First Commercial Cellulosic Ethanol Plant in US Goes Bankrupt

http://www.energytribune.com/75180/first-commercial-cellulosic-ethanol-plant-in-us-goes-bankrupt

Posted date: March 20, 2013

By Robert Rapier

Ed. note: This piece was first ptublished on Robert Rapier’s R-Squared Energy Blog.

First Qualifying Cellulosic Ethanol

 

Last year, to much fanfare, the first batch of qualifying cellulosic ethanol was produced (i.e., it qualified for credits under the EPA program for certifying ethanol for sales). I reported on the development at that time.

Western Biomass Energy LLC, a subsidiary of Blue Sugars Corporation (previously KL Energy) reported the major milestone of claiming the first cellulosic ethanol tax credits under the RFS2 for a 20,069 gallon batch of cellulosic ethanol produced from bagasse (sugar cane waste) in April 2012.

However, regular readers are aware that for years I have been deeply skeptical that cellulosic ethanol as envisioned by — and ultimately mandated by — the US government will be an economic and scalable fuel option. The obstacles to success are significant, and I have described them in detail on many occasions.

Nevertheless, there is the possibility that in some niche applications that modest amounts of cellulosic ethanol may be produced for sale. One of those niches is from waste biomass such as bagasse that is produced during the processing of sugarcane. But in general – despite the proclamations from promoters like Vinod Khosla – the chemistry and physics are formidable obstacles working against the success of cellulosic ethanol. I will state in no uncertain terms that I don’t believe it can ever be mass-produced more cheaply than corn ethanol, and that industry’s financial trouble are well-documented.

Another Reality Check

 

I was extremely skeptical that the batch of cellulosic ethanol produced by Western Biomass was anything more than a publicity stunt rather than an indication that they had actually managed to conquer the economics of the process. My skepticism was heightened when they never produced another qualifying batch for the rest of the year, and that one batch they did produce was exported to Brazil to be used at the Rio+20 Conference.

Now comes news that Western Biomass Energy has filed for Chapter 11 bankruptcy protection. In my column in which I reported on the initial production of cellulosic ethanol from Western Biomass, I noted:

Cellulosic ethanol commercialization still faces a number of challenges. Capital and operating costs are expected to remain higher than for corn ethanol producers, and even they are currently struggling with low margins. The ethanol market also faces the hurdle of the blend wall, which makes it difficult to expand domestic production without increases in E15 and E85 consumption, and/or ethanol exports.

It will continue to be true that as long as the US government incentivizes these ventures, companies will continue to pursue them. But I believe it is also true that every gallon of production they make will be produced at a significant per gallon loss. Mother nature simply didn’t design cellulose to be easily accessible, and extracting the cellulose, converting the cellulose into sugars, fermenting those sugars to ethanol, and finally purifying that ethanol will continue to be capital and energy-intensive operations.

Investors Should be Cautious

 

In addition to Western Biomass, one other company has produced qualifying cellulosic fuel. Vinod Khosla-backed KiOR announced earnings this week, while at the same time announcing that they had shipped their first batch of qualifying cellulosic diesel. This was presented as great news, and KiOR’s share price initially surged on the news. But a closer reading of their financial statement signals the kind of warning flags about KiOR that I have been waving for over a year:

The Pasadena, Texas-based firm lost $0.28 per share during the fourth quarter, falling short of the $0.15 per share loss in Q4 2011. However, it beat the Wall Street consensus of a loss of $0.32 per share.

 Fourth quarter revenue rounded out at $87,000 – the company’s first revenue since   inception. This fell drastically short of the $1.62 million analysts hoped for.

So, revenues were 95% less than expected. Yikes. Also the company’s cash and cash equivalents declined by $91 million over the previous year, down to $41 million. KiOR’s clock is ticking. They will likely find more investors willing to take a chance on them, but even though I have a couple of friends who work there, I am not optimistic about their long-term chances of competing in the motor fuel arena. As long as natural gas prices remain low, they will probably limp along, but their heavy dependence on cheap natural gas is a risk factor unrecognized by most investors.

Southern Research Institute (NC) Wins DOE Grant to Develop Biomass Liquification Process For Transportation Fuels Production

http://www.biofuelsjournal.com/articles/Southern_Research_Institute__NC__Wins_DOE_Grant_to_Develop_Biomass_Liquification_Process_For_Transportation_Fuels_Production-131092.html

Date Posted: March 14, 2013

Durham, NC—Southern Research Institute announced March 13 it has entered into a cooperative agreement with the U.S. Dept. of Energy to develop a mild liquefaction process that will economically convert biomass to petroleum refinery-ready bio-oils.

