Biofuels R&DThe Role of R&D in Agriculture and
Related Industries: Today andRelated Industries: Today and Tomorrow
Federal Reserve Bank of Chicago
Seth Snyder, Ph.D.Chemical and Biological TechnologyChemical and Biological Technology
Argonne National Laboratory
2007 September 24
Ethanol production
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Biofuels GrowthC h l d i 6 8 BGYCurrent ethanol production = 6.8 BGYWith expansions = 13.4 BGYEPACT 2005 calls for 7.5 BGY by 2012 (Energy Policy Act)y ( gy y )Presidential and Congressional plans call for upwards of 35 BGY by 2017 “20-in-10”The 2006 State of the Union called for “30-in-30” which is 60 BGYThe 2006 State of the Union called for 30 in 30 , which is 60 BGYin 2030
DOE/USDA di t i d ti f i 12 16 BGYDOE/USDA predict maximum production from corn is 12-16 BGYCorn growers predict ~20 BGY with slow growth from thereMonsanto has reported that corn hybrids we will achieve 33 BGY
Strong need for R&D to achieve national goals!
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Why corn? 200Actual
US CORN YIELDBushels per harvested acre
corn
300,000
350,000
164
145
173
150
1751973-2004Trend
1990-2004Trend
1995
250,000
s)
100
1251995-2004Trend
150,000
200,000
tons
/yea
r (00
0s
25
50
75 1990-2004 Trend appears to be above 1973-2004 Trend.
wheat
100,000
2570-71 75-76 80-81 85-86 90-91 95-96 00-01 05-06 10-11 15-16
PRX_Ruikka.xls, PRX 14 N 05
Corn production is increasing much more rapidlyThan feed/food use More available for biofuels
sugar beets sugar canesorghum barley oats
0
50,000
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corn wheat sugar beets sugar cane sorghum barley oats
The real cost of oil!
At $60 / barrel crude oil:H d b $0 20 /lb $10 / MM BTUHydrocarbons are $0.20 /lb or $10 / MM BTU
Natural gas is has ranged from ~$5 - $15 MM BTUNatural gas is has ranged from ~$5 - $15 MM BTU
At $0.07 captured dextrose costs:pHydrocarbons are $0.07 / lb or ~$9 / MM BTU
If consumers paid the environmental costs of crude oil directly, prices would be $7 $27/barrel higher Source: Governor’s Ethanol Coalition
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be $7 - $27/barrel higher. Source: Governor s Ethanol Coalition
Approximate Current Economics
Process CAPEX ($/annual gal)Process CAPEX ($/annual gal)CTL (w/CO2 sequestration) (1) $4.25-$6.50Starch ethanol(2) $1.00-$1.75Biochemical ethanol(2) $1.85-$3.00Thermochemical ethanol(2) $2.00-$3.00
(1) L. Scully “The Business Case for Coal Gasification with Co-Production, July 2006(2) 30x30 Vision document and references therein* Prepared by Dave Dayton (NREL)
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p y y ( )
Products: Petroleum vs. Biobased?Biobased feedstocks are cheaper than petroleum.In petroleum, feedstocks ~75 % of manufacturing costsIn biobased feedstocks 25 % of man fact ring costsIn biobased, feedstocks ~25 % of manufacturing costsWhy?– Water vs organic reactionsBiofuels and biobased productsWater vs. organic reactions– Dilute products– Processing and product recovery costs
Biofuels and biobased products must compete on a cost basis!
What do we need to do?– Better conversions (enzymes, organisms, catalysts)
B i / d– Better separations/product recovery– Better process integration (engineering)– Large volumes of affordable feedstocks (energy crops)
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– Large volumes of affordable feedstocks (energy crops)
The Role of R&D:Macroeconomic ImplicationsMacroeconomic Implications
0 6 M
$5 BChemicalI d
$10 BC i 0.6 M
Jobs**Industry
R&DFunding
ChemicalIndustry
OperatingIncome*
$40 BGDP**
$1 BFederalR&D
Funding
Income*
$8 B
FundingIn Chemical
Sciences
The Council for Chemical Research (www.ccrhq.org)
$8 BTaxes**
Basis:*estimated from CCR study
**extrapolated from LANL study by Thayer,
Federal Reserve Bank of Chicago 2007
The Council for Chemical Research (www.ccrhq.org)extrapolated from LANL study by Thayer, et al., April 2005 using REMI economic model
“Measuring Up: R&D Counts for the Chemical Industry
$2 Operating income per $1 R&D invested17% after tax return
Chemical Industry
17% after tax return
Publicly funded science links highly to chemical patents, 6 citations per patentpatents, 6 citations per patent
Basic research to patented invention typically t k 13 16takes 13-16 yearsLag to commercialization from patent is 5+ yearsOverall cycle time of 18-21+ years.
