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By Robert Rapier on Aug 28, 2014 with 29 responses

Global Biofuels Status Update

Introduction to the GSR

Today I want to take a deep look at the global biofuels picture, drawing mainly from the Renewables 2014 Global Status Report (GSR) that was released in June by REN21, the Renewable Energy Policy Network for the 21st Century. I had intended to draw data primarily from the recently released Statistical Review of World Energy 2014, but I believe that the GSR is the most comprehensive report available when it comes to the global renewable energy picture. The GSR has more complete renewable energy data than the BP Statistical Review, but both reports complement each other. Full disclosure, however, I have been a contributor to the GSR for the past five years.

Before I begin, let me introduce REN21 and what are they trying to achieve. From the foreword to the 215-page report:

REN21 is the global renewable energy policy multi-stakeholder network that connects a wide range of key actors. REN21’s goal is to facilitate knowledge exchange, policy development and joint action towards a rapid global transition to renewable energy.

REN21 brings together governments, nongovernmental organisations, research and academic institutions, international organisations and industry to learn from one another and build on successes that advance renewable energy. To assist policy decision making, REN21 provides high quality information, catalyses discussion and debate and supports the development of thematic networks.

With that introduction, let’s do a deep dive on the global biofuel picture.

Ethanol

Global biofuel production falls primarily into three categories; ethanol, biodiesel, and hydrotreated vegetable oil (HVO), also known as “green diesel.” Of the 30.8 billion gallons (116.6 liters) of biofuel produced globally in 2013, 23 billion gallons (75%) were ethanol.

Figure_7_Ethanol_Biodiesel_2014_oNr

Ethanol is the second simplest alcohol, with only two carbon atoms, and is used as a gasoline substitute and additive. (Methanol, with a single carbon atom, is the simplest alcohol.) Ethanol is produced from fermenting the sugars or starches in feedstocks like corn, wheat, and sugarcane. It is primarily used as a 10% blend with gasoline in hundreds of millions of vehicles worldwide, and more than 20 million vehicles globally are capable of running on either pure ethanol or a blend of 85% ethanol and 15% gasoline. If you own a vehicle in the US, it is almost certain that you have operated that vehicle on a 10% ethanol blend at some point.

Ethanol has some key differences from gasoline. First, the energy density is only about two-thirds that of gasoline, which means that a greater volume of ethanol is required to travel an equivalent distance. Ethanol will also absorb water from the air. This can be an issue when transporting or storing ethanol, as well as when using ethanol blends in boats. On the plus side, the octane rating for ethanol is higher than for gasoline. Octane rating is a measure of the tendency of a fuel to pre-ignite when it is compressed. Higher-octane fuels are more resistant to pre-ignition, which allows them to be used in an engine with a higher compression ratio (which enables higher efficiency than engines with lower compression ratios).

When it comes to ethanol production, the US and Brazil dominate the market, cumulatively accounting for 87% of the global total. In 2013 the US produced 13.2 billion gallons, which was 57% of total global ethanol production. Brazil produced another 6.7 billion gallons. Other global producers of ethanol included Argentina, Canada, China, and India.

Both countries have a long history of strong government support for the ethanol industry. US government support for ethanol as fuel began with tax credits for ethanol usage with the Energy Tax Act of 1978. The tax credit was an exemption from the federal excise tax on gasoline, and was in place at varying levels until the end of 2011. In addition to the tax credit, the US government made government-backed loans available to ethanol producers for plant construction and implemented an import fee to protect domestic ethanol producers from cheaper ethanol imports (mainly from Brazil).

As a result of the incentives, US ethanol production slowly grew over time, reaching 1.6 billion gallons by 2000 and 3.9 billion gallons by 2005. Then the US Congress gave the industry a huge boost by mandating ethanol usage in the Energy Policy Act of 2005. One of the key provisions of the new energy policy was the Renewable Fuel Standard (RFS). The RFS started with a requirement of adding 4 billion gallons of ethanol to the fuel supply in 2006—just about the amount that was being produced at that time—and initially increased the amount each year to 7.5 billion gallons of ethanol by 2012.

Congress accelerated ethanol adoption with the Energy Independence and Security Act of 2007. The new act required the use of 12 billion gallons of corn ethanol in the US fuel supply by 2010, rising to 15 billion gallons by 2015. To meet their proportional share of that mandate, refiners have been required to purchase Renewable Identification Numbers, or RINs — effectively ethanol consumption quotas — from producers.

