Show me the Money: $564 Million Awarded to Integrated Biorefinery Projects
In an earlier blog post, Debra Frimerman reported that the U.S. Department of Energy was seeking applications for grants to help promote the construction and operation of pilot, demonstration, and commercial scale integrated biorefinery projects. Today, DOE announced the selection of 19 projects to receive up to $564 million in grant money authorized by the American Recovery and Reinvestment Act.
Notable awards include the following:
· $81 million to Bluefire LLC for a Mississippi project to produce up to 19 million gallons of ethanol fuel annually from woody biomass, mill residue, and municipal solid waste.
· $50 million to Sapphire Energy, Inc. for a New Mexico project to produce algal fuels using the Dynamic Fuels refining process.
· $23 million to Clearfuels Technology Inc. for a Colorado scale project to produce renewable diesel and jet fuel from woody biomass.
A complete list of awards is available here.
Friday Webinar on Commercialization of Advanced Biofuels (Algae)
On Friday August 28, Eric Lindeman of The Energy Daily will be moderating a webinar about "Advanced Biofuels: What Are the Commercial Possibilities? Why All the Interest in Algae?" My partner, the always-entertaining John Eustermann, will be speaking at the Webinar along with Connie Lausten (VP, Regulatory and Legislative Affairs, New Generation Biofuels (NGBF)) and Glenn Johnston (VP, Regulatory Affairs, GEVO, Inc.). You can sign up for the Webinar at http://www.theenergydaily.com/events/bio_fuels_webinar/
Stoel Rives recently published its new "Law of Algae", a guide to the business and legal issues affecting the development of a commercial scale algae biofuels facility. We've introduced The Law of Algae in an on-line “wiki” format because the processes, technologies, and issues are changing rapidly with the commercialization of algae. The wiki format enables us to update the book frequently to bring you the most current information, so feel free to stop by often!
LAW OF ALGAE AVAILABLE NOW
We are pleased to announce that the first edition of THE LAW OF ALGAE is available now. The LAW OF ALGAE is a guide to the business and legal issues in developing a commercial scale algae biofuels facility. We are introducing THE LAW OF ALGAE in an on-line “wiki” format where the contents can be accessed at www.LawOfAlgae.com. Because the processes, technologies, and issues are changing rapidly with the commercialization of algae, the wiki format enables us to update the book frequently to bring you the most current information.
THE LAW OF ALGAE is one in a series of “LAW OF” books that Stoel Rives LLP has produced over the past five years. The others include THE LAW OF WIND—A Guide to Business and Legal Issues, LAVA LAW—Legal Issues in Geothermal Energy Development, THE LAW OF BUILDING GREEN—Business and Legal Issues of Sustainable Real Estate Development, THE LAW OF OCEAN AND TIDAL ENERGY—A Guide to Business and Legal Issues, LEX HELIUS: THE LAW OF SOLAR ENERGY—A Guide to Business and Legal Issues, The Law of Cooperatives, and SHOW ME THE MONEY—The Law of the Stimulus Package. If you are interested in any of these books, please visit our website at http://www.stoel.com/lawofseries.aspx to request a copy.
Stoel Rives Sponsors the 2009 Algae Biomass Summit
Stoel Rives, LLP has decided to sponsor the 2009 Algae Biomass Summit ("2009 ABS"). The Algal Biomass Organization ("ABO") is hosting the 2009 ABS in San Diego this October 7-9th. The event will take place at the Marriot San Diego Hotel & Marina.
This year's ABS will discuss the emerging issue of algae as a feedstock for biofuels and other products. In an earlier article (available here), oil giant Exxon-Mobil's $600 million investment into this area marks a significant upward trend of interest in this area. Exxon's investment involves a partnership with Synthetic Genomics, a biotechnology company founded by the genomics pioneer J. Craig Venter. Venter, along with other leaders in the algae biofuels world, will be attending the 2009 ABS, and will also be the opening keynote speaker.
Shortly after Exxon's announcement, the U.S. Environmental Protection Agency ("EPA") announced that it will measure the greenhouse gas impacts of algae-based biofuels in its final rule to implement the renewable fuels standard (for the article, click here). Algae as a renewable feedstock for biofuel is a hot area of development and those that are interested in getting involved and learning more about it, should consider attending the 2009 ABS.
Registration is currently open. Those interested in taking advantage of early registration prices must register for the 2009 ABS prior to September 1st.
