Biofuels R&D The Role of R&D in Agriculture and Related - - PowerPoint PPT Presentation

Biofuels R&D

The Role of R&D in Agriculture and Related Industries: Today and Related Industries: Today and Tomorrow Federal Reserve Bank of Chicago Seth Snyder, Ph.D. Chemical and Biological Technology Chemical and Biological Technology Argonne National Laboratory 2007 September 24

Ethanol production

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Biofuels Growth

C h l d i 6 8 BGY Current ethanol production = 6.8 BGY With expansions = 13.4 BGY EPACT 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 BGY The 2006 State of the Union called for 30 in 30 , which is 60 BGY in 2030 DOE/USDA di t i d ti f i 12 16 BGY DOE/USDA predict maximum production from corn is 12-16 BGY Corn growers predict ~20 BGY with slow growth from there Monsanto 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?

200

Actual

US CORN YIELD

Bushels per harvested acre

corn 300,000 350,000

164 145 173 150 175

1973- 2004 Trend 1990- 2004 Trend 1995

250,000 s)

100 125

1995- 2004 Trend

150,000 200,000 tons/year (000s

25 50 75 1990-2004 Trend appears to be above 1973-2004 Trend.

wheat 100,000

25 70-71 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 rapidly Than feed/food use More available for biofuels

sugar beets sugar cane sorghum barley

• ats

50,000

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4 corn wheat sugar beets sugar cane sorghum barley

• ats

The real cost of oil!

At $60 / barrel crude oil: H d b $0 20 /lb $10 / MM BTU Hydrocarbons are $0.20 /lb or $10 / MM BTU Natural gas is has ranged from ~$5 - $15 MM BTU Natural gas is has ranged from ~$5 - $15 MM BTU At $0.07 captured dextrose costs: p Hydrocarbons 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-$6.50 Starch ethanol(2) $1.00-$1.75 Biochemical ethanol(2) $1.85-$3.00 Thermochemical 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) Federal Reserve Bank of Chicago 2007

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p y y ( )

Products: Petroleum vs. Biobased?

Biobased feedstocks are cheaper than petroleum. In petroleum, feedstocks ~75 % of manufacturing costs In biobased feedstocks 25 % of man fact ring costs In biobased, feedstocks ~25 % of manufacturing costs Why? – Water vs organic reactions

Biofuels and biobased products

Water 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 Implications Macroeconomic Implications

0 6 M

$5 B Chemical I d $10 B C i

0.6 M Jobs**

Industry R&D Funding Chemical Industry Operating Income*

$40 B GDP**

$1 B Federal R&D Funding Income*

$8 B

Funding In Chemical Sciences The Council for Chemical Research (www.ccrhq.org)

$8 B Taxes**

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 invested 17% after tax return

Chemical Industry

17% after tax return Publicly funded science links highly to chemical patents, 6 citations per patent patents, 6 citations per patent Basic research to patented invention typically t k 13 16 takes 13-16 years Lag to commercialization from patent is 5+ years Overall cycle time of 18-21+ years.

Th C il f Ch i l R h Federal Reserve Bank of Chicago 2007 The Council for Chemical Research

Biofuels, Biobased Products, Chemicals

Commodities that ultimately compete on a cost basis Lower margins g Product differentiation is difficult Incentives are required for R&D investment and growth

• f the industry

Many of the tools of biotech/biomedical research are Many of the tools of biotech/biomedical research are transferable to biofuels. The value equation is very different The value equation is very different

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The Federal Cost Share Model

Basic Research 100 % Public NSF, DOE Office of Science, USDA Applied Research Applied Research 80 /20 % Public/Private DOE EERE, USDA D l Development 50/ 50 % Public/Private DOE EERE Deployment – First of a kind 20/80 % Public/Private Loan guarantees Loan guarantees DOE EERE “N” th plants 100 % 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 announcements

2002 DOE EERE – Biobased Products

– $20-50 M – DuPont (PDO – Serona), Cargill, NatureWorks (PLA), etc.

