R-Squared Energy Blog

Pure Energy

Catching Up

Back home now, just trying to catch up on the energy news of note. Four stories that I want to highlight. First was POET’s announcement on their progress on cellulosic ethanol:

Poet hits ‘long shot,’ cuts cellulosic ethanol costs

WASHINGTON – The head of the world’s largest ethanol producer, Sioux Falls-based Poet, said Wednesday that his company has drastically cut its cellulosic ethanol production costs.

It is a breakthrough that will allow cellulosic ethanol to compete with gasoline within two years.

Jeff Broin, Poet chief executive, told reporters during a roundtable discussion that the company has reduced its cellulosic ethanol production cost during the past year from $4.13 a gallon to $2.35 a gallon.

Andrew Leonard of Salon asked me for some comments, which he included in a story on the news:

Who cares about peak oil when you have corn cobs?

In addition to what made it into the story (and those comments were specifically about the kinds of risk factors POET faces), I said that I thought the guys at POET had done a nice job on this (that comment did make it into the follow-up story at Salon). One thing that isn’t clear to me is whether the production cost includes any capital recovery. If not, then they still have some distance to go to get that $2.35 into an economic range with ethanol presently trading at about $2.00 a gallon. [Edit: A comment from Nathan Schock of POET over at Green Car Congress indicates that this is in fact the total production cost – including depreciation]. Another question I would have is how their version of the process performs with other sources of biomass.

One other thing I said to Andrew (that didn’t make it into the story) is the really big challenge is in getting those ethanol titers up. Low titers mean lots of energy is spent in getting the water out. This is why I have always favored gasification technologies over hydrolysis technologies: You don’t have water to deal with, and thus the BTU efficiency is potentially going to be higher. (Probably your capital costs as well will be higher for gasification – depending on what you are producing from the syngas). If biomass costs rise in the future – as I expect them to – then there will be added incentive for maximizing BTU efficiency.

The second story was sent by a reader. In light of the amount of corn we produce, this could have significant ramifications:

Amaizing: Corn Genome Decoded

A team of scientists led by The Genome Center at Washington University School of Medicine in St. Louis published the completed corn genome in the Nov. 20 journal Science, an accomplishment that will speed efforts to develop better crop varieties to meet the world’s growing demands for food, livestock feed and fuel.

The United States is the world’s top corn grower, producing 44 percent of the global crop. In 2009, U.S. farmers are expected to produce nearly 13 billion bushels of corn, according to the U.S. Department of Agriculture.

The next story is about a trend that I think will continue. In my presentation in Orlando, one of the trends that I pointed out is that more refineries are being built closer to the source of the oil. Saudi produces crude, but would like to capture more of that value chain by refining it as well. There are a number of very large refinery projects underway – especially in Asia and the Middle East – and in a world with stagnant oil production that means some refineries are going to shut down. In the U.S., our refining capacity is more than three times greater than our oil production rates. I see a dismal outlook for refining in the U.S., with a lot of refiners going out of business in the U.S. Valero just announced another refinery closing:

Valero refinery in Delaware City to close permanently

DELAWARE CITY, Del. — Valero Energy said this morning it plans to permanently close its Delaware City Refinery, eliminating hundreds of high-paying jobs, because of weak economic conditions, high local costs and chronic troubles at the 210,000 barrel-per-day complex.

Company spokesman Bill Day said that a plantwide maintenance shutdown, announced late last month, was already under way, and will convert to a final closing. Plant employees will continue on the payroll for 60 days under federal rules for large-scale layoffs.

Day said the plant — which produces about 70 percent of the gasoline sold on the Delmarva Peninsula— has lost $1 million a day since the start of 2009.

About 550 full time workers will be put out of work by the decision. Valero (VLO) also has notified companies that work closely with the refinery, Day said, but effects on those operations were not immediately available.

People forget that refining is a very tough business. They remember when refiners make money – as they were doing a couple of years ago – but forget that most of the time they aren’t making money. Plus, when they do make money they are subjected to accusations of gouging and calls from politicians to tax their windfall.

