The Hottest Slides in Bioenergy: Part IV

From the leaders in bioenergy and chemicals—  the real issues and trends.

In California, ABLC-Next has concluded for this year — and industry leadership in R&D, commercialization, policy and finance will reconvene at ABLC 2014 — the Advanced Biofuels Leadership Conference — in Washington DC on April 21-23 of next year.

Between now and then, we are providing highlights from this year’s presentations. Today, part IV of our look at the hottest slides from ABLC-Next.

The Voices in the Conversation — giving you their outlook on the most important issues and trends

John Kasbaum, KiOR’s SVP of Commercialization

Roy Johnston, Director, Waste Management Corporate Venturing

Martin Mitchell, Business Development Manager, Clariant

Markus Pompejius, Head of Research Bioactive Materials and Biotechnology, BASF

Daphne Preuss, CEO, Chromatin

Eric Pryor, CFO, Fulcrum Bioenergy

Theodora Retsina, CEO, American Process

Alan Shaw, CEO, Calysta Energy

Bob Ames, VP, Fuels Commercialization, Solazyme

Rebecca Boudreaux, President, Oberon Fuels

John Kasbaum, KiOR’s SVP of Commercialization

One of the items that struck us at the Digest during John Kasbaum’s presentation this year at ABLC — the emphasis on local rural redevelopment and the economic impact that a state can realize from adding energy production as a rural industry. $350 million in local investment would be good money in New York or London — in rural counties, often facing plant closings in other industries, it’s a massive infusion. Also realizing, according to Kasbaum (in the case of KiOR), $200 million in annual revenue.

Now, critics sometimes point to the low job creation that industrial enterprises involve. You can add more jobs by adding a Wal-Mart, they say. But what about that $90 million in local procurement? Wal-Mart — well, they may or may not being buying most of their materials from China — as the cliche goes — but they sure aren’t buying in that kind of volume from the surrounding community. That’s what makes bioenergy an export business — bringing net cash flow in to the community — as opposed to the net outflows that can be experienced with adding retail.

Roy Johnston, Director, Waste Management Corporate Venturing

Waste Management has presented a number of times at ABLC — but this was newly-minted Director Roy Johnston’s first time on stage — and we were intrigued by his thesis that it is not technology barriers that face commercialization of waste-to-fuels technologies — but rather, the supply chain issues, regulatory and commodity risk. In the case of WM, they are actively seeking partners that can reduce risk in these areas — including knowledge of price drivers, processing, logistics — in addition to standard offtake agreements.

Martin Mitchell, Business Development Manager, Clariant

One hopes that, with all the deployment of cellulosic biofuels technology that is underway, the cliché that cellulosics are “five years away” have been exploded forever. But…just in case, and for those just now bringing their technologies forward, Clariant provided an excellent roadmap in the “what it takes” and “how long it takes” department, in highlighting their cellulosic ethanol technology. Martin Mitchell, in this slide, encapsulated the key points — have a pilot plant operating for a long period, a demonstration plant running for an extended period (e.g. 12 months), ensure technology validation at that demonstration plant level, and have a technology-package ready for industrial scale. Do all that, from launch of the pilot to commercial-ready, in five years or less — and you are on the same timeline as the industry heavyweights.

Markus Pompejius, Head of Research Bioactive Materials and Biotechnology, BASF

Among the strategic partners that presented at ABLC this fall, we were highly intrigued by the breadth and depth of BASF’s activity. They haven’t been as lively and noisy in promoting their industry activities as some — but in this slide you can see 11 industrial partners they are highly active with — several of them via strategic investment and acquisition. As Markus Pompejius, BASF’s Head of Research Bioactive Materials and Biotechnology said on stage “it is always about financial return, but not at all exclusively about financial return. It is about additive technology — leading BASF to make strategic investments in Genomatica and Renmatix in the near-to-present as well as undertake the acquisition of Verenium.

Daphne Preuss, CEO, Chromatin

Chromatin’s gene-stacking technologies have applications in numerous feedstocks, but they have retained those rights in grain sorghum and have built an impressive case for conversion of certain marginal corn acreage to their hybrid sorghum. This slide, in many ways, sums up the economic case. For farmers realizing less than 130 bushels per acre from corn, sorghum can provide superior economic returns. Among the reasons, lower production cost, near-to-comparable per-bushel prices. Most importantly, in marginal areas (especially marginalized by rainfall), sorghum can flat out-produce corn in terms of bushels per acre. This slide also highlights the fantastic amount of geography that faces these lower corn yields.

