Biofuels Digest’s 2012 Best Project (Thermochemical) Award: KiOR — Columbus, Mississippi

http://www.biofuelsdigest.com/bdigest/2012/12/31/biofuels-digests-2012-best-project-thermochemical-award-kior-columbus-mississippi/

Jim Lane | December 31, 2012 

There’s much to admire about KiOR’s first small commercial project – but three factors stood out for us.

It was built on time, on budget, and produces a drop-in, cellulosic product. That’s transformative on three levels — and with scale-up to the 60 million gallon level, the economics are expected to be as compelling as the story. For any producer of wood products, its one of the best bits of news to come down the pikeway in a long, long time.

READ MORE: All about the project, here.
 

USDA funds MSU biofuel study

http://www.clarionledger.com/article/20121222/BIZ/312220019/USDA-funds-MSU-biofuel-study?gcheck=1&nclick_check=1

10:16 PM, Dec 21, 2012  

 A team of Mississippi State University agricultural economists recently received U.S. Department of Agriculture funding to study policies impacting biofuel supply chains.

Keith Coble is the principal investigator for a project to develop a model to assess how state or federal policies might affect the development of the Southeastern biofuels industry. Coble will work with fellow MSU agricultural economists Daniel Petrolia and J. Corey Miller. Their work will evaluate the effects of risk, incentives and environmental policy on economic sustainability.

All three researchers are affiliated with MSU’s Sustainable Energy Research Center, which researches and develops environmentally and economically sustainable energy technologies that promote the growth of sustainable energy industries in Mississippi and the Southeast, according to an MSU news release.

The USDA’s National Institute of Food and Agriculture awarded the $273,120 grant through its Agriculture and Food Research Initiative.

Can KiOR soar?

http://www.biofuelsdigest.com/bdigest/2012/12/21/can-kior-soar/

Jim Lane | December 21, 2012 

 

By: Robert Rapier, Energy Trends Insider
Last month KiOR announced the start of production of biocrude from their Columbus, Mississippi plant. KiOR CEO Fred Cannon stated in an earnings call that when the product shipped it would be “the world’s first cellulosic gasoline and diesel fuel products.” While I can immediately think of at least 4 other companies who previously made cellulosic diesel and/or gasoline — Choren , Rentech, Envergent, and Community Power Corporation — we can forgive Mr. Cannon for this oversight in his excitement.

Some readers may recall that a year ago I argued that KiOR’s then $2 billion market capitalization was much too high based on the technical risks, the value of competing companies, and the fact that ultimately they were more like an oil refiner than a high tech company.

Since that column was published, the market cap of KiOR has plunged to $636 million. But now that production has begun, I have been asked several times whether my opinion of KiOR has changed. 

Bear in mind that my view was never that KiOR had an unworkable or unscalable technology (although a number of incorrect or misleading facts about the company’s process were widely reported). But my view was that they still had a very rough path to commercialization, and their value a year ago reflected the irrational exuberance that existed across the sector. I still believe that KiOR’s odds for long-term success are long, but they have hired competent people to give them the best chance of making it.

Initial production is an important milestone, but other important milestones are ahead. Many pitfalls await, and most companies in this space will fail to navigate them. But their technology is legitimate. Further, the Department of Energy forecast earlier this year that while the current cost to produce gasoline from pyrolysis oil is well above the cost to produce gasoline from petroleum, by 2017 the cost of pyrolysis-based gasoline is projected to fall to $2.32/gallon.

Biofuels Digest reported that KiOR’s projected production cost upon scale-up in 2013 would be $5.95/gallon. Further projections are that as they proceed up the learning curve and scale further that the cost of production would fall to $3.73 per gallon in 2014, and then to $2.62 per gallon at full-scale.

The company faces risks around biomass costs, natural gas costs (a very important input which becomes clear when one notices that reported fuel outputs of 11 million gallons per year have much greater energy content than the reported wood inputs of 500 bone dry tons per day), and their ability to raise additional funds that will be required for continued scale-up.

As a result, I think KiOR’s share price will continue to be volatile. In the short term, continued incentives for 2nd generations biofuels will help ease their burn rate. But as long as government support of 2nd generation biofuels remains after the fiscal cliff dust settles, KiOR has a realistic chance of crossing the Valley of Death and becoming a company that could maintain a viable business.

