C riley 2005

Biorefineries of the FutureEnvisioned by

DOE’s Biomass ProgramCDMA Fall 2005 Meeting

New Revenues from Sustainable Industrial Biotechnology and Renewables

September 28, 2005

Cynthia Riley, P. E. Lead Systems Integrator

Outline

• Why Biomass ?• OBP Overview

– Biomass Resources – Biorefinery Deployment Pathways– Sugar Lignin Conversion Platform– Systems Analysis incl. Life Cycle Assessment– Stage Gate Approach– Deployment Barriers

• Government Policy/Initiatives– Energy Policy Act of 2005 and OBP NOPI– Other Federal Agency Collaborations

While the growing need for sustainable electric power can be met by other renewables…

Biomass is our only renewable source of carbon-based fuels and chemicals

Unique Role of Biomass

Addressing National Needs•Energy Security and diversity

•Charts on needed capacity, high utilization rates, high imports, national feed stock availability•Availability and price of imports•Presently 1.6 billion gal of ethanol produced yearly, Replacement of MTBE with ethanol will double that amount (6 million gal of bio-diesel)•9,000 MW Biobased power today with an additional 1,000 MW from the Forest and Paper Products industry

•Environmental Concerns•Waste Utilization

•Livestock and poultry waste•MSW•Biogas/methane from land fills and the availability of landfills•Direct or co-firing with bio substantial reduction in greenhouse gasses

•Near zero CO2 emissions due to closed carbon cycle

•10 –20% reduction in NOx (gasification coal co-firing poplar)

•Reduce SO2 emissions by 80-97%

•Low sulfur fuel•Complement forest management practices

•Rural Economies•If $20/ton of biomass, increased biomass use represents over $4 billion per year in new revenues for rural economies. If two thirds of the idle land were used to grow energy cropos those 35 million acres could product between 15 and 35 billion gallons of ethanol each year. •Over the past 20 years, investors have installed 730 bioenergy electric generating facilities, and 58 ethanol production plants. Investments in the residue-based industry have created 66,000 jobs and a net annual income of $2 billion.

DELIVERED COST OF FUELS/ENERGY, $$/MMBTU:(mostly AEO 2001)Electricity Mix = 19.5 Coal = 1.23 Nat Gas = 4.05 Biomass (dry) = 2.81 Ethanol = 14.42 Gasoline = 9.45Oil = 7.44

The need for bioenergy and bioproducts is driven in large part due to increased growth in electric capacity requirements, increased reliance on imported oil, and the need to boost farm income and reverse the decline in the U.S. agriculture trade surplus.

Electric Power - EIA projects that about 1300 new power plants could be needed by 2020 to provide the estimated 1060 GW of electricity generating capacity that will need to be in place by that time. There is a major shortfall that needs to be filled. Current capacity levels are 754 MW. Cumulative planned additions through 2020 are only 14.8 GW where as cumulative planned retirements are 69.4 GW. (Source: EIA/Annual Energy Outlook Table A9) The Opportunity? There are over 370 GW of unplanned capacity which will need to be filled. There are significant opportunities for biomass power technologies to fill part of this gap.

Fuels and Products - New sources of domestic fuels are needed. The U.S. is becoming increasingly reliant on both imported crude oil and imported refined petroleum products. •Domestic crude oil production is projected to decrease from nearly 6 million barrels per day currently to about 5 million barrels per day in 2020. Crude oil imports are about 8.9 million barrels per day and account for about 60% of our crude oil supplies. This is projected to increase to over 12 million barrels per day by 2020 and account for 71% of our total crude oil supplies. •The U.S. is becoming increasingly reliant on imported refined petroleum products. Imports of refined petroleum products are projected to increase 6% annually from about 1.3 million barrels per day at present to over 4 million barrels per day in 2020. Compounding the problem of dependence upon imported petroleum products, is increasingly tight petroleum refinery capacity in the U.S. Refinery utilization rates have been above 91% each year since 1993 and are projected to remain between 92% and 95% over the next 20 years. (Source: EIA/Annual Energy Outlook Table A11 and Petroleum Supply Annual Table S1) The Opportunity? Increased production of domestic biofuels can help to offset a portion of crude oil, petrochemical, motor gasoline, and blending component imports.

