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1
…mostly convenient truths
Vinod KhoslaKhosla VenturesSeptember 2007
from a technology optimist
2
Agenda
• Why
• Coal/CSP
• Biofuels
17
IPCC www.conservationcenter.org/assets/docs/Global%20Warming.PDF
22
Defeatism or Action?
We insure our homes
Why not our planet?
23
Good News Assertions
• Technical solutions exist• Oil Replacement• Coal Power replacement
• Laser Focus: Scaling & Economics• Feedstock scale• Proof for capital markets
• Policy not Technology Problem
24
“First they ignore you, then they laugh at you, then they fight you, then you win.”
Mahatma Gandhi
We are here
26
Conventional Wisdom is Wrong
• Oil Dependence• Food vs Fuel • CAFÉ is costly
• Electric Power : Coal is the only option
• Green means Lower Economic Growth• Higher cost than fossil• Lower economic growth, fewer jobs
27
Un-Conventional Wisdom
• Oil: Replaceable with cheaper alternatives
• Coal: Uneconomic risk adjusted bet
• Efficiency: Need business models
• Lower Cost, More Jobs, More Googles
28
Scale of Resistance
• Saudi Arabia: $1 trillion for each $4bbl
• Exxon, Chevron, Shell, BP…
• Coal: Peabody
29
Cardinal Rules
• Land efficiency!
• Cost (plug-ins, hydrogen)
• Pragmatics: PUG power vs Greenies
• Regulation permanent & Subsidies transient
• Economics & Capital Formation: Business
30
Source: NREL, USDA, NRCS, EIA
Renewable Energy USA!
West, SouthWest have solar…
Texas has wind & solar …
Southeast has biomass!
Rockies have geothermal!
Midwest has corn/wheat belt!
32
Which Gamble?
…. higher startup costs, lower eventual costs?
…. more jobs, more Googles or more of the same?
…. competition for energy or safe oil monopoly?
…. lower power costs or lower healthcare costs?
…. planet insurance or catastropic relocations?
…. terrorism avoidance or military expenses?
…. energy insurance or Mideast dependence?
34
Societal Cost of Hydrocarbons
Source: Coghill Capital ManagementSource: Coghill Capital Management
US Related Data:
• Air, water, and soil pollution from electric generation cost $14.8-90.3 billion – each year!
• 1 gallon of spilled oil can contaminate 1 million gallons of water!
• Oil pollution from automobiles causes $4.6 billion in damages to crops, rivers, forests, lakes etc
35
Source: Coghill Capital Management Source: Coghill Capital Management
Societal Cost of Hydrocarbons (Continued)
Military Costs:
• Strategic Military Bases ($49bn)
• Oil and Gas supply route security ($20bn)
• Strategic Petroleum Reserves ($30bn)
• Iraq ($1 trillion! – or $275mn per day!)
36
Source: Coghill Capital Management Source: Coghill Capital Management
Societal Cost of Hydrocarbons (Continued)
Health Costs:
• 760,000 Chinese die each year due to air and water pollution ($99bn)!
• Lung disease and asthma caused by pollution ($16.1bn)!
• Lead, Mercury, and Arsenic poisoning from coal plants is linked to mental retardation, learning disabilities, premature mortality, and to some autism cases ($88-640bn)
37
What Are Fossil Fuels’ Externalities?
Source: Coghill Capital Management Source: Coghill Capital Management
Fossil Fuel Costs (Billions $USD)
Low Medium High
Military Base and Supply Route Security
$49.00 $75.00 $100.00
Environmental Monitoring and Clean Up
$14.80 $53.00 $93.30
Healthcare Treatment and Mortality from Pollution
$24.03 $237.00 $450.00
Total Fossil Fuel Costs $88.10 $365.00 $640.30
38
What Are Fossil Fuels’ Externalities? (continued)
Source: Coghill Capital ManagementSource: Coghill Capital Management
The Effect on Consumers
2006 Ave. Cost
Mid-Societal Cost
Total Cost/ UnitConsumer Increase
Coal (Short ton)
$20.49 $93.83 $114.32$0.0454 c/kWh
Crude Oil (Barrel)
$60 $26.68 $86.68$1.54 per
gallon
Natural Gas (mmcf)
$6.80 $2.74 $9.54$0.0235 c/kWh
Mid-Range societal cost increases (generation costs only – no distribution or retail included)
• Coal fired electric generation goes from $0.026/kWh to $0.0714/kWh• Natural gas electric generation goes from $0.0615/kWh to $0.0851kWh• Regular gallon of unleaded gasoline goes from $3.46 to $5.01 per gallon
39
…or get to work
42
MascomaVerenium
RangeCoskata
AltraCilion
Hawaii BioEthos
ToolsSolar
NaturalGas
MechanicalEfficiency
ElectricalEfficiency
CellulosicFuture Fuels
Plastics
Water
Materials
NanostellarCodon
Praj
QuosNanoH2o
SegetiseChromics
Calera
StionAusra
AltarockInfinia
Coal
EfficiencyOil
TransonicStreamline
Living Homes
GIVSeeo
Newco1
Great PointEnergy
Corn/Sugar Fuels
Wind
BuildingMaterials
Geothermal
LS9Gevo
AmyrisLanzaTech
Khosla Ventures Renewable Portfolio
51
Solar Flare?
