A Low-Cost, Low-Risk Path to Meeting US Biofuels Targets

by Jim Lane (Biofuels Digest) ...The challenges? Well, there have been three grand ones.

First, the development of economically feasible technologies. Second, the financing and construction of new capacity, including any bolt-ons, restarts or retrofits of existing capacity. Third, the distribution of the fuel, whether through existing blending waivers (e.g. E10 ethanol or B10 biodiesel), expanded waivers (e.g. E15 ethanol), higher blends through flex-fuel car manufacturing (e.g. E30, E85), or drop-in fuels.

36 billion gallons, the easier way Now, there’s no requirement of law of economics that mandates the scenario that we will present below. What it does represent is, we believe, the lowest-cost, lowest-risk path to meeting the RFS based on what we have learned to date regarding the three Grand Challenges.

12 billion gallons of corn-starch based biobutanol. ...But the RFS does not mandate ethanol. We believe that the fleet can convert to biobutanol by 2022. They would do so, to produce higher value molecules, and working around the E10 “blend wall” which limits the US to around 13.5 billion gallons of ethanol via blending at the refineries. ...

3 billion gallons of agricultural residue-based biobutanol, using the existing corn ethanol fleet. Why 3 billion? POET tells us that you can add about 25 percent to existing corn ethanol capacity by having farmers from the same geography bring in their baled cobs and corn stover, while leaving enough biomass on the field for soil quality purposes.

Now, because this is biobutanol, it counts for the equivalent of 3.9 billion gallons of ethanol-equivalent under the RFS.

6 billion gallons of algal-based biofuels or solar fuels, utilizing the existing corn ethanol fleet. ...But BioProcess Algae has its groundbreaking today, for a algal-based fuel system that does just that – uses the CO2 (and process heat) from the Green Plains corn ethanol plant in Shenandoah, Iowa.

3 billion gallons of cellulosic biobutanol, utilizing new capacity, or 2.3 billions gallons of renewable diesel. READ MORE and MORE (Biofuels Digest follow up with readers' comments)

From readers (who generally wished to remain anonymous), we had the most negative feedback on three items.

1. We ignored the stronger GHG emissions reduction opportunities available via ethanol.

2. It will take years to convert the corn ethanol fleet to biobutanol, and the industry is at the ethanol blend wall now, so ignoring, for example, blender pumps, does the industry a disservice.

3. Consumers will not pay more for isobutanol than for ethanol (on an energy value), so how will producers make more money, and why would companies sell a molecule as a $3 fuel instead of a $5 chemical?

Key takeaways from Butamax and Gevo

1. The Butamax joint venture intends to sell isobutanol into the fuel markets at a competitive price (on an energy-equivalent basis) to ethanol. ...

2. The Butamax JV will be capable of and focused on, with its engineering staff and the staff of their proposed partners, conversion of multiple ethanol facilities at one time – rather than onesy-twosy.

...The retrofits are, in the case of both Gevo and Butamax, focused on three key units at the ethanol plant. Namely, the units for fermentation, separation and distillation. ...

3. What’s the proposition to the bioprocessor, the actual ethanol plant? Higher value molecules, for sure. Also, as a lesser point but still important, less exposure to issues such as the ethanol blend wall.

...Well, we certainly agree that, in an ideal world, ethanol might well rule and certainly an “all of the above” portfolio strategy that embraces all fuel molecules is more robust than an “eggs in one basket” strategy.

However, we note the financing and construction timelines, and warn industry that unless they develop an affordable, reliable strategy – which does not cost many more federal dollars – for reaching the RFS targets, the RFS will be opened and revised. Downward, in an investor-crushing manner. READ MORE