Eric Pryor, CFO, Fulcrum Bioenergy

This slide, from Fulcrum’s CFO Eric Pryor, comes as close as any to placing on one slide a “what it takes” to get affordable financing for first-of-kind advanced biofuels technology. In Fulcrum’s case, it’s a zero-cost, 20 year contract on feedstock (though financiers tell us that the important point is not “zero-cost, 20-year” but “long-term, feasible cost” _ Filcrum simply goes “above and beyond” the standard here. But the others are important too — low production cost, long-term offtake contracts with credit-worthy partners, and social attributes ranging from environmental to local economic impact.

Theodora Retsina, CEO, American Process

Although American Process has been most closely associated with its complete cellulosic biofuels package — of late, the company has been much in focus because of its capabilities in producing low-cost renewable sugars. Here in this slide, CEO Theodora Retsina highlights a complex chain of relationships that turns that sugar stream into a value stream. Thought it was a matter of making sugars and shipping them to an ethanol producer? Think again. In this case, retsina highlights opportunities for butanol and ethanol conversion from xylose and mannose. But glucose, she suggests, will go to the sugar markets and to chemical processors. And she highlights the advantages in co-locating with power plants for power & heat. In short, there’s an industrial symbiosis building up — where you can see power, renewable sugars separators, fuel biorefineries and chemical plants potentially sharing a central location, close to biomass feedstock and rail logistics.

Alan Shaw, CEO, Calysta Energy

Of all the excitement that has built up in the area of using low-cost methane to produce transformatively low-cost products — there haven’t been too many deals that have turned as many heads as former Codexis CEO Alan Shaw joining Calysta Energy as CEO and striking a landmark deal with NatureWorks to convert methane to plastics. The Prince of Sugar, joined with the Kings of Bioplastic — using methane, which would primarioly come from fossil sources?

Well, this slide tells the tale. Here. you see how methane (possibly from biobased sources, or stranded and currently flared, mind you) can be converted to lactic acid using Calysta’s methanotrophs. Then, NatureWorks takes that lactic acid monomers and converts it into a range of long-chain polymers — voila, a range of bioplastics. And, if you notice, taking those off-gases which are generally burned, and sequestering them in stable products that replace fossil oil-derived plastics. Ah, more sustainable than originally thought. And good economics, too.

Bob Ames, VP, Fuels Commercialization, Solazyme

Now, of late there has been a huge amount of attention on Solazyme’s higher-value products in cosmetics and longer-chain tailored oils — but what about its origins as a fuels technology. Still highly active — and in this slide, VP of Fuels Commercialization Bob Ames explodes a myth we have heard over and over: that fuels customers will not pay a premium for renewable fuels over fossil fuels.

Not true, says Ames. It may well be true that customers will not pay more for comparable attributes — but renewables do not have comparable attributes, as it turns out. In this slide, he goes through the head-to-head comparison.

Lower maintenance costs, reduced heat signature, high altitudes possible, longer flights possible, storage life in years instead of months, environmental advantages. All of these, he notes, translate into better operating conditions, improved market share, or lower costs for airlines. Why wouldn’t they pay more to make more? The evidence is growing, says Ames, that they will pay more for proven overall savings or reduced risk, whether that savings comes strictly off the fuel bill or is realized elsewhere in their operations.

Rebecca Boudreaux, President, Oberon Fuels

At ABLC, there was much discussion of innovation in feedstock, financing and production — here, Oberon Fuels President Rebecca Boudreaux takes us through another hot area of innovation — the downstream fuel molecules themselves. While it is never easy to convert infrastructure and introduce a new power source — the world is getting much more used to it in this era of electrics, CNG and flex-fuel vehicles. Here. Oberon highlights DME fuels, which handle like propane but are not (like propane) tied to the crude oil price. Moreover, they reduce sulphur and soot just like biodiesel — but also have low NOx, which biodiesel does not have. And they can be made from multiple gas feedstocks — including methane and biogas. A great local producer outcome, potentially — converting low-value biogas to a high-value, propane-like fuel. Another excellent use for stranded natural gas, as well.