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By Robert Rapier on May 7, 2012 with 52 responses

Current and Projected Costs for Biofuels from Algae and Pyrolysis

A reader recently called my attention to a new and very interesting presentation from the Department of Energy’s Biomass Program:

Biofuels Design Cases

The presentation explored the question of whether the U.S. government is spending money on the right technology pathways. Costs were presented for biofuel produced from pyrolysis, algae, Fischer-Tropsch (FT), and methanol-to-gasoline (MTG) routes.

I want to share several slides from the presentation to give an idea of what the DOE thinks about the costs for producing biofuels via the various pathways. The first slide below shows the projected cost of production of biofuels via MTG, pyrolysis, and FT for the “Nth Biorefinery Plant” — which is defined as the projected fuel cost after a number of plants have been built and the learning curve has been mastered.

 Figure 1. DOE projections of costs for biofuel from MTG, pyrolysis, and FT routes.

This slide projects a future best case scenario of about $3.50/gallon for the MTG route, $2/gallon for the pyrolysis route, and $5/gallon for the FT route. So if that is for the Nth plant, where do costs currently stand?

 Figure 2: Projected cost reductions for biofuel from pyrolysis oil.

This slide shows that in 2009 they were estimating costs of production for biofuel based on pyrolysis of $7.68/gallon. By this year (2012) they projected the cost dropping to $4.55, and then over the next 5 years they project costs will fall to $2.32 (again, the Nth plant cost for pyrolysis was projected at $2.00/gallon). They project that the largest savings will come from the upgrading step.

So what do they say about fuel from algae?

 

 Figure 3: Baseline costs for algal fuel.

This slide shows the 2012 selling price for algal products in four categories: Triglycerides (TAG) from open ponds (OP) at $9.28/gallon and from photobioreactors (PBR) at $17.52/gallon, and then the finished diesel (which requires hydrotreating the TAG) at $10.66 from OPs and $19.89 from PBRs.

The following slide projects future algal fuel costs under a number of different scenarios:

 

 Figure 4: Projected future algal fuel costs.

In each case they assume various improvements over the base case, with the final case for both open ponds and photobioreactors being one in which a high value coproduct is produced.

So what are we to make of these slides? First, as I have said in the past, I don’t believe photobioreactors are the future of algal fuel production. Those artist renderings of futurist algae farms such as this one are pure fantasy in my opinion:

 Figure 5: Computer-generated futuristic PBR farm.

In the most optimistic case the DOE could only get the projected cost of the fuel down to $6.10. More conservative assumptions would project that the fuel derived from PBRs will still be more than $10/gallon. As algae expert John Benemann noted here in a guest essay, “The use of closed photobioreactors…is totally absurd.”

Open ponds show more promise, but algae has been grown in open ponds for many years. Some areas that are specific to fuel production might see some significant cost savings, but other areas have already had decades to work on lower costs (e.g., harvesting). I suspect that Target 1 for open ponds might be achievable ($5.45/gallon) but lower than that will be challenging.

The fermentation route that Solazyme utilizes was not covered, but it would be interesting to see how that stacks up. The cost of converting the TAG to diesel should be about the same (~$2.40/gallon), but I know that Solazyme believes that their productions costs will beat both the open ponds and PBR routes.

But I think the real story from this presentation is the DOE’s projections of the pyrolysis to fuel route. They clearly believe that this route can ultimately be competitive with petroleum. The technology currently exists to convert pyrolysis oil into transportation fuel, but it is fairly new and therefore should have room for some improvements. This is the type of route that KiOR is pursuing. A partnership between UOP Honeywell, Ensyn Corporation (those two formed a JV called Envergent) and Tesoro was awarded a DOE grant to build a demonstration facility based on pyrolysis at Tesoro’s refinery in Hawaii.

The overall ranking in terms of future costs would appear to be: pyrolysis < MTG < FT < OP algal << PBR algal.

Link to Original Article: Current and Projected Costs for Biofuels from Algae and Pyrolysis

By Robert Rapier

  1. By AlGen on May 7, 2012 at 10:10 am

    Very interesting slides! The point I see with Solazyme is – they are not only dependent on NPK fertilizer but also on sugars to feed, which might be a factor looking on economic risks… anyhow, future will tell…

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    • By Durwood M. Dugger on May 7, 2012 at 11:14 am

      Solarzyme is dependent on the photosynthesis of sugar cane to make sugar (one of the most NPK use intensive crops on the planet) and then it’s dependent on their algae’s use of the sugan cane’s sugar to make lipids. Now you have  the inefficiencies and risks of two separate, but interdependent biological crops/processes to produce another product. The expectation of how this is biological “two step” is  ever going to compete with petroleum (natural gas – on which it is also dependent upon) or other alternative energy sources (solar – which is already far cheaper than biofuels on an EROI analysis) doesn’t seem realistic. Solarzyme may do very well as nutraceutical and pharmaceutical component supplier, but as they have admitted they really aren’t going to be in the energy business.

