What’s the buzz when 560 advanced biofuels delegates, including 120 C-level executives get together for deal-making, scuttlebutt, and comparing perspectives? Here’s our Top 10 from Day 2 at ABLC.
Best line at ABLC? SynGest CEO Jack Oswald, comparing the opportunities between chemicals and fuels, opined “I pity da fuel.”
Digest editor Jim Lane pulled some laughs when, noting the overwhelming number of companies proclaiming that they are “feedstock agnostic,” observed that “there appear to be more agnostics here in DC today than any time since the Jefferson Administration.”
Comparisons of “peak oil” to the 19th century’s “peak whale” had delegates chuckling, as well as a diversion from a discussion of squalane, previously obtained primarily from sharks and olives, that went briefly into a consideration of the problems of “peak shark”.
In the “peak whale” discussion, when it was pointed out that one of the commercial advantages of whaling had been the ability or processors to use every part of the whale, delegates had some laughs when it was observed that “they used everything except the whale’s permission”.
But ABLC is, in the main, all business. Highlights from the gathering of advanced biofuels’ leaders? Here are the top 10.
1. USDA Secretary Vilsack.
The Secretary of Agriculture spoke for 20 minutes, with nary a note, and took questions from press and delegates for another half-hour, in a bravura performance that was interrupted by cheers and began and finished with standing ovations from the delegates. It was an impressive performance.
His key announcement was an Advanced Biofuels Industry Roundtable in Washington D.C. on May 18, 2012 as the next step in the partnership with the private sector to produce advanced biofuels to power military and commercial transportation. The U.S. Department of Agriculture – along with the Department of Energy, and the Department of Navy – will co-host the event.
“Advanced biofuels are a key component of President Obama’s ‘all-of-the-above’ energy strategy to limit the impact that foreign oil has on our economy and take control of our energy future,” said Vilsack. “By bringing together farmers, scientists, and the private sector to produce fuel for the American military, we can help spur an industry producing biofuels from non-food feedstocks all over the nation, strengthen our middle class, and help create an economy built to last.”
The Secretary told delegates at ABLC, “there are many reasons you must succeed,” noting job creation, consumer choice on fuels, US revival of manufacturing, energy security, opportunities for rural economic development and progress on emissions among the reasons that advanced biofuels were what he termed “the centerpiece” of a bio-based economy.
The Secretary flagged two issues of concern for the industry. RFS and the budget situation on Capitol Hill. He warned that the RFS was under significant pressure from those that wished to amend, alter or repeal the RFS, although Digest sources have discounted the potential for outright repeal as “overreach” by House and Senate Republicans, reflecting forces affected by ethanol mandates, that are likely to go nowhere, given broader support for advanced biofuels and overall public attention on increasing consumer choice in the face of rising gasoline prices.
“I’ll let you in on a little secret,” The Secretary said. “We are experiencing some financial struggles here in DC.” All kidding aside, the Secretary noted that the proposed House budget for the Department of Agriculture represented “a very, very deep cut” and that proposed cuts in nutrition would make it more difficult to assemble the traditional combine of urban and rural legislators that came together in a Farm, Food and Jobs bill. He added that an energy title was not part of the Farm Bill baseline , and that an energy title would have to come in at the cost of something else.
The floor was bussing on news of a joint venture between Solazyme and Bunge to build a commercial-scale renewable oils facility in Brazil. In his ABLC address, Solazyme CEO Jonathan Wolfson surprised delegates by bringing Bunge bioenergy head Ben Pearcy onstage to co-announce the deal
3. Sapphire Energy
The $144 million Series C capital raise by Sapphire, which included a strategic investment by Monsanto – attracted a huge amount of notice, especially as it was roughly equivalent to the total capital raise from the last two industry IPOs. Sapphire chairman CJ Warner, in a entertaining address at ABLC, confirmed that the company is on scheduled towards commercialization in New Mexico.
4. IPO chatter.
Enerkem IPO watch: The company is expected to debut today on NASDAQ Global Market under the symbol “NRKM” and on the Toronto Stock Exchange under the symbol “NKM”. In its latest filing, the company said that it hoped to raise up to $137 million, in a sale of 7,250,000 shares with a price range of $17.00 to $19.00.
Amyris CEO John Melo kicked off the first day of ABLC by re-affirming the company’s commitment to fuels while noting that they represent the “highest risk, cost and challenges in scale-up” and required large a lance sheets or partners with large balance sheets. In an candid address, he reviewed the lessons learned by the company in its scale-up efforts. He contrasted the increasing speed and efficiency of scale-up construction, compared to the difficulties of commissioning plants and bringing them up to full productivity. Melo noted the rapid progress commercially in product lines such as squalane, observing that the company had become “a significant player in squalane” even at this early stage of the company’s commercial development.
