Bio-Industrial Refinery Opportunities Alberta Context Presented by: Matthew Machielse Bio-Industrial Technologies Division Alberta Agriculture, Food and Rural Development July 19, 2006
The Bio-Industrial Opportunity From an economy based largely on petroleum to a more diversified economy in which renewable plant biomass will become a significant feedstock for fuel, material and chemical products
The Bio-Industrial Opportunity Biorefining of biomass is the new Oil
Why Biorefining? Manufacturing Concept Similar to petroleum refineries which generate multiple products from petroleum Key Differences to Petroleum Refining Sustainable, with reduced waste and emissions May occur in small-to-medium-sized facilities located in proximity to where the raw materials are produced Value-added can take place in rural areas, more so than with: petroleum refining, or exporting unprocessed grains & oilseeds & jobs
Bio-Industrial is more than Plant Science Genomics Enzymes Metabolism Composition Production Trees Grasses Agricultural Crops Agricultural Residues Animal Wastes Municipal Solid Waste Production Processing - Acid/enzymatic hydrolysis - Fermentation - Bioconversion - Chemical Conversion - Gasification - Combustion - Co-firing End-Uses Products Plastics Functional Monomers Solvents Chemical Intermediates Phenolics Adhesives Hydraulic Fluids Fatty acids Carbon black Paints Dyes, Pigments, and Ink Detergents Paper Horticultural products Fiber boards Solvents Adhesives Plastic filler Abrasives Fuel Power
Biorefineries will likely include a mix of biobased industries Absorbents, adsorbents, activated carbon Fibers, bonded fabrics, textiles Fuels and fuel additives Plastics, polymers and films Construction and composite materials (panels, laminates, hardware) Cleaning chemicals, surfactants, soaps, detergents Foods, beverages, nutrients Soil and water remediation Gases and vapor technology Inks, dyes, pigments Landscaping materials, soil amenders, fertilizers and agricultural chemicals Oils, waxes, binders, lubricants, rust inhibitors, functional fluids Packaging Paints, coatings and adhesives Personal consumer items, cosmetics Pharmacology and neutracuticals Specialty chemicals, fatty and acetic acid Paper and paper products Water and wastewater treatment
The Bio-Industrial Opportunity What is driving the shift. Record high oil prices World daily consumption of petroleum has increased 4 times in 40 years Emerging technologies dramatically reduce cost of bio-based alternatives Consumer demand pull for green and reduced environmental footprints
The Corporate Response General Electric: ecomagination Double investment in R & D, $1.5 billion annually into cleaner technologies by 2010, up from $700 million in 2004 Introduce more ecomagination products, GE will double revenue from $10 billion to $20 billion in 2010
The Corporate Response Toyota Motor Company Toyota has sold over 400,000 hybrid vehicles and is planning to expand hybrids to include at least 10 new vehicles Johnson & Johnson Johnson & Johnson is investing in green power as an alternative to fossil fuel energy. Johnson & Johnson s use of green power in 2004 equaled 18 percent of their worldwide electricity use and included direct purchases of low-impact hydro and wind power.
The Corporate Response Case New Holland Recently announced it will fully support (warranty) the use of B5 and up to B20 blends in all engines they manufacture. ADM Chooses Energy CEO Archer-Daniels Midland Co, appointed Ms. Patricia A. Woertz as its new CEO. She is a former Chevron Corp Executive VP.
Corporate Response DuPont s Sustainability Goals BY 2010 25% of revenues from businesses not requiring depleteable raw materials. 10% of energy needs derived from renewable sources.
Bio-Industrial Segments Three key product streams Fine Chemicals Materials Energy
Bio-Industrial - Chemicals In 2003 the U.S. Department of Energy release a study in which they identified 12 platform chemicals currently derived from petroleum which can also be derived from crops The specialty chemical industry is a multibillion dollar global opportunity
Organic Chemicals Chemical $/Pound Ethylene (1) 0.25 Propylene (2) 0.19 Acetic Acid (20) 0.36 Citric Acid (74) 0.85 Source: Iowa Energy Center
Bio-Industrial - Materials Biodegradable and Functional Agricultural Fibre ingredients in: Construction materials Insulation Automobiles Fabric Paper
Potential Products Plastic Tanks - $1.50/lb Source: Iowa Energy Center
Source: Iowa Energy Center Potential Products
Bio-Industrial Energy With the current world situation, increasing oil prices coupled with increasing demand U.S. National Security Technology has been adopted in most regions Europe, USA, South America, Asia Canada has lagged well behind First mover short commercialization
Alberta s Response PNW??? Alberta is aligning its resources to support industry activity in all life sciences sectors: Agriculture Forestry Energy Health Providing sustainable global solutions Ultimately driving economic growth in the Province and for our partners
Renewable Fuels Status Canada is lagging our competition Current: 7 plants, 0.5% renewable content in on-road fuels Under construction: 5 new ethanol plants increase renewable content to 2% in 2007 Prospects:numerous proposals Promising technologies, vast biomass
