It is easier to be an optimist if you only need to market the idea, or do research, but creating reality is somewhat more difficult. I work hard for my optimism, trying to find ways to overcome the technical roadblock and economic limitations.

Prof. Edwards, attempting to rebut my alleged ‘pessimism” points to scientists working for “companies that are producing algae for fuel” and that one professor has been “producing algal oil for jet fuel in the laboratory and a field setting for several years”. Sorry, there are no companies producing algae for fuel, just try to buy some, even at $100/gallon (at $1000/gallon you may be able to get a few). Some are claiming to be producing, but there is not a shred of evidence that they have succeeded in any meaningful way. (Solazyme may have, but the economics still are far from proven, and using corn starch or sugar is not a good idea, and using sugars from lignocellulosic biomass, well let us not go there either).

The only company I know that is producing algae oil is Martek Corp., and that is for human food and sells for a hundred-fold that of petrol. Neither are laboratory and academic “field” pursuits a guide to reality or technology.

Prof. Edwards claims that he has “seen” one or more order of magnitude “cost reductions” of algal oil production, extraction and mixing, in the last year or two. With all due respect to his discipline, seeing is not believing, data would be, but it must be based on actual measurements and methods that can be independently verified. Nothing of the sort can be pointed to.

Prof. Edwards is, I am sure, a most qualified expert in business and marketing, but I see little here that is real business and even less than is marketing. Algae for feed and fuel still need a great deal of R&D, of uncertain outcome, like all R&D. I recommend to Prof. Edwards that he redirect his obvious talents to help the real algae industry, the nutritional supplements business. That would be most useful – it is hard to convince people that they should ingest algae (pond scum) on a daily basis. Some do, but not nearly enough. There is the real marketing challenge! And it would lead the way to increased production, to larger scales, lower costs, more R&D, and, who knows, maybe eventually get us to a price point where we can sell algae for food and feed competing with commodity crops. Maybe even fuels at that point, perhaps. I am just an incorrigible optimist.

John Benemann

June 24, 2009 Posted by | algal biodiesel, DOE, green diesel, john benemann, Mark Edwards | 9 Comments

Response to Green Algae Strategy Review

I have received a response from Mark Edwards, auther of Green Algae Strategy: End Oil Imports And Engineer Sustainable Food And Fuel. I reviewed the book here recently, and as I indicated in the conclusion of the review I would gladly post any of Mark’s comments. So, here they are in full. I have added clarifications, such as to indicate when Mark is quoting me [e.g., RR quote]. I have otherwise tried to keep the formatting consistent with what Mark sent me. No further response from me.

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Response to Green Algae Strategy Review

Thank you for the review and the opportunity to respond to your thoughtful comments. Your observations are right on target for someone focused on algal oil as a liquid transportation fuel.

Remember that food energy is actually more important to humans that liquid transportation fuels. We can survive without transportation assistance but we starve quickly without food energy. I see no way to produce algae economically purely for liquid transportation fuels. The only way production makes sense will be to grow massive amounts of algae biomass, harvest the lipids for transportation energy and use the protein and carbohydrates to produce additional forms of energy, including especially food and feed.

RR quote: “Either Mark Edwards is dead wrong, or I am dead wrong.”

On the future of any topic, especially science, the truth is probably somewhere in the middle.

Skeptics abound in the algae space and the leading skeptic, Dr. John Benemann, speaks at all the algae conferences and stands in stark contrast to many other equally experienced scientists who do not share his natural pessimism. John revels in his reputation for pessimism. Other scientists engaged in the Aquatic Species Report have a completely opposite view. Several are working for companies that are producing algae for fuel. Professor Milton Sommerfeld at ASU and a co-author on the Report, has been producing algal oil for jet fuel in the laboratory and a field setting for several years.

Speculation on cost per gallon of algal oil is useless until we see actual field production. The good news on this front is that I have seen the following:

• Cost reduction of algal oil production — one order of magnitude in the last two years
• Cost reduction on algal extraction — two new methods promise two orders of magnitude
• Cost reduction on energy for mixing — one order of magnitude in the last two years

These cost reductions will be reflected in various producers’ cost models. American scientists and engineers are exceptionally talented at taking costs out of production.

The real question is not the cost of algal oil per gallon but the value of the total culture. The best production models I’ve reviewed have only about 30% of the algal biomass value going to fuel. That means 70% of the biomass produces other coproducts from the protein and carbohydrates. Those many coproducts are examined in analyzed in Chapters 7 and 10 in Green Algae Strategy.

Green solar energy captured in algae creates a portable energy source and grows biomass with solar energy stored in forms that may be used for a variety of purposes:

• People – organic protein in food
• Animals – organic protein in fodder
• Fowl – natural protein for birds
• Fish – natural protein in fish feed
• Land plants – organic nitrogen fertilizer
• Fire – high energy algal oil for cooking and heating
• Cars – carbohydrates refined to gasoline for transportation
• Trucks and tractors – high energy clean, green diesel
• Trains, boats, barges and ships – high energy clean diesel
• Planes – high energy, clean aviation gas and jet fuel

Algae also offer low energy and low cost pollution solutions to clean waste, brine or salt water, sequester CO2 from coal fired power plant plumes and recover abandoned soils. This presentation will highlight the status of the algal industry with a focus on food and energy.

RR quoting a study that I cited in the review: What about the value of sequestered carbon in algae-based biofuels? In short, there isn’t any. Atmospheric carbon is only sequestered for a short time until it’s burned in an engine. Under existing biofuels mandates in most industrialized countries, there will be no opportunity to sell carbon offsets unless fuel production is additional, or beyond such mandates.

