The Biorefinery Project of the Future – Part 7 of 10 – Add clean diesel

September 30, 2010 |

In Part VII of our series today, we look at the addition of clean, renewable diesel fuels, as produced by the magic bugs of the type developed by Amyris or LS9 – or utilizing the catalytic bio-forming process under development at Virent. Our goal: the production of even more diesel fuel to replace the fossil-fuels utilized in the farming practices of our community of growers.

The Backstory.

In part I of our series, we outlined the beginnings of the Bioenergy Project of the Future, based on dozens of interviews on the future of technology, policy, rural communities, finance, and the demand for bio-based products and renewable fuels.

We outlined three principles for development:  First do no harm. Less is more. Add ingredients slowly and stir.

In Part I, the product goal is to make and distribute ethanol (butanol is fine too) or biodiesel through the acquisition or construction of a first-generation ethanol (or biobutanol) plant.  We not only have to demonstrate technological prowess in bioprocessing, we have to demonstrate financial and management acumen to all our stakeholders – the community, policymakers, lenders, and customers. As well as to begin to establish that eco-system of relationships in our community that will serve us later on, when we add-on riskier and more advanced second-generation features.

In Part II, the Bioenergy Project of the Future began a graduated series of bolt-ons, beginning with the collection of cellulosic biomass. No, we won’t aren’t adding the capacity to convert that into fuels just yet. That would be getting ahead of ourselves. First, we have to demonstrate that we can build a sustainable ecosystem around the harvest and delivery of biomass.

Part III – Add renewable chemicals. If we have learned anything from the stories of hot companies like Amyris, LS9, Gevo, Solazyme, ZeaChem, Algenol, or Cobalt Technologies, as well as exciting pure-plays like Segetis, Elevance, GlycosBio or Rivertop Renewables, it is the importance of producing chemicals or other bio-based materials first to generate revenues, before taking the company further down the cost curve and up in scale in order to make competitively-priced renewable fuels.

Part IV,  adding renewable fuels
. No longer are we producing advanced biofuels “because we can”, as a demonstration of technology. We are demonstrating the power of our network of relationships in the community, and the power of our growing balance sheet. Now that capacity expands and we begin to saturate some of the market we developed in high-value organic acids, we turn to the fuel market with a capacity expansion effort.

Part V, adding algae. We started to add even more exotic technologies when we look at algae-based options, and other CO2 munching technologies that will help us create renewable fuels from the CO2 we are producing as a byproduct, adding economic strength as well as reducing our carbon footprint.

Part VI, add bioammonia. In our Bioenergy Project of the Future, our goals continue to be not only to increase income, but the sustainability of the project and the carbon impact of our community. Within our slipstream of corn or sugarcane feedstocks, one of the quick wins in terms of producing income while reducing carbon intensity is to add a bioammonia production capability.

Why clean diesel?

Farmers use a tremendous amount of diesel in the production of soybeans and corn – estimates vary, but some have suggested figures of more than three gallons per acre for planting and harvest activities. Controversial researcher David Pimentel has estimated that up to 140 gallons of fossil fuels are consumed per acre of corn, for ethanol production. No matter what the volume, it takes around 50,000 20-ton corn deliveries, or 130 per day, to supply a corn ethanol plant. There’s a lot of fuel in that.

Building our sustainable community

The production of renewable fuels is generally focused around the technologies of sourcing feedstock and the industrial bioprocessing involved. But ultimately, it is about distribution of fuels to a customer. In our sustainable Bioenergy Project of the Future, we start with growers as our community of suppliers – and we are also making them our customers for our renewable fuels.

Their fuel purchases, thereby, will become a form of investment in the community. Communities that embrace our model become exporters of energy – and our diesel-producing magic bug will provide a means of distributing more fuels from the stream of cellulosic sugars produced by our ecosystem.

