R-Squared Energy Blog

Pure Energy

The Wheels Come Off the Biodiesel Wagon

Domestic Biodiesel Production Plummets

One of my Top 10 Energy Stories of 2009 involved the actions taken by the EU against U.S. biodiesel producers. U.S. tax dollars had been generously subsidizing biodiesel that was being exported out of the U.S. European producers couldn’t compete against the subsidized imports, so the EU effectively cut off the imports by imposing five-year tariffs on U.S. biodiesel.

This was a big blow to U.S. biodiesel producers, and was one of the factors leading to a disastrous 2009 for U.S. biodiesel production. How disastrous was 2009? Per the National Biodiesel Board (NBB), here are the statistics from the past 6 years of biodiesel production:

2004: 25 million gallons

2005: 75 million gallons

2006: 250 million gallons

2007: 450 million gallons

2008: 700 million gallons

2009: 300-350 million gallons (estimate)

The NBB also reports that domestic biodiesel capacity is now operating at only 15%. There have been a number of stories in the past few days covering these developments:

Bad start to 2010 after ‘rough year’ for entire biofuel industry

A federal tax credit that provided makers of biodiesel $1 for every gallon expired Friday. As a result, some U.S. producers say they will shut down without the government subsidy.

A one-year extension of the biodiesel tax credit was included in a bill that was approved by the U.S. House recently, but it never made it through the Senate.

Politics and Energy Policy

I have often complained about the chaos that political leaders cause with inconsistency on energy policy. I will get into the wisdom of this biodiesel tax credit in a moment, but government policy makers need to send clear, long-term signals so energy producers can plan. This has long been a problem for planning energy projects. Wind and solar developers have lived with this uncertainty for years. It seemed like at the end of every year, there was a tax credit that may or may not be extended. The uncertainty often froze project developers, and created unnecessary delays.

The same has long been true in the oil and gas industry. One of the reasons that it has been difficult to get a gas pipeline built in Alaska was government refusal to commit to long-term tax rates. Imagine that you are contemplating spending $26 billion on a gas pipeline, but the government can’t tell you what your tax rate is going to be. If my state income tax doubles, I can move to another state. But it isn’t like you can pick that pipeline up and move it, so it is important that you know that the government can’t double the tax rate in the event of a budget shortfall.

A different kind of government interference – a tendency to attempt to pick technology winners – resulted in cancellation of what I believe was a promising 2nd generation renewable diesel process. I documented the saga in several posts, but the gist was that because an oil company was involved – my former employer ConocoPhillips – Congress voted to specifically deny the biodiesel tax credit for a process that was both more efficient and more cost-effective than conventional biodiesel production.

By killing the credit, COP was placed at a $42/bbl disadvantage relative to biodiesel producers who received the credit, and thus COP decided to cancel the project. I documented that sorry saga here. I also explained the differences between ‘green diesel’ and biodiesel here.

Where to Now?

So where to go from here? We now have a classic dilemma created by the government. Through government fiat, an industry was created. Investments were made and infrastructure was put in place. The problem is that the particular industry that sprang up had little hope of ever really competing without the subsidy. The reasons are alluded to in the link above:

“By the time you buy the feedstock and the chemicals to produce the fuel, you have more money in it than you get for the fuel without the tax credit,” Francis said. “We won’t be producing any without the tax credit.”

I have long believed that there is no future for 1st generation biodiesel. I wrote in an August 2007 essay: “I have said it before, and I reiterate: Biodiesel’s days are numbered.” Note that the year after I wrote that the U.S. biodiesel industry had their best year ever. But the handwriting was on the wall for very fundamental reasons, and the prediction I made in 2007 is playing out now.

There are multiple problems that will make it difficult for biodiesel to ever compete without subsidies. In a nutshell the key problem is that the feedstock costs are linked to fossil fuel prices. The feedstock is generally a vegetable oil and methanol – an alcohol typically produced from natural gas. A second big problem is that biodiesel is an inferior fuel to hydrocarbon diesel (especially in cold weather). Further, the by-product of the biodiesel process is glycerin, which has limited value (especially at the volumes produced when biodiesel production is ramped up).

But this story is worse than simply a fuel that can’t compete. As evidenced by the opposition of the NBB to the extension of the tax credit for COP’s 2nd generation process, 1st generation biodiesel isn’t even a bridge to 2nd generation biodiesel – it is a barrier. Not only is biodiesel chemically different, but 1st generation producers have pulled out the stops to protect themselves against 2nd generation competition. So now we have a 1st generation industry that was already in trouble even with the subsidies that it was receiving, and a 2nd generation industry that could have been much further along were it not for 1st generation interference (which was aided by Congress).

If instead of picking technology winners, Congress had simply raised fossil fuel taxes, we wouldn’t be in this dilemma. With the high level of embedded fossil fuels, biodiesel would have been unable to compete and an industry with no future would not have been created by the government. Green diesel, on the other hand, would start to look a lot better because of the lower level of fossil fuel inputs (particularly for gasification), and we might find plants starting up to produce green diesel from both hydrocracking vegetable oils (the COP process I described) and gasification of biomass (e.g., the Choren process).

What I expect to happen is that Congress will eventually extend the credit, and it will be applied retroactively. But there are no guarantees, so producers are once again left with uncertainty. What should happen – in my opinion – is announcement of a phaseout schedule. I wouldn’t simply eliminate the tax credit cold turkey. That would be a blow to producers who invested on good faith that government support would be continued. But they also need to receive a message that this tax credit will be phased out over the next 3-5 years. At that point, prospective investors will be fairly warned that projects whose economics hinge on continued government subsidies are to be avoided.

This, by the way, is the sort of metric I try to apply to projects. I am looking for projects that can be viable without government support and can operate with low/no fossil fuel inputs. The first item means that governments have much less ability to wreck my project by withholding support, and the latter means that the project should become more attractive in the higher oil price environment that I expect.

That doesn’t mean that initial government support isn’t often helpful, but unless the underlying economics are sound then government support is a crutch I will never be able to throw away. In my opinion this is the case for most U.S. biodiesel producers, which helps explain why industry capacity is presently at 15%.