This criticism ignores the fact that algae-based biofuels recycle atmospheric carbon and every gallon displaces a gallon of fossil fuel. When algal production occurs with no fossil energy, the production is carbon neutral because the carbon dioxide is simply being recycled. In contrast, cropland-based biofuels such as ethanol emits more carbon than burning natural gas directly due to the huge amounts of fossil fuels needed to produce corn.

I recently presented a paper demonstrating our work with Desert Sweet Biofuels where we produced carbon negative algal biomass by using a gasifier and creating bio-char. The gasifier burned biomass in a oxygen starved container creating hydrogen and carbon monoxide. The hydrogen was burned for energy to create electricity while the carbon dioxide was flued into algal ponds to produce algal biomass. Our calculations showed that we sequestered only about 10% of the total carbon — the bio char that was scratched into fields. The University of Arizona is currently conducting research to see what percentage of that bio char stays in the soil and for how long. Other research suggests that much of the bio char stay sequestered for decades.

Several countries are financing gasifiers in the U.S. for algal oil production for carbon trade off-sets.

RR quote: Edwards falls prey to the Vinod Khosla fallacy on cellulosic ethanol: This is simply too important and there are too many companies working on this to fail.

Vinod Khosla gave an excellent keynote at the 2009 Algal Summit in Seattle where he outlined his reasoning for not investing in algal production. His primary points were that he needed to see actual production before making investments and that the industry needed to do a better job at conveying the value proposition for algae.

RR quote: He is sufficiently skeptical about the near term prospects for cellulosic ethanol, and is harsh in his assessment of corn ethanol (even more so than I have been).

My prior book, Biowar I: Why Battles over Food and Fuel Lead to World Hunger examines the entire ethanol fiasco including energy and cost models. BioWar I is available for free PDF download with color speaker notes at http://greenindependence.org/. Every claim made for ethanol has turned out to be false. Consider that 2009 production of ethanol produce about 9 billion gallons of ethanol (the DOE Target) and will consume:

• 40 million acres of prime American cropland
• 2 trillion gallons of fresh water for irrigation
• 5 billion gallons of diesel fuel for corn production

The 2009 ethanol production will create severe pollution of air, water and soils while reducing imported oil by about 3%. Algal production, when commercially viable, could produce far more ethanol or other higher energy fuels using no or minimal cropland, fresh water or fossil fuels.

BioWar I covers the research on cellulosic ethanol which, for litany of reasons including that it takes too much fresh water and energy, makes no sense for biofuel production. Cellulosic products may turn out to be an excellent source of carbon for the production of algal oil. BioWar I concludes that our best policy is to end subsidies for ecologically destructive production such as ethanol and big oil and to shift subsidies to ecologically friendly production such as algal biomass. Subsidies played a key role in the review.

RR quote: He blames the lack of progress for algae on lack of funding, which is blamed on corn ethanol. This, he argues, was the politically favorable biofuel that sucked up all the R&D funding (and subsidies). He later writes “If corn ethanol makes sense, the market will reward it without taxpayer monies or protectionist tariffs.” Can’t we say the same about algal fuel?

Making corn whiskey, ethanol, is a 200-year-old technology. Subsidies are useful for changing consumer behavior and supporting new technologies. Subsidizing corn and the many inputs for growing corn for ethanol make no sense and are ecologically destructive. Algal production does not need protectionist tariffs but does need public monies to develop the knowledge base to grow massive amounts of biomass. The two top threats I see to the algal industry are subsidy-based. Lack of government subsidies, which began in the 1990’s at the end of the Aquatic Species Program led to: (Subsidies were shifted to corn ethanol.)

a. No support for academic, institute or government algal research. As a consequence, the US has few algae labs, nearly no American algal professors and very few students trained in algal production. Lack of trained scientists and graduate students put the U.S. at severe disadvantage in algal production.

b. An algal industry constrained by vertical markets. Each algal company jealously protect its intellectual property and does not share bubble research or breakthroughs. Even the scientific meetings are full of statements that the scientist cannot share real numbers because they have signed on disclosure agreements with their employers or grantors.

The R&D necessary for successful algal production will take more money than is available from private investors. Who wants to invest $500 million on R&D. Investors want a fast return and are not willing to fund sufficient R&D. Failing government subsidies, the industry will sputter for decades. Then, when humanity desperately needs sustainable food and energy solutions, we will discover that the intellectual property for production is locked up by a very few producers who monopolize production to the detriment of all humanity.

RR paraphrase: To commercially grow them in the Midwest –pipedream.

Watch. Within 10 years, most the farms in the Midwest will use algal production to:

a. Recover and recycle energy in agricultural waste streams, especially manure
b. Recover and recycle nutrients in agricultural waste streams
c. Reduce the ecological damage and carbon footprint for agricultural production

Yes, many producers may use greenhouses and geothermal energy for algal production. However, cold tolerant algal species may flourish in the Midwest especially during the normal growing season.

RR paraphrase: Energy return not covered.

Correct. No one can credibly address energy return until production specifications and costs are determined. However, the production of algal biomass using solar, wind and geothermal energy avoid the issue of fossil fuel use. Two new extraction technologies promise significant reduction in energy requirements. One method uses simple air flocculation and another uses ultrasonic waves to break up the algal cells and separate the oil from the other biomass. The ultrasonic solution allows the oil to flow to the top where it can be skimmed off at very low cost.

RR paraphrase: Casually dismiss technical challenges

The technical challenges are treated with seriousness and focus. True, most are not solved in the book. An entire chapter examines each technical challenge and what needs to be done to successfully produce algal oil. In addition, the table in the last chapter provides a summary of the technical challenges and the R&D needed.

RR quote: Page 13: As a criticism of using food crops for fuel, he states that massive planting of corn leads to high humidity because the leaves transpire water. This leads to thunderstorms and potentially tornadoes. That large areas planted in corn can increase the risk of tornadoes is something I have never heard before.

