Transcript Biofuels: Think outside the Barrel Vinod Khosla Feb 2006

Biofuels: Think outside the Barrel
Vinod Khosla
[email protected]
Feb 2006
1
Ver 3.2
Implausible Assertions ?
We don’t need oil for cars & light trucks
We definitely don’t need hydrogen!
We don’t need new car/engine designs/distribution
Rapid changeover of automobiles is possible!
Little cost to consumers, automakers, government
2
“Proven in Brazil” Answer: Ethanol
Cheaper Today in Brazil!
3
Why Ethanol?
Today’s cars & fuel distribution
Today’s liquid fuel infrastructure
Leverages current trends: FFV’s, Hybrids
Part of fuel market via “blending” - just add E85
High oil prices accommodate “startup” costs
4
Why Ethanol?
Multiple Issues, One Answer
– Cheaper fuel for consumers
– More energy security & diversified sources
– Higher farm incomes & rural employment
– Significant carbon emission reduction
– Faster GDP growth, Lower Imports & energy prices5
Flex Fuel Vehicles (FFV)
Little incremental cost to produce & low risk
Consumer choice: use EITHER ethanol or gasoline
Easy switchover for automobile manufacturers
Fully compatible with Hybrid cars
6
Plausible?
Brazil “Proof”: FFV’s 4% to ~70% of car sales in 3 yrs!
Petroleum use reduction of 40% for cars & light trucks
Ethanol cost @ $0.75/gal vs Petroleum @ $1.60/gal
VW planning on a phase out of all gasoline cars in 2006?
Brazil Ethanol ~ 60-80% reduction in GHG
Brazil: $50b on oil imports “savings”!
7
Possible?
5m US FFV vehicles, 4b gals ethanol supply, blending
California: Almost as many FFV’s as diesel vehicles!
US costs: Ethanol $1.00/gal vs Gasoline $1.60+/gal
Rapid increase of US ethanol production in process
Easy switchover for automobile manufacturers
Consumers: Lower cost per mile driven
8
RISK: Oil vs. Hydrogen vs. Ethanol
Oil
Hydrogen
Biofuels
Energy Security Risk
High
Low
Low
Cost per Mile
Med
Med-High
Low
Infrastructure Cost
Very Low
Very High
Low
Technology Risk
Very Low
Very High
Low
Environmental Cost
Very High
Med-Low
Low
Implementation Risk
Very Low
Very High
Low
Interest Group Opposition
Very High
High
Low
Political Difficulty
?
High
Low
Time to Impact
-
Very high
Low
9
What makes it Probable?
Interest Groups
Land Use
Energy Balance
Emissions
Kickstart?
10
Interest Groups
• US Automakers: less investment than hydrogen; compatible with hybrids
• Agricultural Interests: more income, less pressure on subsidies; new
opportunity for Cargill, ADM, farmers co-operatives,…
• Environmental Groups: faster & lower risk to renewable future;
aligned with instead of against other interests
• Oil Majors: equipped to build/own ethanol “factories”& distribution; lower
geopolitical risk, financial wherewithal to own ethanol infrastruct.; diversification
• Distribution (Old & New): no significant infrastructure change;
potential new distribution sources (e.g. Walmart)
11
Interest Groups: Action Items
• US Automakers:
90% flex-fuel new car requirement in exchange for some
regulatory relief
• Agricultural Interests: 100% flex-fuel
new cars but no tax on imported
ethanol; “transfer” subsidies from row crops to energy crops (equivalent $/acre)
• Environmental Groups:
tax-credit for “cellulosic ethanol” & debt
guarantees for new cellulosic ethanol technologies
• Oil Majors: new business opportunity?
• Distribution (Old & New): assist “ethanol third pump” strategy; promote
ethanol distribution at destination sites (e.g. Walmart) & fleets
12
Prioritized Action Items
• Require most cars to be Flex Fuel Vehicles (FFV’s)
• Require E85 ethanol distribution at 10% of gas stations
• Loan guarantees of first 5 “new technology” plants
• Allow imports of foreign “low GHG” ethanol tax free
• Switch subsidies (same $/acre) to energy crops
13
Other Easy Action Items
• Call for a grand bi-partisan summit of interested parties
• Switch CAFÉ mileage to “petroleum mileage”
• Require FFV owners be given colored gas caps
• Legislate a “cheap oil” tax if it drops below $40/barrel.
• Allow fleets to import ethanol without tax burden
14
Land Use
15
Land Use: Reality
• NRDC: 114m acres for our transportation fuel needs (2050)
• Jim Woolsey/ George Shultz estim. 60m acres (incl. effic.)