Finally, readers know that I have consistently avoided wading into the debate over global warming. It takes enough of my time just trying to keep up with the latest energy news, and I decided long ago to sit out the debate on climate change. It is far too politicized and people get too emotional over the issue. However, I do think it is important that the debate takes place, and I don’t like to see people trying to shut it down. Attaching labels like “denier” to people who question the science is an attempt to shut down debate, and I don’t care how right you think you are – in my view the debate needs to go on.

A couple of days ago it was announced that some e-mails from a climate research outfit in England had been hacked:

Global Warming Research Exposed After Hack

A climate change dust-up

I have to say that some of the e-mails I have seen posted are troubling. Whatever history ultimately shows, some of those e-mails appear to be agenda-driven and not science-driven. There is no place for that.

Let the debate carry on, and let science – not agendas – determine the outcome.

November 22, 2009 Posted by | cellulosic ethanol, genetic engineering, global warming, greenhouse gases, oil refineries, POET, refining, Salon, valero | 118 Comments

An Extended Conversation with POET

Today (July 17th) I spent some time on the phone with POET‘s VP of Science and Technology Dr. Mark Stowers. (I was invited up for a visit, but I couldn’t swing that just now). Dr. Stowers is in charge of company R&D, which includes corn and cellulose to ethanol, as well as the investigation of novel processes for utilizing waste to power their facilities.

Joining us on the call was Matt Merritt, POET’s Media Relations Specialist. We covered a lot of ground on the call. Along with the environmental impact, key interests of mine in assessing fuels of any kind are the energy inputs – what kind, how much – and the related topic of logistics. I probed the energy inputs in some depth, as I consider that critical when considering long-term commercial feasibility.

First a bit of background on POET. They are the largest ethanol producer in the world, producing more than 1.5 billion gallons of ethanol each year from 26 production facilities across the country (each with its own nuances, I was told). They recently started up a 20,000 gal/yr pilot-scale cellulosic ethanol plant, which uses corn cobs as feedstock. Plans are to commercialize the process in 2011. They have named this effort Project Liberty.

My questions and Mark’s answers below are paraphrased, but as I told them if they spot anything that I got wrong they can notify me and I will correct it. The format below includes questions, answers, and comments from me. Where the comment was part of the interview, it will appear as a prelude to a question or a comment in the follow-up as “RR: Comment…. Mark’s answers will appear as “MS: Comments…” To distinguish from additional comments I might interject, I will indicate those with [RR: Comment…]

I first voiced my skepticism that cellulosic could ever make a huge impact, due to logistical issues and energy requirements. That was going to be a major thrust of the interview, but I started off with a related comment/question.

RR: Conditions in Texas have been really dry. [RR: See this story on the current drought in Texas.] We have had over a week with temperatures exceeding 100 degrees each day. There are a number of corn fields near my house, and the fields appear to be dead. How are conditions up north?

MS: Actually this will probably be one of the best years ever. We got rain when we needed it. Corn grew 6 inches overnight recently. In Sioux Falls right now the temperature is 70 degrees.

RR: OK, let’s move on to your process. Can you start by walking me through your cellulosic ethanol process?

MS: Our cellulosic process is based on corn cobs. We have harvested 25,000 acres over the past couple of years. We are currently still trying to work out harvesting and storage. 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 store at the farm field edge currently and can collect over the following 6-9 months. 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 believe that there is a nationwide potential for 5 billion gallons of ethanol if all cobs are collected and converted.

RR: OK, I am going to walk through some numbers here. As you may know, I have been skeptical about the potential of cellulosic ethanol to scale very well. I feel that there are niches in which it will work, but I don’t think it works well as a large scale solution.

As you mentioned, average cob yields are 0.65 bone dry tons (1300 pounds) per acre. I have a reference that says the heating value of cobs is about 7900 BTU/lb [RR: Mark agreed that this was correct]. So the total BTU value of the cobs on an acre is about 10 million BTUs/acre, which is also the energy content of 135 gallons of ethanol (ethanol has a heating value of 76,000 BTU/gal). That would seem to be an upper limit on a hypothetical perfect conversion process that could capture 100% of the BTUs. But of course enzymatic processes are not going to convert lignin, and there will be some inefficiencies. My guess is that you probably need 20 pounds or more of cobs to produce a gallon of ethanol (as opposed to 10 pounds for a perfect conversion process), putting the actual yield at around 65 gallons per acre. I saw someone (not POET) who recently claimed cellulosic from corn cobs would increase per acre yields by about 110 gallons per acre, but based on the BTU value I don’t think that’s possible.