Disclosures

I want to make two very clear disclosures. First is that as noted, I worked for ConocoPhillips, and I was very pleased at the efforts we were making to commercialize green diesel. The fact that the government caused the project to be aborted by favoring one technology over another was a bitter pill to swallow. Again, I favor projects that are viable without government subsidies, but in this particular case the competing projects did get the subsidies.

Second, as I announced previously I now work for the company that owns the majority of Choren. I came to work for this company because I believe gasification has a long-term future, and I had written favorable articles long before this job opportunity arose. I have, however, had some suggest potential bias toward green diesel because of my link to Choren. What I say to those who might feel that way is the bias toward green diesel was because of my assessment of the technology. That is what led to my link to Choren, not vice-versa.

January 4, 2010 Posted by | ConocoPhillips, energy policy, green diesel, politics, renewable diesel, subsidies | Comments Off on The Wheels Come Off the Biodiesel Wagon

Answering Reader Questions 2009: Part 2

In this installment, I continue to work my way through the list of questions recently submitted by readers. This post picks up where Part 1 left off, and covers coal-to-liquids, technology hype, green gasoline, refining improvements, allocation of money toward renewables, electricity consumption, the Automotive X Prize, Big Oil, cellulosic ethanol, and Exxon’s recent algae announcement.

The Questions

Benny wrote: Arlington researchers’ work could lead to $35-a-barrel oil. Any chance of making oil from lignite? At these prices? Or are they just some guys who want research money? Answer

takchess wrote (and Doug also asked about): Thought this was interesting. If cost and technically feasible this would be cool.

Rive Technology Working to Increase Oil Refining Efficiency 7-9% by 2011 Answer

DDHv wrote: The new ionic liquid technique allows easier extraction of cellulose. Do you know if we have enough information yet to do energy and/or economic balances? If so, what are the present results? Improvements are likely, given the novelty of the technique. Answer

John asked: What do you think of pyloric conversion to make “green gasoline”? What are it’s peak lite and environmental ramifications? Specifically referring to an article in the Boston Globe RE: Anellotech and UMAss on July 13th: The greening of gasoline Answer

PeteS asked: How likely is money spent today on renewables to be wasted in retrospect because of “grey swans”? Obviously nobody can predict the future, but I’m thinking more in terms of, say, a plan to completely power a country from wind turbines, versus low-to-medium-probability dramatic improvements in wind-power within a decade or two. Answer

SamG wrote: I hear many theories about electricity consumption and the utility business model (sell more make more). Do you see any mechanism that puts suppliers in the loop for the reduction of consumption (not just demand reduction via passing through higher prices)? Answer

takchess asked: Any comments on this Urea fueled entry into the XPrize auto race?

Alternative Fuel Sciences Answer

John wrote: Americans are being “taxed” at a rate of 200 billion bucks a year to fund the U.S. Military to “baby-sit” the Strait of Hormuz and other oil company interests in the mid-east, etc.

Factor that in and the bio-fuels look good, as do CNG, electric vehicles or bio-fuel-electric hybrids. Imagine that…. a bio-fuel-electric hybrid. That completely shuts out the oil companies and their little “gasoline forever” game. The fact that bio-fuels, CNG and electricity are already cheaper than gasoline must be giving the traditional oil companies nightmares already. Answer

LovesoiL wrote: 1) What is a reasonable pace towards commercialization of ‘1st generation’ alternative fuels, e.g., cellulosic. Many ethanol advocates (DoE, USDA, EPA, US Congress) assume that while only 1 commercial scale facility is currently in construction (Range), somehow 1 billon gallons of annual capacity will get built during the next 3-5 years, and then we’ll build that much (30-40 plants) every year for the next decade?

2) How long is needed to operate a 1st gen facility to optimize its processing and demonstrate profitability before investors will agree to pay another ~$300 million build the 2nd facility?

3) Both Choren and Range fuels have gasification of woody biomass as the first step for their transformation process. Choren finished construction a year ago and has been in the commissioning process ever since. Range says they will finish construction 1Q 2010, and begin ethanol production in 2Q 2010. Can Range really begin production that soon?

4) Ask POET what they think of cellulosic from corn stover. They seem to say that stover has too many collection and handling problems (dirty, low density, etc), and that is one reason they are concentrating on cobs only. Many others assume corn stover will be the primary source of cellulosic feedstock. Answer

Anonymous wrote: While you’re in Alberta, ask about Iogen and when they’ll finally get their cellulosic plant started in Sask. Also, Enerkem has been making news lately, both with a 10 mgy MSW plant and their just-released plans to construct a $100 million R&D facility in Edmonton. EnerkemR&D EnerkemMSWPlant Answer

bts asked: Comments on this partnership between Venter and Exxon?

Exxon to Invest Millions to Make Fuel From Algae Answer

The Answers

Answer

You always have to read between the lines. Sometimes people talk about where costs might be “in a few years” or “with technical breakthroughs” – as is often the case with algal biodiesel (and has been the case with oil shale for 100 years). Not that this is necessarily the case here, but those are the kinds of things I look for as I read these press releases. Is it possible to make oil from coal? Sure, it just traditionally takes a lot of energy. Coal into oil is essentially what you are doing with CTL, and there are several variations of the process (including non-gasification options). South Africa has been doing it for a while now.

So what the UTA researchers are describing is a chemical process for turning coal into oil. Such processes do exist, so the question is whether this is novel, cheaper, more efficient, etc. That will require peeling a few more layers of the onion than what one finds in a press release – where the best you may get is caveats. Generally speaking, press releases tend to over-simplify things a lot. If even a tenth of the press releases on “the next big thing” had turned out to be true, we would be living in a very different world. My favorite pasttime might be loading the family up in my cold fusion-powered hovercraft for a family outing. Or knocking out essays on my DNA-based computer (I remember in 1995 or so when this was going to put Intel out of business).

People have all sorts of motives for these press releases. Some are to announce something truly revolutionary. Those are a tiny fraction. More often, it is as you say; someone is trying to catch the eye of someone who might fund them. I have been in a position many times to issue just such a press release, and sometimes I think about that when I see one of these.

