Domestic Fuel

A new report from the Milken Institute, “Turning Plants Into Products: Delivering on the Potential of Industrial Biotechnology,” examines the challenges facing the industrial biotechnology sector and identifies market and policy based responses. In particular, the report found that biotech could play a significant role in the reduction of fossil fuel use, but struggles due to petroleum’s price advantage. The report is a accumulation of the Institute’s Financial Innovations Lab’s results derived from discussions with experts and stakeholders on how the US could facilitate a better flow of private capital into companies focused on the production of bio-based products.

“There is much appeal for policymakers to invest in expanding the biotech-derived chemical industry. In the long term, it has environmental advantages and offers an alternative to foreign oil,” said Joel Kurtzman, executive director of the Milken Institute Center for a Sustainable Energy Future. “In the short term, it offers the immediate benefit of rural employment opportunity.”

Industrial biotechnology uses living materials such as plants, algae, marine life, fungi and micro-organisms and biosolids to produce a wide range of products from chemicals to plastics to cosmetics. But unlike the petrochemicals industry, the industrial biotech industry is not well established and doesn’t have the advantages of economies of scale and established operating efficiencies. So to encourage further development the industry will need an organized cooperation of local, state and federal governments along with support from the investment community, trade organizations and academia.

Turning Plants in Products suggests several courses of action to mitigate current challenges and increase the chances of success: establish concrete, long-term government policies; create prize forums; utilize established resources; and create innovative securitization.

Kurtzman added, “The industry needs to find the momentum to get companies past the funding gaps and on to commercial-scale production. This will require continued investment in R&D, supported by the government and public-private partnerships, to make the investment less risky and to increase the efficacy of the technology. We believe the results will be greatly worth the effort.”

The Financial Innovations Lab that led to the development of the Institute report was funded in part by the Office of Energy Policy and New Uses at the U.S. Department of Agriculture.

Germany has inaugurated its first offshore wind farm located in the Baltic Sea. Now that the project is operational, it is the country’s second offshore wind farm to go online. To commemorate the achievement, German Chancellor Angela Merkel was onsite to mark the occasion. The 50 megawatt (MW) wind part is expected to generate up to 185 gigawatts hours of electricity each year, enough to power about 50,000 average sized German homes. This wind farm project is part of the country’s offshore wind “gold rush” in the North Sea and Baltic Sea and marks another project that will get Germany closer to its renewable energy goals.

“Germany’s offshore wind industry is taking off. Two parks off two very different coasts have been completed and others are in development. A pipeline is already in place to serve Europe’s largest market and political backing for wind energy is strong. This recipe has led to manufacturers, suppliers and researchers lining up along the country’s coastlines,” said Anne Brautigam, wind energy expert at Germany Trade & Invest in Berlin.

The EnBW Baltic 1 wind farm is comprised of 21 turbines, at a water depth of 50-60 feet, located 10 miles from Germany’s Baltic Coast. The power generated by the wind turbines are connected to the grid via several 410 feet tall transmission lines and the German grid operators covered a large share of the wind farm costs.

Germany generates 17 percent of its electricity needs via renewable energy with a majority coming from wind. Offshore park alpha ventus (60 MW) in the North Sea began operating last year and served as a cooperative test project for utilities, installers and manufacturers. In development is the BARD Offshore 1 (400 MW) project in the North Sea as well as several other projects including Baltic 2, Dan Tysk, (each 288 MW) Nordsee Ost (295 MW), and Amrumbank West (300 MW).

In an effort to accelerate the commercialization of renewable fuels, the Biofuels Center of North Carolina has awarded $1.6 million to 15 different projects located within the state. The monies for the awards came from the 2011 Statewide Biofuels Development Grants Program. The center received 58 pre-proposals from 23 organizations with funding requests totaling more than $5.2 million.

