The Biorefinery Project of the Future – Part 5 of 10 – add algal fuels

In part V of our series today, we start to add even more exotic technologies when we look at algae-based options, and other CO2 munching technologies that will help us create renewable fuels from the CO2 we are producing as a byproduct, adding economic strength as well as reducing our carbon footprint.

The Backstory.

Part I of the series

In part I of our series, we outlined the beginnings of the Bioenergy Project of the Future, based on dozens of interviews on the future of technology, policy, rural communities, finance, and the demand for bio-based products and renewable fuels.

We outlined three principles for development:  First do no harm. Less is more. Add ingredients slowly and stir.

In Part I, the product goal is to make and distribute ethanol (butanol is fine too) or biodiesel through the acquisition or construction of a first-generation ethanol (or biobutanol) plant.  We not only have to demonstrate technological prowess in bioprocessing, we have to demonstrate financial and management acumen to all our stakeholders – the community, policymakers, lenders, and customers. As well as to begin to establish that eco-system of relationships in our community that will serve us later on, when we add-on riskier and more advanced second-generation features.

In Part II, the Bioenergy Project of the Future began a graduated series of bolt-ons, beginning with the collection of cellulosic biomass. No, we won’t aren’t adding the capacity to convert that into fuels just yet. That would be getting ahead of ourselves. First, we have to demonstrate that we can build a sustainable ecosystem around the harvest and delivery of biomass.

Part III: Add renewable chemicals. If we have learned anything from the stories of hot companies like Amyris, LS9, Gevo, Solazyme, ZeaChem, Algenol, or Cobalt Technologies, as well as exciting pure-plays like Segetis, Elevance, GlycosBio or Rivertop Renewables, it is the importance of producing chemicals or other bio-based materials first to generate revenues, before taking the company further down the cost curve and up in scale in order to make competitively-priced renewable fuels.

Part IV: Add renewable fuels. No longer are we producing advanced biofuels “because we can”, as a demonstration of technology. We are demonstrating the power of our network of relationships in the community, and the power of our growing balance sheet. Now that capacity expands and we begin to saturate some of the market we developed in high-value organic acids, we turn to the fuel market with a capacity expansion effort.

Part V – the CO2 wellspring

Ethanol plants produce a decent flow of high-quality CO2, roughly 5.6 pounds of CO2 per gallon of ethanol we produce. That’s enough CO2 to take our plant, under new EPA carbon dioxide regulations, into the realm of “major emitters” and subjecting us to intense Title V regulations. But its also an opportunity – and for some time ethanol plants have been co-located with CO2 liquefaction plants – such as the 140,000 tons that can be supplied by Badger State Ethanol to the EPCO liquid CO2 facility. EPCO, in turn, supplies CO2 to the food, beverage, chemical, and enhanced oil recovery industries.

How much algae?

140,000 tons of CO2 is also enough to produce 66,000 tons of algae, which can in turn supply as much as 46,000 tons of animal feed and 5.4 Mgy in renewable oils, using up around 1800 acres of land in the process (at 3,000 gallons per acre).

The land footprint?

It’s been estimated that CO2 can be shipped by pipeline up to 10 miles on a cost effective basis for algal fuel production, and 1800 acres is about 1 percent of the land within 10 miles of an ethanol plant. That’s well, well within the kinds of volumes that we associate with available, idle land, unsuitable for row crops.

Even within a 3-mile radius of our project, an 1800 acre algae farm would take up only 10 percent of the available land, which in most cases would be idle, unsuitable lands for crop cultivation. Even utilizing the flow of CO2 from a much larger ethanol project, say 100 million gallons, we are highly likely to find appropriate land for algae farms within a five-mile radius of our plant.

Can algae grow economically in the ethanol belt?

Concerned that algae won’t grow effectively in the ethanol belt because open ponds freeze in the winter and closed systems are not economically effective? Consider the availability of process heat and steam from our algal project. Researchers at Lincoln University in Missouri have developed a pilot project at the Chamois Power plant near Jefferson City. The project has five ponds, uses flue gas directly from the plant, and recovers heat from the flue gas to improve productivity in the winter.

The Joule Unlimited option

But there are even more effective uses for CO2 than algal fuel production on the horizon. Consider the case of Joule Unlimited, which has moved to pilot phase in Leander, Texas with a technology that produces drop-in hydrocarbon fuels from CO2, sunlight, water and nutrients. Those elements are readily available as residues from our ethanol project. In the case of Joule (which also can produce ethanol from its process), the technology looks a little like a series of modular solar panels, and can generate up to 10,000 gallons per acre (and perhaps more). Which reduces our land needs to around 540 acres, or about 5 percent of the land within roughly 2-1/2 miles of our project.

The economics

Are algal economics ready for prime-time or Joule’s technology available on commercial scale? Not yet – but our Bioenergy Project of the Future has significant opportunities, compared to stand alone advanced biofuels projects, by developing out an advanced bioenergy capability based on utilizing its CO2, heat and wastewater resources. 10.8 million gallons in added capacity is an 11 percent addition to capacity without adding to our corn/sugar crop demand, utilizing a free source of nutrients, process heat, water and CO2, and materially reducing the carbon intensity of our corn or sugarcane ethanol (or biobutanol) field-to-wheels emissions.

The market for our algal fuels

Who forms the market for our algal biodiesel, or our diesel drop-in fuels? Without a doubt, market locally to the very farmers dropping off corn or sugarcane to our processing plant. Truckers have to fill up on fuel somewhere, why not at the same time that they are dropping off a load of corn, sugar beets, cobs or other cellulosic material.

If we have a highly conservative 150 truck deliveries per day, we can serve more than 20 percent of our fuel to our own customers in the form of diesel fuel (less in the case of blended biodiesel), while generating some extra profit by cutting out the middleman. Not to mention the reduction in carbon intensity. At retail rates, we could add as much as $23 million to the revenues at our ethanol plant with our algae project on the fuels alone, and perhaps as much as twice that amount in terms of the value of our animal protein. That’s well above the $5.6 million or so in the value of our merchant CO2.

The value proposition for our community of growers

In the Bioenergy Project of the Future, we will also be building stronger value-add opportunities for our community of growers, by giving them additional opportunities for high-value crops through the addition of products such as algae (for those who want to enter into joint venture production agreements, supplying land, capital, water and labor, in return for technology and a ready market for the crop).

The key to our strategy continues to be building economically advantaged bolt-ons to our ethanol base, utilizing our waste streams and at every step of the way building a deeper relationship with the community we serve.

Part VI – tomorrow: add biomammonia

Tomorrow, in part VI of our 10-part series, we will look at the opportunities to add bio-ammonia to our projects, to reduce the carbon intensity of our project, build even stronger ties with our community of growers, and generate stronger profits in the process.

The complete Bioenergy Project of the Future series

PART IX – Adding other renewables is here..
PART VIII – Adding lowest-cost feedstocks is here..
PART VII – Adding cellulosic diesel is here..
PART VI – Adding bioammonia is here..
PART V – Adding algal fuels is here..
PART IV – Adding cellulosic biofuels is here.
PART III – Adding renewable chemicals – is here.
PART II – Adding cellulosic  biomass is here.
PART I of the series – Ethanol as a Base is here.