Coal Clampdown?
52
IEA WEO 2004 Courtesy Steve Koonin, BP
1971 2002 2030
Electricity = biggest and fastest growing carbon problem
55
Annual primary energy demand 1971-2003
Source IEA, 2004 (Exclude biomass)
FastestGrowing
60
Coal: Ready for Updating…
Coal Plant Age
8
16
34
32
9
1
8
24
58
90
99
1
50-100
40-50
30-40
20-30
10-20
0-10
Age
(ye
ars)
Percentage
Cummulative %
%
61
PUG Power (utility grade power)
• Cost Effective in $/kwhr
• Reliable power: high uptime & predictable…not just when wind is blowing
• Dispatchable power: available when customers demand power
• Peak & Base load power: base power at base price; peak load power at peak price (12pm-8pm);no power at low load (12am-6am?)
• Capacity factor: (ideally 60%); predictable operation time daily
62
…alternatives?
…photovoltaic: expensive & not dispatchable
…wind: not utility grade
…geothermal: not enough hydrothermal (EGS?)
…nuclear: who will bear risk?
…clean coal: far away & too uncertain
Where should Duke Energy
commit $10b in
2007-08?
63
Standard and Poor’s AssessmentPulverized
CoalGas
(CCCT)Eastern
IGCCWind Nuclear
Capital Cost ($/kW) 2438 700 2795 1700 4000
Direct Generation Cost (cents/kWh)
5.8 6.8 6.8 7.1 8.9
CCS vs. Carbon Credits
Cost W/CCS (cents/kWh) 12.0 9.6 10.2 7.1 8.9-9.8
Cost w/CO2 Credits ($10-$30 per ton)
6.2-7.9 7-7.7 7.1-8.7 7.1 8.9-9.8
Source: Jim HardingSource: Jim Harding
Capital Costs:Capital Costs: Costs of constructing the plant Costs of constructing the plantDirect Generation Cost:Direct Generation Cost: Costs of generating electricity Costs of generating electricity
Cost W/CCS:Cost W/CCS: Direct Generation Cost + cost of Carbon Capture and Storage – total cost of Direct Generation Cost + cost of Carbon Capture and Storage – total cost of electricity generation with CCSelectricity generation with CCS
Cost w/ CO2 Credits ($10-$30 per ton):Cost w/ CO2 Credits ($10-$30 per ton): Direct Generation Cost + cost of CO2 credits - – Direct Generation Cost + cost of CO2 credits - – total cost of electricity generation with Carbon Creditstotal cost of electricity generation with Carbon Credits
65
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1970 1975 1980 1985 1990 1995 2000
Date of first operation
Inst
alle
d c
apit
al c
osts
in 2
004
$/k
W
Shoreham
Nine Mile Point 2 Watts Bar 1
Comanche Peak 2
Copyright Jonathan G. Koomey 2007
Comanche Peak 1
Nuclear Plants Are Expensive!
Koomey, Jonathan, and Nate Hultman. 2007. “A Reactor-Level Analysis of Busbar Costs for US nuclear plants,” 1970-2005, forthcoming in Energy Policy
Source: Jim HardingSource: Jim Harding
70
Coal Issues
• Availability
• Cost
• Transportation
• Emissions Costs
75
Carbon Pricing Hurts Coal
Steve Clemmer, Union of Concerned Scientists, “Gambling with Coal”, 9/06Steve Clemmer, Union of Concerned Scientists, “Gambling with Coal”, 9/06
One ton of coal produces 3 tons of Carbon Dioxide
Effective cost of coal = 3-6 X greater
77
Plant Costs Continue to Rise!
• “the price of a coal-fired power plant has risen 25 percent to 30 percent.”
Source: NY Times
78
Coal Capital Costs
80
Is Carbon (CO2) risk being ignored?
83
Carbon Dioxide prices Pulverized Coal Uneconomic
Source: EIA, “NEMS EMM Factors for AEO06,” spreadsheet, 2006, and Synapse, 2006. The costs are representative of a new coal plant built in the Midwest in 2015.
High$30/t, $77/mwh
Mid$19/t, $66/mwhLow
$8/t, $55/mwh
20
40
60
80
100
10 20 30 40 50
Cost of CO2 ($/ton)
Lev
eliz
ed C
ost
$/m
wh
86
The Problems with CCSThe Problems with CCS
• The “Wedge Theory” from Princeton professors Stephen Pacala and Robert Socolow suggests that burrying 1b tons of Carbon by 2050 could provide approximately 1/7th of the total emissions we need in the period
• 1B Tons of Carbon = 3.6B Tons of CO2 (greater than 2X the total CO2 emissions from coal plants today)
• “Lynn Orr, a petroleum engineer who directs the Global Climate and Energy Project at Stanford University, estimates that to store a billion tons of carbon underground, the total inflow of CO2 would be roughly equal to the total outflow of oil and gas today.”
