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Compelling Case for Integrated Biorefineries
by
B. A. Thorp, Benjamin A. Thorp IV andL. Diane Murdock-Thorp
Federal Energy Council• Markets varied from “Official forecasts”• After a two year study, the FEC delivered a
colossal 476-page study that involved 350 participants, suggestions from over 1,000 people and submissions by 19 foreign governments.
• One conclusion: annual world increase in oil use exceeds annual new discovery rate
Key Drivers Include
• Federal Energy Council Report (increased demand exceeds new discovery rate)
• 2007 EI&SA requires 36 BILLION gallons of renewable fuel (only 15 is corn ethanol)
• New technologies improve economics• A series of new independent forecasts (one
example to follow)
EGW Peak Oil Analysis
Future Energy Supply a
• Energy supply is not what is “out there”• Energy supply is finding, extracting and
processing• Most of the cost of energy is processing,
conversion and purification
-----------a Huber and Wells, “The Bottomless Well”
Implications• Oil and gas supplies are inadequate• Wall Street Journal articles create public
awareness• Each country will address oil shortage• Anticipated investments in biofuels
forecasted to skyrocket• Oil prices drive biofuel commercialization
Key Definitions• Bioenergy is the production of steam and power
from biomass.
Conventional Bioenergy is typically done with solid fuel boilers and produces steam (and some power from that steam).
Modern Bioenergy projects use technology like gasification which allows displacement of the most expensive fuels, like natural gas.
• Biorefinery is a biomass facility that uses distillation, cracking or chemical separation to export energy from the facility.
Key Definitions• The current DOE strategy defines two technology
platforms:1. Thermo-chemical Platform2. Sugar Platform
• There is a third:3: Chemical Platform
Exactly What is a Biorefinery?
• Lets start with 2 simple diagrams to define the start and end points in pulp and paper.
• Next, look at the 12 current pathways where hardware on the ground or at least proposed commercial facilities (there will be more pathways in the future).
Logs/Fiber
Chemicals
Energy
Kraft Mill
Pulp/Paper
Emissions
Current Mill
Future Mill
Logs/Fiber
Chemicals
Regional Biomass
Forest Biorefinery
SignificantlyReduced Emissions
Pulp/Paper
Green Power OR
BiodieselEthanol
Fuel FeedstockChemicals
Sugar 1Biomass or sorted MSW
Acid Hydrolysis
Fermentation(Blue Fire Ethanol)
Sugar 2Biomass
Enzyme Hydrolysis
Fermentation(Poet & DuPont)
4 Biorefinery Building Blocks (Process Pathways)
1 & 2 3 & 4
5 6
Thermal 1Biomass
Gasification
GTL+E(FRBE)
Fermentation(ALICO)
Thermal 2Black Liquor
Gasification (Norampac)
GTL Fermentation
or or
3 Biorefinery Building Blocks (Process Pathways)
7 8
9
Sugar 3 (Hemicellulose)Pulpwood
Pulping
Ethanol Fermentation(AVAP process)
Pulp
SeparationLignin
Sugar 4 (Hemicellulose)Extraction
Fermentation
Ethanol(VPP)
Pulp
Pulping
Black Liquor
and
Thermal 1Biomass
Gasification
GTL+E(FRBF)
Fermentation(ALICO)
Sugar 4 (Hemicellulose)Extraction
Fermentation
Ethanol(VPP)
Pulp
Pulping
Black Liquor
and
2 Biorefinery Building Blocks (Process Pathways)
10
11
Sugar 4 (Hemicellulose)Extraction
Fermentation
Ethanol(VPP)
Pulp
Pulping
Black Liquor
Thermal 2Black Liquor
Gasification (Norampac)
GTL+energy
Fermentationand
Thermal 1Biomass
Gasification
GTL+E(FRBF)
Fermentation(ALICO)
Thermal 2Black Liquor
Gasification (Norampac)
GTL+E Fermentation
or or
or
1 Biorefinery Building Block
Sugar 5 (Hemicellulose)
Woody Biomass
Separation
Pure Lignin Fermentation
and
12
The Short-Term Winners Will Be:
• A yield of 80 gpt and a sales price of $2.00 per gallon gives a revenue stream of $160 per BD ton biomass, which has little/no profit margin
• The profit only comes when there is another high value product like cellulose, lignin or salable recovered heat that offsets expensive fossil fuel.
