Pacific Rim Summit Focuses on Drop In Fuels for Military

BIO’s Pacific Rim Summit came to a close on Tuesday, but not before giving attendees a preview of what the industry expects to be two of the hottest trends for 2011, as recorded in a recent BIO/Biofuels Digest poll.

Department of Defense interest in biofuels is expected to increase, due to the national security implications of reliance on oil. As Chris Tindal, director of Operational Energy for the U.S. Navy, explained to attendees of the Summit, “While the Department of the Navy is a significant consumer of fuel, neither DoN nor DoD can affect the price of oil. Therefore, both are at the mercy of the market – both the stability of supplies and fluctuations in price.”

Tindal noted that the DoD used 119 million barrels of petroleum in FY08. The Blue Navy used 29.4 million barrels (not including Marine Corps). And the airline industry and the Department of Defense collectively consume 1.5 million barrels of jet fuel per day. The Navy has set a goal of replacing 50 percent of petroleum in the commercial fleet by 2015.

Tindal also noted that the Defense Energy Support Center and the Air Transport Association of America signed an Alternative Fuels Pact on March 19, 2010. The pact sets shared goals of spurring the development and deployment of commercially viable and environmentally friendly alternative aviation fuels.

Commercialization of Bioproducts
Paul Bryan, Biomass Program manager at the Department of Energy, gave some detail behind the second expected trend for 2011, that attention will be given to bioproducts and renewable chemicals in addition to biofuels. Bryan emphasized that we need to “develop technologies and supply chains to replace the whole barrel and all products made from crude today.” Because so many products are made from each barrel of petroleum, and biofuels displace a portion of each barrel, oil refineries have no incentive to make a shift.

If we reduce total petroleum usage as a percentage of one market, we need to think about how that impacts other markets. The most obvious issue is that we have to replace diesel and jet in proportion to gasoline, since their combined volume is approximately three-quarters that of gasoline, and their markets are projected to grow significantly faster than that for gasoline. But other products are important, too. The largest chunk of the ‘other products’ in the barrel is the petrochemical industry, virtually all of which is based on crude oil and natural gas.

Biofuels Digest Surveys Readers on 2011 Industry Trends

Biofuels Digest, the world’s most widely read biofuels daily, is asking readers to rank the trends that will drive the biofuels and biorefining industry in 2011. Will Congress debate new energy legislation? Which federal agency will support construction of the first commercial advanced biofuel biorefinery, USDA, DOE or DOD? How important will biobased products and renewable chemicals be as advanced biofuels producers look for an economically viable model?

BIO member companies weighed in to suggest the trends. Now, we’re encouraging everyone interested in the industry to read Biofuels Digest and rank the trends they think are most important.

BIO and Biofuels Digest will co-publish the top trends in coming weeks and continue watching throughout the coming year.

World Congress on Industrial Biotech Begins in Washington

On the opening day of BIO’s World Congress on Industrial Biotechnology and Bioprocessing in Washington, DC, new announcements came from the Department of Energy, ZeaChem, Elevance and DSM.

The DOE’s Assistant Secretary Cathy Zoi, head of the office of Energy Efficiency and Renewable Energy, announced funding of $24 million for three research groups addressing key hurdles in commercializaiton of algae. The money will be split among the Sustainable Algal Biofuels Consortium, the Consortium for Algal Biofuels Commercialization, and Cellana, LLC Consortium.

The DOE also released the National Algal Biofuels Technology Roadmap.

Elevance announced a joint venture with Wilmar International to build a commercial-scale manufacturing facility in Surabaya, Indonesia with an initial capacity of approximately 400 million pounds of its renewable waxes and oils. The facility will be located within Wilmar’s new integrated manufacturing complex now under construction and is expected to come online in 2011.

DSM announced formation of a joint venture with Roquette Freres — to be called Reverdia V.o.f. and to be headquartered in the Netherlands. The venture will combine Roquette’s sugars with DSM’s fermentation technology to produce succinic acid, which is a building block chemical for nylon and other plastics. This follows another French succinic acid plant, Bio Amber.

ZeaChem announced achievement of milestones in scaling up their biorefinery process.

A session at the World Congress focused on commercialization of algae biofuels, with DOW, UOP Honeywell, Raytheon, and HR BioPetroleum presenting updates on the partnerships they’ve formed. The discussion turned to jet fuels and chemicals as way to ensure any algal process is sustainable — it can ensure economic viability and reuse of all byproducts.

DOE Awards Grants to Biofuel, Chemical Biorefineries

Last month, Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack announced 19 biomass projects that would receive renewable energy grants under the American Recovery and Reinvestment Act. The list included 14 pilot, 4 demonstration, and 1 commercial-scale project, receiving a total of $561 million in grants ranging in size from $2.5 million to $81 million. The projects will be located in 15 different states.

Additionally, Vilsack announced a $54.5 million Biorefinery Assistance Program loan guarantee for Sapphire Energy, one of the projects that received a grant to turn algae into jet fuel and diesel. The project will be constructed in Columbus, New Mexico.

Most interesting about the list is that it is not limited to liquid transportation biofuels. Many of the projects will co-produce renewable chemicals — specifically mentioned are plans to produce potassium acetate, ethyl acrylate, and succinic acid.

The grants are intended to underwrite an equal share of private investment in the projects. That may confound the prediction of Seeking Alpha’s Neil Dikeman, who predicts, “The last petal of the last bloom off the biofuel rose falls by the anniversary of Pearl Harbor in 2010.” While small biofuels producers may not have “the horsepower, expertise, or balance sheet” to compete against the oil giants, the production of renewable and specialty chemicals may provide a handhold in the market.

International Developments in Algae Commercialization

The Pacific Rim Summit on Industrial Biotechnology and Bioenergy hosted a webinar to discuss U.S. and Canadian government efforts to support commercial development of algae for biofuels, chemicals, pharmaceutical and food ingredients, and the long list of applications being considered.

Valerie Reed of the U.S. Department of Energy, noted that the U.S. Economic Recovery Act provided $800 million for new and existing projects, with $480 million to be allocated to pilot- and demonstration-scale biorefineries that can produce advanced biofuels, bioproducts, and heat & power in an integrated system. Algae has the potential to be a big player in this selection, she said.

She also noted that Congress has directed the DOE to spend $35 million specifically on research, development and deployment of algae biofuels.

Patrick McGinn of Canada’s National Research Council, outlined Canadian programs to support research and development of biomass, including algae. The NRC is producing and experimenting with different pathways to convert algae to biofuels, with the goal of creating a high-quality data set on their overall yields, energy and carbon balances.

A recording of the webinar can be downloaded at bio.org.

You can also listen to a streaming version at http://www2.eintercall.com/moderator/presentation/Playback?id=4d83d2db-9c43-4011-a04d-25d13c5d0672.rpm.