• “A new study from MIT estimates that deploying carbon capture and storage will raise the wholesale price of electricity from new coal plants by 50 percent (this may be a conservative estimate--other studies have put the price nearly twice as high).”
• “It would cost $4 billion to eliminate the carbon dioxide generated by power plants in the Carolinas” (The News Observer, March 27, 2007)
If we can’t s
equestrate carbon
where it is produced, how for
do we transport?
Carbon volume = oil volume!
90
IGCC+CCS= Risk, risk & more risk!
• Cost of IGCC & PC plant construction• Technology risk• PC & IGCC: Cost of coal & pollution regulations
• Coast of coal• Cost of transportation• Cost of carbon dioxide
• IGCC+CCS• Cost of transporting liquid/high pressure carbon dioxide• Cost of sequestration• Who will provide insurance against release?
• Coal Externalities• health care liability• Sludge & mercury liability• Carbon dioxide liability (per Supreme court decision)
91
Who wants to be a millionaire?
Knowing each plant =600,000 cars of liability
(Starting with $150 billion)
Who
se $
150
billi
on?
92
COAL = FAST FOOD
CHEAP, PLENTIFUL, ACCESSIBLE It provides about 50% of the electricity in the US The vast majority of reserves are mined within the US Has the potential to supply our electrical needs for at
least 100 years (though the number may vary)
HAZARDOUS TO HEALTH Significant environmental problems Damage to land from mining, water from various sources (acid runoff, heavy metals), and air (single largest contributor to greenhouse gas emissions)
94
The Face (Externalities?) of Coal
Source: “Concentrated Solar Power Potential in China”, Deepak Concentrated Solar Power Potential in China”, Deepak Boggavarapu PhD
China GDP growth = China environmental damage?
& health care costs?
95
• Typical Coal Plant: – 3,700,000 tons of Carbon Dioxide– 10,200 tons of nitrogen oxide (NOx),– 10,000 tons of sulfur dioxide– 720 tons of carbon monoxide– 220 tons of hydrocarbons, volatile
organic compounds (VOC)– 225 pounds of arsenic– 170 pounds of mercury– 114 pounds of lead– Up to 2.6 tons of uranium and 6.4 tons of
thorium
Environmental impacts of coal power: pollution
96
The Effects of Coal: Raw Numbers
• Typical 500-MW coal plant: more than 125,000 tons of ash and 193,000 tons of sludge
• Toxic waste -- including arsenic, mercury, chromium, and cadmium
• A 1,000 MW coal-fired plant : 5.2 tons of per year of Uranium and 12.8 tons per year of Thorium
• 3X as much sludge as all municipal waste in US
Source: ORNL, UCS
Coal is an environmental
menace!
98
Air pollution from power plants causes deaths
Source: Clean Air Task Force, June 2004.
Deaths per 100,000 adults range from <1 (blue) to >30 (pink)
…guess where all the coal power plants are?
102
“Nobody in their right mind should be building a coal plant”
• "It's the definition of financial insanity to invest in a new coal plant," agrees Marc Brammer, head of research for consulting firm Innovest Strategic Value Advisors.
• "It's very likely the investment decisions many are making,
to build long-lived high-carbon-dioxide-emitting power plants, are decisions we'll all live to regret," warns Vice-President Gary Serio of Entergy Corp. (ETR ), which owns several coal plants.
• Those companies "could be really jeopardizing their stockholders' investment," warns one utility executive.
• “Sue us so I can do my job,” pleaded a high-ranking EPA official. “My boss doesn’t believe that enforcing the Clean Air Act is a priority,”
Source: Business Week
Coal Plants are not
economically logical g
iven
the risks!
109
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
2000 2005 2010 2015 2020
Me
ga
wa
tts
*Projected development assuming states achieve annual renewable energy targets.**If achieved, IA, IL, and ME goals would support an additional 4,400 MW by 2020.
HI
CA
NV
IA & WI
NJ
CT & RIMAME
MN
AZ & NM
NY
TX
New renewable energy supported:- 46,270 MW by 2020**
Equivalent to:- 17.7 million less cars
MD
CO & MT
PADC & DE
WA
Renewable Energy from State Standards*BIG MARKET: BIG CARROT
111
Good news on Alternatives
Solar ThermalSolar Thermal
112
…solar thermal (CSP)
116
Carlo Rubbia, SolarPACES2006 earthobservatory.nasa.gov
Scalability : Land For All Electricity
All Worldwide ElectricityAll Worldwide Electricity
117
USA… Looking Good
Creating a U.S. Market for Solar Energy, by Rhone Resch, President of the Solar Energy Industries Association.
Germany: 57% world PV US: 7% world PV
118
Area requirements to power the USA
(150 km)2 of Nevada covered
with 15% efficient solar cells couldprovide the USA with electricity
J.A. Turner, Science 285 1999, p. 687.
