The Next Generation of Ethanol. Wes Bolsen CMO & VP The Coskata Process The Best of Both Worlds. Biofuels Journal Workshop October 30th, 2008

Size: px
Start display at page:

Download "The Next Generation of Ethanol. Wes Bolsen CMO & VP The Coskata Process The Best of Both Worlds. Biofuels Journal Workshop October 30th, 2008"

Transcription

1 The Next Generation of Ethanol Wes Bolsen CMO & VP The Coskata Process The Best of Both Worlds Biofuels Journal Workshop October 30th, 2008

2 Biofuels are a large and growing industry in the U.S. U.S. biofuel consumption Billion gallons Other advanced Cellulosic Conventional (corn) RFS mandate Ethanol has grown into a large market Ethanol represents 6% of gasoline pool and > $20 billion market in 2008 Volume growth of 25% per year since 2003 Industry has added over 60 plants and 4.5 billion gallons of capacity in the last 5 years Government support will stimulate continued growth Energy Act of 2007 requires 36 billion gallons: Corn capped at 15 billion At least 21 billion from advanced biofuels, of which 16 billion must be from cellulosic biofuels Credits, tariff and R&D grants further support domestic industry growth 2 Source: RFA; U.S. Congress

3 2 nd generation ethanol expands the industry beyond corn Projected biomass sources Energy crops (28%) 100%= 1.3 billion dry tons Other (8%) Corn (6%) Forest resources (27%) Crop residues (31%) Cellulosic ethanol can take industry to the next level Second generation technology unlocks the potential of new feedstock sources Using cellulosic materials could displace significant amounts of gasoline (Billion ton report estimates over 1/3 rd ) Use of locally grown resources enhances energy security 3 Source: Biomass as Feedstock for a Bioenergy and Bioproducts Industry: Technical Feasibility of a Billion Ton Annual Supply, 2005, DOE and USDA

4 Cellulosic ethanol reduces GHGs even further DOE analysis targets GHG reduction from ethanol 19% Reduction 28% Reduction 52% Reduction 78% Reduction 86% Reduction Up to 96% Reduction* Gasoline Petroleum Current Average Corn Ethanol Natural Gas Biomass Sugarcane Ethanol Biomass Cellulosic Ethanol Biomass Biomass * As independently estimated by Michael Wang and Argonne National Labs in a GREET study; Based on forest residuals 4 Source: Wang et al, Environ. Research Letters, May 2007; Wang et al, Life-Cycle Energy Use and GHG Implications of Brazilian Sugarcane Ethanol Simulated with GREET Model, Dec As presented by DOE August 2008

5 Cellulosic ethanol economics can be very competitive Production costs Operating costs, USD/gallon* ~2.60 ~1.60 ~1.50 ~ <1.00 Gasoline at $100/bbl** Gasoline at $60/bbl** Corn ethanol $4/bu) Brazilian ethanol $120/ton) DOE cellulosic ethanol 2012 target Early commercial target * Costs at plant gate, not including capital recovery. Gasoline cost assumes $7/bbl (16 c/gal) refining uplift. Corn ethanol assumes 2.9 gal/bu yield. Brazilian ethanol assumes 170 gal/ton yield; DOE target as reported in presentation of August 20, ** No adjustment for energy content made given no mileage loss assumed at an E10 blend level Source: DOE; NREL; Coskata estimates 5

6 2 nd generation biofuels involve several technologies DOE is targeting 2 major pathways for cellulosic biofuels Biomass Energy crops Residue harvesting Biochemical Conversion Enzymatic hydrolysis Fermentation Thermochemical Conversion Gasification Products Fuels Power Bio-products Coskata s Hybrid Gasification + Fermentation (thermo/bio) technology combines the best of both routes Catalysis 6 Source: DOE Biomass program presentation to Governor s Ethanol Coalition, Aug. 20, 2008

7 Gen 2 technologies are advancing to commercialization Over 40 demonstration or pilot scale cellulosic biofuel plants worldwide as of August 2008 * Includes announcements for all cellulosic biofuels facilities except algae biodiesel. May not be exhaustive 7 Source: Press clippings

8 Cellulosic ethanol will represent large markets A 16 billion gallon mandated cellulosic ethanol industry in the U.S. = Markets of comparable size Sales (at $2.50/gal) $40 billion Global pesticide industry Capex (at $4.00/gal) $64 billion 10 large world class oil refineries* Feedstock (at $0.50/gal) $8 billion Brazilian sugar industry** * ~500,000 barrel/day in scale ** Assumes 32 million metric $263/ton as per FAPRI 2007/08 8 Source: US Bureau of Economic Analysis; Phillips McDougall; FAPRI