Agriculture - Under current farm legislation and programs, assuming no supplemental payments, net cash farm income in 2001 is projected to be its lowest since 1994 and about $4 billion below the average of the 1990s.  This is due primarily to a continued rise in production expenses and a decline in government payments.  The U.S. agricultural trade balance with the rest of the world increased by almost $11 billion between 1990 and 1996, then declined by $14.4 billion between 1996 and 2001. This drop in the volume of exports was compounded by a sharp decline in domestic commodity prices. These two factors have combined to severely depress net farm cash incomes since 1997. (Source: Economic Research Service, USDA)The Opportunity? Increased demand for bioenergy and bioproduct feedstocks, in addition to ethanol, biopower, and other bioenergy/bioproduct manufacturing facilities in rural American can boost rural economies and exports.

Projected US Transportation Oil Use

U.S. Vehicles per Thousand People

0

225.000

450.000

675.000

900.000

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

US Vehicles per 1000 People (2002)

Historical U.S. Vehicles Compared to Vehicles per 1000 People around the World - 2002

Vehi

cles

per

100

0 Pe

ople

0

225.000

450.000

675.000

900.000

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

n

n

u

u

nuu

China

Africa

Developing Asia

Middle East

Central & S. AmericaFormer USSR

Eastern Europe

Western Europe

Industrialized Pacific

United States

Vehi

cles

per

100

0 Pe

ople

US Oil Peak

US Oil Peak – an analogy

OBP Mission And Strategic Goals

Mission: Partner with U.S. industry to foster research and development on advanced technologies that will transform our abundant biomass resources into clean, affordable, and domestically produced biofuels, biopower, and high-value bioproducts. The results will be economic development, energy supply options, and energy security.

Strategic Goals:1) Reduce dependence on foreign petroleum.2) Create a new, domestic bioindustry.

Unlike a Dept of defense program we are not procuring a product or capability for the federal governments sole use.Instead we are trying to interest commercial industry to invest in and commercialize technologies for new and existing markets.We have a strategy for this enabling position. In this case the government need to understand the drivers for industry, understand how they make funding decisions, and present the opportunity in the language they understand. Our pathways, milestones, and decision points are based on sustainability, economics, and return on investment.

New Domestic Bioindustry

ConversionProcesses

– Trees – Grasses– Agricultural Crops– Agricultural Residues– Forest Residues– Animal Wastes– Municipal Solid Waste

PRODUCTSFuels:– Ethanol– Renewable Diesel –Renewable Gasoline– Hydrogen

Power:– Electricity– Heat (co-generation)

Chemicals– Plastics– Solvents– Chemical Intermediates– Phenolics– Adhesives– Furfural– Fatty acids– Acetic Acid– Carbon black– Paints– Dyes, Pigments, and Ink– Detergents– Etc.

Food and Feed

- Enzymatic Fermentation- Gas/liquid Fermentation- Acid Hydrolysis/Fermentation- Gasification- Pyrolysis- Combustion- Co-firing

BiomassFeedstock

Replaced corn (which is ok to) with stover and oil refinery with an ethanol plant. Biorefineries could potentially use complex processing strategies to efficiently produce a diverse and flexible mix of conventional products, fuels, electricity, heat, chemicals, and material products from multiple biomass feedstocks. DOE is working to evaluate and develop the biorefinery concept into real world models. Biorefineries in a simple form are present today in some agricultural and forest products facilities. These systems can be improved through better utilization of waste products and by applying the lessons learned from existing facilities to other comparable situations. These facilities both convert wastes to fuel material, but also upgrade fuel materials to product raw materials. These industries also produce by-products, which are commonly under-utilized or treated as waste. Finding higher value uses of these products as fuel and improving the processing efficiency of existing facilities is a primary goal of the BioInitiative.

