About Advanced Biofuels for Growers and Investors
Advanced Biofuels are liquid transportation or power generation/heating fuels derived from: low nutrient input/high per acre yield crops; agricultural or forestry waste; or other sustainable biomass feedstocks including algae.
Some thoughts about the current state of Advanced Biofuels.
If you are a grower, investor or community leader looking into this new opportunity, don’t just jump to a particular feedstock too fast. Here are a few basic things to think about:
1) What grows here already that can be used for energy without displacing food or feed crops (corn stover, rice straw, wheat straw, ;
2) What could grow that would be better for this land than what is growing;
3) If the land is prone to drought, sea level rise, floods, or other changes in growing conditions, what crop adjustments might keep some value in the land;
4) Who will buy this feedstock–OR, do I have something that I can convert to fuel on my own farm or in my own community; then
5) What is the market for the fuel product?
It doesn’t do any good to grow a crop or exploit a waste resource if you have no market or on-site use; and the fuel producers won’t be a market for your feedstock unless there is a market for the fuel. AND, you want to grow something that is appropriate to your land and climate.
Some additional important questions:
1) How will I get my crop to a biorefinery?
2) What technology will convert my crop into fuel?
3) How will the fuel get from the biorefinery to the ultimate customer?
4) Is there a level playing field among fuel competitors? If not, do strong, vigorously enforced policies favor a transition to sustainable renewables?
No matter what scale or community, these are important questions.
For example, a community in Mali found that they could grow enough jatropha to make diesel fuel to operate a multi-purpose unit that could provide electricity, pump water or grind grain. Communities in southern Minnesota are contemplating constructing a 10 million gallon/year combined fuel/electricity plant that will use local crops to provide local fuel and power. Other corporate investors are building large plants designed to provide advanced biofuels for nationwide distribution and export.
If you are looking at cellulosic ethanol production or drop-in fuels based on a sugar platform, you might want to study technologies that overcome biomass recalcitrance to break down your crop into sugars so that it can be fermented into ethanol; or put through an additional process to make biogasolines, biojetfuels, etc.; or used for bioproducts.
A lot of thought is being given to what are called the “logistics issues.” This includes transportation and storage of biomass, as well as logistics of transportation and delivery of ethanol and various blends with gasoline (E10, E15, E30 blends to E85, for example). Click on Infrastructure and its sub-categories along the right margin of each page on this web site for more discussion of these issues. See also the mobile and portable biorefineries category.
Many advanced process challenges are stuck in the research stage because there is no venture funding. In addition to the dry credit market characteristic of the current economic situation around the world, venture capitalists (VCs , fondly referred to from those seeking funding as “vulture capitalists” ) only want to fund “proven technologies” and are looking for an exit or IPO in 2-3 years. Researchers in this nascent industry can’t promise those kinds of returns yet. Regrettably, relatively miniscule amounts of federal funds are available and they are fought over tooth and nail–and often go to universities and national laboratories rather than to independent researchers or small businesses. Click on Grants/Funding/Financing along the right margin of each page of this web site for more more detailed discussions of this issue.
In addition, Biofuels Digest published a 3-part series, “First of Kind” – the Financing of Advanced Bio-Refineries. “The purpose of this three-part article is to provide project sponsors and developers of advanced bio-refinery projects with information and guidance in order to improve their prospects for obtaining project financing. It is believed that project developers’ have a better chance of winning financial support for their projects: if they anticipate concerns that potential financial backers may have; if they fully disclose the risks that are inherent in undertaking the project; and if they provide potential financial backers with answers and possible solutions for mitigating these risks.” Part 1 Part 2 Part 3
Robert Rapier provides a summary of practical advice for evaluating renewable energy technology, including biofuels, from the investor/reporter perspective. And his more recent Are You Looking To Invest in the Google of Biofuels? provides cautionary advice.
Former Congressman Roscoe Bartlett (R, MD 6th), known as the Peak Oil Congressman, admitted at the Biomass 2009 conference hosted by the U.S. Department of Energy, that it will take Apollo or Manhattan Project levels of investment to get advanced biofuels to take off as they should in a short time. However, he was a committed “small government” fellow and didn’t think that the government should foot that bill. He stunned a lot of people at the Biomass 2009 conference when he conceded, when pressed, that our only real hope is to decrease our population by 4-5 billion people. (This from a man with 10 children and 17 grandchildren.)
What keeps those involved in helping us achieve the promise of advanced biofuels from becoming very depressed is the belief that this is the way of the future. And, even with inadequate funding, many researchers, growers, entrepreneurs and supporters are putting their own time and funds into this cause.
Many paths must be followed to achieve as much independence from fossil fuels as possible.
Due to technological challenges and the length of time it will take to implement a smart grid, the cost of the cars and the challenges of battery disposal; few people will be driving electric cars or plug-in hybrids for a few years. Most of us will still be driving the cars we have now and we would certainly be better off fueling them with environmentally thoughtful fuels. With adequate funding, the people working on this problem now can make that happen.
Click here for a “take home” view of advanced biofuels from a financial investment perspective. It includes a glossary of pertinent terms.
Click here for an E2 report on the status of advanced biofuels production as of mid-2013, including definitions of various conversion technologies and a glossary of pertinent terms.
Click here for answers to questions asked at a February 2010 conference at the Stanford-MIT Venture Lab courtesy of Biofuels Digest.