This article was republished with permission from Consumer Energy Report under a content partnership with Biofuels Digest, and originally appeared in Energy Trends Insider, a free newsletter from Consumer Energy Report focusing on financial and investment issues in the energy industry.

University of Georgia Researchers to Examine Public Opinion on Biofuels Industry in Southeast

http://www.biofuelsjournal.com/info/bf_articles.html?ID=129046

Date Posted: December 18, 2012

Athens, GA—Public opinion and local support may very well be the linchpins that determine the future of bioenergy in the United States.

The Southeastern U.S. is poised to become a major producer of bioenergy, and a wide range of bioenergy technologies are now in various stages of development in the region.

Will residents support the new ventures?

Who will grow the biomass?

Will those in established industries fight against it?

These are but a few of the critical questions that citizens, policymakers and investors must answer if bioenergy is to become a viable alternative to fossil fuels.

Now, researchers from the University of Georgia and the U.S. Forest Service are conducting studies in locations throughout the biomass-rich Southeast to find answers to these questions and more.

They hope their unique method of investigation, using a mix of complementary ethnographic methods, will provide a detailed understanding of public opinion about bioenergy while also providing policymakers and business owners with the information they need to make sustainable energy production thrive in their communities.

"We're planning to work on the ground throughout the Southeast," said Sarah Hitchner, a co-investigator and post-doctoral research associate at UGA's Center for Integrative Conservation Research.

"A lot of people talk about biofuels as being an obvious win-win, but it's more complicated than that."

Beginning in Soperton, Ga.-formerly home to Range Fuels and now the Freedom Pines Biorefinery owned by LanzaTech-and then moving on to other areas in Georgia, Alabama, Mississippi, Louisiana, Florida and North Carolina, the researchers will participate in the daily activities of community members and conduct in-depth interviews with a variety of stakeholders, such as landowners, industry representatives, potential employees and county commissioners.

"A big part of this kind of research is to listen to as many perspectives as possible," said Peter Brosius, professor of anthropology in the Franklin College of Arts and Sciences, director of the Center for Integrative Conservation Research and co-investigator in the study.

"From there you begin to see patterns emerge."

This approach, which allows researchers to develop familiarity and rapport with community members over an extended period of time, gives them a more detailed understanding of the various points of view that might not be fully captured by other less comprehensive research methods such as phone interviews or mail-in surveys, Brosius said.

"Researchers across the world have been developing technologies for the conversion of biomass resources into energy and fuels, but we don't have a very good understanding of the effects that a large-scale biomass energy industry may have on the communities involved," said Ryan Adolphson, director of public service and outreach in the College of Engineering and associate director of the Bioenergy Systems Research Institute.

Adolphson works with Georgia companies and state and federal policymakers on bioenergy industry development.

"This study will make great strides toward helping us understand those effects and assist in the development of a more effective biomass energy industry," Adolphson said.

Supported by a grant from the U.S. Department of Agriculture's National Institute of Food and Agriculture, which funds research projects on sustainable bioenergy through its Agriculture and Food Research Initiative, this integrative research aims to explain not only whether people support or oppose bioenergy development, but also what led them to form their opinions and what policies, institutions and events may have influenced their decisions.

"USDA and President Obama are committed to producing clean energy right here at home, to not only break our dependence on foreign oil, but also boost rural economies," said Agriculture Secretary Tom Vilsack.

"These projects will give us the scientific information needed to support biofuel production and create co-products that will enhance the overall value of a bio-based economy.

"Today, with a strong and diversified U.S. agricultural sector, the American automobile industry has a greater incentive for expanding use of bio-based products while supporting good-paying jobs here in the United States."

The researchers stress that as alternative fuel and sustainable industry grow, it will become increasingly important for potential companies to identify and understand the social and economic factors working for and against new ventures.

"This research has the potential to inform the policy process, but we are also pioneering a new method that is applicable to other sustainability issues," Brosius said.

"There is a lot of activity right now in bioenergy with different plants being opened and a lot of proposed plants using a combination of private investment and government incentives to get started," said John Schelhas, a research forester with the U.S. Forest Service and project co-investigator.