Cargill Dow is constructing a biorefinery to produce PLA from corn stover. The facility was dedicated earlier this month (April 2002) in Blair, NE. The facility will produce more than 300 million pounds (140,000 metric tons) of PLA annually and employ up to 100 workers. The plant will requires 40,000 bushels of locally grown corn a day to meet global production demands. In 2000, Cargill Dow Polymers received $2.2 million under the BioInititative for its $4.6 million project “Bioenergy for Polylactic Acid, Ethanol, and Power”. •Development of a process technology for the fermentation of corn fiber and corn stover to lactic acid for conversion to polylactic acid (PLA); ethanol; and other products. •PLA has promising applications in food packaging; disposable products; and fibers for clothing, carpeting, and other applications. Future applications could include injection blow molded bottles, foams, emulsions, and chemical intermediaries. •The versatility and anticipated price and performance of PLA will enable it to displace a significant volume of fossil-fuel-based polymers in the future. Projections include

•Sales volume of 8 billion lbs/year by 2020 (Currently U.S. sales volume for plastics is about 70 billion lbs/year)•Reduction of 10 million tons of CO2 emissions by 2020 (due to displacement of fossil-fuel based polymers).

•Ultimately, other sugar sources, such as residues from wheat and sugar beet production, will be used by Cargill Dow technology.

SawdustWood wasteForest thinnings

Corn stoverCereal strawSugarcane bagasseAnimal waste

SwitchgrassHybrid poplarWillow

Wood and Residues

Agricultural Residues

Energy Crops

Biomass Resources and Issues•Quantity Available

•Cost –Production

–Collection and Transportation–Integrated Supply System

•Sustainability–Land, Air and Water Resources

•Quality –Composition

–Ease of Conversion

CropsCornSoybeansWheatBarleySugar Cane

Point 3 areas with 1 example of each

Waste – sawdust

Ag residues – corn stover

Dedicated crops - switchgrass

Biomass Resource Base

DOE/USDA Billion Ton

Vision Paper• Land resources of the U.S. can

sustainably supply more than 1.3 billion dry tons annually and still continue to meet food, feed, and export demands

• Realizing this potential will require R&D, policy change, stakeholder involvement

• Required changes are not unreasonable given current trends

• Should be sufficient to replace 30% of current US petroleum requirements

Forest Resource Base

Potential nearly 370 million tons/year

0

20

40

60

80

13% 5% 13% 3% 14%

19%

20%

13%

11

2216

16

8

15

28

8

11

49

9

32M

illio

n dr

y to

ns p

er y

ear

Existing useUnexploitedGrowth

Agricultural Resource Base

High crop yield increase

Land use change with perennial crops

High crop yield increase

No land use changes

0 250 500 7501000

0

0

156

377

75

75

75

75

54

95

54

56

250

409

279

425

Million dry tons per yearCrop residues Grain-ethanol Process residues/wastesPerennial crops

Potential exceeds 930 million tons/year

Biomass Conversion Options(OBP current emphasis shown)

Fuels

Chemicals

Materials

Electricity

Heat

Bio-gas

Synthesis Gas

Sugars and Lignin

Bio-Oil

Carbon-RichChains

Plant Products

Hydrolysis

Acids, enzymesGasification

High heat, low oxygen

Digestion

Bacteria

Pyrolysis

Catalysis, heat, pressure

Extraction

Mechanical, chemical

Separation

Mechanical, chemical

Feedstock production,collection, handling & preparation

Biorefinery Deployment Pathways

Grain Wet Mill

Grain Dry Mill

Oil Seeds and Crops

Pulp and Paper Mill

Forest Products Mill

Agricultural Residues

Perennial Grasses

Time

Woody Energy Crops

Pathways are tied to the resource base and existing industry market segments where possible

