Why Biofuels? Why Now?

Why Biofuels? Why Now? Joel West Keck Graduate Institute blog.SolarProf.com Nov 3, 2011

Why are biofuels in demand?
Economics
Technology
Politics

What’s holding them back?
Economics
Technology
Politics

Economics

Key issues of energy economics
Energy prices
Income to producers
Cost (economic drag) to buyers
Demand inelastic in short term
Low costs
Make goods and services cheaper
Improve personal lifestyles
Encourage waste

US 20 th century energy use
Electricity
Coal, natural gas, oil
Nuclear
Hydroelectric
Heating: natural gas, oil
Transportation

US Electricity Sources Source: US Energy Information Administration 2008 data

Energy impact on US economy
Urban pockets and vast expanses
High transportation costs
More use of air travel
Cheap, plentiful energy
Fueled growth
Improved living standards
Home appliances, travel, larger homes
Recessions at times of shortages

Demand for renewable energy
Oil embargo (1973, 1979)
Shortages
Price increases
Economic disruption
Environmentalism
1960s, 1970s: pollution
1990s-present: global warming

What drives RE usage
Cost
Cost
Cost

What drives RE relative costs
Cost of RE
Inputs (e.g. feedstocks)
Processing: capital and operating
Distribution
Cost of traditional energy
Subsidies/taxes (and mandates)

Volatile oil costs Source: “Crude Oil Price History 1950-2008,” oilism.com

Technology

What are biofuels?
Biofuels are liquid fuels that substitute for petroleum products
(Sometimes natural gas)
Part of larger biomass category
Grow things, burn things
Also wood, peat, ag. waste
See http://biomass.energy.gov

Greenhouse gases & biomass
Fossil fuels, biomass emit CO 2
Linked to global warming
Fossil fuels use old carbon
Buried for 300-400 million years
Natural gas: least emissions per BTU
Biomass uses new carbon
Can be continued indefinitely
See also “How Green are Biofuels?” http://dx.doi.org/10.1126/science.115310

How to make biofuels?
Turn sugar into alcohol
Simpler sugars are cheapest
Ethanol is by far most common
Turn fat into biodiesel
Often combined with producing other chemicals (proteins, hydrocarbons)

What do you do with it?
Ethanol: blend in automotive gasoline
Every car using ~10% ethanol
Some cars can run E85 (85%)
Biodiesel
Diesel: trucks, cars
Kerosene:
Jet A: commercial aviation
JP5, JP8: military aviation, ships

Fuel chemistry Source: “Properties of Fuels,” www.afdc.energy.gov ~0 n/a 100% ~0 ~0 Water solubility 16k 20k 12k 19k 19k Heat content (BTU/lb) 77% 75% 52% 87% 85-88% Carbon % C 12 to C 22 CH 4 C 2 H 5 OH C 4 to C 12 C 4 to C 12 Formula Biodiesel CNG Ethanol Diesel Gasoline

Feedstock considerations
Water
Soil, nutrients
Sun, length of growing season
Yield per acre
Cultivation/harvesting labor
Capital intensity
Supply elasticity

Biofuel feedstocks
Ethanol
Corn (Midwestern voters)
Sugar cane (Brazil)
Cellulose, e.g. switchgrass
Biodiesel
Recycled cooking oil
Rapeseed, jatropha, jajoba
Coconut, palm trees
Algae

Success of ethanol
Domestic politics
Iowa primary, corn state senators
Environmental (replacing MBTE)
Known technology
Reasonably effective

Problems with ethanol
Not a drop-in fuel
Less heat, reduces MPG
Miscibility: corrosive, hard to store and transport
Mostly made from food feedstocks
Increases food prices
(Possibly) net negative energy output

Biofuel technology issues
Reducing operational costs
Conversion of cellulose
Cultivation of algae
Processing feedstocks to fuel
Scaling up production
Reducing capital costs

Politics

Industry is policy driven
Hottest industry topics (11/2011):
Feedstocks
BRIC development
Nutrients and water
Fuels vs. chemicals
Policy, subsidies (6 topics)
Source: “…10 hottest topics,” Biofuels Digest, Nov 2

Policy Landscape
Make oil more expensive
Oil company taxation
Fuel taxes
Carbon tax, carbon trading
Make biofuels cheaper
R&D subsidies
Fuel subsidies
Fuel mandates

Politics of Biofuels Policy
California
Local industry
Bay Area: Amyris, LS9, Solazyme
S.D.: Sapphire, Synthetic Genomics
State is broke
Federal
R&D subsidies are cheap
Ethanol subsidies are controversial
US going broke

Main policy levers
VEETC: 45¢/gallon subsidy
Volumetric Ethanol Excise Tax Credit
Signs it’s going away
2.5% tariff on imported ethanol
RFS: Renewable Fuel Standard
9b gallons in 2008 to 36b gallons in 2022
Currently allows corn ethanol
Excludes algae-based fuels

Resources

News
BiofuelsDigest.com
AlgaeIndustryMagazine.com
RenewableEnergyWorld.com
GreenTechMedia.com
Xconomy.com/san-diego

Department of Energy
EE/RE program
eere.energy.gov
Biomass program
biomass.energy.gov
Bioenergy research centers
genomicscience.energy.gov

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Why Biofuels? Why Now?

by Joel West on Nov 03, 2011

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Why Biofuels? Why Now? — Presentation Transcript