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Presentation by Bart Lucarelli

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Presentation by Bart Lucarelli, Energy Advisor To Governments And Companies - LP Power Consultants - Thailand

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Presentation by Bart Lucarelli

  1. 1. Ethanol Fuel Programs: Sustainable Development or just another Farm Subsidy Program?
  2. 2. Topics <ul><li>Review of US & Brazilian Ethanol Programs </li></ul><ul><li>Ezymatic Hydrolysis: The Way Forward </li></ul><ul><li>Summary </li></ul>
  3. 3. The Story-line <ul><li>Current Biomass-to-Energy Conversion technologies in use </li></ul><ul><ul><li>Enzymatic conversion of feed grains, sugar and other starches into ethanol </li></ul></ul><ul><ul><li>Convert fats and specialty crops into bio-diesel </li></ul></ul><ul><ul><li>Convert ligno-cellulosic (LC) wastes into electricity & heat </li></ul></ul><ul><li>Current methods of producing ethanol are costly and as scale of programs increase raise serious social issues such as Food vs. Fuel trade-offs </li></ul><ul><li>Advances in enzymatic hydrolysis technology may soon allow the economic conversion of LC wastes into ethanol and over come some of these barriers to traditional ethanol programs. </li></ul><ul><li>Remaining commercial barriers </li></ul><ul><ul><li>High costs of cellulase enzymes </li></ul></ul><ul><ul><li>High costs of collecting and transporting agricultural wastes </li></ul></ul><ul><ul><li>Seasonal nature of agricultural waste production. </li></ul></ul>
  4. 4. Top Ten Ethanol Producers, 2004 Source: F.O. Lichts, Annual World Ethanol Production by Country, (Millions of Gallons, All Grades), http://www.ethanolrfa.org/industry/statistics/#E 219 3972 3,535 964 462 198 110 106 79 79 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Brazil U.S.A. China India France Russia South Africa U.K. Saudi Arabia Spain Million of gallons
  5. 5. A Tale of Two Ethanol Industries US vs. Brazil <ul><li>US Ethanol Industry </li></ul><ul><li>US is now the largest producer of fuel ethanol (EtOH) </li></ul><ul><li>Output has almost quadrupled from 4,180 million liters in 1996 to 16,195 million liters (ML) in 2005 </li></ul><ul><li>2005 EtOH output equals around 3% of US motor gasoline usage by volume; 2% by energy content </li></ul><ul><li>By 2008, USDA and RFA forecast that US EtOH output will increase to 30,000 ML </li></ul><ul><li>9O% of US EtOH is produced from corn using 13% of total 2005 US corn output </li></ul><ul><li>EtOH plants are located largely in mid-west corn belt </li></ul><ul><li>Preferred technology: Dry milling, which produces distillers dry feed grains as a by-product </li></ul><ul><li>Brazil Ethanol Industry </li></ul><ul><li>Brazil was once the world’s largest EtOH producer; now is running a close second to US at 16,000 ML in 2005 </li></ul><ul><li>Brazil produces all of its EtOH from sugar cane using straight sugar cane juice plus some from molasses </li></ul><ul><li>Plants located in southern & central parts of Brazil </li></ul><ul><li>Considered lowest cost producer of EtOH in the world. </li></ul>
  6. 6. Figure 1 Brazil has the lowest cost of ethanol production. Brazil’s unsubsidized price for EtOH is currently lower than the cost of petrol Sugar Cane Source: Michael Wang. ANL, March 2006, Bangkok Conference on Alternative Fuel for the Transport Sector Sugar Production Cost Estimated Cost (US$/Ton in Dec/00) Production (Mt) 2002 22,7 5,4 2,6 19,0 2,3 6,6 5,1 7,3 10,3 1,5 1,5 0,9
  7. 7. A Tale of Two Ethanol Industries (cont.) <ul><li>US Issues </li></ul><ul><li>Cost of producing EtOH in US is very high </li></ul><ul><li>US EtOH Industry can only survive with substantial help from Government: </li></ul><ul><ul><li>Renewable fuels standard requires U.S. refineries and filling stations to use 28,500 ML/yr of bio-fuels by 2015 with1,000 ML coming from cellulose. </li></ul></ul><ul><ul><li>Duty on imported EtOH: $0.14/liter </li></ul></ul><ul><ul><li>EtOH exempted from Gasoline Tax in many States </li></ul></ul><ul><ul><li>EtOH Excise Tax Exemption - $0.13/liter </li></ul></ul><ul><ul><li>Other state and Federal subsidies. </li></ul></ul><ul><li>Inefficient way to produce transport fuels </li></ul><ul><ul><li>Pimentel and others argue that it takes more energy to produce a liter of ethanol from corn than the energy content of that liter of EtOH. </li></ul></ul><ul><ul><li>USDA disagrees strongly with that view, but the energy pathway efficiency is still very low. </li></ul></ul><ul><li>Brazil Issues </li></ul><ul><li>Very small domestic market; growth of Brazi’s EtOH industry is highly dependent on exports </li></ul><ul><li>High import duties in the US and elsewhere are limiting EtOH exports from Brazil. </li></ul><ul><li>Fuel vs. Food issue resurfaces whenever sugar prices jump or if a drought or natural disaster affects sugar cane crops. </li></ul><ul><li>Domestic regulations related to blending ratios continue to create government-caused supply fluctuations. </li></ul><ul><li>Water and land required to expand sugar cane output = significant local environmental impacts. </li></ul>