EPA Shows Positive Interest in Algae
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From InsideEPA.com (reproduced essentially verbatim with the permission of the publisher Inside Washington Publishers):
EPA will measure the greenhouse gas (GHG) impacts of algae-based biofuels in its final rule to implement the renewable fuels standard (RFS) in response to growing interest in the renewable feedstock, including recent announcements by Exxon-Mobil (as noted in an earlier article) and Dow Chemical that they are undertaking separate projects to help commercialize the technology. Algae is a particularly tempting feedstock choice because it can be engineered to sequester large amounts of carbon dioxide (CO2) and because algae-based biofuel has a similar molecular structure to gasoline, allowing it to be used in the existing transportation infrastructure. These qualities could help the fuel sidestep controversy associated with corn-based ethanol, which some say cannot meet the CO2 reduction goals of the RFS and which, due to its corrosivity, can impact engines, pipes and fuel pumps.
EPA fuels official Sarah Dunham said the agency considers algae “a promising feedstock” that will be included in the final RFS rule. EPA issued its RFS proposal earlier this year to expand biofuels use in line with congressional mandates, and is taking comment on the proposal through Sept. 25. Dunham was speaking to a July 16 meeting of a National Academy of Sciences panel on reducing greenhouse gas emissions from the transportation sector. Algae-based fuels could be considered under the advanced biofuel or bio-based diesel portion of the RFS, according to the proposed rule.
Advanced biofuels such as algae-based fuel and cellulosic ethanol are expected to supplement or possibly replace corn-based ethanol. EPA had originally planned to wait to include algae-based biofuels in the RFS, arguing improvements in harvesting, dewatering and lipid extraction were needed to make the fuel economically competitive with other feedstocks, according to the proposal. But the agency’s expected inclusion of algae in the RFS may help boost efforts to commercialize the technology of farming algae, using it to sequester CO2 and then turning the algae either into a biofuel or a chemical.
For example, Exxon July 14 announced its plan to invest $600 million in producing transportation fuel from algae in a partnership with Synthetic Genomics. The partnership would represent Exxon’s first foray into renewable fuels and could help stymie criticism that the company has dismissed concerns about global warming. Synthetic Genomics founder, J. Craig Venter, told the New York Times, “Algae is the ultimate biological system using sunlight to capture and convert carbon dioxide into fuel.”
Additionally, Dow announced June 29 a partnership with startup Algenol Biofuels to build a demonstration plant that would use algae to turn CO2 into a vehicle fuel or an ingredient in plastics. The process also produces oxygen, which would be used to burn coal more cleanly, allowing sequestration of the CO2 produced from the coal to be used to grow more algae. The Department of Energy (DOE) is also considering providing economic stimulus funding for the demonstration plant, that could produce 100,000 gallons of fuel a year, according to news reports.
On a July 20 conference call on development of algae for fuels and chemicals, sponsored by the Biotechnology Industry Organization, leading experts in the field discussed challenges and opportunities for commercializing the technology and how algae-based fuels can play a key role in climate change legislation pending in Congress because of its reliance on CO2. On the call, Ed Legere of Algenol Biofuels said the pending climate bill could vastly help spur the technology. “The game is changing politically and that makes a market for micro-algae,” he said, adding that any cost imposed on CO2 is “an opportunity for algae companies.”
Noting that CO2 capture and sequestration (CCS) systems to bury CO2 underground is an extremely expensive process fraught with technical and legal challenges that does not put the CO2 to use, Legere said using CO2 to produce algae-based fuel could be a win/win situation. For example, a power plant could put in an adjacent algae farm and use the CO2 to grow the fuel or use the algae to make other useful products, rather than spending $500 million for a CCS system that simply buries the CO2. A bonus is that the CO2 used for algae does not need to be compressed, saving additional money. “Forward-thinking companies are already looking at this,” he said. “If cap-and-trade is a reality at $30 a ton [of CO2 emitted], then large emitters are looking at hundreds of millions in costs coming their way.” However, Legere admitted that using CO2 generated from power plants to grow algae is still a long way off and that algae biofuels developers initially will seek to use CO2 streams from industrial processes that are cleaner than coal, with fewer toxins, and have a manageable flow rate of 5 to 100 tons an hour, rather than the 400 tons an hour released by a typical 500-megawatt coal plant.
Also on the panel, Steve Gluck of Dow noted that government support is vital to algae developers, who still need to overcome challenges of scale. Legere said in terms of renewable fuels the best thing the government can do “is not try to pick winners, so whatever policy they put in place they don’t pick who should benefit and who shouldn’t.” Gluck added that Dow is seeking to put algae on a level playing field with other fuels and hopes the government will be “responsive and quick” in deciding whether to allow genetically modified hybrid algae to be grown for fuel.
