Institute of Transportation Studies University of California, Davis

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1 Institute of Transportation Studies University of California, Davis Liquid Biofuels for Transportation National Academies Workshop on Oil Peaking Daniel Sperling Professor and Director October 20, 2005

2 Biofuels is One of Several Potentially Attractive Long Term Energy Supply Options for Vehicles Petroleum-like fuels from unconventional fossil sources Used in combustion engines and maybe in fuel cells Made from tar sands, heavy oil, shale oil, and coal Electricity Used in BEVs and plug-in hybrids Made from many sources (including nuclear and fossil) Hydrogen Used in fuel cells Many sources (including nuclear) Biofuels (ignored by Bob Hirsch this morning) Used now in combustion engines (with little energy benefit) Can be made from residues, grasses, and trees, as well as corn and sugar cane

3 The Biofuels Question How important? Biofuels can be a modest part of the solution in US and a few other countries. But important to move beyond corn ethanol. How expensive? Fairly high, but so are other alternatives Environmental impacts? Potentially huge GHG benefits, but some negative impacts also. Easy to make happen? At small scale, yes Caution: Must consider competing uses for land and biomass; and very different industry organization is needed. Overriding Issue: Possibility of transitioning to a more decentralized, distributed energy system??

4 Biofuels Are Not New Ethanol production is thousands of years old Rudolph Diesel demonstrated engine running on rancid peanut oil at 1900 Paris Exhibition Early Model T s ran on corn ethanol, and Henry Ford was strong ethanol advocate in 1930s First biodiesel patents early 1950s Corn-ethanol widely used in US (and sugar-ethanol in Brazil) since 1970s, but cellulosic ethanol has lagged. But, for larger production volumes and more environmentally attractive options, need to target new types of biomass and new processes.

5 (Fuel) 7.5B in 2012 (3% of gasoline) (330,000 b/d GGE) In 2003, the U.S. consumed 134 billion gallons of gasoline and 39 billion gallons of on-road diesel fuels, Earth-Policy.org

6 Of the 11.8 Billion Bushels of Corn Produced in U.S. in 2004, ~12% Was Used for Ethanol Production U.S. Corn Usage by Segment 2004 Feed/Residual: 56.4% Export: 18.5% Ethanol: 11.7% High Fructose Corn Syrup: 5.2% Starch: 2.7% Sweeteners: 2.2% Cereal/Other: 1.8% Beverage/Industrial Alcohol: 1.3% Seed: 0.2% Source: ERS/USDA, 2004, Feed Outlook (in RFA, 2005); EIA

7 Many Biofuels Production Pathways Vehicles Mobility 2030, WBCSD 2004 Sun, Land, Water, Fertilizer, Insecticide, Herbicide

8 Promising Biofuels Pathways Fermentation of sugar/starch materials (ethanol) what we do now Corn in US, with co-product used for animal feed Sugar in Brazil, with bagasse used for energy Lignicellulose (for ethanol, methanol, petroleum-like liquids, gases) Waste from forests, sawmills, etc Crop residues (corn stover, rice straw, etc) Woody material (wood farms) Grasses Oils to replace diesel Waste oils (frying oil, animal fats) Oil seeds and algae Note that there are many new thermochemical and biological techniques under development to increase feedstock yields and conversion efficiencies, and to utilize multiple products in bio-refineries (fiber, food, chemicals, energy).

9 Attractions of Biofuels (for vehicles) Domestic Potentially very low GHGs Largely compatible with existing fuel and vehicle infrastructure, and thus easier to implement than battery EVs and hydrogen

10 Relatively high cost Shortcomings of Biofuels Large land and water requirements Land-related environmental impacts (soil erosion, water and chemical runoff) Corn ethanol uses much fossil energy and provides minor environmental benefits Limited opportunities in most parts of world (Japan, EU, China)

11 Substantial Biofuel Subsidies in Place in US Ethanol Federal $0.51/gallon Various direct and indirect subsidies (small biofuel producers, new ag fuel businesses, biofuel crop production) Brazilian import tariffs State 22 states provide production incentives 32 states provide use incentives Biodiesel $1.00/gallon for virgin plant oils and animal fats $0.50/gallon for recycled materials

12 Maximum US Biofuels Supply (Billion GGE) Type of Biomass Sperling 1988 % of GGE Used by Transport ORNL 2005 % of GGE Used by Transport Crop Residues 4 2% % Grass (Perennial) Crops % % Wood/Forest Resources % % Total 11-29B gall/yr (0.7-2M b/d) 6-15% ( M b/d) 9-30% 1) % of GGE calculation is based on a future 200 billion GGE demand per year (currently 173B) 2) Criteria: Biomass is accessible by road, sensitive areas excluded, largely ignores economic considerations and competing uses for biomass (other forms of energy and bio-based products)