Renewable Fuels Status International Benchmarks USA: approximately150 plants producing 2% renewable content, target is 4% by 2012 (140 billion gasoline / 4.5 billion gallons renewable) - 1 billion gallons under construction in Iowa / Nebraska EU: 1% renewable content, and directive to achieve 5.75% by 2010 Brazil: 15% renewable content
Renewable Fuels Ethanol Federal Targets Nationally we consume over 40 billion litres per year of gasoline Federal Government established a target of 35% of gasoline will contain a blend of 10% ethanol Climate Change Proposed 5% RFS for Transportation fuels Would require 1.5 B litres of ethanol EEP will see 1.2 B capacity growth by 2007
Permolex Ltd. Red Deer
Renewable Fuels Ethanol Alberta Situation Alberta consumes about 6 B litres transportation gasoline Currently only produce about 25 M litres ethanol with minor expansion to 40 Ml Limited support other than 9 cent road tax exemptions 5-10% target is being considered
Renewable Fuels Ethanol Alberta Targets Assume growth from 40 Ml to 300Ml 2010 (E5) Wheat /triticale feedstock would require 325k to 1 M tonnes processing input Produce from 120k to 350k DDG Would require capital investment of $130 M - $300 M
Renewable Fuels - Biodiesel Alberta consumes approximately +5 billion litres of diesel (on and off-road) Stretch target is to build capacity of 300 million litres in Alberta Require up to 750K tonnes of Canola if all vegetable based $200 million in capital investment
Renewable Fuels - Biodiesel Positive Health and Air Quality Consumer/Industry perception and awareness Commercial technology readily available Quality certification and assurance Ultra Low Sulphur Diesel (ULSD)
Highmark Renewables
Commercial Biogas Opportunities Methane from manure and municipal organic waste offers Alberta great potential in energy. Offers tremendous value add to mitigate external costs environmental, social, SRM Value add to waste/low value co-product streams Cluster opportunities are numerous
Basic Value Chain for Feedstock Manure Biosolids Municipal/ Processing Waste Fibre Crops Deads Biogas Collection Feedstock Preparation Pre Processing Anaerobic Digestion Bioenergy Biogas Steam Heat Refrigeration Electricity BioMaterials Fertilizer Greenhouse Pots BioChemicals Chemical Compounds GHG Reduction Carbon Credits Strong Rural Development Focus Odor Reduction Nutrient Mgmt SRM Disposal
Passau, Germany. $15 M. Cdn. Dry fermentation plant - garbage.
Current Situation in Germany 2,700 biogas plants, there are 55 plants for treatment of organic municipal solid waste (OMSW) 650 MW electrical power output installed 0.8 % of total electricity supply from biogas (all renewables: 9.4 %)
Barriers to Commercialization High Capital Cost to get high efficiency technology ($2-$5M /MW currently). Farm scale plt. $500 K to $6.5 Million. Regional scale plt. $7 to $15 M plus for larger commercial scale. Technology still at innovator stage entering early adopters Consumer Awareness - NIMBY
Infrastructure Barriers Accessing grid in Alberta, each electrical company has their standards of connecting. Standardization on Net Metering? Ontario and BC have already enabled. BSE need to get technology proven that prion destruction is validated (CFIA) ie. Biosphere Technology s thermal hydrolysis. Waste heat need to capture value.
Preparing biogas for the natural gas grid.
Two key issues.. Integrate renewable alternative supplies into the existing petroleum energy market Build the production capacity to meet the market needs and demand
The Value of an Eco-Industrial Cluster to the Feasibility of an Anaerobic Digester What is an eco-industrial cluster? An eco-industrial park or cluster is a collection of companies and/or institutions that are located in close proximity to one another and that make use of each others waste / low value outputs as feedstock inputs. Why is the eco-industrial model of interest in relation to anaerobic digesters? One of the key challenges with the business model associated with anaerobic digesters is the ability to realize value from co-products such as heat, biomaterials. By locating an anaerobic digester in a functioning eco-industrial cluster, it is possible to make use of the various co-products (heat, electricity) in the local environment
A Cluster Regional Development System Dewatered Digestate Organic Fertilizers Liquid Digestate water Food Grade Organics Local Municipal Organics Rendering, Deadstock Co-gen Resource Centre Electricity Co-Located Industries Heat CO 2 Greenhouses Clean Water Food Processor Slaughterhouse Bio-energy plant Wet Distillers Grain - 15% savings
Primary Inputs Value Add Activity Primary High Value Products Secondary Low Value Coproducts Cluster Leverage Point Wheat Water Energy/Heat Feeder Cattle Barley DDG s Milling Biorefining Ethanol Dried distillers grain Feedlot Biodigestor Feedlot Fat Cattle Solid Manure Biodigestor Ethanol Biodiesel Canola Tallow Crushing Biorefining Biodiesel Glycerine Canola Meal Biodigestor Feedlot Fat Cattle Water Energy/Heat Meat Processing Boxed Beef Tallow Paunch stream SRM Biodiesel Biodigestor Manure Municipal Waste Energy/Heat Anaerobic Digestion (Biogas) Methane/Energy Heat Water Fertilizer All Potatoes Energy Water SugarBeets Natural Gas Energy/Heat Slicing / Freezer French Fries Peelings Tailings Slicing / Condensing Sugar Beet Pulp Tailings Biodigestor Ethanol Biodigestor Ethanol
There is nothing so powerful as an idea whose time has come. Victor Hugo Contact: Matthew Machielse 780-916-9224