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      • By Robert Rapier on May 7, 2012 at 1:20 pm

        Solarzyme may do very well as nutraceutical and pharmaceutical component supplier, but as they have admitted they really aren’t going to be in the energy business.

        That’s been more or less my reading of the tea leaves as well. When they branched out into those other areas I thought “Fuel must not be looking so good.” The fuel business is tough; very low margin. Anyone producing fuel that is significantly more expensive is going to have a very tough time staying in business.

        RR

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      • By PLD on May 7, 2012 at 4:17 pm

        Sugarcane fixes its nitrogen (N – the “N” in NPK) via symbiotic association with the various acetobacter type spp (nitrogen fixing soil bacteria).  PK are different issues that are generally problematic for all plant growing systems.  You might be thinking of corn when you say “one of the most NPK use intensive crops on the planet”.  You can grow sugarcane on the same plot of land YOY without the addition of N, and minimal P (mycorrhizal symbiotic association).  You just need a boat load of water and a tropical environment, preferrably in a location that is not undergoing a revolution.  :-)  

        Sugar can also come from many sources, including the breakdown of pretty much any plant material, (with some having obvious cost advantages) so Solazymes source material is somewhat broad.

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        • By Durwood M. Dugger on May 8, 2012 at 4:20 pm

          Nitrogen isn’t the limiting factor in global food production (or sugar cane) and probably never will be – even without petroleum thanks to Fisher Tropsch. Phosphorus is the limiting factor. In spite of 40+ years of intensive research on how to generate phosphorus economically from other sources like eutrophication – instead of mining declining peak rock phosphates no one has a viable solution – especially not an economic one that competes with current rock phosphate prices. Changing the price of phosphorus in fertilizers in a significant way has dramatic extenuating negative effects in the global food production (85+% dependent on NPK and growing daily with India and China converting from manure to NPK rapidly) economy resulting in unintended consequences in politics – as we have seen this past decade. China stopped all phosphate exports in 2002.

          Regarding the “broad” choice of sugars – sugar cane is by far the cheapest, followed distantly by beet sugar I believe – so depending on the product’s margins being produced – Solarzyme may not have a broad range of sugars to chose from because most others are significantly more expensive and again – all are NPK dependent.

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          • By Optimist on May 8, 2012 at 6:24 pm

            Beg to differ, champ.

            Ever heard of Ostara’s Crystal Green (struvite)? There’s a renewable P source, gaining increasing acceptance.

            You seem to be overly focused on research. IMHO, it’s not the research that’s the bottleneck, it’s the market: as long as the virgin materials remain cheap, that’s what we’ll use. Per definition, as long as the virgin materials remain cheap, the market is oversupplied.

            Your well-intentioned concerns are a few decades early, it would seem.

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            • By Durwood M. Dugger on May 8, 2012 at 10:24 pm

              Overly Optimistic – I have researched struvites as well. There is at least one or two companies that have a struvite product they claim is competitive with rock phosphates (note – you don’t see any “Pricing” or “Clients” on the Crystal Green web page.  When I looked at the concentrations of phosphorus required in commercial struvite processes – it eliminated the vast majority of municipal sewage plants in the US. Europe has started already separating their urine in municipal sewage so they can effectively concentrate it and process struvite, but not here in the US. Consider that 38% of US sewage ends up in a back yard septic tank and we Americans take really long showers. Clearly, if this was a competitive and money making process we would already have one at every municipal sewage and CAFO plant.  

              The issues are  concentrated feedstocks, economics and scale in phosphorus recycling. Recycling is great, but most recycled phosphorus is not available for biological uptake until it is treated with acids in a process almost identical with virgin rock phosphate processing to fertilizer. If could be done competitively and with sufficient scale, recycling phosphorus could help offset about 3% of high quality rock phosphates (you know the stuff that isn’t quite so radioactive). All phosphate recycling is a process of diminishing returns – each pass through the biological systems causes some phosphorus chemicals to be converted to phosphorus compounds that are not feasible to recover. Consequently, we are going to need far more than recycling of our sewage and wastes to supply just our food production needs.

