by Jim Lane (Biofuels Digest) … With great sessions at conferences, delegates are usually keen to get a hold of the powerpoint decks. But how do you get a hold of the great Q&A that follows the presentations — or the pertinent questions that get left unanswered when sessions run out of time?
We’ve been saving classic questions this year — and here are the answers, too. We’ve divided these up into six areas: R&D, Policy, Feedstocks, Production & Commercialization, and Downstream Markets and Infrastructure, and Finance.
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Q. The US land grant school and the USDA extension service is crucial to the success of US agriculture. Are there efforts to export this concept/model/system?
A. The land grant and extension systems in the US go back more than a hundred years ago, and the Morrill Act of 1862 (for land grant colleges) and the Smith-Lever Act of 1887 (establishing cooperative extension programs). While the financing mechanism for establishing science-based colleges is probably obsolete — agricultural extension services are becoming more popular around the world, and have been around for decades. FAO supports a lot of this activity. Canada has a highly developed system. Brazil, Argentina too, and its widely in place in the EU. China has a huge program which is undergoing reform. In the developing world, especially Asia, its been spotty since the World Bank scaled back its activity in the sector.
Q. What’s going on in engine design to work with companies like Mercedes Benz and others to develop advanced biofuels-friendly engines, such as high-blend ethanol engines?
A. Ricardo developed one. Cummins just launched a real amazing engine. Adoption by car-makers has been slow — chicken-and-egg problems, mostly. New US fuel economy standards have stimulated a whole new round of discussions on ways that advanced ethanol engines (e.g. E30) can offer sufficient increased compression ratios to substantially raise fleet fuel economy. The new CAFE standards will begin biting in the 2020s, so there’s a while to wait, but not forever.
Meanwhile, the US advanced engine technologies effort continues to focus research on electrics and fuel cells, at the moment.
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Q. What are the costs for feedstocks like wood chips — is power market demand distorting that cost, and can fuel costs be competitive based on feedstock costs?
A. Competitive renewable fuels are entirely dependent on affordable feedstocks. To ensure those, industry must continue to develop value-add applications for new feedstocks faster or better than competing industries.
In the special case of power and woodchips, Renewable Power Standards are pushing more and more utilities to biomass to meet renewables mandates — and yes, that is driving up the costs of woodchips faster than the price of fuels is going up, and that stresses the business model. In those cases, companies will likely target other higher-value markets such as chemicals or high-value fertilizers, in addition to or in replacement of the fuel markets.
For crops like corn stover — the fuels industry has an advantage in having developed strong grower relations, long-term contracting options, and one-stop shopping in terms of shipping corn and stover to the same facility. With sugarcane trash and bagasse, the same applies. So, it depends on the feedstock.
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Q. A state like Florida is looking for alternative crops to replace citrus on 500,000 acres, devastated by HLB disease. Sugar beets, cane, sorghum can be grown in these markets at scale, and there is sun, rain, land and infrastructure. What’s the hold up?
A. Growers are conservative, and generally want to see an established markets before they commit the capital to plant huge numbers of acres. … We’ll see if growers also can make money growing feedstocks in Florida that are affordable for fuels — keeping in mind that the cost of retail fuels is around the cost of retail water.
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Q. Why take biomass and convert to fuels instead of converting to higher value chemicals? Has the “bioeconomy” become a religion that ignores the technoeconomic facts and doesn’t differentiate between technically feasible and economically viable? How will society and the economy continue to prosper by switching to a cellulosic biofuels with an EROI of less than 3, and as low as 1-1.3? What about the economics of these fuels once the co-products have become commodities with very low margins.
A. Perhaps the most important thing is to see renewable fuels as a source, not THE source, for fuels in the marketplace — and to see fuels as an application for a given chemical.
Project develoeprs geenrally don’t focus solely on margin. They need to see margins that exceed a financing hurdle rate — but after that, they look at market size. Otherwise, everyone would be developing niche nutraceuticals to sell at GNC.
One other thing. We probably should avoid the religion of focusing on “cellulosic” feedstocks. They certainly are out there — but its often used as a proxy for “advanced biofuels” or “ABC” (anything but corn) fuels. That’s problematic, as there are plenty of non-cellulosic feedstocks — for example, waste fats, greases and oils — that are powering growth in renewable diesel and biodiesel.
For some time, we may see companies bring forward green chemistry applications for their process — where they have those high-value opportunities and can finance them, they should. Eventually, you will see companies starting to target fuels for some of those technologies — either as producers or as licensors — where they see the economics are there.
Take renewable diesel as an example. The technologies started coming forward a number of years ago — we’ve now seen nearly a billion gallons in capacity deployed, by very serious companies like Neste Oil, Valero and Eni. … READ MORE