½ as much land with 30% efficient
turbines
120
Technologies1st
Generation2nd
Generation3rd
Generation4th
Generation
Si a-Si, CdTe, CIGS MOS
[15- 18%] [7-9%] [10-12%] [25- 30%]
Sharp, Q-Cells, Kyocera, Sanyo,
Mitsubishi, SunPower
Schott Solar, EPV, Fuji Electric,
Unisolar
Shell, Honda, Daystar, First
Solar, Nanosolar, Miasole, Heliovolt
Stion
•Crystalline ingots, wafers•Diffused and screen printed unit cells•Assembled modules
•PECVD deposited•Silicon multi-junction thin films on flexible or rigid substrates
•Sputtered or evaporated reactive compounds•Complex, esoteric and hazardous
•Thin films with straightforward processing•Readily available, low cost and environmentally benign•Fully integrated
121
Source: Sunpower
123
Photovoltaic Cost Trajectory
• Module Prices Falling
• System Share Of Cost Is Growing
• With zero cost modules Systems at $2/Wp
• Annual capacity equals China’s weekly needs
IEA http://www.iea-pvps.org/products/download/rep1_15.pdf
124
Costs Including Storage• PV @ $3-5/Wp
• Total ≈$30/Wp for a 60% capacity factor
• Thermal CSP $3-7/W for 60% CF
• PV @ 22.4 cents kW/h
• Current Thermal CSP at 16 cents kW/h
– A 700MW plant means 7.1 cents kW/h!
PV cost reduced from http://www.iea-pvps.org/products/download/rep1_15.pdf , other reports PV storage: ½ reported battery cost CSP: Black & Veatch, CA study 4/06
Solar therm
al is th
e key
to turning of coal
129
Three Gorges Dam
~18 GW generating capacity >25 years planning and construction~1.3 million people displaced~630 sq km reservoir>$50B estimated actual construction cost
CSP would generate 1.7 times the powerin same land area at significantly lower capital cost and faster construction time.
Source: “Concentrated Solar Power Potential in China”, Deepak Concentrated Solar Power Potential in China”, Deepak Boggavarapu PhD
130
Hoover
CLFR plant with same annual power Output as Hoover Dam
131
Ausra CSP vs Hydro
• Glen Canyon
• Built 1956, $300M
• $2.222B in 2006 $
• 3,208,591 MWh ’05
• $693/MWha
• Ausra CSP in US SW
• 500MW with storage
• $1.802B in 2006 $
• 3,209,038 MWh/yr
• $562/MWha
133
The CSP Technologies
TowersTroughs Dishes
137
CLFR
139
Ausra CLFRBenefits of CLFR:
• Sturdy, low cost construction• Primary components steel, glass, water• Efficient use of land• Air cooled; minimal water use• No toxic materials• Easily protected from hail and dust storms• Can by hybridized with fossil fuel plants
141Copyright © Ausra, Inc. 2007
Solar Thermal Power Plant
280C50bar
Up to 20 hours energy storage
Increase capacity factor by building largersolar field. Basic 180MW plant is 640 acres
145
To Storage
Direct Solar
Storage For Time-shifting
From StorageDirect Solar
Direct SolarFrom
Storage
Time of Day
Pla
nt
Outp
ut
6 AM 9 AM 12 PM 3 PM 6 PM 9 PM
8 hour peak load vs. 5 hour peak sunlight6 hours of storage increases revenue 50%
Shift Output To Peak Hours
147
Solar Baseload PricingSolar Baseload Pricing
Solar Peaking PricingSolar Peaking Pricing
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
148
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CTSolar Baseload PricingSolar Baseload Pricing
Solar Peaking PricingSolar Peaking Pricing
Trough 2007
DPT 2007Trough 2011
DPT 2011VK 2011
149
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CT
Cost of Power by Type
020406080
100120140160180200
0 10 20 30 40 50
$/t CO2
$/M
Wh
Gas CC
Nuclear
Coal IGCC
Coal PC
Coal IGCC + CCS
Gas CTSolar Baseload PricingSolar Baseload Pricing
Solar Peaking PricingSolar Peaking Pricing Trough 2007
DPT 2007Trough 2011
DPT 2011VK 2011
Net Impact of Time-Of-Day(Including Thermal Storage)
151
Poised for Breakaway Growth?
• Crossing Gas Prices
• Meeting IGCC Prices (2008-09)
• Meeting Pulverized Coal Prices (2008-09)
• Large Capital Flows Will Follow Costs
153153
Power to the Nation: HVDC
156
… with positive local impact
• Each 100mw of CSP: 94 permanent jobs,
• versus 56 for combined cycle gas plants
• Each 100mw of CSP: $628 million gross
state output
• compared to $64m for the combined cycle plant
Source: Black & Veatch, 3/06
158
Geothermal Potential
Source: Matthew Clyne, Black Mountain Technology, MIT
Geothermal Potential in the United States
10¢ kW/hr 1,251,351 MWe
12¢ kW/hr 7,188,200 MWe
159
EGS TechnologyHow it works
160
…or get to work
161
Biofuels Think Outside the Barrel
166
What’s PossibleYear Biomass
Yield
Tons/acre
Acres
Planted
(millions)
Cellulosic
Ethanol
(billion gals)
Corn
Ethanol
(billion gals)
Total
Ethanol
(billion gals)
2012 8.9 5 4.4 12.0 16.5
2017 12.5 19 24.8 14.6 39.4
2027 23.1 49 124.4 14.6 139.0
Replace most of our imported oil in twenty years!
