"Future of Biofuels" as presented at the World Future Society Conference - July 30, 2007 Minneapolis, MN by Jim Lee.

 
I’d like to start by clearing up a popular misconception that biofuels are by nature  exotic or sophisticated.  So, I’d like you to think of your two favorite food groups:   I’m not talking about vegetables.  And, I’m not talking about meat.  I’m talking about Sugars and Fats. These are your two basic sources of biofuels.  Think about a can of soda.  What are the two main sweeteners that are used in soda?  Corn syrup and cane sugar.  These are the main sources of ethanol.  If you take sugar then ferment it into alcohol, and purify it through distillation, you have ethanol.  And if you ferment and distill corn, you get a very special type of ethanol that some people call “moonshine.”

Needless to say, there are regions of our country that have generations of experience with this particular technology.   Now think about the other food group, which would be fats.   What do you cook french fries in?  Oil – maybe canola oil or maybe peanut oil.  Biodiesel is essentially just that – a plant oil of almost any sort.   In fact, Rudolph Diesel used peanut oil for the original diesel engine at the 1911 World Exhibition in Paris.  He always intended the fuel for his engines to be bio-based, and said (quote, unquote) that “'the diesel engine can be fed with vegetable oils and will help considerably in the development of the agriculture of the countries which use it.”  After his somewhat mysterious death in 1913, the petroleum industry co-opted his name for a byproduct of gasoline distillation known ever since as “diesel fuel.” 

So biofuels have been around since the beginning.  The early Fords would run on ethanol, which was sold at the country store.   Furthermore, some of the earliest cars also ran on lead-based electric batteries.  So, none of these technologies are particularly new. What has happened that makes biofuels the next big thing? One significant change is that a gasoline has increased from $1 a gallon to $3.25 a gallon in less than five years. 

Let’s face it, we knew something was wrong when gasoline was cheaper than water.  It was just too good to last. And there are signs that our supplies of petroleum are not going to last forever.  The U.S. hit peak production of oil back in the early 1970’s.  Exxon stated in its annual report that it produced less oil in 2006 than it did in the previous year. 

Saudi Arabia produced 8% less petroleum last year than it did the year before, despite having more operational drilling rigs.  The largest oilfield in the world, the Ghawar in Saudi Arabia, produces 1/20^th  of the world’s supply of petroleum, and there are signs that it will also have less production this year than last. Meanwhile, here in the U.S. we import close to 60% of our petroleum. 

Clearly there are some big opportunities for alternative fuel sources. We are definitely beginning to see some regional differences in biofuel production.   In U.S., we’ve embraced bioethanol from corn production.  However, Brazil is the second largest producer of ethanol and it relies on sugarcane.  Sugarcane yields comparatively more fuel than corn, but it grows better in tropical climates – so Brazil has something of a geographic advantage.  Meanwhile, Europe seems to be relying on biodiesel from rapeseed (although in the U.S. we call it “canola”, because it just sounds a little bit more marketable.)   Most of Europe’s biodiesel production is coming from Germany, where there are government subsidies of $1.80 per gallon.   Global ethanol production has tripled since the start of the decade while biodiesel has quintupled.  By contrast, conventional petroleum production has only increased by 10% during the same period. Ethanol currently comprises less than 2% the world’s gasoline supply by volume.   It’s doubtful that we will ever see most biofuels being used on a standalone basis anytime soon. 

What we are seeing is that it is getting blended in greater proportions.  I was surprised recently when I noticed that my Prius hybrid has been running on a 10% ethanol blend from local Conoco station for the past year! Under guidelines implemented in the Energy Policy Act of 1992, many government fleet vehicles that run on diesel fuel are now required to use B20 (which is a 20 percent biodiesel blend.) In moderation, both ethanol and biodiesel can be good when mixed with traditional fuels in low concentrations without having any modifications to the engines that burn them.  Biodiesel, tends to burn fairly cleanly and with less particulate emissions than petroleum-based diesel.   It also has the added benefit of cleaning out fuel lines and injectors.  So, many people find that they need to replace their oil filters shortly after moving to biodiesel blends, and then notice shortly thereafter that they are getting better overall mileage.  And this is a good thing.   

Ethanol has a 35% oxygen content, which results in more complete fuel combustion, reducing tailpipe emissions.  Ethanol also displaces the use of toxic gasoline constituents such as benzene, which is a carcinogen. Ethanol is mainly non-toxic, and quickly biodegrades. It is worth noting, though, that ethanol on a stand-alone basis, lacks the energy density of conventional gasoline and consumers report that they typically get only 80%-90% of their normal mileage when using high ethanol blends.  BP and Dupont are jointly working on an alternative process that produces biobutanol, which has a higher energy density (or  octane number) than ethanol.  Biobutanol also has the advantage of being transportable via pipeline.      

There are still some problems with ethanol, though, and we’re beginning to see some signs of backlash.   Brazil has been using ethanol heavily for the past twenty-five years.  One of my co-workers was living in Brazil during the 1970’s when people went to 50/50 ethanol blends in their cars.  Unfortunately ethanol, like other forms of alcohol, attracts water.  As a result, cars started rusting from the inside out after continual use.  It was his experience that cars running on heavy mixes of ethanol had an effective lifetime of only 5 years.  It can also corrode fiberglass tanks used in boats.   Ethanol is not necessarily a permanent solution for the U.S. energy needs.  Dedicating all U.S. corn and soybean production to biofuels would meet only 12% of our gasoline demand.    