Th C il f Ch i l R h
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The Council for Chemical Research
Biofuels, Biobased Products, ChemicalsCommodities that ultimately compete on a cost basis
Lower marginsgProduct differentiation is difficultIncentives are required for R&D investment and growth of the industry
Many of the tools of biotech/biomedical research areMany of the tools of biotech/biomedical research are transferable to biofuels.The value equation is very differentThe value equation is very different
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The Federal Cost Share ModelBasic Research
100 % PublicNSF, DOE Office of Science, USDA
Applied ResearchApplied Research80 /20 % Public/PrivateDOE EERE, USDA
D lDevelopment50/ 50 % Public/PrivateDOE EERE
Deployment – First of a kind20/80 % Public/PrivateLoan guaranteesLoan guaranteesDOE EERE
“N” th plants100 % P i
• EERE = Energy Efficiency and Renewable Energy
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100 % Private • EERE is the home of the Office of Biomass
Major funding announcements2002 DOE EERE – Biobased Products– $20-50 M– DuPont (PDO – Serona), Cargill, NatureWorks (PLA), etc.
2007 GTL Bioenergy Centersgy– $125 M - 100 % Federal – optional cost shares included– UC Berkeley, Oak Ridge National Lab, U Wisconsin
2007 Cellulosic ethanol – “commercial scale”– Up to $385 M federal/ $1.2 B total– Abengoa, Alico, Blue Fire, Iogen, Poet (Broin), Range Fuels– 11-40 MGY
2007 Loan guarantees– To be announced shortly
2008 10 % scale biorefineries– Under review
Several privately funded centers– BP $500 M Energy Bioenergy Institute
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gy gy– UC Berkeley/U Illinois
12
Biofuels funding issues and opportunitiesVC Investment– Khosla Ventures – invested in several companies
Incentives– $0 51 cents/gallon– $0.51 cents/gallon– Extra credit for cellulosic– E85 Vehicles - CAFE requirements
Potential premiums– CO2– Domestic supplyDomestic supply
Potential risks– OPEC – price of crude oil
I f d k i h d i– Infrastructure does not keep up with production• Fuel distribution – rail, barge, pipeline• Exceed need for 10 % blends
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f• E85 availability
13
2.5
Energy Balances: The Type and Amount of EnergyBTU required for 1 BTU available at fuel pump
2.0
From Biomass (Solar)From Coal and Natural GasFrom Petroleum
1.5
1.0 Energy in the Fuel
0.0
0.5
0.0Cellulosic EthanolFossil BTU < 0.1
Petroleum BTU = 0.1
Corn EthanolFossil BTU = 0.74
Petroleum BTU = 0.1
GasolineFossil BTU = 1.23
Petroleum BTU = 1.1 * vs. li
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CO2 reduction* = 85 %CO2 reduction*= 20 %CO2 reduction* = 0 %
Michael Wang - Argonnewww.transportation.anl.gov/software/GREET/
gasoline
What will the feedstocks be?Now
C t h h l (U S )– Corn starch ethanol (U.S.)– Sugar cane ethanol (Brazil)– Rapeseed (canola) biodiesel (Europe)– Forest residues heat & power (No. America and Europe)
Mid term– Corn starch – continued growth for 1-2 decades– Agricultural residues: Corn fiber, corn stover, etc.
• Cellulase R&D– Forest Products: Paper and pulp mills, black liquor, forest residues
syngas– Oil crops: soybean, canola (upper Midwest), tropical oils
Longer termg– Energy crops – poplar trees, switch grass, etc. – Growth on marginal lands R&D opportunity
• See “Billion-ton study”:
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yhttp://feedstockreview.ornl.gov/pdf/billion_ton_vision.pdf
How does nature degrade biomass?
