Biofuels: Important Options for Cleaner Transportation

Biofuels: Important Options for Cleaner Transportation

Updated July 6, 2014

Transportation around the world continues as it has for the past 100 years, dependent on petroleum in its many forms to function–as gasoline, diesel or jet fuel. The latest word from the U.S. Energy Information Administration is that even in 2040 the government expects 93.23 percent of light-duty vehicle fuels to be gasoline (down 6.1 percent from in market share from 2012). During that same period diesel will increase to 3.23 percent of the market, E85 take 2.82 percent of the market and electricity will take .28 percent (all three of those will make huge market share gains, but starting from a very small base). The rest of the market will be filled by propane, natural gas and hydrogen, according to EIA report. The resulting CO2 is one of the major contributors to global warming so many efforts around the world are looking for ways to reduce the carbon content of fuels with biofuels being the leading contenders to move the needle. Leading the way worldwide is the Low Carbon Fuel Standard of California, which measures the carbon content of fuels and their alternatives, assigning values for comparison. New alternatives are being developed and new fuels making their way to market slowly.

Biodiesel

Diesel engines are the standard for heavy vehicles, such as trucks and buses. Biodiesel is a blend of petroleum diesel and biofuel from sources such as soy, waste vegetable oils or animal fats. Blends of 5, 10, and 20% biodiesel are popular because they run in many current diesel engines. The federal government has been promoting the use of B20, so look for wider use of B20 in heavy-duty vehicles, but watch out for restrictions from some light-duty manufacturers about any blends higher than B5. The latest word from California Air Resources Board’s testing showed FAME biodiesel increasing NOx, which may limit its application in that state.

  • Nature Conservancy
  • National Biodiesel Board
  • USMC Camp Pendleton
  • Portland Oregon Fleet of 84
  • WVO Designs – Waste Vegetable Oil As A Fuel

Renewable Diesel

Renewable diesel is produced from non-petroleum renewable resources but is not a mono-alkyl ester like biodiesel. Renewable diesel consists solely of hydrocarbons and thus is a drop-in fuel that can be used at various blend rates. There are several different chemical approaches to producing renewable diesel. One is based on hydrotreating vegetable oils or animal fats, a process already in use as part of petroleum refining. A second method involves synthesis of hydrocarbons through enzymatic reactions. A third method involves partially combusting a biomass source to produce carbon monoxide and hydrogen (syngas) and utilizing the Fischer-Tropsch reaction to produce complex hydrocarbons. Compared to biodiesel, renewable diesel uses similar feedstocks but has different processing methods and can include chemically different components. (Thanks to the California Air Resources Board website for some of the details above.)

Ethanol

When you drive a car, there is most likely an ethanol blend in your fuel tank. Ethanol is a fuel from a plant source that is normally mixed with gasoline. All U.S. gasoline vehicles can run on a blend of up to 10% ethanol (E10). Ethanol has the potential to reduce U.S. dependency on foreign oil. We are growing our own fuel. Ethanol—a form of alcohol—is the predominant biofuel in use today. The United States and Brazil together produce about 90 percent of global fuel ethanol. Brazil has used ethanol to reduce its dependency on gasoline by 40% and has the auto industry producing vehicles that can run on blends of up to E99 as well as gasoline. In the U.S., the vast majority of ethanol is processed from corn although a major effort is being made to move to cellulosic ethanol that will reduce the carbon intensity of the biofuel. In the real world vehicles running on E85 will discover that the less energy-dense fuel will deliver reduced fuel economy.

Butanol

BP is spending millions running TV ads about fuel from sugar beets. BP and Dupont is looking for the type of funding assistance that is given to ethanol. They are also looking for millions of customers. Butanol has a much higher energy content than ethanol. Butanol can most likely be blended with gasoline in higher percentages than ethanol and run in non-flexfuel engines. Butanol may get transported in the same pipelines as gasoline.

  • Butanol Facts and Links (PES Wiki)
  • Dupont and BP Biobutanol Fact Sheet

Di-Methyl Ether (DME)

DME can be derived from many sources, including renewable materials (biomass, waste and agricultural products) and fossil fuels (natural gas and coal). It is currently being tested as a transportation fuel in California in a project based in the San Joaquin Valley involving Volvo Group and Oberon Fuels. They believe the fuel can provide reduced greenhouse gas emissions, reduced PM and NOx emissions, and be a replacement for diesel fuel.

Oil vs. Biofuels: Cellulosic Ethanol, Biodiesel, and Biogasoline.