• Processes where valuable co-products are produced include pathways 1, 2, 3, 4, 7 and 12. In 2008 DOE funded projects with pathways 1,2 and 12
• There is far more commercial experience with the unit operations in pathway 1
The Long-Term Winners Will Be:
• Chemical technologies which are just emerging and are proprietary. Yields can be 120 ++ gpt.
For one example see www.Virent.comand
• Cleverly integrated short term winnersand
• There will be others, but they will likely be “niche”solutions.
Historical Perspective• Corn, potato, juniper and other “bio-based”
alcohols have been produced from various biomass for centuries. The price for “adult beverages” has supported the costly processes.
• Even cellulosic ethanol has been COMMERCIALLY available from as early as 1909.
• Before the last energy crunch “Cellulosic Ethanol”was made in at least a half-dozen places.
2008-04-18/19Sune Wännström
1880 1900 1920 1940 1960 1980 2000 2020
1909 The first sulphite ethanol plant
1874 Sulphite pulp
Cellulose Ethanol(sugar platform)
1925 (Lättbentyl, 75% EtOH)
1941 Domsjö, ÖrnsköldsvikOrganic synthesis, long before the petrochemical industry
~2000 Bellingham idled2005 Modern Mills proposed
1945 34 factories in Sweden produced 80 000 m3 EtOH
Sulfite Mills with Biorefinery Capability(sugar platform)
• GP, Bellingham, USA (1945 to ~2000)• Tembec, Temiscaming, Canada• Borregard, Lingo-Tech, Norway• Borregard, Ligno-Tech, South Africa• Domsjo, Sweden• Nippon Specialty Chemical, Japan• Flambeau River, Hardwood Line, USA
Thermal Platform Historical, Commercial Summary
Commercial Black Liquor Gasification:• Weyerhaeuser, New Bern, NC, USA• Norampac, Trenton, Canada
Biomass for total thermal energy in NA:• Jackson Paper, Sylva, NC• Grays Harbor, Hoquiam, WA• Catalyst, Port Alberni, Canada
In North America the technology development and implementation
pathway of independent verses large corporations has been markedly
different.
Key Projects Started Without DOE $
• Coastal Paper, Wiggins, MS - Biomass gasification-syngas to steam (modern BioEnergy project)
• Weyerhaeuser, Kamloops, Canada - Biomass gasification with Syngas to the lime kiln (also modern BioEnergy)
• P&W, Claiborne, AL, USA (Biodiesel from soybean oil, a BioRefinery with mill synergies)
• KL Process, Wyoming USA (1.5 million gpy ethanol from Ponderosa Pine Biomass, maybe the first modern commercial biorefinery)
• Community Power-modular gasification and GTL
Six Projects funded by DOE in 06(yield should include all BTUs but that data is not yet available)
Project Technology Capital Cost($ millions)
Yield(gal/ton)
CapitalEffectiveness
($/gal/yr)
Announced Projects
Abengoa Gasification & GTL 190 or more 79 more than 16.7
Alico Gasification & fermentation 83 or more 75+ power, etc. less than 4.0
BlueFire Hydrolysis & fermentation 100 or more 68 about 5.3
Broin Enzyme & fermentation 200 or more 83 cannot break out
Iogen Enzyme & fermentation 200 or more ~71 about 11.1
Range Gasification + GTL ~225 92 about 5.8
Corn(19) 50 Million GPY “dry mill” ~ 100 80 new about 2.0
Key DOE grant Demonstrations • ICM Corp., Colwich KS-plant at St. Joeseph Mo
will integrate biochemical and thermo chemical processing.
