Transcript Bioenergy Market Overview - 1er CONGRESO INTERNACIONAL …

Biofuels Market and
Technology Overview
1st Biofuels International Conference
Guadalajara, Jalisco, Mexico
May 7, 2008
Brad Chadwell
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Who We Are
• Global enterprise
– Applying science and
technology to real-world
problems
– Managing machinery of
scientific discovery and
innovation
– Creating commercial value by
bringing new technologies to
international marketplace
• Non-profit, charitable trust
formed by Will of Gordon
Battelle in 1925
• Generates $4 billion annually
in global R&D
• Oversees 20,000 employees
in 130 locations worldwide
12 International
Locations
BUSINESS SENSITIVE
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The $890m energy R&D portfolio Battelle manages
is first in the nation in breadth and depth in energy
science and technology
Long term
Near term
Abundant,
affordable
energy
supplies
More
efficient
energy use
Protection
of the
environment
High-yield,
robust
biofuel
crops
Closing
the
nuclear
fuel cycle
Oil shale
extraction
technology
Nano
materials for
affordable solar
Net-zero
energy
houses
Efficient vehicles
and
engines
Inexhaustible
fusion
power
Sustainable
nuclear reactors
and fuels
Biotech and materials
Smart, efficient
processes for efficient
electricity grid
industry
Capturing and
sequestering CO2
Cleaner coal plants and engines
BUSINESS SENSITIVE
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Biofuels in the News
• Green Energy Sings the Blues: Credit Crunch Hits Clean
Tech, Too Wall Street Journal
Global venture capital and private equity investments in clean energy were down
significantly in the first quarter; U.S. ethanol investments tumbled from $1.7 billion in 1Q last
year to just $311 million this year
• Ethanol Profits May Still be Hindered by Overcapacity,
Corn Prices, Despite Government-Mandated Use
Associated Press
Ethanol profits remain near record lows and industry plans to increase capacity will likely
continue to outpace mandated use.
• Shocked, Shocked: Biofuels Are Bad, Saudis Say
Wall Street Journal
The list of those opposed to biofuels continues to grow, including British Prime Minister
Gordon Brown, who blamed biofuels for food shortages in a letter to fellow G-8 members
• Studies Say Clearing Land for Biofuels Will Aid Warming
Washington Post
Clearing land to produce biofuels such as ethanol will do more to exacerbate global warming
than using gasoline or other fossil fuels, two recent scientific studies have shown. The
studies were written by a team of researchers from Princeton, Woods Hole and Iowa State
as well as a team from Nature Conservancy and the University of Minnesota
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U.S. Energy Secretary Defends
Biofuels
“The bottom line is this: concerns about the
sustainability and environmental impact of biofuels
are not misplaced, but they are absolutely not a
reason to ignore the tremendous promise of
biofuels. They are an argument for developing them
in a way that makes sense for our environment, for
our food supply, for our agricultural community and
for our nation's economic health.”
– U.S. Energy Secretary Samuel Bodman, April 18, 2008
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Energy and Fuel Costs Continue to
Rise
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Energy Security Has Become a
Watchword
• EIA forecasts that by 2030 U.S. will be importing
2/3 of its oil and nearly 25% of its natural gas
Source: EIA, Annual Energy Outlook 2007, December 2006
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“Conventional” Feedstocks
Encountering Difficulties
• After peaking in mid-2006,
ethanol margins have
slowly eroded
• Food vs. Fuel debates
“US ethanol development
is dead until 2009, says
exec after 15-bank tour”
– Reuters 3/26/2008
• EISA Renewable Fuel
Standard (RFS) mandate
“saturated” with corn
ethanol
– As of January 2008, the US had
total, on-line ethanol production
capacity of 7.5B gallons with
another 5.8B under construction
– This would put total capacity in
the next few years ahead of RFS
mandate
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U.S. Showing National
Commitment to Biofuels Goals
• “Cost-competitive cellulosic ethanol”
– Cost-competitive in the blend market by 2012
• “20 in 10” (from the 2007 State of the Union address)
– Reduce U.S. gasoline* use by 20% by 2017 through…
- 5% reduction from enhanced efficiency standards (CAFÉ)
- 15% reduction from new Alternative Fuels Standard at 35 billion
gallons/year (consistent with the current RFS)
• EISA (Energy Independence & Security Act)
– 36 billion gallons renewable fuel by 2022
- 21 billion gallons advanced biofuels
• 30 x 30 (followed from the 2006 SOU)
– Longer-term biofuels goal
– Ramp up the production of biofuels to 60 billion gallons
– Displace 30% of U.S. gasoline consumption* (based on 2004 use) by
2030 Source: J. Spaeth, DOE, “Overview of U.S. Energy Policies,” Feb 13, 2008
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Similar Requirements Across the
Globe
Source: Renewable Fuels Association, January 2008
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Mexico’s Law for the Promotion
and Development of Biofuels (LPDB)
Extends Beyond Corn
• Biofuels defined as “fuels obtained from biomass
derived from organic material in the following
activities: agriculture, cattle activities, forestry
activities, aquaculture, algaeculture, fisheries
products, households, commercial, industrial, from
microorganism, enzymes, and derivatives of the
foregoing that are produced by technological
sustainable processes that comply with the
specifications and quality norms issued by the
competent authorities.”
