Biofuels 2009 Presentation


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A presentation to the Advisory Group covering technologies, emissions, economics and incentives related to biofuels, including ethanol and biodiesel.

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  • Diesel might be slightly higher because direct emissions is gCO2 and WTT is gCO2e B20 is probably a lot higher because direct emissions is gCO2 and WTW gCO2e is assumed net zero
  • current national capacity of over 12 billion gallons of ethanol (supply) typical cars can handle E10 blend need more cars on the road that can handle higher blends (flex fuel - increase demand (E85)) about 2mm mfg’d flex-fuel cars on the road today -> small % of all cars more cost-effective and reliable to mfg rather than retrofit however, (demand is down) fuel consumption is down due to the economy fuel consumption will be down with higher efficiency cars, including PHEV and EVs also, (supply is down) tax credit driven investment is down due to effect of economy on tax liability and just a general investment risk-aversion
  • August 2001 The 6 megawatt (3x2,000kW) biofueled backup power system University of California, Riverside's 2001 pilot program and represented a significant milestone in the effort to reduce emissions from standby emergency generators. Temporary backup petroleum diesel-fueled generators typically operate in emergencies without the benefit of exhaust after-treatment to reduce emissions. Using alternative fuels for these necessary backup power sources is a cost effective method of protecting the environment. Fueled on 100% biodiesel (B100), these generators help reduce emissions compared to petroleum diesel in several key areas. Hydrocarbons, a contributing factor in the localized formation of smog and ozone, and sulfur emissions, a major component of acid rain, are essentially eliminated with the use of B100. The exhaust emissions of carbon monoxide, a poisonous gas, are about 50% lower in biodiesel than carbon monoxide emissions from petroleum diesel. Particulate matter, a human health hazard, is reduced by a third, with the smaller particulates reduced by over two thirds. 16 cylinder, 3,673 cubic inch, 2,922 HP Turbocharged/Low Temperature After-Cooled computer controlled four cycle industrial engine drives a heavy duty brushless four pole permanent magnet type generator capable of outputting up to 2,000kW of power at 480 volts. Separate transformers for each generator to increase reliability steps up the voltage to match the 12,470 volt electrical grid operated and maintained by Riverside Public Utilities. The three generators, operating at full output, consume almost 450 gallons of fuel per hour.
  • Biofuels 2009 Presentation

    1. 1. BIOFUELS - Primer• Biofuel – Ethanol – Made from almost any grain • Critics and competition with food – Process • Feedstock, enzymes, heat = ethanol plus waste for mulch/animal feed – Excitement • Cellulosic and biomass – avoid competition with food sources – Corn stubble, corn cobs, wood chips, straw – Included in national RFS but not commercially proven – Lone oxygenate for EPA CAA • Replaces MTBE • NAAQS intermittently require E10 – Under the radar • Miscanthus – Order of magnitude more efficient than corn – Not edible, higher yields/less land, marginal soil, broader climate rangeGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    2. 2. BIOFUELS - Primer Ethanol Production by Feedstock, 2006 Capacity (millionPlant Feedstock galllons/year) % of Capacity No. of Plants % of PlantsCorna 4,516 92.7% 85 83.3%Corn/Grain Sorghum 162 3.3% 5 4.9%Corn/Wheat 90 1.8% 2 2.0%Corn/Barley 40 0.8% 1 1.0%Milo/Wheat 40 0.8% 1 1.0%Waste Beverageb 16 0.3% 5 4.9%Cheese Whey 8 0.2% 2 2.0%Sugars & Starches 2 0.0% 1 1.0%Total 4,872 100.0% 102 100.0%Source:Environmental Protection Agency, Office of Transportation and Air Quality "Renewable Fuel Standard Program - Draft Regulatory Impact Analysis," September 2006, EPA420-D-06-008.Governors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    3. 3. BIOFUELS - Primer Feedstock as Percentage100%80%60%40%20% 0% Corn Corn/Grain Corn/Wheat Corn/Barley Milo/Wheat Waste Cheese Sugars & Sorghum Beverage Whey Starches Governors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    4. 4. BIOFUELS - Primer• Biodiesel – Made from vegetable or animal fats • Soy (80%), rapeseed, some canola • Virgin – Competition with food arguments • Waste – Used fryer grease (18%), must be filtered first, limited supply – Process – Transesterfication • Oil or fats react with alcohol in presence of catalyst to yield mono-alkyl-esters • Waste used as mulch, animal feed – Excitement • Algae - Carter administration, huge potential spurring VC, not commercial ready • Final ASTM Standards for B5 – B20 recently released – Under the radar • Camalina – Non-edible, marginal lands, less water/fertilizer – Used in bio-jet-fuel demonstrationGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    5. 