Transform methane into low-cost plastics, chemicals, fuels? Yep, there’s an app for that too.

The deal, as seen by the partners

The research and development collaboration with Calysta Energy relates to NatureWorks strategic interests in feedstock diversification and a structurally simplified, lower cost Ingeo production platform.

Determining the feasibility of methane as a commercially viable feedstock for lactic acid may take up to five years, according to NatureWorks.

If the collaboration results in the successful commercialization of this first-of-its-kind technology, the cost to produce Ingeo would be structurally lowered, and the wide range of Ingeo based consumer and industrial products could be produced from an even broader set of carbon-based feedstocks, complementary to what is already in use by NatureWorks.

“If proven through this R&D collaboration, the new technology could be revolutionary because it will provide alternatives to the current reliance on agricultural feedstocks, and with the direct conversion of methane, it will greatly simplify the number of steps and operations needed to convert carbon into performance consumer products,” said Marc Verbruggen, president and CEO of NatureWorks. “This could structurally lower the cost of producing Ingeo.”

Feedstock diversification for Ingeo: The NatureWorks view

Currently, Ingeo relies on carbon from CO2 feedstock that has been fixed or sequestered through photosynthesis into simple plant sugars, known as “first generation materials.” NatureWorks’ flagship facility in Blair, Neb., uses industrially sourced corn starch, while its second facility currently in planning for a location in Southeast Asia will use cane sugar.

Corn vs natural gas prices since 2005

For NatureWorks, methane could be an additional feedstock several generations removed from simple plant sugars. The project will wrap up with an evaluation of potential sources of a methane feedstock for commercial scale production of lactic acid. The evaluation will include criteria such as purity, availability, price, location to customers, GHG sequestration potential and environmental and energy impacts.

As NatureWorks observes: “Feedstock diversification supports the organization’s goal of utilizing the most abundant, available and appropriate sources of carbon to produce Ingeo for the local geographic region served by a NatureWorks’ production facility.”

Feedstock diversification: seen from the outside

There isn’t going to be a very long study needed to determine the right sources of methane, based on price. Except in highly niched situations — and taking into account that natural gas prices are much higher, and supplies tighter, in Asia than in North America — it is nearly impossible for biomethane to compete economically with fossil-sourced methane, based on current technology.

But there’s good reason for NatureWorks to be looking beyond corn sugar and towards natural gas — and that is the growing disparity between corn prices and natural gas prices.

The chart tells the tale. In 2005, there’s been more than a 10X flip between corn and natural gas prices — moreover, between climate change and commodity speculators, there’s been a spectacular amount of volatility in the corn price — high prices knocked a number of ethanol producers out of the market last year during the epic US drought. It would not be surprising at all to see methane offering, at the very least, a means of assuring steady prices for customers and steady profits for investors by addressing commodity prices swings through diversification.

At the same time, NatureWorks notes that “in parallel with the collaboration, NatureWorks is continuing its broad technology assessment of “second generation” cellulosic sources of carbon. In the case of Southeast Asia, opportunities exist for harvesting cellulosic sugars from bagasse, an abundant lignocellulosic byproduct of sugarcane processing.”

In today’s Digest, we explore the 5-year goal, what Alan Shaw learned from the Shell-Codexis relationship, and the bottom line — by following the page links below.