WHY CELLULOSIC ETHANOL IS NEARER THAN YOU MAY THINK

1. WHY CELLULOSIC ETHANOL IS NEARER THAN YOU MAY THINK Bruce E. Dale Dept. of Chemical Engineering & Materials Science Michigan State University www.everythingbiomass.org Presented at: 2007 NACAA Conference Grand Rapids, Michigan July 16, 2007

2. 1978 – 2007 CRUDE OIL PRICES IT PAYS TO BE PATIENT President Bush promotes cellulosic ethanol My career begins

3. Linked Sustainability Challenges of the Coming Decades • Diversify transportation fuels & end strategic role of petroleum in the world • Provide food for growing & wealthier population (which will consume more meat) • Control greenhouse gases & limit other human emissions (for example, nitrogen & phosphorus discharge to ground & surface waters) • Provide economic opportunities for rural people • These challenges & opportunities intersect at biofuels, particularly cellulosic biofuels • Abundant opportunities for creative design & system level thinking

4. Some Basic Energy Facts • We do not need “energy”…we need services that energy provides • The services we need from energy are (current sources or carriers of these energy services) • Heat (natural gas, coal) • Light (coal, natural gas, hydro & nuclear) • Mobility (petroleum—97%, rest is ethanol) • Energy has fundamentally different qualities: carriers are not all interchangeable “All BTU are not created equal” • Industrial society literally stops without liquid fuels • Liquid fuels: not “energy” are required for mobility for the next few decades at least!

5. The Problem:Our Society STOPS Without Liquid Fuels!

6. All Energy Carriers do Not Have Equal Strategic Importance Either • Coal– U.S. & China have huge domestic reserves • Naturalgas—imports significant, mostly from Canada and Mexico • Petroleum– more than 60% imported (U.S.) and rising • “We (U.S.) are addicted to oil” President Bush • Oil revenues sustain oppressive & aggressive regimes • Oil used as a political weapon • Oil revenues finance international terrorism • Petroleum dependence undermines • climate security (a chief source of greenhouse gases) • economic security (no fuels = no movement of goods = no trade = no prosperity) • international security & world stability

7. Options for Dealing with Petroleum Issue • Decrease demand • More petroleum efficient vehicles • Better mileage (start measuring vehicle efficiency by “petroleum per mile” or “miles per gallon gasoline” • Electrical/hybrid vehicles • Fewer miles traveled (better planning) • Increase supply • Athabasca oil sands (Canada) • Oil shale (U.S.) • Super heavy oil (Venezuela) • Coal to liquid fuels (U.S., South Africa, China) • Biofuels • Biodiesel • Ethanol (from sugar, from corn, from cellulosics)

8. Why Biofuels? • Biofuels, including cellulosic ethanol, are one of a small handful of petroleum alternatives that can provide: • (inter) national security advantages • large greenhouse gas reductions • economic advantages (lower cost fuels than petroleum fuels) • This presentation emphasizes cellulosic ethanol • From agricultural and forestry residues • From “energy crops”

9. Ethanol Production Flowchart Corn Process Ethanol Sugar Ferment-ation Distillation Drying Co-Product Recovery Animal Feed Chemicals Starch Conversion (Cook or Enzymatic Hydrolysis) CornKernels

10. Ethanol Production Flowchart Corn Process Sugar Cane Process Ethanol SugarCane Sugar Ferment-ation Distillation Drying Co-Product Recovery Animal Feed Chemicals Starch Conversion (Cook or Enzymatic Hydrolysis) CornKernels

11. Ethanol Production Flowchart Cellulose Process Corn Process Sugar Cane Process Ethanol SugarCane Sugar Ferment-ation Distillation Drying Co-Product Recovery Animal Feed Chemicals Starch Conversion (Cook or Enzymatic Hydrolysis) CornKernels Cellulose Conversion Hydrolysis Cellulose Cellulose Pretreatment • Crop residues: corn stover, rice straw, wheat straw, etc. • Forestry residues/slash • Energy crops: switchgrass, poplar, Miscanthus, many others • Municipal & construction wastes, etc

12. Ethanol Production Flowchart Cellulose Process Corn Process Sugar Cane Process Ethanol SugarCane Sugar Ferment-ation Distillation Drying Co-Product Recovery Animal Feed Chemicals Starch Conversion (Cook or Enzymatic Hydrolysis) CornKernels Cellulose Conversion Hydrolysis Cellulose Cellulose Pretreatment • Corn Stover • Switchgrass • MSW • Forest Residues • Ag Residues • Wood Chips ThermochemicalConversion • Heat and Power • Fuels and Chemicals