"We're looking at specific sites where bioenergy development is taking place, and we're interested in talking with community members and landowners who have various degrees of investment and interest in bioenergy."

Ultimately, the researchers hope that this project will not only yield important information about the future of bioenergy in the South but also serve as a springboard for future research designed to examine the social complexities of bioenergy development by investigating diverse perspectives and interests within the communities in which these new and proposed facilities are embedded.

"It's essential to understand the way people perceive, understand and talk about biofuels as bioenergy industries develop in this region," Schelhas said.

"And it seems like we will be able to provide more clarity about that."

For more information, call 706-542-5222.

Greener planet is goal for 3 startups

http://www.equities.com/news/headline-story?dt=2012-12-16&val=832224&cat=material

By Julie Wernau, Chicago Tribune McClatchy-Tribune Information Services

Dec. 16--If the glut of companies billing themselves as "solutions" providers is any indication, the world has no shortage of problems.

Green tech companies take on some of the most complicated, difficult problems to solve. They tend to be problems created by our mere existence, chief among them our massive demand for energy. The more we rely on energy to power our electronics, our vehicles and our lives, the more pollution we churn into our land, water and air.

The Tribune checked in with three local green tech startups at various stages of development. They haven't changed the world yet, but they're working on it.

COMPANY: LanzaTech

PROBLEM TO BE SOLVED: Global warming, a huge challenge as energy demand is expected to double within 40 years.

FUNDS RAISED: $100 million

It may sound like sci-fi, but LanzaTech produces gas-eating "bugs" that don't require oxygen to survive.

In April, the company's microscopic bacteria began ingesting carbon monoxide from a steel mill in China. Carbon monoxide goes in one end of the bacteria and ethanol comes out the other.

With a few genetic tweaks, the bug can produce a wide range of fuels and chemicals from gases that companies spend money to get rid of. The idea, says Jennifer Holmgren, the company's chief executive, is to trap nasty gases that float from steel mills, power plants and chemical factories, turning them into products that are useful and profitable.

The company recently inked a deal with Petronas, the national oil company of Malaysia, to develop a modified version of the bug that takes in carbon dioxide and produces acetic acid, a chemical companies need to produce polymers used in plastics.

"Rather than trying to sequester carbon deep into the earth, we will 'bury' it in a chemical," Holmgren said. "In this way, companies can not only comply with emissions reduction requirements, but also generate revenue along the way."

When Holmgren talks about the technology's potential, she pulls up a map of the world, showing partnerships and agreements the company has with companies from Boeing Co. in Chicago and Kansas-based Invista, the world's largest nylon producer, to Indian Oil Co. in New Delhi and Mitsui & Co. Ltd. in Japan.

Out of the company's various projects, the carbon monoxide-eating bacteria are the furthest along in the path toward commercialization. This month, LanzaTech finished a demonstration project for China's largest steel manufacturer, Baosteel, at a plant near Shanghai.

LanzaTech successfully produced the equivalent of more than 100,000 gallons of ethanol per year from just a fraction of the carbon monoxide the company creates in the steel-making process.

"You're literally driving for miles watching this steel mill," Holmgren said, explaining its vast size -- and its potential to produce hundreds of millions of gallons of ethanol per year.

The technology creates a financial incentive to trap the gas rather than flare it, a common practice that produces carbon dioxide, which contributes to global warming. Through a series of pipes, the gas enters a vessel filled with the organism, which is floating in water. Fuel comes out the back end and is pumped through a distiller to create pure ethanol.

Because of the success of that demonstration, the steel company has ordered the first of what will eventually be three or four units, each about $80 million, that are each expected to produce 30 million to 50 million gallons of ethanol per year. Each unit pays itself back in under five years, Holmgren said.

"We don't want it to be green for green's sake. If it is, no one is going to use it," she said.

With 140 employees worldwide, LanzaTech doesn't have any revenues to report yet. Holmgren said LanzaTech expects to grow to profitability between 2013 and 2015.