Magic bugs or bioforming: two paths for bioprocessing

Whether we are using the Amyris yeast-based technology, LS9’s e.coli-based magic bug, or the catalytic bioforming process pioneered by Virent, in each case we need sugar as a feedstock, whether it is from starches, simple sugars such as cane, or cellulosic sugars released by our processing. Rather than generating ethanol for blending into the general gasoline supply, a portion of our product is sequestered for local distribution.

As we highlighted in previous entries in our series, we can provision that service ourselves by establishing fueling facilities at our own processing plant, and catching growers as they deliver fuels. Or, alternatively, we can supply through our local retail network.

The economics and impact

Consider the impact of 10 million gallons of clean diesel, locally generated and distributed through our local community. With 60 billion gallons of diesel consumed in the US (over 3.2 million square miles), a 10 million gallon supply covers the averaged diesel demand in an 80-mile radius around our Bioenergy Project of the Future.

In a practical sense, we may find that the optimum production economics dictate higher or lower gallonages than 10 million gallons, for our diesel-producing process. But consider the impact on rural economics, even at this notional figure.

Where does money flow from fossil fuel purchasing?

Currently, where does the $30 million go, that is spent on diesel fuel in this radius? It may flow to the regional fuel terminal, or to the port, but a lot of it ultimately flows back to the source of fossil fuels in Canada, Mexico, Venezuela or the Middle East, or to fossil-fuel producing states such as Louisiana, Texas or Alaska. Though it may not represent an exported dollar in terms of the US balance of payments, it certainly represents dollars exported to points outside the community. Deposited in other people’s banks, building other people’s communities, creating wealth that creates jobs and attracts a diverse set of businesses.

In addition, the fossil fuel intensity of our renewable fuels directly impact the greenhouse gas emissions associated with each fuel “pathway”. Less fossil fuels used in planting, harvest and hauling, more GHG savings.

Opportunities in the Low Carbon Fuel Standards

And here’s where it gets interesting. Under the proposed Low Carbon Fuel Standards, fuels would meet a qualifying standard not if every fuel used met the overall standard, but if the overall blend of fuel meets the carbon standard. If we make clean diesel cleaner, we get the same GHG impact with less fuel, making clean diesels more economically effective for consumers earlier in their histories.

An example, if our clean diesel gives us a 40 percent improvement in GHGs but costs an extra $1.00 per gallon, we can reduce GHGs in a fuel blend by 20 percent only by passing along a $0.20 cost to the consumer, per gallon. If we can increase that GHG improvement to 80 percent, we can have the same impact on emissions with half as much clean diesel, reducing the consumer impact to $0.10 per gallon.

That improves consumer acceptance and adoption rates, which in turn spurs investment, which spurs economies of scale and process improvements, which narrow the cost gap between clean diesels and fossil diesels more rapidly.

That’s the kind of synergy we all want to create, and stems from the diversion of some portion of our original feedstock from ethanol production to clean diesel. As we build out our Bioenergy Project of the Future, though we started with a first generation ethanol plant, as we build new capabilities we create, more and more, a palette of fuels and make ourselves less dependent on simply blending ethanol into the gasoline supply.

Part VIII – adding lowest-cost feedstocks

In part VIII of our series, as we reduce the carbon intensity in every aspect of our process, we start to have options to reintroduce some lower-cost feedstocks into our process, even if in some cases they cause an increase in emissions.

So we will be looking at the world of lowest-cost feedstocks tomorrow, such as municipal solid waste, brown greases, sludge, and even the dreaded coal. We’ll find that lowering our carbon intensity has given us a lot of flexibility to reduce cost while still producing qualifying fuels, and that spurs adoption.

The complete Bioenergy Project of the Future series

PART IX – Adding other renewables is here..
PART VIII – Adding lowest-cost feedstocks is here..
PART VII – Adding cellulosic diesel is here..
PART VI – Adding bioammonia is here..
PART V – Adding algal fuels is here..
PART IV – Adding cellulosic biofuels is here.
PART III – Adding renewable chemicals – is here.
PART II – Adding cellulosic  biomass is here.
PART I of the series – Ethanol as a Base is here.

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