• Lignol Innovations-plant is Commerce City CO will produce “pure” lignin and ethanol from wood chips (pathway 12)
• Pacific Ethanol-plant in Boardman, OR convert agriculture and forest residues to ethanol (proprietary pathway 6)
• NewPage, Wis. Rapids, WI will use gasify forest residues to produce FT liquid with tail gas to fuel the lime kiln (pathway 1)
Key Projects Proposed• Flambeau River BioFuels, WI, USA
(Demo plant that produces 6 million gpy of FT liquid @~$1.20/g + 4.5 MW renewable energy from unmerchantable biomass)
• Catalyst Renewables, NY, USA(Demo funded by NY State to produce 130 thousand gpy cellulosic ethanol by water extraction of hemicellulose from biomass prior to a solid fuel boiler which produces steam and power)
• Colusa Biomass, CA, USA(12.5 million gpy cellulosic ethanol from rice straw from Sacramento Valley via enzymatic hydrolysis followed by fermentation
• Dynamic Fuels- JV of Tyson and Syntroleum(bio fuel from animal fat via Fischer-Tropsch)
• Energy Quest and Willow Industries(6 MW power in Edmonton from downdraft gasification)
More Key Projects Proposed
• Potlatch, McGhee, AR, USA(34 million gpy of FT liquid + 126 Trillion BTUpy steam+ 118 Trillion BTUpy tail gas from ~2,000 tpd unmerchantable biomass)
• Florida Crystals, FL, USA(A demo/development plant funded by the Univ of FL to produce 1 to 2 million gpy of cellulosic ethanol from biomass)
• Perhaps 7 from 48 responses DOE solicitation, which closed August 14, 2007.
Examples of Increased Attention to Biomass Gasification Include:
• Choren-Shell joint venture in Freiberg, Germany• Stora-Neste JV with demo unit for the P&P mill at
Varkaus, Finland• UPM-Choren JV with a semi-works plant at another P&P
mill in Finland• Norske Skog Follum with a unit at Honefoss Norway• Flambeau River Biofuels at Park Falls, Wisconsin• Potlatch developed project at McGhee, Arkansas• Volkswagen investment in Choren for another proposed
plant• Daimler investment in Choren • Chippewa Valley Ethanol JV with Front Line Bioenergy
• Objective: Commercial-scale production of clean, renewable liquid transportation fuels; secondary energy streams such as electricity, steam and hot water sold to integrated host mill facility
• Scope: State-of-the-art, commercially-proven steam-reforming gasifier producing high-quality syngas, converted to renewable transportation fuels via proven Fischer-Tropsch process
• Cost: $210 - $250 million • Benefit: Investment-grade opportunity for renewable fuels at a
solid profit; Biorefinery converts local wood waste and other available biomass streams into clean, renewable, high-value liquid transportation fuels, transforming regional economy; industrial host controls energy costs at less than
fossil fuel prices, reduces carbon footprint and opens new revenue streams
Flambeau River Integrated Forest Biorefinery Overview
Advanced Systems for Biomass-to-Green Energy Solutions
Major Project Assumptions• Overall project cost: $210 - 250 MM
Cost estimates include engineering, construction, commissioning and turnkey premiums. Pro formaeconomics include development and financing costs, interest reserve and interest during construction requirements
• Raw material/biomass volume: 1,900 dry tons per dayExisting literature and related studies estimate a “typical” commercial biorefinery to convert between 2,000 – 3,000 dry tons per day of biomass; to tilt to the more conservative low-end for an early project, we have chosen 1,900 dry tons per day as our target; project biomass will be a combination of various locally-available woody biomass
• Biomass cost: $50/dry tonBiomass cost estimates are derived from local market analyses, existing local contracts and industry/academic/government estimates
• Output Liquid Transportation Fuel: 2,691 bbl/d (40 million gpy, 70 million ethanol equivalent gpy)Steam: 150 Kpph, sold to hostHot water: 14MMBtu/hr, sold to host
• Future Energy PricesProduct pricing forecasts are pegged primarily to the Energy Information Agency’s (EIA) most-recently released petroleum estimates (Feb. 2007), i.e. Low-Sulfur crude projected to be ~$63.50/barrel in 2010
• PermittingPermitting period will range from 9-18 months and will begin prior to the anticipated 18-21 month construction period; will be faster and less costly than for a commensurate greenfield site, as biorefinery will benefit from host facility’s existing permitting umbrella and infrastructure
• Financing50/50 D/E split, with (tax-exempt) industrial development revenue bond & loans rates ranging from6-7.5%
Advanced Systems for Biomass-to-Green Energy Solutions
Return on Project Equity
Integrated Biorefinery Equity Return, Two Different Financing Scenarios
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
$31.73 $38.08 $44.42 $50.77 $57.11 $63.46 $69.81 $76.15 $82.50 $88.84 $95.19 $101.54
Per Barrel Price (2010) of Low-Sulfur Crude (projected, inflation-adjusted dollars)
Ret
urn
on E
quity
, %
Later Project Financing, 80/20 Debt/EquityEarly Project Financing, 50/50 Debt/Equity
Dotted Red Line Shows CurrentBaseline Pro Forma Price Assumption -->
Advanced Systems for Biomass-to-Green Energy Solutions
Conclusions
• Petroleum consumption outpaces capacity• Renewable fuel standards beyond corn–
ethanol• Technology development dictates biomass
gasification followed by GTL and/or cellulosic ethanol will be the next biofuel boom.