Ethanol Production 1980 to 2013

Government mandates in Brazil have an even longer history, dating back to 1976. The mandated percentage of ethanol is higher than in the US (it has mostly fluctuated between 20% and 25% for a decade), and car companies there have developed flex-fuel vehicles that can run on varying concentrations of ethanol. Ethanol in Brazil is produced from sugarcane, as opposed to US ethanol, which is almost entirely derived from corn.

Weather and market forces have recently been kind to US ethanol producers, with an expected bumper corn crop lowering the price of their main input, while ethanol prices have been propped up by the high price of gasoline refined from increasingly expensive crude oil. In the long run continued government support is critical for the industry (corn prices will rise again), but in my estimation is unlikely to waver in the US.

Biodiesel

Biodiesel is the second largest category of global biofuel, accounting for 6.9 billion gallons globally in 2013 — 22.6% of total biofuel production. Biodiesel is derived from reacting fats like vegetable oil with an alcohol like methanol. The products of the reaction are biodiesel and glycerin.

The chemical structure of biodiesel is distinctly different from that of petroleum diesel. Petroleum diesel is composed of only hydrogen and carbon (hydrocarbons), but biodiesel also contains oxygen. This gives biodiesel somewhat inferior physical and chemical properties compared with petroleum diesel.

A key difference is that biodiesel will gel and freeze at higher temperatures than petroleum diesel. This can cause fuel filters to plug if the biodiesel concentration is too high in cold weather conditions. Thus, biodiesel tends to be blended at much lower levels with petroleum diesel in cold weather, and is unsuitable for aircraft that fly at high altitudes.

On the other hand, biodiesel is relatively easy to produce. Unlike many alternative fuel technologies, biodiesel can be made in a garage from widely available waste cooking grease with minimal equipment or training. Most alternative fuel technologies have much larger capital expenditure and expertise requirements.

Biodiesel is produced and used in numerous countries around the world, and is the most commonly used biofuel in the European Union. The EU produced 2.8 billion gallons of biodiesel in 2013, 40% of the global total. Many EU countries have biofuel mandates that encourage the use of biodiesel, although some countries have weakened their mandates in recent years over concerns that cultivation of certain biodiesel feedstocks was encouraging deforestation.

As with ethanol, the US was the largest national producer of biodiesel in 2013. US production in 2013 was 1.4 billion gallons, produced primarily from soybeans. Production exceeded the mandate from the RFS, which covers ethanol, biodiesel, and advanced biofuels, and which called for inclusion of 1.28 billion gallons of biodiesel in diesel fuel markets in 2013.

Behind the US in biodiesel production were Germany and Brazil, which increased production by by 16% and 5% respectively in 2013, to 820 million gallons and 766 million gallons. Argentina was the fourth largest producer with 608 million gallons. France was the world’s fifth largest biodiesel producer, but is moving toward reducing its biofuel mandates.

Most of the major biodiesel producers consumed what they produced. China, on the other hand, is a significant consumer of biodiesel, but satisfies most of its demand by importing biodiesel from Southeast Asian countries like Malaysia and Indonesia. In fact, I visited Malaysia several years ago and asked a palm oil producer if the EU’s concerns about the sustainability of palm oil (production of which has caused deforestation in Malaysia and Indonesia) might slow their growth. I was told that China had no such concerns and would buy every drop they could produce.

Hydrotreated Vegetable Oil

Hydrotreated vegetable oil (HVO) has emerged as an attractive alternative to biodiesel in recent years. With this process the same kinds of vegetable oil feedstocks that are used in biodiesel production are reacted with hydrogen in a process called hydrotreating — a common process in the petroleum industry. The products of this reaction are diesel-length hydrocarbons (also known as “green diesel”), with propane produced as a byproduct.

The primary advantage of hydrotreated green diesel over biodiesel is that the product is chemically equivalent to petroleum diesel, so it can be used in diesel engines in any concentration with no modifications. The disadvantage is that the capital costs of hydrotreating equipment are much higher than for the equipment required to produce biodiesel, and thus the process requires larger scale to be economical.

HVO accounted for only 2.7% of global biofuel production (820 million gallons), but grew by 16% in 2013. In 2013 HVO production took place primarily in Europe (475 million gallons), Singapore (238 million gallons) and the US (80 million gallons).

