Building the Biofuels Industry: DOE efforts to Demonstrate ...$34M: Advanced Biofuels Technology Consortium $44M: Algal Biofuels Consortium to accelerate demonstration $20M Ethanol

Building the Biofuels Industry:

DOE efforts to Demonstrate and Deploy Integrated

BiorefineriesBrian Duff, Chief Engineer

DOE EERE Biomass Program

TAPPI/BioPRO

March 14, 2011

Energy Efficiency & Renewable Energy eere.energy.gov

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Building the Biofuels Industry

Goals, Vision, Mission

Importance of Biofuels

Biofuels Development Efforts at OBP

Efforts to Demonstrate and Deploy Integrated Biorefineries

Barriers to Biofuels Commercialization

Near Term Market Entry Opportunities

AGENDA


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Department of Energy Priorities and Goals

Science & Discovery - Maintaining our leadership position

Economic Prosperity – Job Creation

Climate Change – GHG Reduction

Clean, Secure Energy – Energy Security

Advancing Presidential Objectives


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• Dramatically reduce dependence on foreign oil

• Promote the use of diverse, domestic and sustainable energy resource

• Establish a domestic bioindustry

• Reduce carbon emissions from energy production and consumption

Key Tenets of the Office of Energy Efficiency and Renewable Energy Strategic Plan:


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“A viable, sustainable domestic biomass industry that:

• produces renewable biofuels, bioproducts and biopower

• enhances U.S. energy security

• reduces our dependence on oil

• provides environmental benefits, including reduced greenhouse gas emissions, and

• creates economic opportunities across the nation.”

Vision of the Biomass Program


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“Develop and transform our renewable biomass resources into cost-competitive, high-performance

biofuels, bioproducts, and biopower through targeted research, development, demonstration, and deployment

supported through public and private partnerships.”

Mission of the Biomass Program


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• At low % blends, refiners can

adjust operations to produce

suitable blendstocks• Ethanol, e.g., Vapor Pressure

• Biodiesel, e.g., Cold-Flow

• At higher % biofuel, displaced

hydrocarbons may be shifted to

less-valuable markets• Gasoline, e.g., to Cracker Feed

• Diesel, e.g., to Fuel Oil

• As crude is displaced as a source

of one product, there may be

shortfalls in other markets• Gasoline, e.g., Diesel & Jet

• Motor Fuels & Jet, e.g., chemicals

• Aromatics, e.g., hydrogen

Energy Security:Liquid Fossil Fuel Displacement

Source: Energy Information Administration, “Oil: Crude Oil and Petroleum Products Explained” and AEO2009, Updated February 2010, Reference Case.

In our fuels as in our schools, “drop-outs” are a problem!


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0 5 10 15 20 25 30 35 40

2012

2015

2022

Renewable Fuel

Standard (RFS2)

Production Targets (Billions of Gallons)

Conventional (Starch) Biofuels

Biomass-based diesel

Cellulosic Biofuels

Other Advanced Biofuels

Advanced Biofuels(include cellulosic biofuels other

than starch-based ethanol)

EISA Mandated Biofuel Production Targets

15 BGY Cap on Conventional (starch) Biofuels


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-40

-20

0

20

40

60

80

100

Gas Diesel Corn Ethanol Sugarcane Ethanol

Switchgrass Diesel

Stover Diesel Switchgrass TC Ethanol

Stover TC Ethanol

Switchgrass BC Ethanol

Stover BC Ethanol

g C

O2e p

er

MJ

Biofuel pathways with % reduction from baseline

EPA RFS2 CO2 e IntensityBiofuel lifecycle greenhouse gas emission reductions relative to petroleum fuels

Petroleum

Baseline

19%

61%

70%

91%

72%

93%

110% 130%

* TC = Thermochemical conversion | BC = Biochemical conversion

Source: EPA RFS2 Final Rule, March 26, 2010

Petroleum

Commercial Biomass

RD&D Biomass

Climate Change:

GHG Reduction


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The Importance and Relevance of Biofuels

Economy

Why are Biofuels so Important?

Security

Environment

www.navy.mil/


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Energy Security:

o We import ~64% of our liquid fuels, often from countries who are

antagonistic towards the US

o We are a captive market dependent on countries we cannot rely on

National Security:

o We expend a significant amount of our military budget in funding and

personnel in activities directly related to maintaining our access to oil

o Our National Security is related to our Economy

Economic Security:

o Our dependence on oil and impact of oil prices acts like a throttle on

our economic engine

o The impact of rising oil prices reverberates through the economy,

raising the prices of goods and services and driving inflation

Biofuels: Why should we bother? SECURITY!