5. BIOFUELS – Energy DensityFUEL BTU (based on volume)Diesel (No. 2) 129,500B2 129,276B20 127,259Gasoline (mid-grade/premium) 125,000B100 118,296Gasoline (clear) 115,000E10 111,500E85 81,800E100 75,700CNG (3600psi) 38,000Governors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    6. 6. BIOFUELS – Energy Density BTU by Volume140,000120,000100,000 80,000 60,000 40,000 20,000 0 Diesel B2 B20 Gasoline B100 Gasoline E10 E85 E100 CNG (No. 2) (clear) (3600psi) Governors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    7. 7. BIOFUELS – Energy Density• Caveats Translation into “vehicle range” – LHV and HHV – Driving conditions – Winter and Summer • Road conditions – Quality variations among Producers • Headwinds and Suppliers • Hills • Traffic congestion – Vehicle Conditions • Engine efficiency • Tire pressure • Roll resistance • Wheel alignment – Driving habits • Acceleration • Cruising speed • Air conditioning /defrosterGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    8. 8. BIOFUELS – EmissionsFuel gCO2e/MJ SourceCoal (scrubbed) 266.66 Nature reports (10/2008)Natural Gas 123.05 Nature reportsMidwest 20% dry mill, 20% wet mill, dry 99.40 Ethanol Producer Magazine (04/2009) distiller grains - Citing CARB’s LCFS calculationsDiesel 97.28 ICBE and ODOEGasoline 95.86 Ethanol Producer Magazine (04/2009)Oregon E10 using local ethanol 93.49 ODOECalifornia dry mill, wet distiller grain, 77.40 Ethanol Producer Magazine (04/2009) biomassBrazilian sugarcane 73.40 Ethanol Producer Magazine (04/2009)B20 71.28 ICBE and EPAOregon dry mill, dry distiller grain, natural 67.60 ODOE gasOregon dry mill, wet distiller grain, natural 49.90 ODOE gasNuclear 18.33 Nature reports (10/2008)PV 8.33 Nature reports (10/2008)Wind 2.77 Nature reports (10/2008)Governors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    9. 9. BIOFUELS – Emissions gCO2e/MJ Comparison Well to Wheel30025020015010050 0 Coal Natural Midwest Diesel Gasoline Oregon California Brazil B20 Oregon Oregon Nuclear PV Wind Gas Mill E10 Mill #1 #2 Governors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    10. 10. Biofuels – Note on gCO2e• CO2e and Global Warming Potential (GWP) – CO2 1 – CH4 21 – N2O 310 – SF6 23,900• Biodiesel – Greatly reduces CO – EPA assumes CO2 emitted in WTT is reabsorbed • CARB LCFS calculations are controversial – NOx increases slightly, but with greater GWPGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    11. 11. BIOFUELS – Incentives• Federal – State • Funding to assist states develop and maintain emission reduction programs, including grants for clean bus fuel and technology • Funding to help states develop RE and energy efficiency programs • Funding for the Clean Cities program – Retailers and Suppliers • Tax credit for cost of installing alternative fueling equipment • Tax credit for Small Ethanol Producer (60mm gal) and cellulosic biofuel producer • Tax credit for blending ethanol and biodiesel • USDA Section 9006/9008 funding for rural renewable energy systems and R&D • Funding for biomass proof of concepts and R&D • Funding for community-based producer planning or working capital • Funding for public transportation in parks and commercial airport ground equipment • Improved Energy Technology loan guarantees – Consumers • Tax credit for cost of installing alternative fueling equipmentGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    12. 12. BIOFUELS – Incentives• State – Retailers and Suppliers • Zoning exceptions for on-farm biofuel production • Tax credit for feedstock collectors and producers • Property tax credit for biofuel producers • BETC for alternative fuel production and fueling infrastructure • Energy Loan Program (SELP) – Consumers • Tax credit for purchase of biofuels • RETC for alternative fuel vehicles and infrastructure • SELPGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    13. 13. BIOFUELS – Mandates• Federal – Require percentage of federal fleets to be alternative fuel vehicles (AFV) • DOE in rulemaking process determining if local government and private fleets must do the same – Incremental costs of AFV spread across entire fleet – Renewable fuel standard for federal fleets • Reduce petrol use by 2% per year • Increase alternative fuel use by 10% per year – Renewable Fuel Standard • EPA rule set it at 7.76% for 2008 (9 billion gallons) • 15 billion by 2015 • 36 billion gallons required by 2022 • 30% by 2030 • Beginning in 2013, certain percentage must be biomass / cellulosic • 2mm FFV on road today, very small percentageGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    14. 14. BIOFUELS – Mandates• State – Agency fleets and transit districts must purchase AFVs and use alternative fuels • Except when not economically of logistically feasible – Renewable Fuel Standard • E10 ethanol after production reaches 40mm gallons • B2 biodiesel after production reaches 5mm gallons – B2 is considered an additive • B5 after production reaches 15mm gallons • Production capacity surpassed thresholds as of September, 2008 – Ethanol 297mm – Biodiesel 27mm • Air and maritime exceptions – Airlines voluntarily pursuing petrol blended with biodiesel• City of Portland – City vehicles must use at least E10 or B20, FFV must use E85 – Solid waste collectors must use B20 – All gas sold must be E10 – All diesel sold must be B5 (B10 by July, 2010)Governors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    15. 