Conclusion • Need for chemically equivalent biofuels will
be a driver• Biomass gasification followed by F-T well
understood and adequately developed• Integrating a biorefinery with a steam host
provides another significant revenue stream• Currently there are attractive economics for
an integrated biorefinery
??Q & A??
Final thought --- this appears to be a business with an incredibility long life cycle.
Appendix I
Technology Provider Start Year No. Units Amount & Type Biomass Owner Location Use of Syngas
1. TRI 1980’s 1 ~1 tpd-any Pilot Line Analysis & trials. 1st unit in CA, 2nd in M
2. Energy 1982/3 2 125tpd-rice hulls Pro.Rice Mills Exhaust dries rice and steam boils rice
3. EnvirOcycler 1982/3 2 135 tpd wood waste Norboard Heats MEC rotary dryers
4. Homemadeb 1993 1 900 tpd biomass GB Packaging Steam turbine, then 270,000 #/hr to the mill
5. Energyc 1995 1 570tpd rice hulls Pro.Rice Mills 7.5 MW power + steam boils rice
6. Energy 1996 1 30 tpd-any Pilot Line Analysis & trials-uses technology
7. Energy 1996 3 550 tpd-rice hulls Riceland 15 MW steam turbine + 100,000 #/hr steam for the soybeanprocessing plant
8. Energy 1997 1 175 tpd-rice hulls Riceland Exhaust dries rice, steam boils rice
9. Ethopowerd 1997 1 ~20tpd-wd.shavings Canfor Wood Smithers, BC Space heating for remanufacturing plant
10. EPI-modified 1998 2 150 tpd msc biowaste BFC G&E , IO Steam used to make salable power
11. Ethopowerd 2001 1 ~15-wd.shavings Wd Exhaust from combustor to lumber kiln
12. Nexterra 2004 1 15 tpd-any Pilot Line Analysis & trials
13. ChipTec (with modifications)
2004 1 240 tpd 60% wet wood waste & bark
Marion Plywood Close-coupled gasifier, the syngas fuels a conventional 900 HP triple pass boiler
14. Energy 2005 1 67 tpd sewage sludge City ries bio-solids from 90% moisture to 10%
15. Energy 2005 1 66 tpd carpet waste Shaw Carpet 50,000 #/hr steam for manufacturing
16. Energy 2006 1 240 tpd wd wastee Ethanol Little Falls, MN 1 MW steam turbine + drying G
17. Nexterra 2006 2 40 tpd wd. waste Exhaust from oxidizer to vainer drying, steam to log conditioning
18. () 2007 1 66 tpd crum rubber Intrinergy Syngas to Clow Pipe for gas boilers
19. Nexterra/ 2007 3 312 tpd wood waste U of S.C. Steam for campus heating+1.38 MW to grid
Black Liquor Units20. Chemrecf 1996 1 ~300-tpd bl solids Weyerhaeuser Syngas goes to multi fuel boiler
21. TRI 2003 1 126 tpd bl solids NorAm Pac Syngas to gas boilers
Notable European UnitsE1. KavernerCFB 1986 1 75 tpd bark Sodra Cell Fuel for lime kiln+20% to rotary dryers
E2. Energy 2002 1 144 tpd olive waste Guascor Gas engine driven 4 MW turbineg
E3. Choren 2007/8 TB TB TB Worlds first commercial gas to liquid plant on biomass feedstock
E4. Energy 2006 1 30 tpd wood/dist res Eneria IC Engine 1.0MWe to gridg
Partial List of Commercial Biomass a Gasifiers in North America(Plus 4 Interesting European Installations)
Footnotes