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Trade Deficit

• We spend $400 billion/year on

imported oil, of which about $300B

finds its way into foreign treasuries

as profit: >$1 billion/day!!!!

Why should we bother? ECONOMICS!

www.census.gov

GDP: Rural Economic Development

and JOBS

• Creating 50-75 new direct jobs per

biorefinery

• Reinvigorating rural economies

• Creating major new energy crop

markets


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The Environment!• Petroleum dependency contributes to anthropogenic

GHG emissions

• Rising levels of CO2 are decreasing the pH of our

oceans, potentially upsetting delicate and vital

ecosystems such as coral reefs

• Biofuels can reduce GHG and CO2 emissions up to

130%

• Biofuels can reduce risks & damages from oil

production/transport

Sustainability

• Many of our industrial practices are not sustainable

• Biofuels are renewable

• Production technologies and metrics are being

developed for sustainable biofuels production

Why should we bother?

Source: http://prasoondiwakar.com


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QUALITY OF LIFE!

• Biofuels contribute to our economic prosperity

• As China and India continue to grow their

economies, the US will need to move away

from using 25% of every daily barrel of oil to

~10% or less , more reflective of our relative

populations

• To maintain our quality of life, we need to

develop new energy sources and renewable

bio-based analogs for petrochemical fuels and

products

Why should we bother?


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Biofuels: Other Considerations

• Liquid fuels are a premium product application: we pay for energy density and

convenience. In the near term, biofuels are the only alternative that fits our

lifestyle

• Biomass is not unlimited: “Best Use of Biomass” dictates the highest value

product application

• Electricity generation has many other options: Hydro, Nuclear, Wind, Solar,

Geothermal, Wave, Ocean Thermal

• There is no other option for liquid transportation fuels besides biomass

• Electrifying the vehicle fleet does not address GHG issues unless generation

uses renewable, sustainable sources

• Ethanol is a “transition” fuel. The technologies being developed for ethanol are

being leveraged to other renewable liquid fuels: gasoline, diesel and jet fuel

• We need every arrow in our quiver, every tool in our box, and biofuels is one


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Biofuels Development Efforts at the Biomass

Program of DOE


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Biomass Program Mission, Objectives, Goals

Research, Development, and Demonstration

Integrated

BiorefineriesInfrastructure

Biochemical and

Thermochemical

Conversion

Feedstocks

Biopower

Biofuels

Bioproducts

Crosscutting Activities

Analysis; Sustainability; Partnerships, Communications, and Outreach

R&D Priorities• Achieving biofuel cost targets (modeled)

o <$2/gal for cellulosic ethanol;

o <$3 for cellulosic drop-ins

• Developing bio-power and bio-products for

important supporting roles

• Meeting the EISA Renewable Fuel Standard

• Investing to meet targets (~$200M/yr)

Moving Markets

• Close collaboration with USDA, EPA, DOD

• Pilot and commercial demonstrations

• Infrastructure for delivery (including fuel

dispensers)

• Subsidies and other policy drivers

Develop and transform our renewable and abundant biomass resources into cost

competitive, high performance biofuels, bioproducts, and biopower.


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Strategic Focus: Biofuels

• Cellulosic Ethanol: Historically, the primary focus of the program has

been on the conversion of lignocellulosic biomass to fuel ethanol. This

work can be fully leveraged and applied to renewable hydrocarbon fuels.

• Alternative Light-Duty and Diesel Replacement Fuels: Over past few

years, Biomass Program has expanded its technology portfolio to include

the production of renewable hydrocarbon fuels from lignocellulosic

biomass, including renewable gasoline, diesel and jet fuel, which will be

required to meet the EISA goal.

FeedstockProduction

FeedstockLogistics

BiofuelsProduction

BiofuelsDistribution

BiofuelsEnd Use


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R E

F I N

I N

G

Focus of Biomass Conversion RD&D

Integrated Biorefineries

FeedstockProduction& Logistics

• Energy crops

• Forest Residue

• Agricultural Residue

• Algae

Ethanol

Butanol

Olefins

Gasoline

Diesel

Others

Feed Products

Lignin(for power)

Thermochemical Conversion

FastPyrolysis

Gasification Syngas Fischer TropschAlcohol Synthesis

Liquid

Bio-oilZeolite Cracking

Hydrogenolysis

Upgrading

Enzymatic Hydrolysis

Sugars Fermentation

Biochemical Conversion

Lipid (Oil) Extraction

Algal

Oil

Transesterification

Fractionation


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Recovery Act Funding and InitiativesBiomass R&D and Demonstration Projects - $800 Million

$509M Pilot and Demonstration-Scale BiorefineriesValidate technologies for integrated production of advanced

biofuels, products, and power to enable financing and replication.

