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DOE awards $36M to six projects for drop-in fuels, chemicals

| June 13, 2011

LS9, Virent, Genomatica, HCL CleanTech among the winners, as DOE fosters replacement of “entire barrel of oil” in latest funding round

In Washington, US Secretary of Energy Steven Chu announced up to $36 million to fund six small-scale projects that will advance the technology improvements and process integration needed to produce drop-in advanced biofuels and other valuable bio-based chemicals. The projects aim to improve the economics and efficiency of biological and chemical processes that convert non-food biomass feedstocks into replacements for petroleum-based feedstocks, products, and fuels.

The newly funded funding projects, which stem from a funding opportunity that closed in February, represent an increased focus on drop-in fuels – and “replacing the entire barrel of oil”, as outlined by DOE Biomass Program manager Paul Bryan at the 2011 Advanced Biofuels Leadership Conference in April. The DOe said that the grants will help diversify DOE’s Biomass Program portfolio to include a breadth of fuels and chemicals beyond cellulosic ethanol and ensure that the Department’s research and development on biofuels remains integrated and strategic.

“Projects such as these are helping us to diversify our energy portfolio and decrease our dependence on foreign oil,” said Secretary Chu. “Together with our partners, the Department is working hard to expand the clean energy economy, creating jobs in America and providing sustainable replacements for the fuels and products now provided primarily by petroleum.”

$13.4M to Virent

The largest award, $13.4 million, went to Virent Energy Systems. The objective of the Virent project is to develop a fully integrated process that can efficiently and cost effectively convert a cellulosic biomass feedstock, such as corn stover, to a mix of hydrocarbons ideally suited for blending into jet fuel.

“We’ve been making jet fuel from conventional sugars for approximately three years,” explains Dr. Randy Cortright, founder and chief technology officer at Virent. “But this award will allow us to move quickly to leverage our recent breakthroughs with cellulosic biomass conversion.” Last week the company announced it was the first company to create gasoline from both corn stover and pine residuals.

In this project, Virent’s novel catalytic conversion technology, known as BioForming, will be integrated with the biomass deconstruction technologies of the National Renewable Energy Laboratory, the state-of-the-art purification technologies of the Argonne National Laboratories and advanced computational modeling of Northwestern University. Like Virent’s other fuels and chemicals, the jet fuel generated in this 3-year project will be “drop- in” meaning it can be blended seamlessly into other jet fuels at high concentrations.

Other awardees

General Atomics (up to $2.0 million): The proposed project aims to reduce energy, capital, and operational cost for algal fermentation processes. This will increase production of algal oils, which can be further refined into advanced biofuels.

Genomatica, Inc. (up to $5.0 million): This project will deliver an engineered organism and optimized fermentation process to enable the conversion of cellulosic sugars to the valuable industrial chemical, 1,4-butanediol (BDO). Such technology will enhance the commercial profitability of integrated biorefineries by enabling co-production of high-volume fuels and the higher-margin commodity chemical, BDO.

Michigan Biotechnology Institute (up to $4.3 million): The project will focus on improvements to a pretreatment process, which provides a stable, conversion-ready intermediate of consistent quality at a cost and in a format compatible with long-term storage and ease of transfer between multiple modes of transportation.

LS9 – HCL CleanTech, Inc. (up to $9.0 million): This project will develop and demonstrate process improvements for pretreatment, conversion to sugars, and subsequent conversion of those sugars to fuels. The complete integrated process will use concentrated hydrochloric acid hydrolysis to convert pre-extracted biomass feedstocks including wood waste into fermentable sugars, and then further convert the sugars into diesel products.

Texas Engineering Experiment Station (up to $2.3 million): The focus of this project will be on developing a novel pretreatment for cellulosic biomass feedstocks using a combination of chemical and mechanical processing. Once the cellulosic feedstock has been pretreated it can be converted into biofuels, including hydrocarbons.

The Digest’s Take

1. Process integration, cost reduction and pre-treatment. The DOE is clearly looking to connect the dots between promising conversion technologies, and pre-treatment technologies that prepare biomass for the conversion to fuels and chemicals. The awards to HCL, Michigan Biotechnology, Virent and Texas Engineering Experiment Station all focus in this area.

2. Drop in fuels and the entire barrel of oil. Each of the six awardees is focusing, in these projects, on the production of drop-in fuels and chemicals that directly substitute for diesel or aviation biofuels hydrocarbons, or chemicals. The DOE has moved sharply away from its long-time focus on ethanol production, which replaces gasoline – and onto the diesel, jet fuel, chemicals, and plastics cuts from a barrel of oil.

Biomass Program manager Paul Bryan has indicated that the DOE sees replacing oil from any cut in the barrel as a worthy goal in reducing energy dependence – and also moves towards the higher value, higher margin cuts in the barrel (vs substitutes for low-value gasoline) as a means of reducing the production capacity, and investment, at which projects can compete on an unsubsidized basis with fossil-based crude oil.

3. Smaller awards. The average award in this round is just $6 million, a fraction of the $25-$80 million that were awarded to projects under funding opportunities in 2007-2009. Like venture capitalists in the field, the DOE is working with smaller projects, smaller amounts in attempt to make its limited funds work harder towards commercializing fuels and chemicals, while recognizing that the progress made by technologies in the 2007-11 period has reduced the scope of the remaining challenges, and thereby reduced the need for larger grants.

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