Fugitive Methane, Eating Elephants, and Brewing Quarantine Ethanol

June 10, 2020 |

Earlier this week The Wolfpack was in the news with a discussion that led from Resilience to the possibilities of renewable methane. We left the discussion with a hint about the potential conversion of methane to methanol, which can serve as a powerful chemical building block or, in China most prominently, as a fuel. We’ll pick up from that point today.

Wolf Ron Cascone

Here’s some background on methane to methanol conversion from Wolf Cascone. And he responded with some provocative math on “fugitive methane”:

CO2 as a chemical has little or no value in most cases (ex beverage carbonation, etc.). CCS has no ROI, and CCU is challenging.  Yet, the EU intends to tax carbon at around €30/ton of CO2. Methane has, say, 23 times per mole the GHG potential as CO2.   Should its emissions be taxed at €30 x 23 x 16/44= €250/ton = $279/ton? Methane is now selling for $2/MM Btu = $128/ton.  A typical leak rate of 5% would add $14/ton, over a carbon tax of $91.5/ton.  Thus, the current taxed price of methane should be $233.5/ton = $3.65/MM Btu

You have to forgive Wolf Cascone about the unfamiliar English dialect that top science consultants write in. In science, standard English has been forbidden and everyone writes in a dialect known as TLA, which stands for Three Letter Acronym. So, CO2 is carbon dioxide, CCU is carbon capture and use, CCS is carbon capture and sequestration, GHG is greenhouse gas emissions, ROI is return on investment, BTU is British Thermal Unit, MM stands for millions.

Recently, the Lord’s Prayer was translated into TLA:

Hallow’d BTN,
Give UTD our DB,
+ forgive (if(UOT=forgive(TAU))

Wolf Steve Weiss chimed in with some thoughts driven by The Methanol Economy.

Wolf Steve Weiss

Key ideas include a “seamless” (hate that word) transition to methane / methanol due to its match with current infrastructure (i.e. leverage trillions $); and an upside of moving to renewable methanol over time (e.g. by using renewable power to make hydrogen to combine with CO2). Jim, to me, that 20 year old book sets the stage for much of the discussion we’ve been having here.

How to measure it all?

Wolf Weiss

You’re raising a fundamental policy issue, re taxing various emissions. Does someone estimate methane leaks from pipelines and at oilfields? Measure them? What happens if I can come in with some tech that grabs some of those emissions and turns them into a genuine carbon long-term product sink (a durable material/product)?

What kind of goals and incentives move the needle, and where’s the tax applied?

Wolf David Dodds

Very interesting is the interactive en-ROADS climate model, which can be found here.

Just close the box that says this is a beta product. I can’t speak to the algorithms used – although the assumptions are listed when you go to the detailed views of the different inputs. Playing around with all the detailed setting of this model, I could find only two things that really “moved the needle” and kept the global temperature increase to just 2.0C.

One was to reduce non-CO2 GHG emissions from agriculture by 50% and from industry by 90% (going to reductions greater than those values didn’t make any further difference). Two, a whopping carbon tax of at least $575/ton, starting from “zero” today and ramping up to that $575 in 10 years (by 2030). Nothing else really did much.

I have suggested in the past that fossil carbon should be taxed where it leaves the ground (pithead, wellhead), or where it enters the country (at station on a pipeline, railcar, tanker truck – including “finished petroleum products” such as chemicals and polymers).  Imposing the tax at the point of production (or at the port of entry) at the beginning of the value chain, rather than the consumers at the end, is far easier to do (and to enforce), and the fossil carbon – bearing its new cost from the tax liability – can go wherever the market directs it without need for any further regulation.

Wolf Joel Stone

Sounds like you have provided a great Introduction for me to make folks aware that the Energy Innovation and Carbon Dividend Act (HR763) does exactly as you have described. The tax is levied at the origination point. On June 18th we will have a presentation on DigestConnect followed with a Q&A to discuss the present attributes of the bill and seek ideas on other aspects that a bill like this should consider to change behaviors and create the environmental changes that are needed. Here are some details to help get you all educated.

Is taxing at source tough?

A friend from Nexant, Babul Patel, jumped into the fray. Definitely hungry for value like a Wolf though not formally of the Wolfpack.

Wolfling Babul Patel

Taxing CH4 at source based on its GHG potential will be difficult. How would you assign a leakage factor at the source when NG is distributed all over the country and ownership of the gas changes from wellhead to trunk line to city gate to end users. If you tax methane as fuel with CO2 emissions, it has to be taxed may be at 50% to coal or 70% to diesel. I believe best way is to control leakage is through proper permitting and surveillance programs.