Neither had I before doing the research for BioWar I and Green Algae Strategy.

RR quote: Page 150: When writing that algal fuel mimics fossil fuels without fossilization, he writes “Skipping the fossilization step not only saves 200 million years of pressure and heat, but lowers production costs significantly.” I can’t really comprehend this one.

Consider the true cost of production for fossil fuels. Failing government subsidies, fossil fuels would cost around $15 a gallon and that’s ignoring their ecological cost. Oil fields must be found and developed at huge cost. Extraction and transportation add significant additional costs.

Imagine growing algae locally for fuel production when the inputs are only sunshine, carbon dioxide and wastewater.

RR quote: Page 179: He cites a claim by Aurora Biofuels that their process creates biodiesel with yields 125 times higher and 50% cheaper than current methods. I am going to presume that this was supposed to read 125% higher and not 125 times higher.

You are correct.

RR quoting from the book: Page 204: “When someone invents a carbon capture filter for vehicle exhaust pipes, there will be a nearly limitless supply of low-cost CO2 for growing algae.”

I think this is a great idea. A Brit has developed the vehicle exhaust filter. This is only one of many new and some recycled ideas presented to spur algal production.

June 15, 2009 Posted by | algal biodiesel, DOE, green diesel, john benemann, Mark Edwards | 29 Comments

Book Review: Green Algae Strategy

Green Algae Strategy: End Oil Imports And Engineer Sustainable Food And Fuel by Mark Edwards

Introduction

I love to read. I particularly enjoy books about energy, sustainability, and the environment. One of the benefits of reviewing books is that I end up getting a lot of free books on these topics. One thing about getting free books, though, is that I have to be careful that it doesn’t impact my objectivity. After all, the publisher or author was nice enough to send me this free book. How do I then approach the matter if I sharply disagree with some aspects of the book?

I am on record as being very skeptical about the ability of algal biodiesel to scale up and contribute significantly toward liquid energy supplies. Mark Edwards, a Professor of Strategic Marketing and Sustainability at Arizona State University recently saw one of my essays, and said that while he agreed with my points that many algal producers have been overly optimistic, he also felt like I had glossed over algae’s potential. He offered to send me a copy of his book Green Algae Strategy: End Oil Imports And Engineer Sustainable Food And Fuel.

The first thing I thought when I saw that title is “Either Mark Edwards is dead wrong, or I am dead wrong.” But I believe it is important to read and understand a wide range of viewpoints, because I just might change my mind. Maybe I am dead wrong. This book won the 2009 IPPY award for the best science book, so there are definitely those who think Mark makes a good case.

Mark Edwards writes that he has three goals:

1. Create Green Independence for America and the world

2. Halt and reverse climate change

3. End American and world hunger

While I can certainly get behind those goals, the devil is always in the details. And I think in the details we are going to run into some very challenging problems. Of course this is something I wouldn’t mind being dead wrong about. In fact, a few years ago I was very optimistic about the possibility of algae to produce large amounts of fuel without utilizing large amounts of good crop land. The prospects for algal fuel certainly sounded too good to be true. But a series of articles and discussions since then has swung me increasingly to the belief that the stories were too good to be true.

My Slide Toward Skepticism

First I read an essay at The Oil Drum called Has the Algae Cavalry Arrived? The essay was mostly based on work done by Krassen Dimitrov, who had gone back to first principles of incoming solar insolation to argue that GreenFuel Technologies was exaggerating their claims. While Dimitrov’s work has been criticized, he does raise a number of important issues. Primarily for me was the issue of just how much renewable diesel could be made from a square meter of area, contrasted with what the overall costs might be. Dimitrov concluded that you could make at best about a gallon of algal oil per square meter per year. However, costs were estimated to be over $100 per square meter. That sounded like a pretty serious, but potentially surmountable problem. (Important to note that in Green Algae Strategy, Mark Edwards also argues that GreenFuel made “some serious mistakes in executing strategy”, and led the industry in “hope and hype”).

Then came a post from John Benemann: Algal Biodiesel: Fact or Fiction? John has been heavily involved in algae studies for many years. In fact, he was the Principal Investigator and main author of the U.S. DOE Aquatic Species Program Close-Out Report. He certainly has some credentials on the topic of algae, and he weighed in to say that the essay described in the previous paragraph was generally correct. John’s position is that the present status of algal biodiesel is nowhere near commercialization, but in 10-15 years commercialization may not be out of the question. But it is far from a sure thing, and it certainly won’t happen soon. (See also John’s recent position paper on the subject: Opportunites and Challenges in Algae Biofuels Production).

Meanwhile, more question marks emerged. De Beers Fuel, having made some pretty far-fetched claims about their ability to deliver algal biodiesel, as well as having sold 27 franchises for algal biodiesel production, turned out to be a scam and collapsed. GreenFuel Technologies finally decided their future was bleak, and they closed down.

Information about the true costs started to become publicly available. While it has long been known that algal biodiesel is currently very expensive to produce, the actual price was only vaguely quantified. Krassen Dimitrov had suggested costs of around $20/gal. The government in British Columbia commissioned a study to look at the prospects, as well as the estimated costs of production. They estimated that the net cost of production per liter for photobioreactors (PBRs) was $24.60 ($93.23 US dollars/gallon), for open raceways it was $14.44 per liter, and for fermentors was $2.58 per liter. (There are some other issues with using fermentation that I won’t get into here). The report also stated that the much-touted carbon sequestration benefits of algae were illusory:

What about the value of sequestered carbon in algae-based biofuels? In short, there isn’t any. Atmospheric carbon is only sequestered for a short time until it’s burned in an engine. Under existing biofuels mandates in most industrialized countries, there will be no opportunity to sell carbon offsets unless fuel production is additional, or beyond such mandates.

