WHY CELLULOSIC ETHANOL IS NEARER THAN YOU MAY THINK

Bruce E. DaleDept. of Chemical Engineering & Materials Science

Michigan State Universitywww.everythingbiomass.org

Presented at:2007 NACAA ConferenceGrand Rapids, Michigan

July 16, 2007

1978 – 2007 CRUDE OIL PRICES

IT PAYS TO BE PATIENT

My career begins

President Bush promotescellulosic ethanol

Linked Sustainability Challenges of the Coming Decades

• Diversify transportation fuels & end strategic role of petroleum in the world

• Provide food for growing & wealthier population (which will consume more meat)

• Control greenhouse gases & limit other human emissions (for example, nitrogen & phosphorus discharge to ground & surface waters)

• Provide economic opportunities for rural people• These challenges & opportunities intersect at

biofuels, particularly cellulosic biofuels• Abundant opportunities for creative design &

system level thinking

Some Basic Energy Facts 1. We do not need “energy”…we need services that

energy provides2. The services we need from energy are (current

sources or carriers of these energy services)• Heat (natural gas, coal)• Light (coal, natural gas, hydro & nuclear)• Mobility (petroleum—97%, rest is ethanol)

3. Energy has fundamentally different qualities: carriers are not all interchangeable “All BTU are not created equal”

4. Industrial society literally stops without liquid fuels5. Liquid fuels: not “energy” are required for mobility

for the next few decades at least!

The Problem:Our Society STOPSSTOPS

Without Liquid Fuels!

The Problem:Our Society STOPSSTOPS

Without Liquid Fuels!

All Energy Carriers do Not Have Equal Strategic Importance Either

1. Coal– U.S. & China have huge domestic reserves2. Natural gas—imports significant, mostly from

Canada and Mexico3. Petroleum– more than 60% imported (U.S.) and

rising• “We (U.S.) are addicted to oil” President Bush• Oil revenues sustain oppressive & aggressive regimes• Oil used as a political weapon• Oil revenues finance international terrorism

4. Petroleum dependence undermines 1. climate security (a chief source of greenhouse gases) 2. economic security (no fuels = no movement of goods =

no trade = no prosperity) 3. international security & world stability

Options for Dealing with Petroleum Issue1. Decrease demand

• More petroleum efficient vehicles – Better mileage (start measuring vehicle efficiency by

“petroleum per mile” or “miles per gallon gasoline”– Electrical/hybrid vehicles

• Fewer miles traveled (better planning)

2. Increase supply• Athabasca oil sands (Canada)• Oil shale (U.S.)• Super heavy oil (Venezuela)• Coal to liquid fuels (U.S., South Africa, China)• Biofuels

– Biodiesel– Ethanol (from sugar, from corn, from cellulosics)

Why Biofuels?• Biofuels, including cellulosic ethanol, are one

of a small handful of petroleum alternatives that can provide: – (inter) national security advantages– large greenhouse gas reductions– economic advantages (lower cost fuels than

petroleum fuels)• This presentation emphasizes cellulosic

ethanol– From agricultural and forestry residues– From “energy crops”

Distillation EthanolDrying

Co-Product Recovery

Animal FeedChemicals

Corn Process

Ferment-ation

Sugar

CornKernels

Starch Conversion(Cook or

Enzymatic Hydrolysis)

Ethanol Production Flowchart

Distillation EthanolDrying

Co-Product Recovery

Animal FeedChemicals

Sugar Cane Process

Corn Process

Ferment-ation

SugarSugarCane

CornKernels

Starch Conversion(Cook or

Enzymatic Hydrolysis)

Ethanol Production Flowchart

Distillation EthanolDrying

Co-Product Recovery

Animal FeedChemicals

Sugar Cane Process

Cellulose Conversion

Hydrolysis

Corn Process

Cellulose Process

Cellulose Pretreatment

Cellulose

• Crop residues: corn stover, rice straw, wheat straw, etc.

