2011 FEW Review - Track 1 Cellulosic Ethanol: Room for Debate

Cellulosic producers present multiple paths forward
By Kris Bevill | July 21, 2011

Ethanol produced from cellulosic materials—once thought to be a concept that would never make it out of the lab—has unarguably become the most popular topic among corn ethanol producers and cellulosic project developers alike, as evidenced by the overwhelming turnout of eager speakers and attendees in the cellulosic track at the 27th annual International Fuel Ethanol Workshop & Expo in Indianapolis. While it seems to be widely agreed that second-generation biofuel production is the future of ethanol, exactly which feedstocks and technologies will be best used to produce that fuel are still under debate.

For years, cellulosic ethanol was viewed as a portion of the industry that would exist independently from starch-based facilities, but as new technologies become available and corn ethanol producers aggressively seek new ways to diversify their product streams, a growing number of traditional ethanol producers are warming to the notion of co-locating cellulosic systems with their existing plants. More than 200 conference attendees packed into the conference’s opening cellulosic ethanol session to listen as industry experts discussed their views toward integrating cellulosic production at existing corn ethanol facilities. Mark Penshorn, project manager for Science Applications International Corp.’s renewable energy group, pointed out that it will eventually become impossible to plant enough corn to meet the U.S. federal government’s steadily increasing renewable fuel standard. “The obvious next step is cellulosic biofuel,” he said.

One of the most attractive aspects of co-locating cellulosic facilities with corn facilities is the ready availability of feedstock by way of corn stover. Or is it? Several presenters said they’re placing their bets on corn stover as the winning feedstock for cellulosic ethanol production, but others disagreed. Speakers representing Inbicon A/S and EdeniQ Inc. said they are exploring stover as one of the first primary cellulosic feedstocks. Inbicon’s project leader for North America, Paul Kamp, appealed to the ease of obtaining stover suppliers at existing ethanol plants and said that’s one reason it makes sense for corn ethanol facilities to integrate cellulosic capabilities. “Your grain suppliers will also likely be your stover suppliers,” he said, adding, “we do a lot of work on it and we know we can do it.” Tom Griffin, vice president of technology at EdeniQ, said stover is the first feedstock of focus for his company, followed by switchgrass, bagasse, energy cane and wood sources.

Doug Rivers, director of research and development at ICM Inc., made a case against corn stover as a primary feedstock during his presentation. He displayed a photo taken of the 2009 corn crop that showed unharvested corn nearly buried in snowdrifts after the area received early, heavy snowfalls. Stover can’t be taken off fields until the corn crop is harvested, and if the harvest is delayed due to bad weather conditions, it could result in feedstock shortages for stover users, he suggested. “It is our position that we would hate to bank a $200 to $400 million cellulosic plant on a stover supply that doesn’t get there,” he said. “So we see corn stover as an opportunist feedstock, where you may run it part of the year based on availability.”

Others are focusing their efforts on ethanol produced from dedicated energy crops and many favor the Southeast U.S. as an ideal location to establish those facilities. Speakers from Tennessee-based Genera Energy LLC and Ceres Inc. said weather and land availability in the Southeast make it favorable for switchgrass, sorghum and miscanthus projects. Genera is readying a launch into the commercial arena as a feedstock supplier for ventures throughout the Southeast, according to Bob Randle, the company’s vice president of business development. Frank Hardimon, Ceres’ director of sales, highlighted his company’s switchgrass and sorghum projects throughout that portion of the country but said miscanthus is not ready for commercialization anywhere yet due to the difficulties of harvesting it.

Financial hurdles continue to be a major issue for cellulosic ethanol producers. In his presentation, Jeff Passmore, president of Passmore Group Inc., said Wall Street investors are currently more willing to invest in wind or solar projects than biofuels because of the inherent uncertainties related to first-of-a-kind cellulosic projects. “The project capital cost and the project operating cost and the project revenue flow are all known for wind. And none of them are known for cellulosic ethanol,” he said. “So, while wind faces cost challenges—yes, it’s more expensive than natural gas—cellulosic ethanol faces first-plant commercialization challenges.” Passmore’s list of “tools” necessary to encourage investment in cellulosic ethanol projects included a long-term cellulosic producer’s tax credit, expanded infrastructure by way of E85 and blender pumps and more flex-fuel vehicles, and the continuation of the renewable fuel standard.

Considering the multitude of issues facing cellulosic ethanol producers, Phil Madsen, president of Katzen International Inc., offered an alternative to the next generation of biofuels. His presentation focused heavily on new sugar and starch feedstock sources, such as inedible sweet potatoes, cassava root, and SunSpuds, which could be used with existing technologies and strategies as a bridge between first-generation and second-generation biofuels. His company refers to this as generation 1.5 and believes it will be a necessary filler to move the industry from first- to second-generation biofuels production. “Cellulosic conversion will succeed in special situations and by 2020 we will see less than 500 million gallons worldwide,” he said. “We believe at Katzen that new sugar and starch sources, by 2030, using fuel-specific agriculture, will have greater than 50 billion gallons of production using conventional, known technology.”

—Kris Bevill