Starch/sugarsGl f i– Its food
Biomass – lignin/cellulose/hemicelluloseFungal degradation slow
Glucose fermentations
Bi h i l i– Fungal degradation – slow– Combustion - fast
Biochemical conversionThermochemical conversion
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DOE EERE biomass model
Biochemical & Thermochemical - Need bothActual Volumes(Billion gal/yr)(Billion gal/yr)
150
Thermochemically DerivedBiochemically Derived
100
Grain Derived
3 0 % 2 0 0 4 Gaso lineEnergy Equivalent
f rom Et hano l
50
0Existing &
UnexploitedHigh Yield
Growth But NoHigh Yield
Growth With2004 Motor
Gasoline
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Resources Energy Crops Energy Crops
DOE Office of Biomass - Products Analysis
These platform chemicals are multi-billion pound per year
opportunities that could carry through the economythrough the economy
Producing a pound ofProducing a pound of biobased chemicals displaces
a pound of fossil
3-6 Carbon organic acids (mono- and di-carboxylic acids)Ne tral s gar alcohols (e g sorbitol)
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Neutral sugar alcohols (e.g., sorbitol)
Opportunities for Succinic Acid Derivatives
Tetrahydrofuran(THF) - 255MM lbs
1,4-butanediol (BDO)- 150MM lbs
Maleic Anhydride- 450MM lbs
150MM lbs
Gamma-butyrolactone(GBL) - 105MM lbs
Fumaric Acid- 35MM lbs Deicers – 10-100MM lbs
Malic Acid- 20MM lbs
n-methyl-2-pyrrolidinone (NMP)
80MM lbs
Sugars SuccinicAcid
- 6 MM lbs
Dibasic Esters- 50MM lbs
- 80MM lbs
4,4-polyesters
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Separative BioreactorOrganic
acidproduct
Organicacid
productCells or enzymes are immobilized
in the porous Anode C Cathode
+++
---
---
B A
+++
---
CA
OrganicOrganicanion
in the porous resin wafer
-+++++++
-----
-----
+++++
-----H+
OH-anion
H+
anion
H+
Organicanion Organic
anion++++
----
----
++++
----
H
H+H+
Electroderinse
Electroderinse
Glucose feed
Glucose feed
biocatalyst biocatalystGlucose feed
Glucose feed
A t l IP (k IP i i th b k d)
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Argonne controls IP (key IP is in the background)
Conventional Process
Biobased Chemicals
Sugars
Separative Bioreactor
Neutralization
Conventional Process Sugars
Separative Bioreactor
NeutralizationAgent, Lime
Fermentation
Organic Acid Salt
CaSO PrecipImmobilized Biocatalyst
Sulfuric Acid Acidulation
Rotary Drum il
CaSO4 Precip.
Organic Acid
Concentrated Organic Acid
Rotary Drum Filtration
Low Concentration
Filter Aid Filter Press
Waste
Organic Acid Gypsum
• Partnership with ADM
• Costs competitive with petrochemicals!
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• Integrates bioprocessing and separations
Syngas fermentations?
H2/CO/CO2Yes you can ferment syngas! Anaerobic bacteriaAnaerobic bacteriaSome of the oldest biological mechanisms in existence
Technical barriersO i d l tOrganism developmentGas/liquid mass transfer
Product titer
• Partnerships with BP and VC funded companies
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funded companies
Creating our Biobased FutureIt will take the biochemical and thermochemical routesIt will take the biochemical and thermochemical routes– Feedstock and regional emphasis– Produce every available fuel, chemical, material
There will be multiple commercial opportunities– There will be multiple commercial opportunitiesMaximize product output will minimizing impact/use– Land– Water– Emissions– Infrastructurenf ast uctu e– Capital
Don’t overlookCO– CO2
– SustainabilityTo create the biobased future will take biologists, chemists, and
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engineers!
Argonne National LaboratoryThe Advanced Photon Source isAmerica's first national laboratory
Chartered in 1946 from Enrico Fermi’s work on the Manhattan Project.
The Advanced Photon Source is the North America’s most
brilliant X-ray.wo o e ojec .Operating budget of ~$500 millionAs of 2006, Argonne is operated by the UChicago Argonne LLCUChicago-Argonne LLC25 miles southwest of the Loop
S th S d Ph DSeth Snyder, Ph.D. Section Leader
Chemical and Biological Technologyh@ l 630 252 7939
The white deer are native to Northern Africa and Europe and were a gift to Gustav Freund,
[email protected], 630-252-7939
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the estate owner in the 1930’s.