• Forestry residues/slash• Energy crops: switchgrass, poplar,

Miscanthus, many others• Municipal & construction wastes,

etc

Ferment-ation

SugarSugarCane

CornKernels

Starch Conversion(Cook or

Enzymatic Hydrolysis)

Ethanol Production Flowchart

Distillation EthanolDrying

Co-Product Recovery

Animal FeedChemicals

Sugar Cane Process

Cellulose Conversion

Hydrolysis

Corn Process

Cellulose Process

ThermochemicalConversion

• Heat and Power• Fuels and Chemicals

Cellulose Pretreatment

Cellulose

• Corn Stover• Switchgrass• MSW• Forest Residues• Ag Residues• Wood Chips

Ferment-ation

SugarSugarCane

CornKernels

Starch Conversion(Cook or

Enzymatic Hydrolysis)

Ethanol Production Flowchart

Major Cost Elements: Petroleum Fuels & Biofuels

For all commodity products (fuels, bulk chemicals, semiconductor chips, potato chips, etc.) two things determine the final selling price:

1. Cost of raw material (the feedstock)2. Cost of processing the feedstock to the

desired product(s)For gasoline, diesel, etc. the cost to make

them depends on petroleum cost (70%) and processing cost (30%)

0

20

40

60

80

100

120

140

160

0 10 20 30 40 50 60

Cost of oil, $/barrel

Cos

t of b

iom

ass,

$/to

n

Energy content

Forages & hay crops-typical prices

Plant material is much, much cheaper than oil on both energy & mass basis

Our margin for processing: here to here and beyond

Adapted from Lynd & Wyman

Impact of Processing Improvements: Oil’s Past & Future

• Historically, petrochemical processing costs exceeded feedstock costs

• Petroleum processing efficiencies have increased and costs have decreased dramatically but reaching point of diminishing returns

• Petroleum raw materials have long-term issues

– Costs will continue to increase as supplies tighten

– High price variability– Impacts national security– Climate security concerns– Not renewable

• Not a pretty picture for our petroleum dependent society

Early Years Today's MatureProcesses

Future

Oil Processing

Relative Cost

Oil

Pro

cess

ing

From J. Stoppert, 2005

Brazil Has Been Reducing Sugar Ethanol Costs for 30 YearsCellulosic Ethanol Costs Have Declined and Will Decrease More!

Ethanol-Brazil

Gasoline-Rotterdam

Impact of Processing Improvements: The Future of Cellulosic Biomass Conversion

• Processing is dominant cost of cellulosic biofuels today

• Cellulosic biomass costs should be stable or decrease

• Processing costs dominated by pretreatment, enzymes & fermentation

• Biomass processing costs must (& will) decrease

• Two ways to do this:1. “Learning by doing” in large

scale plants2. Applied (cost focused) research

• Much more attractive future– Domestically produced fuels– Environmental improvements– Rural/regional economic

development

Today Future

Proc

essin

gBi

omas

s

Biom

ass

?

Relative Cost

Adapted from J. Stoppert, 2005

Testing AFEX pretreatment technology

Key Processing Cost Elements

Capital Recovery Charge

Raw Materials

Process Elect.

Grid Electricity

Total PlantElectricity

Fixed Costs

Biomass Feedstock

Feed Handling

Pretreatment / Conditioning

SSCF

Cellulase

Distillation and Solids

Recovery

Wastewater Treatment

Boiler/Turbogenerator

Utilities

Storage

(0.20) (0.10) - 0.10 0.20 0.30 0.40

33%

5%

18%

12%

9%

10%

4%

Net 4%

4%

1%

(after ~10x cost reduction)

Biomass Refining CAFI

Ethanolrecovery

Enzymatichydrolysis

Sugarfermentation

Hydrolyzateconditioning

Central Role and Pervasive Impact of Pretreatment for Biological Processing

Hydrolyzatefermentation

Enzymeproduction

Biomass production

Harvesting, storage,

size reduction

Residueutilization

Wastetreatment

Pretreatment

Biomass Refining CAFI

DOE 2005

Cellulosic Biomass

Production

Biomass Conversion Research Lab at

Michigan State Works Here Using AFEX Process

Cellulosic Biomass to Ethanol

Reactor Explosion

AmmoniaRecovery

BiomassTreatedBiomass

RecycleAmmonia

GaseousAmmonia

Reactor Expansion

AmmoniaRecovery

BiomassTreatedBiomass

Ammonia

GaseousAmmonia

Heat

Biomass heated (~100 C) with concentrated ammonia

Rapid pressure release ends treatment

99% of ammonia is recovered & reused, remainder serves as N source downstream for fermentation

AFEX covered by multiple U. S. and international patents

Sugars not degraded, fermentation inhibitors NOT produced

How does AFEX work?

