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This presentation discusses Iogen Corporation's leading position in developing cellulose ethanol technology. It covers their history, achievements, and partnerships, as well as the potential impact of cellulose ethanol on the environment, energy security, and agriculture.
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Presentation to:Governor’s Ethanol Coalition & US EPA Environmental Meeting“Ethanol and the Environment” • February 10, 2006 Jeff Passmore, Executive Vice President Iogen Corporation
The Leading Firm in Cellulose Ethanol Technology • Pioneer in making ethanol from “biomass” • Active since late 1970s • $120 million spent in development • $30 million annual revenue in related businesses • A leading position • 178 employees focused in this area • $40 million demonstration plant… the world’s first • Competitive commercial manufacturer of enzymes • Alliances: $60m $21m $16m
Iogen’s cellulose ethanol process
Iogen’s Ottawa demo plant - The world’s most advanced cellulose ethanol facility
The 9,000 mile launch of cellulose fuelled E85 Yukon – Aug. 2004
Iogen cellulose ethanol fuels G8 leaders’ vehicles Gleneagles, Scotland, July 2005
Iogen cellulose ethanol fuels delegates’ flex fuel fleet at COP11, MontrealNovember 28 – December 9, 2005
Straw and stover - Our oil • Farmers often burn or plow-under the residue that could be used as feedstock. • In certain black soil zones, straw burning would be eliminated.
DOE: Cellulose ethanol could deliver 20% savings in gasoline consumption
DOE & USDA: Cellulose ethanol could displace over 30% of the country’s present petroleum consumption “The purpose of this report is to determine whether the land resources of the United States are capable of producing a sustainable supply of biomass sufficient to displace 30% of the country’s present petroleum consumption (i.e.60 billion gallons per year)…1 billion dry tons of biomass feedstock per year The short answer to the question … is yes.” Source: USDOE / USDA April 2005
Iogen Cellulose Ethanol Plant Preliminary U.S. Feedstock Availability Assessment Based on total wheat and barley straw averages for 1999/2000 drawn within a 100 km radius (metric tonnes) 9 5 4 3 12 2 13 15 1 17 29 January 02n 20 19 11 10 7 14 6 16 8 18 1. MN-ND South (2.3) 2. MN-ND-North (2.3) 3. NE Montana (2.2) 4. Whitman-Lata (2.2) 5. North Central Montana (2.2) 6. South Central Kansas (2.0) 7. Western KS -Eastern CO (1.9) 8. North Central OK (1.9) 9. Lincoln-Adams-Grant (WA) (1.8) 10. North Central Kansas (1.8) 11. NW Kansas -S. Central NE (1.8) ACRES 12. NW-ND (1.6) 13. Walla-Walla- Umatilla (WA-OR) (1.5) Not Estimated <10,000 10,000 -24,999 25,000-49,999 50,000-99,999 100,000-149,999 150,000+ 14. Hodgeman (1.4) 15. Central North Dakota (1.4) 16. OK Panhandle (KS,CO,OK,TX) (1.2) 17. North Central South Dakota (1.2) 18. SW Oklahoma (1.1) 19. North East Colorado (1.0) 20. Chase County (.67) (by request) Reference:Superimposed on the USDA Map - All Wheat 1999 - Harvested Acres by County created by USDA National Agricultural Statistics Service.
29 January 02 Iogen Cellulose Ethanol Plant Preliminary U.S. Feedstock Availability Assessment Based on total corn stover averages for 1999/2000 drawn within a 100 km radius (metric tonnes) Reference: Superimposed on the USDA Map - All Corn for Grain 1999 - Harvested Acres by County created by USDA National Agricultural Statistics Service. 19 8 20 13 4 7 14 6 3 11 10 16 5 12 9 2 1 21 18 22 23 15 24 17 ACRES 1. E. Central IL - W. Central IN (11.7) 2. W. Central IL (11.0) 3. North IL (10.9) 4. N. Central IA – S.Central MN (9.6) 5. S. Eastern NE (8.9) 6. East Central IA (8.6) 7. NW Iowa – SW MN (8.4) 8. Central MN (8.3) 9. Central Indiana (7.8) 10. West Central Iowa (7.7) 11. S. Central Iowa (7.5) 12. S. Central NE (6.6) 13. NE Iowa – SE MN (6.3) 14. NE Nebraska (5.9) 15. South Illinois (3.6) 16. SW NE – Chase County (3.4) 17. OK Panhandle (KS,CO,OK,TX) (2.9) 18. NW KS – S. West NE (2.5) 19. MN-ND South (2.5) Not Estimated <10,000 10,000 -24,999 25,000-49,999 50,000-99,999 100,000-149,999 150,000+ 20. N. Central SD (2.3) 21. NE Colorado (2.2) 22. W. Kansas – Eastern CO (1.9) 23. Hodgeman (1.6) 24. S. Central KS (.84)
Benefits to energy security Cellulose ethanol can have a significant impact Over a billion tons of agriculture and forestry residue plus dedicated crop material is available in the US, according to recent DOE/USDA estimates Using Iogen yields, a billion tons of cellulosic material equates to the production of ~75 billion gallons of cellulose ethanol or, on an energy basis, over 40% of the US current gasoline consumption
Benefits to the environment DOE: Ethanol made from cellulose has virtually no net CO2 emissions Gasoline Ethanol from Corn Ethanol from Cellulose
Benefits to agriculture • Puts $ in farmer’s pockets • Keeps jobs on the farm and in the community • Represents a living example of sustainable development • Eliminates the need for straw burning (certain soil zones)
Commercial plant rollout: What are the site evaluation criteria? Assess commercial/country risk using factors such as: Feedstocks • Type, availability, cost, ease of collection Government Policy • Tax situation, fuel mandates, financial incentives Infrastructure Issues • Water availability/cost, road network, rail, power and natural gas price Investment Climate • Tax rates, industrial development incentives, financing options Ethanol & Co-Product Sales • Off-take customers, refinery locations, market proximity
2007 Construction start targeted • Pursuing a disciplined Front End Development Process • Staged commercial and technical milestones • Working closely with Shell • Straw procurement underway • 320 contracts (382,000 t/yr) in place
Project Developer: Iogen Shell Global Solutions Lead Equity Investors: Royal Dutch/Shell Iogen Energy Lead Candidate Locations: Idaho Saskatchewan Alberta A commercial biorefinery will look like… • Project Data: • $350 M project cost • ~ 500,000 t/yr feedstock • ~ 30 million gal/yr production • Associated power plant and enzyme plant
The US Energy Policy Act of 2005 aggressively pursues cellulose ethanol • 7.5 billion gallons of renewable fuel by 2012 • A $1 billion loan guarantee program • 80% non-recourse loan guarantee for first four plants up to max of • $250 mm/plant • A 2.5:1 trading ratio for cellulose ethanol • 250 million gallon minimum annual required volume of cellulose ethanol beginning in 2013
The President’s ’06 State of the Union Address put wind in the sails of the ’05 Energy Policy Act • “Keeping America competitive requires affordable energy. Here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world. • We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips, stalks, or switch grass. • Our goal is to make this new kind of ethanol practical and competitive within six years. Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025.” - President Bush, Jan. 31 State of the Union Address