Office of Biomass Program

Energy Efficiency & Renewable Energy

1

Office of Biomass Program

U.S. Department of Energy Biomass Program

Growing A Robust Biofuels Economy

June 2007 Corporate Presentation


2

2005 Biofuels Market Below 2% of Global Transportation Fuel Use

Heavy fuel oil

Others

Biofuels

Light distillates

Middle distillates

Total = 82.4 million barrels/day

388 billion gallons/yr

454 billion gallons/yr

0

2

4

6

8

10

12

14

Ethanol Biodiesel

Billi

on g

allo

ns/y

r

ROW

USAEurope

Total = 862 thousand barrels/day

2005 Global Petroleum Product Consumption

2005 Global Biofuel Production

Sources: BP Statistical Review of World Energy; National Biodiesel Board, European Biodiesel Board, Renewable Fuels Association

Navigant

13 billion gallons


3

U.S. Presidential Commitment to Ambitious Biofuels Goals

• Cost-competitive cellulosic ethanol” by 2012• “20 in 10”

– Reduce U.S. gasoline* use by 20% by 2017 through…o 15% reduction from new Alternative Fuels Standard at

35 billion gallons/year o 5% reduction from enhanced efficiency standards (CAFÉ)

• “30 in 30” – Longer-term DOE biofuels goal– Ramp up the production of biofuels to 60 billion gallons– Displace 30% of U.S. gasoline consumption* by 2030

* light-duty vehicles only


4

Biomass R&D Initiative (BRDI)

• Multi-agency effort to coordinate and accelerate all Federal biobased products and bioenergy research and development.

• Mandated under the Biomass Research & Development Act of 2000, further revised by Energy Policy Act of 2005 (Sec 937).

• BRDI coordinating bodies– Biomass R&D Board, a cabinet level council co-chaired by

DOE and USDA – also includes DOI, DOT, EPA, DOC. – Biomass R&D Technical Advisory Committee – 30 senior

individuals from industry, academia, state government• Aims to deliver National Biofuels Action (NBA) Plan by Fall 2007.

www.brdisolutions.com


5

How Do We Achieve These Goals?

Policy

Market/Capital Investments

RD&D/ Technology

• Effective RD&D Program• Effective policies• Private sector investments

DOE Biomass Program

Three-pronged approach


6

Biomass Program Mission

Core activities accelerate the technological advances needed to supporta domestic bioindustry producing cellulosic ethanol and other biofuels in

integrated biorefineries.

Collaborative R&D

Integrated Biorefineries: Systems Integration and Demonstration

• Partnerships

• Policy

• Interagency Coordination

Develop and transform our renewable and abundant biomass resources into cost competitive, high performance biofuels, bioproducts, and biopower.


7

$-

$50

$100

$150

$200

$250

FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007CR

FY 2008Request

OBP Budget

Biomass Program Budget FY2002-FY2008

Mill

ions

of

Dol

lars

Office of Biomass Budgets

The Advanced Energy Initiative and 20 in 10 have provided a boost in funding for biofuels in FY2007 and FY2008


8

Corn and Sugarcane Ethanol

R&D Demo Market Entry

Market Penetration

Market Maturity

Cellulosic Ethanol

Rapeseed and Soy BiodieselRenewable Diesel

Mixed OH; Fischer-Tropsch

1st Generation Biofuels

• Ethanol is a clean burning, high-octane alcohol fuel used as a replacement and extender for gasoline– Has been commercially produced since the 70s

in the US and Brazil, still the market leaders– Corn ethanol is cost competitive (with no

subsidies) with gasoline when crude oil is above $50/barrel ($30/brl from sugar cane)

• Biodiesel is a high-cetane, sulfur-free alternative to (or extender of) diesel fuel and heating oil– Commercialized in Europe in the 90’s– Worst economics (and smaller market) than

ethanol

“First generation” biofuels are commercially developed technologies, but have high costs and limited scalability…

2nd Generation Biofuels

• R&D efforts are focused on:– Increasing the range of feedstock from which

to produce biofuels – Reducing biomass-to-liquid conversion costs

• Two main technology platforms in development:– Biochemical pathway: conversion of the

cellulose to sugars and fermentation to alcohol fuels

– Thermochemical pathway: gasification of biomass to syngas and synthesis to fuels

• Commercial renewable diesel plants are under construction (e.g., Neste oil “NexBTL”)

Butanol; DME

Source: Navigant Second generation” technologies aim to resolve these limitations


9

Future efforts will address obstacles to biochemical and thermochemical routes to biofuels, support demonstrations, and resolve infrastructure issues.