DOE recently selected

- 14 pilot-scale projects for up to $25M each

- 4 demonstration-scale projects for up to $50M

$81M Commercial-Scale BiorefineriesIncrease in funding for prior awards; one project

Expedite construction; accelerate commissioning and start-up

$107M Fundamental Research$24M: Integrated Process Development Unit

$5M: Sustainability research with the Office of Science

$34M: Advanced Biofuels Technology Consortium

$44M: Algal Biofuels Consortium to accelerate demonstration

$20M Ethanol Infrastructure ResearchOptimize flex-fuel vehicles operating on E85

Evaluate impacts of intermediate blends on conventional vehicles

Upgrade existing infrastructure for compatibility with E85

$13.5M NREL Integrated Biorefinery Research Facility

expand the pretreatment capacity

$69.5M SBIR and Program Direction

http://recovery.gov/


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Biomass Program Demonstration

and Deployment Activities in Support of

Integrated Biorefineries


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Integrated Biorefineries andMajor Research Thrusts

• 29 R&D, pilot, demonstration, and commercial-

scale projects selected to validate IBR

technologies: 2,12,9,6• Diverse feedstocks represented

• Multiple transportation fuels and bio-based

products

• Fundamental Research• Drop-in biofuels consortium

• Algae consortia (4)

• Deployment • Expansion of Integrated Biorefinery Research

facility at NREL

• Integrated Process Development Unit to reduce

cost of feedstocks logistics


23For more information visit:

http://www.eere.energy.gov/biomass/integrated_biorefineries.html

Biomass Program‟s Integrated Biorefinery

Project Portfolio


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Integrated Biorefinery Pathways

Feedstock Conversion Intermediate Conversion Product Partner


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Integrated Biorefinery Pathways

Feedstock Conversion Intermediate Conversion Product Partner


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Barriers to Commercialization


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Challenges for the Demonstration

and Deployment of IBRs


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Barriers exist throughout the value chain:Feedstock:

Who‟s going to invest in planting a new crop when

there‟s no plant to take it to?

Financing/Capital: Who‟s going to finance a plant when there‟s no

feedstock to supply it?

Who‟s going to finance a plant when the Conversion

Technology can‟t get a performance guarantee?

Product Off-take: Who‟s going to finance a plant when the longest off-take

contract you can get is 2-3 years?




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Conversion Technology Development

Market Surety

Project Financing




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Conversion Technology Development



Technology developers must contend with the “Valley of Death”

between bench scale reduction to practice and true

commercial production.

Conversion Technologies must be scaled up to generate the

engineering data required for plant construction

Conversion Technologies must be validated at scale to obtain

engineering data and support project financing


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Market Surety



The price of oil fluctuates dramatically and therefore there

is no surety in the off-take product price for the

renewable analogs

Federal incentive policies and market mandates are subject

to change and expiration, and there is no surety that they

will cover the tenor of the loan

Market Surety can be increased through

consistent public policy


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Project Financing



The lack of a performance guarantee can be addressed

through the federal loan guarantee programs

Feedstock supply chain issues can be addressed through

programs like the USDA‟s Biomass Crop Assistance

Program (BCAP)

Project financing can be improved through financial

assistance programs and capital construction tax

incentive programs

Product off-take supply issues can be addressed with

programs like the Cellulosic Biofuels Reverse Auction


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Investing across the value chain

What‟s the Biomass Program Doing

to Address these Barriers?

• Feedstock & Feedstock Logistics

• Conversion: expanding beyond ethanol;

leveraging investments

• Demonstration and Deployment Projects

• Infrastructure Development for Mid-Level Blends

• Fuel Certification


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Working with Stakeholders to Access Capital

and Secure Project Financing

What‟s the Biomass Program Doing

to Address these Barriers?