The HVO space is dominated by Finland’s Neste Oil. Neste began developing its hydrotreating technology — called NEXBTL — in 2002, and in May 2007 started up a plant at its Porvoo refinery outside Helsinki, Finland with an initial capacity of 55 million gallons per year of HVO. The feedstock for the HVO refinery is vegetable oil and animal fat, and in 2009 the capacity was doubled to 110 million gallons. In November 2010, Neste commissioned the largest HVO plant in the world in Singapore with a capacity of 245 million gallons per year (800,000 metric tons), and in 2011 started up another 245 million gallon per year HVO refinery in Rotterdam. The Rotterdam facility is Europe’s largest renewable diesel refinery, and to my knowledge this facility and the Singapore plant are the two largest biofuel plants of any kind in the world.

Besides Neste, HVO processes have been developed by Honeywell (NYSE: HON) subsidiary UOP, Syntroleum (recently purchased by Renewable Energy Group), ConocoPhillips (NYSE: COP) and Petrobras (NYSE: PBR). Syntroleum formed a joint venture with Tyson Foods (NYSE: TSN) called Dynamic Fuels LLC, which opened a $150 million facility in Geismar, Louisiana in 2010 with an annual HVO capacity of 40 million gallons per year.

Conclusions

Global biofuel production continues to be dominated by ethanol, and the US is the world’s dominant biofuel producer — leading in both ethanol and biodiesel. HVO is the world’s third largest volume biofuel and its production is growing at a faster pace than the more mature ethanol and biodiesel industries.

Biofuel volumes will continue to be heavily influenced by government policies and subsidies, and some weakening of these policies has hurt both the ethanol and biodiesel industries in several countries. Investors wishing to place their bets on the future of biofuels need to understand the role that governments will play in the future success of these fuels.

Link to Original Article: Global Biofuels Status Update

By Robert Rapier. You can find me on TwitterLinkedIn, or Facebook.

  1. By Forrest on August 28, 2014 at 7:34 am

    Reflecting back on how energy sources first got their start. Wood per lightening ignition provided most of humanity creature comforts for the great majority of history. Clever inventors mechanically harvested water force of gravity. Coal was found on the ground and threw onto wood fire with amazing heat results. Whale butchers discovered a pure lamp oil within the skulls of sperm whale. Surface crude oil discovered to be burnable with great plumb of noxious smoke. Clever inventors figured out how to mine crude oil easily per small hole drilling and pumping methods. As sperm whale lamp oil was rapidly depleting and cost skyrocketed upon early American history the capitalist moved to seized an opportunity to transform crude oil to lamp oil. These technologies completely obsoleted whale oil overnight per the low cost and supply. So, how hard was it for crude oil to enter market place? What great fuel competitor did they face? Crude oil is not manufactured, processed, or generated. It’s a harvesting technique to tap geological formations much like coal energy except crude oil is much harder to discover deep beneath ground and seas. Also, reserves of crude oil must be continually be upon the path of discovery as the small bore drill hole technology single handed incapable of unearthing large harvests. Meaning the fuel source is continually capturing expensive R&D public support and attractive investor speculation risk per preferential tax laws. Research and development will always have high risks, high expenses, and maximum public attractants to make it possible.

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    • By Forrest on August 28, 2014 at 7:55 am

      Ethanol once had unopposed competition during early car production of U.S. history as well. The inventor of mass market auto supplied the needs of efficient I.C. engine per moonshine octane boosting abilities. Gasoline had no such attribute, but Henry Ford knew moonshine did. The R&D efforts of the company led them to the ideal auto fuel with 30% ethanol. The company started the first ethanol plant to make it possible. Thomas Edison supported the new motor fuel progress as well, Standard oil did not and viewed ethanol as hated competition. Standard oil went to work to improve octane of gasoline with chemical invention of lead. The ensuing dirty political battle legendary even per Hollywood standards, with accusations of fomenting prohibition to kill competition. Hence the term moonshine per the illegal, dastardly, and evil alcohol fuel. Ethel lead a wonderful alternative to family motoring. Now, why is it necessary modern day to have RFS? You know, to regulate ethanol market survival. It does seem odd that it would be required with all the attributes of the fuel additive. The most obvious being greatly reducing fuel costs.

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  2. By Forrest on August 29, 2014 at 9:39 am

    History of motor fuel per gasoline and ethanol have an intertwined past per the entire span. A study will quickly conclude ethanol should have been utilized, future secured, and promoted per countries and environmental benefit. This the place for government reg as perfect zone to improve marketplace security, competition, small business, environmental improvement, and agriculture security. It’s obvious oil companies were gunning to destroy ethanol future per insistence of monopolistic power. The history of Great Depression, devastation of rural farm economics, foreign wealth, corruption of international corporations, and history of political corruption could all have been mitigated per supports of this small business competitor. Competition empowers public to have a voice and greatly diminishes exploitation ability.