Also, the statement O&G and Petrochemical industry is using the atmosphere as an open sewer will be considered a very radical statement by many in the industry. They are supplying consumer needs. Ultimately, we the users demand their products and consume them.

Wolf Cascone

Rep. Francis Rooney (R) of Florida (offered a)…bill (that) would create a carbon tax of $30 a ton. Imports from heavy emissions-producing countries like China would be taxed, while U.S. exports would be exempt to make sure our international competitiveness is not harmed.

Rooney’s approach is in keeping with that endorsed by most economists, who see a price on carbon emissions as a better way to reduce greenhouse gases than complex and unwieldy regulations. We been unsuccessful at getting the industry all along the value chain to control [methane] leakage (see the M2M report), so I am suggesting a tax. “When you tax something, you tend to get less of it.

The “open sewer” reference is appropriate, not new, and in this case, I am told, comes from Dr. Paul Bryan, who has spent more of his career, including with DOE, in O&G than in the bioeconomy. We have done taxes and cap and trade on various pollutants at every jurisdictional level for decades, including for SOx and NOx acid rain, NOx and VOCs in the SCAQMD and USGC, etc., and on COD and BOD in wastewater everywhere. We don’t let municipalities dumped sewage into rivers and the ocean. The idea of taxing harmful pollutants is baked into our economy and policies. Why is this different, and not an open sewer?

Wolf Dodds

I do recall the same language being used quite widely and publicly in the late 1960s to describe the behavior of “the chemical industry” that was dumping untreated industrial waste into waterways, and again in the 1970s when talking about acid-rain. That kind of language does have its uses, and is appropriate for some occasions. But I would not use it as an opener when being introduced to the CEO of any of the O&G producers at a dinner.

Wolf Bryan

By focusing penalties on the specific thing that you are trying to prevent, you avoid the error-prone and politically-fraught process of “picking winners.” Picking ethanol, for example, was not unreasonable when it first occurred. But today, converting a highly fungible biochemical substrate like corn sugars to the cheapest organic molecule on the planet is simply silly. Yet it persists because ethanol is effectively granted economic preference over almost all other potential products.

Ethanol isn’t silly

Wolf Stone

I have to beg to differ with you Paul as related to ethanol as a fuel additive. Keep in mind that it is the lowest cost, highest octane, and oxygenate for high performance internal combustion engines. Further being a uniform molecule with optimized ignition it is one if not the most clean burning fuels. The engine designers such as Ricardo created the new small block high performance and mileage products based upon ethanol as a significant ethanol additive.

If ethanol is silly then what option would you propose. Certainly not aromatics that have profound environmental issues. Continued gasoline consumption is not environmentally sustainable.

Ethanol can be an essential building block for higher value products but keep in mind we need fuel solutions and from an emissions and environmental and health safety standpoint ethanol to me is the best immediate term option.

Wolf Bryan

My quarrel with fuel ethanol is NOT that it is a poor fuel. It is a good one, and could be an excellent one with engines optimized to take advantage of its properties. My issue is on the grander scale, in the sense that biology can use sugars to make molecules that are far more valuable than ANY fuel, while on the other hand, the much higher rates and “titers” in thermochemical conversion of LC biomass can lead us to multi-component mixtures that will serve perfectly well as fuels. To me, it’s sort of like saying that a 21-year-old Islay Single Malt tastes great with ginger ale and plenty of ice. I’m sure it does, but that’s not the best way to drink it.

If we are going to focus on one slice of the barrel to get the Bioeconomy off the ground (pun intended), why in the world should we start with the LOWEST VALUE slice? Let’s steal the premium chemicals market from the refiners first! Of course, the slanted playing field has forced us into the ethanol business and into fuels, but that doesn’t mean it’s RIGHT.

I hope that you don’t think we have the option of 100% replacement of liquid fuels by ethanol, at least not from fermentation. A 30% renewable blend is failure, or at best a stepping stone. The planet needs 90% renewable, and sure, maybe a third of that being ethanol is a good target, but what about the other two-thirds?

To take one example, we can make methanol from LC Biomass or bio-gas via conversion to syngas with very high Btu capture and with 100% commercial technology, then store and move methanol around as easily as we do crude oil or traditional liquid fuels. We can greatly enhance that process if we do have access to so-called green hydrogen, too. Blending the methanol directly is an option, but if you don’t like that, there is a proven commercial process for converting methanol to high-octane, low-aromatics, alkylate-like gasoline.