Before and After AFEX

Pretreatment Economic Analysis by NREL

0.00

0.25

0.50

0.75

1.00

1.25

1.50

1.75

Dilute Acid Hot Water AFEX ARP Lime Corn Dry Mill

Net Stover Other Variable Fixed w/o Depreciation Depreciation Income Tax Return on Capital

CashCostPlantLevel

MESP

Proof Year: 4th Year of Operation$/gal EtOH

AFEX: $1.41/gal

Results of AFEX Economic Analysis*

• Reduce ammonia loadings

• Reduce required ammonia recycle concentrations (manage system water)

• Reduce capital cost of AFEX• *Analysis performed by Dr. Tim Eggeman of NREL

Improvements in AFEX Give Improved Ethanol MESP

2,205 dry ton/day scale

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

NREL-2004 SSF-COMP-UPD

SSF-NEW-UPD

CBP-NEW-UPD

Mature

Simulation

ME

SP

($

/ga

l)Stover Feedstock Cost Processing Cost

Reduced ammonia loading & concentration

Plus new ammonia recovery approach

Original estimate

Final Result will be Low Cost Ethanol from Cellulose

2,205 dry ton/day scale

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

NREL-2004 SSF-COMP-UPD

SSF-NEW-UPD

CBP-NEW-UPD

Mature

Simulation

ME

SP

($/

gal

)

Stover Feedstock Cost Processing Cost

D

~$0.62

Ethanol from Cellulosics: Look for Fast Growth!

courtesy Dr. Steve Long UICU

What Happens Because of Inexpensive Ethanol?• Petroleum dominance declines

– Reduce petroleum’s influence on prosperity & politics– Less chance for international conflict– Greater economic growth opportunities for poor nations

• Environmental improvements possible– Reduced greenhouse gases– Reduced nitrogen & phosphorus-related pollution– Improved soil fertility

• Rural economic development possible– Local cellulosic biomass processing– Greater wealth accumulation in rural areas– Less migration to cities to find economic opportunity

• Less expensive food (animal feed) possible– Improved animal feeds: protein & calories– Less expensive, more abundant human food

Will People Go Hungry Because of Biofuels?

• Three major U.S. crops alone (corn, soy, wheat) produce 1300 trillion kcal & 51 trillion grams protein/yr

• Could meet U.S. human demand for protein & calories with 25 million acres of corn (~5% of our cropland)

• Most U. S. agricultural production (inc. exports) is fed to animals-- i.e., we are meeting their protein/calorie needs from our land resources. Their needs are: – 1040 trillion kcal/yr ( 5 times human demand) – 56.6 trillion gm protein/yr (10 times human demand)

• Thus we can address perceived “food vs. fuel” conflict by providing animal feeds more efficiently, on less land

• Dairy & beef cattle consume more than 70% of all calories and protein fed to livestock

• As nations grow richer, they want more protein, especially more meat….

U.S. Livestock Consumption of Calories & Protein

HERD SIZETOTAL

PROTEIN TOTAL ENERGY

ANIMAL CLASS (THOUSANDS) (MILLION KG/YR) (TRILLION CAL/YR)

Dairy 15,350 10,400 184.8

Beef 72,645 25,100 525.3

Hogs 60,234 6,900 136.2

Sheep 10,006 461 10.6

Egg production 446,900 2,470 4.3

Broilers produced 8,542,000 9,540 150.3

Turkeys produced 269,500 1,760 28.6

Total consumed by U.S. livestock 56,630 1,040.00

Human requirements 5,114 205

Coproducing Animal Feeds and Biofuels• Must supply animals (fish, poultry, swine, cattle) with:

– Calories (food energy), and– Protein

• Can grow grasses with high protein content & recover the protein with well-known (since 1945) technology

• Grasses/crop residues/woody materials also have lots of calories as sugars “locked up” in plant cell walls.