• Khosla: 20 tons/acre x 100gals/ton x 75m acres =150b gals
• CRP+ soybean land : co-produce ethanol & animal protein
• Ethanol form municipal waste products & animal waste
16
Potential for Billion Tons of Biomass
“In the context of the time required to scale up to
a large-scale biorefinery industry, an annual
biomass supply of more than 1.3 billion dry tons
can be accomplished with relatively modest
changes in land use and agricultural and forestry
practices”
Technical Feasibility of a Billion-Ton Annual Supply
US Department of Energy Report , April 2005.
http://www.eere.energy.gov/biomass/pdfs/final_billionton_vision_report2.pdf
…. Or a 100billion++ gallons per year!
17
Energy Crops: Miscanthus
1 years growth without replanting!
20 tons/acre? (www.bical.net)
10-30 tons/acre (www.aces.uiuc.edu/DSI/MASGC.pdf)
18
Biomass Will Make a Difference
…a member of OPEC?!
Turning South Dakota into…
Today
Tomorrow
44 Million
44 Million
Tons/acre
5
15
Gallons/ton
60
80
Thousand
barrels/day
857
3,429
Farm acres
Thousand barrels/day
Saudi
9,101
South Dakota
3,429
Nigeria
2,509
UAE
2,478
Kuwait
2,376
Iraq
2,011
Libya
1,515
Qatar
818
…or ~30% of U.S. transportation fuel supply!!
Source: Ceres Company Presentation
19
Energy Balance
&
Fossil Fuel Use Reductions
20
Energy Balance (Energy OUT vs. IN)
• Corn ethanol numbers ~1.2-1.8X
• Petroleum energy balance at ~0.8
….but reality from non-corn ethanol is…
• Sugarcane ethanol (Brazil) ~8X
• Cellulosic ethanol ~4-8X
21
Fossil Fuel Use: Argonne Study
Legend
EtoH
Allo.
Disp.
= Ethanol
= Allocation
= Displacement
22
Environmental Issues
23
24
Emission Levels of Two 2005 FFVs
(grams per mile @ 50,000 miles)
Vehicle
Model
Fuel
NOx
(CA
std=0.14)
NMOG
CO
2005 Ford
Taurus
E85
0.03
0.047
0.6
Gasoline
0.02
0.049
0.9
2005
E85
Mercedes
-Benz C Gasoline
240
0.01
0.043
0.2
0.04
0.028
0.3
(CA
(CA std. =3.4)
std.=0.10)
source: California Air Resources Board, On-Road New Vehicle and Engine Certification
Program,
Executive Orders; http://www.arb.ca.gov/msprog/onroad/cert/cert.php
25
Technology Improvements
• Bioengineering
– Enzymes
– Plant engineering
• Energy crops
–
–
–
–
Switch grass
Poplar
Willow
Miscanthus
• Co-production of animal protein & cellulose
• Process & Process Yields
–
–
–
–
–
Process Cost
Pre-treatment
Co-production of industrial chemicals to reduce net fuel costs
Process Yield gals/dry ton
Consolidated bioprocessing
• Other: “out of the box” technologies
26
Technology Progression
Synthetic Biorefinery
Gasification
Direct Synthesis?
Corn
Algae
Cellulosic Bioethanol
27
Ethanol Supply Projections
Billions of Gallons
250
Demand(2%growth)
200
Demand(1%growth)
150
Ethanol Gal.
100
Gasoline Equiv.Ethanol Gal.
50
0
2006
2011
2016
2021
2026
2031
2036
Year
28
Strategy & Tactics
• Choice: Oil imports or ethanol imports?
• GDP – “beyond food to food & energy “ rural economy
• Add $5-50B to rural GDP
• Better use for subsidies through “energy crops”
• Rely on entrepreneurs to increase capacity
• Biotechnology & process technology to increase yields
29
What makes it Probable?
Interest Groups
Land Use
Energy Balance
Emissions
Kickstart?
30
The Clean
Alternative
Energy Act
A voter initiative for the
November 2006 ballot
31
CA- Only State with no Oil Assesment
ACTUAL TAX RATES AND PRODUCTION IN 2004
(AVG. CRUDE $/BBL = $36.22)
STATE
ASSESSMENT
RATE
2004 CRUDE
PROD (000S
BARRELS)
% OF U.S.