For instance, in 1994 at Texas A&M I had an idea to create a cellulose reactor based on the contents of termites’ stomachs. To my knowledge, I was the first person to attempt such a thing. The experiment didn’t turn out very well. My analysis detected only a small amount of butanol in the product. Had my imagination been big enough, here was the press release: “A&M Researcher Turns Trash into Fuel.” For the story, I could project increases in yields, renewable butanol bringing Arab sheiks to their knees, and an actual use for those pesky termites. Of course as my yield projections go up, my cost projections go down, and I could predict that this “may soon lead to sub-$1/gal fuel.” In reality, I considered it a failed experiment, stopped work, and wrote up my dissertation. But that is the sort of experience that always has me looking at these press releases in a pretty skeptical light.

Return to Top

Answer

Jim, this is along the lines of my last answer. People are working on these catalysts all the time. I have spent time in the lab working on gasification catalysts, and sometimes you come across something that looks pretty interesting. Then you try to scale it up and find that it isn’t stable in a larger reactor because the temperatures are hotter than they were in the lab.

Again, without peeling the onion and having a look at what everyone else is doing, it is impossible to tell whether this really amounts to something special. It could be that their competitors have already achieved these milestones and just didn’t issue press releases. Most organizations don’t. I was awarded several patents from my days at ConocoPhillips, but we never issued a press release even though the potential implications of some of them were pretty interesting.

One thing I will say is that from my time in a refinery, there wasn’t 7-9% efficiency gain to be had. We were already pushing the maximum possible conversion efficiency of oil into liquid products, and while you might have squeezed out another 2-3%, no way could you get up into the 8% range. There may be some really inefficient refineries out there that could benefit from this, but we will have to wait a couple of years and see if they actually start penetrating the market. Then you will know that they indeed invented something with a distinct advantage over the competitors.

Return to Top

Answer

There are a couple of developments in cellulose chemistry that I have been watching pretty closely: The ionic liquid techniques that you mentioned, and supercritical cellulose chemistry with either CO2 or ethanol.

Both of these techniques are energy intensive, so a lot of work needs to be done around the economics of these processes relative to competing technologies. A number of questions arise, such as “What other components are extracted along with the cellulose?” Or “What does it take to separate the cellulose from the component used to extract it?” That isn’t to say that these technologies aren’t well-worth further exploration. From an academic standpoint, they are very interesting. In the end, I think they will be hard pressed to compete with gasification if the intent is production of fuels. However, specialty chemicals might turn out to be a good niche application for these techniques.

Return to Top

Answer

Building on the previous answer, I think the more interesting developments in lignocellulosic chemistry are in chemical processing, as opposed to biochemical processing. I discussed this in an essay a couple of years ago, which was about Vinod Khosla’s investment into KiOR. This is their approach as well; to use catalytic processes to produce fuel.

The challenge is that biomass isn’t very energy dense, and these processes require elevated temperatures and pressures. So a key question is how much energy (and in what form) it takes to transport one BTU of biomass and process it into one BTU of fuel. Presently I think the processing energy is a pretty high fraction of the contained energy. Those energy inputs are going to have to come down before these sorts of technologies make much of an impact. The research is certainly promising, and I favor continued government funding. Would I invest in a company based on this concept? Not at this stage of development.

Return to Top

Answer

Generally speaking, I think we are going to look back and see that we wasted tremendous money, time, and resources chasing dead ends. As you say, nobody knows what developments are in front of us. But many are betting that there are revolutionary developments that will transform the energy sector. As a result, they are throwing a lot of money in a lot of different directions. I don’t have a big problem with this if the proper due diligence is done, especially if private money is being used to fund these various ventures. I do agree with Vinod Khosla’s philosophy of spreading his bets across many different technologies. What I find annoying is that often the proper due diligence is not done, and often taxpayer money ends up funding these dead ends. That is money that is truly wasted.

However, one thing to keep in mind with respect to your “grey swans” is that they also have entrenched lobbies to contend with. It may turn out that the grey swan finds itself in a difficult fight to penetrate the market. One particular example I am thinking of is the decision of Congress to kill support for more efficient 2nd generation green diesel production because the inefficient 1st generation producers argued that it would put them out of business. Add in the fact that it was an oil company involved in the 2nd generation technology, and we find that grey swan struggling to survive.

Return to Top

Answer

Sam, I don’t see an easy answer to that. Utilities are in the business of making money. When people reduce consumption it costs them money. Is there a way that they can benefit from that? I suppose in a world in which we are taxing carbon emissions, the savings from lower emissions would partially offset the loss of the sale of the electricity. But truthfully, that will be a small fraction at best. I always had the same issue when I was in the oil business. I wanted to see lower consumption, and I couldn’t see any way the oil companies could benefit directly from that. I think an effective mechanism for enabling suppliers to benefit from lower consumption would really be a game changer. If you think of something, let me know.

Return to Top

Answer

When I first saw this, I thought “That’s one of the strangest energy-related stories I have ever seen.” It reminded me of my reaction to a recent story: Greenland shark may become new source of biofuel. I like the wild and wacky, and both of these fall into that category. But can it make an impact? The problem with the urea idea is that the fuel is actually ammonia and hydrogen. Where do those come from? Mostly from natural gas. If you look at the efficiencies of the processes involved, you would be far better off just to burn the natural gas. So I don’t see it going far in its current form, but I applaud the creativity. Who knows, maybe this will evolve into something more promising.

Return to Top

Answer

John, while I agree that we are spending dollars in the Middle East because of oil, I disagree with several of your points. First, we aren’t spending that money to guard oil company interests. It is being done with the intent to keep cheap oil flowing to the American consumer. So the key interest here is that of the U.S. government, so the voting public is kept happy. Not that there is no benefit to the oil companies, but the government views a military presence there as an important issue of national security – not one of oil company security. If the oil did get cut off, the average person is going to bear the consequences.

I also disagree with your comment that biofuels are cheaper than gasoline. There are some exceptions – like sugarcane ethanol from Brazil – but for the most part gasoline is cheaper based on energy content. For instance, at today’s close ethanol on the CBOT for September delivery was trading for $1.65 a gallon. Gasoline on the NYMEX today was trading for $2.07/gal. However, because of the difference in energy content, the cost of this ethanol was $21.71/MMBTU and the gasoline was $18/MMBTU. With rare exceptions over the years, this has always been the case – and at times the differences have been quite large.