Click here for frequently asked questions for communities seeking to attract biorefinery investors courtesy of Biomass4Energy.
Click here for examples of marketing summaries of biomass and biofuels technologies available for licensing from U.S. Department of Energy laboratories and participating research institutions.
Click here for links to a 10-part series by Biofuels Digest in Fall of 2010 that provides more detail about the day-to-day requirements for a successful “Bioenergy Project of the Future” from community relations to feedstock to technology to financing to strategic planning and more. Biofuels Digest’s Jim Lane’s, The Biorefinery Project of the Future can provide a framework for advanced biofuels development.
This series is one of the most valuable quick reads you will ever find for any price–and it’s free. Valuable for potential investors, financiers, growers, political leaders, community advocates, teachers and students of sciences and social sciences, and for those with a general interest in biofuels and advanced biofuels.
The strategic path, philosophy of development and insights about the biofuels and renewable fuels industry are well-organized, succinct and applicable to any place on the globe. This is a must-read for beginners and industry professionals alike. —Joanne Ivancic
To learn how well-known investor Vinod Khosla evaluates potential biofuels investments, click here to read Appendix 1 at the end of the article on feedstocks.
If you are interested in the aviation biofuels sector, the CAAFI Fuel Readiness Level pages and tools provide information on how to become involved with the aviation community, the testing and environmental evaluations required to show the fuel’s suitability for aviation use, and how to best facilitate ASTM International certification for a new fuel. READ MORE and MORE
Biofuels Digest’s Bioenergy Information Zone provides free downloads of position papers, presentations, models and reports provided by researchers, industry and non-governmental organizations. For example:
Supply, Demand & Economics
Algae Yield model
Profitable Biodiesel Potential from Increased Agricultural Yields
EIA Outlook 2010
Each Year, the Energy Information Administration releases a closely-watched Energy Outlook.
90 Billion Gallons Sandia analysis
The Sandia National Laboratory issued this projection of where 90 Billion gallons of renewable fuels could be sourced in the United States.
USDA – Billion Ton Study
Oak Ridge National Laboratory authored this study of where a billion tons of biomass could be sourced for bioprocessing.
Oil Demand 2008
The International Energy Agency’s Oil Market Report for 2007-09.
McKinsey Biofuels 2007
McKinsey’s influential study, published in 2007, issued one of the first warnings over “irrational exhuberance” over biofuels.
Sandia – Biofuels, Water and Algae Economics In this data-loaded presentation, Ron Pate of Sandia National Laboratory looks at algae economics in the context of restrictions imposed on biofuels production by water supply sustainability concerns. Excellent overview of the state of aquifers and the water intensity of biofuels.
US national and state reports and forecasts
EIA 2006 Energy Review
Sandia National Labs 90 billion gallon biomass feasibility report
Emerging Biofuels: Outlook of Effects on U.S. Grain, Oilseed, and Livestock Markets
BioDME fuel overview
California Bioenergy Action Plan
California Investment Plan for the Alternative and Renewable Fuel and Vehicle Technology Program
Chesapeake Biofuel Policies
GAO: ENERGY-WATER NEXUS
GAO: Preliminary Observations on the Links between Water and Biofuels and Electricity Production
GAO: BIOFUELS:Potential Effects and Challenges of Required Increases in Production and Use
Iowa Biofuels Study
Oregon Biofuels Opportunity
New York Biodiesel Report
Massachusetts Biofuels Report
Massachusetts Biofuels Mandate
National Renewable Energy Laboratory: Biomass Oil Analysis
National Renewable Energy Laboratory: State of the States 2009
National Renewable Energy Laboratory: 2007 Algae study
Baker Institute – Fundamentals of a Sustainable Biofuels Policy
Current and Potential Green Jobs in the U.S. Economy
International reports and forecasts
World Energy Outlook
European CO2 Emission Trading Scheme, Consequences and strategic options for the aviation industry
International Green Jobs Report
2008 Oil Demand Outlook
McKinsey on Biofuels
Ethanol in Canada
West Africa’s Energy Promise
And much, much more at http://www.biofuelsdigest.com/bdigest/biofuels-digest-supercontent/free-industry-data/ For a review of the most requested articles, click here.
For continuously updated links to articles about Investing, search by key words such as “investing” or “financing” in the search box (upper right of each web page). You can also find relevant articles by clicking on the category “Grants/Funding/Financing” along the right margin of each page of the web site.
For a list of articles on the topic “The VC Model is Broken,” or why venture capital is hard to come by, click here.
Jim Lane, Biofuels Digest, suggests attention to these questions when doing a preliminary investigation.
1. Has it been demonstrated? The bigger the scale, the less technology risk.
2. Has my feedstock been tested. How are the rates and yields?
3.What are my special local conditions and how does that cause me to make specific choices on enzymes, yeasts and technologies.
4. Is there a local premium for green electricity. If so, technologies that have green power options will work well?
5. How fast is performance improving — is the technology at a stand-still or are big leaps in rate, yield, temperature tolerance etc being achieved?
6. How’s the capex / opex trade off? Most of the time, choices made to reduce capex (such as eliminating harsh chemical pretreatment), can cost on yields and you have to watch opex. Or, is there so much emphasis on gross cost-per-gallon that the plant has been engineered to the point where you simply can’t afford the equity?
7. Turn around time.
8. Feedstock and product flexibility. How much is there. Could be a lifesaver some time if the economics go upside down in one of your pathways. READ MORE
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