MS: Yes, I think that 110 gal/acre number looks too high. The 20 pound number you came up with looks approximately correct. We can get 85 to 100 gallons per ton with our process but operate mostly in the high eighties and low nineties at present. We are drying and burning the lignin for fuel, but in addition to the cellulose we are also converting the hemicellulose to ethanol.

[RR: OK, so 85 gallons per ton is equal to 55 gal/acre, and 100 is 65 gal/acre – which is the number I had worked out. Incidentally, I think the difference between a skeptic and a cornucopian is that the skeptic will look at that range and say “OK, realistically speaking they probably get 85 gallons/ton on a good day, and they think they can push it to 100 gallons if they continue to push the envelope.” The latter will claim matter-of-factly that yields are at least 100 gallons/ton.]

RR: OK, I did not know you were converting the hemicellulose. What is the percentage of cellulose and lignin in the cobs?

MS: The cellulose plus hemicellulose is upwards of 60%. Lignin is about 15%.

RR: One of the keys to success for a cellulosic ethanol process is to increase the concentration of ethanol in the crude product. Historically this has been in the 3-4% range for cellulosic ethanol, and I don’t believe that will be commercially practical. The energy required to purify a solution in that range would be comparable to the energy contained in the ethanol. [RR: Of course with waste heat or very cheap BTUs, you might be OK to do it anyway]. So can you discuss the sorts of ethanol concentrations you are getting?

MS: First of all, I agree with your comments on ethanol in the 3-4% range. While we have not released information on our cellulosic ethanol titers, they are lower than those for corn ethanol. On the other hand we have some of the highest corn ethanol titers in the business; we can achieve greater than a 20% ethanol solution from corn. But we are better than the 4-5% range for our cellulosic process. Also, there is sufficient energy in the solid waste stream and the liquid stream to provide more than enough energy to power our cellulosic process.

RR: Don’t you have problems with the enzyme activity diminishing at higher ethanol concentrations?

MS: We do not see enzyme activity as a rate limiting step with respect to ethanol tolerance.

RR: Beyond the energy required to process the cellulosic ethanol, there is the fuel required to gather and transport the corn cobs. Along those lines, one of my readers wondered about the radius to the plant in which the logistics are still economical. His comment was that he heard that shipping costs for cobs are twice as costly as the grain because they are so bulky.

MS: We can go out to a 25-35 mile radius; about the same as corn.

[RR: I suspect if you did the analysis for cobs by themselves, collecting cobs and transporting them from 35 miles away might not be worth the fuel value of the subsequent ethanol produced.]

RR: Do you have a feel for how many BTUs is required to produce a BTU of cellulosic ethanol?

MS: We have some idea of those numbers, but haven’t released them. [RR: I think he said they are waiting for more results from their pilot plant, and they are working on getting better numbers.]

RR: Another question from a reader: “Will they contract with producers and what will the terms be?” I think I know the answer to this, because I read an article yesterday in which Poet spokesman Nathan Schock said that this hasn’t been fully determined. [RR: Here is the article: Iowa plants to offer farmers cash for corn cobs.]

MS: Nathan was correct; we have contracted with some farmers for fall harvest but we don’t know where the economic sweet spot for everyone involved is going to be.

RR: I would think you would hold those numbers close anyway, or all farmers will be holding out for the highest published price.

MS: Yes, that is a key point.

RR: (I asked if another reason for focusing on cobs over stover was related to concerns about soil depletion. I also incorporated another question from a reader): “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.”

MS: 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.

RR: Is your ethanol purification compatible with existing corn ethanol infrastructure? I would think that with a higher water concentration you could go into your corn ethanol distillation system, just at a lower feed location.