And this brings up another complication.   As a result of increased crop demand for ethanol production in the U.S., we’ve seen price spikes in multiple parts of the food chain.  Corn prices have gone up from $1.90 a bushel to over $4.00 a bushel earlier this year.  As a result, profit margins on ethanol production have been squeezed from $1.00 per gallon a year ago to $.03 per gallon this spring.  This is reflected in the price of ethanol stocks such as Archer Daniels Midland and Pacific Ethanol, both of which peaked last year.   Corn is an important feed product in both the dairy and the poultry industries.  So, we have also seen a 6% rise in milk over the past year, and a 20% increase in egg prices over the same time.   In January, we had the tortilla riots in Mexico City, with people protesting the high price of cornflour and lack of access to an important staple food.   Meanwhile, barley is being displaced by heavily subsidized biofuel crops in Germany, where cheap beer could become a thing of the past.  Also, in Indonesia last year, hundreds of thousands of acres of forestland were burned to make space for environmentally friendly palm oil crops.  Implications and contradictions abound. So, let’s look at some trends that are in place to make biofuels both more cost-effective and more sustainable. 

The First trend that we are seeing is a change in production methods to optimize energy production at the systems-based level.   We are beginning to see more and more ethanol plants being situated near conventional power production plants, where excess generated heat is re-used for drying and distillation.   VeraSun is planning to become the first company that co-produces ethanol and biodiesel fuel from the same feedstock.  After the ethanol-production process, the resulting distillers dried grains (DDG) are then recycled for oil extraction to make biodiesel.    E3 Biofuels is proposing an even more efficient process, which closed-loop ethanol plants provide an organic form of co-generation.  In this process, cattle are fed the waste byproducts of ethanol distillation.  The subsequent manure is collected for fermentation and re-distillation, with the leftover manure being used for fertilization of the soil.   

Right now, cellulosic ethanol production is a two stage process.  One stage is breaks  the cellulose down to sugars and another stage is required for fermentation to alcohol.   Iogen, which is a biotech located in Canada, is currently producing and selling a cellulose-based ethanol, using wheat straw as feedstock and a genetically enhanced fungus designed to hyperproduce cellulose-digesting enzymes. There is also a company called Synthetic Genomics which is attempting to design a bacterium from that “will do everything”.  It will break down sugar like a bacterium but ferment it like yeast.   To do this, they are exploring the modification of a simple bacteria from the human urinary tract, which has only 517 genes.  The bacteria still functions when even half of its genes are knocked-out.  This will enable Synthetic Genomics to “upload” new genetic instructions into the bacteria like software code.  

The Third trend that we are seeing is radical experimentation with a broad range of potential biofuel sources.   As we mentioned earlier, traditional food crops might not be the best source of biofuels.  Agricultural land and water resources are becoming increasingly precious.  Fortunately, biofuels can be harvested from a broad range of sources.   My home state of Delaware is an example.  Currently, we have just one source of renewable energy in the entire state – and that unfortunately is landfill gas.  In conjunction with a private company, the Delaware Solid Waste Authority captures methane from landfill decomposition and converts it to a form of synthetic gas for electricity generation.  This is a big deal for a state in which second highest point is now a landfill.   

Other interesting things are happening as well.   Tyson Foods is partnering with Conoco and Syntroleum to create renewable biodiesel from animal fat.  Pretty soon, there could be a chicken in every tank.     In Arkansas, BRI Energy has developed a bioreactor filled with a patented bacteria which can use a blended feedstock of nontraditional materials, such as tires, consumer waste, fossil fuels, etc.  BRI Energy is expected to go into commercial production by next year. BP and D1 oils are investing $160 million over the next five years in the development of Jatropha, a drought-resistant oilseed bearing tree that does not compete with food crops or agricultural land.   This would make a more sustainable biodiesel feedstock on a large scale.   

But the most intriguing source for biofuels might be algae.   Algae is interesting.  It has a fat content of up to 50%, relatively little cellulose, and it doubles in mass every four hours.  At least it does in my pond.  It has no particular growing season.  It lives on sunlight, carbon dioxide, and brackish water.   It’s been estimate that algaculture can produce 100x more fuel per acre than corn crops, using 95% less water than conventional agriculture.   I’ve heard it said that algae can produce more oil in an area the size of a two-car garage than an entire football field of soybeans. As an added plus, the carbon dioxide absorption from algae production can be used in some areas to create marketable carbon offset credits. 

Bob Metcalf, a founder of 3Com and one of the engineers who led the development of the Ethernet is now heading a start-up called GreenFuel Technologies which is committed to cultivating biofuels from algae.   Both GreenFuel Technologies and Greenstar Products ran pilot tests on algae production earlier this spring, and they both ran into exactly the same problem – the stuff grew faster than they could harvest it.  This is a great problem to have, and potentially a great opportunity.   

All of this is beginning to remind me of the 1967 film, The Graduate.  There is a classic scene where Walter Brooke gives Dustin Hoffman some advice.  An updated version would sound like this:   

I just want to say one word to you - just one word.  Are you listening?  Algae.  There’s a great future in algae.  Think about it.