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Home » BioRefineries, Business News/Analysis, Federal Litigation, Feedstocks, Field Crops, Funding/Financing/Investing, Opinions, Performance, Process, R & D Focus, Sustainability

Renewable Isobutanol: It’s Time for a Truce

Submitted by on May 19, 2015 – 12:14 pmNo Comment

by James Evangelow (Chemical Strategies) & Sam Nejame (Promotum) (Biofuels Digest)  If an advertising professional were writing the copy, renewable isobutanol would be called “The new and improved ethanol”. It overcomes essentially all the major deficiencies of ethanol as a fuel and can be produced in an ethanol plant. However, relentless litigation, waning interest in biofuels in general and meager investment are killing it.

One of ethanol’s greatest drawbacks as a fuel is its high volatility. The nation’s base gasoline supply changed with the introduction of ethanol oxygenate. Inexpensive light ends were removed to produce the costlier Reformulated Blendstock for Oxygenate Blending (RBOB) to compensate for ethanol’s high volatility in the finished blend. Butanol, on the other hand, has very low volatility, allowing blending without the need for RBOB and freeing the refiner to obtain higher margins for heavier cuts.

In addition, the molecule has nearly 20 percent higher energy density than ethanol. In fact it is sufficiently close to gasoline that it can be used at any blend ratio, even at 100 percent, obviating the need for Flex Fuel Vehicles. Testing this theory, physicist David Ramey, drove from Blacklick, Ohio to San Diego, California using 100 percent butanol in an unmodified 1992 Buick Park Avenue. The vehicle completed the trip without incident and achieved a 14 percent INCREASE in fuel mileage compared to 87 octane gasoline.

Followers of renewable fuels well know the two major players developing isobutanol technology: Butamax, the DuPont/BP joint venture and Gevo. Not so very long ago things looked promising on all fronts as Gevo raised an impressive war chest, built innumerable strategic relationships and signed large off-take agreements. Meanwhile, Butamax created an Early Adopter Group with close to a billion gallons of installed capacity itching for retrofit. Both companies toured the corn belt, made friends and raised expectations.

Then in 2012, Gevo started up the world’s only isobutanol facility and promptly fell on its face – contaminations required a long shake down, tighter cleaner pots and pans, larger separations equipment and lots of additional capital. Capital that got more expensive and harder and harder to come by. Today, things have improved but only one of Gevo’s four fermentation trains is running isobutanol.

Theoretically Butamax has all the money and time to get it right, but a double oreo of big company political miasma has limited progress to a single corn oil separation unit for one ethanol producer. Current Butamax isobutanol production is zero. That’s not a lot to show for a nine year old JV.

What is surprising is that litigation over isobutanol intellectual property has gone to the US Supreme Court and still ownership somehow remains unresolved. Without a doubt this has hindered market development for isobutanol and despite what the parties will tell you the battle looks like it will continue to drag on. What has been lost in this battle is that they need each other to succeed.

Any way you slice it both companies are running out of time. Gevo’s finances have decayed to the point where it’s operating a skeleton crew, had to conduct a reverse stock split to remain on the NASDAQ and its last public financing was tiny, inadequate at even current burn and subject to arbitrage. Survival is questionable. On the other hand things at Butamax may not be much better. BP appears less and less committed to renewables, as primary oil prices have fallen. It recently auctioned off its cellulosic biofuels business (announcement soon) and Butamax executive CVs are reportedly on the street, leaving one to wonder if other non producing assets are to follow.  READ MORE

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