    Ethanol was top tier fuel per Otto engine development. Henry Ford preferred the fuel per agriculture benefit to poor small farmers. Standard oil did utilize ethanol at the beginning to boost octane. In the 40′s Army built and operated ethanol plant for military needs. From 40′s to 70′s gasoline was so cheap and plentiful, no one bothered with ethanol support as leaded fuel provided the octane boost. This the era many dismayed per lack of obtaining true value of a valuable resource. Leadership of country should have educated the public to future generation wealth benefit to economize consumption and support more expensive ethanol competitive fuel. We have very few politicians willing to risk their historical heritage on such dangerous water even today as they employ give em want they want popularity. Party politics scheme to advantage themselves per populous spending of fed tax money and future wealth per deficit spending. In 1975 lead was phased out as evidence accumulated to the toxic health effects. MTBE invented as alternative, eventually banned per water contamination results. Oxygenates added to gasoline to decrease smog per decrease in carbon monoxide. MTBE eventually replaced by ethanol per improved results and lack of environmental harm. Energy policy enacted to protect country from market gyrations of critical import energy resources. Renewable energy envisioned as primary stabilizer to diminishing crude oil resources and improved environmental emissions. RFS standards enacted to stabilize and increase biofuel market. EPA test results approved petition for e15 fuel standard. Present day almost all new gasoline auto manufactures approve E15 fuel. Most modern engines E10 approved, excepting older small engines that can get into trouble under non standard severe conditions. Note, education of fuel use the best solution. These engines often abused and can operate at the brink of failure. These engines could be easily modified per ethanol fuel additive use and enjoy more power and cooler operating environment. They would enjoy better life span if doing so.

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  3. By Cl1ffClav3n on August 29, 2014 at 6:17 pm

    Ethanol was around for thousands of years before petroleum and failed to become a fuel source because it takes more energy to make than it yields. Farmers during the industrial age were wise enough to burn wood and stover for fuel and reserve ethanol as a premium beverage. The discovery of coal and the creation of steam engines ushered in a new age of high-EROI energy that completely eclipsed the marginal EROIs possible from vegetable sources which are ultimately limited by photosynthesis. It’s a conspiracy of physics, not oil companies.

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    • By Forrest on August 30, 2014 at 4:28 am

      Coal mining and oil drilling are harvesting techniques, meaning they produce no energy. The geological conditions for producing these energy sources is long gone. Farmers probably will continue to utilize stover and wood for heat and fuel for a long time.

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    • By alpha2actual on September 2, 2014 at 5:57 pm

      After 30 years and 40 Billion Dollars even the Environmentalists have turned on Ethanol yet the Crony Capitalists keeping pushing this boondoggle. Corn ethanol is a net carbon emitter after factoring in land usage, carbon footprint of fertilizer, fuel expenditure etc. Ethanol is corrosive and can’t be transported by pipeline, call in those nasty 18 wheelers. It takes 1 gallon of water to crack out 1 gallon of gasoline while 2650 gallons of water begets 1 gallon of ethanol factoring in the agricultural usage. It takes 195 pounds of fertilizer per acre of corn which adds to runoff into the Mississippi then into the Gulf of Mexico which will have the biggest recorded dead zone this year. For comparison 1 acre of Soybeans uses no fertilizer. What’s more, burning corn ethanol in gasoline releases more benzene, a known carcinogen, and other toxic air pollutants that have been linked to asthma, bronchitis and other respiratory ailments.

      It’s astounding to me that 40% of the total US corn production is consumed by this moronic program and after 30 years Congress is just now attempting to shut it down by not subsidizing it.

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      • By Forrest on September 9, 2014 at 7:47 am

        That is quite a pant load of misinformation, I’m impressed. U.S. corn acres is trending to 15%. First the ethanol process produces a few co-products that must be removed from ethanol acres. The animal feed co-product is of superior nutrition value, more so than the one to one plain corn utilized per the yeast content and a new water treatment that grows fungi. Process improvements, agronomic improvements, and seed improvements also decrease acreage. Carbon rating of ethanol continues to improve per fertilizer technique and added soil amendments that decrease nitrogen gassing. The rating has improved 50% as some processes can qualify for Calif. low carbon fuel market. Water consumption is per water vaporization, not exactly a horrid pollution stream. All other process water is now recycled as the process plant must utilize premium quality water, much above municipal standards. Most corn is not irrigated. Sugar beets and sorghum grain a few new entries to market. Corn usually follows soy beans per the benefits of crop rotation. Ethanol displaces more costly and unhealthy benzene, MTBE, and butadiene upon the traditional petrol gasoline. Ethanol does not produce these chemicals. Ethanol can be transported by pipeline. Problem arises with old lines as the chemical will dislodge (clean) the gunk and cause pumping problems. New pipelines can be treated to accept both fuels. It appears the problem more of concern of competition and ownership. The Mississippi plume this year is 2rd smallest in history. They have a theory it is supported by fertilizer runoff, but also concerned of huge quantity of municipality storm water runoff. Farmers have greatly reduced fertilizer use per more accurate application and low till practice. Low till helps soil retain water and carbon sequestration.