Further, you are kidding yourself if you think the oil companies are running scared. As I have pointed out before, it is a matter of scale. If corn ethanol started to look like a viable, long-term business model for them, the oil companies would just buy their way in as Valero recently did. Oil companies won’t sit around and go extinct because some fancy new biofuel put them out of business. They have big R&D budgets, and their efforts likely cover every biofuel you ever heard of (and many options you probably haven’t).

Return to Top

Answer

1. Put me down as someone who believes that the one currently under construction – Range Fuels – is going to see their schedule continue to slip, and I believe they are going to have a difficult time meeting production goals. Multiple sources are telling me that they have some issues.

Further, the national projected ramp-up in cellulosic ethanol – if it happens at all – will be a fraction of what has been projected. Right now there isn’t even a clear pathway. It’s like marking out the road map for curing various cancers over the next few years. It is great to have such a road map, but you are assuming technological breakthroughs that may not happen. Right now cellulosic ethanol still looks to me like a niche, and not a scalable, mainstream fuel.

2. That’s a good question, because I am aware of just such a situation now. Investors are dragging their feet on Plant #2 because Plant #1 is still not producing per the plan. In general, I think if a 1st gen facility comes online and starts to deliver per expectations, money will start to flow pretty quickly. I would think within 6 months of delivering, investors will be ready to jump in. But it is going to take more than 6 months to optimize production to optimize one of these next generation plants once it starts up. There isn’t a blueprint for success, and novel problems are going to be encountered and have to be solved.

3. No, the schedule for Range will slip because they still have kinks to work out. Write it down and hold me to it.

4. Here is what POET said about stover: “The yield of cobs is 0.65 tons/acre, and we can collect them commingled with grain with a modified combine. Or we can collect them with stover coming out of the back of the combine. The bulk density for cobs is higher than for stover, and that makes them easier to separate. We make sure sufficient stover is left on the field for erosion control and nutrition. We are focused on cobs because the bulk density for cobs is better than for stover, and cobs have 16% more carbohydrates than the stover. We don’t have to leave all stover in the field necessarily over soil depletion issues; we have just chosen to focus on cobs. How much one can remove depends on soil type, location, and tillage practice. Cobs take those variables away.”

Return to Top

Answer

I did ask about both Iogen and Enerkem while I was in Alberta. My hosts were quite skeptical that Iogen will ever build a commercial plant. I will say that they have enough demonstration level experience that it is suspicious that they don’t have plants sprouting up everywhere. After all, they have been producing cellulosic ethanol at small scale for 5 years. There are people that have been producing it for 0 years who are in the process of building plants. Given that governments are throwing money at anything looking like cellulosic ethanol, I think this puts a big question mark over their true commercial viability (at least at the present state of their technology).

There was less talk about Enerkem, and frankly before the trip I didn’t know much about them. The talk I did hear was that Enerkem is really only focused on the front end of a GTL plant (the gasification step). Enerkem’s view is that their post-gasification steps are flexible, and they can produce a variety of chemicals. They have announced that one site will produce ethanol (this is not the most efficient usage of syngas, by the way). Enerkem’s Press Release page certainly implies that they are busy with projects.

Return to Top

Answer

I think there are two approaches to algal fuel that might work. One is if algae can be made to naturally excrete oil. If so, then it may be possible to let the oil layer build up and then skim it. This avoids the materials handling nightmare of separating the algae from the water, and then the oil from the algae. This is apparently the focus of the research. Still, it is a long shot. Exxon’s VP for R&D was quoted as saying “I am not going to sugarcoat this — this is not going to be easy. Any large-scale commercial plants to produce algae-based fuels are at least 5 to 10 years away.” I think that is a realistic assessment. If the breakthrough came tomorrow then you are still looking at piloting and finally commercialization. I don’t think that is likely to happen in 5 years. So first you have to have some technical breakthroughs – and those aren’t a given – and if you pass through that gate then you won’t see this on the market for 10 years. I believe that is a realistic assessment.

The second approach that might work is if a valuable product – such as a pharmaceutical – is being produced as the primary product, and oil is being produced as a co-product. The expense of collecting and processing algae is just too great for oil to be the primary purpose of the operation.

Return to Top

August 4, 2009 Posted by | algal biodiesel, biodiesel, biogasoline, Choren, coal, ExxonMobil, green diesel, Iogen, range fuels, refining, Vinod Khosla | 39 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.

——————————–

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.

—————————————–

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

Congress Kills a Biofuel Project

If we are to seriously encourage a move to biofuels, incentives are going to be required because the economics of biofuels just can’t compete with petroleum (regardless of what Vinod Khosla thinks). Eventually depletion will cause petroleum to become very expensive, and then the economics of certain biofuels (especially those with the best energy returns) are going to start looking a lot better. But if depletion occurs quickly, we are going to wish that we had provided encouragement for all sorts of alternatives. Of course not all alternatives are created equally, and there are often unintended consequences to deal with. But overall, Congress and now two administrations in a row have shown overwhelming support for incentivizing biofuel production. There is, however, one glaring exception.

I have posed the question before of whether it ever makes sense to offer subsidies to oil companies. I would argue that it does if you want oil companies to do something that economics would otherwise argue against. As an example, let’s say in the name of energy security that Congress thought it was a good idea for oil companies to invest in solar. The oil companies wouldn’t be interested if production costs are higher than the price they expect to get for the panels. The only way Congress would convince them that they should do this is by offering an incentive to do so. Oil companies are not going to otherwise make decisions that are counter to the bottom line (unless of course they are mandated to do it, and that’s another matter altogether).

Such is the case with renewable diesel. Broadly speaking, there are two different kinds of renewable diesel. Biodiesel is normally produced by reacting methanol with animal fats or vegetable oil. (See the process description at Wikipedia). The product is actually an alkyl ester. More simply put, the product contains oxygen, and is structurally different from petroleum diesel. The structural differences can cause some problems in cold weather, and this limits the amount of biodiesel that can be blended into petroleum diesel.

The second kind of diesel is green diesel, which is chemically equivalent to petroleum diesel. This product contains no oxygen, and can be blended in any proportion with petroleum diesel. It can be made via gasification from any biomass (see the Choren process) or by hydrocracking the same fats and oils that you use to produce biodiesel. Besides the structural differences in the product, biodiesel results in a glycerin by-product whereas green diesel results in a propane by-product. (All of this is explained in more detail in my Renewable Diesel Primer).