Finally, Bryan Wilson, a co-founder of Solix Biofuels, went on record and stated that they could indeed make biofuel from algae, but the cost to do this was $33/gallon.

That preamble is meant to establish that there was quite a lot behind my slide from algae optimist to algae skeptic. But I was looking forward to seeing whether Mark Edwards could push me back toward the optimist camp with his book.

The Book’s Strengths

Let me talk first about what I feel are the book’s strengths. Edwards clearly lays out the challenges we face over our dependence on fossil fuels. He takes on current U.S. biofuel policy in a credible way. He is sufficiently skeptical about the near term prospects for cellulosic ethanol, and is harsh in his assessment of corn ethanol (even more so than I have been). He cites familiar names such as Lester Brown, delves deeply into the challenges of water and soil depletion, and discusses the issue of NPK (nitrogen, phosphorous, and potassium) availability in the future.

On the overall topic of algae, the book is incredibly informative. I had no idea that algae played such an important role in food, medicines, and consumer products (e.g., Aquafresh toothpaste). Edwards discusses many different varieties of algae, and characterizes them according to lipid, protein, or carbohydrate production.

Edwards makes a good case for why it would be a great idea to have algae-based fuels. He emphasizes that the co-products in many cases can improve the overall economics of the process. He lays out all the possible benefits of procuring our fuel from specific waterways as opposed to trading topsoil and fossil aquifers for fuel.

I can say with certainty that this book will come in handy for me in the future as a reference book. (More details at a later date, but I am likely to do some work on algae myself in the not-too-distant future). But what I won’t use this book for is as a “How To” guide. And that’s a good segue into the problems I had with the book.

The Book’s Weaknesses

At times it felt as if this book was written by two people. There was Mark Edwards, the cellulosic ethanol skeptic, accurately reporting on some of the potential problems with commercialization of cellulosic ethanol. Then there was Mark Edwards, the algal biofuel optimist, uncritically presenting seemingly far-fetched claims from any number of would be algae producers.

There was even Mark Edwards the algal fuel skeptic, but I just couldn’t reconcile that person’s views with those of Mark Edwards the optimist. On one hand, Professor Edwards notes that the current estimated costs for algal biodiesel are over $20/gallon. He said that over 75% of the companies who had algal aspirations in the 80’s and 90’s no longer exist. He wrote that the algal fuel industry as a whole has produced less than 100 barrels of product. Then he turns around and writes that within three years the industry will be producing hundreds of millions of gallons. (Based on the 2008 publication date, I guess we can expect a gusher of production next year).

I had a number of specific criticisms as I read the book. First, it was presented throughout the book that algae can be used to produce food and fuel, all while sequestering carbon. I don’t agree with that. Certainly algae take up carbon dioxide and convert it into biomass as they grow. However, unless that biomass is stored away without being consumed, there is no real carbon sequestration. Imagine two different scenarios. In the first scenario, the carbon dioxide from a coal-fired power plant is bubbled through tubes filled with algae. The algae will consume that CO2, preventing the immediate escape into the atmosphere. But what happens if fuel is produced from the algae? The carbon dioxide ends up getting released into the atmosphere. What you can say is that the release was delayed, and (depending on the energy inputs into producing the fuel) potentially more fuel was produced for a given emission of CO2. However, that isn’t carbon sequestration.

Second case, algae are grown utilizing atmospheric CO2. During the growth phase carbon dioxide is indeed removed from the atmosphere. Take that algae and bury it deep in the earth, and carbon is sequestered. Turn it into fuel, and the CO2 taken up during the growth-phase is released back into the atmosphere. This is potentially a greenhouse gas (GHG) neutral process, but there is little potential for sequestration if the goal is to use the algae for fuel. However, this carbon sequestration meme is mentioned many times in the book (and many themes in the book were unnecessarily repetitive).

He blames the lack of progress for algae on lack of funding, which is blamed on corn ethanol. This, he argues, was the politically favorable biofuel that sucked up all the R&D funding (and subsidies). He later writes “If corn ethanol makes sense, the market will reward it without taxpayer monies or protectionist tariffs.” Can’t we say the same about algal fuel? If the potential is so great, money should flood in from investors looking to get in early on a huge growth opportunity.

I don’t recall that the issue of energy return was ever covered in the book. If the energy inputs into the process are too high – as Bryan Wilson of Solix Biofuels recently suggested – then you have a potentially serious issue. How can algae be harvested and processed with minimal energy inputs? One of John Benemann’s comments from his position paper was “At present there are no low-cost harvesting technologies available.” Why? It takes a lot of energy to extract the algae from the water, relative to the BTU content of the algae you are extracting.

I felt that there was some confusion around the usage of specific terminology. For instance, on Page 6 Professor Edwards wrote that oil pressed directly from algae can be used directly in a diesel engine, and this is called green diesel. While plant oils can be used straight in a diesel engine, this product is called straight vegetable oil, or SVO. (Note: Do not attempt to use SVO in a vehicle unless you understand the caveats!) Further, there is a difference between green diesel and biodiesel, but this terminology is used interchangeably in the book. (See my Renewable Diesel Primer for an explanation of the differences between green diesel and biodiesel.) Another misuse of terminology comes on Page 15, where ethanol is called a hydrocarbon.

But those aren’t the biggies for me. The title of the book indicates that it is a strategy book, but I see it more as a series of facts, connected to goals. What is missing is the “how to”, which would be the strategy part. Yet difficult technology challenges were addressed casually. There are numerous instances where there is a presumption that technology will solve a particular problem. The word “might” is used an awful lot in the book. But when you casually dismiss technical challenges, you can effectively argue that the most implausible scenarios are inevitable. Let me give you an example.

