Biobutanol – the fuel to leap the blend wall?

| June 15, 2010

A demonstration car taken cross-country by Butyl Fuel

Digest readers who closely analyze the Advanced Biofuels Tracking Database will have noticed that, commencing in 2012, biobutanol is scheduled to grow rapidly from pilot stage today to more than 500 million gallons in production by 2014. That’s about 60 percent more butanol by 2014 than the entire US biodiesel market today.

Not to mention that biobutanol has become one of the “now” darlings of the DOE — which has been looking for early “wins” from its round of integrated bioenergy facility grants and sees biobutanol as a sector that will gain traction and find financing the fastest.

What’s up?

The traction is coming from three companies – Butamax, Gevo and Cobalt Technologies – each with a different path to commercialization based on differentiated technology, and also their financial structure. What they share is commercial guidance that biobutanol is about to explode – for both the chemicals and fuels markets.

Today, in the Digest, we are delighted to present this special update on biobutanol including revised guidance from Gevo this spring, and new guidance from Cobalt and Butamax as of last week.

Biobutanol – what is it? Why the excitement?

Butanol is a four-carbon molecule — as opposed to ethanol’s two — made from the same feedstocks as ethanol. As a fuel, it can be transported in existing infrastructure and does not require flex-fuel vehicle pipes and hoses. It has about 4 percent less energy density than gasoline, but that’s hard to notice compared to ethanol’s 27 percent drop compared to gas.

Addressing the blend wall

Its real beauty is in the fuel blending. Biobutanol, today, is approved for 16 percent blends (compared to ethanol’s 10 percent limit). If ethanol were approved for 15 percent blends by the EPA, biobutanol would be approved for 24 percent blends. Combined with the improved energy density, in a standard 13-gallon sedan tank you can carry up to 109,000 BTUs of E10 ethanol or 228,000 BTUs of biobutanol – a little more than double.

However, there are fewer blend wall issues. Right now, with E10 the US is right at the “blend wall” where farmers and processors will have to look for alternative, lower-margin foreign markets to market their ethanol. With biobutanol, the same amount of corn that results in 13 billion gallons of ethanol and hits the blend wall, produces 10.4 billion gallons of biobutanol. Plus, the 16 percent biobutanol blend wall is encountered not at 13 billion gallons, but at 20.8 billion gallons.

So you could process twice as much corn into biobutanol without hitting today’s blend wall. If the EPA were to approve E15 (and, in the process, Bu24), that would create a blended biobutanol market of up to 31.2 billion gallons. That carries the US a long, long ways towards the Renewable Fuel Standard without requiring a massive flex-fuel fleet.

Some other biobutanol advantages

Not to mention some production efficiencies. With biobutanol, you can use a smaller fermenter to make the same BTUs per batch as ethanol, or make more BTUs per batch. So, more revenue per run.

Here’s another secret, though. Because of ethanol’s low vapor pressure,, when prepping a gasoline blendstock for E10, according to Butamax CEO Tim Potter, “refiners have to cut off the light end of gasoline, and that cut-off gasoline – that used to go into gasoline – has to be distributed in the form of lower value co-products. With butanol, a refiner uses more of barrel of oil.”

For the feedstock processor, there’s little difference. A 100 Mgy ethanol plant can be retrofitted to produce about 80 Mgy of biobutanol – equivalent on the BTUs and – assuming that biobutanol will be priced in the market at the same on BTUs as ethanol or gasoline — farmers receive the same value for their feedstocks either way.

Win-win-win-win?

In short, its a potential win for the auto manufacturer (less hassle in converting vehicles), for the refiner (higher profits), for the farmer (more high value markets, blend wall farther away), and for the transition to renewable fuels (more BTUs of renewables in the tank).

So, why wasn’t biobutanol the target fuel from the start?

As Butamax’s Tim Potter explains simply, “it’s hard to make, and especially on a commercially viable basis.” But that’s what is changing at Butamax, Cobalt and Gevo – with companies like ButylFuel and Green Biologics also in the development phase.

Cobalt

Focus: Cobalt makes n-butanol, a higher value isomer that is more important for the renewable chemicals market. Butanol has a 1 billion gallon global market as a chemical base, selling at $7 per gallon, and that’s where Cobalt is focusing its attention.

Near term: Pilot running. 1.5 Mgy commercial demo open in 2012. The partner has been selected and development is underway, but the partnership has not been yet publicly announced. That should happen over the summer. The last stage-gate will be crusaded in August – “no turning back then” says CEO Rick Wilson.

Technology and Feedstocks: Cobalt has a bacterial-based conversion technology that likes pulp and paper’s five-carbon sugars in the waste flows, so look for partnerships along those lines. Pine trees work well also.

Commercialization: Cobalt will commercialize int he 10-15 Mgy range, focusing on the expected waste flow from standard pulp and paper mills waste flow. By co-locating with a mill, construction costs are kept low, though we do not have form $ per gallon figures at this time, though Rick Wilson says that operating costs will be in the $2 per gallon range.

Future moves: Aside from broadening to pine tree feedstocks, expect Cobalt to target Asia where butanol can help with renewable fuel mandates in India. Diesel is a possibility, as butanol can be converted via di-butyl ether, and jet fuel is a chemical possibility as well and opens up a $4 per gallon market.

Key advantages: N-butanol fuel gives market opportunities. Bacteria-based technology makes Cobalt the only biobutanol producer that can use C5 sugars as feedstocks.

6 things to know about n-butanol

• NButanol can be converted to 1-butene which can be used to make Jet-A, JP5 and JP8.  Chemistry developed by US Navy for cellulosic N-butanol, report attached.