2007 GTL Bioenergy Centers gy

– $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

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Biofuels funding issues and opportunities

VC 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 supply Domestic 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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• E85 availability

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2.5

Energy Balances: The Type and Amount of Energy

BTU required for 1 BTU available at fuel pump

2.0

From Biomass (Solar) From Coal and Natural Gas From Petroleum

1.5 1.0

Energy in the Fuel

0.0 0.5 0.0 Cellulosic Ethanol Fossil BTU < 0.1 Petroleum BTU = 0.1 Corn Ethanol Fossil BTU = 0.74 Petroleum BTU = 0.1 Gasoline Fossil BTU = 1.23 Petroleum BTU = 1.1 * vs. li Federal Reserve Bank of Chicago 2007

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CO2 reduction* = 85 % CO2 reduction*= 20 % CO2 reduction* = 0 % Michael Wang - Argonne

www.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 term g – Energy crops – poplar trees, switch grass, etc. – Growth on marginal lands R&D opportunity

• See “Billion-ton study”:

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y http://feedstockreview.ornl.gov/pdf/billion_ton_vision.pdf

How does nature degrade biomass?

Starch/sugars Gl f i – Its food Biomass – lignin/cellulose/hemicellulose Fungal degradation slow Glucose fermentations Bi h i l i – Fungal degradation – slow – Combustion - fast Biochemical conversion Thermochemical conversion

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DOE EERE biomass model

Biochemical & Thermochemical - Need both

Actua l Volum e s ( Billion ga l/ y r ) ( Billion ga l/ y r ) 150 Therm ochem ically Derived Biochem ically Derived 100 Grain Derived

3 0 % 2 0 0 4 Gasoline Energy Equivalent f rom Et hanol

50 Existing & Unexploited High Yield Growth But No High Yield Growth With 2004 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

• pportunities that could carry

through the economy through the economy Producing a pound of Producing 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 Succinic Acid

• 6 MM lbs

Dibasic Esters

• 50MM lbs
• 80MM lbs

4,4-polyesters

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Separative Bioreactor

Organic acid product Organic acid product

Cells or enzymes are immobilized in the porous

Anode C Cathode

+ + +

• B

A

+ + +

• C

A Organic Organic anion

in the porous resin wafer

• +

+ + + + + +

• +

+ + + +

• H+

OH- anion H+ anion H+ Organic anion Organic anion

+ + + +

• +

+ + +

• H

H+ H+ Electrode rinse Electrode rinse

Glucose feed Glucose feed

biocatalyst biocatalyst

Glucose 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

Neutralization Agent, Lime Fermentation Organic Acid Salt CaSO Precip Immobilized 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/CO2 Yes you can ferment syngas! Anaerobic bacteria Anaerobic bacteria Some of the oldest biological mechanisms in existence Technical barriers O i d l t Organism development Gas/liquid mass transfer Product titer

• Partnerships with BP and VC

funded companies

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funded companies

Creating our Biobased Future

It will take the biochemical and thermochemical routes It 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 opportunities Maximize product output will minimizing impact/use – Land – Water – Emissions – Infrastructure nf ast uctu e – Capital Don’t overlook CO – CO2 – Sustainability To create the biobased future will take biologists, chemists, and

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engineers!

Argonne National Laboratory

The Advanced Photon Source is

America'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

• e
• jec .

Operating budget of ~$500 million As of 2006, Argonne is operated by the UChicago Argonne LLC UChicago-Argonne LLC 25 miles southwest of the Loop

S th S d Ph D Seth Snyder, Ph.D. Section Leader Chemical and Biological Technology h@ l 630 252 7939

The white deer are native to Northern Africa and Europe and were a gift to Gustav Freund,

seth@anl.gov, 630-252-7939

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the estate owner in the 1930’s.