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        • By Optimist on September 11, 2014 at 4:21 pm

          Food2Fuel is moronic. Period.

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          • By Forrest on September 11, 2014 at 6:07 pm

            Your post made me think of other factors of food production. Factors that are equally important as food production is a business. Meaning no one will bother with food production if there is no profit or what is normally called payback. Do your want to work for nothing?

            1. Cost of fuel depresses food production, same with property taxes, cost of land, cost of money, low education, and low profitability.

            2. Per economics, if you want more of something eat it. That is a crude explanation of creating more demand and profit per the open market as the natural motivation will swing supply to the need. This is the problem with southern socialist countries such as Argentina and Venezuela. They foolishly think this is a function of government to prevent business from making a profit the correct action. Again do you want to work for nothing?

            3. Corn ethanol makes farming more lucrative and attracts more capable people to the profession. They spend more on education, equipment, taxes, land, and fuel to accomplish the task of raising crops for profit.

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            • By Optimist on September 11, 2014 at 6:16 pm

              Aren’t you the joker? Who said anything about working for free?

              1. And converting food to fuel leaves less food for the consumer, making it more expensive (hence the corn riots in Mexico). It also makes no dent in fuel prices, since fuels trade at many times the volumes seen in food markets.

              2. Wait, you’re equating resistance to foolish food-to-fuel schemes with socialism? (waiting for the punchline..)

              3. Correction: “Corn ethanol makes corn farming more lucrative…” It also makes farming less lucrative for anybody using corn as a feedstock. So while corn farming becomes a career choice for the PhDs, the rest of the inductry suffers…

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            • By Forrest on September 11, 2014 at 6:37 pm

              Corn feedstock does become more expensive. Live stock producers in the past have enjoyed government subsidy over production corn. Doesn’t get any better than that if you are a powerful influential corporation. Thank you taxpayer. Poor countries that have no government subsidy and such could not compete and walked away from the horrible labor intensive farming practices. Why should they grow corn at a loss or work for nothing? Dam Yankees! This artificial marketplace of field corn has been a long time condemnation per the U.S. subsidy of corn, as no one could compete. With ethanol demand corn is more lucrative and takes no tax payer subsidy. Foreign countries can compete. They, also like ethanol as the auto fuel is expensive and high demand. They have a high profit per demand driven product to offer international consumers with cash in hand ready to purchase as they flee petrol high costs. It is a good thing for us and them.

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            • By Optimist on September 11, 2014 at 7:35 pm

              “…takes no tax payer subsidy”
              LOL!

              Stop! Please! If only!

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            • By Forrest on September 12, 2014 at 7:18 am

              The Farm Bill is a behemoth of torrid political compromise. The House attempted to deregulate some of the agricultural business, but a torrent of public media as usual came to the emotional support of the Left whom appear have successfully bought another faithful sector of voters. Remember all the emotion of starving overweight children going hungry per even attempting to lower the doubling of free food giveaways. This the biggest expense of the farm bill. Also, the farm Crop Insurance now appears to grantee income per good or bad crop. The small organic farms had a big win, Live stock and poultry had a big win.

              Corn profit has cut deep in government subsidy. The conservation programs, crop insurance, for example. Notice the gov’t isn’t stockpiling purchases of corn. There is no subsidy of corn ethanol. The RFS is a no cost to taxpayer reg and results in lower cost fuel for consumers. It could be an expense for petrol as they are prohibited from crushing a competitor whom is tempering their ability to stimulate cost of fuel.

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            • By Optimist on September 12, 2014 at 4:01 pm

              “The RFS is a no cost to taxpayer reg…”

              Only those taxpayers who don’t drive. That would only be the occupant of the White House, by my estimate.

              “…and results in lower cost fuel for consumers. It could be an expense for petrol as they are prohibited from crushing a competitor whom is tempering their ability to stimulate cost of fuel.”

              Wow, so much horse manure in such a short statement. Must be some kind of record.

