Resource Base and Technological Advances in Biofuels

Resource Base and Technological Advances in Biofuels U.S. Association of Energy Economics National Capital Area Chapter June 15, 2007 Zia Haq U.S. Department of Energy Office of the Biomass Program 1

The President s State of the Union Address Current and Projected Motor Gasoline Market Motor gasoline consumption 140 billion gallons/year in 2005 Motor gasoline consumption 161 billion gallons/year by 2017 according to Energy Information Administration (AEO2007, reference oil price case) 20 in 10: Increase supply of renewable and alternative fuels The goal is to produce 35 billion gallons per year of alternative fuels by 2017 reducing motor gasoline consumption by 15% Increase vehicle efficiency Reform and modernize CAFÉ to achieve additional 5% reduction in motor gasoline consumption Program Response: Develop cost-competitive cellulosic ethanol conversion technologies via two platforms Biochemical platform cellulose destruction and fermentation of the component sugars to ethanol Thermochemical platform gasification to syngas and conversion to mixed alcohols and ethanol Through public/private partnerships Energy Policy Act of 2005 Section 932 solicitations 2

Production of Ethanol From Cellulosic Biomass Perennial Crops Other Corn Crop Residues Today: Nearly all ethanol is made from corn grain The Future: Cellulosic biomass will be primary source for fuel ethanol Forest Resources Estimated Future Potential U.S. Biomass Resource Benefits of Cellulosic Ethanol Emits nearly 60% less greenhouse gases than reformulated gasoline Relies on non-food and waste resources Source: Biomass as Feedstock for a Bioenergy and Bioproducts Industry: Technical Feasibility of a Billion Ton Annual Supply. 2005. DOE and USDA. In future, far more ethanol will be made from cellulosic biomass than from corn. 3

US Markets Driven by High Prices and RFS: Building Capacity U.S. Ethanol Production Capacity Billion Gallons 14 12 10 8 6 4 Capacity Under Construction: 6.14 Billion Gallons per Year Expected by End of 2008 Current Production Capacity: 5.58 Billion Gallons per Year Total Capacity with Current and New Construction: 11.7 BGPY 2 0 2000 2001 2002 2003 2004 2005 2006 2007e* 2008e* *Estimated as of February 7, 2007. Source: Renewable Fuels Association. While biofuels represent only 3% of U.S. transportation consumption today, production is growing rapidly 4

U.S. Ethanol Infrastructure 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Industry Background 240 FFV s in Service (millions) 2000 2001 2002 2003 2004 2005 2006 Operating Plants Fueling Stations in Service 1200 1000 800 600 400 200 0 1999 2000 Operating E-85 Stations 2001 2002 2003 2004 2005 2006 2007 200 Source: Alternative Fuels Data Center, March 8, 2007 160 120 78 As of 3/8/07 80 114 40 0 2000 2001 2002 2003 2004 2005 2006 2007 As of 2/25/07 Existing Facilities Plants Under Construction Source: Renewable Fuels Association Existing infrastructure must expand & improve to meet future biofuels demand 5

Feedstock Assessment Objective: Provide accurate, comprehensive feedstock information, analysis tools, and logistical processes with linkages to conversion technology. Tasks: Enhance Billion Ton Study to provide data on feedstock types, regional detail, supply curves, and environmental impacts, based on GIS tools Develop Regional Partnerships to provide connections to needed business partners, suppliers and academic & government experts The partnerships will develop region-specific feedstocks using regional skills with national data inputs http://www1.eere.energy.gov/biomass/pdfs/final_billionton_vision_report2.pdf 6

Feedstock Regional Partnerships Goal: Establish regional feedstock development partnerships to increase affordable biomass supplies for the bio-industry of the future. Partners are: DOE and their energy laboratories USDA (extension and crop development centers) Sun Grant Initiative (land-grant institutions with extension capabilities) State and regional energy programs Environmental constituency 7

