President Obama's nomination of an alternative-fuels insider to a Department of Energy (DOE) post is the latest news that points to imminent large-scale production of ethanol made from non-edible plant sources (cellulose) in the United States.
On March 23 Obama announced his nomination of Steven Koonin, chief scientist at BP, to the Undersecretary of Science position, which reports to DOE Secretary Steven Chu. Koonin, a physicist, has focused heavily on alternative energy research since joining BP in 2004, and he and Chu previously collaborated on biofuels research through a BP partnership with academia.
The president and others see development of a cellulosic ethanol industry as crucial to meet the federal Renewable Fuels Standard (RFS) mandate for the transportation fuel industry to produce 36 billion gallons of renewable fuel by 2012. Producers will make 11 billion of renewable fuels this year, according to the Renewable Fuels Association (RFA).
Since the relatively recent realization that production of traditional ethanol is too problematic to fulfill RFS mandates, at least a dozen new companies and partnerships have formed around an industry that has not yet coalesced but could replace as much as 30% of gasoline in the U.S. transportation fuels market by 2030, according to a recent report released by Sandia National Laboratories and General Motors.
Cellulosic biofuels could compete without incentives with oil priced at $90 per barrel, assuming a reduction in total costs as advanced biofuels technologies mature, according to a summary of the report, which was released in February 2009.
Researchers view cellulosic ethanol as more economically and environmentally sustainable than other alternative fuels because it is not tied to price-sensitive food crops such as corn and soybeans, and it requires less energy and farmland to produce its core feedstocks.
A slew of small start-ups focusing on one of many and myriad aspects of the nascent industry have formed, as have several partnerships involving well-known, global companies. Among the large, established companies investing in such ventures are BP, Shell, U.S. Sugar, ADM, and Dupont.
There are a multitude of folks chasing this cellulosic ethanol grail, said Joe Skurla, CEO of Dupont Danisco Cellulosic Ethanol (DDCE), a joint venture of Dupont; and Danish enzyme and biotech company Danisco. Those that are aligned with large companies and have their own funding are more likely to succeed.
According to a Des Moines Register report on March 25, the projects of three of the largest companies are on hold due to lack of funding. These include plans for plants in Iowa, Florida and Kansas.
Skurla said DDCE differs from other cellulosic ethanol ventures in three ways dedicated support (financial and otherwise) from two well-established companies with relevant legacy technologies; a focus on a complete solution that spans the entire three-phase production process and value chain; and a powerful partnership in terms of developing new knowledge and translating it into commercially scalable solutions.
The joint venture has within itself the understanding of the full value chain from the agronomics through processing, and into the downstream distribution arm of the transportation fuel industry, Skurla said. Additionally, we have very strong, financially sound parents. Were not going out into the investment community looking for the next round of investors to continue to support the effort.
Dupont and Danisco are supplying $140 million in funding to DDCE, which in October broke ground on a research-focused cellulosic ethanol plant in Vonore, Tenn., in partnership with the University of Tennessee. DDCE is using the Vonore plant to research variables of production on corncob and switch grass at a smaller scale of what a full-scale plant would produce. The companys first goal is to achieve production at a cost that matches traditional ethanol, which Skurla said is doable in the near term; and the second goal is to refine research until the cost is on par with gasoline.
I believe that the consumer is what is going to drive the success of the industry, Skurla said. In the beginning, subsidies are needed. But in order for it to survive, cellulosic ethanol needs to be competitive with other transportation fuels.
Making cellulosic ethanol requires pre-treating the cellulose to prepare it for conversion to sugar; applying enzymes to make that conversion; and fermenting the mass to produced distilled ethanol. Major supplying industries include agriculture, industrial enzymes and chemicals, and agriculture/industrial equipment. Downstream partners include transportation and distribution companies, and refiners that would sell the ethanol to consumers initially in the form of ethanol-gasoline blends.
Skurla said his company expects to grant licenses for its business-and-technology plans by the end of 2010. The first licenses will enable end-to-end, large-scale production of ethanol made from corncobs. By 2014, the company expects to grant the same type of licenses for production of ethanol from switch grass, a crop now being tilled in the United States exclusively for cellulosic ethanol.
We havent published a lot of our technology milestones because its important that we operate within a certain amount of proprietary protection, Skurla said. But we are meeting or beating [deadlines for] all of our technology milestones.
Tonya Vinas is the editor of Lean and Green News