MS: A cellulosic plant will be a bolt on to an existing corn ethanol plant. But we will have a better efficiency if we don’t intermingle the streams with corn ethanol because we don’t want to get things like lignin in our corn ethanol distillation train. So it is better to have separate distillation trains. The infrastructure will be more of what you see in common (utilities, logistics in and out, etc.).

RR: Why not just use the cobs to produce steam for the corn ethanol process? Have you done comparative studies on that?

MS: We are doing that today as well. We are using other renewable biomass to fuel a solid fuel boiler at Chancellor, South Dakota. This is a 100 million gal/yr facility. We are also using landfill gas in a multi-purpose boiler.

RR: What is the quality of the methane from your digestor? Do you have to clean it up?

MS: We have two applications for our biogas. One is for overall energy, and the other is fuel for the dryers. We are just finishing up our 3rd month of operation. The boiler that we have developed can handle the biogas that is produced.

RR: How many engineers are working on Project Liberty?

MS: Between the lab and pilot plant, we probably have 25 scientists and engineers.

RR: Is your pilot unit fully integrated? Is the pilot process fully connected?

MS: We are completely integrated from cob collection through ethanol production and recycle streams. We have a 24/7 operation with 4,000 data points collected. The pilot plant has been running since about Nov 18, 2008.

RR: One of the things that I strongly believe is that if the corn ethanol industry is ever going to break free from endless subsidies, you have to get the fossil fuels out of the process to the greatest possible extent. The sugarcane ethanol producers are more immune to the ups and downs of fossil fuel prices because of the large role bagasse plays in providing fuel for their process. So it feels like you are headed down the right path here, even though natural gas prices aren’t exactly a pressing concern for ethanol producers right now.

However, it might be that you have enough waste energy to fuel your process, but most of the BTUs are used up in the conversion, leaving very little ethanol. So in a case like that the question becomes, “Are you left with a small net amount of ethanol, or a very small net amount of ethanol?”

[RR: For example, if you had one BTU of biomass, and consumed 0.9 BTUs to produce 0.1 BTU of liquid fuel, you could say that you have gotten the fossil fuel inputs out, but you have produced very little fuel and were very inefficient with the utilization of the BTUs. In that case you could ask if there might have been a better use for that BTU of biomass.]

MS: The energy from our waste streams should be sufficient to power the 25 million gal/yr cellulosic plant and nearly power the 50 million gal/yr starch plant next door.

[RR: To me this was the most significant statement he made during the interview. If an added benefit is that you are also powering your corn ethanol plant with the energy produced from the cellulosic process, you have a very powerful synergy. But I admit that I have a bit of a hard time with this one. I would like to really dig into the energy balance, because it doesn’t seem to me like there are enough BTUs. If I go back to my analysis of 10 million BTUs/acre available from the cobs and you back out 65 gallons of ethanol produced from the cobs, that would only leave you with about 5 million BTUs per acre to power both a cellulosic plant and a corn ethanol plant. If I make a couple of reasonable assumptions, it looks to me like they are assuming only 30,000 BTUs of energy input per gallon of ethanol production. This seems on the low side, but is perhaps reasonable when the ethanol yields from the cobs are on the low end of the range – leaving >30,0000 BTUs/gal for running the process.]

RR: When you are out front with a technology, there are always risk factors. What are some of the risk factors that you have identified that might keep you from meeting your goals?

MS: First is the absence of a market for cellulosic ethanol. The blend wall from E10 really limits the cellulosic market.

RR: OK, that’s market risk. How about technical risk?

MS: We must have farmers and equipment manufacturers engaged; we need a solution in which both sides can make money. We need programs early on to help biomass collectors overcome the risk. How many cobs can you get in a truck? The logistics become important. There is also the issue of inventory management. The annual supply of cobs for a 25 million gal/yr cellulosic plant would require a silo the size of the Empire State Building. We need to decentralize this, and we need as high a throughput into the reactor as possible.

RR: Gentlemen, that’s about all the questions I have, although I will probably come up with 10 more when I am writing this up.

MS: Feel free to contact us for any followups.

RR: Thanks guys. Appreciate you taking the time.