13. Major Cost Elements: Petroleum Fuels & Biofuels For all commodity products (fuels, bulk chemicals, semiconductor chips, potato chips, etc.) two things determine the final selling price: • Cost of raw material (the feedstock) • Cost of processing the feedstock to the desired product(s) For gasoline, diesel, etc. the cost to make them depends on petroleum cost (70%) and processing cost (30%)

14. Adapted from Lynd & Wyman Forages & hay crops-typical prices Our margin for processing: here to here and beyond Plant material is much, much cheaper than oil on both energy & mass basis

15. Impact of Processing Improvements: Oil’s Past & Future • Historically, petrochemical processing costs exceeded feedstock costs • Petroleum processing efficiencies have increased and costs have decreased dramatically but reaching point of diminishing returns • Petroleum raw materials have long-term issues • Costs will continue to increase as supplies tighten • High price variability • Impacts national security • Climate security concerns • Not renewable • Not a pretty picture for our petroleum dependent society Relative Cost Processing Oil From J. Stoppert, 2005

16. Brazil Has Been Reducing Sugar Ethanol Costs for 30 Years Cellulosic Ethanol Costs Have Declined and Will Decrease More! Ethanol-Brazil Gasoline-Rotterdam

17. Impact of Processing Improvements: The Future of Cellulosic Biomass Conversion • Processing is dominant cost of cellulosic biofuels today • Cellulosic biomass costs should be stable or decrease • Processing costs dominated by pretreatment, enzymes & fermentation • Biomass processing costs must (& will) decrease • Two ways to do this: • “Learning by doing” in large scale plants • Applied (cost focused) research • Much more attractive future • Domestically produced fuels • Environmental improvements • Rural/regional economic development Relative Cost Processing ? Biomass Biomass Adapted from J. Stoppert, 2005

18. Testing AFEX pretreatment technology

19. 33% Biomass Feedstock Capital Recovery Charge 5% Feed Handling Grid Electricity 18% Pretreatment / Conditioning Raw Materials SSCF 12% Total Plant Electricity (after ~10x cost reduction) 9% Cellulase Process Elect. Distillation and Solids 10% Recovery Fixed Costs 4% Wastewater Treatment Net 4% Boiler/Turbogenerator Utilities 4% Storage 1% (0.20) (0.10) - 0.10 0.20 0.30 0.40 Key Processing Cost Elements Biomass Refining CAFI

20. Central Role and Pervasive Impact of Pretreatment for Biological Processing Enzyme production Biomass production Harvesting, storage, size reduction Pretreatment Enzymatic hydrolysis Sugar fermentation Hydrolyzate conditioning Hydrolyzate fermentation Ethanol recovery Residue utilization Waste treatment Biomass Refining CAFI

21. Cellulosic Biomass to Ethanol Cellulosic Biomass Production Biomass Conversion Research Lab at Michigan State Works Here Using AFEX Process DOE 2005

22. Ammonia Ammonia Gaseous Gaseous Recovery Recovery Recycle Ammonia Ammonia Ammonia Ammonia Treated Treated Heat Biomass Biomass Biomass Biomass Reactor Reactor Explosion Expansion How does AFEX work? • Biomass heated (~100 C) with concentrated ammonia • Rapid pressure release ends treatment • 99% of ammonia is recovered & reused, remainder serves as N source downstream for fermentation • AFEX covered by multiple U. S. and international patents • Sugars not degraded, fermentation inhibitors NOT produced

23. Before and After AFEX

24. Pretreatment Economic Analysis by NREL $/gal EtOH Proof Year: 4th Year of Operation AFEX: $1.41/gal MESP Cash Cost Plant Level

25. Results of AFEX Economic Analysis* • Reduce ammonia loadings • Reduce required ammonia recycle concentrations (manage system water) • Reduce capital cost of AFEX • *Analysis performed by Dr. Tim Eggeman of NREL

26. Improvements in AFEX Give Improved Ethanol MESP 2,205 dry ton/day scale Original estimate Reduced ammonia loading & concentration Plus new ammonia recovery approach

27. Final Result will be Low Cost Ethanol from Cellulose 2,205 dry ton/day scale

28. Ethanol from Cellulosics: Look for Fast Growth! courtesy Dr. Steve Long UICU

29. What Happens Because of Inexpensive Ethanol? • Petroleum dominance declines • Reduce petroleum’s influence on prosperity & politics • Less chance for international conflict • Greater economic growth opportunities for poor nations • Environmental improvements possible • Reduced greenhouse gases • Reduced nitrogen & phosphorus-related pollution • Improved soil fertility • Ruraleconomic development possible • Local cellulosic biomass processing • Greater wealth accumulation in rural areas • Less migration to cities to find economic opportunity • Less expensive food (animal feed) possible • Improved animal feeds: protein & calories • Less expensive, more abundant human food

30. Will People Go Hungry Because of Biofuels? • Three major U.S. crops alone (corn, soy, wheat) produce 1300 trillion kcal & 51 trillion grams protein/yr • Could meet U.S. human demand for protein & calories with 25 million acres of corn (~5% of our cropland) • Most U. S. agricultural production (inc. exports) is fed to animals-- i.e., we are meeting their protein/calorie needs from our land resources. Their needs are: • 1040 trillion kcal/yr ( 5 times human demand) • 56.6 trillion gm protein/yr (10 times human demand) • Thus we can address perceived “food vs. fuel” conflict by providing animal feeds more efficiently, on less land • Dairy & beef cattle consume more than 70% of all calories and protein fed to livestock • As nations grow richer, they want more protein, especially more meat….