“The juncture of new energy and new agriculture requires smart ideas and practical commercial outcomes,” said Steven Burke, CEO of the Biofuels Center. “The 15 awarded projects-encompassing rural communities and woody biomass, technology and municipal solid waste-verify the competence, scope, and remarkably rapid development of this new sector statewide.”

Within the Center’s legislative and policy mandate is the need to strengthen and fund projects leading to biofuels commercialization. These objectives also help the state meet its renewable energy goal of having 10 percent of its liquid transportation fuels by 2017 produced from locally grown biofuels feedstocks and produced in the state.

The program sought projects targeting three areas: county or regional analyses of assets available for site location of biofuels companies; needs analyses and plans for the conversion of municipal waste into biofuels; and the growing of energy grasses in the North Carolina Piedmont region. The awarded projects will impact 60 counties and will in various ways address biofuels ranging in variety from biogasoline and bioethanol to FT diesel, and biomass-derived jet fuel.

Click here for a full list of award recipients.

As a graduate of Iowa State University (ISU), I couldn’t pass up this story. Several students are launching a project to recycle used vegetable oil from campus cafeterias into biodiesel. The fuel will then power campus buses, known as CyRide.

One of the drivers of this project is Bernardo de Campo, a co-chair of the organization Next Generation Scientists for Biodiesel, an organization that creates a virtual network for young scientists to work together and with the biodiesel industry. Students from various fields have collaborated to install a processor that will turn the waste grease into biodiesel. They have already produced their first batch and are now involved in a 3 week field trial to ensure they can meet the ASTM D6751 biodiesel spec.

Once the BioBus club has achieved this goal, they will start producing and donating the biodiesel to the university who will use the fuel to power one bus with a B20 blend. From there, ISU plans on expanding the B20 blend to additional buses.

Another cool element of the project? It was featured in a recent issue of U.S. News & World Report.

I know what CyRide bus I’ll be riding when I got back to ISU this fall for a football game….

All energy of the bio variety – biomass, biogas, biodiesel and biofuels – were represented at the 4th International Biomass Conference and Expo on Monday during a panel featuring executives of seven different industry organizations.

Moderator Tom Bryan, Vice President of BBI International, asked the panel was what the top priorities for their organizations are this year.

“Just getting parity for algae,” said Algal Biomass Organization Executive Director Mary Rosenthal. She says they are also working on educating lawmakers about algae and keeping the funding they currently have for development from departments of energy, agriculture and defense.

Charlie Niebling with the Biomass Thermal Energy Council said they would like to see thermal incorporated into a true federal Clean Energy Standard. “We still face real challenges in just making sure people understand the role that thermal plays in addressing energy challenges in our country,” he said.

Biomass Power Association CEO Robert Cleaves says they support the development of a federal Clean Energy Standard as well and they want to retain the USDA Biomass Crop Assistance Program (BCAP). “BCAP for existing facilities may be the only game in town as a bridge to somewhere,” he said.

Inclusion and parity are also important for biogas, as well as working on a fundamental change in waste management. “Discontinuing policies that simply take all this organic matter, put it in a hole in the ground and create environmental issues. Instead we need to create policies to divert that to higher, better and multiple uses.” said Norma McDonald of the American Biogas Council.

For members of the Renewable Fuels Association, president Bob Dinneen says what is most important is education and certainty. “We’re looking at a situation where our tax incentive expires the end of this year,” Dinneen said. “What we’re trying to do is get to some reform of the existing incentive that reflects the fact that the industry has indeed grown, that will allow the industry to continue to grow and evolve, but do so in response to fiscal realities in Washington DC now.”

“The biodiesel industry is an example of what can happen when you have total policy failures in Washington DC,” said Joe Jobe with the National Biodiesel Board, referring to the non-renewal of the biodiesel tax for a year that caused many plants to shut down. Jobe says the industry is going strong again and plants are re-opening but they would like to see the tax credit extended again at the end of this year. “We just need a little more time to get a little more mature.”