• NButanol can be converted to dibutylether which is stand alone diesel fuel.

• NButanol can be converted to butene which is used to make MEK, LLDPE, Polybutene, Valeraldehyde, butadiene, butyl rubber, MMA

• Ethanol + Butanol can be converted to propylene (existing process called Propylene on Purpose) used to make polypropylene plastics. Ethanol can be converted to ethylene used to make plastics (polyethylene).

• Butanol as gasoline.  N-butanol (cobalt) has RM/2 = 87 regular gasoline which is 92% of market.  Iso-butanol has RM/2 = 92 premium gasoline.<

More on Cobalt

In April, Cobalt discovered a process for commercially utilizing bettle-killed pine.

In January, Governor Schwartzenegger of California was on hand when Cobalt opened its pilot plant, and CEO Rick Wilson began to steer the conversation on Cobalt’s progress to a more-imminent time.

In October 2008, the company shored up its war chest with a $25 million series C capital raise.

Butamax

Focus: Butamax, a joint venture of Dupont and BP, is focused on the fuel market. It expects to be at parity with ethanol on a cost per BTU basis by 2013.

Near term: Butamax will commence production at its integrated demo plant in Q3, and expects to enter the US market on a commercial basis in 2012/13. Later focus will be Brazil.

Technology and Feedstocks: Butamax has genetically enhanced yeast to produce biobutanol instead of ethanol, and has developed a technology to extract the biobutanol continuously, because biobutanol is more toxic to the yeast. Near-term, US corn,  Brazilian sugarcane. Later, wheat, macroalgae and eventually lignocellulosic feedstocks.

Model: Will license the technology and market biobutanol, working initially with existing US corn ethanol plants that will go through a “couple of weeks” downtime for retrofitting the fermentation and distillation units.

Scale. “You’ve got to do it at scale – got to have impact, you need enough volume for the fossil fuel blendstock,” says Potter. “we’ll start with one plant with partners — a collaboration with existing key partners we are in discussions with now – and we’ll demonstrate the value. Then, we’ll target a supply envelope where we can use the infrastructure and add a premium value.”

Pace: “Looking at how the industry executed ethanol,” Potter said, “in its heydey there were 24 plants under construction at one time in an 18 month cycle. Ours is a very small project by comparison. We believe we have to scale as fast as possible, for one, to have an influence on future regulation, and we are targeting the
strong, deep, capable partners to do that.”

More on Butamax

The Digest did a profile on Butamax and its parents Dupont and BP in April: Portrait of a Biobutanol Strategic Investment by BP and Dupont, here.

If you were keyed in on Butamax CEO’s  Tim Potter’s comment, above, about working with Dupont and BAL on macroalgae, here’s more.

And here. from last July, is the three-pronged Dupont strategy, including its interest in biobutanol.

Gevo

“Gevo’s strategy is to retrofit ethanol capacity to produce butanol,”” said SVP Jackk Huttner in prating the Digest’s guidance earlier this spring. “Our 1 MGPY demonstration plant, built with ICM, our exclusive engineering partner for No. America, is operating in St. Joe, MO.   We are currently in the market for and plan to bring 30-50 MGPY on line in 2011 and ramp up from there with a total of 500 MGPY in production by 2014.  So, say:  50 MGPY in 2011; 150 MGPY in 2012 and 300 MGPY in 2013.”

In May, Lanxess, the world’s largest producer of synthetic rubber, announced that it invested $10 million in Gevo and will receive a board seat, as part of a proposed cooperation to produce isobutene from renewable resources. The companies aim to find an alternative route to source isobutene – a key raw material needed in the manufacturing of butyl rubber. Isobutene is conventionally produced in steam crackers, which use petroleum derivatives as a feedstock.

Last November, Gevo was awarded up to $1,780,862 in a combined USDA/DOE grant to develop a yeast fermentation organism that can cost-effectively convert cellulosic-derived sugars into isobutanol.

Green Biologics

Earlier this month, Green Biologics announced the completion of new $7.20 million investment round to fund its biobutanol commercialization plan. Green Biologics intends to focus on the retrofit of ethanol plants as well as providing fermentation and process technology solutions for existing and new build biobutanol plants in China, India, Brazil and the US.

In February, the company updated  Digest readers on its development efforts with biobutanol. GBL recently expanded its business in China, where it is working with two biobutanol producers to provide step change improvements in their process economics. The work to date in China has demonstrated a cost saving of over 30% for GBL’s lead client reducing the production cost of biobutanol by over $400/tonne.

ButylFuel

ButylFuel has not proceeded out of the R&D stage after landing a DOE SBIR grant, and staging two promising long-distance demonstration drives using a butanol-based fuel. But the company says: “ButylFuel, LLC has developed and patented technology that overcomes the limitations that have to date complicated and kept the cost of butanol production from corn and other forms of biomass high.

“BFL is now able to produce 2.5 gallons of butanol from corn with no Acetone or Ethanol, whereas others have not been able to achieve better than 1.3 to 1.9 gallons of Butanol per bushel and still utilize an ABE process. Further, BFL’s technology generates hydrogen which is likely to receive additional attention as an alternative fuel in the future. In fact, taking into account the hydrogen production, BFL can produce 42 % more energy from a bushel of corn than is typically produced by a corn-to-ethanol plant – 25 % of the difference lies with the butanol and 18 % comes from the hydrogen.”

R&D

Last August, research engineers at Ohio State University, reporting at the American Chemical Society meeting, said that they have developed a new strain of the bacterium Clostridium beijerinckii in a bioreactor containing bundles of polyester fibers, that produced up to 30 grams of butanol per liter.



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