              There appears to be comparatively few sources of cheap virgin high grade phosphates left (especially here in FL – once the largest producer in the world) comparable to phosphates we have mined over the past 100 years. It’s interesting to note that 85% of the remaining global phosphate reserves (quality unknown) are located Morocco and the Western Sahara. You think you liked foreign energy dependence, wait to you try foreign food production dependence.

              Since we have already spent 40+ years and thus far unsuccessfully trying to develop economically feasible phosphorus extraction and recycling technology – what makes you think my concerns are too early? Current peak phosphate estimates vary from 30 years to 300 years – with some “experts” saying complete depletion in as little as 50 years. When you look at these so called “expert” estimation data – you realize that none of them have any real idea of how much rock phosphate remains at specific quality levels – just unverified gross levels of phosphate bearing soils around the world – which is one step above meaningless.  As some one that has been in the food production technology development for the past 40 years, that makes me nervous. Like most things that have 300% ranges in estimation, the real number is probably in between, but do you want to bet your grand kids dinner on having plenty of time to develop a replacement source for rock phosphates before we effective run out? You should also remember that rock phosphate mining is currently dependent completely on peak petroleum fuels. Peak phosphate is a serious issue and doesn’t get nearly enough discussion in the media – especially compared to it’s importance. We might get by without fuel for our SUVs, but nothing grows without adequate phosphorus and the human population hasn’t been within the natural phosphorus replenishment cycle since the beginning of the industrial revolution.

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            • By Optimist on May 9, 2012 at 3:02 pm

              Now, now, let’s not get overly pessimistic!

              When I looked at the concentrations of phosphorus required in commercial struvite processes – it eliminated the vast majority of municipal sewage plants in the US.

              You don’t do this on the raw wastewater: you put in biological phosphorus removal (almost free – check it out) and then you anaerobically digest the P-laden solids. This produces a saturated, or near saturated solution of struvite from which Crystal Green is harvested. Can be done at every activated sludge plant in America, which would be the vast majority of them.

              Clearly, if this was a competitive and money making process we would already have one at every municipal sewage and CAFO plant.

              Municipal sewage treatment plant operators have zero incentive to make (or save) money. That’s an unfortunate byproduct of public ownership.

              CAFOs should have regulations forcing them to remove the nutrients from their effluents, but by an unfortunate combination of farm state politicians and powerful lobbyists, there is no leadership on this issue.

              So, again, the technology is not the bottleneck, the weird political system is.

              Recycling is great, but most recycled phosphorus is not available for biological uptake until it is treated with acids in a process almost identical with virgin rock phosphate processing to fertilizer.

              Crystal green, and more importantly, the buyers of their product believe otherwise. Since the buyers are spending their own $$ on this, and you are not, I’m going to say you’re the one not knowing what he’s talking about.

              All phosphate recycling is a process of diminishing returns…

              Cut it out! You’re basically saying recycling won’t work because you can never recover 100%. That’s pretty odd logic.

              There appears to be comparatively few sources of cheap virgin high grade phosphates left…

              And the merkets somehow missed that? Again, I’m voting for the guys spending their own $$. So far they all agree: there is no shortage. Enjoy the cheap fertilizer.

              It’s interesting to note that 85% of the remaining global phosphate reserves (quality unknown) are located Morocco and the Western Sahara.

              I guess you should invest in real estate in Casa Blanca then.

              Since we have already spent 40+ years and thus far unsuccessfully trying to develop economically feasible phosphorus extraction and recycling technology…

              Academics have been playing with the idea. Cheap virgin material means it was never a priority. And that has not changed, so far. When it does, things will change.

              Current peak phosphate estimates vary from 30 years to 300 years…

              20 years ago, I had a college professor tell me the time frame when we were supposed to be running out of various raw materials. By now, we should be out of just about everything. Somehow we dodged the bullet. Could it be that speculators are actually good for something? Heresy! We  just might manage again.

              Robert Malthus has been wrong for 200 years. Just maybe, in the distant future, you’ll share that distinction.

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  2. By Durwood M. Dugger on May 7, 2012 at 10:36 am

    Great informative article with interesting, if not totally expected conclusions (based on all major mass balance studies). One factor that was conveniently ignored was the competition of cultivated biofuel feed stocks (that would be about 97% of biofuel production potential) with human food through their dependency upon NPK and NPK’s production dependency upon petroleum. Some discussion regarding the illogical circular reasoning of bio-fuels trying to replace the petroluem – that is used to produce NPK that bio-fuels are dependent upon  should be essential to this article.