Bananas are a very healthy food, and in the U.S. we depend on imports from tropical countries for our banana supplies. Just imagine if we could grow bananas in the Midwest. The soil is fertile. There would be additional options for farmers to make money. New jobs could be created in the domestic banana supply chain. So let’s say I write a book about my Midwest Banana Strategy. I talk at length about the benefits of bananas, and the benefits of growing them in the Midwest. These are facts. I then tie them to my goals: To commercially grow them in the Midwest. The only problem is that unless I am willing to invest in heated greenhouses – at very great expense – my banana goal is going to come to naught. So presently Midwestern bananas are a pipe dream. But if I invoke the wonders of biotech – “there will be a solution that will enable cold-tolerant bananas” – then problem “solved.” And that’s how I felt many problems were dealt with in the book.

There are a series of independent facts, and then we have a black box, and then we have commercial algal biofuel. Solutions are presented as inevitable (“when this happens”) instead of possible (“if this happens”). Sometimes I had flashbacks to The Singularity Is Near, in which author Ray Kurzweil employed this tactic throughout to argue that the near future is so fantastic we can’t even imagine it. It is certainly true that a lot of companies are working on algae. But I would argue that Professor Edwards falls prey to the Vinod Khosla fallacy on cellulosic ethanol: This is simply too important and there are too many companies working on this to fail.

If I hand wave away the challenging problems and presume technology will solve them, then who needs algae for fuel? Hydrogen is waiting to solve all of our problems. Recall all that hydrogen economy business that was all the rage a few years ago? Despite numerous potential benefits, there are multiple very challenging technical issues that keep a hydrogen economy at bay – and will continue to do so for the foreseeable future. But I could still write a book called Hydrogen Economy Strategy if I am willing to brush away those technical issues as temporary.

While there were a number of claims that I thought were presented uncritically, there were also some claims that I found to be very odd. Some examples:

Page 13: As a criticism of using food crops for fuel, he states that massive planting of corn leads to high humidity because the leaves transpire water. This leads to thunderstorms and potentially tornadoes.

That large areas planted in corn can increase the risk of tornadoes is something I have never heard before.

Page 105: Algal biodiesel is carbon neutral because the power needed for producing and processing the algae can come from the methane produced by anaerobic digestion…

That sentence is inaccurate. It is only carbon neutral if the power does come from digestion, not that it can. Based on the above, we could also say that corn ethanol is carbon neutral, because the power for processing can come from methane produced from digestion.

Page 150: When writing that algal fuel mimics fossil fuels without fossilization, he writes “Skipping the fossilization step not only saves 200 million years of pressure and heat, but lowers production costs significantly.”

I can’t really comprehend this one. The reason biofuels have trouble competing with fossil fuels is because nature already did the heavy lifting for the fossil fuels. Nature provided all that heat and pressure for free. Humans have to provide the heat and pressure to process biofuels – at a price. So I would come to the opposite conclusion: Skipping 200 million years of pressure and heat increases production costs significantly.

Page 179: He cites a claim by Aurora Biofuels that their process creates biodiesel with yields 125 times higher and 50% cheaper than current methods.

I am going to presume that this was supposed to read 125% higher and not 125 times higher.

Page 204: “When someone invents a carbon capture filter for vehicle exhaust pipes, there will be a nearly limitless supply of low-cost CO2 for growing algae.”

I don’t even know what to say about that one. It gets back to the issue of energy return. Anything you do here (e.g., compressing the spent CO2 from the vehicle) is going to take energy (and add weight to the vehicle) which is a penalty against the overall energy return of the process.

Conclusion

Let me say that I agree with the goals of Professor Mark Edwards, and that I think his heart is in the right place. I agree that we should spend research dollars on an algal biofuel program. I agree with him that economical algal biofuel could provide substantial benefits. (A good portion of the book was devoted to algae as food, and I didn’t really address that at all in this review). Where I disagree sharply is that solving the technical challenges is inevitable. This is primarily where I found fault with the book.

On the other hand, the book was very informative on the topic of algae. I learned a lot I didn’t know. But at the end of the book, my skepticism had not been swayed because I did not see a real pathway to get from where we are today to vast quantities of commercial algal biofuel. The book failed to make the case that the technical challenges will be solved.

No doubt Professor Edwards will disagree with some of this review. But I am a strong proponent of allowing people to answer criticisms. I therefore extend an open invitation to Professor Edwards. If he wishes to dispute or address any of the points I have raised, I will happily publish his comments.

June 4, 2009 Posted by | algal biodiesel, DOE, green diesel, john benemann, Mark Edwards | 61 Comments

A Year Without a Car

On March 1, 2008 I sold my Nissan Micra in Aberdeen, Scotland and hopped a plane to Amsterdam to take up a new position. I have not owned a car since that time. A while back someone asked what that experience has been like, and suggested I write a story on it. So here it is.

While in Europe

It is really a tale of two continents. In large parts of Europe, one can get along reasonably well without a car. In the past year, I have worked at my company’s Accoya factory in the Netherlands most of the time. I fly in to Amsterdam, and there is a train station right in the airport. I catch a direct, 1 hour and 15 minute train to the Arnhem Central Train Station. From there, it’s a 15-minute cab ride to my apartment. (If you want to argue that my international flights more than offset any fuel savings from biking to work, you won’t get any argument from me. But in this economy, you do what you have to).

I secured an apartment that is only about half a mile from work, and I adopted the common Dutch habit of riding my bike to work. I certainly don’t feel safe all of the time with cars whizzing past me, and at times it has been an inconvenience, but the vast majority of the time the bike suits me just fine.

As for the inconvenience, if I want to go out to eat, I am around a mile from the nearest restaurant. When visitors come over to the factory to visit, I often find myself riding the bike in the dark, to a restaurant that may be 3 miles from my apartment. That may seem like a piece of cake, but I have done it in the snow, in freezing rain, and with a fierce wind in my face. It would certainly be more convenient to hop in a car and go.