In 2007, ConocoPhillips (Full disclosure: This is my former employer) and Tyson Foods announced a partnership in which COP would hydrocrack waste animal fats and oils provided by Tyson to make green diesel. Costs of production were around $40/bbl higher than for producing conventional diesel, but COP was able to take advantage of the $1/gal tax credit that Congress had put in place for renewable diesel to bring the costs down to parity with petroleum. Whereas corn farmers love our ethanol policy, ranchers were happy with this announcement because it afforded them an opportunity to participate in the biofuels market. Tyson Foods was also happy to have another outlet for their oils, as this would take some of the sting out of higher corn prices which had cut into their bottom line.

The fact that an oil company would benefit from “their” tax credit sent the biofuel lobby into a tizzy. They asked why an oil company should be allowed a tax credit for doing this. My answer was the same one I have earlier: To get them to do something that wouldn’t otherwise make economic sense. We can have a different debate on the wisdom of the incentive itself (i.e., unintended consequences), but if the goal is to incentivize the production of biofuels, you shouldn’t selectively decide who gets the tax credit. The 1st generation biodiesel industry wanted special treatment (a $1/gallon subsidy advantage over anyone else who might like to compete against them) and they cranked up the lobbying machine.

Democrats were particularly outraged, with Lloyd Doggett of Texas suggesting that oil companies benefiting from this tax credit was a case of legislative abuse. (Especially ironic that he is going after a Texas company, mostly to the benefit of companies operating outside of Texas). They promised to correct this by making sure only targeted companies (i.e., anyone but oil companies) could take advantage of the credit. While ConocoPhillips explained that this project would simply not be profitable without the credit, the Senate called them on it and voted to kill the tax credit. The assumption is that they either thought oil companies would subsidize a money-loser from some of their more profitable divisions, or they simply didn’t want oil companies to produce biofuel. The first assumption is naive, and the second implies that this isn’t about energy security at all, but about favoring special interests.

Yesterday, COP followed through by announcing that they were indeed going to idle the project. This is certainly a victory for less efficient 1st generation biodiesel producers, and it should also be a warning to those who think 1st generation corn ethanol is going to naturally lead to 2nd generation cellulosic ethanol. Besides the technical challenges in getting cellulosic to work commercially, cellulosic producers are going to run up against those same vested interests who wish to see the status quo maintained, and who will lobby to prevent anyone from taking away their market share.

I will repeat what someone wrote to me when Congress first announced their intentions to deny the credit: “It ain’t about the fuel… it’s about a piece of the pie.”

May 14, 2009 Posted by | biodiesel, ConocoPhillips, green diesel, Tyson Foods | 49 Comments

We Do Not Have a Simple Solution

Those were the words of Helena Chum, a research fellow at NREL on the topic of advanced biofuels. Forbes just published an article on this:

Biofuels Battle: Chemistry Versus Biology

A lot of the subject matter and the companies discussed will be familiar to regular readers.

There are 1,865 biofuels companies out there, and sometimes it seems that there are at least 1,865 different ways of turning every manner of biological material into fuel for a car, truck, train or plane.

The problem is finding a way of doing this alchemy on the scale of millions of gallons a year at a cost that comes somewhere near the price of gasoline without leveling the world’s forests, sucking the world’s fresh water supply dry or starving the world’s humans.

I wouldn’t have guessed there were that many companies working on this problem. I have harped on the difficulties in scaling these lab experiments up, and Dr. Chum tried to put a price to it:

Despite all the hope, the finish line is not close. Helena Chum, a research fellow at the National Renewable Energy Laboratory, estimates that next-generation biofuels now cost anywhere between $5 and $1,000 a gallon, with a median of about $25.

“The finish line is not close.” “A median of about $25.” Of course that’s based on a certain energy price. If the cost is high because the energy inputs are high, you have a loser no matter the price of a barrel of oil. Which approaches might come in around $5/gal? (You may be surprised that this was the low end, given the claims of so many of making ethanol for $1 or $2 a gallon).

My guess is that lipid hydrocracking to give renewable diesel and propane – so called ‘green diesel – would be on the lower end of the price range. (I explained the difference in green diesel and biodesel here, and then gave a much more extensive explanation in my Renewable Diesel Primer). At the upper end, I have no idea which approach would cost $1000 a gallon, but I might reconsider that approach.

As the article concludes, having 1,865 companies in the game does not ensure success:

So who’s going to win? Certainly not all 1,865 companies. And maybe none will. Maybe the science will be too hard to scale up cheaply. “There has never been as much science and engineering done,” Chum says. “We do not have a simple solution. But the conditions for making it work are there.”

I think ‘winning’ here is going to be on a sliding scale – from marginally economical to moderately economical. My prediction is that the companies that win – and there are probably a dozen or so that have staying power – will still produce a product that is significantly more expensive to produce than gasoline. But the real winners must get their fossil fuel inputs down to a low level, otherwise rising fuel prices may make them less competitive, not more.

I will have Part III of the Vinod Khosla interview posted in a day or so.

May 3, 2009 Posted by | biofuels, green diesel, NREL | 75 Comments

The Potential of Jatropha

The previous post provided an introduction to Jatropha curcas, a tropical, oil-producing shrub. In this essay I want to get into why I believe there is great potential for jatropha to make an impact on the world’s energy supply. I will also explain the hurdles that need to be overcome.

Jatropha Curcas in India (Photo courtesy of Tree Oils India Limited.)

The Potential

Jatropha has many qualities that make it an attractive biofuel option. One, it is tolerant of dry conditions and marginal soils. This is a big plus, because it opens up areas for cultivation that would otherwise be unsuitable. The type of land with great potential is land that is being degraded, or turned into desert. Desertification is a significant problem worldwide, and occurs when dry land is overexploited. Think of the Dust Bowl in the 1930’s and you start to get a picture of how desertification impacts and threatens lives.

There are techniques for combating desertification. Plants that can grow on dry, marginal land have the potential to start providing a matrix for the soil to prevent the soil from being eroded by the wind. There are a number of candidate plants that can be used to combat desertification. However, there has to be adequate incentive to grow plants for combating desertification. I suppose the ideal plant would be one that can supply food while at the same time rehabilitating marginal soil. I am unaware of candidate plants in that category, but I presume some exist. A close second, however, would be a plant that can provide a quality fuel – and thus a cash crop – on marginal soil. Jatropha curcas is such a plant.