Lign

ocel

lulo

sic F

S

Grain Dry Mill Pathway

Grain Dry Mill Biorefinery Pathway

Lignin: 15-25% Complex network of

aromatic compounds “New clean coal” High energy content Treasure trove of

novel chemistry

Hemicellulose: 23-32% A collection of unusual 5- and

6-carbon sugars linked together in long chains Xylose is 2nd most abundant

sugar in biosphere

Cellulose: 38-50% Long chains of glucose Most abundant form of

carbon in biosphere

3 Major Components of Lignocellulosic Biomass

Hydrolysis of Carbohydrates

100 g rawsolids (dry)feedstock

27 g residuesolids (dry)

lignin coproduct

60 g pretreatedsolids (dry)

processintermediate

Pretreatment Enzymatic Hydrolysis

Not All Biomass is Created Equal

0%

25%

50%

75%

100%

poplar sawdustcorn stover (fresh)bagasse (fresh)

glucanxylanmannanarabinangalactanligninextractivesashUronic acidsacetylsoilchlorophyllprotein

Products from SugarsMajor Products in Existing Projects• Ethanol (many)• Lactic Acid (Natureworks)• 1,3 propanediol (DuPont)• Polyols ( NCGA/ADM)

Additional Building Blocks from “Top Ten” report• Succinic, fumaric, malic acids• 2, 5 furan dicarboxylic acid• 3 hydroxy propionic acid• Aspartic, glucaric, glutamic, itaconic, levulinic acids• Glycerol• Sorbitol• Xylitol, Arabinitol

Products from Lignin Intermediates

Carbohydrate Hydrolysis

Lignin Intermediates

Combustion

Gasification

Depolymerization Hydroprocessing

Recovery and Upgrading

SugarsPower,Heat

Syngas

Liquid Fuels

Lignin Products

Low Molecular Wt. Products•Simple aromatics•Quinones•Hydroxylated aromatics•Aromatic aldehydes•Aromatic acids and diacids•Aliphatic acids

High Molecular Wt. Products•Carbon fiber•Polymer fillers•Thermoset resins•Wood adhesives and preservatives

Residual solids tocombustion orgasification

Residual solids tocombustion orgasification

Pyrolysis Bio-oil/char

Estimating Competitive Advantage and Environmental Characteristics of

Technologies and Systems

Conceptual Design

Material and Energy Balances

Capital and Operating Cost Estimates

EconomicAnalysis

EnvironmentalAnalysis(Life Cycle Assessments)

R,D&D

Level of rigor depends on stage

Systems Analysis

Conceptual process engineering design and techno-economic analysis is used extensively in the Program to carry out the detailed technical and financial assessments that are integral parts of the Stage Gate process. We practice a graded approach to these assessments meaning that as the projects move along the development pathway, the assessments become more robust and hopefully, more accurate. The Program has developed a series of detailed process models and assessment tools for the main process concepts under development. These tools are used where appropriate. However, when new ideas or process concepts are being considered, these models and tools must be developed. The information below describes the level of robustness appropriate for the assessments at each gate in the process.

Normalized Costs by Area (Corn Stover to Ethanol Case)

Sustainable? Check the Life Cycle

Feedstock Production

Feedstock Transport

Feedstock Conversion

Fuel Distribution

Ethanol

Gasoline

Corn Stover Hydrolysis andFermentation

One Mile Traveled

Crude Oil Production

Crude Transport by barge, pipeline

Oil Refiningto Gasoline

Biomass Transport

LCA Energy & Climate Benefitsfor Corn Stover to Ethanol & Power

Reduce oil consumption by 95%

Reduce greenhouse gas emissions by 106%

Synergies of Integrating Technologies (Mature Technology Cases)

OBP Stage Gate Process

Includes early stage, high risk government-funded technology R&D to insure alignment with industry needs for later stage cooperative development and commercialization.

“Industry-driven

science”

1. Strategic Fit (look to OBP MYTP, EERE Plans)2. Market/Customer3. Technical Feasibility and Risks4. Competitive Advantage5. Environmental, Legal, Regulatory Compliance6. Critical Success Factors and Showstoppers 7. Plan to Proceed

Reviewers include Industry and Peers, DOE

Gate Decision Criteria: 7 Dimensions

What we have found in our implementation is that Emphasis on identifying success factors and showstoppers has enabled us to identify what is most important and prioritize our work.

Helps define interfaces of Public, Private, and Joint Public-Private research, development, demonstration and deployment activities

OBP Strategy:• Core pre-competitive research to “enable” expanded bioindustry• D, D & D through Public-Private Partnerships

What does OBP stage gate do?