31. U.S. Livestock Consumption of Calories & Protein

32. Coproducing Animal Feeds and Biofuels • Must supply animals (fish, poultry, swine, cattle) with: • Calories (food energy), and • Protein • Can grow grasses with high protein content & recover the protein with well-known (since 1945) technology • Grasses/crop residues/woody materials also have lots of calories as sugars “locked up” in plant cell walls. • Pretreatment processes required to “unlock” these sugars to make cellulosic ethanol could also unlock these sugars for ruminant animal feeding • Cellulose-based biorefineries could also be in the animal feed business: this is a really important “food vs. fuel” opportunity

33. LotsofHay Ruminant Animals & Biorefineries: Improve Cellulose Conversion for Biorefinery = Improve Cellulose Digestibility for Cows Mobile Cellulose Biorefinery (a.k.a. Cow) Stationary Cellulose Biorefinery = SSCF Bioreactor: Ruminant Bioreactor: Biomass Input ~ 5,000 Dry Ton/Day= 10 M Dry Lb/Day Biomass Input ~ 26 Lb/Day* Capacity ~ 40 Gal Fermentor Capacity ~ 45 M Gal Fermentor Cow is 3x more efficient than industrial bioreactor *Rasby, Rick. “Estimating Daily Forage Intake of Cows”. University of Nebraska-Lincoln Institute of Agriculture and Natural Resources, http://beef.unl.edu/stories/200608210.shtml, 10/02/06.

34. What Might the Future Look Like? • Land available (million acres) • Cropland (430): corn, wheat, soy, sorghum, alfalfa, hay, CRP • Permanent pasture (570)- half suitable for mechanical harvest • Most of these acres suitable for perennial grasses • Does NOT include forests • Assume we can develop a pretreated perennial grass yielding 10 tons/acre/yr with 10% protein, 75% cellulose + hemicellulose (90% digestible), 15% lignin and ash • Supply ruminants 710 trillion cal/yr & 36 trillion grams protein/yr using ~40 million acres of productive grasses • Leaves available >600 million acres for other feeds, human foods and biofuel production • I simply do not agree that land for food is a limiting resource for biofuel production—animal feed is the issue

35. Thinking Ahead: Farmers & Biofuels “More than a century of bitter experience has taught farmers that when they simply sell a raw crop, they fall ever further behind.” David Morris “The American Prospect” April 2006

36. Capturing Local Benefits from Biofuels • Some issues for farmers/local interests • If farmers merely supply biomass, they will not benefit much from the biofuels revolution • Investment required for cellulosic ethanol biorefinery is huge ~ $250 million and up—difficult for farmers to participate • Some issues for biofuel firms/larger society • Supply chain issues are enormous—need 5,000 ton/day from ~1,000 farmers: chemicals/fuels industries have zero experience with such large agricultural systems • Cellulosic biomass is bulky, difficult to transport • Need to resolve “food vs. fuel” problem: actually “animal feed and fuel opportunity” • Is there a common solution? • Regional Biomass Processing Center– concept worthy of study • Pretreat biomass for biorefinery & ruminant (cattle) feeding • Much lower capital requirements—accessible to rural interests • Develop additional products over time—animal feed protein, enzymes, nutraceuticals, biobased composites, etc

44. Ethanol: Some Myths and Realities • Myth: Ethanol has a negative “net energy” Reality: Gasoline’s “net energy” is worse than ethanol’s and anyway this metric is irrelevant • Myth: Ethanol will drive up food prices Reality: Complicated: no easy sound bites for fuels derived from oilseeds or grains. Cellulosic ethanol will reduce food prices • Myth: Ethanol is bad for the environment Reality: Compared with what? Corn ethanol is superior to gasoline now for most metrics. Cellulosic ethanol will be even better • Myth: Ethanol will always cost more than gasoline Reality: Ethanol from corn costs ~$1.20/gal; ethanol from cellulosics, when mature, will cost $0.60/gal

45. 1978 – 2007 CRUDE OIL PRICES IT PAYS TO BE PATIENT President Bush promotes cellulosic ethanol My career begins

46. “Absolutely!”

47. Questions ??