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Lee Edwards, Virent Energy Systems CEO, presentation at the 2011 Wisconsin Bioenergy Summit.
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2011 Wisconsin Bioenergy Initiative
Replacing the Crude Oil:Energy and Economic Security
Competitive Advantageand Lower Carbon
Lee Edwards Virent CEO6 October 2011
Slide 1© 2011 – Virent, Inc.
Slide 2
Overview
• The case for Biofuels and Bioproducts
• Conversion Technologies and Products
• Supporting Industry Scale-Up
Slide 2© 2011 – Virent, Inc.
Slide 3
History of US Energy Consumption
Slide 3© 2011 – Virent, Inc.
Slide 4
Energy Use Per Capita
Slide 4© 2011 – Virent, Inc.
Slide 5
2009 Regional Shares of World Oil Reserves, Production and Consumption
Slide 5© 2011 – Virent, Inc.
Data Source: ENI World Oil & Gas Review
U.S. Crude Oil Supply
Slide 6© 2011 – Virent, Inc.
Carbon Dioxide Emissions
Slide 7© 2011 – Virent, Inc.
By Sector By Country
Source: Japanese Ministry of Land, Infrastructure, Transport and Tourism, 2006
Slide 8
US Liquid Fuels Consumption 1970-2035
Slide 8© 2011 – Virent, Inc.
U.S. EIA, Annual Energy Outlook 2011
U.S. FeedstocksPotential Fuel Impact
Slide 9© 2011 – Virent, Inc.
2 %
12 %
23 % Percent of US Liquid Fuel Demand
World Oil Price Scenarios
U.S. EIA, Annual Energy Outlook 2011
Slide 10© 2011 – Virent, Inc.
Value of US Crude Oil Imports
Slide 11© 2011 – Virent, Inc.
Inflation-adjusted annual value in billions of dollars. Constant dollars valued in the year 2000
SOURCE: U.S. Energy Information Administration, Annual Energy Review 2008, DOE/EIA-0384(2008) (Washington, DC, 2009), p. 81
Slide 12
Economic Costs of Petroleum Dependence
“…the rising price of oil acts like a tax on the U.S. consumer. $75 billion is taken out of our purchasing power for every $10 increase in a barrel of oil.“
- Fred Smith, CEO of FedEx
Slide 12© 2011 – Virent, Inc.
Slide 13
Fuel Cost of Military Action
About $500 billion annually, plus indirect and long-term costs, such as lost productivity and future disability costs from military casualties.
Slide 13© 2011 – Virent, Inc.
Transportation Cost and Benefit Analysis II – Resource Consumption External CostsVictoria Transport Policy Institute (www.vtpi.org)
Estimated to be $140 per barrel or $3.33/gallon of gasoline
Slide 14
Energy as a Competitive Advantage
• Minimize Exposure to Petroleum Price
• Rural Development – agriculture advantage
• Jobs at Biorefineries stay local
• US Technology Leadership from Global Deployment
Slide 14© 2011 – Virent, Inc.
Slide 15
Advantaged Biofuels
Slide 15© 2011 – Virent, Inc.
Abundant Feedstocks• Deployment Flexibility• Low Cost• Low Volatility
Conversion Technology• Yield• Scalability• IP Position• Product Quality
Economic Returns•Capital and Cash Costs•Customer Off-Take•Strategic Partners•Stable Policies
Advantaged Products• Customer Pull• ‘Drop-In’• Large Markets• Low Carbon
Slide 16
Fuels and Chemicals from Biomass
Biomass
Fermentation
Fermentation
AqueousPhase
Reforming
Refining
Fischer-Tropsch
Catalysis
Gasification
Pyrolysis
Hydrolysis
Syngas
Bio-oils
Sugars
DieselJet Fuel
Ethanol
MethanolEthanol
Liquid Fuels
EthanolButanolHydrocarbonsGasoline,Jet, Diesel,Chemicals, Alcohols, Hydrogen
CH1.4O0.6
CH1.6O0.4
CH2O
CO + H2
CH2
CH2
CH3O0.5
CH3O0.5
CH3O0.5
CH2
CH2
CH3O0.5
Virent’sBioForming® Process
© 2011 – Virent, Inc. Slide 16
Slide 17
Secure and Sustainable Energy
Slide 17
Virent Technology can Replace > 90% of the Barrel
The US consumes over 18 million barrels of oil per day. 49% is imported from foreign countries.
In the USA, E-15 and B20 combined would be 10% crude displacement
© 2011 – Virent, Inc.
Slide 18
Virent at a glance
The global leader in catalytic biorefinery research, development, and commercialization
Employees
Financial Infrastructure
115 Employees
> $76 MM in Private Funding> $61 MM in Gov & Industry
25x Development Pilot Plants1x 10,000 gal/yr Demo Plant
Partners & Investors
Slide 18© 2011 – Virent, Inc.