Oil vs. Biofuels: Cellulosic Ethanol, Biodiesel, and Biogasoline.

 

Freedom HarvestBy John Addison (11/20/07)

Oil prices neared $100 per barrel as hundreds of leading investors converged at the Pacific Growth Equities Clean Technology Conference. A number of exciting companies presented next generation biofuels that promise to reduce the nation’s dependency on foreign oil. Look for a freedom harvest.

Corn ethanol is likely to continue its strong growth in the U.S. from one billion barrels of fuel per year to the current five billion per year. Ethanol can be blended to 10% with gasoline – E10 – without new infrastructure and without modification of engines. More states are starting to mandate E10. Ethanol will continue strong growth based on these mandates and on concerns about dependency on foreign oil.

At the Pacific Growth Conference, Steve McBee delivered a keynote that predicted passage of significant ethanol and clean energy subsidies before the 2008 presidential election. Ethanol will receive billions, most likely in the Farm Bill, possibly in an Energy Bill. Mr. McBee sees high likelihood of a Renewable Fuel Standards (RFS) despite opposition from several food, oil, and environmental groups. Look for all of these to continue:
• 51-cent-a-gallon direct subsidy
• Protectionist tariffs that exclude cheaper ethanol from Brazil sugarcane
• Loophole in the fuel economy standards that allows the automobile manufacturers to claim a fuel economy credit if they build cars that can use E85, even if those cars never drive within 500 miles of a filling station that sells E85.
• More from WRI

The growing use of corn ethanol is creating serious problems. The price of corn is up 40% in only 12 months. Children and families living in poverty suffer globally. If the entire U.S. started switching to E85, there would not be enough land to grow the corn. Ethanol must be trucked not pipelined to oil refineries. Needed is fuel from wood and waste, not food and haste.

Fortunately, next generation ethanol and other biofuels are in development. Next generation biofuels are also likely to benefit from pending legislation being put into law. While corn produces a yield of 300 to 500 gallons per acre, other sources can produce ten times that yield without corn’s water and pesticide requirements.

Presenting at the Conference, cellulosic ethanol developer Verenium (VRNM) presented a positive update. Verenium sees revenues of $42 to $45 million this year. Their 1.4 million gallon per year (MPY) pilot plant in Osaka, Japan, meets the demanding challenge of converting construction wood waste into ethanol. A similar plant is being built in Louisiana that will use sugarcane as feedstock. Look for a 25 to 30 MPY plant in 2010. Sugarcane has been the key source for Brazil’s amazing transition away from petroleum dependency. Sugarcane yields per acre can be 2,500 gallons – five to eight times the yield of corn. Sugarcane has been the key to Cosan (CZZ) tripling revenue and profit in three years. (NOTE: Author owns stock in Cosan.)

Most cars may run on gasoline, but most heavy vehicles run on diesel. The hottest selling cars run on diesel not gasoline. Diesel and biodiesel has about 25% more energy per gallon than gasoline. Ethanol has about 25% less energy than gasoline. Nova Biosource Fuels (NBF) presented at the Pacific Growth Conference. Nova has a joint venture (JV) with ConAgra targeted at taking ConAgra animal waste and producing biodiesel and glycerin. ConAgra has agreed to buy 130 million gallons of biodiesel per year from the JV. If successful, Nova Biosource could buy other players in the fragmented U.S. biodiesel market and solve a significant waste problem for meat and poultry processors. Consensus estimates from analysts is that Nova Biosource will experience explosive growth from $26 million in 2007 to $187 million in 2008, and become profitable in 2008. Reuters Estimates

Private venture-backed Virent presented an exciting alternative to ethanol. It takes biomass and converts it gasoline – biogasoline. Gasoline, after all, is a complex hydrocarbon molecule that can be made from feedstock other than petroleum. Unlike ethanol, biogasoline has the same energy content as gasoline. Unlike cellulosic ethanol alternatives, Virent produces water using a bioforming process, rather than consuming valuable water. Virent has raised $28.5 million of investments from Cargill, Honda (HMC), Venture Investors, Advantage Capital Partners, and Stark Investments. Biogasoline will be its major initial focus. Its technology can also be used to produce biodiesel and bio jet fuel. Virent also has a five-year joint development agreement with Shell to produce hydrogen without CO2 emissions.

All presenters started with safe harbor warnings about future uncertainties. If you are an investor, please use this article only as a starting point for added research. In the transition from petroleum, their will be losers and winners. Some will be big winners.