Deployment Barriers

BasicR&D

Technology Development

Demonstration Permitting &Engineering

Proof of Concept Construction Operation

Com

mis

sion

ing

First Commercial Plant Mec

hani

cal c

ompl

etio

n

Atta

inm

ent o

f per

form

ance

crit

eria

Del

ays

in a

ttain

men

t of

perf

orm

ance

crit

eria

Operation

80% / 20% 50% / 50% 20% / 80% Loan Guarantee Program/Risk Mitigation Pool

Dev

elop

men

t Cos

ts

100% / 0%

Current BiorefineryProjects

Procurement

Private Cost-Share:OBP Cost-Share:Project Timeline:

Development Stages:Unexpected Cost:

Risk Mitigation:

Potential FutureDOE/OBP Deployment Efforts

(to overcome barriers)

Barrier Solution Arena

Market Risk

Off-Take Agreements – Identify and secure off-take markets for biobased technology Policy/Legislation/

Market Risk Mandates – Quotas to purchase biobased technology Policy/LegislationMarket Risk

Incentives – Financial incentives to purchase biobased technology Policy/Legislation

Core Fundamental R&D – National Labs – no cost share OBP (+ other gov’t)

Technical Risk

Applied Technology R&D Funding – 20% cost-share OBP (+ other gov’t)

Technical Risk

Integrated Bench/Pilot-Scale R&D Funding – 50% cost-share (Industry-led) OBP (+ other gov’t)Technical

RiskCommercially Viable Demonstrations – 80% cost-share of demo proving market viability OBP

Commercial Risk

Loan Guarantee Program – Finite guarantee program mitigating construction & start-up risk

Policy/LegislationDOE HQCommercial

Risk Risk Mitigation Pool – Resources to address corrective actions needed to deploy new technology in later stage of construction

Policy/LegislationDOE HQ

Deployment Barriers and Solutions

Biomass Highlights in EPAct of 2005(Authorization, not Appropriation)

• Renewable Fuel Standard (Sec 1501)– 4 Billion gallons by 2006– 8 Billion gallons by 2012– Ethanol, biodiesel, anything renewable– Cellulosic or waste derived ethanol counts 2.5X grain ethanol– 250 Million gallons cellulosic ethanol by2013

• Bioenergy Progam (Sec 932)– Fuels and energy from lignocellulosic biomass– Technologies based on enzyme-based processing systems– Cost-effective bioproducts – Integrated Biorefinery Projects (~ 50% of $, more later)

• Loan Guarantee Programs (Sec 1511, 1516, 1703)• Update of Biomass R&D Initiative of 2000 (Sec 306)• Numerous other related RD&D, grant and incentive programs and

reports from DOE, USDA, EPA Policy

Notice of Program Interest (NOPI)

• Section 932 (d) of EPAct of 2005 requires a solicitation of proposals for integrated biorefinery demonstration projects within six months of the signing of the Act.

• OBP has a NOPI open until Nov 3rd looking for input on what the solicitation should cover.

• “Demonstration of Integrated Biorefinery Operations for Producing Biofuels and Other Products”– Uses lignocellulosic or natural oil feedstocks– Produces a biofuel and one or more chemical or

chemical intermediate coproducts• Anticipate a Funding Opportunity Announcement

in Jan ‘06 – depending on Gov’t budget process

Federal Biomass Agency Collaborations

Biomass Research and Development Act of 2000 Biomass R&D Technical Advisory Committee Biomass R&D Board

(DOE/USDA/EPA/NSF/DOI/OSTP/OFEE)

Farm Bill 2002, Title IX Federal Procurement of Biobased Products (Section 9002) Renewable Energy Systems and Energy Efficiency

Improvements (Section 9006) Biomass Research and Development (Section 9008) Continuation of the Bioenergy Program (Section 9010)

Healthy Forest Restoration Act of 2003, Title II

Memorandum of Understanding (MOU) for Woody Biomass Utilization (DOE/USDA/DOI)

