Heard on the Floor: Reflections and the buzz from ABLC Global 2018

The bunting is down, the bands have retreated and ABLC Global is now in the rear-view mirror — all the bustle of 625 delegates raising a din of deal-making so loud in the anterooms that delegates had to routinely flee to other floors to be heard. It was, at times, not unlike the old trading floor of the Chicago Board of Trade and that was no coincidence, for there was optimism abounding and the deal-talk that flows from a general feeling that the advanced bioeconomy is, to use Amyris’ Joel Cherry’s characterization, “off the beach”. Though students of the Normandy invasion analogies might recall that hedgerows awaited the soldiers who advanced of Omaha, Utah, Juno, Sword and Gold. 

The news of ABLC was in many ways based less around the successes in the American market and more on the specific case of California. As a hot-bed for nutritional innovation, it was not lost on delegates that Impossible Foods’s heme-producing “meat without the cow” was voted the Hottest technology in the Advanced Bioeconomy.

But also as a hot bed for renewable diesel — project after project has been announced for the California market, including World Energy’s massive expansion to 300 million gallons in Los Angeles, the expansion to 300 million plus in Louisiana where Diamond Green continues to mint money with California-bound renewable diesel, Andeavor’s oil-to-renewable refinery conversion in North Dakota, and smaller but technologically important projects from Red Rock Biofuels and Fulcrum Bioenergy and the project that REG has now tipped (though details on  that are sketchy at present). To the extent that these technologies can produce some — or a lot— of sustainable jet fuel, there were smiles from airlines too.

On the ethanol side

Optimism abounded on the ethanol side to the extent that the prospect of US-wide, year-long E15 ethanol blends have moved from “someday” to “next summer, we think and hope”. Much policy work remains in Washington to clear roadblocks. That had cellulosic project developers happy, though Aemetis CEO Eric McAfee warned in a keynote that oil refinery hardship waivers had to be rolled back for oil refiners that were making millions of dollars — that the EPA’’s sorry record of demand destruction had to be stopped if ethanol prices were to recover to sustainable levels.

Aemetis CEO Eric McAfee noted the “Favorable and Enforced Regulatory Environment” in California via the Low Carbon Fuel Standard. Specifically, he noted that LCFS credits traded at $62 in July 2017, but are now trading at $190.

In the Aemetis cellulosic ethanol project in California, McAfee said that the support offered by California’s consumers — finally turning away from fossil fuels despite the price opportunities that comes with free pollution —  works out to $1.86/gallon from the LCFS alone. Add to that the US Renewable Fuel Standard RIN values, which routinely exceed $1.00 per gallon for cellulosic fuels, and there’s a “more than $5.20 per gallon” effective price for cellulosic ethanol in the California market.

McAfee noted that California advanced ethanol plants could produce 160+ million cellulosic ethanol gallons per year from orchard waste. At a time when Biomass-to-Energy Plants are closing in California. Biomass to energy plants decreased from 33 plants to only 5 plants operating. The cause? Lack of ability to compete with low-cost solar, wind and natural gas. Yet there are About 1.5 million acres of almond and walnut orchards in Central California. That’s 2+ million tons/year of Ag Waste. 

Advanced nutrition is rocking

The nutrition technologies stole the glittering rankings in the Hot 40 — not only Impossible, but Modern Meadow, and Clara Foods achieved high rankings,. And the toolkit companies shocked all — with Arzeda landing at #5 and Inscripta zooming up into the Hot 40, and Zymergen and Ginkgo both making the top 20.

Perhaps the technology though that took the most attention was the last one on stage all week — early-stager OPUS-12 CXEO Etosha Cave knocked it out of the park in unveiling a series of CO2-to-syngas and chemicals partnerships with the likes of LanzaTech, White Dog Labs and industrial Microbes. The last shall be first perhaps is the way to think about this electrofuels-like company which fries CO2 with electricity and uses proprietary process to reform the molecules into useful targets. Not since Jason Kelly took the stage about 7 years ago to unveil little-known Ginkgo BioWorks (also within the contract of an electrofuels project, ironically) has a company made such a splash so late in the program and leapt from obscurity to Hot Tech in the space of 15 minutes.