              If ethanol made gas cheaper, why does it need to be propped up by government mandate? Surely different filling stations would be competing with each other to get even more ethanol into their gasoline, so that they could sell it even cheaper than the next guy.

              Somehow, oddly, just the opposite is happening…

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            • By Forrest on September 12, 2014 at 7:44 pm

              Just read a post from E85Vehicles that reports price of E85 fuel. Just north of me:

              E85 $2.51
              E10 $3.52
              Ethanol free $4.72

              Also a report on wholesale price of E85 at $1.69. API just announce the President has reviewed the EPA proposed adjustment of the RFS per API request to lower requirement per the “Blend Wall”. It appears it won’t happen.

              Also, yes, the independent gas station owners are reviewing options to change over tanks and pumps to utilize more ethanol blend fuels per the ability to attract more customers. Flex fuel pumps gaining much attention as well as pulling the low volume mid grad and putting in price attractive E15. This will all take time as this requires investment and customer incentives are subtle. Meaning customers are familiar with unleaded and satisfied with the product. Only those whom interested and educated will make a change. Also, average consumer have heard “bad” things of ethanol. It will take time for the alarm to fade per reality experience.

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  4. By Forrest on August 30, 2014 at 5:23 am

    Some ethanol plants produce HVO. It is an attractive option and not nearly the investment requirement of cellulosic processing. The cost evaluations very specific upon marketplace for decision to go biofuel or Green Diesel. Ethanol plants ramping up cellulosic process invented from Quad County processing plant. I guess they have some enterprising talent that invented a new process that is just a minor adaptation to present process. Expect 2 billion gallons of fuel from cellulosic corn kernel. It’s attractive as no additional manpower required. Another benefit is the doubling of production of corn oil. These plants expected to process the oil to biodiesel or Green Diesel. Also, they produce several more valuable co-products naphtha, glycerin for example. The animal feed is bumped up in protein content as well, more valuable, and good for all farm animals.
    Poet is celebrating Project Liberty cellulosic processing plant opening this Wednesday. It’s a 20 million gallon facility. They plan on adapting to all 28 plants and licensing technology. This is good value in utilizing so much in place infrastructure. Interestingly, 1.3 billion tons of cellulose feed stock have been identified present day. Note the process is expected to achieve 100 gallons per ton and has diverse feedstock capability. Industry leaders expect to be equivalent to corn ethanol cost by 2016. Gross numbers for rough calculations, the corn plant about equal to the corn for generating ethanol except the corn plant generates little animal feed, but does produce biogas and high energy lignan. The lignan has enough energy to power the plant steam processes such as heat and some may produce power. Later generations of cellulosic process may omit the co-product per increase in ethanol yield. Field harvest is restricted to no more than 25 percent stover per sustainability requirements. Poet’s co-generation plant of corn and cellulosic about 2 parts corn to 1 part cellulose. This may be per harvest of current farms. Meaning, no additional acres required.

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    • By Cl1ffClav3n on September 2, 2014 at 12:39 pm

      Hydrotreatment is a hugely net negative energy process that begins by pumping in copious amounts of hydrogen derived from fossil fuel natural gas to saturate all carbon bonds and remove all oxygen. The oxygen comes out as . . . wait for it . . . CO2. 11 tons of CO2 are emitted for every ton of input hydrogen. This is only the beginning. The hydrotreated oil is now paraffin wax comprising long-carbon chain alkanes and requires extensive further processing to become a fuel additive let alone a fuel substitute. The paraffin molecules must be first be cracked into shorter molecules, some of which must then be isomerized into different shapes and then oligomerized back into longer chains. The final fuel must have very specific attributes such as vapor pressure, shelf-life, cold flow properties, octane, decane, elastomeric rubber seal compatibility, electrical conductivity, density, etc. to be a true “drop-in” fuel fully compatible with jet engines and tactical military equipment. This is achieved by carefully blending all these diverse and carefully crafted molecules of varying carbon chain lengths and shapes (straight alkanes, cyclic alkanes, olefins, aromatics) in exactly the right proportions in a process known as fractionation. The exquisite complexity and cost of all of the above are why hydrotreated renewable fuels have averaged more than $50 gallon to the US military and the most recent purchases made over the past 2 years have been flat at $59.00/gal. The dependence upon fossil fuel hydrogen and energy also reveals that these fuels are neither green nor renewable.

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      • By Robert Rapier on September 2, 2014 at 11:06 pm

        “The exquisite complexity and cost of all of the above are why hydrotreated renewable fuels have averaged more than $50 gallon to the US military and the most recent purchases made over the past 2 years have been flat at $59.00/gal.”