EXTRACTION
EST. REVENUE
AT 2004 LEVEL
& PRICE ($M)
1
TX
4.6%
392,867
19.8%
655
2
AK
9.0%
332,465
16.8%
1,084
3
CA
0.2%
237,908
12.1%
10
4
LA
12.5%
83,411
4.2%
378
5
NM
3.8%
64,236
3.2%
87
12.1%
32
259-527
PRODUCER
RANK
CALIFORNIA WITH A SLIDING SCALE ASSESSMENT:
1.5 - 6.0%
237,908
A 10-year $4 Billion Program
 $2.3B
GASOLINE & DIESEL
USE REDUCTION
 $1.1B
RESEARCH AND
INNOVATION
 $400M
COMMERCIALIZATION
ACCELERATION
 $100M
VOCATIONAL TRAINING
 $40M
PUBLIC EDUCATION
33
A Diverse 9-Person Independent Board
4 year terms, an elected chairperson
1. Chair of the CEC
2. Secretary of CAL EPA
3. CA expert in economics and energy
4. CA expert in finance
5. Dean or tenured faculty from a top CA Business School
with expertise in new technology ventures
6. CA expert in renewable energy technologies research
7. CA consumer advocate
8. State Treasurer (acts as treasurer of the board)
9. CA expert in public health
34
$2.3B for Our Primary Goals
• Achieve 25% reduction by
2017 (4billion gal/year).
Petroleum
consumption
(billions of gallons)
• Comply with all CA
greenhouse gas and tailpipe
emissions standards.
Petro Fuels
Conserved
(Billion Gals)
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Totals
16.0
16.8
17.6
18.5
19.4
20.4
21.4
22.5
23.6
24.8
26.1
27.4
254.5
0.0
0.15
0.15
0.17
0.20
0.26
0.36
0.56
0.90
1.44
2.38
3.93
10.5
30
5
25
4
Petroleum consumed (left axis)
20
3
15
2
10
1
Petroleum conserved
(right axis)
5
0
2005
2010
2015
0
2020
Petroleum conserved
(billions of gallons)
• Offset 10 billion gallons of
petro-fuels over 10 years.
Year
Petro Fuels
Consumed
(Billion Gals)
35
Technology Neutral
Cleaner Air - Cheaper Fuels
• Ethanol
• Bio-Diesel
• Electric
• Hybrids
• Emerging
technologies
• New fuel
infrastructures
Cheaper
today in
Brazil
36
RESEARCH AND INNOVATION ACCELERATION
($1.1B of fund)
CA Public and Private
Universities

Accelerate viable transportation
and stationary power solutions via
technology research.

Californians will share in the
revenues derived from new
patents and royalties.

Create a CA CleanTech industry
like we did with Silicon Valley.
“The UC system is incredibly badly positioned when it
comes to green energy R&D. It’s going to take an effort on
the level of this initiative to get us where we need to be.”
Mary Nichols, UCLA Institute for the Environment, board
member California League of Conservation Voters
37
COMMERCIALIZATION ACCELERATION
A 50/50 commercialization matching fund ($400M)
 Help defray one-time commercialization costs for best
new tech solutions.
 Examples: engine certification, crash testing, or
Underwriters’ Laboratory approval.
 Both transportation and stationary power
technologies.
38
Tens of Thousands of New Jobs
Vocational Training ($100M fund)
 Expand vocational training thru California Community Colleges.
 Create tuition grants for: retraining fossil fuel workers, low
income tuition support, new cleantech skills training.
 “Non-outsource-able” blue and white collar jobs.
39
Shift Consumer Behavior
Public Education ($40M fund)
 Grow consumer markets for newly funded
technologies.
 Stimulate awareness for buy-downs,
rebates, tuitions, etc.
 Promote conservation.
40
No New Bureaucracy
• The initiative will revive and restructure a
moribund state agency to administer
these programs.
• The California Alternative Energy and
Advanced Transportation Financing
Authority (CAEATFA), was set forth in
Public Resources Code Section 26000
since 1980 but now is dormant.
41
Top 15 CA Big
Oil Companies
Producer
Mbbls
Gross sales
$45/bbl
Revenue
4.5% levy
Aera Energy LLC (Exxon, Shell)
ChevronTexaco E & P
Occidental of Elk Hills
THUM S Long Beach Company
Nuevo Energy Co. (now owned b y Plains)
Plains E & P Co.
Berry Petroleum Comp any
Seneca Resources Corp.
Vintage Petroleum Inc.
Tidelands Oil Production Co.
BreitBurn Energy Corp.
Exxon /Mobil Corp.
MacPherson Oil Co.
Venoco Inc.
Oxy USA Inc.