Feedstock Regional Partnerships (continued) Regional Partnerships seek to expand biomass feedstocks supply for bioethanol via: Resource assessment and development teams to conduct economic and engineering analysis Cost-share validation of technology Shared know-how and outreach Influence public policy Prove environmental sustainability Expected Outcomes: Direction for the region with clearly defined coordinating roles and responsibilities for agencies Useful tools and methodologies that can be widely used Vehicle for facilitating collaboration and interaction among regions 8

Targeted Research, Demonstration, and Deployment: Overcoming the Barriers Barriers High cost of enzymatic conversion Inadequate technology for producing ethanol from sugars derived from cellulosic biomass Limitations of thermochemical conversion processes Demonstration/integration of technology in biorefineries Inadequate distribution infrastructure for expanding markets Solutions R&D to improve effectiveness and reduce costs of enzymatic conversion R&D on advanced microorganisms for fermentation of sugars Re-establish thermochemical conversion as a second path to success Fund loan guarantees, Section 932 biorefinery demonstrations, and 10% scale validation project Form interagency infrastructure team and Regional Feedstock Partnerships Future efforts will address obstacles to biochemical and thermochemical routes to biofuels, support demonstrations, and resolve infrastructure issues. 9

Cellulosic Biorefinery Investments Recently announced competitive selections to provide up to $385 million over four years for cost-shared integrated biorefineries in six states Abengoa Bioenergy Biomass of Kansas Capacity to produce 11.4 million gallons of ethanol annually using ~700 tons per day of corn stover, wheat straw, milo stubble, switchgrass, and other feedstocks ALICO, Inc. Capacity to produce 13.9 million gallons of ethanol annually using ~770 tons per day of yard, wood, and vegetative wastes and eventually energy cane BlueFire Ethanol, Inc. Sited on an existing landfill, with capacity to produce 19 million gallons of ethanol annually using ~700 tons per day of sorted green waste and wood waste from landfills 10

Cellulosic Biorefinery Investments (continued) Poet (formerly Broin Companies) Capacity to produce 125 million gallons of ethanol annually (~25% will be cellulosic ethanol) using ~850 tons per day of corn fiber, cobs, and stalks Iogen Biorefinery Partners, LLC Capacity to produce 18 million gallons of ethanol annually using ~700 tons per day of agricultural residues including wheat straw, barley straw, corn stover, switchgrass, and rice straw Range Fuels (formerly Kergy, Inc.) Capacity to produce 40 million gallons of ethanol annually and 9 million gallons per year of methanol, using ~1,200 tons per day of wood residues and wood based energy crops 11

Accelerating Market Penetration of Biofuels by Developing New Microorganisms Five organizations selected for further negotiations $23 million to develop highly efficient fermentative organisms to convert biomass material to ethanol Including industry cost-share total project costs ~$37 million Funding to begin in FY07 and continue through FY10, subject to Congressional appropriations Projects include: Cargill Inc., up to $4.4 million Celunol Corp., up to $5.3 million E.I. du Pont de Nemours and Co., up to $3.7 million Mascoma Corp., up to $4.9 million Purdue University, up to $5.0 million 12

Ethanologen Selections Common Objectives: Develop and validate organisms that can simultaneously utilize mixed C5 and C6 sugars Increase organism tolerance to higher ethanol concentrations and other inhibitors Feedstocks: Corn stover Hardwood chips Bagasse (sugarcane stalks) Various other agricultural wastes and lignocellulosic biomass 13