        It’s not the hydrotreating the drove up the cost of these fuels. In the case of Solazyme, it’s because the starting material of algal oil was extremely expensive to produce. But Neste, for example, is making hydrotreated renewable diesel at a cost not much above that of conventional diesel. And hydrotreated vegetable oils don’t result in wax. If you look at the structure of some of the components of vegetable oil, the oxygen atoms are knocked out leaving propane and carbon chains in the gasoline and diesel range.

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        • By Cl1ffClav3n on September 4, 2014 at 12:49 am

          Come on, Rob. A typical triglyceride like triolein has has three 17-carbon branches attached to the glycerine backbone. When these are fully hydrogenated, the product will be three 17-C n-alkane molecules (which are clearly paraffins and will be solid at room temperature), a single propane molecule, 3 CO2 molecules, and one or more water molecules, plus the glycerine. A photo essay of the actual sequential products is provided. And again, hydrogenation is only one of the steps of hydrotreatment, which is commonly understood to include all the steps necessary to produce pure hydrocarbon blends that are “drop-in” compatible with refined petroleum fuels.

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          • By Robert Rapier on September 4, 2014 at 1:16 am

            The straight chain C17 alkane, n-heptadecane, is a liquid at room temperature. Palm oil (for example) contains primarily C16 and C18 chains. The average molecular weight of diesel is about 230 grams/mole, indicating an average carbon chain of about 16.5 (with certainly plenty of C18s in there).

            So once these vegetable oil fatty acids are hydrocracked (which is what is actually happening), they are not waxes. Fischer-Tropsch produces waxes that have to be cracked and further processed; hydrocracking vegetable oils produces diesel. Again, the two largest biofuel plants in the world are based on this process. They are not producing fuel for $50/gallon. There is quite a large body of literature on this process.

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            • By Cl1ffClav3n on September 4, 2014 at 9:08 am

              n-heptadecane has a melting point of 70-73 deg F. STP in the chemistry world is 59 deg F and 1 atmosphere. At this point, you have a pure paraffinic solid. Most people refer to paraffinic solids as waxes. Cold flow requirements for fuels generally require a liquid state well below freezing. You can burn FAME in a diesel engine, but it is not “drop-in” diesel fuel. You can burn HVO in a diesel engine, but it is not “drop-in” diesel fuel. The military requires true hydrocarbon diesel fuel and the airlines require true naphthalic or parrafinic kerosene. Getting there from vegetable oil is a $30-50/gal process, and even more expensive if the feedstock is alcohol.

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            • By Robert Rapier on September 4, 2014 at 11:53 am

              “n-heptadecane has a melting point of 70-73 deg F. STP in the chemistry world is 59 deg F and 1 atmosphere.”

              On the C-17, I was just addressing your claim that C16 straight chains were solid at room temperature. STP is not room temperature, and C17 straight chains (the average length of the triglyceride chain before further fractionation) aren’t even solid at room temperature.

              Second thing, further fractionation occurs anyway. I would encourage you to read some literature on this. There is a large body of it. The hydrocarbon produced in this process have been well-characterized in the lab.

              Further, if you really want to convince yourself this product can’t be in the $30-$50/gal range to produce, look at the volumes Neste is producing, multiply by $30, and see how huge their losses would be. They are selling this into the EU market in bulk, not in some tiny quantities for military testing.

              You can find lots of literature (some of which is free to access) that characterizes the products of this process. They aren’t waxes. You can get started here: http://www.aiche.org/resources/chemeondemand/conference-presentations/biojet-production-hydrocracking-vegetable-oil

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            • By Cl1ffClav3n on September 4, 2014 at 5:29 pm

              Neste HVO is pure paraffinic hydrocarbons ( Presentation_Hydrotreated Vegetable Oil HVO as a.pdf
              ). As such, it contains no olefins, and no aromatics. They can vary the process to shorten or lengthen the alkane chains and to induce iso-alkanes, and this is a tradeoff between cetane number, energy density, lubricity, cloud-point/cold flow properties, etc. The natural product is longer-chain n-alkanes very similar to the output of FT-synthesis. The more they move from long-chain n-alkanes to short-chain iso-alkanes, the greater the cost and the lower the EROI. In no case are they producing olefins or aromatics. These other species are essential to make “drop-in” fuels. Aromatics are particularly required to swell the elastomeric seals in fuel systems. Neste, like most others producing BTL fuels, rely on blending with refined petroleum at 50-90% ratios to get the missing ingredients for “drop-in” fuel applications. This blending with fossil fuels and the use of natural gas as the source of the hydrotreatment hydrogen and energy crush any claims of either straight HVO or petroleum-blended HVO being “renewable.” I have never said straight HVO was $30-50 a gallon, I have been very explicitly associating that cost with “drop-in” fuel. Not trying to be an @$$. We are both on the side of facts and science here.