MOU for Biomass to Hydrogen (DOE/USDA)

Additional Information

• Biobased Products and Bioenergy Initiative (DOE & USDA)• www.bioproducts-bioenergy.gov

• DOE Biomass Program• www.eere.energy.gov/biomass/

Thank You

How do we get from here to there? Transition Modeling Approach

Collaborations with Starch Ethanol Industry

• Biorefinery Projects– Broin, Abengoa, ADM

• Bridge to the Corn Ethanol– Purdue / Aventine wet mill– Fiber conversion

• Others– Cargill, Amoco, New Energy

Technology DemonstrationRisk ReductionValue Addition

Co-location studies we are currently involved with or have been in the past. Corn fiber conversion and demonstration at semi-works scale in Pekin, IL via subcontract. ADM is working towards this also (picture is PT tube reactor at Aventine). Dry mill co-location is collaboration w/ USDA to investigate economics for different levels of co-location and integration. Power plant co-location studies complete.

DuPont-NREL Partnership: Integrated Corn Biorefinery

• 4 year CRADA• Goal:

Develop a Process Design Package for farmers to produce fuels, chemicals and power from entire corn plant

• Economic synergies being realized

IntegratedCorn

Biorefinery(ICBR)

corn

corn stoverpower

bioethanol

chemicalsSoronaTM

building blockfor SoronaTM polyester

Syngas Liquid Fuels and Chemicals from:BL Gasifier, andWood Residue Gasifier

Pulp Manufacturing

Extract portion of the hemicelluloseConvert the extract to ethanol and chemicals

Black Liquor

& Residuals

Steam,Power &Chemicals

Forest Biorefinery Example

courtesy of: Del Raymond (Weyerhaeuser)

Cellulose still used to manufacture paper

OMB R&D Investment Criteria(select few)

Thermochemical Platform

Sugar Platform

BiomassCombined Heat & Power

Residues

Clean Gas

Conditioned Gasor Bio-oils

Sugar Feedstocks and

Lignin Intermediates

Advanced Biomass R&D

Systems Integration

Fuels, Chemicals, Materials & Intermediates

Integrated Carbon-basedRefineries

Fossil Resources

Intermediates

DirectBioconversion

Products

DirectThermochemical

Products

Challenges – Bioconversion• Pretreatment

– Reduce cost of producing sugars for large volume, low cost commodity fuels and chemicals.

• Catalysts – Better chemical and biological catalysts needed for hydrolysis,

sugar utilization, lignin processing. • Separations

– Improvements needed in all areas for efficiency and valuable product recovery.

• Lower Capital and Operating Costs – Handling of solids and concentrated slurries, and low cost

materials of construction. • Integration of systems for chemicals, materials, fuels and

power

• 2nd Generation Dry Mill Biorefinery - Broin and Associates, Inc. is enhancing the economics of existing ethanol dry mills by increasing ethanol yields and creating additional co-products. Broin estimates that its process will increase ethanol output at existing plants by approximately 10%-20% by 2006.

• New Biorefinery Platform Intermediate - Cargill, Inc. is developing a biobased technology to produce a wide variety of products based on 3-HP acid, produced by fermentation of carbohydrates.

• Integrated Corn-Based Bio Refinery (ICBR) – DuPont is developing is developing technology to convert corn and stover into fermentable sugars for production of value-added chemicals.

OMB R&D Investment Criteria(select few)

• Making Industrial Biorefining Happen - Cargill Dow LLC is developing process technology and sustainable agricultural systems to economically produce sugars and chemicals such as lactic acid and ethanol.

• Advanced Biorefining of Distiller's Grain and Corn Stover Blends - Abengoa Bioenergy Corporation is developing a novel biomass technology to use distiller's grain and corn stover blends to achieve significantly higher ethanol yields while maintaining the protein feed value.

• Separation of Corn Fiber and Conversion to Fuels and Chemicals - The National Corn Growers Association, with ADM and others, is developing an integrated process for recovery of the hemicellulose, protein, and oil components from corn fiber for conversion into value-added products.

OMB R&D Investment Criteria(select few)