173
Energy Crops:Energy Crops: MiscanthusMiscanthus
20 tons/acre? (www.bical.net)10-30 tons/acre (www.aces.uiuc.edu/DSI/MASGC.pdf)
1 years growth without replanting!
Little water, little fertilizer, no
tillage, lots of biomass,
….energy crops make it possible
175
annual
Sept Dec March June
12 mos 21 mos
annual
Sept Dec March June
12 mos 21 mos
The perennial advantage• Annual crops rely more heavily on human inputs. Humans can only respond to environmental changes on the scale of months or seasons and hectares or square kilometers.
177
Ethanol Yields Up & Up & Up
0
500
1,000
1,500
2,000
2,500
3,000
3,500
2000 2005 2010 2015 2020 2025 2030 2035
Time
Ga
llon
s p
er
ac
re
Conservative Cellulosic(24tpy/108gpt)
Sugar Cane + Baggasse (11 tpy/102gpt)
Corn, Cellulose,Cane Today
Large Improvements Are VisibleLarge Improvements Are Visible
BrazilBrazil Energy Cane Energy Cane
CellulosicCellulosic (10tpy/100gpt) (10tpy/100gpt)
BiodieselBiodiesel
178
MythsMyths Galore! Galore!• Energy Balance – not your father’s ethanol
• Not enough cropland – only if you try to make pigs fly!
• Food prices or the best thing for poverty?
• Lower energy content, lower mileage – in which engine?
• More expensive or poorly managed? US oil or Saudi oil?
• Existing infrastructure – for E85 or additive? Some or all pumps?
• Dubious environmental benefits – as additive E20 or E85?
• Cellulosic ethanol – real or not?
• Free marketeers hell or level playing field?
183
“The War on Oil” …weapons from the “innovation ecosystem”
184
Biofuels Feedstocks & Pathways …
Mixalco Process
GlycerinNatural Oils
BioDiesel (FAME or FAEE)
Methanol/Ethanol
Gasification
Syngas
Syngas Fermentation Ethano
l
BTL Diesel
Mixed Higher Alcohol
MethaneMicrobial cultures
Dimethylfuran
Gasoline, Diesel, Hydrocarbons
Ethanol, Butanol, Renewable Petroleum FermDiesel
Sugars/
Starch
Fermentation
Biogasoline
ETG via catalysis
C6, C5 Sugars
Biomass
Cellulose/ Hemicellulo
se
Acid or Enzyme Hydrolysis
Saccharification
FermentationEthano
l
Algae
+ Sunlight – CO2
Cell Mass
Hydrocracking
Waste
Fischer-Tropspch catalysis
BioDiesel (FAME or FAEE)
Catalytic Conversion
ButanolDiese
l
Transesterification
Catalysis and Aqueous phase Reforming
185
Mixalco Process
GlycerinNatural Oils
BioDiesel (FAME or FAEE)
Methanol/Ethanol
Gasification
Syngas
Syngas Fermentation Ethano
l
BTL Diesel
Mixed Higher Alcohol
MethaneMicrobial cultures
Dimethylfuran
Gasoline, Diesel, Hydrocarbons
Ethanol, Butanol, Renewable Petroleum FermDiesel
Sugars/
Starch
Fermentation
Biogasoline
ETG via catalysis
C6, C5 Sugars
Biomass
Cellulose/ Hemicellulo
se
Acid or Enzyme Hydrolysis
Saccharification
FermentationEthano
l
Algae
+ Sunlight – CO2
Cell Mass
Hydrocracking
Waste
Fischer-Tropspch catalysis
BioDiesel (FAME or FAEE)
Catalytic Conversion
ButanolDiese
l
Catalysis and Aqueous phase Reforming
Transesterification
Increasing Technological
Difficulty
Feedstock Supply Volume
Feed
Cost
Biofuels Feedstocks & Pathways …
186
Vegetable oil
Sugar/starch
Algae
Biomass•Agricultural•Forestry
Fatty acid esters (biodiesel)
Diesel
Ethanol
Butanol
Diesel/gasoline“Biocrude”
“Biocrude”LipidsFatty acid esters
Ethanol
Ethanol
Mixed alcohols
Fuel oil/diesel
Fuel oil
Ethanol
Ethanol
transesterification
hydrocracking
dry mill yeast fermentation
Ethanolethlyacetate production/hydrocracking
bacterial fermentation
Synthetic biology/fermentation
Aqueous phase reforming
growth with CO2 and light/transesterification of hydrocracking
enzyme hydrolysis/fermentation
gasification/catalysis or syngas fermentation
biopile fermentation/catalysis
Catalysis/pyrolysis
acid hydrolysis/fermentation
CO fermentation
thermal depolymerization
Diesel/gasoline
Companies involved in feedstock improvementMonsantoDuPontSyngentaAllelyxCanaVialisMendel BiotechnologyCeresBical EnergyAgrividaEdenspaceTeriPraj
Wastes•Flue gases•Municipal waste•Municipal sewage•Recyclable plastics
LanzaTech
Changing World Technologies
Imperium Renewables, FutureFuel, etc.