The worst inconvenience to date was when I had a bad cold, and my secretary made me a doctor’s appointment on short notice. I hopped on my bike and rode a mile and a half in a freezing downpour. I could have probably bothered someone to take me, but I really try to be as low-maintenance as possible.

I do have other options, and I utilize them. There is a bus stop near my apartment, and I use it quite a lot. During the day the bus comes frequently, but later in the evening it only runs once an hour, and then stops altogether at about 10 p.m. (Incidentally, I learned one night while waiting for a bus at 10 that’s when the prostitutes come out and take over the bus stops).

For trips of intermediate length, a cab is another option I utilize from time to time. When I fly home, I have to catch a train at 6 a.m. That’s always a cab ride to the station. If I want to travel to another major European city, the train connections are superb. However, if you want to venture out into the countryside, it may be more difficult. My son wants me to take him to Normandy this summer, and that’s almost impossible to do without a car because the major points of interest are scattered over several miles, and there aren’t easy train connections to my knowledge. So this summer I expect to rent a car in Europe for the first time.

Meanwhile, Back in Texas

But as I said, it is a tale of two continents. When I fly back to Texas, it is hard to do without a car. I fly into the airport, and the first thing I have to do is catch a cab for the 35-mile drive to my house.

I bought a house 25 miles from my Dallas office, because 1). I hate cities, so I chose a house in the country; 2). I knew I wasn’t going to have to spend that much time in the office. 3). Because the housing bubble was imploding, I got a builder’s foreclosure for about half the appraised price. If I had to make that commute every day, I would have sucked it up and bought a house closer to the office, preferably close to some kind of public transportation. From where I live, public transportation isn’t an option, so I rent a compact car when I have to be in the office, or borrow my wife’s car if the kids are out of school.

How long can I keep this up? To be honest, I never thought I could keep it up for over a year. My initial assignment involved several straight months in the Netherlands, and I thought I would have to buy a car when I returned. But every time I do a cost benefit analysis, I can never justify it when I only need it one or two weeks a month. I have no registration fees or maintenance to pay, and I don’t have to keep insurance on it, because my insurance company covers me for a car rental at no extra cost. In the past six months, I have spent a total of $825 on car rentals. I don’t think a car purchase makes economic sense until I find myself spending 3-4 times this amount over a six month period. Given my current work arrangements, that is unlikely to happen any time soon.

Besides, I like the idea of living without a car. I will continue to put it off as long as possible, even if it occasionally means riding my bike to the doctor in the freezing rain.

Footnote

On an unrelated footnote, the 2009 EIA Energy Conference takes place on April 7th and 8th. The conference is free, so feel free to drop by if you are in the area. There are a number of topics that look interesting, including the following two plenary talks:

Energy and the Macroeconomy – William D. Nordhaus, Sterling Professor of Economics, Yale University

Energy in a Carbon-Constrained World – John W. Rowe, Chairman and Chief Executive Officer, Exelon Corporation

There are also a number of panel sessions, including:

The Future for Transport Demand

What’s Ahead for Natural Gas Markets?

Meeting the Growing Demand for Liquids

Financial Markets and Short-Term Energy Prices

Investing in Oil and Natural Gas – Opportunities and Barriers

I have been asked to participate on the panel Energy and the Media. The other panelists are Steven Mufson from the Washington Post and Eric Pooley from Harvard University (who was also former managing editor at Fortune). Mufson is the main energy reporter for the Post, and I think he does a good job of reporting the important stories. I have read a lot of his work, and have spoken to him on at least one occasion. Then there’s me, the energy blogger. Please humor me and let’s not play the game “Which One is not Like the Others?” 🙂

Here’s where I could use some assistance. I have a general idea of the themes I would like to explore. Namely, I want to discuss the amount of energy misinformation, which I think stems from some reporters really not having the background to know when they are being misled. We as a nation have a low energy IQ, and that creeps into many of the stories in the media. The TDP fiasco is a perfect example. Had the reporters dug a bit more and been more critical, it would have been another possibly interesting next generation fuel experiment, instead of something that ultimately had a lot of taxpayer money thrown at it.

But what else? What other themes should be examined on a panel entitled Energy and the Media?

March 16, 2009 Posted by | cars, DOE, EIA, Energy Information Administration, mass transit, Netherlands, texas | 83 Comments

2009 EIA Energy Conference

Sorry for the long gap in posts, but I haven’t had much Internet access this week. Now I am freshly arrived back in the U.S., so I thought I would just quickly touch base.

The 2009 EIA Energy Conference is scheduled for April 7th and 8th, and I have been invited to be on a panel session called Energy and the Media. Lots of familiar names will be speaking; at least familiar to me. I have mentioned Paul Sankey from Deutsche Bank here a couple of times. I have spoken with Steve Mufson from the Washington Post on energy issues, and he will be on the panel with me. Of course former TWIP author and friend of R-Squared Doug MacIntyre will be there, and I look forward to finally meeting him.

I can’t imagine that the RFA’s chief lobbyist Bob Dinneen is going to be happy that they have invited an “energy blogger” to participate, given that he finds us such an “unsavory lot.” Maybe he can set his ad hominems aside for long enough to answer some serious questions during his panel session Renewable Energy in the Transportation and Power Sectors. That may be asking a bit much from someone who is paid $300,000 a year to say nice things about the ethanol industry – and nasty things about those who are critical of ethanol policies.

Anyway, the conference is free, so if you happen to be in the area, be sure to drop by.