The process will convert biomass to stabilized bio-oils that can be directly blended with hydrotreater and cracker input streams in a petroleum refinery for production of gasoline and diesel range hydrocarbons.


“We hope the project will advance liquefaction by demonstrating cost-effective biomass conversion to stable bio-oils at mild conditions. Other liquefaction processes either use severe conditions or expensive catalysts to achieve stability,” said Santosh K. Gangwal, Ph.D., Southern Research principal investigator.

“We will also evaluate the suitability and process economics of directly blending our bio-oils with refinery hydrotreater and cracker streams for co-production of diesel and gasoline.”

Gangwal said co-processing of bio-oil with petroleum refinery streams can help refineries comply with new renewable fuels standards (RFS-2.)

The process will be evaluated and optimized using a continuous flow lab-scale biomass liquefaction system simulating the commercial embodiment of Southern Research’s liquefaction process.

Also a lab-scale reactor will be constructed and tested for hydrotreating and cracking the bio-oils to produce gasoline and diesel range hydrocarbons.

Southern Research is seeking a refinery partner who will help to further define bio-oil quality specifications that meet requirements for direct insertion at various points in the petroleum refining process.

Based on the experimental data, a technical and economic evaluation and life-cycle assessment of the process will be carried out.

Requirements for scale-up and commercialization of the liquefaction process will be determined.

“Development and commercialization of a cost-effective biomass liquefaction process using a high impact feedstock such as wood waste to produce renewable gasoline and diesel can reduce the nation’s requirement for importing oil from foreign countries, help to stabilize the prices at the pump, and lower the emission of greenhouse gases” said Tim Hansen, director of Advanced Energy and Transportation Technologies.

For more information, call 205-337-9634.

Plant Gene for Improved Biofuel Processing

http://www.thebioenergysite.com/news/11541/plant-gene-for-improved-biofuel-processing

Tuesday, August 28, 2012

 

US - Since 2007, researchers at the BioEnergy Science Center, one of three Department of Energy-funded research centres, have partnered to figure out how to break down plants so that they easily release the simple sugars that can be processed into biofuels. It’s a breakthrough that could make biofuels cost competitive with gasoline. 

 

Now, University of Georgia researchers, who are part of the team, have taken an important step toward that goal by identifying a previously uncharacterized gene that plays a major role in cell wall development of Arabidopsis plants, a discovery that promises to help turn plants into biofuel more efficiently.

The team of researchers found that the gene GXMT1 is responsible for directing a key step in the development of the plant polymer xylan, a principal component of cell walls in woody biomass that make it resistant to biofuel conversion.

“Our goal is to figure out how the plants make this polymer,” said William York, the study’s principle investigator and faculty member in the UGA Complex Carbohydrate Research Center.

“If we can manipulate that process, we can change how plants make their cell walls, which could make them easier to turn into liquid fuel.”

As a member of the BioEnergy Science Center, York joins multidisciplinary, multi-institutional research teams pursuing the fundamental scientific breakthroughs needed to make the production of cellulosic biofuels derived from non-food plant fiber cost effective on a national scale.

York explained that the problem with many biomass plant candidates is not that they are difficult to grow or harvest, but that they are difficult to process. In order to make biofuels, processing facilities use microbes to ferment the naturally occurring plant sugars into ethanol and other valuable products, much in the same way distilleries make alcoholic beverages.

But plants have evolved powerful defenses against the microbes researchers use to break down biomass for fermentation. This research demonstrates that manipulation of biomass structure at the molecular level could yield a crop that is more easily converted into biofuel.

“We want to develop strains of plants that are strong and grow well but break down easily when we want them to,” said York, who is also a professor of biochemistry and molecular biology in the UGA Franklin College of Arts and Sciences and a member of the UGA Bioenergy Systems Research Institute.

In their paper, published in the Proceedings of the National Academy of Sciences, the researchers identified a mutant GXMT1 plant that produces structurally modified xylan that is more easily released when the biomass is treated with hot water. The release of xylan during this treatment will ultimately make it easier for microbes to digest the woody fibres and convert them to ethanol.

If researchers can find ways to capitalise on this mutant version of the plant and alter this gene without compromising the structural integrity of the wood, they can begin the process of developing plants specifically designed for biofuel conversion.

While the development of efficient biofuels is a major driving force behind their work, this research also contributes significantly to the understanding of basic plant development.

Before their discovery, GXMT1 was categorized in scientific literature as a protein of unknown function, but it is now the first enzyme shown to catalyze the formation of methyl-glucuronic acid, a key structural component of xylan in plant biomass.