Upcoming Solicitations 10% Validation Solicitation - Demonstration of Integrated Biorefinery Operations for Producing Biofuels and Chemical/Materials Products, up to $200 million over 5 years, 50/50 cost share, closing date August 14, 2007, http://www.grants.gov One-tenth of the projected scale of a first of its kind commercial facility Integrated biorefinery demonstrations using cellulosic feedstocks and producing a combination of fuels, chemicals, and substitutes for petroleum-based feedstocks and products Joint USDA/DOE Solicitation - $18 million grants - R&D of biomass-based products, fuels, and related processes Pre-application closing date July 11, 2007, http://www.grants.gov Technologies to convert cellulosic biomass into intermediaries for biobased fuels (45%) Product diversification (30%) Feedstock production (20%) Analysis for strategic guidance (5%) Enzyme Solicitation: FY07 Second phase of cellulase development with cost-sharing industry partners Create commercially available, highly effective & inexpensive enzyme systems for biomass hydrolysis Thermochemical Conversion Solicitation: FY07 - Integration of gasification and catalyst development Freedom Prize 14

Benchmarking the Ethanol Optimized Saab 9-5 BioPower Fuels, Engines, and Emissions Research Center Oak Ridge National Laboratory (ORNL) with support from DOE - OBP Brian West, Tim Theiss & Ron Graves 15

Why Evaluate a European Saab FFV? U.S. legal FFVs are ethanol-tolerant gasoline vehicles Little or no performance benefit on ethanol fuel Typically suffer ~30% drop in fuel economy (mpg) due to 30% reduction in energy content of E85 from gasoline Little or no power/acceleration advantage Saab 9-5 BioPower is reportedly optimized for ethanol use 20% increase in power with ethanol (150 to 180 hp) Saab reports ~ 25% decrease in mpg implies improved thermal efficiency on ethanol over what would be expected No emissions certification data requirement on ethanol fuel in EU Do performance, efficiency advantages come at expense of emissions? 16

The Saab Test Program Baseline emissions and fuel economy on gasoline and E85 FTP (city) HFET (highway) US06 (aggressive) Acceleration Measurements at TRC (Ohio) and ORNL Regulated and unregulated emissions Comparison of fuel economy data to U.S. FFV Fleet Summary and future plans 17

Fuel Economy Tests Shows that E85 Fuel Economy 25-30% Lower Than Gasoline Fuel Economy (mpg) 40 35 30 25 20 15 10 5 FTP HFET US06 Swedish Saab 9-5 Biopower 2.0 liter turbo, flex-fuel vehicle 150 hp on gasoline 180 hp on E85 0 UTG-1 UTG-2 E85-1 E85-2 UTG96 Fed Certification Gasoline FTP: City Test HFET: Highway Fuel Economy Test US06: Aggressive driving Test Fed Certification E85 Fuel (83% Ethanol, 16% UTG96) 18

Saab BioPower Below Stringent US06 Standards on both Gasoline and E85 Relative US06 Emissions (Pct. Of Std) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% US06 4000 mi Stds (g/mi): 0.14 8.0 E0 E85 NMHC+NOx CO Reduction in CO with E85 likely due to increased power (150 versus 180 hp) 19

Summary of Emissions Evaluations Saab BioPower appears to be capable of meeting stringent U.S. Tier 2, Bin 5 emission standards, despite Not certified on U.S. cycles No E85 certification requirement in EU In fact there is: 20% higher power output on E85 No sacrifice of emissions for performance Increased power results in lowered CO emissions on aggressive US06 cycle Note that Full Useful Life (120,000 miles) Emissions were not measured Saab measurements conducted at ~4500 miles 20

Summary of Saab BioPower Benchmarking Detailed exhaust speciation reveals Ethanol and aldehyde emissions higher on E85 Hydrocarbon-based hazardous air pollutants are higher on gasoline Levels of these compounds on either fuel are very low Saab BioPower fuel economy is good compared to the US FFV fleet Among higher fuel economy vehicles available in the U.S. Gasoline equivalent fuel economy on E85 on par with U.S. fleet on the highway test (~3% better than on gasoline) Gasoline equivalent fuel economy on E85 is slightly better on the city test (~7% better than on gasoline versus 3% for U.S. Fleet) 21

Contacts Zia Haq Zia.Haq@ee.doe.gov Office of the Biomass Program http://www.eere.energy.gov/biomass 22