Comparison with Palm Oil

Where can jatropha be used in such a role? Have a look at the graphic below:

It is true that the African Oil Palm, from which palm oil is derived, is a much more prolific producer of oil than is jatropha. In fact, palm oil yields – as high as 5 metric tons per hectare – places the African Oil Palm as the world’s most productive lipid crop. But there are significant disadvantages/risks that go along with palm oil. First is the fact that the range of the African Oil Palm is a narrow band close to the equator (see the graphic above). While this is fine for countries like Malaysia, Indonesia, and Thailand – where it has provided a valuable cash crop for farmers – it means that India and most of Africa is unsuitable for cultivation.

Of a more serious nature is that expansion of oil palm plantations – driven by biofuel mandates in Western countries – has led to a dramatic expansion in many tropical countries around the equator. In certain locations, expansion of oil palm cultivation has resulted in serious environmental damage as rain forest has been cleared to make room for new oil palm plantations. Deforestation in some countries has been severe, which negatively impacts sustainability criteria, because these tropical forests absorb carbon dioxide and help mitigate greenhouse gas emissions. Destruction of peat land in Indonesia for oil palm plantations has reportedly caused the country to become the world’s third highest emitter of greenhouse gases.

Because the range of jatropha is much greater, there is substantial potential to alleviate poverty throughout Africa, India, and many poor countries by providing a valuable cash crop for farmers. Further, it is unlikely to contribute to deforestation as more productive oil producers provide greater incentive to go that route. (Note: While the range is clearer greater than for palm oil, native jatropha is not frost resistant, which means the range shown in the figure above is overstated. The graphic indicates that jatropha could be grown in the Dallas area, and we certainly get hard freezes and frost here.)

Reality Check

The essay up until now may make jatropha sound like a real silver bullet for addressing fossil fuel dependence. Alas, there are no silver bullets. And in fact, the hype for jatropha has gotten out of hand. As I noted in the essay describing my trip to India, I found the present situation with jatropha to have been overhyped.

Jatropha has negatives just like every other energy source. First, it is toxic to humans and livestock. As pointed out in the previous essay, the Western Australian government banned jatropha as an undesirable, invasive species in 2006. Second, because it has not been domesticated, yields are highly variable and the fruits ripen over a broad time range. Third, it is labor intensive to gather the fruits and extract the oil. Finally, while it can be grown on marginal land, there has to be a logistical infrastructure in place to economically get it to the market. Much of the world’s marginal land lacks such an infrastucture. For instance, when I was in India last year, I saw great swaths of borderline desert land that might be used to grow jatropha. The problem is that it was all remote, with no infrastructure.

The answer to many of these concerns potentially lies in the fact that jatropha is still a wild plant. Selective breeding and/or genetic engineering likely have great potential to address many of these issues. Because the world is just now beginning to seriously experiment with jatropha, there is naturally a learning curve to climb. It may turn out that some of the issues are indeed insoluble, but I wouldn’t bet on it. What is needed is a serious, dedicated investigation into the genetics of jatropha, in conjunction with a major plant-breeding effort. We need some modern-day Luther Burbanks working on this problem. By doing so, jatropha may one day live up to the hype.

Additional Resources

There are numerous jatropha resources out there. Here is a sampling.

The Jatropha System

The site is quite a rich source of jatropha information, and if you are interested I would encourage you to explore it. It is devoted to the concept of providing renewable energy while creating new opportunities for farmers in poor nations

Jatropha Comes to Florida (3 minute video from Time Magazine)

Jatropha Potential for Haiti

Chhattisgarh plants 100 million jatropha saplings in 3 yrs

Mali’s Farmers Discover a Weed’s Potential Power

Toxic jatropha not magic biofuel crop, experts warn

Yield Per Hectare of Various Lipid Producers

UP to cultivate Jatropha for bio-diesel production

February 15, 2009 Posted by | biodiesel, green diesel, India, jatropha, palm oil, renewable diesel | 11 Comments

The Potential of Jatropha

The previous post provided an introduction to Jatropha curcas, a tropical, oil-producing shrub. In this essay I want to get into why I believe there is great potential for jatropha to make an impact on the world’s energy supply. I will also explain the hurdles that need to be overcome.

Jatropha Curcas in India (Photo courtesy of Tree Oils India Limited.)

The Potential

Jatropha has many qualities that make it an attractive biofuel option. One, it is tolerant of dry conditions and marginal soils. This is a big plus, because it opens up areas for cultivation that would otherwise be unsuitable. The type of land with great potential is land that is being degraded, or turned into desert. Desertification is a significant problem worldwide, and occurs when dry land is overexploited. Think of the Dust Bowl in the 1930’s and you start to get a picture of how desertification impacts and threatens lives.

There are techniques for combating desertification. Plants that can grow on dry, marginal land have the potential to start providing a matrix for the soil to prevent the soil from being eroded by the wind. There are a number of candidate plants that can be used to combat desertification. However, there has to be adequate incentive to grow plants for combating desertification. I suppose the ideal plant would be one that can supply food while at the same time rehabilitating marginal soil. I am unaware of candidate plants in that category, but I presume some exist. A close second, however, would be a plant that can provide a quality fuel – and thus a cash crop – on marginal soil. Jatropha curcas is such a plant.

Comparison with Palm Oil

Where can jatropha be used in such a role? Have a look at the graphic below:

It is true that the African Oil Palm, from which palm oil is derived, is a much more prolific producer of oil than is jatropha. In fact, palm oil yields – as high as 5 metric tons per hectare – places the African Oil Palm as the world’s most productive lipid crop. But there are significant disadvantages/risks that go along with palm oil. First is the fact that the range of the African Oil Palm is a narrow band close to the equator (see the graphic above). While this is fine for countries like Malaysia, Indonesia, and Thailand – where it has provided a valuable cash crop for farmers – it means that India and most of Africa is unsuitable for cultivation.