a Any mass that has a biological origin except turkey/chicken parts/waste as most of those were environmentally not energy drivenb An old recovery was equipped with a vibrating grate and auger feeders to make a “section 29” gasifier. There could be others.c Some of these units were installed by Prime Energy who used to be a licensee of PRM Energyd This is a predecessor of Nexterra.e The fuel may include corn Stover at a later date. DDG = dry distillers grain (an animal feed)f This is an atmospheric pressure designed for capacity gain and is a net consumer of energyg This includes a patented gas cleanup technology
Appendix II - Current Biorefinery ActivitiesCompany Abengoa Bioenergy, St Louis, MO
Plant Site Hugoton, Kansas
Project Ethanol via biochemical routes, syngas for energy via thermochemical conversion routes, with the long term strategy of using the syngas for ethanol and chemicalsproduction.
Technology Co-processing of agricultural residue at a corn dry grind facility via biochemicaland thermochemical conversion routes.
Feedstock 700 tpd corn stover, wheat straw, switchgrass, and other lignocellulosic biomass(400 tpd into ethanol plant, 300 tpd into syngas plant).
Energy Products Initially 15 million gal/yr of fuel ethanol based on 400 tons lignocellulosic biomassfeedstock
Yield 79 gallons ethanol per BD ton biomass
Projected Investment Total cost $190 million or greater, DOE match $76 million,
Previous Experience Lignocellulosic biomass: 1.2 tpd pilot facility in York, NE (previous DOE award,2003,) and 70 tpd integrated process in Spain to startup in 2007.Corn: Portales, NM (1985) - 30 million gallons of fuel ethanol; York, NE (1994) –50 million gallons of fuel ethanol; Ravenna, NE (2007) - 88 million gallons of fuelethanol
References 20, 21 and 22
Appendix II - Current Biorefinery Activities (continued)
Company Alico, Inc., Labelle, Florida
Plant Site Labelle, Florida
Project Ethanol via bioconversion of syngas generated from biomass.
Technology To produce fuel in the Bioengineering Resources Incorporated process, rawmaterial is first gasified in a two-stage process that reaches temperatures as highas 2350o F (1290oC), producing a mixture of CO, H2 CO2, and water vapor. Thehot gases are scrubbed, cooled to 100oF (38oC), passed through activated carbonfiltration and fermented in a bioreactor where ethanol is produced.
Feedstock 770 tpd Agricultural residues (citrus peel), wood and later energycane
Energy Products 20.9 million gallons ethanol per year, 6,255 KW power, 8.8 tpd hydrogen; alsoproduces 50 tpd ammonia used by ALICO for fertilizer
Yield 75 gallons ethanol per BD ton biomass PLUS energy values of power, hydrogenand ammonia
Participants Bioengineering Resources, Inc. Fayetteville, AR; Washington GroupInternational Boise, ID; GeoSyntec Consultants, Boca Raton, FL; BG KatzCompanies/JAKS,LLC, Parkland, FL; Emmaus Foundation, Inc., AR
Projected Investment Total cost $190 million or greater, DOE match $76 million.
Previous Experience Bioengineering Resources Incorporated has demonstrated process at pilot scalefor 6 years
References 20, 21 and 23
Company BlueFire Ethanol Inc., Irvine, CA
Plant Site Southern California
Project Ethanol via strong acid hydrolysis of biomass waste and biochemical conversionof the sugars produced.