USDA Grants Support Sustainable Bioenergy Production

http://www.nifa.usda.gov/newsroom/news/2012news/12141_afri_bioenergy.html

Media Contact: Jennifer Martin, (202) 720-8188

LANSING, Mich., Dec. 14, 2012—Agriculture Secretary Tom Vilsack today announced $10 million in research grants to spur production of bioenergy and biobased products that will lead to the development of sustainable regional systems and help create jobs. Vilsack highlighted the announcement today with a visit to Michigan State University, a grant awardee. The Secretary also pointed to a recent study released by Iowa State University (ISU), and funded by the U.S. Department of Agriculture, which finds that while the use of biobased products in automobile manufacturing is increasing, there are still many parts in the top-selling automobiles manufactured in the United States that may be replaced with biobased materials. 

“USDA and President Obama are committed to producing clean energy right here at home, to not only break our dependence on foreign oil, but also boost rural economies,” said Vilsack. “These projects will give us the scientific information needed to support biofuel production and create co-products that will enhance the overall value of a biobased economy. Today, with a strong and diversified U.S. agricultural sector, the American automobile industry has a greater incentive for expanding use of biobased products while supporting good-paying jobs here in the United States.”

USDA’s National Institute of Food and Agriculture (NIFA) awarded the grants through the Agriculture and Food Research Initiative (AFRI). AFRI’s sustainable bioenergy challenge area targets the development of regional systems for the sustainable production of bioenergy and biobased products that: contribute significantly to reducing dependence on foreign oil; have net positive social, environmental, and rural economic impacts; and are compatible with existing agricultural systems.

The long-term goal for the research projects, which were selected through a highly competitive process, is to implement sustainable regional systems that materially deliver liquid transportation biofuels to help meet the Energy Independence and Security Act goal of 36 billion gallons per year of biofuels by 2022. The programs focus on the many environmental, social and economic benefits and trade-offs associated with decisions and policies regarding the where, when, and how of national and regional biofuels development. Projects were awarded in four areas: 1) policy options for and impacts on regional biofuels production systems, 2) impacts of regional bioenergy feedstock production systems on wildlife and pollinators, 3) socioeconomic impacts of biofuels on rural communities, and 4) environmental implications of direct and indirect land use change.

Fiscal year 2012 awards include:

• University of Arizona, Tucson, Ariz., $36,000
• Arizona State University, Tempe, Ariz., $350,000
• University of Georgia, Athens, Ga., $345,689
• University of Florida, Gainesville, Fla., $496,996
• University of Florida, Gainesville, Fla.,  $497,851
• Boise State University, Boise, Idaho, $493,210
• University of Idaho, Moscow, Idaho, $499,009
• University of Idaho, Moscow, Idaho, $350,000
• Michigan State University, Lansing, Mich., $349,695
• University of Minnesota, St. Paul, Minn., $498,786
• University of Minnesota, St. Paul, Minn., $349,996
• Mississippi State University, Mississippi State, Miss., $273,120
• University of Missouri, Columbia, Mo., $499,447
• Lincoln University, Jefferson City, Mo., $94,258
• Montclair State University, Upper Montclair, N.J., $349,963
• Duke University, Durham, N.C., $349,084
• University of Oklahoma, Norman, Okla., $466,534
• Oregon State University, Corvallis, Ore., $349,624
• Temple University, Philadelphia, Pa., $149,977
• Pennsylvania State University, University Park, Pa., $348,959
• Clemson University, Clemson, S.C., $50,000
• University of Tennessee, Knoxville, Tenn., $350,000
• Texas A&M University, College Station, Texas, $255,972
• Texas AgriLife Extension, College Station, Texas, $499,619
• Washington State University, Pullman, Wash., $349,993
• West Virginia University, Morgantown, W.V., $349,952
• University of Wisconsin, Madison, Wis., $496,109
• University of Wisconsin, Madison, Wis., $345,327
• USDA Agricultural Research Service, Peoria, Ill., $500,000

AFRI is NIFA’s flagship competitive grant program and was established under the 2008 Farm Bill. AFRI supports work in six priority areas: plant health and production and plant products; animal health and production and animal products; food safety, nutrition and health; renewable energy, natural resources and environment; agriculture systems and technology; and agriculture economics and rural communities.

Each award was made through a competitive selection process. An external peer review panel reviewed all proposals and made award decisions based on scientific merit to the best and brightest scientists across the nation.