82,901
76,899
18,723
11,834
9,799
6,679
5,876
3,244
3,173
2,472
1,823
1,746
1,626
1,328
1,310
$3,730,545,000.00
$3,460,455,000.00
$842,535,000.00
$532,530,000.00
$440,955,000.00
$300,555,000.00
$264,420,000.00
$145,980,000.00
$142,785,000.00
$111,240,000.00
$82,035,000.00
$78,570,000.00
$73,170,000.00
$59,760,000.00
$58,950,000.00
$167,874,525.00
$155,720,475.00
$37,914,075.00
$23,963,850.00
$19,842,975.00
$13,524,975.00
$11,898,900.00
$6,569,100.00
$6,425,325.00
$5,005,800.00
$3,691,575.00
$3,535,650.00
$3,292,650.00
$2,689,200.00
$2,652,750.00
42
Californians for Clean Alternative Energy
A Developing Leadership Council
Vinod Khosla - Chairperson, Khosla Ventures, Kleiner Perkins, Founding CEO Sun MicroSystems
Ralph Cavanagh - Senior Attorney, Natural Resources Defense Council
Steven Chu - Nobel Laureate, Director Lawrence Berkeley National Laboratory
Harry Gray - California Scientist of the Year, Caltech
Alan J. Heeger - Nobel Laureate, UC Santa Barbara
Dan Kammen - Director, Renewable & Appropriate Energy Lab, UC Berkeley
Nathan Lewis - George L. Argyros Prof and Prof of Chemistry, CalTech
Mario Molina - Nobel Laureate, UC San Diego
Mark Paul - Deputy Treasurer, State of California
John Podesta - President, Center for American Progress
Jerome Ringo - President, The Apollo Alliance
David Saltman - President & CEO, Barnabus Energy, Inc.
Daniel Weiss - Managing Partner, The Angeleno Group
43
What Voters Tell Us
 Voters support the initiative by a two to one
margin
 More than 3 out of 5 vote YES
 Voters are with us on the problem
 76% say gas prices have hurt them economically
 75% say oil companies are engaged in price
gouging
 73% of voters say CA still faces an energy crisis
 62% say oil money funds terrorism
44
What Voters Tell Us
 Voters are with us on the solution
 89% support developing renewable technologies
like solar, wind and hydrogen
 86% say they would buy a hybrid or less
polluting alt-fuel vehicle
 79% support incentives to consumers to
purchase cleaner alt-fuel vehicles
 75% support raising $4 billion from oil
companies to invest in renewable energy
 72% support reducing oil and gas consumption
by 10 billion gallons over ten years
45
The Clean
Alternative
Energy Act
A voter initiative for the
November 2006 ballot
46
Brazil: A Role Model
47
Can Rapid Adoption of FFV Happen?
Brazil: FFV Market Share of Light Vehicle Sales
4% in Mar’03
50% in May’05
70% in Dec’05
48
Ethanol: Learning Curve of Production Cost
100
Market
Conditions
( Oct. 2002) US$ / GJ
Ethanol
(producers BR)
1980
1986
1996
10
1990
2002
1993
1999
Gasoline
(Rotterdam)
1
0
50,000
100,000
150,000
Accumulated Ethanol Production ( 1000 m3)
200,000
250,000
49
(J Goldemberg, 2003)
Brazil sugar-cane/ethanol learning curve
Liters of ethanol produced per hectare since between 1975 to 2004
??
Rendimento Agroindustrial – Brasil
(em litros de álcool hidratado equivalente por hectare)
6500
6000
5931
5500
5000
4500
4000
3500
3000
2500
+3,77% aa em 29 anos
2024
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
2000
1500
08 Nov 2005
Fonte: Datagro
Nastari / Datagro @ Proálcool 30 anos
11
50
Consumer Price Ratio
* São Paulo (SP)
67,00%
62,00%
57,00%
52,00%
47,00%
42,00%
37,00%
Ja
n/
01
M
ar
/0
1
M
ai
/0
1
Ju
l/0
1
Se
t /0
1
N
ov
/0
1
Ja
n/
02
M
ar
/0
2
M
ai
/0
2
Ju
L/
02
Se
t /0
2
N
ov
/0
2
Ja
n/
03
M
ar
/0
3
M
ai
/0
3
Ju
l/0
3
Se
t /0
3
N
ov
/0
3
Ja
n/
0
M 4
ar
/0
4
M
ai
/0
4
Ju
l/0
4
Se
t /0
N 4
ov
/0
4
Ja
n/
05
M
ar
/0
5
M
ai
/0
5
Percentage: Hydrated x Gasoline
72,00%
51
Source: Honorable Roberto Rodrigues, Minister of Agriculture, Brazil
SOURCE: MAPA
(Assessing Biofuels Conf., June 2005)
Status: United States
52
Ethanol Capacity Expansion is Underway
53
Ethanol FFVs Are Here!
California’s Motor Vehicle Population
Vehicle
Type
Gasoline
Diesel
Ethanol
FFV
Hybrid
gas/
elec
CNG
Electric
LPG/
other
H2
Light-Duty
24,785,578
391,950
257,698
45,263
21,269
14,425
538
13
HeavyDuty
372,849
471,340
--
--
5,401
806
1,172
--
source: California Energy Commission joint-agency data project with California Department of Motor Vehicles. Ethanol FFV data as of April 2005; all
other data as of October 2004.