Financial/Market:

Financial assistance programs

LGP – DOE and USDA

Interagency collaborations: USDA – BCAP; EPA

– markets; DOD – potential off-take partner

Market development: RFS2, reverse auction,

off-take contract opportunities with industry


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Near-Term Market Entry Opportunities




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Potential Near-term Market Entry Opportunities:

Market Entry Opportunities

• Breweries

• P&P plants – fuels, chemicals, power

• Oilseed crushers/processors

• Corn dry mills – fuels, chemicals

• Petrochemical Refineries – fuels, chemicals, power

• MRFs & Landfills – fuels, chemicals, power

• WWTP – fuels, chemicals, power

• Pharmaceutical and contract fermentation

operations


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Focus on P&P Mills as a Market Entry Point –

Matching Barriers to Opportunities:


• Feedstock Supply:

• Already been doing it for 100+ years

• Infrastructure already exists

• Relationships already in place

• Documented historical supply

• Documented cost history

• Sustainable practices already demonstrated

• Multiple opportunistic feedstocks already on or near site:

Hog fuel, Black Liquor, Green Liquor, Sludges


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• Technology:

• Derivative of existing P&P unit operations

• Staff already up to speed with most unit operations

• Sites already developed: permit facilitation, etc.

• Opportunities to reduce cost by co-location and shared

labor

• Option to reduce cost of operation and generate new

revenues

• Technology/business model readily replicated in other

mills


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• Product Off-take/Financing:

• Power contract with mill or grid provides reliable, long-

term off-take potential

• Co-location diversifies the product slate

• Mills can bring equity in form of equipment and site

• Mills bring operating cash flow that contributes to

successful financing potential


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Existing Examples:


Tembec, Témiscaming, QC

• The only known pulp mill in North America that

currently produces ethanol.

• The company ferments spent sulfite liquor (wood

hydrolysates) with yeast

• Tembec produces 15 million liters per year (4

mmgy) of alcohol, most of which goes to the food

and beverage market.


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Existing Examples:


SEKAB AB, Domsjö, Sweden

• SEKAB has been producing ethanol from black

liquor since the „40s

• The company supplies over 90% of the Swedish

market through Brazilian imports and is ramping up

its own lignocellulosic ethanol technology


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Highlighting Three P&P Projects in the

Biomass Program Portfolio




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Projects in the Biomass Program

Portfolio

Flambeau River Biofuels

• Site : Park Falls, WI

• Objective: Build and operate a 1000 ton-per-day Integrated

Biorefinery for production of renewable diesel at an Existing

Pulp and Paper Mill

• Supporting Pilot Data: 1000+ hours of pilot plant operation in

Raleigh, North Carolina

• Feedstock(s): Woody Biomass

• Technology: Thermochemical gasification with Fischer-

Tropsch

• Products: 18 MGPY Renewable Diesel and Olefins Waxes


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Portfolio

NewPage Corporation: Project Independence

• Site : Wisconsin Rapids, WI

• Objective: Build and operate a 500+ ton-per-day Integrated

Biorefinery for production of renewable diesel at an Existing

Pulp and Paper Mill

• Supporting Pilot Data: 1000+ hours of pilot plant operation in

Raleigh, North Carolina

• Feedstock(s): Mill Residues and un-merchantable wood

• Technology: Thermochemical gasification with Fischer-

Tropsch

• Products: 8.2 MGPY Renewable FT Liquids


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Portfolio

Red Shield Acquisition – Old Town Mill

• Site : Old Town, ME

• Objective: Construct an Integrated Biorefinery that will

extract hemicelluloses from wood chips to make biofuel and

other specialty chemicals at an existing pulp mill.

• Feedstock(s): Pentose sugars from wood hydrolyzate

• Technology: Biochemical – Fermentation

• Products: 1.5 MGPY Biobutanol; 2.2 MGPY Acetic Acid


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The Mission is not over ; What‟s still to be done:

• Continue to foster new feedstock production methods

• Continue to develop feedstock collection, preprocessing and

supply logistics

• Demonstrate technology readiness and reliability

• Continue to develop market outlets and long-term contract

options

• Invest in pioneer plants to reduce technical risk and

demonstrate financing mechanisms

• Develop metrics and methods to document technology

sustainability and LCA/GHG benefits

• Develop sustainable public policy


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Secretary of Energy Steven Chu :

"Developing the next generation of biofuels is key to our effort to end our dependence on foreign oil and address the climate crisis -- while creating millions of new jobs that can't be outsourced. With American investment and ingenuity -- and resources grown right here at home -- we can lead the way toward a new green energy economy."

Challenges for the Demonstration and

Deployment of IBRs

Documents

Building the Biofuels Industry: DOE efforts to Demonstrate ...$34M: Advanced Biofuels Technology Consortium $44M: Algal Biofuels Consortium to accelerate demonstration $20M Ethanol