July 17, 2009 Posted by | biogas, biomass, cellulosic ethanol, POET | 28 Comments

The Dominant Fuel in 2030

I just spent a fruitful week in Canada, learning about some of the biomass resources in Alberta. There are some interesting opportunities there for the right technology, and I expect that I will be making future trips up there.

One of the questions I was asked this week by one of my new Canadian friends was “Do you believe fossil fuels will still be the dominant power source in 20 years?” Without hesitation, I said “Absolutely.” Others around the table nodded their heads in agreement, and the questioner said “So do I.” It isn’t that this is what we want, but this is how we see it. Government agencies like the EIA see it the same way. While they show renewable energy growing, there is a very long hill to climb before they begin to challenge fossil fuels for supremacy.

I think the question was meant to gauge whether I am realistic about the potential contribution of biofuels in the years ahead. I believe that I am. While I believe that biofuels – or more appropriately renewable energy in general – will eventually become our predominant source of energy, that is going to take a long time. I also believe that it is going to happen by necessity – because of the depletion of fossil fuels – rather than a breakthrough that makes something like algal biofuel as cheap to produce as petroleum. Regardless, we need to pave the path to that potential future today, so when the need is pressing we aren’t scrambling to come up with solutions.

Speaking of algae, you may have seen the story on ExxonMobil plunking down $600 million for algal biofuel development. When I was in Canada, someone referred to this as “Dead Money Walking”:

Exxon’s algae

Exxon, the west’s biggest oil company, has launched a new research programme into producing biofuels from algae, in a break from its general antipathy towards alternative energy.

At first sight, this looks a pretty bizarre thing for the company to be doing. Rex Tillerson, Exxon’s CEO, has been consistently sceptical about biofuels, even the advanced “second generation” variety. (Or, as Steven Chu, US energy secretary, described them to the FT, “fourth generation” biofuels.)

Incidentally, I did an interview in the airport yesterday on “4th generation biofuels.” I told the interviewer that I hate that term “4th generation biofuels.” Can we at least wait until we see what the 2nd generation really looks like?

But back to the ExxonMobil story. I am highly skeptical of the conventional paths to produce biodiesel from algae. In fact, John Benemann recently commented here that if you really want to know where algal biofuels stand, offer to buy some for $100/gal. He said you can’t get it. On the other hand ExxonMobil is certainly not stupid, so you have to wonder about their angle. The reporter I spoke with asked about algal biofuel, and I did say that I could see one circumstance in which it might work. If you could engineer/breed algae that excreted oil, you could potentially collect it by skimming it instead of collecting and pressing the algae. That would potentially be a much lower cost fuel, provided the production rates were decent.

Finally, it looks like I have 100 responses to the previous open thread, and I presume at least some of those are questions for me. I will try to work my way through those over the next few days. First, as indicated before I will speak with POET tomorrow about their ethanol work, and I will report on that conversation here in the next couple of days. If you have anything that you would like to ask them, let me know in the comments and I will try to get your questions answered.

July 17, 2009 Posted by | algal biodiesel, Canada, ExxonMobil, john benemann, POET | 35 Comments

Off to Canada, but the Floor is Open for Questions

I am flying to Alberta in the morning and will be there through the middle of the week, trying to learn more about the renewable energy opportunities there. I doubt I will put up anything new until I return. So I thought this might be a good time to solicit questions readers may have. I know that I don’t always address all questions in the comments, so if you have one that I have neglected, you can ask following this post and I will answer when I return.

The last time I asked readers for questions, I got 30 or so that I answered in the following two posts:

Answering Questions – Part I

Answering Questions – Part II

That’s been almost two years, though, and there have been lots of interesting developments since then. So ask away, and I will answer to the best of my ability. Other readers are certainly welcome to offer their own answers to questions, and in some cases I may use something from the comments when answering.

One thing I will throw out there is that on Friday, July 17th I am supposed to speak to POET about their cellulosic efforts (which I mentioned in a recent post). I have a list of things I want to ask them about, but if you have something you would like me to ask them, please post the question here and I will ask for you provided it is topical.

