Domestic Fuel

There is a lot of action in the “Beltway” these days surrounding biofuels. One such conversation is around the fate of the Department of Energy (DOE) Loan Guarantee Program. A group of policy makers want to end the program, which right now is funded with Reinvestment and Recovery monies. However, energy companies, such as Pleasanton, California-based Fulcrum Bioenergy, would be dead in the water. CEO Jim Macias said if this program ends “it would be a tragedy.” Not only for his company, but for the entire alternative energy industry as a whole.

Fulcrum Bioenergy is in the process of building a waste-to-ethanol plant just outside of Reno, Nevada using ordinary household garbage and converting it to ethanol, electricity and biochemicals. The plant is fully permitted, engineered and equity financed and the company is in the final stages of documentation to close on a DOE Loan Guarantee that is the final piece for their financing. Once that piece is in place, Fulcrum will start construction and begin producing renewable ethanol at the end of 2012. It is important to note that Fulcrum has been working on the DOE loan for more than 2 years.

When the first plant in Reno is complete, it will produce 10 million gallons of ethanol per year and 16 megawatts of electricity. From there, Fulcrum plans to roll out 20 more sites, already selected, and Macias said the feedstock contracts are already in place. When these 20 sites are in production, they will produce 1 billion gallons of ethanol per year from garbage.

Yet if the DOE Loan Guarantee program gets axed not only would his project die, but any project that has been awarded DOE Loan Guarantees since 2009 would lose their funding.

“It’s very challenging for first-of-a-kind commercial plants to to get fully funded in normal economic times, and federal support for new technologies like this, loan guarantees play a very valuable role in closing the funding gap. We’ve raised all the equity capital to construct it including coverage for potential overruns, and the DOE loan guarantee provides a very important step to help these emerging technologies.”

Macias said its important for emerging technologies to receive government support during good economic times, but even more critical now due to the lack of capital fund and bank credit caused by the ongoing recession. He stressed that the loan guarantee program has played a critical role in helping these technologies that are ready for commercial demonstration to get there.

Macias concluded that if the DOE Loan Guarantee Program is rescinded, it would set back the industry. He also said it would be “devastating to breaking our [America's] dependence on imported oil and reducing the price of oil.”

You can listen to my full interview with Fulcrum Bioenergy CEO, Jim Macias here: Jim Macias Discusses DOE Loan Guarantee Program

PetroAlgae has inked a deal with Haldor Topsoe to provide technology and catalysts to upgrade oils produced from PetroAlgae’s biomass through refinery coking processes and pyrolysis into drop-in renewable fuels including diesel and jet fuels. Haldor Topsoe is global company focused on the refining, petrochemical and power industries. Under the agreement, the two companies will work together to apply Haldor Topsoe catalysts, equipment, and licensed technology to upgrade oils derived from PetroAlgae’s biocrude.

PetroAlgae’s micro-crop technology employs indigenous, aquatic micro-organisms suitable to local climates. The company has structured its business in such a way to enable its licensees to produce an alternative to fossil fuels as well as a high-value protein co-product, while absorbing carbon dioxide from the atmosphere.

“We are very excited to be working with Haldor Topsoe to further validate the commercial viability of our micro-crop biomass for use in refinery cokers and the production of a drop in renewable fuel,” said Dr. John Scott, Chairman of PetroAlgae. “They have extensive hydroprocessing research and development expertise from both a catalyst and a technology design standpoint and we see this agreement as just the beginning of a relationship that will help us realize the promise of our biomass as a clean and environmentally sustainable alternative to fossil fuels.”

Niels Sorensen, CEO of Haldor Topsoe A/S added, “We look forward to taking this important step with PetroAlgae toward producing renewable fuels. PetroAlgae is a leader in developing technology to produce biomass at a large commercial scale, which enables them to be cost competitive with traditional fossil fuels. Haldor Topsoe is committed to renewable fuels and we are excited about implementing projects that will help reach the goals set for renewable fuels all around the world.”

Biotech firm Dyadic International has introduced a new advanced biofuels enzyme at this week the World Biofuels Markets exhibition in Rotterdam, The Netherlands.

According to the company, AlternaFuel® CMAX™ has proven to be effective in converting multiple forms of biomass into fermentable sugars which is the critical step in the production of cellulosic ethanol and other advanced biofuels and biochemicals from non-food feedstocks.

The World Biofuels Markets is Europe’s largest biofuels congress and exhibition, supporting the world’s development and search for alternative energy sources. Dyadic’s President and CEO, Mark Emalfarb, will also be presenting the most recent data regarding the performance of AlternaFuel® CMAX™ at the World Biofuels Markets on Wednesday, March 23rd at the Biobased Chemicals session and on Thursday, March 24th at the Advanced Biofuels session.

The head of a company that produces biochemicals and biofuels says the chemical market, although smaller, is much more profitable than the renewable fuel market.

According to this piece from Biofuels Digest, during the recent BioPro Expo and Conference in Atlanta, Cobalt Technologies CEO Rick Wilson questioned the wisdom of focusing on biofuels when the better money is in biochemicals:

“Why make a $2 fuel when you can make a $5 chemical?” asks Cobalt CEO Rick Wilson, whose company was branded in the public eye as Cobalt Biofuels for several years, but has morphed towards “Cobalt Technologies” (its original name) and is squarely focused on the market for renewable chemicals for the time being. By any name, it’s a hot company, ranked #14 in the world in this year’s 50 Hottest Companies rankings.