Of a more serious nature is that expansion of oil palm plantations – driven by biofuel mandates in Western countries – has led to a dramatic expansion in many tropical countries around the equator. In certain locations, expansion of oil palm cultivation has resulted in serious environmental damage as rain forest has been cleared to make room for new oil palm plantations. Deforestation in some countries has been severe, which negatively impacts sustainability criteria, because these tropical forests absorb carbon dioxide and help mitigate greenhouse gas emissions. Destruction of peat land in Indonesia for oil palm plantations has reportedly caused the country to become the world’s third highest emitter of greenhouse gases.

Because the range of jatropha is much greater, there is substantial potential to alleviate poverty throughout Africa, India, and many poor countries by providing a valuable cash crop for farmers. Further, it is unlikely to contribute to deforestation as more productive oil producers provide greater incentive to go that route. (Note: While the range is clearer greater than for palm oil, native jatropha is not frost resistant, which means the range shown in the figure above is overstated. The graphic indicates that jatropha could be grown in the Dallas area, and we certainly get hard freezes and frost here.)

Reality Check

The essay up until now may make jatropha sound like a real silver bullet for addressing fossil fuel dependence. Alas, there are no silver bullets. And in fact, the hype for jatropha has gotten out of hand. As I noted in the essay describing my trip to India, I found the present situation with jatropha to have been overhyped.

Jatropha has negatives just like every other energy source. First, it is toxic to humans and livestock. As pointed out in the previous essay, the Western Australian government banned jatropha as an undesirable, invasive species in 2006. Second, because it has not been domesticated, yields are highly variable and the fruits ripen over a broad time range. Third, it is labor intensive to gather the fruits and extract the oil. Finally, while it can be grown on marginal land, there has to be a logistical infrastructure in place to economically get it to the market. Much of the world’s marginal land lacks such an infrastucture. For instance, when I was in India last year, I saw great swaths of borderline desert land that might be used to grow jatropha. The problem is that it was all remote, with no infrastructure.

The answer to many of these concerns potentially lies in the fact that jatropha is still a wild plant. Selective breeding and/or genetic engineering likely have great potential to address many of these issues. Because the world is just now beginning to seriously experiment with jatropha, there is naturally a learning curve to climb. It may turn out that some of the issues are indeed insoluble, but I wouldn’t bet on it. What is needed is a serious, dedicated investigation into the genetics of jatropha, in conjunction with a major plant-breeding effort. We need some modern-day Luther Burbanks working on this problem. By doing so, jatropha may one day live up to the hype.

Additional Resources

There are numerous jatropha resources out there. Here is a sampling.

The Jatropha System

The site is quite a rich source of jatropha information, and if you are interested I would encourage you to explore it. It is devoted to the concept of providing renewable energy while creating new opportunities for farmers in poor nations

Jatropha Comes to Florida (3 minute video from Time Magazine)

Jatropha Potential for Haiti

Chhattisgarh plants 100 million jatropha saplings in 3 yrs

Mali’s Farmers Discover a Weed’s Potential Power

Toxic jatropha not magic biofuel crop, experts warn

Yield Per Hectare of Various Lipid Producers

UP to cultivate Jatropha for bio-diesel production

February 15, 2009 Posted by | biodiesel, green diesel, India, jatropha, palm oil, renewable diesel | 11 Comments

Repost of TDP: What Went Wrong

The is Part II of my look at Changing World Technologies’ thermal depolymerization process. This essay came from a reader, and was originally posted on April 12, 2007.

But I also want to add some comments that regular reader “Optimist” added following the previous essay. First, those comments:

The 85% efficiency claim is based on a faulty mass balance. The faulty mass balance is the basis for an equally faulty energy balance. You can verify by comparing production data (bbl oil/ton of waste) to the mass balance (still) presented by CWT.

Contrary to what the breathless writers at Discover magazine believe, this technology is good only for recycling lipids (fats and oils) and the fat-soluble amino acids in protein. To understand why you need to follow the process flow diagram, which consists of three key steps:

1. Thermal Depolymerization (aka Dilute Acid Hydrolysis – yes, the process uses sulfuric acid).
2. Separation of water and fat/oil.
3. Decarboxylation of fatty acids to yield hycrocarbon (diesel) product.

Anything soluble in water goes into the effluent in step 2. That includes (but is not limited to) all carbohydrate and the bulk of the protein hydrolysis product (amino acids).

CWT cleverly states that this makes the effluent a high quality fertilizer. Probably true. But that high quality fertilizer contains BTUs not available as fuel (the main product).

Another comment from Optimist:

To their credit, Discover magazine did raise another issue: product quality: Fuel quality was another challenge. Changing World Technologies‘ thick, tarry fuel resembles boiler-grade fuel oil. One prospective buyer insisted on what the company called “unacceptable pricing terms” for its relatively unproven product. In the end, CWT sold only 93,000 of the 391,000 gallons of fuel it produced and earned just 99 cents for each one. At the time, wholesale fuel oil distributors were raking in $2.50 to $3.30 per gallon. Even with the $1-per-gallon U.S. biofuels tax credit for every gallon sold, Changing World Technologies paid more for Butterball’s turkey offal than it earned back in revenue. (Accounting for all its operating costs, the company lost $5,003,000 in the first quarter of 2008, though operating at a loss is not uncommon or necessarily a very bad sign for a technology startup.) Emphasis added.

Don’t worry – I’m sure next year they’ll be printing money…

In light of this, I am not sure why they think it’s a good idea to do an IPO now.

Now for the essay from a reader who provided some very specific details on what went wrong. He included a presentation in which he referred to several slides, and I will pull those out and post them so the references are clear. I will also insert some comments in the text [like this].

—————————————

Robert,

I enjoy your blog quite a lot. Intelligent analysis is rare. Coupled with unbiased interpretation it is almost an unknown.

Saw your discussion of TDP/TCP. Pretty much spot on. As a chemical engineer I thought you’d be interested in some deeper insights of how the process works. This is all information that used to be available on the web, but most of it has been removed.

Start with the lecture (attached) by Terry Adams, CWT technical officer at MIT in April 2005 – best TDP technical article I know of [I have searched for an online version of this, but to no avail. Perhaps using the Wayback Machine one could locate an online archive of the original presentation]. The way I understand it, the process basically consists of two thermal treatment steps. The first step (slide #13) is a low temp/high pressure step that causes hydrolysis of all the biological material. A check of steam tables confirms that pressure is just high enough to maintain liquid water at the temperature given.