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Biomass Potential Exceeds One
Billion Dry Tons Per Year
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Research Is Underway…
Lignocellulosic Biomass Conversion Strategies
Source: NW Biomass Business Case (PNNL)
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…And Supported by US DOE Funding
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Opportunities to Advance
Technology Abound
Water gas shift
+ separation
Hydrogen
FT Diesel
Gasification
Syngas
Catalytic
synthesis
Mixed Alcohols
Methanol
Lignocellulosic
biomass
Anaerobic
digestion
Flash
pyrolysis
Hydrothermal
liquefaction
Hydrolysis
Bio synthesis
Alcohols
Organic Acids
Biogas
Purification
SNG
(CH4)
Bio-oil
Hydrotreating
and refining
Biodiesel/
Syn Crude
Fermentation
Ethanol
Bioprocessing
Milling and
hydrolysis
Oil plants
Pressing or
extraction
Mid Term (scale up
beginning in 5-10 years)
Longer Term (scale up
beginning in 10+ years)
Catalytic
Hydrocarbons
Synthesis
Catalytic
Synthesis
Monomers /
Chemicals
Alcohols
Organic Acids
Catalytic
Synthesis
Monomers /
Chemicals
Glycerin
Catalytic
Synthesis
Polyols
Biodiesel
(alkyl esters)
Catalytic
Synthesis
Monomers /
Chemicals
Bio oil
(vegetable oil)
Catalytic
Synthesis
Bio-lubes
Sugar
Direct
Bioconversion
Sugar/starch
crops
Mature or Extensive
Development Underway
Near Term (scale up
beginning in 3-5 years)
Vegetable oil
Esterification
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Diverse Feedstocks, Including
Algae, Should Be Considered
• “The high cost of algae
production remains an
obstacle” – NREL 1998
Left: Commercial
Photobioreactor in Germany
Below: Raceway Ponds
(Earthrise Farms, California,
USA)
• Raceway ponds are producing high
value nutraceuticals (spirulina) today
• Photobioreactors (PBRs) currently
limited to inoculum production (due to
high capital costs)
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Commercialization “Valley of
Death” Remains
Source: Ethanol Statistics, March 2008 • Volume 1 • Issue 1
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Battelle Energy Technology Provides a
Market Facing Asset to Complement Lab S&T
Assets
Laboratory S&T Assets
Commercial Energy Clients
Battelle Energy Technology
Client Alliances / Needs
 Systems Engineering
 Program Management
 Technology Development
 Product Development
 IP Platform Development
S&T Solutions / Products
Expanding Opportunities for
Societal and Commercial Impact
from Energy Innovation
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Battelle’s Bioenergy/Bioproduct
Business Will Build on Lab Capabilities
• Basic plant science
• Fuels research
• Basic plant science
• Biomass transportation
• Bio-energy feedstocks
• Bioenergy Science Center
• Feedstock handling and
processing expertise
• End-to-end process
modeling
• Specialized enzymes
• Advanced imaging
• Fuels chemistry
•
•
•
•
End-to-end process modeling
Enzymes
Fermentation processes
Cellulosic Energy Center
• Pyrolysis and
thermal-chemical processes
• Catalysis
• End-to-end process modeling
• Computational modeling
• Chemical process engineering
• Chemical synthesis and application formulation
• Additional value can be brought to the market through integration of Battelle/National
Lab capabilities
• A systems-engineering orientation will identify technology gaps/needs while providing
value to others
• Opportunities exist for technology maturation/scale up for both Battelle/Lab
technologies and for technologies from other sources
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Battelle Is Integrating Labs’
Bioenergy Capabilities for Field to
Fuel Solutions
Basic
Biology
Research
Foundational
understanding
Systems
Biology
Better crops and
organisms to
process them
Feedstock
Assembly
Efficient
harvesting and
transportation
Conversion
Processes
Effective
processes to
produce fuels
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PETRONAS Renewable Energy Laboratory (REL)
• Battelle has entered a relationship with PETRONAS to
scope, design, and develop a renewable energy laboratory
(REL) in Malaysia
• R&D agenda for the new lab
– Initially focused on biomass conversion to biofuels,
biochemicals, and biopolymers
– Future R&D activities to address solar power, hydrogen
generation and storage, fuel cells, ocean and other areas
• REL predominately will be an applied R&D laboratory, with
outreach for “basic” research to Battelle and others
• The new laboratory will:
– Showcase state-of-the-art energy efficiency design and
operations
– Be modeled after leading laboratories around the world
– Provide a suite of new products and technologies, initially
aligned with existing PETRONAS business units
New Malaysian Renewable Energy Laboratory
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Biofuels Hold Tremendous Promise
for Diversifying the Energy Base
• The need continues to grow
• The significant investments being made require
strategic focus and sound scientific basis
• Technical challenges remain, but can be overcome
Advanced biofuels offer tremendous
promise for helping our nation to bring
about a new, cleaner, more secure and
affordable energy future.”
– U.S. Energy Secretary Samuel Bodman, January 30, 2008
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