15. BIOFUELS – Retailers• Cost of Converting (E85) – Profit margins have decreased $0.005/gal/year since 1994 – Average: 3.3 tanks @ 12,000 gallons each • Assume 2 regular, 1 premium • Truck stops along shipping corridors have higher percentage of diesel tanks – Once a tank is blended, can’t go back, must be permanently marked – Biofuels require dedicated blended tank, can’t blend with petrol through pump • Blending equipment not UL approved yet • Requires zoning variances or fire marshall exceptions • Ethanol becomes more dense in quantity affecting weights and measures – Profit margins justifying voluntary conversion are driven by throughput, not conversion cost • though conversion cost could be psychological barrier – Option: take out the premium grade fuel tank • Premium is higher margin fuel, but throughput has been decreasing • Replace premium tank with biofuel removes medium and high grade • Presents less options to customers – regular and biofuel – Option: take out 1 regular grade fuel tank • Now have less volume of higher throughput fuel gradeGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    16. 16. BIOFUELS – Retailers• Market Experiences – Since throughput is the most important factor • Sufficient local demand must exist – Tax incentives, fleet vehicles, government mandates • Customers require information about their choices – Ethanol vs. driving habits re: mpg and range – Petrol vs. Ethanol price differential of 20% maximizes profit margin • Influenced by price of petrol and dependable, long term, favorably priced, local wholesale supply of ethanol – Pricing Ethanol: • Retail gas price -> use as starting point • E85 retail price -> subtract 20% – Profit margin -> $0.10 - $0.30 per gallon » Taxes -> reduced property and income tax » Transportation to retailer -> local vs. distant » E85 wholesale price -> feedstock price - influenced by RFS and incentivesGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    17. 17. BIOFUELS – Consumers• Need OEM options – FFV, diesel, serial PHEVs with diesel or FFV ICEs• Magnusson-Moss Act – manufacturers must warrant materials and workmanship of vehicles. If engine problems are caused by a fuel, such problems are not related to the materials or workmanship of the engine, but are the responsibility of the fuel supplier and not the engine manufacturer. – Hence the excitement over the ASTM B5 – B20 standards making it easier to avoid dirty biodiesel – But, still unclear whether B5 or higher blends degrades modern diesel emission equipmentGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    18. 18. BIOFUELS – Points of InterestGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    19. 19. BIOFUELS – Points of Interest• Rural Areas • Power source • Steady biodiesel supply/demand • Overlapping state/fed incentives • Low fuel transportation costs • Double as EVCN • transmission constrained rural areas• Urban Areas • Standby or peaker power source • Peaker power source for am/pm EV commute• State government • Standby power already required to go biodiesel• Caveat • More efficient if combined cycleGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    20. 20. BIOFUELS – Review Executive Order• Applicable to Biofuels – EO #5 • compile, review, evaluate market and policy research • review current and future opportunities for leadership and growth – EO #7.c • develop plan to work with private sector to build/maintain alt fuel stations • assist in public awareness campaignGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    21. 21. BIOFUELS – Recommendations• Vehicles – PHEV • ICE in serial PHEV running on biofuels • Scale state incentives based on technology – EV • Biodiesel charging stations in rural areas – Heavy-duty • I-5 truck stops providing higher biodiesel blends• Fuel – Implement RFS now – Raise biodiesel blend requirement from B5 to B20 – Support retailers by requiring gov fleet vehicles to fuel at local, not state, fueling stations• Tax – Manipulate price differential between petrol and biofuel with gas tax that decreases as cost of petrol goes up• Feedstock – Incentivize Miscanthus and CamelinaGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009
    22. 22. BIOFUELS – Recommendations• Biodiesel – New ASTM standards make product more reliable – Superior BTU to emissions ratio compared to all other fuels – Unfortunately, existing fleet is mostly gas, not diesel – Incentivize new PHEV ICE’s to be serial and diesel (but see E85 below) – Easier to blend at pump with forthcoming UL certification of parts – Educate, invoke OR RFS mandate and encourage broader use at • Diesel truck stops • Backup power • Rural EVCNs as range extenders for EVs in transmission constrained areas• Biofuel – Ethanol – Lower energy content may not be a concern in serial PHEV ICE – Educate and assist retailers overcome poor blending attributesGovernors Alternative Fuel Vehicle Infrastructure Workgroup - Oregon 2009