Slide 13 of “The CWT Thermal Conversion Process” Presentation

The first stage is followed by separation (slide #3).

Slide 3 from “The CWT Thermal Conversion Process” Presentation

As indicated in slide #14 they have a clever way of flashing off some of the water and then using the steam to heat the feedstock [This sort of heat recovery is standard practice in the petrochemical industry]. This is at the heart of their claims about high efficiency: the steam is condensed, so most of the water in the feedstock is discharged as liquid. Calling it distilled water, is of course salesmen talk that would make a used car salesman’s eye’s water.

Slide 14 of “The CWT Thermal Conversion Process” Presentation

But take a closer look: After separation only the “organic oil” goes to the second stage. After full hydrolysis (let’s just assume that for now) what monomers would be part of the organic oil? Fatty acids barely make it into this oil, due to the little known fact (see flow diagram on slide #11) that sulfuric acid is used to aid hydrolysis [If I had known that, I had forgotten about it. That does put quite a different spin on the whole process]. (DOE would call the first stage by another name: Dilute Acid Hydrolysis). Some fat-soluble amino acids. That’s it. (I bet you can figure out what cellulose fed to these two units would yield…) [It would interesting to see some yields on this. What I would really like to see is what they get if they threw corn in there. If their energy balances are really good – and even with all that has gone wrong they appear to be better than for corn ethanol – then I would like to see some experiments in that direction.]

Slide 11 of “The CWT Thermal Conversion Process” Presentation

Of course, CWT are master salesmen. The water-soluble amino acid and glycerol solution is not waste: it is a wonderful liquid fertilizer (slide #23). Talk about taking a lemon and making lemonade…

Slide 23 of “The CWT Thermal Conversion Process” Presentation

So, the “organic oil” goes to the second stage (high temperature/low pressure) where the fatty acids are decarboxylized (to yield oil) and some of the amino acids are deaminated and decarboxylized to yield who-knows-what (slide #15, point 2).

Slide 15 of “The CWT Thermal Conversion Process” Presentation

You raise the question of how on earth did CWT get their cost estimates so wrong. Well, a large factor in that would be overestimating yield (and per extension efficiency). CWT has long claimed that TDP has an energy efficiency of 85% (heading slide #12). Right there you smell a skunk. Now the dirty details.

Slide 12 of “The CWT Thermal Conversion Process” Presentation

The mass balance, slide #11 [posted earlier], shows that CWT probably did not take the CO2 that results from decarboxylation into account. This causes them to overestimate fuel production. You can easily do the calc’s I’m sure, but it is spelled out here. Apologies for the format, got mangled when they changed their format [That thread was a very good discussion on this issue; perhaps I will pull it out, reformat it, and post it at some point].

The energy balance, slide #12, does not include the energy present in the “liquid fertilizer”. What, all that glycerol and amino acids contain no energy? The water vapor also presents energy lost, even if it’s not much.

The mass and energy balances actually date from a previous publication (February and March 2004), also attached. One would expect that CWT would have discovered the error in the interceding year, and corrected it. I guess they were to busy ironing out the substantial start-up problems, such as the odor issue, you mentioned.

You may have notice a subtle shift between those two breathless Discover articles. Instead of producing 500 bbl from 210 tons of waste (first article), they now need 290 tons (20 tons of it pure pig fat), or a 28% reduction in oil yield. Instead of claiming 2.4 bbl/ton of waste, it is now 1.7 bbl/ton (validating an estimate of the maximum yield of ~2.0 bbl/to). Funny thing is Appel and his team still use the 2.4 figure in their financial analysis, even when it would help their argument to use the 1.7 real number. From the second Discover article: “‘We thought we would get $24 a ton for taking the waste,’ says Appel. ‘Instead we are paying $30 a ton.’ That alone raises his production costs about $22 a barrel.” How did they get to $22? ($24/ton + $30/ton)/2.4 bbl/ton = $22.50/bbl. Using the real number would yield: ($24/ton + $30/ton)/1.7 bbl/ton = $32/bbl. Also getting less yield would raise production cost in a number of ways, including the fact that they may be buying natural gas for heating…

So where does that leave TDP? No doubt it is not the silver bullet once claimed. None of the “anything” into oil that seduced Discover’s reporters. And costs are substantial. However, it seems like a good process for converting waste grease into liquid fuel. Much better than say biodiesel. Look at the feedstock (slide #6). How much cleaning (i.e. money and energy) would that stuff need to make it suitable as feedstock for a biodiesel plant? TDP uses sulfuric acid, whereas biodiesel uses methanol and a catalyst (usually NaOH). In terms of energy and money, I suspect TDP has the better input here. TDP yields a liquid fuel that is chemically almost identical to fossil diesel (without the sulfur and aromatics). TDP-40 can be blended with diesel in any ratio 1 to 100, without any issues. As Minnesota discovered last winter, biodiesel has some issues with cold weather. [Having worked in a Montana refinery, I can attest to the fact that winter properties for diesel are critical. I am aware that biodiesel has some problems with pour and cloud points in cold weather, limiting their usage to small blend fractions.]

Slide 6 of “The CWT Thermal Conversion Process” Presentation

The main threat to TDP, as I see it, is a process developed by Neste Oil, Finland, that I read about at GCC. Apparently this process allows an existing refinery to incorporate waste grease as a feedstock, without a radical change to the process (or a brand new SS plant). Even that process is not a slam-dunk, as I’ve seen reports of canceled projects.

So yes, you nailed it: these guys overpromised and underdelivered big time. But in terms of the big picture I give them some credit: at least we are not talking about food -> fuel (as with most of the biodiesel plants being built in Europe, proving that the food -> fuel madness is not endemic to North America). [Oh, I agree completely. It is not the process that I took issue with; in fact I do applaud their initiative. My concern was the completely willingness of so many to accept this as the solution to our energy problems. I see the same thing happening right now with cellulosic ethanol.] They probably help to advance the debate on waste -> energy quite a bit. And they do have a working plant, which is more than we can say about Washington’s next big thing, aka cellulosic ethanol. [I will probably write the same article on cellulosic ethanol in just a few years – overpromised and underdelivered. I see many parallels here.]

January 31, 2009 Posted by | biodiesel, Changing World Technologies, green diesel, reader submission, Thermal Depolymerization | 8 Comments