    While there is a debate about our incompetent knowledge of the worlds rock phosphate reserves which range from 30 to 300 years by “experts,” it is a logical conclusion that at some point in the relatively near term we are going to have to find another source of phosphorus to support the worlds population – whose food sources are now 85% (and growing – India and China converting to NPK agriculture) dependent on NPK. These fact alone should make the pursuit of a biofuel industry dependent upon NPK fertilized feedstocks and or precursors (i.e. Solayzyme – sugar) counter productive to alternative energy development and a non-starter in general. It should also considered that 85% of the remaining rock phosphate reserves are in Morocco and Western Sahara. This creates another argument counter to biofuel development – as in why trade foreign petroleum dependency – for foreign rock phosphate (and food) dependency? However, this does leave the need for an industry that can biologically recapture, or mine phosphorus from our oceans – and suggested topic for a future article.

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    • By Optimist on May 7, 2012 at 4:36 pm

      Relax Durwood: there is plenty of NPK in sewage. That we still allow all that to literally go to waste, just tells you how cheap the virgin raw materials still are. As long as that remains the case, it will probably just be to tempting. Hopefully it will all get more expensive soon, and drive some innovation.

      What you call “cultivated biofuel feed stocks” is a crime against humanity. Especially as we are filling our landfills with perfectly good renewable biofuel feedstocks, and allowing it to rot away, adding that super GHG methane to the atmosphere. Farmers should produce food, NOT fuel.

      Once we get efficient at reusing all that landfill biofuels, and are close to exhausting that source (50 – 100 years at the soonest), it would be time to think about energy crops. The only energy crop that would make sense is either micro-algae (if a low energy harvester can be developed) or macro-algae. Both would be based in the open ocean, effectively increasing primary production, with the added benefit of consuming CO2 and producing O2.

      BTW, the limiting nutrient in the open ocean is Fe, so not to worry about NPK. Just leave an old aircraft carrier to rust away nearby.

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      • By Durwood M. Dugger on May 8, 2012 at 2:28 pm

        Just read a paper on this very topic – if we converted all the global human waste to fertilizer nutrients – it would supply 3% of the nutrients required to produce today’s energy demands.

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        • By Optimist on May 8, 2012 at 6:17 pm

          Again: nutrients -> energy crops is a crime against humanity.

          We can make a dent by going after the cheap feedstocks, such as MSW and sewage sludge.

          And, unlike fossil fuels, nutrients are NOT converted to thin air by use. So the challenge for nutrients, as for water,  is one of efficient recycling.

          Market related pricing will help all that come along.

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  3. By Tom G. on May 7, 2012 at 11:10 am

    Does anyone else ever get the feeling that no matter what we do the cost of living [fuel, food, etc] is about to  take off like a rocket ship?   O.K. so refresh my memory; what should I be buying?

     

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    • By Robert Rapier on May 7, 2012 at 1:21 pm

      O.K. so refresh my memory; what should I be buying?

      Land probably (in the right markets).

      RR

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      • By Tom G. on May 7, 2012 at 1:31 pm

        Thank you for the advice Robert.

        You might be happy to know that my son and his family just bought a home and of course some land on Laukona St. in Lihue.  It has a granny flat for grandpa and grandma when they come to visit.  

        Grandpa is a happy man :-)  

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    • By Optimist on May 7, 2012 at 4:23 pm

      Some movement on the cost of living is probably long overdue. The Free Market system is very efficient at finding viable solutions, using market signals (aka price) to communicate the value of commodities.

      Unfortunately governments tend to fight the Free Market whenever they fear their voters might get hurt. Gotta hate it: your tax $$ involved in a futile effort against the forces of nature.

      Oh well, we’ll survive in spite of the prostitutians and their best efforts to screw it all up…

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      • By BruceMcF on May 9, 2012 at 4:47 pm

        “Free Market System” is underspecified with respect to technological progress, as markets cannot design complex systems. “Free markets” does not specify what organizations will be designing the new complex systems to replace those that are dependent on strategic resources in declining supply. If those organizations are to be large translation corporations, that is a reliance on private government rather than public government, and private governments that have their own voters to pander to.

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        • By Optimist on May 10, 2012 at 5:40 pm

          Sorry Bruce,

          But I think you are looking for an orderly, well-planned transfer to the future that simply isn’t going to happen. Chaos is coming, in one form or another.