Cilion, AltraVerasun, Aventine, etc.Poet
BP-DuPont BiofuelsGevoAdvanced BiofuelsGreen BiologicsCobalt
Amyris BiotechnologiesLS9
GreenFuelAurora BiofuelsLiveFuelsPetroSun
MascomaVereniumIogen, Abengoa Bioenergy, Poet, SunEthanol, TMO
BlueFire Ethanol
RangeFuelsCoskataBRI Energy
Terrabon
BIOeCON, FES
Choren
ZeaChem
Virent Energy Systems
188
Story Time… or news from the frontlines
189
190
192
Southeastern U.S. Potential• ≈ 13 Billion gpy
Product Potential– From
unmerchantable timber & timber harvesting residues only
193
194
195
Synthetic Biology
Recombinant Small Molecule Bio-Synthetic Pathway
Potential of Synthetic Biology
Gene 4Gene 2Gene 1
Gene 3Gene 1
Artimisinin
Source of genes Custom-Built Microbe
Fermentation DieselSynthetic Biology = Fermentation DieselXAnti-Malarial
196
Hydrocarbon Biosynthesis: Nature’s Energy Storage
Metabolic modeling+
Synthetic biology
Renewable Feedstock
LS9 Designer Biofuels & Chemicals
X
X
X
X
X
X
X
X
>90% Energetic Yield From Feedstock
Hydrocarbons
Designer Hydrocarbons
197
Butanol, the old fashioned way…
198
CO2
ethanol lactate
acetone formate hydrogen . . .
Metabolic Engineering
Biomass Hydrolysate
BUTANOL
A recombinant strains containing a butanol pathway produces butanol in addition to other products.
199
Biomass Hydrolysate
XX
XX
X
Classical and genetic techniques are used to improve butanol tolerance.
BUTANOL
X
X
X
Metabolic Engineering
200
• DOE: Six “meritorious” biorefinery grants
• Multiple demo plants under construction
• Various technologies, feedstocks under test
• A diversity of geographies – not just mid-west
• Question is “not if” but “at what price”
Cellulosic Biofuels Status
President sets 35b gallon
goal!
201
…and this is just the beginning
…imagine the map in 2017!
Believe in
the “innovatio
n ecosy
stem” th
at
brought y
ou free lo
ng distance
!
207
Biomass, Geopolitics & Biomass, Geopolitics & PovertyPoverty
Biomass & PovertyBiomass & PovertyBeltBelt
210
Simple Action ItemsSimple Action Items
• Require 70% new cars to be Flex Fuel Vehicles … require yellow gas caps on all FFV’s & provide incentives to automakers
• Require E85 distribution for all high volume gas stations …. for stations that pump more than 2 million gallons per year of fuels;
• Make VEETC credit variable with oil price ($0.25-0.75) …. with cellulosic multiplier and minimum carbon reduction standards
• Make the cellulosic biofuels RFS = “all production till 2015” …. With price caps on maximum cellulosic premium over the price of gasoline
• Increase RFS to 35 billion gallons by 2022
...ensuring investors long term demand and oil price stability
211
We can cu
t fuel
consu
mption in
half!
212
The Possible at “NORMAL” The Possible at “NORMAL” Margins!Margins!
June 2006, Aberdeen , South Dakota
Imagine $1.99 ethanol at every Walmart in America
213
Generic Approach
take a big problem (challenge)
… add the best minds… the power of ideas… the fuel of entrepreneurial energy… and a dash of greed
214
…the chindia testonly scalable if competitive unsubsidized
215
…the scaling modelbrute force or exponential, distributed…
216
…investments or climate solutions?
windphotovoltaicsbiodeselhybrids
217
…”relevant scale” solutions for
…oil
…coal
…materials
…efficiency
221
…biases
…hybrids good
…corn ethanol bad
…biodiesel good
…nuclear bad
222
Subsidies: Oil or Ethanol?• Ethanol receives:
• a $0.54 per gallon producers credit, as well as additional state-specific subsidies
• Oil receives:• Excess of Percentage over cost depletion” worth $82 billion dollar subsidy • Expensing of exploration and development cost - $42 billion subsidy. • Add on alternative fuel production credit (read oil shales, tar sands etc). • Oil and gas exception from passive loss limitation• Credit for enhanced oil recovery costs• Expensing of tertiary injectants• $7 billion in Katrina relief!
Oil subsidies dwarf
those of
ethanol!