  8. 8. The US ethanol industry is concentrated in the mid-west where feedgrains are grown <ul><li>1995 data </li></ul>
  9. 9. Br
  10. 10. Enzymatic Hydrolysis: The Way Forward? <ul><li>New crops and conversion technologies needed for EtOH to have a significant impact on fossil fuel usage </li></ul><ul><li>US corn-to-EtOH program has limited potential and is too expensive. Without huge subsidies, it would collapse. </li></ul><ul><li>Growth in Brazil’s EtOH industry is limited by high import duties in US and elsewhere and environmental impacts of expanding sugar cane plantations </li></ul><ul><li>Technology of the Future: Enzymatic Hydrolysis </li></ul>
  11. 11. Enzymatic Hydrolysis: Has its time finally come? <ul><li>Short answer is we are very close but…. </li></ul><ul><ul><li>Cellulose-to-biomass technologies still need further improvement </li></ul></ul><ul><ul><li>Resource selection must be sensibly done. </li></ul></ul><ul><ul><li>Reliability and seasonality of biomass fuel supplies remains a continuing question. </li></ul></ul>
  12. 12. Enzymatic Hydrolysis <ul><li>But, to achieve substantial increases in EtOH production, all countries, including Brazil, will need to turn to ligno-cellulosic biomass as an additional feedstock. </li></ul><ul><li>In the US, EtOH production is expected to plateau at 40,000 ML by 2010, unless biotech firms develop new varieties of corn with higher yields/acre or higher levels of fermentable starch levels. </li></ul><ul><li>US EtOH production can increase to 225,000 ML if cellulosic biomass is relied on as a future feedstock. </li></ul><ul><li>Before this feedstock can play a significant role, improvements in process economics are needed </li></ul>
  13. 13. Progress in Commercializing Enzymatic Hydrolysis <ul><li>Two of the World’s largest enzyme producers – Genecor International and Novozyme- have worked under a US DOE contract to achieve a 50-fold reduction in the cost of cellulase. </li></ul><ul><li>US DOE has claimed that: </li></ul><ul><ul><li>10-fold cost reduction was achieved in 2002 </li></ul></ul><ul><ul><li>30-fold improvement was achieved by 2004. </li></ul></ul><ul><li>Examples: </li></ul><ul><ul><li>Genecor has developed enzymes that allow a simplified process for producing EtOH from cellulose. </li></ul></ul><ul><ul><li>Novozyme is building a demonstration plant in Nebraska that will use its “brand” of improved enzymes. </li></ul></ul><ul><li>Other technological breakthroughs expected to reduce the cost of producing EtOH from cellulose such that enzymatic hydrolysis will become the cost effective option for producing EtOH in most countries </li></ul><ul><li>Thailand, Malaysia, the Philippines and most other ASEAN countries can then expand their EtOH programs to include agricultural wastes </li></ul><ul><li>Given the abundance of agricultural wastes in most ASEAN countries, the shift in feedstocks should result in EtOH finally achieving a significant displacement of oil imports. </li></ul>
  14. 14. Map 1 Growth of cellulose-to-ethanol industry will be helped in US by the favorable location of ethanol plants to crop residues
  15. 15. Map 2 Potential location of Ethanol Plants in 2025 with application of enzymatic hydrolysis technologies Source: Michael Wang, Argonne National Lab, USA
  16. 16. Even Brazil – land of low cost sugar cane- has tremendous potential to produce EtOH from cellulosic wastes. <ul><li>436 million tonnes of sugarcane were harvested in 2005 from </li></ul><ul><li>~ 5 million hectares </li></ul><ul><ul><li>55% used for sugar and 45% for EtOH </li></ul></ul><ul><ul><li>16 billion liters of fuel ethanol produced </li></ul></ul><ul><li>122 million tonnes of bagasse was produced in 2005 </li></ul><ul><ul><li>Currently being burned in inefficient CHP plants, capable of producing 7.6 GW of electric capacity </li></ul></ul><ul><ul><li>With improved enzymatic hydrolysis systems, Brazil can theoretically produce 25 billion liters of EtOH from its bagasse </li></ul></ul><ul><ul><li>Even if only 30% of bagasse and cane waste is converted to EtOH, Brazil could still produce 6.6 billion additional liters of EtOH </li></ul></ul><ul><ul><li>Plus the lignin, which is left over after cellulose is converted to EtOH can provide all the electricity & steam requirements of sugarcane-to-EtOH plants </li></ul></ul>
  17. 17. For each tonne of sugar cane, only 6%-9% is in the form of sucrose. Rest: high moisture fermentable waste
  18. 18. Summary <ul><li>Using increased amounts of food crops and arable land to produce more ethanol will raise “Food vs. Fuel” debate to level that will render current ethanol production methods as “unsustainable”. </li></ul><ul><li>Subsidies in US are neither sustainable nor desirable. </li></ul><ul><li>Way forward is to use enzymatic hydrolysis to convert cellulosic wastes into ethanol at a reasonable cost. </li></ul><ul><li>Process produces lignin as a by-product, which can be used to produce power and steam, effectively allowing ag industry to “have his cake and eat it too”. </li></ul><ul><li>Farmers can earn extra income (some, not much) from selling their residues and wastes to enzymatic hydrolysis plants </li></ul>

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