Organization Capabilities
Employees from leading energy, agribusiness and chemical companies; start-ups; and research institutes
Catalytic Process Research
Feedstock
Techno‐Economic Analysis
Operations
Partnering
Process Engineering
Process Development
Analytical
Slide 19© 2011 – Virent, Inc. Slide 19
Virent’s BioForming® Technology
• Fast and Robust– Inorganic Catalysts– Moderate Conditions– Industry Proven Scalability
• Energy Efficient – Exothermic– Low Energy Separation– Low Carbon Footprint
• Premium Drop-in Products– Tunable Platform– Infrastructure Compatible– Fuels and Chemicals
• Feedstock Flexible– Conventional Sugars– Non-Food Sugars
Slide 20
Leading catalytic route to renewable hydrocarbon fuels and chemicals.
Virent Biogasoline Demonstration Plant- Madison, WI
© 2011 – Virent, Inc.
BioForming® Concept
Biomass
Cane
Corn
© 2011 – Virent, Inc. Slide 21
Reformate
Distillate
Biomass
SugarCane
Corn
APR
ModifiedZSM‐5
Condensation + Hydrotreating
AromaticsGasoline
Jet Fuel Diesel
26 Issued/Allowed Patents –U.S. (13), South Africa (3), Australia (3), New
Zealand (2), India (2), Japan, Canada and China
142 Pending Patent Applications –22 U.S. and 120 Foreign Patent Applications
High quality, Drop-in Fuels
Slide 22
Energy dense, Drop‐in Fuels
Premium Biogasoline – 120,000 Btu/gal Virent Distillates meet ASTM Specifications
Virent fuel in Scuderia Ferrari race fuel
Slide 22© 2011 – Virent, Inc.
Slide 23Slide 23
Virent's plant-based para-xylene
Bio-Based PX Press Release
Slide 23© 2011 – Virent, Inc.
Slide 24
BioForming Refinery Break Even
5
10
15
20
25
60 70 80 90 100 110 120
Net Sugar Cost,
¢/lb
Crude Oil, $/BBLNotes:*Product Values utilize historic Crude to Product Value Ratios from Mid 2007 to Mid 2010*Major Utilities Cost Assumptions of $6/mmbtu NG and $0.07/kw-hr*Includes Variable and Fixed costs
Cash cost break even for a Virent Bioforming refinery producing aromatic chemicals and biogasoline.
Slide 24© 2011 – Virent, Inc.
Slide 25
Leadership in Sustainability
Great Green Fleet
Slide 25© 2011 – Virent, Inc.
“…still on target to produce a 100% bio-based polyethylene terephthalate(PET) bottle by 2020”
Newly announced initiative to use plant based plastics in packaging
Objectives include being supplied 100 percent by renewable energy
Slide 26
Policy Leadership and Investment
• US Railroads• Solar Power In Germany• China with Solar and Wind• France with Nuclear
Slide 26© 2011 – Virent, Inc.
Slide 27
Eu
Building the Industry
Slide 27© 2011 – Virent, Inc.
FeedstockPricing Risk
Technology/CapitalRisk
Product PricingRisk
Policy Risk
Slide 28
Challenges to Sensible Policies
• Fiscal realities• Lack of long term stability • Priorities for oil industry, electricity • Renewables not yet fully valued • Uneven success of implemented policies
– Loan guarantees/grants– Volumetric Incentives
• Short term – no certainty• Don’t reward performance
Slide 28© 2011 – Virent, Inc.
Slide 29
State and Regional Incentives
• Loans/Grants• Product Payments• Tax Exemptions/Reductions• State Tax Credits & Deductions• Renewable Fuel Use Standard• State Fleet Requirements• Funding for Workforce Training or Supply
Chain Development
Slide 29© 2011 – Virent, Inc.
Wisconsin Biomass
Slide 30© 2011 – Virent, Inc.
Benefits for Ag and Forestry sectors should:• Optimize land-use for food, feed, fiber, fertilizer, and energy needs• Secure biomass resources for products without other renewable sources• Support biorefineryinvestment with grants, loans, and tax policies to create jobs and rural growth
Slide 31
Summary
• Unique Opportunity for Bioproducts
• Competitive Advantages Available
• Collaboration & Leadership Required
• Wisconsin Assets & Advantages
Slide 31© 2011 – Virent, Inc.
Lee EdwardsPresident and CEOVirent, Inc3571 Anderson StreetMadison, WI 53704E‐Mail: [email protected]: +1 (608) 237‐8606Fax: +1 (608) 663‐1630
www.virent.com
© 2011 – Virent, Inc. Slide 32.