Biocrude producers are moving closer to providing a cost-competitive substitute for petroleum, but obstacles remain in building scale.
Biocrude is derived from renewable sources like wood waste and algae, but can be converted into near-perfect substitutes for petroleum products, known as “drop-in” fuels. Drop-in fuels “can serve as direct replacements or supplements to existing gasoline, diesel and jet fuels, without any changes to existing fuel distribution networks or engines”, according to the Department of Energy (DOE).
“You can almost consider it a renewable, light, sweet crude,” Aquatic Energy CEO David Johnston told Breaking Energy.
Biocrude has distinct advantages over much of the ethanol that is commonly blended into gasoline in the U.S. today. Critics have repeatedly warned that fuels containing more than a specified percentage of ethanol can cause damage to auto and other engines, and to fuel processing and distribution infrastructure.
Biocrude’s versatility gives it an additional advantage over ethanol. Neil Rossmeissl, technology manager for DOE’s biomass program, noted in a July 2011 presentation that ethanol is only employed as a substitute for a fraction of the gasoline in a tank. It fails to address a rising need for other transportation fuels, like diesel.
And biocrude producer KiOR says the energy density of its fuel compares favorably to that of ethanol — “one gallon of KiOR’s renewable gasoline or diesel blendstocks equates to 1.7 gallons (USG) of ethanol equivalent”, said a company spokesman.
KiOR produces biocrude from materials like switchgrass, logging residues and urban wood waste. Other biocrude producers, like Aquatic Energy, use algae as feedstock. Both firms indicate that their operations can be cost-competitive with crude oil when brought up to commercial-scale production.
“Based on the data it has accumulated at its demonstration facility, KiOR believes that at current yields, it can produce its gasoline and diesel blendstocks at a per-unit production cost below $1.80/USG, unsubsidized, if produced in a standard commercial production facility,” said a company spokesman. Standard commercial production requires processing capacity of 1,500 bone-dry tons (BDT) per day, he said.
Operations at Aquatic Energy’s demonstration facility, which yields an average of 2,500 USG/year of biodiesel, suggest that at a commercial scale of four square miles, production would break even at $55/bl. Accounting for labor, debt repayment, and other inputs, production would be profitable at $75-80/bl, according to Johnston.
The Green Credentials
Johnston also noted that refiners have an incentive to blend biodiesel into petroleum-derived diesel, which can help bring sulfur content down to the 15 parts per million level required by the EPA for highway diesel fuel (for 2007 and later model year engines and vehicles).
“Biodiesel can help them meet that standard by having zero sulfur content,” he said.
Algae-based biocrude has emerged as a strong contender in the search for alternative fuel supplies for the U.S. transportation sector. A study by Pacific Northwest National Laboratory, released in April 2011, stated that algal biofuels have the potential to displace 17% of U.S. oil imports.
Growing algae puts less pressure on both fresh water and land resources than cultivating crops like corn or soybeans, as it yields substantially more oil per acre, and can grow in brackish or even waste water. Algae can also serve an emissions-control function by consuming carbon dioxide.
But turning algae into biocrude remains an energy-intensive process, according to Joanne Morello, who focuses on algae in DOE’s Biomass Program. And while the technology exists to turn algae and biomass into transportation fuel, biocrude from any source has yet to overcome obstacles to widespread commercial production.
Variety Is An Obstacle, Too
Many of the processes that can be used to create biocrudes are relatively new and untested, and may turn out to be too costly to be viable, or insufficiently scalable. Different processes and feedstocks require different inputs, and many of these inputs are not consistently available across regions. That variety could undermine prospects for any one specific feedstock or process to emerge as a clear front-runner in efficient, viable, scalable production.
And the scale required to make a dent in U.S. petroleum product consumption is daunting.
DOE’s Biomass Program is involved in 11 integrated biorefinery projects producing renewable hydrocarbons (see table) with a combined capacity of almost 20 million U.S. gallons per year (roughly 55,000 USG/d). This DOE list is by no means exhaustive — it does not include private sector facilities like those operated by KiOR and Aquatic Energy. But by volume, it accounts for well below 1% of U.S. petroleum product demand, which exceeded 19.2 million barrels per day (806.4 million USG/d) in July 2011, according to oil industry group API.
For more on the biocrude process, and the oil majors getting involved in the industry, read: Get Ready For The Biocrude Boom. Read more of Breaking Energy’s biomass coverage here.
