Blue Skies: the high-value opportunities above us for advanced biofuels

September 1, 2014 |

Blue Skies: Labor Day 2014, above USMC Camp Pendelton’s Artillery firing ranges

Renewable chemicals and nutraceuticals are rightly hot because their high-margin markets offer go-to opportunities for emerging technologies.

But what about high-margin markets for advanced fuels? The Digest investigates.

Now that Labor Day is past, we are all supposed to get back to work or school — and in the world of the advanced bioeconomy that generally means, these days, finding high-value, smaller-markets that have immediate cash-generating opportunities for biobased molecules.

There are a number of patient investing “parents” out there in investment land with inspiring goals and giving their portfolio companies plenty of runway to “change the world” — but for more and more companies, the fall of 2014 is going to be replete with talk about accessible, available markets for molecules that can a difference, now.

For many emerging technologies, that means a detour away from the high volumes and the low margins available in road transport fuels — unless they have a compelling case as a bolt-on or a retrofit technology for first generation biofuels companies looking themselves to improve margins, reduce carbon and diversify feedstock sets.

But it is not necessarily the case that all high-margin, small-volume, customer-ready markets exist only in the world of omega-3 nutritional supplements or in the chase for affordable biosuccinic acid.

CL-20 and opportunities in niche, super-dense fuels

Consider the case of CL-20. The CL stands for China Lake Naval Weapons Research Lab, and it’s a super energy-dense fuel used for missiles — and one day, perhaps to reduce the payload cost for rocket launches.

(It’s a complex amine, chemically known as Hexanitrohexaazaisowurtzitane, or HNIW)

The density is impressive. 2.04 grams per cc compared to 0.8 g/cc for kerosene, which is used primarily for jet fuel. The military’s current incumbent for high-energy explosive and propellant — and been the fuel of choice for Trident missiles and the Peacekeeper ICBM — is HMX, also known as octogen, checks in at 1.91 g/cc.

So, there’s a market, and HMX is pricey. Last we heard, it was running $100 per kilo, and CL-20 itself, produced in small quantities by Thiokol mostly, is running something like $1300 per kilo.

What can you use a fuel like CL-20 for?

Besides, missile propellant, consider the opportunities in space. Right now, a limiting factor for satellite launches and anything else in the commercial side of space is the cost per pound of payload.

To illustrate: the Space Launch System due in 2017 will require 5.5 million pounds of spacecraft to put 154,000 pounds in orbit. 89 percent of the weight is in the propellant. So, consider the opportunities.

Beyond kerosene

Is biobased a platform in any way, right now, for the development of super energy-dense fuels that exceed the kind of performance seen with kerosene, which was the primary propellant (by weight) for the Saturn V launch system.

As a team of researchers from the Naval Air Warfare Center at China Lake and NIST, headed by Dr. Ben Harvey, observed a few months back:

“Renewable fuels with densities that exceed those of conventional jet fuels by up to 13% can be generated from multicyclic sesquiterpenes. This advance has the potential to improve the range of aircraft, ships, and ground vehicles without altering engine configurations. In addition, as strategies to efficiently convert lignocellulosic biomass into sugars improve and organisms are developed that can utilize these sugar mixtures and convert them to sesquiterpenes, these fuels can be produced on a scale that would help supplant significant quantities of petroleum.”

Those terpenes, in fact, are under investigation by Allylix, in partnership with China Lake — not only for jet fuel, but high-value chemicals as well. We covered a range of projects from ARPA-E aimed at terpenes here and here. We looked at Allylix’s latest most recently here and here.

So, how do you actually make CL-20?

Right now, it’s a complex process, but you start out with benzyl chloride, ammonia and ethylene glycol (MEG). The last two are the biobased components of choice. A number of companies have been chasing biobased ammonia — BioNitrogen is in the chase, and at one stage SynGest was active here.

Over in the ethylene gloycol space, consider Liquid Light. As we observed in The race to capture, use and monetize waste CO2, it’s “a small company funded by BP Ventures, Redpoint, Osage University, VantagePoint and Chrysalix it just emerged from stealth after six years of developing a technology to convert CO2 into an array of speciality chemicals at reactivity rates — and thereby costs — that not only make it attractive as a carbon remediation, but in this case actually lower the cost of carbon compared to using fossil oil & gas in the first place.

Liquid Light’s first process is for the production of ethylene glycol (MEG), with a $27 billion annual market, which is used to make a wide range of consumer products such as plastic bottles, antifreeze and polyester clothing. Liquid Light’s technology can be used to produce more than 60 chemicals with large existing markets, including propylene, isopropanol, methyl-methacrylate and acetic acid.

And all of that leaves aside the possibility that synthetic biology might deliver a transformative process with fewer steps and radically reduced cost. As LanzaTech CEO Jennifer Holmgren once observed, “the more complex the target, the better that biology looks.”

The Bottom Line

CL-20’s prices, markets and customers illustrate something worth considering, as the lazy days of summer gives way to the harder, tougher days of fall: not all small volume, high value markets are found in nutraceuticals. They are found in super-dense amine fuels — as well as in the terpenes being explored at China Lake and by Allylix.

In the case of fuels and high value markets, you might find that great opportunities lie in the general direction of the blue skies. Er, more power to ’em.

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