54
Costs
Wet Mills
Dry Mills
Overalll
Weighted Average
Electricity & Fuel
$0.112/gallon
$0.131/gallon
Operating Labor,
$0.124/gallon
$0.109/gallon
Yeast, Enzymes, Chemicals and
Other
$0.114/gallon
$0.090/gallon
Administration, Insurance and Taxes
$0.038/gallon
$0.037/gallon
All Other Costs
$0.072/gallon
$0.051/gallon
$0.46/gallon
$0.42/gallon
$1.118/gallon
Repairs and Maintenance
Total Cash Costs
Combined with Net
$0.48/gallon
$0.53/gallon
$0.94/gallon
“NET” cost of corn
Depreciation (plant & Equip)
$0.10-$0.20
$0.10-$0.20
Note: Capital costs of ethanol production are estimated to be between
$1.07/gallon to $2.39/gallon, varying with facility type, size, and technology.
55
Source: Encyclopedia of Energy (Ethanol Fuels , Charlie Wyman)
Unfair Expectations?
• Level of “domestic supply expectations” : why a
100% domestic supply initially when petroleum is
imported?
• Level of “cleanliness” too high for biofuels : better
than petroleum or “100% Pure”
• Agricultural standards too high: far more rigorous
debate on new crops than on traditional crops?
• Debate on subsidy on ethanol but not on the tax on
cheapest worldwide ethanol supply (Brazilian)?
56
References
•
NRDC Report: “Growing Energy” (Dec 2004)
•
http://soilcarboncenter.k-state.edu/conference/carbon2/Fiedler1_Baltimore_05.pdf
•
George Schultz & Jim Woolsey white paper “Oil & Security”
•
Rocky Mountain Institute: “Winning the Oil Endgame”
•
http://www.unfoundation.org/features/biofuels.asp
•
http://www.transportation.anl.gov/pdfs/TA/354.pdf
•
The Future of the Hydrogen Economy ( http://www.oilcrash.com/articles/h2_eco.htm#8.2 )
•
Fuel Ethanol: Background & Public Policy Issues (CRS Report for Congress, Dec. 2004)
57
Comments?
Vinod Khosla
[email protected]
58
ETHANOL:
MARKET PERSPECTIVE
Luiz Carlos Corrêa Carvalho
Sugar and Alcohol Sectorial Chamber,
Ministry of Agriculture, Brazil
Assessing the Biofuels Option
Joint Seminar of the International Energy Agency,
the Brazilian Government and the
59
United Nations Foundation
Paris, 20 – 21 June 2005
Consumer Prices Ratio*
* São Paulo (SP)
67,00%
62,00%
57,00%
52,00%
47,00%
42,00%
37,00%
Ja
n/
01
M
ar
/0
1
M
ai
/0
1
Ju
l/0
1
Se
t /0
1
N
ov
/0
1
Ja
n/
02
M
ar
/0
2
M
ai
/0
2
Ju
L/
02
Se
t /0
2
N
ov
/0
2
Ja
n/
03
M
ar
/0
3
M
ai
/0
3
Ju
l/0
3
Se
t /0
3
N
ov
/0
3
Ja
n/
0
M 4
ar
/0
4
M
ai
/0
4
Ju
l/0
4
Se
t /0
N 4
ov
/0
4
Ja
n/
05
M
ar
/0
5
M
ai
/0
5
Percentage: Hydrated x Gasoline
72,00%
60
Source: Honorable Roberto Rodrigues, Minister of Agriculture, Brazil
SOURCE: MAPA
(Assessing Biofuels Conf., June 2005
Current Situation

Acohol-gasoline mixture set to 25% since July, 2003.

The automotive industry has launched “flexible-fuel cars” in March, 2003.
Advantage to alcohol consumption if oil prices are above US$ 35 / per
barrel.

Total consumption: ~ 200,000 barrels / day of equivalent gasoline (30,000
gas-stations).


~ 40% of total consumption of spark ignition cars (Otto Cycle Engines).
May, 2005: for the first time, flexi-fuel vehicles sales exceeded gasolinefueled vehicle sales, 49.5% against 43.3%.