I agree 100% that we need to end fossil fuels, but I just don’t think that ethanol takes us far enough. And chemicals markets, biology shines there. Thermochemistry as the cheapest route to the lower value fuels.

The deliciousness of ethanol

Lone Wolf Steve Slome

Another friend from Nexant, Steve Slome, jumps in at this point. Also as hungry for value as any Wolf, so we’ll consider him also Lone Wolf Slome.

Currently there is nothing easier to produce and cheaper than making ethanol as a fuel additive for gasoline. The case could be made for biogas and CNG vehicles, but the vehicles for the most part aren’t set up to use biogas. Thermochemical technologies are few and far between in actual commercial production. While I cede that we MAY be able to do better in the future, I’m not as bullish for a few reasons:

One, and this applies to sugar fermentations only, ethanol is a robust fermentation, one we have been working on for thousands of years.

Two, the high technical complexity of thermochemical technologies comes with a high capital cost, generally. As several high viability developers have outright failed, while others have struggled and changed models several times. Even if other technologies come about in the future, we need a bridge to the future from the present, and ethanol is that bridge.

Three, ethanol is also delicious. Checkmate other biofuels. 😉

Wolf Bryan

Ethanol (at any reasonable price) is limited to simple sugars and starches, though, and those feedstocks can only be part of the answer. Cellulosic ethanol is NOT cheaper than thermochemical fuels, probably never will be, and it’s certainly nowhere near economic. I believe that we MUST use thermochemical technologies to make fuels from LC Biomass, and that as a corollary we SHOULD use starches, sugars, and oils to make the more valuable products.

TC technologies are higher capital than dry-grind corn mills, sure, but potentially less capital intensive than cellulosic ethanol plants. And yeah, those natural gas people talk about bridges, too. I’ll believe it when I see them kicking in some of their profits to build what’s on the other side. Same for corn growers and ethanol makers.

As for the tastiness — I’ll drink to that! As as my old friend Jack Fossbenner user to say: “You aren’t drunk if you can lie on the floor without holding on.”

Not Making Perfect the Enemy Of Good

Lone Wolf Slome

One, we still have to do something now until those technologies are available, and ethanol is better than gasoline.  Let’s not make perfect the enemy of good.

Two, if you can make anything that would generally fall into the gasoline pool, I would argue it is either better: a) fed to a naphtha cracker and turned into olefins for polymers or b) if it is an aromatic converted into any of a number of higher value downstream chemicals, than just burning them as a fuel—not to mention the environmental implications.  I’m not saying tear down the ethanol plants and start from scratch. It’s the ADDED capacity that I think should be looked at differently.

Wolf Stone

Plenty of great discussion and so many different perspectives. Steve make a great argument for ethanol as a fuel. Here are my points:

    • Ethanol is not only a fuel. It is a performance additive that offers octane and oxygenate to existing fuel supply. It would be great to go to 100% replacement of gasoline. That is totally unrealistic since engagement across automobile manufactures, public opinion, supply chain capabilities, production capabilities, and political wills would not be aligned.
    • We need to take baby steps as a plan to make progress. As one of my mentors taught me: How do you eat an elephant? A bite at a time.
    • Having been a sports car racer and engine design follower the most likely approach to take steps further that automobile manufacturers would embrace and in fact have already suggested would be a 30% blend to offer a higher octane fuel that offers both performance and mileage. The auto folks then have a reason to support the change versus fight it. It also allows a phase out of gasoline volumes.
    • We could then gradually increase the ethanol blend levels and possibly introduce butanol ethanol blends for total replacement of gasoline as a fuel.

I am totally supportive of replacing the entire barrel with producing renewable chemicals. My career has been focused on doing just that. Yet, repurposing ethanol plants to make chemicals is quite complex since most of, if not all the new fermentation processes are aerobic and require sterile conditions at a large scale. That is cap ex intensive and no slam dunk by any stretch of the imagination.

No doubt the lowest cost feedstock for producing fuels in the near term is corn and the North American capability to produce and the ability to increase production of corn is continuing on the increase as Doug Berven presented on Thursday. The only way to provide even a 30% blend rate of ethanol would require doubling present capacity. That would mean a construction effort as large as was undertaken from 2005- 2009 during the ethanol expansion. Such an undertaking would be what the USA needs in terms of job creation. It would also mean jobs in the agricultural belt that is in dire need.

Wolf Dodds

Making ethanol is easy. It is the end point of an anaerobic pathway for extracting energy from carbohydrates that is common to a very wide array of micro-organisms. It also happens to be somewhat protective, in the sense that most micro-organisms that make it “in the wild” are reasonably resistant to its deleterious effect on cell membranes. So keeping an ethanol fermentation clean – or at least clean enough to make a useful amount of ethanol – is not very difficult.