“At our company, we produce n-butanol, normal butanol. That’s been produced for a long time, through the complex ABE process, using a lot of different traditional feedstocks. But the feedstocks are increasingly cost prohibitive. The usual barrier to using advanced microorganisms to produce biobutanol has been the rate of fermentation. In our process, we have dramatically overcome that, and accelerated the fermentation rate. Our fermentation time is four hours, compared to 72 hours with the ABE methods. So we have the opportunity to use low-cost feedstocks such as bagasse and wood biomass, to large-value markets where we have a significant cost advantage.”

Wilson admits the biochemical market is much smaller than biofuels, especially when you consider there’s $250 billion in jet fuel and nearly a $1 trillion in gasoline alone. But he says it’s a lot harder to turn a profit in biofuels.

Solazyme has announced that it has filed a registration statement on Form S-1 with the Securities and Exchange Commission (SEC) for a proposed initial public offering (IPO). Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. will act as joint book-running managers for the offering with Pacific Crest Securities and Lazard Capital Markets as co-managers. At this time, the number of shares to be sold has yet to be determined, nor has the offering price.

In other news, Solazyme has announced a partnership with the Dow Chemical Company (DOW) to further the development of Solazyme’s algal oils for use in next generation, bio-based dielectric insulating fluids, which are key to transformers and other electrical applications.

According to a press release, under the terms agreement, Dow will combine its extensive knowledge of specialty fluid formulations and dielectric insulation capabilities with Solazyme’s unique feedstock capabilities to develop of a new class of algal oils tailored for optimized performance and cost in dielectric insulating fluid applications. The non–binding Letter of Intent provides that Dow may obtain up to 20 million gallons of Solazyme’s oils for use in dielectric insulating fluids and other industrial applications in 2013 and up to 60 million gallons in 2015.

“Dow is a world-class organization with enormous research, production and commercialization expertise in a broad range of high-value and high-growth chemical sectors. In this initial joint effort Dow and Solazyme will work to tap into the >500 million gallon dielectric insulating fluids market with novel and breakthrough bio-based solutions,” said Solazyme Chief Executive Officer and Co-founder, Jonathan Wolfson. “In parallel we are working with Dow to explore the use of Solazyme’s algal technology and oils in a wide variety of products that Dow commercializes worldwide, to help provide high performance, environmentally sustainable and cost competitive solutions to a broad set of end users.”

Dow Wire & Cable General Business Manager Tim Laughlin added, “Solazyme is a leading company in the industrial biotechnology space and its renewable oil technology platform provides a unique opportunity to significantly improve the next generations of chemical solutions.”

Researchers at Iowa State University are developing polymers made from vegetable oils that repair themselves.

This press release from the school says Michael Kessler, an Iowa State University professor and an associate of the U.S. Department of Energy’s Ames Laboratory, is working on the technology:

“If successful, the results of this research will provide biorenewable alternatives to petroleum-based resins,” says a summary of Kessler’s research project. Successfully developing the concept “should have a huge impact economically and environmentally.”

The technology has evolved into a system that embeds catalysts and microcapsules containing a liquid healing agent within a composite. As cracks develop in the composite, they rupture the microcapsules and release the healing agent. The healing agent contacts the catalyst and reacts by forming 3-D polymer chains that fill the cracks. That increases material lifetimes and reduces maintenance.

Kessler has collaborated with fellow Iowa State and Ames Laboratory researcher Richard Larock, who has invented and patented a process for producing various bioplastics from inexpensive natural oils, which make up 40 percent to 80 percent of the plastics.

This year will be the year of bio-based chemicals made from algae … that according to the CEO of OriginOil, algae-to-biofuel maker.

Riggs Eckelberry made the prediction on MoneyTV, an internationally-syndicated weekly business television program.

“2011 is the year of biochemicals made from algae.”

OriginOil on MoneyTV, 6 Jan 2011 from OriginOil on Vimeo.

Eckelberry says some major players in the algae-based biochemical business have received funding, especially in the plastics field. He says utilities will also be a big catalyst behind the growth of algae use.

“A power plant is never going to grow algae. They make power. So, for them, it doesn’t work unless an integrator that comes in and does all the engineering and operation. And those are the key players that are going to come into the market.”

Eckelberry points out all the things that use petroleum, such as plastics and fuels, can be substituted with the renewable oil from algae. Plus, the algae can also be used as a nutritional item.

He adds that his own company will be focusing on the oil extraction from algae process.

Butanol is not just for fuel. Today, TetraVitae Bioscience announced that it has successfully demonstrated its process to produce renewable n-butanol in a corn dry-mill pilot plant. The company says this is a major milestone for them in creating economically competitive renewable n-butanol for the coatings, plastics, personal care, and packaging industries.

“With this achievement, TetraVitae has shown that producing renewable n-butanol in a commercial scale corn dry-mill will be a reality very soon,” said Jay Kouba, CEO of TetraVitae. “Corn dry-mills offer the most direct, capital efficient, and low-cost route to large-scale production of renewable chemicals in North America. The industry has built a successful business based on fuel ethanol. TetraVitae is offering dry-mill operators a way to make higher value products using their existing capital base.”

For the demonstration phase, TetraVitae worked with The National Corn-to-Ethanol Research Center (NCERC) to retrofit NCERC’s fully integrated corn dry-mill pilot plant to operate using their technology. The technology performed and successfully produced n-butanol as well as acetone and distillers grains at a competitive cost.

Working with the University of Texas in Austin’s Separations Research Program, the pilot phase of the program also demonstrated product purification. TetraVitae took raw chemical products produced at NCERC and produced purified n-butanol and acetone in a continuous distillation that met all standard chemical industry specifications for solvents.

“n-Butanol and acetone are high value chemicals with many applications in the coatings, plastics, personal care, and packaging industries,” said Kouba. “TetraVitae is creating partnerships with companies across these value chains that will result in economically competitive renewable products that consumers use every day.”