Source: Honorable Roberto Rodrigues, Minister of Agriculture, Brazil
(Assessing Biofuels Conf., June 2005
61
Comparative Energy Balance
Raw Material
Total Energy Ratio
Corn
1,21
Switchgrass
4,43
Sugarcane
8,32
62
Source: Leal, Regis, CO2 Life Cycle Analysis of Ethanol Production and Use, LAMNET, Rome, may 2004
LIFE CYCLE GHC EMISSIONS IN ETHANOL
PRODUCTION AND USE
Kg CO2 equiv./ t cane
Average
Best Values
Emissions
34,5
33,0
Avoided Emissions
255,0
282,3
Net Avoided
Emissions
220,5
249,3
Anhydrous Ethanol
2,6 to 2,7 t CO2 equiv./m3 ethanol
63
Source: Leal, Regis, CO2 Life Cycle Analysis of Ethanol Production and Use, LAMNET, Rome, may 2004
Ethanol: LEARNING CURVE
(J Goldemberg, 2003)
100
Market
Conditions
( Oct. 2002) US$ / GJ
Ethanol
(producers BR)
1980
1986
1996
10
1990
2002
1993
1999
Gasoline
(Rotterdam)
1
0
50000
100000
150000
Accumulated Ethanol Production ( 1000 m3)
200000
250000
64
ETHANOL AND EMPLOYMENT
( IN THE PRODUCTION OF THE VEHICLE AND OF FUEL)
VEHICLES
ETHANOL
RATIO OF
EMPLOYMENTS
“C” GASOLINE
21,87
6,01
“A” GASOLINE
1
Considering that an ethanol driven vehicle consumes, on average,
2.600 litres of ethanol per year ( one million litres of ethanol, per
year, generates 38 direct jobs );for gasoline, spends 20% less fuel
( one million litres of gasoline, per year, generates 0,6 direct jobs);
“C” gasoline contains 25% ethanol.
Source: Copersucar/Unica/ANFAVEA/PETROBRAS
65
66
The Ethanol application as
vehicular fuel in Brazil.
Brazilian Automotive Industry Association - ANFAVEA
Energy & Environment Commission
Henry Joseph Jr.
67
Brazil: FFV Market Share of Light
Vehicle Sales
….from 4% in early 2003 to 67% in Sept. 2005
68
69
3. Brazilian Domestic
Production of Vehicles
Passenger Cars, Light Commercials, Trucks and Buses
12.1
14
2003
10.3
12
8
Brazil:
10th World Production
1.828.000
vehicles / year
5.5
1.2
India
0.5
1.3
Russia
0.9
1.3
Italy
2
1.6
1.8
2.5
3.0
4
3.2
3.6
4.4
6
Turkey
Belgium
Source: AAMA, OICA, ANFIA,
IMT, INA, ANFAVEA, SMMT,
Mexico
Brazil
UK
Canada
Spain
S. Korea
France
China
Germany
Japan
0
USA
1.000.000 units
10
Vehicle Modifications
Carburetor
Engine
Intake Manifold
Fuel Tank
The material of the carburetor body or carburetor
cover cannot be aluminum or exposed Zamak; if it is,
must be substituted, protect with surface treatment or
anodize;
The engine compression
ratio should be higher;
With new profile and less
internal rugosity, to increase
the air flow;
If the vehicle fuel tank is metallic, the internal surface
of tank must be protected (coated);
Any component in polyamide 6.6 (Nylon) that has
contact with the fuel must be substituted by other
material or protected;
The material of buoy, nozzle, metering jet, floating
axle, seals, gaskets and o-rings must be appropriated.
Camshaft with new cam
profile and new phase;
New surface material of
valves
(intake
and
exhaust) and valve seats.
Must provide higher intake air
temperature.
Any component in polyamide 6.6 (Nylon) that has
contact with the fuel must be substituted by other
material or protected.
Higher fuel tank capacity, due to the higher fuel
consumption.
Catalytic Converter
Electronic Fuel Injection
It is possible to change the kind and amount of noble
metal present in the loading and wash-coating of
catalyst converter;
Substitution of fuel injector material by stainless steel;
New fuel injector design to improve the “fuel spray”;
The catalyst converter must be placed closer to the
exhaust manifold, in order to speed up the working
temperature achievement (light-off).
New calibration of air-fuel ratio control and new
Lambda Sensor working range;
Any component in polyamide 6.6 (Nylon) that has
contact with the fuel must be substituted by other
material or protected.
Exhaust Pipe
The internal surface of pipe must be protected
(coated);
Fuel Pump
The internal surface of pump body and winding must
be protected and the connectors sealed;
Any component in polyamide 6.6 (Nylon) that has
contact with the fuel must be substituted by other
material or protected.
The pump working pressure must be increased.
The exhaust design must be compatible with higher
amount vapor.
Fuel Pressure Device
Motor Oil
The internal surface of the fuel pressure device must
be protected;
Any component in polyamide 6.6 (Nylon) that has
contact with the fuel must be substituted by other
material or protected.
