Paul K. Bergey North Carolina State University, USA & Geoffrey G. Parker Tulane University, USA

1. Toward a Model for Generational Transition of Sustainable Energy Platforms: The Greenfield vs. Brownfield Problem Paul K. Bergey North Carolina State University, USA  & Geoffrey G. Parker Tulane University, USA

2. “Our goal is to build a supply chain from lignocellulose to butanol.” • Tony Hayward, (former) CEO of BP 2

3. A Dark Cloud Appears over Ethanol • In 2008, there were 170 ethanol plants operating in the U.S. and 24 additional plants under construction to provide a total production capacity of approximately 12.6 billion gallons per year • In 2009, the Renewable Fuels Association reported that 24 plants with a combined capacity of over 2 billion gallons per year are currently not producing and about 12 were in bankruptcy.

4. It Has a Silver (Biobutanol) Lining • It has a higher energy density per unit volume than ethanol. • It is compatible with the existing distribution infrastructure for petroleum based fuels, and thus, can be distributed via the national pipeline network, unlike ethanol. • It is highly resistant to moisture absorption and therefore has potential as an aviation fuel • It can be burned in existing automobile engines in any blended proportion (up to 100%) • It is cleaner burning than gasoline or ethanol

5. Butamax Advanced Biofuels LLC • “Fuel and fleet testing of biobutanol in real vehicles on real roads – covering a distance of more than 1.3 million vehicle road-miles – has confirmed the high performance advantages of this fuel blend. For example, biobutanol blended at a concentration of 16%* volume into fuels demonstrated excellent vehicle performance. A commercial fuels trial confirmed the compatibility of butanol with existing fuel infrastructure and consumer satisfaction with the product.”

6. The Greenfield vs. Brownfield Problem

7. Coalition Definitions

8. Necessary Conditions for a Non-Empty Core in a 3 Player Game

9. Characteristic Functions – 3 Players

10. Three Player Game Solution Plane

11. The Core is Defined by an Irreducible and Consistent System of Constraints

12. Two Necessary and Sufficient Conditions for a Non-Empty Core to a 3 player Greenfield vs. Brownfield Game

13. Exploring Equilibria in the DV space

14. Exploring Equilibria in the DV space

15. Exploring Equilibria in the DV space

16. Exploring Equilibria in the DV space

17. Conclusions • The reduced set of sufficiency conditions expose tipping points which yield managerial insights through sensitivity analysis of the core • Brownfield conversions only make economic sense when the destruction of a productive economic asset is justified by the avoided cost of an economically equivalent greenfield option • Early opportunities arise for brownfield conversions of lower producing high margin plants (particularly those of limited size and opportunistic location) • The social benefit of the 2nd generation biofuel plant “should” exceed the social benefit of the 1st generation plant to achieve sustainability of the core • Higher levels of 2nd generation biofuel production combined with higher levels of social benefit on a per unit basis of 2nd generation biofuel suggest a stable brownfield grand coalition

18. Physical Property i-butanol n-butanol Ethanol Density at 20°C (g/cm³)‏ 0.802 0.810 0.794 Boiling Point at 1 atm (⁰C)‏ 108 118 78 Water Solubility at 20⁰C (g/100mL water)‏ 8.0 7.7 Miscible Net Heat of Combustion (BTU/gal)‏ 95,000 93,000 80,000 R+M/2 103.5 87 112 Blend RVP (psi at 100⁰F) 1 5.0 4.3 18-22 Butanol Physical & Fuel Properties Promotum, Gevo 18

19. Bio-Butanol Projecting the 3rd Wave 19

20. Company Bug Bug Strategy Molecule Fermentation Process Separation Strategy Development Status Gevo Yeast GMO UCLA Valine metabolism iso-buoh Semi batch vacuum flash in situ removal followed by distillation trains 2010 Operating pilot in St. Johns, MO. 2011 Commercial Cobalt Biofuels Clostridium Non GMO strain reduced etoh and acetone n-buoh for blending w/gasoline, diesel, jet Continuous modified ABE Fermentation vapor compression distillation 2010 pilot 10-35k gpy 2011 demo 2-5m gpy 2012 commercial Tetra Vitae Clostridium beijerinckii Non GMO selected for reduced etoh production n-buoh and acetone 2:1 Semi batch "AB" Fermentation Carbon dioxide stripping continuous in situ removal followed by distillation trains 2009 300 liter bench 2010 10,000 liter pilot Butyl Fuel Clostridiums Aceto & tyro GMO & mutant strain n-buoh Continuous two stage dual path anaerobic fermentation stripping following immobilized cell bioreactors Unknown Syngas Biofuels Energy Fermentation of Syngas GMO n-buoh Thermochemical catalyst NA Unknown Status Domestic Butanol Companies 20

21. Company Bug Bug Strategy Molecule Fermentation Process Separation Strategy Development Status Butamax (DuPont/BP)‏ 1.Clostridium 2.E.Coli GMOs iso-buoh Semi batch continuous in situ removal followed by distillation trains 2010 Salt End Hull, UK 2013 Commercial Additional Feedstocks 2013+ Green Biologics (UK)‏ Clostridium. Mixed populations GMOs high tolerance (4%)‏ n-buoh Continuous fermentation In situ removal unknown. Building demo in India. Consulting w/Chinese firms Metex (FR)‏ "Well known bacteria“ GMOs n-buoh Unkown In situ removal unknown. Unknown Butalco (Switzerland)‏ Yeast GMOs unclear Unkown In situ removal unknown. Unknown China Clostridium Currently selected strain. Migrating to GMOs n-buoh Migrating from traditional ABE Fermentation. May include in situ removal 2010 100MM gpy traditional ABE. 201X migration beyond ABE. Plans to add 350 MM gpy new capacity. Status International Butanol Companies 21