Finally, Advanced Biofuels Association president Michael McAdams stressed the importance of keeping the Renewable Fuels Standard in place. “The RFS2 is the single most important public policy in the United States for first, second and third generations biofuels,” he said.

Listen the panel talk about priorities here: Biomass Conference Panel

The head of the U.S. Energy Information Administration is anticipating a significant expansion of biomass in the nation’s energy system within the next 25 years.

Dr. Richard Newell told attendees at the 4th annual International Biomass Conference in St. Louis on Tuesday that includes liquid biofuels and electric power working in combination. “You have advanced biofuels made from cellulose and other feedstocks and in the process of producing these advanced biofuels, you also produce electricity,” he said.

Newell was impressed with the attendance at the conference and the great variety of potential energy feedstocks represented. “While corn ethanol has already seen significant expansion, we’re seeing expansion in biodiesel, there’s a lot of other potential pathways that we could be seeing in the future and I think over the next 5-10 years we’ll know a lot more than we do now about exactly where biomass is going to go in the U.S. energy future.”

Listen to a brief interview with Newell here: Richard Newell at Biomass Conference

Sun and algae go together like peanut butter and jelly. Just ask Karl Seitz, Co-Founder of Heliae. I sat down with Seitz during the Advanced Biofuels Leadership Conference in DC to learn a little more about his company and their technology. The first unique attribute of the company is their name. Heli is Greek for the sun and the ae was added for algae so their name is the combination of the sun and algae.

Heliae was formed about four years ago when the team met two professors at Arizona State University (ASU) who told them about a new process by which they could take algae and turn it into jet fuel. The more they heard and understood about the technology, the more hooked they became.

“We looked in to it more and what was of particular interest to us was that their particular strains of algae grew very rapidly, doubled its weight every day, it was high in oil content, greater than 30 percent, and it had the right oil components,” said Seitz. That means it has a component of carbon that goes from C8 to C16 and that happens to be roughly the same carbon string that kerosene has. Kerosene is the main component of aviation fuel.”

Another pro of algae, said Seitz, is that not only can you produce fuel, but also food.

Listen to my full interview with Karl Seitz: Heliae - Measuring Algae by the Barrel

I asked Seitz about their technology and how they were going to go from pilot to commercial scale. “We’re going to start off with our proprietary strains of algae and improve upon them. We do not use a GMO strain. We use a strain that has been chemically altered and provides us with higher oil content and a faster growth rate,” said Seitz. “We also combine that with our closed photobioreactor and then we use our proprietary and patented extraction formulas and techniques to get the fuel out as well as the protein and carbohydrates.”

Seitz said the other issue they are focusing on is developing algae strains that are suited for different parts of the country or different regions around the world.

There are still questions about whether or not algal fuels and products can be competitive with petroleum based fuels and products. Seitz said their initial goal was to produce one barrel per day per acre and at that rate they think they can be competitive. And while many other companies are measuring success by the liter or the gallon, Heliae is measuring success by the barrel. The reason is that the world needs billions of barrels of renewable fuels to replace just aviation fuels. So in the future, Heliae hopes to play a major role in helping the world achieve that goal.

Click here to view the Advanced Biofuels Leadership Conference flickr photo album.

It’s official. BioJet International, a developer of bio jet fuels, and Abundant Biofuels Corporation, an integrated feedstock development company, have merged. With this merger in place, Abundant is now a wholly owned subsidiary of BioJet but its affiliates will continue to operate under the Abundant name and brand. Abundant is best known for its Philippine Jatropha Project and today has more than 4 million hectares in 10 countries under development with ample nursery feedstock to grow enough jatropha over the next three years to produce nearly 20 million barrels of biofuel.

“The Abundant deal is a major step toward BioJet attaining its goal of becoming the world’s largest owner and developer of feedstock for renewable jet fuel and green diesel,” said BioJet Chairman Mitch Hawkins. “Ownership and control of feedstock is the absolute key to all biofuels. The strategic additional bandwidth brought by the team and assets of Abundant form a major building block in the expansion of our Camelina, Jatropha, Algae and Biomass projects in Latin America, Asia, Europe, and Africa. This deal also fits in nicely with our plans for the recent US$1.2 Billion funding commitment we received from Equity Partners Fund.”