• Pretreatment processes required to “unlock” these sugars to make cellulosic ethanol could also unlock these sugars for ruminant animal feeding

• Cellulose-based biorefineries could also be in the animal feed business: this is a really important “food vs. fuel” opportunity

Ruminant Animals & Biorefineries:

Improve Cellulose Conversion for Biorefinery = Improve Cellulose Digestibility for Cows

LotsofHay

Mobile Cellulose Biorefinery (a.k.a. Cow)

Stationary Cellulose Biorefinery

Ruminant Bioreactor:

Capacity ~ 40 Gal Fermentor

Biomass Input ~ 26 Lb/Day*

SSCF Bioreactor:

Biomass Input ~ 5,000 Dry Ton/Day= 10 M Dry Lb/Day

Capacity ~ 45 M Gal Fermentor

*Rasby, Rick. “Estimating Daily Forage Intake of Cows”. University of Nebraska-Lincoln Institute of Agriculture and Natural Resources, http://beef.unl.edu/stories/200608210.shtml, 10/02/06.

Cow is 3x more efficient than industrial bioreactor

=

What Might the Future Look Like? • Land available (million acres)

– Cropland (430): corn, wheat, soy, sorghum, alfalfa, hay, CRP– Permanent pasture (570)- half suitable for mechanical harvest– Most of these acres suitable for perennial grasses– Does NOT include forests

• Assume we can develop a pretreated perennial grass yielding 10 tons/acre/yr with 10% protein, 75% cellulose + hemicellulose (90% digestible), 15% lignin and ash

• Supply ruminants 710 trillion cal/yr & 36 trillion grams protein/yr using ~40 million acres of productive grasses

• Leaves available >600 million acres for other feeds, human foods and biofuel production

• I simply do not agree that land for food is a limiting resource for biofuel production—animal feed is the issue

Thinking Ahead: Farmers & Biofuels

“More than a century of bitter experience has taught farmers that when they simply sell a raw crop, they fall ever further behind.”

David Morris “The American Prospect” April 2006

Capturing Local Benefits from Biofuels • Some issues for farmers/local interests

– If farmers merely supply biomass, they will not benefit much from the biofuels revolution

– Investment required for cellulosic ethanol biorefinery is huge ~ $250 million and up—difficult for farmers to participate

• Some issues for biofuel firms/larger society– Supply chain issues are enormous—need 5,000 ton/day from

~1,000 farmers: chemicals/fuels industries have zero experience with such large agricultural systems

– Cellulosic biomass is bulky, difficult to transport– Need to resolve “food vs. fuel” problem: actually “animal feed and

fuel opportunity”

• Is there a common solution?– Regional Biomass Processing Center– concept worthy of study– Pretreat biomass for biorefinery & ruminant (cattle) feeding– Much lower capital requirements—accessible to rural interests– Develop additional products over time—animal feed protein,

enzymes, nutraceuticals, biobased composites, etc

Ethanol: Some Myths and Realities• Myth: Ethanol has a negative “net energy”

Reality: Gasoline’s “net energy” is worse than ethanol’s and anyway this metric is irrelevant

• Myth: Ethanol will drive up food pricesReality: Complicated: no easy sound bites for fuels derived from oilseeds or grains. Cellulosic ethanol will reduce food prices

• Myth: Ethanol is bad for the environmentReality: Compared with what? Corn ethanol is superior to gasoline now for most metrics. Cellulosic ethanol will be even better

• Myth: Ethanol will always cost more than gasolineReality: Ethanol from corn costs ~$1.20/gal; ethanol from cellulosics, when mature, will cost $0.60/gal

1978 – 2007 CRUDE OIL PRICES

IT PAYS TO BE PATIENT

My career begins

President Bush promotescellulosic ethanol

“Absolutely!”

Questions ??