Until then, please behave yourselves. 🙂

July 12, 2009 Posted by | POET, reader submission | 109 Comments

POET Sets the Standard

In a recent post (but certainly not the first time I mentioned this), I wrote:

Corn ethanol producers have to move away from fossil fuel inputs – or they need to otherwise find inputs that don’t normally track gasoline prices. This is why the sugarcane ethanol producer can compete on a level playing field with gasoline. The fertilizer inputs for sugarcane are much lower than for corn, and the distillation energy is provided by biomass. The only way the ethanol industry in the U.S. will be able to break free from the subsidies is to adopt similar practices.

The ethanol company POET, which I recently described as setting the standard for ethanol production in the U.S., has just taken a big step in that direction. This press release was just e-mailed to me:

Waste material to power cellulosic/grain ethanol plant

POET installs anaerobic digester at pilot cellulosic ethanol facility

SIOUX FALLS, S.D. (June 17, 2009) – A self-sustaining energy cycle for producing cellulosic ethanol is close to reality with the recent startup of an anaerobic digester at POET’s pilot plant in Scotland, S.D.

Corn cobs at Project LIBERTY will not only be used to produce ethanol; the liquid waste will go to an anaerobic digester to power the cellulosic plant and offset natural gas usage at the attached grain ethanol plant as well. That’s renewable energy created at the plant, powering the plant and powering the adjacent facility.

POET installed and fired up its anaerobic digester, which was designed and built by Biothane, on May 20. The digester uses liquid waste created in the process of converting corn cobs to ethanol. That waste is used to produce methane gas, which acts as roughly the equivalent of natural gas.

“This technology will cut fossil fuels out of our cellulosic ethanol production process and further improve the benefits of grain-based ethanol,” POET CEO Jeff Broin said. “Over the long term, POET would like to eliminate the use of fossil fuels at all of our plants through a variety of alternative energy sources.” The alternative energy technologies employed at other POET facilities include a solid waste fuel boiler, landfill gas and cogeneration.

The digester is in the research phase – corn cobs have never been used in this way before. The methane is currently being flared, but once the process is refined, it will be installed as part of Project LIBERTY.

Project LIBERTY is a 25 million gallon-per-year cellulosic ethanol plant, which will be built in Emmetsburg, Iowa. Research and development work is on schedule for the plant to begin production in 2011.

A photo of the anaerobic digester is available at http://www.poet.com/news/showRelease.asp?id=169.

To see a documentary about POET’s pilot cellulosic ethanol plant visit http://www.poet.com/cellulosedocumentary.htm. Media outlets are welcome to link to the documentary in online coverage. Photos are also available for publication at http://www.poet.com/news/releases.asp.

About POET

POET, the largest ethanol producer in the world, is a leader in biorefining through its efficient, vertically integrated approach to production. The 20-year-old company produces more than 1.54 billion gallons of ethanol annually from 26 production facilities nationwide. POET recently started up a pilot-scale cellulosic ethanol plant, which uses corn cobs as feedstock, and will commercialize the process in 2011. For more information, visit http://www.poet.com.

What POET is doing is similar in spirit to what E3 Biofuels attempted. E3 had some startup problems that ultimately put them out of business, but as I described it at the time, this is I believe a necessary step for the ethanol industry. While I don’t expect this approach to be as cheap as using natural gas or coal for power, in the long run using biomass to power their plant will dampen some of the oscillations caused by volatile fossil fuel prices.

One other key issue – and I have seen conflicting information on this – is how much biomass can be removed in a sustainable manner. Since POET is just using cobs, they are probably OK. Start taking out large amounts of stover, and you may run into trouble. But using cobs solves many of the logistical challenges that cellulosic ethanol in general will face. The cob is already being collected with the corn (analogous to bagasse) so a portion of that logistics battle is already included in the deal. This is also why I think lignocellulose to fuel schemes need to focus on biomass already coming into central locations, such as landfills.

The one other obvious question is just how much natural gas can be displaced by digesting the liquid waste. Since they are still in a research phase, they probably don’t even have a good answer to this yet.

June 17, 2009 Posted by | biomass, cellulosic ethanol, ethanol, POET | 38 Comments