          The Free Market is our only hope to survive that chaos. The Free Market is the only way to send the right signals to all the players and ensure a rapid conversion to a workable future.

          The market does NOT have to plan, design or allocate scarse resources. It merely conveys the signals (prices) to the various players, allowing them to make rational decisions.

          As you imply, the main threat is from prostitutians, pandering to dimwit constituents, or well-financed lobbyists. Not that clueless royals are any better…

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  4. By peter goehausen on May 7, 2012 at 1:35 pm

    The most viable algae for fuel project out there. This technology could eventually be applied to every CO2 emitting plant out there.

    http://vimeo.com/22912955

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  5. By Optimist on May 7, 2012 at 4:42 pm

    I still don’t get the excitement about Solazyme. To me, it’s like saying: “If we had free hydrogen, we could produce really cheap biofuels.” Replace hydrogen with sugar, and you have Solazyme’s business plan.

    Challenges to Solazyme include:
    1. Sugar can never be cheaper than fossil fuels in a free market.
    2. Food (incl. sugar) to fuel is a crime against humanity.
    3. The algae as a sugar-fed lipid factory is a neat, but odd use of algae. Surely yellow grease is cheaper than sugar. Brown grease would be even cheaper.

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    • By Robert Rapier on May 7, 2012 at 6:32 pm

      I still don’t get the excitement about Solazyme. 

      I think the biggest thing is that they have actually delivered hundreds of thousands of gallons of algal fuel. Nobody else has come close to that. Now whether they could ever do it in a cost-competitive fashion is a different story. 

      RR

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      • By Optimist on May 8, 2012 at 6:28 pm

        OK, but I would call it pseudo-algal fuel, since most people associate algal fuel with fuel produced by algal photosynthesis. Solazyme cheats in that regard by importing a substrate for the algae to grow on. Their process would more accurately be described as algal fermentation.

        IMHO, the central challenge remains unaddressed: where is all the substrate going to come from?

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  6. By Washakie Renewable Energy on May 7, 2012 at 5:36 pm

    The recent funding for Algae (specifically biomass) makes it really hard to predict what can be cost competitive  in the future.

    Fossil-based fuels speculative market can make almost any innovation work if you are willing to risk guessing the market.

    The other market that isn’t being talked about enough is the high cost of viscosity fuel additives. This makes things like algae-based fuel much safer cost wise.  If the focus is on low blends with traditional fuels, biofuels do not have to compete with fossil-fuels directly, and then the numbers are very different.

    If you are interested, we did a longer write-up about additives and biofuel cost, due to EPA regulation, here. http://wrebiofuels.com/blog/?p=38 

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  7. By Tubingmaster on May 7, 2012 at 11:51 pm

    Dozens of companies throughout Europe and the Middle East are proliferating the use of closed loop PBR systems. They are making neutraceuticals, pharmaceuticals, and fish feed. These companies are currently not interested in making biofuels, but they are several steps closer to finding sustainable solutions than we all are – especially if we continue to listen to evangelists of the past and rely on DOE studies of assumptions to lead us to a petroleum-free future. Closed-loop systems have their place and will continue to expand. In fact, one could argue – as a recent study by the Pacific Northwest National Laboratories concluded – that open pond systems are “absurd” and “bizarre” solutions to out fuel crisis. Just read today’s Forbes article: http://www.forbes.com/sites/larrybell/2012/05/06/obamas-algae-energy-euphoria-is-pond-scum-a-green-scam/

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    • By Robert Rapier on May 8, 2012 at 1:15 am

       These companies are currently not interested in making biofuels,…

      I don’t think it’s that they aren’t interested; it’s just that the costs are too high for a low margin business like fuel production. I have looked very closely at both open ponds and PBRs (in fact I wrote a book chapter on them), and while open ponds are a long-shot (which the Forbes article sums up well), PBRs add a huge layer of capital costs on top of everything else. There is a very good reason that the vast majority of the commercially produced algae in the world comes from open ponds.

      RR

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    • By Optimist on May 8, 2012 at 6:49 pm

      Master,

      I suggest you go calculate how many acres, or make that square miles of tubing it will require to produce a decent amount of fuel. Next do a simple material cost. It’s that easy. Closed loop PBRs are going nowhere, as fuel supply at least.

      Of course, open pond systems aren’t the obvious answer either. Only the open ocean is big enough to make  a dent…

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  8. By Benny BND Cole on May 8, 2012 at 12:05 pm

    Nice post by RR.

