Issue: Apr 2011


NEW BIO FUEL ADVANCE COINCIDES WITH U.S. DRIVE TO CUT OIL IMPORTS



by Bob Brooks

The stated objective of President Obama to achieve one third cut in U.S. oil imports by 2025 coincides with recent reports of the development of new technology, ultra high production, low cost, clean bio fuel technology.

Announcements have indicated this objective is in sight via technology that produces bio fuel by secretion from algae or bacteria. The new technology replaces complex and costly systems that cultivate, harvest and extract fuel from a wide variety of food and fiber materials. In the secretion system, algae or bacteria are not consumed but rather function as continuous micro production elements fed primarily with solar energy, fresh or salt water, CO2, and small amounts of nutrients to generate fuel.

Craig Venter’s Synthetic Genomics firm under contract to ExxonMobil in a $600 million overall effort to develop low cost, high volume bio fuel, has announced that its focus is now on production of oil from algae via secretion. Targeted is the fundamental need for technology that can produce the huge quantities required at cost able to justify production facility investment and be price competitive in the broad liquid fuels market without subsidies. The need for bio oil is effectively a need for the full range of diesel, JetA and gasoline products.

A leader in secretion technology is Algenol Biofuels (now affiliated with Dow Chemical Co) with a $50 million production unit close to start up at a Dow facility in Texas. This is a follow on program based on successful pilot production. Algenol calls its system “Direct to Ethanol” and indicates basic cost of about $1/gal. Although much of the initial ethanol from the Texas facility will be feedstock for Dow non-petroleum plastics, Algenol points out that its system could account for the additional 21 billion gal/year fuel sought by the RFS (renewable fuel standard), presumably without subsidies. The added 21 billion gallons are said to be impossible from corn (Current corn ethanol now consumes 40% of U.S .corn production)

Algenol spokesman, Paul Woods, explains that algae used in the firm’s continuous production secretion system is replaced only once each year although work is in progress to further extend the re-charge time schedule..

Another reported developer of the low cost secretion system is Phytonix Energy said to be advancing the system for production of biobutanol from bacteria. Surely tracking this technology is the BP/Dupont team which is gearing up to produce biobutanol (initially from bio sugars) as a replacement or addition to ethanol in gasoline. Biobutanol with 26% higher heating value per gallon than ethanol is approved for use at 16% in gasoline although BP engineer Jim Baustian says it could go to 24% without spark ignition engine modifications. Biobutanol can be shipped with gasoline via pipeline (not possible with ethanol). Overall, it is more like gasoline than ethanol.

Although in recent years there has been some shift in focus away from corn, soy beans and other food crops to proposed use of cellulosic materials from which sugars can be extracted for conversion to fuels, the need for large quantities of such materials with their use of land and fresh water have posed their own problems. By contrast, use of salt water and now algae and bacteria working continuously as micro fuel producers, is a new ball game.

It is interesting to note that the charter of USDA (U.S. Department of Agriculture) is limited to crops (such as corn and soy beans) that use fresh water which is 3% of total World water. This explains USDA’s limited interest in algae, for instance, which can use salt water (97% of the World’s water) Salt water plants and organisms are the charter of the National Oceanographic & Atmospheric Administration (NOAA). U.S. Department of Energy is focused on algae as fuel regardless of type of water used.

Unknown is when the first full scale production of broad spectrum fuel via secretion from algae or bacteria will be available for verification of the technology and its economics.
Following that will be the question of when U.S. energy policy officials will define the degree to which it will be supported, given the objective to reduce the $1 billion per day the U.S. spends on imported petroleum (not counting the huge military cost to protect imported oil supplies)

Also at issue will be the impact of competition for U.S. bio fuel business from foreign suppliers. In this context we are reminded that ExxonMobil VP, Emil Jacobs reported at a Masdar Institute Conference (United Arab Emirates) early last year that a first choice location for producing algae based fuel in plastic photobioreactors would be in the Arabian Gulf Coast with second choice in the U.S. Gulf Coast area. Masdar is assisted by IBM, Boeing and UOP in its effort to develop bio fuels.

Considering that most major energy sources (coal, nuclear, petroleum, etc.) have major environmental or economic (and some represent considerable geopolitical) problems, the prospect of new drop in bio fuel at lower cost with virtually no significant negatives, becomes likely.



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