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            • By Robert Rapier on September 4, 2014 at 11:54 am

              Oh, one more thing:

              “even more expensive if the feedstock is alcohol.”

              Of course. And if the feedstock is algal oil, your argument holds, but not because of the hydrocracking piece. That’s pretty standard refinery processing; not a $30/gallon process, and it yields jet and diesel hydrocarbons.

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    • By Cl1ffClav3n on September 2, 2014 at 1:17 pm

      I would recommend that Robert Rapier ask to visit Quad Counties Corn Processors and focus his chemist’s eye on their process.

      They have installed a bolt-on secondary refinery to the primary conventional corn ethanol biorefinery. In the primary refinery, corn starch is extracted from the corn kernels and then fermented and distilled. In the secondary process, the feedstock is the corn kernel husks themselves which are composed largely of hemicellulose. However these husks also contain residual corn starch missed in the primary process. This firm claims to be the first in Iowa to be producing commercial cellulosic ethanol, somehow beating out well-funded giants POET and DuPont and Abengoa. A clue to the likely truth is in their admission that their secondary process has also increased corn oil production by 300%. Rather than converting the difficult cellulosic inputs into alcohol, it is much more likely that they are converting residual corn starch clinging to the kernels into both ethanol and corn oil, and that the cellulosic kernel fiber itself is passing through largely unconverted. This theory also fits the volume of production, which only added 2 million gallons per year to the 35 million produced from corn starch in the primary process.

      Without on-site inspectors to measure the mass-balance of the cellulosic inputs and outputs, there is no way to assure that any fraction of their product is truly cellulosic. Nevertheless, the EPA will now grant them full cellulosic RINs for their product until proven otherwise. And because the EPA has been embarrased year after year for its unfulfilled predictions of millions of gallons of cellulosic ethanol production that have not materialized, it now has every incentive to let producers cheat.

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  5. By Forrest on August 30, 2014 at 5:17 pm

    BTW, I’m not a anti fossil fuel guy. We are indeed fortunate to have such valuable resources of NG and crude oil reserves upon North America terra firma. Best we use the resource wisely. Ethanol is a friend of gasoline and can make the fuel reserves last longer. E30 is close to perfect fuel. Ethanol makes gas more efficient. Often times the lower energy density of ethanol is presented as a compromise fuel. But, the fuel additive has the ability to make gasoline blend more efficient. Meaning the E30 fuel will power vehicles per same MPG as E0 upon the modern efficient engine technology. What is so good about this, is the carbon rating of ethanol has fallen 50% per last analysis. This improvement is attributed to full production chain of the fuel inputs i.e. fertilizer, argronomics, processing technology. The typical ethanol fuel will meet California’s low carbon fuel standard. This is good as the additive will make gasoline a better fuel. This E30 100 octane fuel replaces the need for water fouling oxygenates and octane boosting aromatic carcinogenic component. Also, the fuel has lower vapor pressure for improved emissions of raw fuel vapor. It appears to be best of both worlds.

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  6. By John H. on August 31, 2014 at 7:01 pm

    Thanks for this, Robert. Do you have estimates on EROEI for HVO versus the other bio-fuels?

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  7. By alpha2actual on September 2, 2014 at 5:54 pm

    The internal fuel load of a F-18 Super Hornet is 18,800 pounds (2,254 gallons). The Government Accounting Office reported that the DOD purchased $150 per gallon algae derived jet fuel in May of this year at a time when petroleum base jet fuel cost $2.88 per gallon. Do the math, max load out $355,000 vs $6,495. Mind boggling, no?

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  8. By Severi2 on September 8, 2014 at 1:14 am

    Just thought I might clear up some misconceptions about HVO. It is a pure hydrocarbon so no blending issues, storage issues etc. It uses hydrogen (made from methane) to do the splitting of the molecules. Hydrotreating is exothermic so very little energy is required for heating. The paraffins that are produced which have poor cold properties, so they are branched (isomerized). Branching amount can be controlled by the severity of the process. Propane is a co-product (comparable to glycerine from biodiesel production). It may be combusted for used for energy or for hydrogen production. This compensates for the detrimental effects of hydrogen production. Compared to biodiesel (where methanol produced from methane is used) the CI is very similar.

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