    Note: Methanex sells methanol today for $1.38 a gallon.  That’s today. in the real-world commercial markets.  I guess methanol is tied to natural gas prices, so maybe this price will go up in the future.  Or maybe we will get better and better at producing natural gas, and perhaps economies of scale would allow even lower prices in the future. 

     

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  9. By Whirlwind on May 8, 2012 at 12:11 pm

    Whats the point of all this if biofuels can never make up our needs from oil?  Guess the die off and collapse of industrial civilization is coming fast.

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  10. By Optimist on May 8, 2012 at 2:13 pm

    RR, you’re not losing your edge, are you?

    I would have expected some harsher comments to accompany the first slide you show: $2/gal for a refinery processing only 2,000 t/d (metric) with an output just below 5,000 bpd? What would fuel cost from a (tiny) 5,000 bpd oil refinery?

    Or slide #2 that shows a (very likely) decrease of the “upgrading to stable oil” step from current ($2009) of $4.70/gal to $0.47/gal!!! 90% reduction coming, we know what we’re doing… Does anybody know if we are anywhere close to the $2.01/gal that this step should now (2012) cost, or the overall cost of $4.55/gal, which would make pyrolysis-based fuels borderline competitive right now in places like Honolulu (current price: $4.40/gal, according to gasbuddy.com)?

    Again, Uncle Sam’s central weakness is on full display: by clever academic research, and well-informed projection into the future, DOE wants to pick the technology winner. Cut it out, already!

    This is most unfortunate. PNL does some great basic research, and are developing some very interesting technologies, such as hydrothermal (wet) gasification. But is there no way for them to stay out of the fortune-telling business? This sort of ill-informed projecting the cost of the nth plant in year X will only serve to give them a black eye in public.

    I don’t like where this is going: once the press gets wind of these unrealistic projections, and the spending decisions that were made, the Party of the (Mad) Hatters will shout that we need to close DOE. The (Silent) Party of the Lambs, meanwhile, will try to blame speculators, or the Tooth Fairy, for high gas prices…

    All that good technical work is put at risk by some dumb bureaucrat’s need to pretend that he is planning for the future.

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    • By Robert Rapier on May 8, 2012 at 2:26 pm

      I would have expected some harsher comments to accompany the first slide you show: 

      But I am not endorsing any of this; just presenting the information. There are numerous unrealistic projections in the presentation, but I wanted to show what the government is thinking (and I only had about an hour in which to write this post or there would have been no post on Monday — thus I couldn’t evaluate too deeply).

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      • By Optimist on May 8, 2012 at 6:33 pm

        Now I realize the job is keeping you busy, and that may be a good thing… BUT the strength of this blog has always been that, unlike the MSM, RR does not just pass the information along, he analyses it, and expose the ridiculous claims.

        It would be a pity if that had to change…

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    • By Durwood M. Dugger on May 8, 2012 at 2:38 pm

      Though I disagree with him more often than not, I think Nick Hodge’s comment in Capital and Energy (5/4/12) is appropriate when considering the current state of biofuel development “How many gas stations and oil storage tanks do you see while driving around? How many algae or biobutanol plants and storage tanks do you see? That’s something that takes a decade to change.” Actually Nick – scientist have been working on trying to make competitive biofuels – including algae biofuels for about 8 decades.

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  11. By ben on May 8, 2012 at 6:32 pm

    I had seen the EE&RE study and found it a sober attempt to estimate the trajectory of costs without the benefit of grasping all the variables associated with future costs which are–let’s face it–unknowable in the final analysis.   I don’t believe folks at DOE have their own favorites for winning the sweepstakes.    Most of these guys/gals play it straight and simply focus on keeping their jobs while earning tidy pensions.   Some of political appointees may be tempted to get a little ideological at times, but not many people are really listening to most of them below the secretary level anyway:) 

    Our own evaluation places a decided bias in the near/intermediate term on pyrolysis-based options.  This is attributable to cost structures; the ability on the part of project sponsors to piggyback existing infrastructure, process equipment and proven methods while introduding a slight twist or two in their engineering to achieve the bulk of their  IP innovation.   Your citation of Envergent is a good case in point.  When you combine this with the ability of particular companies to gain strategic access to well-scaled projects with accompanying public sector sponsorship (read: capital and/or operating subsidies or guarantees), well, you’re talking a leg up on the competition.  For anyone taking the time and effort to connect all the dots on the spectrum of these biofuel companies, there is certainly a pattern that emerges on how the winners manage to become winners–even when some of the tertiary shareholders sort of get road hard and put to bed wet.   Quite a spectacle to behold.  RR is clearly one of the better observers around while among the most candid/honest– and the reason for tuning in each week.   Thanks!