9 Coskata s 3 step process is flexible and efficient Flexible Wide variety of feedstocks Scalable around syngas output Efficient Yields over 100 gal/dry ton biomass Produces only fuel grade ethanol Affordable Production costs under $1/gallon 9

10 Step 1: Gasification has many advantages Fully utilizes feedstock - chemical bonds from all components are cracked to breakdown feedstock into synthesis gas ( syngas, CO, H2 and CO2) Provides feedstock flexibility can use any carbonaceous feedstock Multiple technologies proven at scale 10

11 Step 2: Biofermentation uses proprietary microorganisms and bioreactor designs Microorganisms utilize the chemical energy of the syngas to selectively produce ethanol Proprietary microorganisms consume both CO and H2, allowing efficient conversion across the range of H2:CO ratios 6 CO + 3 H20 C2H5OH + 4 CO2 6 H2 + 2 CO2 C2H5OH + 3 H20 Proprietary bioreactor designs encourage maximum productivity 11

12 Microorganisms and bioreactors are highly efficient Microorganisms Bioreactors Exclusive license to many strains of anaerobic bacteria Able to convert both CO and H 2 Selectively produce ethanol Require typical impurities found in biomass derived syngas Able to operate at low or moderate pressures and low temperatures Various strains can selectively produce ethanol and/or other organics (butanol, butyric acid, propanol) Patents pending for several proprietary designs Encourage maximum mass transfer and productivity Highly scalable 12

13 Step 3: Options exist for separation Ethanol is separated out of solution and converted to fuel-grade ethanol (99%+ concentration) Recoverable heat is sufficient to complete traditional distillation Membrane separation has advantages For co-location applications, membrane separation offers energy integration benefits Coskata has proprietary codeveloped membrane separation technology Provides significant energy savings (up to 50% vs. traditional distillation) 13

14 Coskata process is ready for commercialization Commercial productivity EtOH productivity, g/l/hr Best case economics (<$1/gallon) Microorganism productivity has surpassed best case economic threshold Base case economics ($1/gallon) Minimum economic threshold (corn) Dec-08 Oct-08 Aug-08 Jun-08 Apr-08 Feb-08 Dec-07 Oct-07 Aug-07 Jun-07 Apr-07 Feb-07 Dec-06 Oct-06 Aug-06 Jun-06 Apr-06 14

15 Coskata has the leading technology pathway Gasification + Enzymatic Chemical Feedstock Flexibility No Yes Yes Ethanol Specificity Yes No Yes Yield* (gal/dry ton) Capital Cost (US$ Mil. for 100MMGY)* Operating Cost (US$/gal)* ~ ** >100 $450-$700 $400-$700 ~$400 $2.00-$5.00 $1.25-$2.50 <$1.00 * Best estimates from publicly available data ** Chemical catalysis yield estimate from 2012 NREL targets (76 for ethanol, 89 for all alcohols) 15 Source: Press; DOE; Company reports

16 Coskata has a two pronged commercialization strategy License Own License technology to development partners including Feedstock suppliers Chemical manufacturers Petroleum companies Ethanol distributors/blenders Project developers Enables rapid scale up of technology Establishes Coskata as the industry enabler Build, own and operate facilities Encourages continual process improvements Allows Coskata to capture full economic benefits of its technology 16

17 Coskata is proceeding to commercial scale Currently Operating Under Construction In Development Horizon (Q1 2008) Integrated Processing Warrenville, IL Integrated processing system system with methane thermal thermal reformer, multiple multiple bioreactor designs, designs, and distillation Lighthouse (Q1 2009) Commercial Demonstration Madison, Pennsylvania Minimum engineering scale (linear scale-up to commercial commercial production) Front-end biomass gasifier Will test multiple commercialcommercial-scale bioreactor and and separations designs Flagship (2011) Commercial Production Location TBD MM Gallons / yr Multiple gasifiers that process process ~1500 dry tons/day of of biomass ~ $1.00/gallon production cost cost $4-5/ gallon of capacity CAPEX CAPEX (plant 1 economics) 17

18 Coskata has assembled a capable team to execute Senior executives William Roe, CEO David Blair, CFO Wes Bolsen, CMO Jeff Burgard, VP-Eng. Dick Tobey, VP-R&D Rathin Datta, CSO 29 years at Nalco culminating as President & COO 30+ years experience; formerly CFO of Westmoreland Coal Formerly CFO of ICM 27 years with UOP 28 years with Dow 30+ years experience at Exxon, Michigan Biotech Institute and Corn Products Staff Nearly 50 employees, over half with PhDs Technical staff from leading science based companies, e.g. Dow, Abbott, Nalco, Eli Lilly 18

19 Coskata has strong financial and technical partners Financial Technical 19

20 Contact Phone: The Next Generation of Ethanol 20