March 6, 2009 Posted by | Bob Dinneen, DOE, Doug MacIntyre, EIA, Paul Sankey | 15 Comments

Gasoline Demand Has Recovered

It’s been taking place slowly, week after week, but low gas prices have brought gasoline demand back up. There has been anecdotal evidence that suggested demand might be heading higher, such as recovering sales of gas guzzling cars. But for watchers of This Week in Petroleum, the data confirm the anecdotes: Gasoline demand has recovered to the point that it is now higher in the U.S. than it was a year ago. This week’s Summary of Weekly Petroleum Data (off of which This Week in Petroleum is based) shows that the 4-week rolling average has for the first time in recent memory increased above (albeit slightly) the level of a year ago.

Another factor to keep an eye on as demand recovers is that refinery utilization is still quite low relative to what’s normal for this time of year. Percent utilization relative to the past 3 years is 3-5% lower for comparable weeks. This is starting to impact gasoline inventories. A typical January will see a healthy build of gasoline across the month, as refiners build stocks ahead of spring turarounds. This year, however, gasoline inventories have been flat across January, and this week in fact saw a drop of 2.6 million barrels. Inventories are still in decent shape, but they bear watching as we move toward spring.

Gasoline imports are also down marginally relative to the past two years, primarily a result of low gas prices. But the present trends of increasing demand, falling inventories, and low refinery utilization, suggest that prices will continue heading north.

February 11, 2009 Posted by | DOE, EIA, gas prices, oil refineries, refining, twip | 38 Comments

Thoughts on the New Energy Team

In case you are just venturing out of your cave for the first time in a week, you are probably aware that President-elect Obama has announced his new energy team:

Obama names energy team

The team includes Nobel Prize winning physicist Steven Chu as Secretary of Energy, former EPA head Carol Browner to fill the newly-created job of Energy Czar, and Lisa Jackson to head the EPA. The focus of this essay will be on Dr. Chu, but I will comment briefly on the others.

Lisa Jackson is trained as a chemical engineer (as was the outgoing Secretary of Energy Samual Bodman). It should go without saying that I like to see technical people in roles like this, where understanding science and data are both critical. Carol Browner, while not trained as a technical person, has a lot of administrative experience within the EPA. Incidentally, I once met Mrs. Browner, as she was the person who presented my research group with the 1996 Green Chemistry Challenge Award at the National Academy of Sciences.

While I don’t know nearly as much about Browner and Jackson, Dr. Chu has a very long public record. I have been searching through his various publications, speeches, and presentations to get a really good view of the man. Here is what President-elect Obama had to say about Dr. Chu:

“His appointment should send a signal to all that my administration will value science. We will make decisions based on the facts, and we understand that facts demand bold action.”

If you asked me for a few characteristics that would top my list of desirables for the spot of Energy Secretary, I would want someone who is 1). Knowledgeable about a broad range of energy technologies; 2). Someone who is passionate about the subject; 3). Someone who isn’t highly partisan, and can work with diverse groups.

Dr. Chu’s record indicates to me that he easily fills these three criteria. Dr. Chu is currently director of the Lawrence Berkeley National Laboratory. Among his accomplishments there was to secure a $500 million partnership with BP to do alternative energy research. (See this story from Salon for more details.) This suggests someone who can work with industry on next generation energy technologies. I am not sure how quickly he feels we can transition away from oil, and therefore whether we need additional exploration and drilling. However, he has been outspoken over his opposition to coal, and his concerns about global warming. Some quotes on these topics from Dr. Chu. First, his position on coal is pretty clear:

“Coal is my worst nightmare.”

He favors nuclear energy over coal (it should come as no suprise that a physicist like Dr. Chu is pro-nuclear):

“The fear of radiation shouldn’t even enter into this.”

“Coal is very, very bad. Nuclear has to be a necessary part of the portfolio.”

Chu, who also is professor of physics and molecular and cell biology at UC Berkeley, said nuclear is the preferred choice to coal, pointing out that coal releases 50 percent more radioactivity than nuclear power plants.

His concerns over global warming have been well-publicized:

Consider this. There’s about a 50 percent chance, the climate experts tell us, that in this century we will go up in temperature by three degrees Centigrade. Now, three degrees Centigrade doesn’t seem a lot to you, that’s 11° F. Chicago changes by 30° F in half a day. But 5° C means that … it’s the difference between where we are today and where we were in the last ice age. What did that mean? Canada, the United States down to Ohio and Pennsylvania, was covered in ice year round.

So think about what 5° C will mean going the other way. A very different world. So if you’d want that for your kids and grandkids, we can continue what we’re doing. Climate change of that scale will cause enormous resource wars, over water, arable land, and massive population displacements. We’re not talking about ten thousand people. We’re not talking about ten million people, we’re talking about hundreds of millions to billions of people being flooded out, permanently.

He is no fan of corn ethanol:

We can indeed make fuel out of crops. Corn is not the right crop. The reason it’s not the right crop is because the amount of energy you put into making a fuel and growing the corn and fertilizing the corn fields and plowing the fields is within ten or 20 percent of the amount of energy you get by making it into the ethanol that you can put in your car.

Also, the amount of CO2 you create by growing corn is again within 20 percent of the amount of carbon dioxide you make by drilling and refining oil and putting into your car.

He favors higher gas taxes:

“Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Source.

From that same article:

Lee Schipper, a project scientist with the Global Metropolitan Studies program at U.C. Berkeley, hailed Obama’s nomination of Chu as Energy Secretary and praised his colleague’s support for higher gasoline taxes.

Schipper thinks Obama’s concerns about not placing additional burdens on America’s families can be addressed by agreeing to rebate all — or close to all — of the money raised by higher fuel taxes. “The answer is: raise the price of gasoline and give all the money back,” said Schipper.

Hmm. Where have I heard that before?