    Ben     

     

     

       

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    • By Optimist on May 8, 2012 at 6:40 pm

      Just for the record, Ben,

      I’m not suggesting the folks at DOE are trying to manipulate the analysis. My point is that even with a completely honest and most intelligent analysis the future remains unpredictable. It follows then that it is folly for DOE to try to predict technology winners. Much better to set the parameters, and have an X-prize type challenge which gives the contestants as much leeway as possible.

      And, as RR has suggested many times, only pay for kWh delivered. That would take away the temptation for Mr. Khosla to inflate the promises on his new-new-new technology.

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  12. By ben on May 9, 2012 at 9:43 am

    I’m not sure there was need for clarification (by Optimist), above, as his/her remarks offered earlier don’t appear to challenge motives.  Not knowing the future is a given, but that hardly keeps Uncle Sam from offering incentives in various forms to companies pursuing R&D along the path to actual commercialisation.   We may disagree with such subsidies as a basic policy/political judgment–and many certainly do–but it is a approved activity undertaken pursuant to Congressional authorization/appropriation and after extensive debate and duly-recorded public votes by elected representatives.   Does all this make it “right.”  Well, I guess that depends on whose child is playing the piano.   We do seem to get a vague glimpse as to who may be writing much of this sheet music:)  

    Ben

      

     

     

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  13. By Martin Mizera on May 9, 2012 at 3:06 pm

    A total bunkum ! We already make tank-ready diesel below $1.00/gal from biomass/organic wastes.This is not including financing costs as we do not know what they are for various clients.

    Price is also not equal cost …

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    • By Robert Rapier on May 9, 2012 at 3:32 pm

      A total bunkum ! We already make tank-ready diesel below $1.00/gal from biomass/organic wastes.

      Number 1, consider me highly skeptical because if that was true it would not take long for you to dominate the entire global diesel market. 

      Number 2, if you aren’t using a process identified in this presentation, then your costs are irrelevant (and hence, no “bunkum”) as far as the presentation goes because it was specific to specific processes.

      RR

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  14. By Robert Rapier on May 9, 2012 at 8:31 pm

    Check out the warning from the conclusions of a new report from the IMF:

    http://www.imf.org/external/pubs/ft/wp/2012/wp12109.pdf

    Our empirical results also indicate that, if the model’s predictions continue to be as accurate as they have been over the last decade, the future will not be easy. While our model is not as pessimistic as the pure geological view, which typically holds that binding resource constraints will lead world oil production onto an inexorable downward trend in the very near future, our prediction of small further increases in world oil production comes at the expense of a near doubling, permanently, of real oil prices over the coming decade. This is uncharted territory for the world economy, which has never experienced such prices for more than a few months.

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  15. By Robert Rapier on May 9, 2012 at 8:37 pm

    And Amyris admits that their fuel route costs $30/gallon to produce. I had specifically warned some people that their process would have a hard time making cost-competitive fuel: 

    http://www.technologyreview.com/energy/40387/

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  16. By Brandon Iglesias on May 14, 2012 at 10:42 pm

    Current DOE:EERE April 24, 2012 publication by Zia Haq focuses on algal lipid extraction to fuel and leftover biomass to food indicates that lipid extraction is distracting when solely used to produce fuels, but preferable when focused in higher-margin bioproducts (pharma, nutri, etc.).  Also, note that the process generates waste sludge (see slide 7).

    What about HTL? TCC? of algal biomass? Why go after the needle in the haystack, when you can go after the entire haystack with HTL/TCC that requires water as a reactant (sub-critical)?

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  17. By billt07 on June 9, 2012 at 8:48 am

    I’m currently reporting on a group called the Fuel Freedom Foundation.  They maintain that the quickest, cheapest way to an oil substitute at this moment is to reform natural gas into methanol and substitute it in current internal combustion engines.  Most racing cars have already made the conversion and it would be very easy for the auto companies to do as well.  Methane reform plants could be located at natural gas pipelines and the methanol distributed to gas stations via the current tanker system.

    I realize this isn’t a biofuel and therefore “renewable,” but is there any sense to this proposal?  Are there any obvious flaws?