BioJet is the first Alternative Fuels Strategic Partner of the International Air Transport Association and they have operations covering various segments of the biofuel value chain including feedstock generation, technology, refining, logistics and distribution for end use by the aviation and transportation sector.

“The International Energy Agency projects that, by 2050, demand will reach $11+ Trillion. Consolidation of our companies creates the first fully integrated global biofuel company capable of addressing that challenge,” said Charles Fishel, Chairman of Abundant Group. “Competitors either focus solely on refining or, alternatively only on production of feedstock. BioJet will be one of the only (if not the only) international biofuels company that can control all of its feedstock.”

“This provides BioJet with the ability to control its internal allocation of resources for a significant cost control advantage while other companies are subject to severe fluctuations in cost and availability of feedstock,” Fishel concluded.

The Town of Newtown, located in Connecticut, will soon be the home of a new solar photovoltaic (PV) project. The city’s waste water treatment facility (Newton Facility) is installing a 95 kilowatt (kW) solar system using technology developed by OPEL Solar International. The project received a $320,000 grant from the Connecticut Clean Energy Fund (CCEF) to help cover the cost for the solar farm, and OPEL Solar was selected through a competitive public bid process with the Town of Newtown.

The solar project includes OPEL Solar’s TF-800 single axis trackers along with PV panels manufactured in the U.S. by Grape Solar, Inc. According to OPEL Solar, their single axis trackers allow for higher energy production for each PV panel. This translates to less cost per kWh than conventional fixed-panel solar systems. It is estimated that for the Newtown Facility, the OPEL Solar tracker system will increase the project’s energy production approximately 28 percent. The flexibility in design of the OPEL Solar tracker product line allows it to be matched with any type of solar panel technology, providing greater efficiency and a competitive edge for panel vendors and as well greater layout flexibility for integrators and engineering firms.

“We are excited that the Town of Newtown selected our advanced trackers for this critical municipally-owned facility, and we are proud of the fact that this installation serves to validate our decision to pursue the municipal market in order to benefit the public with clean solar energy,” said Leon M. Pierhal, CEO of OPEL Solar. “It pleases OPEL to know that the TF800 trackers contributed positively to the Town’s receipt of this significant grant award from the State of Connecticut. We believe the increased energy output from our trackers provides a great match to other facilities similar to Newtown’s waste water treatment plant.”

E. Patricia Llodra, First Selectman of the Town of Newtown, added, “Newtown’s evaluation process was greatly simplified by OPEL Solar offering the lowest cost option, the best energy production and the most advanced solar technology of all the bids received for this installation. This is a leading edge project for Newtown in our continuing efforts to move our Town toward greener options and reduced reliance on fossil fuels.”

A national laboratory in Thailand has signed an agreement that will allow them to produce biofuels using the University of California, Riverside’s process to convert biomass and agricultural wastes into fuel. The project is a collaboration between the UC Riverside Bourns College of Engineering and the Thailand Institute of Scientific and Technological Research. The work will focus on utilizing steam hydro gasification as a means to convert the biomass into fuel. This is a thermal chemical process that turns carbon-based materials into “drop-in” fuels such as gasoline, diesel and jet fuel.

“It’s really an exciting project because Thailand is showcasing the UCR technology,“ said Joseph Norbeck, a professor emeritus at UC Riverside. “It’s a showcase for all of Asia.”

Norbeck, along with Dr. Chan Park and his students have led the development of steam hydro gasification at the College of Engineering Center for Environmental Research and Technology (CE-CERT). The steam hydro gasification process was recently determined by the U.S. Department of Energy to be the most efficient and least capital intensive of all gasification processes.