Barriers• High cost of enzymatic

conversion

• Inadequate technology for producing ethanol from sugars derived from cellulosic biomass

• Limitations of thermochemical conversion processes

• Demonstration/integration of technology in biorefineries

• Inadequate feedstock and distribution infrastructure

Solutions• R&D to improve effectiveness and

reduce costs of enzymatic conversion

• R&D on advanced micro-organismsfor fermentation of sugars

• Re-establish thermochemical conversion as a second path to success

• Fund loan guarantees, commercial biorefinery demonstrations, and 10% scale validation projects

• Form interagency infrastructure and feedstock teams

Targeted R,D &D: Overcoming Barriers


10

Biomass Program Portfolio

Collaborative R&D

• Feedstocks: integration of feedstocks with conversion processes

• Conversion Technologies: biochemical and thermochemical

Integrated Biorefineries

• Systems Integration: feedstocks, conversion, biopower, infrastructure

• Demonstrations: pilot scale and commercial scale for diverse feedstocks

OBP organizes to deliver against barriers

Removing barriers to large-scale production of cellulosic biofuels

Infrastructure (New)


11 11

OBP RD&D Activities & Timeline

Cellulosic Ethanol Growth

CommercialEthanologen

Biorefinery Demos10% Scale Validation

1st Generation Feedstock, Biochemical,Thermochemical Core R&D

IBRF

Adv. Feedstocks & Conversion

Technology R&D

Pre-Validation Integrated Biorefineries

$6.0

$5.0

$4.0

$3.0

$2.0

$1.0

2002 Dollars per G

allon/Ethanol

Bill

ion

Gal

lons

of E

than

ol

U.S. Ethanol Production

CellulosicCorn


12

Collaborative R&D Is Producing Results

• Achieved substantial decrease in cost of ethanol production – from over $5 to approximately $2.26 per gallon

• Developed organisms with superior ability to convert mixed sugars to ethanol – an important step toward cellulosic ethanol and the 2012 goal

• Developed high-value plastics, foams, and coatings from oil crops and corn sugar

Cell phone casings made from bio-based polymers developed through DOE-industry cost-shared R&D

The program can already claim many successes

Achievements


13

DOE Office of Science: Complementary Basic Research on Biomass

• Invests $375 million to fund three new Bioenergy Research Centers to accelerate basic research on the development of cellulosic ethanol and other biofuels.

• Recently issued a joint biofuels research agenda with the EERE Office of Energy Efficiency and Renewable Energy – Breaking the Biological Barriers to Cellulosic Ethanol.

• Part of the NBA Plan effort


14


Policy


RD&D/ Technology

• Effective RD&D Program

• Effective policies• Private sector

investments DOE Biomass Program



15

Policy Drivers & Incentives Supporting Biofuels

Biofuels

Energy

Agriculture

Environment

• Energy Security/ Political Tensions

• Resource Diversification

• Petroleum Prices/Volatility

• Climate Change• Air Pollution

• Economic Development

• Farm Income

United States• Energy Policy Act of 2005 (federal policy)

• State tax credits, blend requirements…Europe• Tax credits: most common incentive• EU set target for biofuels consumption (similar to RFS, but not a mandate)

Asia• China, India, and Malaysia introducing policies to support biofuels

• Japan has tax credits in placeSouth America−Brazil: Ethanol blending requirements in place and a requirement for biodiesel starting in 2008

Examples of Policies

• Ethanol is currently the most prevalent US biofuel

Biofuels require a comprehensive & effective policy frameworkSource: Navigant


16

Energy Policy Act 2005 (EPAct 2005)• Section 932: Commercial Integrated Biorefinery

– Secretary Bodman recently announced six awards– $53 million in FY 2007 budget request

• Section 941: Revisions to Biomass R&D Act of 2000– Vision document released November 2006; updated Roadmap due May 2007

• Section 942: Cellulosic Ethanol Reverse Auction– Request For Information and Options papers completed– $5 million requested for FY 2008

• Sections 1510, 1511, and Title XVII: Loan Guarantees– DOE issued guidelines for the first Loan Guarantees under Title XVII in August 2006– Loans for conversion of Municipal Solid Waste and cellulosic biomass to fuel ethanol

and other commercial byproducts also considered under this offering

EPAct 2005 goals are integrated into core technology priorities.

Policies Accelerating Biofuels Production


17

New Policies May Foster Market Expansion

• National strategy for low level blends/ Regional strategy for E-85

• RFS with greater requirements for cellulosic ethanol

• Stronger incentives for all biofuels– Extension of ethanol subsidies to 2015– Payments to lignocellulosic biomass

suppliers for residues and energy crops

• Tougher greenhouse gas regimes• State support – individual state mandates/

legislation

Ramp-up of ethanol production will require innovative and focused policies for infrastructure and feedstocks


18


Policy


RD&D/ Technology

• Effective RD&D Program

• Effective policies• Private sector

investments DOE Biomass Program



19

The future of biofuels will depend on the creation of new partnerships among several industries

Utilities

Forest Products

Industrial Biotech

Petroleum

Chemicals

Agribusiness

Future Biorefineries

Source: Navigant


20

Global Ethanol Status

• 2005 Production: 12,150 million gallonso 35% -- U.S. (corn)o 35% -- Brazil (sugarcane)o 8% -- China (feedstock

unknown)o 22% -- Other Countries

(wheat, barley, beet)

• 2004 Production:10,770 million gallons

2004 2005

U.S.