     

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  18. By Roux Dit Buisson JL on June 14, 2012 at 11:00 am

    Dear all,

     

    Look at slide 9, compare the growth rates estimates and draw your own conclusion. In an active photobioreactor with an average size, a maximum algae concentration of 4 g/l and a doubling time of 0.25 d-1 and 30% respiration you canproduce 10-18 kg sugar per m2 footprint, depending on algae’s yield.

    This reduces the cost significantly.

    Thanks for your attention

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  19. By Robert Rapier on June 14, 2012 at 2:40 pm

    “…you can produce 10-18 kg sugar per m2 footprint, depending on algae’s yield.”

    That is going to be limited by the solar insolation falling on a m2, which I don’t think will allow for yields nearly that high.

    RR

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  20. By Roux Dit Buisson JL on June 15, 2012 at 7:40 am

    well active photobioreactors don’t depend on the direct incidence of photons, this is why they can have much higher productivities per unit area footprint, and this is why they can be a solution to the CO2 and the sourcing problems.

    ponds and plastic reactors lined up horizontally or vertically are passe when it comes to offering an industrial solution.

    so long.

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    • By Robert Rapier on June 15, 2012 at 1:51 pm

      well active photobioreactors don’t depend on the direct incidence of photons, this is why they can have much higher productivities per unit area footprint,

      This was the same line that now-bankrupt Greenfuel Technologies used when Krassen Dimitrov pointed out the solar insolation problem. True, you can put up a vertical reactor and capture more than a square meter in a square meter of land, but two things. First, as you stack it up you end up shading other portions, but more importantly, the solar insolation striking a square meter of the actual photobioreactors certainly limits how much algae can be produced. And when you look at actual costs of photobioreactors per square meter, the costs will never justify the production in my opinion.

      RR

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  21. By Jay Rosenberg on June 15, 2012 at 1:17 pm

     

    I see assumptions that are using performance/ cost technology that is 4 years old. My back of the envelope calculations are $2/gallon PBR algae biofuel is achievable, using upgraded methods, technology, some innovation, and fundamental which transcend technology and business. Bigs typically like brute force, big grants, big groups, and have limited vision. The Fukashima Nuclear design illustrates a lot of principles which are still being applied to RE.   History has shown, that insights, and embedding leading, but optimized technology can cross over threshholds such as $2/gallon.  When you look at pure play systems, you loose synergistic results.  If you did a levelized cost, you would realize you do not have the layers of competing costs such as exploration, shipping, refineries/ cracking/ insurance, logistic distribution, And,  the geopolitical costs.  One lesson from ethanol was, transportation from plant to market was very constricted.  sannerwind@gmail.com

     

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  22. By art on June 15, 2012 at 4:46 pm

    claims of < 10 dollar / gallon algae oil  up till now never proven to be true  if you ask for  thusands of gallons.  Solazyme  may have delivered some. Reasonable amounts of oil by a conversion process based on heterotrophic algae but the will  compete for sugar with shell in the largest  caneethanol Market, Brazil.nhere the advantage of established process and scale are  sketching in the tea leaves that solayme needs to go for  the algae  to food and nutraceuticals  route to survive 2013.

    The american congress blocking expensive biofuel purchase by the military testing projects seem spoil the fun for solazyme …

     

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  23. By Rae McRae on June 11, 2013 at 12:11 am

    They never explain very well why bioreactor is bad. The open ponds wouldn’t produce large amounts of oil in a short amount of time, we need all kinds of algae farms to help balance cost and space. Trashing one type of farming without proper reasoning isn’t professional at all. Look all around you, do you realize how many people and how many fossil fuel companies there are, how many in each city? We need all the help we can get to slow down fracking for fossil fuel to keep our homes warm during -30c winter weather, we need all kinds of algae farms, cause open algae farms won’t work up here, we have winter about 7 months out of the year, or lakes and ponds are frozen, so we need closed ponds, stop thinking we don’t have winter up here, cause we do! I don’t believe in all talk and no action, I believe in taking actions, cause all talking wastes time when you could be doing something positively productive, being part of a solution.
    Do you realize how large of a demand it would be to replace all fossil fuels with algae? We would need at least 4 algae farms in each city with a population of 25,000 to help decreas the demand of fossil fuels, this is a quick and sneaky way of decreasing the demand for fossil fuels and besides, I love in the north where fracking is very common and its destroying some boddied waters, bullying First Nations to contaminate their land (no morals, no values, no respect for the people).

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    • By Giancarlo Bravo on September 12, 2013 at 8:07 pm

      well said!

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