13 ~5-10% of all land (48 states) is needed to produce 30% of transport fuel 10 3 sq miles % of total land Commercial forest Noncommercial forest Harvested cropland Idle cropland Pasture and rangeland Other (urban, wetlands, preserves, etc) TOTAL %

14 Biofuel Plant Size (and Production) is Limited by Diseconomies of Feedstock Supply Cost/Gallon Total Costs Process Costs Feedstock Costs Supply curve when almost all land is devoted to high yield crop (eg wood) note that costs sharply increase at ~40 mile radius from central plant. O Quantity, b/d GGE 7000 b/d

15 Economics of corn ethanol based on using protein in kernel as animal feed (co-product) Starch Ethanol Protein Distillers Dry Grains and Solubles (DDGS) (Animal feed mostly for cattle that contributes revenue of ~$0.60 per GGE - but transport cost is very expensive, and thus quickly saturates nearby feedlot and dairy farm markets) Carbon Dioxide

16 Another Scale Issue: Small Size of Production Plants Means Distribution is by (Expensive) Truck or Rail Tanker Truck Pipeline (100,000 b/d) miles

17 Current and Future Costs of Biofuels (at plant gate) ($24/bbl) ($30/bbl) IEA 2004

18 Current and Future Costs of Biodiesel (at plant gate) IEA 2004

19 Bushels/lb. Fertilizer Corn Farming Has Become Far More Efficient Over Time U.S. Corn Output Per Pound of Fertilizer Has Risen by 70% in The Past 35 Years? Precision farming, etc.? Based on historical USDA data; results are 3-year moving averages

20 and Corn-Ethanol Processing Technology and Efficiency Has Also Improved Significantly 70,000 60, s 2000s Btu/Gallon 50,000 40,000 30,000 20,000 10,000 0 Wet Mill Dry Mill Source: from Argonne s discussions with ethanol plant designers, recent USDA data, and other reported data.

21 Large Improvements are Possible With Concerted Human Effort Selective breeding to genetic engineering

22 Cellulosic Ethanol Plants Will Be Significantly More Energy Efficient than Corn Ethanol Plants Emissions Emissions Biomass Feedstock Pretreatment Fermentation Separation Fuel Ethanol Wastewater Emissions Solid Residue and Methane Wastewater Treatment Emissions Power Plant: Gas and/or Steam Turbine Steam Electricity Effluent Discharge Plant facilities are being designed to use unfermentable portions of biomass to generate steam and electricity.

23 The Energy Bill Encourages Production of Cellulosic Ethanol Creates a credit-trading program where 1 gallon of cellulosic ethanol is equal to 2.5 gallons of renewable fuel Creates a program for production of 250 million gallons of cellulosic ethanol in 2013 Creates a Loan Guarantee Program of $250 million per facility Creates a $650 million Grant Program for cellulosic ethanol Creates an Advanced Biofuels Technologies Program of $550 million Information is courtesy of the Renewable Fuels Association

24 Future Biofuels Pathways for Transportation High yield plant oils for biodiesel (rapeseed provides 7 times greater yield/acre than corn, and palm oil provides 40 times greater yield). Native switch grasses (land friendly) Algae and other very high yield feedstocks Use biotech to accelerate/enhance photosynthesis Cheaper enzymes for production of sugars from cellulose Biomass gasification (Fischer-Tropsch synthesis, etc) Photobiological and other exotic techniques

25 Biofuels Can Provide Large GHG Benefits Lifecycle GHG emissions, compared to gasoline from petroleum. Black bars indicate range of estimates. From IEA (2004).

26 Caution: Energy Balance and GHG Analyses of Biofuels Sensitive to System Boundary Choices Operation-Related Activities: Fertilizer, Farming, Corn Transportation, Ethanol Production, Ethanol Transportation, Energy Use for Producing Process Fuels Food Intake by Farmers Ethanol Plant Materials and Construction Solar Energy Embedded in Biomass Farming Equipment Materials and Manufacture

27 Biofuels Conclusions Biofuels could replace substantial amounts of petroleum in US (and Brazil and a few other regions) Production is limited by scale issues (feedstock collection, coproducts, distribution) Relatively easy to implement Relatively expensive Potentially very low GHG emissions, though other nontrivial environmental impacts Corn ethanol happened because of ADM. Who will be investors and promoters of cellulosic and other advanced biofuel options?

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29 IEA, 2004 and IEA, Expressed in US$ 2000.