The duration of the partnership is currently set for three years and will allow an exchange of researchers to execute the research, an exchange of information and publications relating to the research, advice on related technology, implementation of cooperative research and joint publication of the research.

Norbeck has been working with researchers in Thailand for more than 15 years. The relationship has spawned several other collaborations between UC Riverside and Thai researchers including some work studying algae as a biofuel.

The agreement was signed on Monday with UC Riverside Chancellor Timothy P. White. Also present from Thailand were Sutiporn Chewasatn, deputy governor of Thailand Institute of Scientific and Technological Research and Chanchira Sinoulchan, foreign relations officer with the institute.

Reza Abbaschian, dean of the Bourns College of Engineering added, “It is critical to our mission that we be engaged with institutions and researchers throughout the world. Developing and sharing new knowledge across cultures and among nations ensures that we solve problems on a global as well as regional scale.”

The International Biomass Conference is being held this week at the America’s Center in St. Louis.

Domestic Fuel will be there Tuesday morning for the plenary session that starts with a keynote address from Dr. Richard Newell, Administrator, U.S. Energy Information Administration, who recently testified during a Senate Ag Committee Hearing on high gas prices and the role agriculture may play in developing energy sources for America.

That will be followed by an industry roundtable: Our Industry in a Changed Political Landscape. The panel will include Renewable Fuels Association (RFA) President and CEO Bob Dinneen, National Biodiesel Board CEO Joe Jobe, Algal Biomass Organization Executive Director Mary Rosenthal, Advanced Biofuels Association president Michael McAdams, Charlie Niebling with the Biomass Thermal Energy Council, Biomass Power Association CEO Robert Cleaves and Norma McDonald of the American Biogas Council.

Questions for the panel can be submitted via email.

According to a new study released today by Iowa State University and the University of Wisconsin, in 2010, on average the use of ethanol reduced wholesale gasoline prices by an average of .89 cents per gallon. The research was conducted by a number of economists and released by the Center for Agricultural and Rural Development (CARD) and is an update to a 2009 Energy Policy paper authored by professors Dermot Hayes and Xiaodong Du. The paper, sponsored by the Renewable Fuels Association (RFA), also found that the growth in ethanol production reduced gasoline prices by an average of $0.25, or 16 percent while it was even more significant in the Midwest with an average price per gallon reduction of .39 cents.

“This study confirms that ethanol is playing a tremendously important role in holding down volatile gasoline prices, which are currently inching closer to all-time record highs,” said RFA President Bob Dinneen. “As rising oil prices are contributing to higher retail costs for everything from gas to food to clothing, ethanol is clearly providing some real relief for American families.”

The CARD study also showed that the impact of ethanol on gasoline prices in 2010 was even more significant than the average over the past decade. “In 2010 alone, ethanol reduced the average American household’s gasoline bill by more than $800,” said Dinneen. The number was derived from using data published by the Federal Highway Administration, Environmental Protection Agency, and Department of Energy. The organizations show that the average household consumed 900 gallons of gasoline at an average price of $2.74 per gallon in 2010. That means the average family’s annual gasoline bill was $2,470, but it would have been closer to $3,270 without ethanol.

Also examined was the impact of removing ethanol from the fuel supply. Today ethanol represents approximately 10 percent of the supply and the authors found that “Under a very wide range of parameters, the estimated gasoline price increase would be of historic proportions, ranging from 41% to 92%.” At today’s prices, that means gasoline prices would increase from roughly $4 per gallon to $5.60-$7.70 per gallon.

The authors point out that this dramatic price increase would stem from the fact that “…the ethanol industry now provides approximately 10% of the gasoline used in automobiles, an amount that exceeds the spare capacity of US oil refineries.” If ethanol suddenly disappeared, they say “[the] ‘missing’ fuel would have to be imported in the short run, and the required volume would be large relative to available import supplies. The only way to solve this short-term supply problem would be to use high gasoline prices to ration demand.”