On the policy front

On the policy front, there was optimism that the US elections would usher in good news for a US Farm Bill and otherwise protect the Renewable Fuel Standard after eight years of adverse pressure from the US House of Representatives, but the deployment talk was more about global Feedstock Readiness Level definitions, standardized risk scoring and risk-packaging, technology and project insurance and the structure of bond issues. The idea of a publicly-traded “fund of funds” that could offer smaller, younger Millennial investors a way to support and profit from commercial-scale deployment of advanced, privately-held technologies was in the air. Better transparency for investors and getting better technologies out of stealth mode and weaker technologies out of PR-a-minute mode was buzzing for delegates who were ready for a reset of the public image of advanced biotechnology. 

AgTech’s advances and reflections on genetics

Crop tech and genetic improvement, meanwhile, was persistently buzzing at ABLC from the ovation given (in absentia) to Frances Arnold for winning the Nobel Prize for directed evolution, to the huzzahs given by the Wolfpack to Pivot Bio’s technology for fixing nitrogen in corn production. And the close attention that Zymergen was getting all week.

Perhaps the best received plenary panel of the week was the reflections offered by JBEI legend and Constructive Biology co-founder Jay Keasling, Checkerspot CEO Charlie Dimmler, DMC Bio CEO Matt Lipscomb and Industrial Microbes CTO Noah Helman on the opportunities that genetics and microbe engineering us are offering us in this second wave of Industrial biotechnology. The technology breakthroughs and commercial disappointments of Amyris, Solazyme, OPX Bio and LS9 were in the mix as these veterans of those first-wave high-fliers essayed the new opportunities for a new class of higher-value, customer-demanded, faster-to-market molecules. 

A new pathway to fuels

Good news from our friends at PNNL in Washington state. In a study that appears in Applied Energy, bioconversion and hydrothermal liquefaction were integrated in a new hybrid approach that combines the advantages of both processes to produce a high quality distillate fuel blendstock. 

The paper is titled “Renewable diesel via hydrothermal liquefaction of oleaginous yeast and residual lignin from bioconversion of corn stover” and it’s here.

As a backgrounder, the researchers note, “Oleaginous yeast can produce high yields of lipids from hydrolyzed lignocellulosic carbohydrates, but the difficulty and cost of extracting the lipids from the bioreactor broth, as well as the lack of profitable options for valorizing feedstock lignin are major barriers to cost-competitive production of renewable diesel from corn stover via bioconversion. Hydrothermal liquefaction of lignocellulosic biomass effectively breaks down and converts lignin into biocrude oil products, but provides relatively low yields of biocrude from feedstock carbohydrates.”

Techno-economic analysis suggests a doubling of renewable distillate fuel output compared to contemporary biorefinery designs. And an upcoming research project funded by DOE will look at reducing costs via adding co-product revenue streams. Future research may focus in on improving process efficiency. 

It’s interesting news for the cellulosic feedstock sector — the opportunity to produce drop-in diesel and jet fuel from cellulosics. Amazing low-carbon potential there and expanded supply for aviation biofuels, for example.

Low Carb? Think Low Risk. New co launches

At ABLC, Global Biofuture Solutions was launched by industry vets Cindy Thyfault and Gerard Ostheimer. GBS) applies a sectoral-specific risk-mitigation based approach to unlock increased investment in the low carbon bioeconomy both domestically and internationally. GBS is the evolution and extension of the successful financial consulting company Westar Trade Resources. 

The mission of Global BioFuture Solutions is to accelerate the development and deployment of low carbon technologies worldwide by combining our deep understanding of industry best practices with best-in-class project risk assessment and mediation techniques to:

• Provide expertise to guide legislators and regulators as they develop the policies and approaches to realize new investment in the global bioeconomy.

• Effectively evaluate, share and promote sustainable best practices for the entire bio-project value chain through consulting services that includes feasibility studies and other technical support.