The fuel pressure must be increased.
Fuel Filter
The internal surface of the filter must be protected;
The adhesive of the filter element must be
appropriated;
The filter element porosity must be adjusted.
New additive package.
Cold Start System
Auxiliary gasoline assisted start system, with
temperature sensor, gasoline reservoir, extra fuel
injector and fuel pump;
Ignition System
New calibration of advance
control;
Colder
plugs.
heat
rating
spark
Evaporative Emission
System
Due to the lower fuel vapor
pressure, it is not necessary
evaporative emission control.
The vehicle battery must have higher capacity.
(Otto Engines)
71
8. Relative Performance of Ethanol
Engines
140
129.4 %
120
105.5 %
95.5 %
105.3 %
103.2 %
106.4 %
89.3 %
40
102.1 %
60
103.3 %
80
110.0 %
100
20
0
Power
Torque
Gasoline 0%
Max Speed
Gasohol 22%
Acc Time
(0~100 km/h)
Consumption
(L/100km)
Ethanol 100%
72
10. Comparative Raw Exhaust
Emission
120
100
104
80
85
80
60
86
40
51
53
20
0
CO
HC
NOx
Gasoline 0%
Gasohol 22%
Ethanol 100%
73
15. Comparative Aldehyde
Emission
500
450
400
350
300
250
200
150
100
50
0
RAW
Gasoline 0%
AFTER CAT
Gasohol 22%
Ethanol 100%
74
16. Comparative Evaporative
Emission
120
100
80
60
40
20
0
RAW
Gasoline 0%
AFTER CANISTER
Gasohol 22%
Ethanol 100%
75
11. The Fossil Fuels
Aquatic Life Breathing
Photosynthesis of Algas
Plants
Photosynthesis
Plants Breathing
Soil and Organisms Breathing
Animal Breathing
Carbon Dioxide at Atmosphere
Vegetable
Garbage
Rooths
Breathing
Fossil Fuels:
Coal, Natural Gas, Oil
Oceans,
lakes
76
12. The Renewable Fuels
CO2
77
Comparative Vehicle Prices (Brazil)
Ford EcoSport XL
– 1.6L 8V gasoline
- € 14.859,00
– 1.6L 8V Flex Fuel
- € 15.231,00
Volkswagen Gol 2d
– 1.0L 8V Special gasoline
- € 7.496,00
– 1.0L 8V Special alcohol - € 7.649,00
– 1.0L 8V City Total Flex - € 8.035,00
Renault Scénic Privilège 4d
– 2.0L 16V gasoline
- € 22.597,00
– 1.6L 16V Hi-Flex
- € 21.540,00
(€ 1,00 = R$ 2,933)
78
http://www.transportation.anl.gov
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
Wholesale Prices
96
Source: http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/petroleum_marketing_monthly/current/pdf/pmmall.pdf
Projected World Oil Prices (EIA)
97
US Domestic Oil Consumption &
Supply
98
Prices of Selected Petroleum Products
99
Source: http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/petroleum_marketing_monthly/current/pdf/pmmall.pdf
Characteristics of an Ideal Crop: Miscanthus
100
Source :http://www.aces.uiuc.edu/DSI/MASGC.pdf
Economics of Miscanthus Farming
101
Source: http://www.aces.uiuc.edu/DSI/MASGC.pdf
Hydrogen vs. Ethanol
Economics
• Raw Material Costs: cost per Giga Joule (gj)
– Electricity @$0.04/kwh = $11.2/gj (Lower cost than natural gas)
– Biomass @$40/ton = $2.3/gj (with 70% conversion efficiency)
• Hydrogen from electricity costly vs. Ethanol from Biomass
• Hydrogen from Natural Gas no better than Natural Gas
• Cost multiplier on hydrogen: distribution, delivery, storage
• Higher fuel cell efficiency compared to hybrids not enough!
• Hydrogen cars have fewer moving parts but more
sensitive, less tested systems and capital cost
disadvantage
Reference: The Future of the Hydrogen Economy ( http://www.oilcrash.com/articles/h2_eco.htm#8.2 )
102
Hydrogen vs. Ethanol
• Ethanol: US automakers balance sheets ill-equipped for hydrogen switchover
• Ethanol: No change in infrastructure in liquid fuels vs. gaseous fuels
• Ethanol: Current engine manufacturing/maintenance infrastructure
• Ethanol: switchover requires little capital
• Ethanol: Agricultural Subsidies are leveraged for social good
• Ethanol: Faster switchover- 3-5 years vs 15-25yrs
• Ethanol: Low technology risk
• Ethanol: Incremental introduction of new fuel
• Ethanol: Early carbon emission reductions
103
Why Now?