Brazil

China

Other13% Increase

The market is placing bets on biofuels


21

U.S. Ethanol Production Capacity

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006 2007e* 2008e*

Bill

ion

Gal

lons

Capacity Under Construction:6.14 Billion Gallons per Year Expected by End of 2008

Current Production Capacity:5.58 Billion Gallons per Year

*Estimated as of February 7, 2007. Source: Renewable Fuels Association.

Total Capacity with Current &

New Construction:

11.7 billion gallons

per year

US Markets Driven by High Prices and RFS: Building Capacity

While biofuels represent only 3% of US transportation fuels today, production is growing rapidly.


22

Ethanol Plants Focused on Midwest; “Destination” Plants Increasing

One of the drivers for destination ethanol plants is to produce DDGS closer to market.

Source: Navigant


23

0200400600800

10001200

Fuel

ing

Stat

ions

in S

ervi

ceIndustry Background

Source: Renewable Fuels Association

0

40

80

120

160

200

240

2000 2001 2002 2003 2004 2005 2006 2007

Existing Facilities Plants Under Construction

78

Operating PlantsSource: Alternative Fuels Data Center, March 8, 2007

0.00

2.00

4.00

6.00

8.00

2000 2001 2002 2003 2004 2005 2006

FFV’s in Service (millions)

Operating E85 Stations

As of 2/25/07

U.S. Ethanol Infrastructure

Existing infrastructure must expand & improve to meet future biofuels demand

As of 3/8/07

114


24

RD

&D

Tim

elin

e

2007: Ethanologen Solicitation

2006: Loan Guarantee Program; Section 932 Demonstrations

2011: Operation of 932 and 10% Scale Facilities

2012: Reduced Enzyme and Feedstock Costs ($1.31/gallon cost target)

2014: Repeatable Plant Design Packages

2018: Genomics-Improved Feedstocks

2025: Integrated Ethanol/ Bioproduct Facilities

DOE focuses on investment risk reduction to drive market

Applied R&D Demonstration Commercialization

Technical & Market Risk vs Time

Value vs. Time

Ris

k of

Inve

stm

ent

Operating Cellulosic Ethanol

Facilities

HIGH RISK, LOW VALUE

LOW RISK, HIGH VALUE

DOE absorbs some of the risk through focused RD&D program

Val

ue o

f Inv

estm

ent


25

Cellulosic Biorefinery Investments

• Abengoa Bioenergy Biomass of KansasCapacity to produce 11.4 million gallons of ethanol annually using ~700 tons per day of corn stover, wheat straw, milo stubble, switchgrass, and other feedstocks

• ALICO, Inc. Capacity to produce 13.9 million gallons of ethanol annually using ~770 tons per day of yard, wood, and vegetative wastes and eventually energy cane

• BlueFire Ethanol, Inc. Sited on an existing landfill, with capacity toproduce 19 million gallons of ethanol annuallyusing ~700 tons per day of sorted green wasteand wood waste from landfills

Recently announced competitive selections to provide up to $385 million over four years for cost-shared integrated biorefineries in six states


26

Cellulosic Biorefinery Investments

• Poet Capacity to produce 125 million gallons of ethanol annually (~25% will be cellulosic ethanol) using ~850 tons per day of corn fiber, cobs, and stalks

• Iogen Biorefinery Partners, LLCCapacity to produce 18 million gallons of ethanol annually using ~700 tons per day of agricultural residues including wheat straw, barley straw, corn stover, switchgrass, and rice straw

• Range Fuels (formerly Kergy Inc.) Capacity to produce 40 million gallons of ethanol annually and 9 million gallons per year of methanol, using ~1,200 tons per day of wood residues and wood based energy crops


27

Upcoming solicitations

• 10% Validation Solicitation: Imminent announcement – One-tenth of the projected scale of a first of its kind commercial

facility– Integrated biorefinery demonstrations using cellulosic feedstocks

and producing a combination of fuels, chemicals, and substitutes for petroleum-based feedstocks and products

• Enzyme Solicitation: FY07– Second phase of cellulase development with cost-sharing

industry partners– Create commercially available, highly effective & inexpensive

enzyme systems for biomass hydrolysis

• Thermochemical Conversion Solicitation: FY07– Integration of gasification and catalyst development

• Freedom Prize


28

Other ways to get involved

• Advisory Committee (TAC): Seats renewed periodically• Comments to Biomass R&D Board, DOE, OBP, etc…• Participate in regional feedstock partnerships• Communicate benefits of cellulosic biofuels• Etc…all ideas are welcome


29

Contact Info

• Office of Biomass Programs– Jacques Beaudry-Losique, 202-586-5188– Web Site: http://www1.eere.energy.gov/biomass/

• Golden Field Office– Jim Spaeth, [email protected]

• Office of Science – Sharlene Weatherwax,

[email protected]

• USDA– Bill Hagy, [email protected]

• EERE INFO CENTER– http://www1.eere.energy.gov/informationcenter/

THANKS

http://www1.eere.energy.gov/biomass/

mailto:[email protected]

Documents

Office of Biomass Program