The ISU report, Biobased Automobile Parts Investigation, shows that “the history of biobased automobile parts begins early in the development of automobiles themselves. During the 1930s, automobile pioneer Henry Ford began developing soy-based automobile parts.” The report goes on to highlight how a variety of U.S. automobile manufacturers are showing a greater commitment to exploring biobased options, and provides a variety of resources for policymakers and other decision-makers interested in exploring the issue. 

Creating new markets for the nation's agricultural products through biobased manufacturing is one of the many steps the Obama Administration has taken over the past four years to strengthen the rural economy. Since August 2011, the White House Rural Council has supported a broad spectrum of rural initiatives including a Presidential Memorandum to create jobs in rural America through biobased and sustainable product procurement; a $350 million commitment in SBA funding to rural small businesses over the next 5 years; launching a series of conferences to connect investors with rural start-ups; creating capital marketing teams to pitch federal funding opportunities to private investors interested in making rural connections; and making job search information available at 2,800 local USDA offices nationwide.

Policy Shifts Signal Growth Ahead for Advanced Biofuels

http://www.forbes.com/sites/pikeresearch/2012/12/14/policy-shifts-signal-growth-ahead-for-advanced-biofuels/



12/14/2012 @ 4:15PM

 Mackinnon Lawrence, Contributor

This has been a tough year for the U.S. biofuels industry: drought curtailed corn starch ethanol production and investment in the industry shrank to its lowest level in nearly a decade.  Headed into 2013, though, industry momentum appears to be regaining steam.  Led by advanced biofuels, the potential for expanding biofuels production has improved dramatically as Washington offers clarity on key policy issues.

Last week, in a vote on partisan lines, the U.S. Senate extended support for the military’s efforts to scale up advanced biofuels production.  As reported in Biofuels Digest, it approved an amendment offered by Senator Kay Hagan of North Carolina to repeal a section of the annual Defense appropriations bill that would have prohibited “the Secretary of Defense or any other official from the Department of Defense (DoD) from entering into a contract to plan,  design, refurbish, or construct a biofuels refinery or any other facility or infrastructure used to refine biofuels unless such planning, design, refurbishment, or construction is specifically authorized by law.”

Over the past year, the U.S. military has emerged as a key torchbearer leading the commercialization of advanced biofuels.  Spearheaded by the Navy, which signed a Memorandum of Understanding (MOU) with the U.S. Department of Agriculture (USDA) and Department of Energy (DOE) to develop cost-competitive advanced biofuels, the DoD has been a lone bright spot for an industry that has suffered from press blowback and investor retrenchment in recent years.

Only $84 Billion to Go

Prior to the Hagan amendment, the Senate approved another amendment, offered by Senator Mark Udall of Colorado, to repeal section 313 of the annual Defense appropriations bill.  Offered by Republican Senator James Inhofe of Oklahoma, Section 313 would have prohibited the DoD from procuring alternative fuels if they cost more than their conventional counterparts.  The section was introduced in response to the U.S. Navy’s highly criticized purchase of advanced biofuels from firms like Solazyme and Dynamic Fuels for its “Great Green Fleet” exercises off the coast of Hawaii, at an estimated price-tag of $15 per gallon.

These bills are expected to facilitate public-private partnerships and funnel much-needed capital to support advanced biorefinery construction within the United States.  In our Industrial Biorefineries report, Pike Research forecasts that at least 13 billion gallons of advanced biorefinery production capacity will come online over the next decade in the United States.  Although that falls short of the 21 billion gallons of advanced biofuels carved out under the EPA’s Renewable Fuel Standard (RFS), more than $60 billion will be invested over that same period.

With the minimum cost of scale-up to meet the advanced biofuel production mandate estimated at $84 billion, the industry still has significant ground to make up.  Although continued federal support will help assuage investor fears, uncertainties around feedstock supply and production profitability persist, translating into high levels of risk for investors.

Advanced biofuels, which address these concerns at least in part, have enjoyed a rising tide of policy support in recent months from Washington.  In August, Congress allocated $170 million to support the development of military biofuels and other defense initiatives, voted to extend key tax credits for advanced biofuel producers, and granted algae producers tax credit parity with other feedstock pathways.  Meanwhile, the recent commissioning of first-of-kind facilities from advanced biofuel producers KiOR and INEOS Bio are strong indicators of a maturing cellulosic biofuels industry.