• Use the QuantaVision Risk Management System to successfully measure, manage and mitigate the diverse risks of any given bio-project. These initial risk evaluations can unlock previously untapped financing opportunities, and the independent, regularly scheduled reports can be used for financing servicing requirements for boards of directors, investors, lenders and other stakeholders.

• Build a global network of highly knowledgeable investors interested in using ERM, EGC, and Green Bond criteria to more rapidly develop low-carbon bioeconomy-related investments.

• Deploy a team of experienced global consultants that can assist clients to understand sector specific issues across the entire bioeconomy value chain, including fuel standards and incentives, regulation and legislation, international markets and relations, multilateral financing approaches, bio-based engineering, environmental issues, and bio-based product sales channels.

“Gerard and I, in coordination with our Global Advisory Team members, have been researching the needs and opportunities to assist with rapidly accelerating the growth of the global Low Carbon Economy for the last two years.  Our research led us to develop this new business model, which features a suite of products and services that can help countries, developers, and financiers work smarter, not harder, and increase the pace of new biorefinery development.  We understand that only results count, and we wanted to re-position Westar to increase and expand the offering of products and services that can assist our clients to get there as well. Re-branding as Global Biofuture Solutions highlights our expanded suite of services and highlights our increased ambition,” explains Cynthia Thyfault, Founder and CEO.

It’s the audience, stupid

In my closing remarks at ABLC, I noted that it has always been said that what makes Broadway theatre a beacon of innovation and excellence is not just the creators and the performers, but the great Broadway audiences, sophisticated enough to know quality and motivated enough to consistently support it, give it buzz, and make sure that innovation has an audience. It’s what makes ABLC so much the event that it has become — not just the excellence of the 182 presenters but the discerning intelligence of the audience. Where else, after all, could you pack them in for a session like the Wolfpack, where six due diligence experts explode myth, overturn cant, and blast out pettifoggery and hype in search of real value. ABLC is lucky in the quality of its 630 delegates this year.

But it’s something to note for the customers  of the advanced bioeconomy’s products as well. They are beginning to tire of arguments that fossil fuels are the right platform for making consumables and endurables, simply because they are cheap at the pump (and elsewhere). Californias are turning away from the idea that offering a free sky-based sewer to fossil-based “one and done” emissions may produce a cheap product, but it doesn’t produce a better world. Americans supporting President Trump and other people supporting other leaders around the world are discovering that handing fortunes to lowest-cost producers — regardless of consequences — create intolerable global conditions. 

It’s time to set aside the myth that Low Carbon Fuel Standards offer subsidies to clean technologies. That’s a narrative offered by apologists for the darker times that “lowest cost, regardless of consequences” bring on. Though supporters of Republican policies and doing something about climate change often find themselves at loggerheads, it’s a ridiculous divide. Because the Trump Narrative and the Climate-Change narrative are the same narrative — greatness lies not in lower prices but in a world organized around values. Values have value. Though groups disagree about priorities, and area of action — and economists debate the wisdom of tariff policies, carbon schemes and so forth, the message is clear from a public weary of the unintended consequences of two generations in pursuit of cheap stuff. 

We are more important than our stuff., Our identity is more valuable to us than the price on the shelf. In tying a carbon price to a fuel price, climate-concerned voters are doing much that is different than tying a tariff-price to a commodity price. Economists warn us that the economy will suffer if we arrange the world to become a better place, because we are not allocating out money to do the most economic good,.

So what. I am writing this on a Sunday when millions of people around America and the world are placing hard earned dollars in collection plates as an offering to God and in support of religion and values. There’s nothing particularly efficient in individual supporting the works of religion or the institutions of the Almighty. 

Yet the nation was founded in pursuit of religious freedom. It is a nation of values, and same goes almost everywhere else. The Advanced Bioeconomy’s progress is evidence that America  — like many nations around the world — is finding, once again, the road to greatness is paved with values. Values drive habits, habits drive actions, and actions change the world.