Dinneen concluded this finding alone should serve as a wake-up call to those who are seeking to reduce or eliminate the role of ethanol in the U.S. energy market at a time when oil markets are increasingly volatile.

ICM has announced that it is beginning commercial deployment of its biomass gasification system after the successful completion of infrastructure development, research, testing, and an independent engineering review. The company began operating its commercial scale demonstration gasifer back in 2009. The technology has the capacity to covert 150 tons of biomass per day to a syngas that can then be used a a fuel for industrial power and heating applications.

“We’re extremely pleased to announce the commercialization of our gasifier technology. We believe that ICM’s past experience in delivering technology to the renewable energy sector, coupled with our favorable reputation with lenders, makes the ICM gasification technology an extremely valuable and rare option for clients seeking gasification technology solutions,” said Dave Vander Griend, President and CEO of ICM.

Since 2009, ICM has successfully tested more than 13 feedstocks, processed 7,000 tons of biomass, and amassed more than 2,100 hours of operation. The various feedstocks tested include refuse-derived fuel (RDF) generated from municipal solid waste (MSW), tire-derived fuel (TDF) mixed with RDF, wood chips, pine bark, wheat straw, corn stover, chicken litter, switchgrass, automobile shredded residue (ASR) mixed with RDF, and other biomass/energy crops.

“It was critically important for ICM to invest heavily in a commercial-scale demonstration unit to prove the feedstock-flexible capabilities of this robust technology, which dates back to 1975, as well as to give potential customers and lenders the comfort and reassurance they need to finance waste-to-energy and biomass-to-energy projects,” added Tom Ranallo, Vice President of Operations for ICM.

In addition to producing syngas, ICM’s biomass gasification platform also has the ability to co-produce biochar, a type of charcoal, that has the ability to store carbon dioxide in the soil for thousands of years when buried.

“When we embarked on this project three years ago, we thought by the time we reached commercial scale, like we have today, there would be plenty of demand for algae biomass to produce these products,” said Todd Becker, CEO of Green Plains Renewable Energy (GPRE) during the dedication of BioProcess Algae’s Grower Harvester bioreactors. This dedication signaled the last stage to commercialization for algae fuels and by-products as part of the partnership between the two companies that was forged several years ago.

“All we wanted to do was become the farmer of this product and grow and harvest algae. What we have discovered is that we’ve moved faster than the downstream markets have developed,” said Becker.

The event was held in Shenandoah, Iowa, the home of the only co-located first and advanced biofuels plant and also the former headquarters of GPRE before growing and moving to Omaha. Today, GPRE is publicly traded, is the fourth largest producer of ethanol in the U.S and owns and operates nine ethanol plants in six states. Directly employing nearly 600 people, the company expects revenues for 2011 to reach the $3 billion mark.

But maybe why GPRE is so excited about this project, is that they are demonstrating to the world that carbon has value. “What this represents is a true intersection between first generation technologies and advanced technology. What we are showing today to the world is not only does carbon have value, but carbon and other by-products from this ethanol plant, like warm water and heat, can create a product that will give Americans food, feed and fuel,” said Becker.

GPRE and BioProcess Algae have discovered as they reach commercial stage, that they will have to help create the markets for algae fuels and by-products. This month, they are beginning feed trails with Iowa State University that they hope will show the value of a high protein animal product for animal feed. In addition, they are looking to produce products for the food markets including antioxidants, pigments, Omega-3s, and protein. In the energy markets, they are looking at producing biodiesel, a biocrude product as well as producing ethanol from the algae.

So what is the vision of the project? Becker concluded, “It’s still very early days of the technology, but if successful, our vision is to create a process that captures carbon dioxide from every ethanol plant in the United States, use that input to grow and harvest algae, reduce the production plant’s carbon footprint from neutral to negative, and takes the output from the reactors, the algae, and produces next generation fuels, ethanol and energy.”

Click here to view the Flickr photo album from the BioProcess Algae/GPRE Grower Harvester event.