Cellulosic Ethanol and Jatropha, too much too soon

It would seem, despite the inability of the cellulosic ethanol industry to produce an economically viable product to date, that it remains this Administration’s answer to coming liquid fuel shortages. Last week President Obama announced that $510 million from the Government, would be invested in biofuels, with an equal amount of private funding.

The U.S. Departments of Agriculture, Energy and Navy will invest up to $510 million during the next three years, in partnership with the private sector, to produce advanced drop-in aviation and marine biofuels for military and commercial transportation, President Barack Obama announced today. . . . . . . To accelerate the production of bio-based jet and diesel fuel, Secretary of the Navy Ray Mabus, Agriculture Secretary Tom Vilsack and Energy Secretary Steven Chu have developed a plan to jointly construct or retrofit several drop-in biofuel plants and refineries.

The investment will be aimed at increasing biodiesel production. The country has more than doubled the production of biodiesel in the last year, with monthly production rising to 81 million gallons in June. (That is 64,000 bd). Further, as the EIA TWIP noted this week, the USA has started exporting significant quantities of ethanol (from corn). Which is good since Brazil's ethanol production is not doing as well as might be thought, due to high sugar prices.

Current increase in exports of ethanol, relative to historic imports.

At the same time some funds will support scientific advances in the National Labs and help to move the results into production.

A team of researchers at the Department of Energy's BioEnergy Science Center have pinpointed the exact, single gene that controls ethanol production capacity in the microorganism Clostridium thermocellum.

Scientists can now experiment with genetically altering biomass plants to produce higher concentrations of ethanol at lower costs, said Secretary Chu, announcing the discovery on Thursday.

Why the combination of departments? Well:

The Agriculture department will work on securing feedstocks while the Energy department will look for the right technologies. The Navy, which has a huge fleet of ships and planes, will be the customer.

Feedstocks are not necessarily the problem, depending on the technology that is going to generate the fuel. (The bacterium can turn cellulose into gasoline, with an estimate that it might be cheaper than getting ethanol from corn. Though IIRC we may have heard that argument before. )

The plan will first create an Executive Steering Group and that will then create a Plan of Action and Milestones. So this won't drop gas prices tomorrow.

I have a bit of a concern about this effort, which has the goal of replacing half the Navy’s consumption of petroleum-based fuels with domestically produced sustainable fuel alternatives by 2020. This is especially true as the objective is directed at creating or retrofitting existing biofuel plants and refineries to create military specification biofuels at a price competitive with petroleum.

We have seen, for example with Range Fuels, that the Government is quite willing to throw large sums of money into creating plants nominally capable of producing large quantities of fuel, before the enabling technology to make that fuel at that scale exists.

in March 2007 (Range Fuels) received a $76 million grant from the Department of Energy . . . . Range said it would build the nation's first commercial cellulosic plant, near Soperton, Georgia, using wood chips to produce 20 million gallons a year in 2008, with a goal of 100 million gallons. Estimated cost: $150 million.

By spring 2008, Range had also attracted $130 million of private funding. . . Investors included California's state pension fund, Calpers. The state of Georgia kicked in a $6 million grant, and all told Range raised $158 million in VC funding in 2008.

By the end of 2008 with no operational plant in sight, Range installed a new CEO, David Aldous. In early 2009, the company said production was not expected until 2010. Undeterred, President Obama's Department of Agriculture provided an $80 million loan. In May 2009, Range's former CEO, Mitch Mandich, explained that the problem was that nobody had figured out how to produce cellulosic ethanol in commercial quantities.

The plant closed in February, and it was only then, as Robert Rapier has noted that the media started paying attention to some of the downsides of cellulosic ethanol production.

So now we go through the whole thing again. The problem, however, if you look at the totality of the sums of money that were involved in the Range Fuels case, the $510 million that has not been proposed for this new effort could, at the same scale, be easily swallowed up by just one or two ventures. We seem to be getting too far ahead of ourselves and rushing to put large quantities of money into technologies before they have gone through the proper demonstration, scale-up, demonstration, scale-up process that stops a few folk wasting large amounts of a lot of other folks cash.

There is an unwillingness to do all the due diligence required to slowly and methodically build on small successes to ensure the value when larger investments are finally made. Money is being concentrated in the hands of a few groups, rather than issued as a broader funding to address potentially different and successful approaches outside of the one that has maneuvered to get the best media and government attention.

There is a similar sort of story, though with a possibly ultimately different conclusion, going on with the potential for getting fuel from the Jatropha plant. Initially when the potential viability of this plant was discovered (the nut produces an oil that can be used for fuel, yet it grows on very poor land) there was a rush of investment with Governments persuaded to spend millions of dollars in plantations in places such as India and China. Spurred on by promises that were not adequately checked at small and intermediate scale, plans were implemented to raise millions of acres of jatropha. By 2008 it was estimated that over 2 million acres had been planted, with plans to increase this to 25 million acres by 2015. It has been estimated, given that the plants take 3 years before producing a crop, that the crops would only be profitable at a yield of 7.5 tons per acre, but it has turned out that yield is only about half to two-thirds that.

Yields can be raised by more care in the selection of land, and with fertilization and watering ( up to 18.5 tons/acre) – but none of these were considered necessary in the initial rush to plant. So now there is a reaction to the poor result, with the suggestion that this was yet another blind alley.

Again the problem seems to be one of rushing to large scale investment without the necessary intermediate steps to ensure that scale-up works. In India there also appears to have been considerable manipulation in the market, so that farmers were not, among other things, waiting the three years for the first crop to develop but giving up before that point.

On the other hand it appears that the smaller experiments and plots in places such as Mali, with a Youtube here have been successful, and they are now seeking to expand the Mali project.

The objective of the Malian government is to achieve a 10% reduction of its diesel imports by 2013 and a 15% one by 2018 via the development of agrofuels such as bio-ethanol, bio diesel and Jatropha oil., If 25% of that objective is based on Jatropha oil production, Mali must produce 10 million liters of oil in 2013 (which will require to cultivate 21,000 ha of Jatropha plantations.) and 14 million liters in 2018 (which is the equivalent of 32,000 ha of village plantations)

Work is also progressing in Ghana though there are also protests.

But with a bit of patience, and a more methodical approach, this may still lead to some answer, perhaps only on the smaller scale in villages that previously did not have electricity and now might, rather than on a huge scale, but that will still be progress, and at much less cost.

Moving slowly and methodically does not carry the political credits that flashy large scale investments do, but on the other hand it is an approach that is more likely to lead to success without large wastes of money, which may well be the current consequence. If the technology is not yet in successful demonstration of viable economic pilot scale production, then it is highly unlikely that it will reach "drop in" capability by 2020 at a scale large enough to help the Navy out. And at the moment I don't see those technologies for cellulosic ethanol in that phase.