Ultimately, York and his collaborators hope that their research will open the door to new ways of manipulating plants and making them more useful to humans.

“We use plants for everything: We eat plants, we build our homes out of plants, we make all sorts of things with them,” York said.

“If we can change them, we can make them easier to work with.”

Other UGA researchers on the study were primary authors Breeanna R. Urbanowicz and Maria J. Pena and co-authors Jason Backe, Malcolm A. O’Neill, Alan G. Darvill, Supriya Ratnaparkhe and Harry J. Gilbert. Collaborators and co-authors from BESC were Hongjia Li and Charles Wyman of the University of California Riverside and Marcus Foston and Arthur J. Ragauskas of the Georgia Institute of Technology.

TheBioenergySite News Desk

Answers for your biofuels questions: Coskata, LanzaTech, butanol

http://www.biofuelsdigest.com/bdigest/2012/08/05/answers-for-your-biofuels-questions-coskata-lanzatech-butanol/

Jim Lane | August 5, 2012 

 

Here in Digestville, we debut this week a content collaboration with Consumer Energy Report, a must-see content site that we recommend you check out and bookmark. Twice a month, we’ll check in with CER and excerpt their latest and greatest – including contributions from CER and Energy Trends editor and noted biofuels commentator Robert Rapier.
In our first collaborative, RR answers some questions from readers. One is on Lanzatech, and the other is about the feasibility  of filtering for butanol separations. The questions were slightly edited for brevity.

Q. I am interested if the decision by Coskata shall flow on to Lanzatech and their purchase of Range Fuels in regards to ethanol?

We are currently developing a project that incorporates a number of pieces, however we are considering the use of natural gas as a dual feedstock to produce critical volume likely producing methanol as a fuel and chemical base. Our view is to follow the lead by China and to develop technologies and processes around methanol to fuel. Currently we are are undertaking research and developing a possible business model.

Do you think we are going to see a vhs (ethanol) vs beta (methanol) situation develop in the future?

RR answers: Lanzatech has technology that was close to Coskata’s technology, so this is certainly a good question. In my opinion, Lanzatech is going to have a tough time making cost-competitive ethanol for many of the same reasons that caused Coskata to shift to natural gas. If you don’t want to make a full commitment to natural gas, I think a low-risk approach (but probably higher capital) is the one you describe in which you would have a capability of feeding natural gas into the process.

Natural gas should work fine in Lanzatech’s process, and would certainly be a lower capital option than wood waste. I know they would ideally like to process waste streams that contain a lot of carbon monoxide, but they are going to need the capability of building greenfield plants that provide their own feedstock. Natural gas could be a path forward.

As far as ethanol versus methanol, in my view methanol and di-methyl-ether (DME) produced from methanol are likely to gain a stronger foothold in China before they do so in the U.S. The U.S. agricultural lobby has not looked favorably upon methanol in the U.S., and I believe they will fight hard to keep it out of the fuel supply and protect ethanol’s market share. After all, there is already a large supply of cheap methanol in the U.S. and approximately none of it ends up in the fuel supply. I don’t expect that situation to change soon, but if you are thinking about China as a target market then your chances may be better there.

Q: This may be a dumb question (chemistry is not my area), but has anyone looked at simply filtering the butanol from the water?  What are the relative molecular sizes?

RR answers: This particular issue is in reference to the energy-intensity of separating a solution containing low levels of butanol. For reference, I have written in some detail about this issue in Butanol 101 .

It’s not a dumb question; in fact membranes can be used to separate butanol from water. The membranes I am familiar with don’t work on the basis of size differences (although some gas membranes do) but rather the relative polarity of butanol and water. Since butanol is a less polar molecule than water, some membranes such as polydimethylsiloxane (PDMS) that present a hydrophobic surface allow butanol to migrate into the membrane while excluding water.

This sort of separation can allow low-concentration butanol that is generally produced from biological processes (perhaps 2% to 6% butanol) to concentrate up to above the phasing concentration (~8% for n-butanol). Once the phasing concentration is reached, the energy requirements are far lower because the mixture separates into a butanol-rich phase containing maybe 20% water and a water-rich phase containing about 8% butanol. Therefore, instead of distilling off a mixture of 95% water and 5% butanol — which is extremely energy-intensive — you would distill a mixture that contains only 20% water.

The disadvantage is that the total costs of operating a membrane system are still not cheap. Chemical companies that produce billions of gallons of butanol each year are well aware of such systems, and have taken a look at the economics many times. But a fundamental difference between the petrochemical process and the biological process is that the former does not have to remove copious amounts of water as is the case in the latter. Therefore, the economics may be more compelling to utilize membranes for those pursuing the biological route.