In addition to comments from Secretary Vilsack, a panel including DOE, USDA, and the heads of AEC, BIO’s Industrial & Environment Section, ABFA, ABO and the National Biodiesel Board all noted the pressure on the RFS. NBB chief Joe Jobe warned delegates not to form a monolithic impression of oil refiners, noting that even among those most impacted by RFS there was support to be found for a renewable fuel standard.
7. Steel in the ground.
Presentations this year were highly focused on showcasing ongoing pilots, and also completed demonstration-scale facilities and steel going in the ground for full-scale commercialization. LanzaTech, ZeaChem, Elevance, Virent Solazyme and Amyris focused almost exclusively on discussions of commercialization achieved or in prospect, with a wide variety of applications including fuels, chemicals, plastics, fragrances & flavors.
8. Oils vs sugars.
One of the key hot technology platforms that is receiving white-hot attention – renewable sugars. In the afternoon’s opening address, Virdia CEO Philippe Lavielle downplayed talk about “low-cost sugars” as an”opening statement”, and said that ultimately the focus was going to be all about “the right sugars” rather than simply focusing on cost as the sole driver of strategy.
But delegates were highly attentive when companies such as Solazyme and Elevance focused on opportunities in renewable oils, noting the strong customer demand in, for example, the C10-C14 range as well as chemical intermediates that can be manufactured from plant oils (in the case of Elevance’s olefin metathesis technology).
Agrisoma Biosciences Inc. and Paterson Grain announced a long term partnership agreement for the commercial contracting and distribution of Carinata, the energy feedstock crop Agrisoma has developed as a sustainable source of biofuel. The crop will be marketed under the Resonance brand, a name that reflects the new crop’s energy connection. Under the agreement, Paterson will be the exclusive contracting partner for identity preserved production of Resonance energy feedstock in Western Canada. Resonance seed will be distributed through Paterson outlets.
10. Aviation biofuels
The federal government released a Special Notice regarding possible issuance of a Broad Agency Announcement, under the Defense Production Act, which would request proposals from domestic sources to execute an Advanced Drop-In Biofuel Production Project. “This project will use unique authorities of the DPA to achieve the goals of the Department of Defense (DoD). The BAA will invite domestic sources to propose to address the critical steps involved in the creation of an economically viable production capacity for advanced drop-in biofuels.”
Flagged as a bomb in the solicitation: “No plant based material that is generally intended for use as food may be employed as a feedstock. Corn starch and sugars derived from sugarcane or beets and oils derived from soy, canola, sunflower, peanut, etc., normally recovered using conventional food processing methods, are excluded from eligibility for this project. The determining factor will be the typical use of the material in commerce.”
The DPA announcement gave the following categories of “acceptable” feedstock:
a) Materials, pre-commercial thinning, or invasive species from National Forest System land and public lands (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) that -
(1) Are byproducts of preventive treatments that are removed
(a) To reduce hazardous fuels;
(b) To reduce or contain disease or insect infestation, or
(c) To restore ecosystem health
(2) Would not otherwise be used for higher-value products; and
(3) Are harvested in accordance with -
(a) Applicable law and land management plans; and
(b) The requirements for -
(i) Old growth maintenance, restoration, and management direction of paragraphs (2), (3), and (4) of subsection (e) of section 102 of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512); and
(ii) Large-tree retention of subsection (f) of that section; or
b) Organic matter that is available on a renewable or recurring basis from non-Federal land or land belonging to an Indian or Indian tribe that is held in trust by the United States or subject to a restriction against alienation imposed by the United States, including -
(1) Renewable plant material, including -
(a) Organic material grown for the purposes of being converted to energy; and
(b) Algae; and
(2) Waste material, including -
(a) Crop residue (including cobs, stover, bagasse and other residues);
(b) Other vegetative waste material (including wood waste and wood residues);
(c) Animal waste and byproducts (including fats, oils, greases, and manure); and
(d) Food waste and yard waste.
2) Biomass that is segregated from municipal solid waste (MSW) or municipal sewage sludge (MSS or “biosolids”) are acceptable feedstocks, so long as appropriate considerations are made for the costs of segregation, collection, processing, and transportation.”
The DPA announcement would have immediate potential impact on a variety of potential suppliers, including Imperium and Gevo, that focus on feedstocks such as canola or corn starch.
Next up at ABLC
The Advanced BIofuels Leadership Conference continues today with a focus on Hot Technologies, Hot Partnerships, Financing and Feedstocks with companies such as Phycal, Ensyn, Codexis, Catchlight Energy, Gren Plains, BioProcess Algae, BP Biofuels, Chromatin, Ceres, Proterro and Waste Management on the platform today.