Most ethanol plants today run to about 14% ethanol in about 48-52 hours or so, giving a productivity of about 3.5 g/L/hr. It is still the best whole cell process productivity. Poet has reported running to 17% ethanol, and a champagne yeast will run to 20%, but that last few percent takes far too long to be useful.

Further, for reasons that were not directed to making ethanol we are very, very good at growing corn. And all that carbon comes directly out of the atmosphere. And even if photosynthesis is not efficient, ethanol plants are! Theoretical yield of ethanol form a bushel of corn is 3.1 – 3.2 gallons, and plants today are running at around 2.9. And, is a source of income to the ag industry. What Doug Berven said the other day on that point is essential.

Efficiency, and a role for fugitive hydrogen

Lone Wolf Slome

I cannot agree more. The fact that ethanol is both protective and energy producing makes it an evolutionarily advantaged pathway. The problem with many other fermentations is what you are trying to make isn’t good for the cell to make. For ethanol it’s made quite selfishly. Show me another metabolite that does that for the cell, and I‘ll agree that it’s a good platform chemical and fuel.

Wolf Stone

Most all ethanol plants are operating at 15 to 17 %. Some of the advanced yeast strains are pretty remarkable. Some new innovations include bacterial addictions to increase cellulose conversion. Cannot really say more on that detail.

The big bonus going forward is valuable co products for high protein feeds. The next step is converting the CO2 to higher value materials. At present it is a critical Ingredient for soft drinks and frozen foods.

Wolf Dodds

Yes – the CO2 off the top of an ethanol fermentor is the best place to get CO2, but relative to fuel volumes, it is still small. And we need lots of hydrogen to go with it!  And protein is a big deal, and getting bigger. Protein is metabolically expensive to make.  And the world wants more – lots more.

The killer in almost every biological process that makes a “useful chemical” is the need for reducing equivalents (which I have called “biological hydrogen” in other venues.) Theoretically, by adding exogenous hydrogen/reducing equivalents to an ethanol fermentation, one could get three molecule of ethanol and no loss of carbon as CO2, rather than 2 molecules of ethanol and the carbon loss of two CO2 – a 50% increase – with the same amount of carbohydrate input. For Genomatica’s 1,4-BDO, the increase in production would be 83% at the theoretical limit, with no increase in carbohydrate input.  1,3-PDO would see a 33% increase at the limit, and succinic acid would be 16%.

And yes – I completely acknowledge that the cost of that exogenous hydrogen still needs some work.

I am also going to remind us all about what Paul said earlier, comparing thermal processes to biological ones.  Paul has also told us “horses for courses”, so I am going to combine (and likely abuse) his advice and say the world should use thermal processes for handling waste (you know where this is going….) and then feed biological process with the methanol to make things like protein or various fine chemicals that can be produced slightly off the central carbon pathways.  Methanol has an advantage in that it brings along lots of hydrogen in the molecule.

Lone Wolf Slome

Again, I couldn’t agree more!  For the chemical engineers, he’s referring to the redox balance, which isn’t managed by molecular hydrogen, but through metabolites such as NADH and FADH2.

The concept that we have discussed internally to clients is similar to the “cracker plus one” concept from the chemical industry.  It is where you don’t just build a cracker, you build the cracker plus one downstream derivative—whether it is EO, PE, or some other downstream derivative, you go one step down to maximize value.  This is a similar concept that we have suggested: “Central Metabolism plus One”.  You can go one step from central metabolism (e.g., succinic to BDO), without too much trouble—but much further and you will run into serious problems (e.g., genetic drift, low yields, etc).

Also, I think it was a few emails back when we were discussing scale, I am reminded about one of the “overheard around the ABLC” from I think like 5 years ago, “somewhere someone in the petrochemical industry is laughing at your concept of scale”.

The Bottom Line

So, there you have it. The Wolfpack have spoken. Some takeaways: a spirited debate on the role of ethanol, not the appeal of it. Some general agreement that biological conversion relates to chemistry better, and thermochemical conversion (of biomass) relates better to fuel, especially when considering lignocellulosic feedstock. Some positive remarks on future structures and prices for carbon to reach our societal goals for transport. A spirited debate as to the point of measuring and taxing emissions that is not entirely resolved.

We’ll look forward to having the Wolfpack back on the ABLC stage in July when they tackle hydrogen and its production and applications, in their inimitable style.

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