Wednesday, November 21, 2007

[PBN] Progress on Cellulosic Ethanol


Breaking Ground on Cellulosic Ethanol

Commercial-scale plants are being built, but the fuel could still be too
expensive to compete with corn ethanol.

Range Fuels, a startup based in Broomfield, CO, has broken ground on
what could be the first plant to make commercial-scale quantities of
ethanol from cellulosic biomass. But the news isn't necessarily a signal
that ethanol from wood chips and grass is ready to compete with ethanol
from corn grain. Commercially viable cellulosic ethanol may still be
many years away.

The Range Fuels plant, to be located in southeast Georgia, could be
producing ethanol as soon as next year. It's being funded by the U.S.
Department of Energy (DOE) as part of the agency's effort to increase
the use of biofuels. The DOE is providing a total of $76 million to the
company for the construction of its new plant. At first, it will produce
20 million gallons, eventually increasing that amount to 100 million.

Almost all of the more than five billion gallons of ethanol produced in
the United States has been made from cornstarch. But ethanol from
cellulosic sources is an attractive alternative because it could
potentially require less fossil-fuel energy to produce, and its supplies
of biomass are vast. Indeed, if biofuels are ever to displace more than
about 10 percent of gasoline in the United States, cellulosic ethanol
will be essential. But making ethanol from cellulosic biomass is much
more difficult than making it from cornstarch. And the process for
converting biomass into biofuels has not been economically viable.

However, Range Fuels CEO Mitch Mandich says that the company can produce
ethanol at prices competitive with corn-based ethanol--even factoring in
the high capital costs associated with building a cellulosic-biofuel
plant. Range Fuels has developed a two-step thermochemical process for
converting wood chips and other types of biomass into a combination of
alcohols that include ethanol, methanol, propanol, and butanol. In the
first step, called gasification, heat, pressure, and steam convert
biomass into a mixture of primarily hydrogen and carbon monoxide. This
gas mixture, called syngas, is then exposed to catalysts that convert it
into alcohols. The process is similar to the Fischer-Tropsch process
that has been used for decades to convert coal into liquid fuels.

Mandich says that a combination of a new, proprietary catalyst and
improvements in the design and engineering of the plant can make the
process economical. Also, the company is locating the plant close to
supplies of wood chips, minimizing the transportation costs associated
with bulky biomass. In addition, the company plans to blend the ethanol
with gasoline and sell it locally to drivers, reducing the costs of
shipping the biofuel.

But since the company is depending heavily on funding from the federal
government to build the first plant, it is difficult to gauge whether
its process is actually commercially viable. Earlier this year, the DOE
announced funding for six cellulosic-ethanol plants. The first
installment of Range Fuels' award will be $50 million to build a
20-million-gallon-a-year plant. Mandich declines to give estimates on
the total cost of the plant. But the typical cost of corn-ethanol plants
is about $2 per gallon of capacity, or $40 million for a
20-million-gallon plant. Even if the cost of Range Fuels' plant is twice
as much as that of a conventional plant, or $80 million, the DOE is
providing the lion's share of the investment--money that Mandich says is
"very important" to the success of Range Fuels. Such a heavy dependence
on government financing, rather than on private investors, could suggest
that commercially viable cellulosic ethanol remains a good way off.

What's more, there are many unknowns about how well the thermochemical
process will work when it comes to making commercial-scale quantities.
Past attempts by scientists at the National Renewable Energy Laboratory
(NREL) to scale up thermochemical techniques showed that smaller systems
that work well face problems when processing chambers are bigger. Also,
plants operating at high temperatures and pressures tend to deteriorate
quickly, adding to costs. The latter concern might be less of a problem
now, however, says Steve Deutch, a senior research scientist at NREL,
because of the more-resilient materials.

Thermochemical approaches to making biofuels, such as Range Fuels'
approach, also face competition from new biological methods that use
enzymes and organisms to break down cellulose and produce ethanol.
Indeed, in September, Mascoma, based in Cambridge, MA, announced that it
would build a cellulosic plant in Monroe County, TN, that will make
ethanol from switchgrass. At this point, it's still not clear which
approach will work best, because no commercial-scale plant of either
type is operating. During the DOE's funding earlier this year, the
agency backed both thermochemical and biological approaches.

Ultimately, it's still too soon to predict how successful early attempts
like Range Fuels' will be. "It's hard to make money on the first one of
anything," says Lanny Schmidt, a professor of chemical engineering and
materials science at the University of Minnesota, who is also developing
thermochemical methods for making biofuel. However, if the first plant
works as well as Mandich hopes, the production of cellulosic fuel could
quickly accelerate.

"Who knows how the economics will work out?" Schmidt says. "You have to
build it and see what happens. It's a wise move on DOE's part to try
different technologies, because no one knows at this point who's going
to be the winner."

Check for earlier Pacific Biofuel posts:

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