223
Hybrid
Carbon reduction
20-30%
Cost $5000
Scalability Battery breakthrough
Impact to automakers
High
Oil reduction 20-30%
Hybrids or Ethanol?
Corn Ethanol
20-30%
$50
Cellulosic Breakthrough
Low
90%
Ethanol is a fa
r cheaper a
nd
more scalable solutio
n!
224
Hybrid or FFV?Hybrid
Cost $3000
Gasoline Savings
(11000 m/yr; 14mpg)
157
FFV
$30
477
FFV’s offer a m
ore-effective
solution!
225
Biodiesel vs. Ethanol vs. Cellulosic Diesel
“Classic” Biodiesel
Carbon reduction - 2006
80%
Carbon reduction – 2010
80%
Scalability (2030Gallons/acre)
600-900
Sustainability (2030) Poor
Product Quality
Poor
Unsubsidized 10 yr market
competitiveness
High (@ $45 oil price)
2010 Production Cost High
Technology Poor
Ethanol
20-30%
80%
2500 (cellulosic)
High
Good
Excellent (@ $45 oil price)
Med-Low
Improving
Cellulosic Diesel
Not Available
80%
2500 (cellulosic)
High
Good
Excellent (@ $45 oil price)
Med-Low
Nascent
Trajectory M
atters!
226
• The Mexican Tortilla Story ….
Nearly all Mexican tortillas are made of home-grown white maize, rather than the yellow variety that is more common in the United States. The growing popularity of subsidised ethanol across the border has prompted the price of yellow corn, quoted in Chicago, to rise by over 50% since October. So industrial users of imported yellow corn in Mexico (for animal feed and syrup) started buying white maize instead. The government was slow to react. The tariff on imported maize is not due to disappear under the North American Free Trade Agreement until next year. But the government could have blunted the price rise by waiving the tariff or moving quickly to expand the tariff-free quota, says Luis de la Calle, a former trade official. Mr Calderón did raise import quotas on January 18th, and agreed a voluntary price-cap with the biggest tortilla makers. But the political damage had already been done, and the price cap does not cover the small-scale tortilla makers patronised by many poorer Mexicans. A previous government withdrew the subsidy on tortillas because it was indiscriminate. Officials point out that the higher price is good news for the rural poor, who grow maize. Mexico's Federal Competition Commission is investigating the import and distribution of maize. But Eduardo Pérez Motta, the commission's president, says he thinks that import quotas rather than monopolies are to blame for the price spike. In other words, contrary to Mr López Obrador's claims, Mexicans would benefit from free trade in maize.
Economist, 2007
Is There a Food vs. Fuel Issue?
… real is
sue or oil i
ndustry PR
real issue or o
il industry
PR
campaign?
campaign?
……why have developing
why have developing
countri
es been pushing for
countri
es been pushing for
lower farm
subsides?
lower farm
subsides?
227
228
BioPlastics – the next cycle?
234
Oil Refinery Concept
235
Bio-Refinery Concept
236
Twelve Platform ChemicalsTwelve Platform Chemicals
Succinic AcidSuccinic Acid FDCAFDCA 3-HP3-HP Aspartic AcidAspartic Acid
Glucanic AcidGlucanic Acid Glutamic AcidGlutamic Acid Itaconic AcidItaconic Acid Levulinic AcidLevulinic Acid
3-HDL3-HDL GlycerolGlycerol SorbitolSorbitol XylitolXylitol
237
Hieroglyphic Writings…A specimen of an Egyptian language writing
ca. 530 B.C.
HOOH
O
O
OO
OH
O
HO
HO OH
O
HO OHOH
O
O
OH
O
OHOOH
HOO
O NH2
OH OH
OH
OHOH
OH
OH
OH
OH
OH OH
OH
O
NH2
HO
O
HOOH
O
O
HOOH
OH
OH
OH
OH
O
O
ca. 2000 A.D.
A version of graphic representation of “Top 12 DOE platform chemicals from glucose”
letters syllables words poems
238
Enabling Renewable Value Chains for Sustainable Chemical Industry
RenewableFeedstocks(crops & forestry)
Industrial Bioproducts
New Industrial Bioproducts
Triglycerides(vegetable oils)
Soybean, Linseed, Corn, Canola
Carbohydrates
StarchSucroseCellulose/Wood
Bioplastics
Specialty polymers
Polymer additives
Performance Surfactants
Adhesives
Coalescent Solvents
Other
Biodiesel
Compound set A
Compound set B
Fuel ethanol
Compound C
Other Products
Technologies:
Synergy of
Renewable
Feedstocks
239
…bottled water renewable???