Brazil has “proven” model
High oil prices accommodate “startup” costs
Carbon credits will further improve “economics”
Breakeven at scale likely to be ~$35/barrel
104
Miscanthus vs. Corn/Soy
• Lower fertilizer & water needs
• Strong photosynthesis, perennial
• Stores carbon & nutrients in soil
• Great field characteristics, longer canopy season
• Economics: +$3000 vs -$300 (10yr profit per U Illinois)
105
Energy Crops: Switch Grass
• Natural prairie grass in the US; enriches soil
• Less water; less fertilizer; less pesticide
• Reduced green house gases
• More biodiversity in switchgrass fields (vs. corn)
• Dramatically less topsoil loss
• High potential for co-production of animal feed
106
Three of Ten Important Sources
•
Production of corn stover and stalks from other grains (wheats, oats) totals well over 250 million
dry tons. A combination of different crop rotations and agricultural practices (e.g. reduced tillage)
would appear to have potential for a large fraction of these residues to be removed. For example,
although complete removal of corn stover would result in a loss of about 0.26 tons of soil carbon
per year, cultivation of perennial crops (e.g. switchgrass, Miscanthus) adds soil carbon at a
substantially higher rate. Thus, a rotation of switchgrass and corn might maintain or even
increase soil fertility even with 100% stover removal. This, however, brings up questions about
the length of time land might be grown in each crop, since switchgrass would benefit from longer
times to distribute the cost of establishment while corn would benefit from short times to maintain
productivity and decrease losses due to pests. It is likely that some crop other than switchgrass
as it exists today would be best for incorporation into a relatively high frequency rotation with corn.
Targets for crop development could be identified and their feasibility evaluated.
Stovers: 250m tons
•
•
Winter Crops: 300m tons
Winter cover crops grown on 150 million acres (@2tons/acre) = 300 million tons of cellulosic
biomass.
In recent years, U.S. soybean production has averaged about 1.2 tons of dry beans per acre
annually. Given an average bean protein mass fraction of about 0.4, the annual protein
productivity of soybean production is about 0.5 tons protein per acre. Perennial grass (e.g.
switchgrass) could likely achieve comparable protein productivity on land used to grow soybeans
while producing lignocellulosic biomass at about a rate of about 7 dry tons per acre annually. The
limited data available suggest that the quality of switchgrass protein is comparable to soy protein,
and technology for protein extraction from leafy plants is rather well-established. The 74 million
acres currently planted in soybeans in the U.S. could, in principle, produce the same amount of
feed protein we obtain from this land now while also producing over 520 million tons of
lignocellulosic biomass. Alternatively, if new soy varieties were developed with increased aboveground biomass (option 4, Table 1), this could provide on the order of 350 million tons of
lignocellulosic biomass – although soil carbon implications would have to be addressed.
107
Soybeans: 350m tons
Source: Lee R. Lynd, “Producing Cellulosic Bioenergy Feedstocks from Currnently Managed Lands,”
Land Is Not Scarce
US Acreage
U.S. Cropland Unused or Used for Export Crops
Total = 2,300M acres
120
Other
460
Crop
480
Forest
760
Range
600
Millions of acres
100
CRP
80
Cotton
60
Soybean
40
Wheat
20
Corn
20
04
/0
5
20
05
/0
6
20
06
/0
7
20
07
/0
8
20
08
/0
9
20
09
/1
0
20
10
/1
1
20
11
/1
2
20
12
/1
3
20
13
/1
4
20
14
/1
5
0
In 2015, 78M export acres plus 39M CRP acres could produce 384M
gallons of ethanol per day or ~75% of current U.S. gasoline demand
108
Source: Ceres Company Presentation
Farmers Are Driven By Economics
Per acre economics of dedicated biomass crops vs. traditional row crops
Biomass
Corn
Wheat
Grain yield (bushel)
N/A
162
46
Grain price ($/bushel)
N/A
$2
$3
Biomass yield (tons)
15
2
2
Biomass price ($/ton)
$20
$20
$20
Total revenue
$300
$364
$178
Variable costs
$84
$168
$75
Amortized fixed costs
$36
$66
$36
Net return
$180
$120
$57
109
Source: Ceres Company Presentation
Biomass as Reserves: One Exxon every 10 yrs!!
1 acre
100M acres
=
=
209 barrels of oil*
20.9 billion barrels
Proven Reserves (billion barrels)
Exxon Mobil
22.20
BP
18.50
Royal Dutch Shell
12.98
Chevron
9.95
Conoco Phillips
7.60
* Assumes 10 yr contract
Source: Energy Intelligence (data as of end of 2004);Ceres presentation
110
Tutorial
•
http://www.eere.energy.gov/biomass/understanding_biomass.html
111