Biomass conference focuses on cellulosic ethanol

By Ryan C. Christiansen | September 08, 2008
Web exclusive posted Oct. 2, 2008 at 1:48 p.m. CST

Approximately 120 agricultural researchers, economists and industry professionals who attended the Northern Plains Biomass Economy conference in Fargo, N.D., on Sept. 29 discussed incentives that are in place to develop a U.S. cellulosic ethanol industry and how biomass-producing states can take advantage of those incentives.

Cellulosic ethanol is "the most promising opportunity" for biomass-producing states in the Upper Midwest and the Food, Conservation, and Energy Act of 2008, also known as the farm bill, along with the Energy Independence and Security Act of 2007 (EISA) provide a framework of incentives for developing the cellulosic ethanol industry in the United States, said Scott Stofferahn, a staff member for U.S. Senator Kent Conrad, D-N.D. The legislation was driven by concern over increased food and animal feed costs as they relate to increased production of corn-based ethanol, he said, and also concerns about how to reduce greenhouse gas emissions.

In this environment, cellulosic ethanol technologies are advancing. Researchers at Michigan State University and North Dakota State University are working together with MBI International in Lansing, Mich., to improve the ammonia fiber expansion (AFEX) pretreatment process that was developed at MSU to break down biomass into nano-scale fibers dubbed "nano-whiskers" that can more easily be processed by enzymes into sugars for the production of cellulosic ethanol. The group is working to develop a continuous AFEX process that can be integrated with the hydrolysis and fermentation processes to produce ethanol. The high cost of enzymes is a critical barrier to commercializing the process, according to Bernie Steele, director of operations at MBI.

The nano-whiskers can also be combined with other chemicals, for example, polyvinyl alcohol, to make composite materials for the manufacture of consumer goods, according to Lawrence Drzal, a researcher in the Department of Chemical Engineering and Material Science at MSU. The group has had good success using the AFEX process and wheat straw as feedstock because the fibers are low in weight but have excellent strength and stiffness properties, he said.

When the AFEX process is used to pretreat biomass, the resulting material can be used as fiber for material manufacturing, as feedstock for cellulosic ethanol, and also as an easily digestible animal feed, said Joseph Carolan, an agricultural economist at MSU. Carolan suggested multiple, small-scale satellite pretreatment centers might be developed in rural communities to process biomass that could be sold to multiple markets.

Switchgrass has been positioned as a feedstock of choice in producing cellulosic ethanol in an effort to achieve a reduction in greenhouse gases. However, research suggests that switchgrass might not be the most practical option. Varieties of the perennial, as well as varieties of wheatgrass and wild rye, have been grown in test plots in North Dakota. With adequate precipitation, switchgrass grows well, but wheatgrass is the most productive in dry seasons, according to Paul Nyren, a researcher at the NDSU Central Grasslands Research Extension Center.

The premise that switchgrass might be a competitive option for farmers when grown on marginal lands was challenged by Dean Bangsund, a researcher in the NDSU Department of Agribusiness and Applied Economics. He said based on an economic model that forecasts the production costs and returns for switchgrass, it might be difficult to convince growers to raise switchgrass as a dedicated energy crop if the same land could be used to grow food crops.

If switchgrass was the primary feedstock for the 21 billion gallons of cellulosic ethanol needed in 2022, more than 78 million acres of land would have to be dedicated to growing the crop, said Francis Epplin, an agricultural economist at Oklahoma State University. Weather patterns suggest that a single harvest in July and August might be necessary and 600,000 tons of field storage in large rectangular solid bales would be required to store the crop until a projected 333 biorefineries would be ready to accept more deliveries of the feedstock, he said. Custom harvesting crews would most likely be used and $27 million would need to be invested in harvesting equipment. Epplin said an integrated and centrally controlled harvest and transportation system would be necessary, because there would be too much risk in a spot market for switchgrass, and the industry would resemble the vertically integrated timber production and processing business.

Corn cobs are the cellulosic ethanol feedstock of choice for Poet LLC in Sioux Falls, S.D. According to Doug Berven, director of corporate affairs at Poet, potentially 5 billion gallons of ethanol could be produced each year from corn cobs alone. The company is adding a 25 MMgy corn cob-to-ethanol plant to its Emmetsburg, Iowa, corn ethanol facility. Construction will begin in 2009 and the plant will begin producing cellulosic ethanol there in 2011. Berven said cobs are a good feedstock choice because they are consistent in quality, they can be collected during the main corn harvest pass, they have good bulk density, and farmers are more willing to collect cobs than corn stover. Using cobs is the logical first feedstock for producing cellulosic ethanol, he said. Poet is working with multiple companies to develop cob harvesting technologies, Berven said, including Vermeer Corp., Kinze Manufacturing Inc., SmithCo Manufacturing Inc., Demco, Agco Corp., Claas of America Inc., Deere & Company, and CNH America LLC.

The technology for producing cellulosic ethanol may be ramping up, but the lending environment for funding ethanol plants is tight, said Dave DeVos, senior vice president of agribusiness finance at AgCountry Farm Credit Services in Fargo, N.D. DeVos said there are few lenders that have taken a lead in funding ethanol projects in the United States and those lenders have maxed out the biofuels portions of their portfolios. Due to the subprime mortgage problems that Wall Street is facing, it's difficult for leading lenders to find new investors, he said, adding that continued government support for ethanol is also in question.

DeVos said potential projects would need to have more than 50 percent initial equity, loan guarantees, detailed and viable business plans, and would need to align with premier industry partners in order to gain financing. There is a significant upside to investing in cellulosic ethanol projects, he said, but to-date the technology is unproven at the commercial-scale. DeVos said exuberance around 2006 when ethanol plants were earning profits at the rate of $1 per gallon against $.80 cents per gallon in construction costs hurt the industry. He said there were more than 300 ethanol plant projects on the drawing board at one time and one leading construction firm had a 10-year waiting list for its services. Plant projects were organized without solid feasibility studies, he said, and inexperienced construction companies were sometimes used.

However, according to Won Koo, the director of the Center for Agricultural Policy and Trade Studies at NDSU, even if the technology is in place and financing is possible, the United States will not be able to produce enough ethanol to meet the consumption targets that have been set for the U.S. EPA in current legislation.

EISA directs the EPA to promulgate regulations to ensure that the U.S. consumes 36 billion gallons of ethanol in transportation fuel per year by 2022. However, based on current technology and feedstock availability trends, Koo said, the U.S. will only be able to produce 84 percent of that amount or 30 billion gallons of ethanol per year. He said improvements in ethanol processing technologies, yields, and the development of new crops can help to close that gap. Koo said his prediction assumes that the U.S. will be producing 13.7 billion gallons of cellulosic ethanol per year by 2022 from both perennial biomass crops, such as switchgrass, and also crop residues, such as corn stover and wheat straw. Koo said 100 percent of the biomass from 50 percent of the nation's Conservation Reserve Program could be harvested to produce 2.67 billion gallons of ethanol, as well as 70 percent of the wheat straw from 50 percent of the wheat crop could produce 3.2 billion gallons of ethanol, and 50 percent of corn stover from 50 percent of the corn crop could produce another 5.8 billion gallons of ethanol.