240
CH2
OH
O
3-hydroxypropionic acid
1,3-propanediol
EEP
acrylamide
acrylic acid
malonic acid
poly(hydroxypropionate)
dehydration
oxidation
hydrogenation
HO OH
O
HO OH
OO
O
O O
CH2
NH2
O
HO OHOH
O
OH
n
241
3-HP Derivatives
242
Succinic AcidSuccinic Acid
THFTHF1,4-Butanediol1,4-Butanediol
PolyurethanesPolyurethanes
AliphaticAliphaticPolyestersPolyesters
PolycarbonatesPolycarbonates
PBTPBT
Polycarbonate/PBT BlendsPolycarbonate/PBT Blends
SolventsSolvents
NewNew
TPE’sTPE’s
SaltSaltReplacementsReplacements
CropCropGrowthGrowth
PromotersPromoters
N-Methyl PyrolidoneN-Methyl Pyrolidone
Adipic AcidAdipic Acid HexanediamineHexanediamine
NylonNylon
Succinic Acid as a Platform
Sources: MBI, Zeikus, et.al 1999; Sado, et.al, 1980; Dake, et.al. 1987
243
Succinic Acid Derivatives
244
Lactic Acid As a Platform
Lactic AcidLactic Acid
PLAPLAPropylene GlycolPropylene Glycol
Acrylic AcidAcrylic Acid
Lactate EstersLactate EstersSolventsSolvents
Polyacrylic AcidPolyacrylic AcidPolyurethanesPolyurethanes
PolyestersPolyesters
PolycarbonatesPolycarbonates
Propylene OxidePropylene Oxide
EpoxidesEpoxides
Chiral SynthonsChiral SynthonsNewNew
Amino AcidsAmino Acids
PharmaceuticalPharmaceuticalPrecursorsPrecursors
HighHighPerformancePerformance
MaterialsMaterials
TPE’sTPE’s
ResinsResins
Food Food AdditivesAdditives
245
PLA Derivatives
OH
O
OH
246
Levulinic Acid Derivatives
247
DuPont Soronahttp://www.azom.com/images/dn_photo_swim229x275.jpg
DuPont Soronahttp://www.dupont.com/corp/news/daily/images/dn_photo_sorona270x270.jpg
DuPont Sononahttp://www.jobwerx.com/images/DuPont_sorona_apparel.jpg
DuPont Sorona polymer; part of polymer is 1,3-propanediol from fermentation
OHHO
248
● Enzymes● Organisms● Selective catalysts
Heavy Metals
Organic
Petroleum
● Environment● People
Higher inherent risk● Pressure● Temperature
Petroleum based
Rigid discipline silos
Who cares?
A Change of ParadigmOld New
Catalyst
Solvent System
Raw Material Source
Harmful Impacts
Production Risk
Energy
_
Sustainability
Water
Renewable
Low to no negative impacts
Lower inherent risk
Renewable energy
Cross discipline team
A new attribute
249
Societal Cost of Hydrocarbons
Source: Coghill Capital ManagementSource: Coghill Capital Management
US Related Data:
• Air, water, and soil pollution from electric generation cost $14.8-90.3 billion – each year!
• 1 gallon of spilled oil can contaminate 1 million gallons of water!
• Oil pollution from automobiles causes $4.6 billion in damages to crops, rivers, forests, lakes etc
250
Source: Coghill Capital Management Source: Coghill Capital Management
Societal Cost of Hydrocarbons (Continued)
Military Costs:
• Strategic Military Bases ($49bn)
• Oil and Gas supply route security ($20bn)
• Strategic Petroleum Reserves ($30bn)
• Iraq ($1 trillion! – or $275mn per day!)
251
Source: Coghill Capital Management Source: Coghill Capital Management
Societal Cost of Hydrocarbons (Continued)
Health Costs:
• 760,000 Chinese die each year due to air and water pollution ($99bn)!
• Lung disease and asthma caused by pollution ($16.1bn)!
• Lead, Mercury, and Arsenic poisoning from coal plants is linked to mental retardation, learning disabilities, premature mortality, and to some autism cases ($88-640bn)
252
What Are Fossil Fuels’ Externalities?
Source: Coghill Capital Management Source: Coghill Capital Management
Fossil Fuel Costs (Billions $USD)
Low Medium High
Military Base and Supply Route Security
$49.00 $75.00 $100.00
Environmental Monitoring and Clean Up
$14.80 $53.00 $93.30
Healthcare Treatment and Mortality from Pollution
$24.03 $237.00 $450.00
Total Fossil Fuel Costs $88.10 $365.00 $640.30
253
What Are Fossil Fuels’ Externalities? (continued)
Source: Coghill Capital ManagementSource: Coghill Capital Management
The Effect on Consumers
2006 Ave. Cost
Mid-Societal Cost
Total Cost/ UnitConsumer Increase
Coal (Short ton)
$20.49 $93.83 $114.32$0.0454 c/kWh
Crude Oil (Barrel)
$60 $26.68 $86.68$1.54 per
gallon
Natural Gas (mmcf)
$6.80 $2.74 $9.54$0.0235 c/kWh
Mid-Range societal cost increases (generation costs only – no distribution or retail included)
• Coal fired electric generation goes from $0.026/kWh to $0.0714/kWh• Natural gas electric generation goes from $0.0615/kWh to $0.0851kWh• Regular gallon of unleaded gasoline goes from $3.46 to $5.01 per gallon