He appreciates the need for greater energy efficiency (and like me, wants to be emperor of the world):

“I cannot impress upon you enough how important energy efficiency is.”

“Just refrigerator efficiency — bigger refrigerators by the way — saves more energy than all we’re generating from renewables [today], excluding hydroelectric power.”

“If I were emperor of the world, I would put the pedal to the floor on energy efficiency and conservation for the next decade.”

And finally recognizes that the U.S. can be a leader in new energy technologies, but are starting to fall behind in some areas.

“We have an option to be a leader in energy technologies, but we are not because our support system for that is on again off again. The future wealth of the United States will come from our ability to invent new technologies.”

“Americans take for granted that the United States leads the world in science. But we’ve lost many of these leads, especially when it comes to energy.”

“The U.S. is making it easier for other countries to catch up and pass us.”

So, let’s see. He has had a career devoted to energy, is clearly passionate about the subject, doesn’t favor making ethanol from corn, thinks we need higher gas taxes, favors nuclear power, favors alternative energy funding, is pro-science, and favors higher energy efficiency. That’s exactly how I would describe myself, so from my perspective he is a very good choice. I like his priorities. He has also been involved in research on cellulosic ethanol, and will likely send more research dollars flowing in that direction.

I think the issue that will generate some controversy is his very strong position on global warming. Not since Al Gore was Vice-President will there be such a staunch proponent of reducing greenhouse gas emissions at the highest levels of government. Global warming activists will love him. Skeptics probably won’t be quite so enthusiastic.

——————

Here are the quick bios of the rest of the energy/environment team, courtesy of Wired:

Lisa Jackson, EPA head

Quick bio: Trained as a chemical engineer at Princeton, she has spent her entire career with government environmental agencies. She worked her way up through the EPA from 1987-2002, then moved to the New Jersey Department of Environmental Protection, eventually becoming its head in 2006. She was appointed as New Jersey Governor John Corzine’s chief-of-staff less than a month ago.

Carol Browner, energy czar

Quick bio: The longest-serving EPA administrator in the history of the agency, Browner is the non-scientist on the team. She came up through politics, working as Al Gore’s legislative director in the late 1980s, before heading the Florida Department of Environmental Regulation. She was appointed by Bill Clinton in 1993 to helm the EPA and left in 2001. Since then, she’s been a consultant with The Albright Group.

Her position: The new “energy czar” will coordinate (and politically shepherd) the President-elect’s various proposals around energy and the environment.

December 17, 2008 Posted by | cellulosic ethanol, coal, conservation, DOE, energy policy, gas tax, global warming, greenhouse gases, politics, Steven Chu | 40 Comments

Clarifying the Ethanol Blending Requirement

I have seen the question frequently arise as to whether the ethanol blending mandate is based on rigid numbers (e.g., 9 billion gallons in 2008) or whether it is actually a percentage requirement, and the number is an estimate based on projected gasoline sales. In other words, let’s say that hypothetically gasoline sales this year are only half the level of last year. Is the mandate still for 9 billion gallons, or does it drop to 4.5 billion gallons?

Also, I saw someone recently make the charge that refiners are underblending ethanol, and are likely to end the year in violation of the mandate. So, I also sought some clarification around this issue. I contacted Peter Gross at the EIA, who seemed to be their expert in this area. He was kind enough to reply, and clarified both issues:

9 billion gallons (and future levels) are mandated and not based on projected total gasoline sales. The scenario you mention of gasoline sales falling way off (10% at most maybe from last year), would still put the total motor gasoline consumption at more than 130 billion gallons (which includes the 9 billion gallons of ethanol) for the year. Thus, there is plenty of gasoline around even in this extreme case to absorb the ethanol and still not saturate the E10 market. In fact, 9 billion gallons of ethanol means 90 billion gallons of E10 which leaves over 40 billion gallons of conventional gasoline without ethanol.

The immediate problem is not that there will be enough gasoline to absorb the ethanol in 2008, 2009, and probably 2010; in these years the questions are “Is there enough infrastructure to send the ethanol to (and blend with gasoline in) as-of-yet untapped regions, esp. the southeast?” or “Will mounting political pressure over food/grain costs force the EPA to lower the mandate?” (witness Texas’s recent waiver application).

After 2011 EIA projects there will not be enough gasoline sold to absorb the ethanol as E10; then the big question becomes how does the U.S. absorb the excess; as E85? (currently the only legal option) or as E15/E20? (as of yet not fully tested). Can the EPA lower the mandate if the E85 infrastructure is inadequate or too costly and the E15/E20 option is not available? Yes, but again this probably would not happen until after the “blend wall” (i.e., saturated E10 market) has occurred.

All obligated parties (refiners and importers of refined fuel products) must satisfy their “renewable volume obligation” (RVO) which is essentially their share (based on how much fuel they produce or import) of the total renewable fuel that must be used (this year 9.0 billion gallons). Volumes of blended renewable fuel are assigned RINs (renewable identification numbers). If a particular party cannot blend their share, they may buy these RINs from parties that have over complied on their RVO (though some alternatives exist such as carrying a RIN deficit for one year or using one’s own excess RINs from the previous year). In any case, every year every obligated party is required to document its RINs and show that they have the same or more than their RVO to the EPA. If they don’t, they can carry a deficit as mentioned earlier or they will be penalized by the EPA.

Peter Gross
EIA, DOE
202-586-8822

To summarize, the ethanol mandate is based on a fixed number. Further, refiners can technically underblend, but they must make up for it by either buying credits from parties who overblend, or by carrying a deficit that they have to make up – or suffer penalties. Thus, they can underblend and not be in violation of the mandate, because there are provisions for that. If they don’t meet those provisions, they are in violation and are penalized.

July 17, 2008 Posted by | DOE, EIA, ethanol, gasoline blending | 21 Comments