Technology Arkenol Process: concentrated acid hydrolysis of sorted green waste and woodwaste to liberate sugars that are then converted to ethanol using a fermentationtechnology developed by NREL to ferment both 5- and 6-carbon sugars.
Feedstock 700 tpd of sorted green waste and wood waste from landfill sites
Energy Products 19 million gallons ethanol per year
Yield 68 gallons ethanol per BD ton biomass
Participants Waste Management, Inc., Houston, TX; JGC Corp., Yokohama, Japan; MECS,Chesterfield, MO; NAES, Issaquah, WA, and Petro-Diamond Inc., Irvine, CA
Projected Investment Total cost $100 million or greater, DOE match $40 million,
Previous Experience Demonstrated in a wood chip-fed pilot plant in Izumi, Japan since 2002,producing 21,500 gal ethanol per year
References 20, 21 and 22
Appendix II - Current Biorefinery Activities (continued)
Company Broin Companies (now POET), Sioux Falls, SD
Plant Site Emmetsburg, IA
Project Enzymatic hydrolysis biomass waste and biochemical conversion of the sugarsproduced.
Technology Advanced corn fractionation and ligniocellulosic conversion technologies thatinclude enzymatic hydrolysis followed by fermentation
Feedstock 842 tpd corn fiber, corn stover, and corn cobs
Energy Products Approximately 30 million gallons ethanol per year from lignocellulosic biomassand (adjacent dry mill plant will make 100 million gpy ethanol)
Yield 83 gallons ethanol per BD ton biomass
Participants E. I. DuPont, Wilmington, DE; Novozymes, Bagsvaerd, DK; NREL, Golden, CO
Projected Investment Total cost $200 million or greater, DOE match $80 million
Previous Experience Pilot line being built by POET, a company with considerable experience withcorn ethanol. DuPont reported to have a small labratory line
References 20, 21 and 25
Appendix II - Current Biorefinery Activities (continued)
Company Iogen, Arlington, VA
Plant Site Shelley, ID
Project Ethanol via biochemical conversion of agricultural residues.
Technology Enzymatic hydrolysis followed by fermentation of the sugars produced.
Feedstock 700 tpd of wheat, barley, and rice straw, switchgrass and corn stover
Energy Products 18 million gallons ethanol per year in first plant; 250 million gal/yr in futureplants
Yield 71 gallons ethanol per BD ton biomass
Participants Goldman Sachs, New York, NY; Royal Dutch Shell, The Hague, The Netherlands
Projected Investment Total cost $200 million or greater, DOE match $80 million,
Previous Experience Their technology was demonstrated in a pilot plant near Ottawa, Canada
References 20, 21 and 26
Appendix II - Current Biorefinery Activities (continued)
Company Range Fuels, Inc., Broomfield, CO
Plant Site Soperton, GA
Project Ethanol and methanol from southern pine
Technology Thermo-chemical conversion of wood and forest residues to syngas; catalyticconversion of syngas to alcohols.
Feedstock 1200 tpd of unmerchantable pine wood and forest residues
Energy Products 10 million gal/yr from first unit; 40 million gallons of ethanol and 9 milliongallons of methanol per year from commercial unit
Yield 92 gallons of alcohols per BD ton biomass
Participants Khosla Ventures, Yeomans Timber, Ga. Forestry Commission, WesternResearch Institute, Merrick and Company, PRAJ Industries, CH2MHill, andGillis Ag & Timber
Projected Investment Total cost $225 million or greater, DOE match $76 million,
Previous Experience Their technology was demonstrated in a 5 tpd pilot line in Colorado
References 20, 21 and 27
Appendix II - Current Biorefinery Activities (continued)
Serious Consequences• Continuation of business as usual, will surely mean loss
of leadership, faster decline and the closure of many more mills.
• The full impact will include infrastructure such as forest management, sawmills, building products and suppliers.
• This can be devastating to employment, rural community health and healthy forests. A recent prediction by one notable columnist: “My forecast for pulp making in Finland, in particular, is that it is doomed”.
• We are dealing with serious consequences.
The Only Known Solution
Capitalizing on biorefinery opportunities may be the only way to avoid massive shutdown and loss
of pulp and paper facilities in North America.