Additionally, Tom Byrne of XL Renewables said it appears the government is behind algae. In addition to EPA including it in the RFS, DOE July 15 announced up to $85 million in economic stimulus funding grants to develop algae-based biofuels, including the possible funding for the Dow demonstration plant. “So the U.S. is jumping behind it . . . seeing the potential. They understand not all the questions are answered yet but see it can be achieved,” Byrne said. XL Renewables has a 1.5-acre demonstration algae production facility in Arizona. Byrne said capital costs including harvesting and processing equipment are about $40,000 per acre while the company is harvesting about 25,000 tons of algae per acre but hopes to boost that to 100,000 tons. Additionally, he said algae-based biofuel would cost about 30-cents a gallon.
SHOW ME THE MONEY:Funding of $85 million for Algal and Advanced Biofuels
The U.S. Department of Energy (“DOE”) today announced Recovery Act funding of up to $85 million over a three year period for the development of algae-based biofuels and advanced, infrastructure-compatible biofuels. DOE wants leading scientists and engineers from universities, private industry, and government to collaborate in developing advanced biofuels and a thriving domestic bio-industry. Examples of advanced biofuels include green aviation fuels, green gasoline, and green diesel from a variety of biomass feedstocks.
The DOE will award between $25 million and $50 million to one or two teams that develop cost-effective algae-based biofuels. The remaining $35 million will be awarded to one team that can use the existing infrastructure to produce, distribute and transport algae-based biofuels.
Only teams may apply and applications are due September 14, 2009. No letters of intent are required.
Algal Fuels Developments
The recent blog posting (available here) regarding Exxon's $600 million investment in biofuels served as a reminder to me that comments are due soon (August 3, 2009) on the Department of Energy's draft "National Algal Biofuels Technology Roadmap" (the "Roadmap").
The Roadmap was prepared by a working group commissioned by DOE. The working group was commissioned to assess the current state of algae technology and to determine the next steps toward commercialization. For more information, see my earlier blog.
To submit comments, complete the "Algal Road-Mapping: Request for Information (RFI) Response Form" and submit it as an attachment to an e-mail message addressed to algaeRFI@go.doe.gov
Further, Gary Hunt has reported (available here) that Prize Capital, LLC has issued a $10 million algae fuel prize to encourage the development of advanced algal fuels. For more information about this contest, click here.
Exxon Sinks $600M Into Algae-Based Biofuels in Major Strategy Shift
Oil giant Exxon Mobil Corp., the world’s largest and richest publicly traded oil company, is making a major jump into renewable energy with a $600 million investment in algae-based biofuels. Exxon is joining Synthetic Genomics Inc., a biotechnology company founded by the genomics pioneer J. Craig Venter, to research and develop next-generation biofuels from sunlight, water and waste carbon dioxide by photosynthetic pond scum.
The partnership will last five to six years and will involve the creation of a new test facility in San Diego to study algae-growing method and oil extraction techniques. Exxon’s investment includes $300 million for in-house studies and potentially more than $300 million to Synthetic Genomics to scale up the technology for commercial production if research and development milestones are successfully met.
The partnership admits that it faces many obstacles, such as type of algae to use, the algae-growing environment, and the scale required for commercial use, to achieve this commercial production goal. Even in light of these challenges, algae holds many potential advantages over other sources of biofuels. One advantage is that algae grows in areas not suited for food crops, using pools of brackish water or even farming them in seawater. Additionally, algae needs carbon dioxide to grow, a benefit that could be used to help cut greenhouse gas emissions that cause global warming.
Show me the Money: USDA funded Research for Small Businesses
The Department of Agriculture ("USDA") is now accepting proposals for its Small Business Innovation Research Program ("SBIR"). SBIR has $18.5 million available to fund research projects that address important problems facing American agriculture. Research areas include, but are not limited to:
- Biofuels and biobased products;
- Air, water, and soils;
- Rural development;
- Aquaculture; and
- Animal Manure management
Individual awards can be as high as $90,000 and proposals are due September 3, 2009. For more information click here.
Click here for more information on USDA funding opportunities.
National Algal Biofuels Technology Roadmap
The Department of Energy ("DOE") has issued a Request for Information ("RFI") to solicit feedback on the DOE's draft "National Algal Biofuels Technology Roadmap" (the "Roadmap").
The Roadmap was prepared by a working group commissioned by DOE. The working group was commissioned to assess the current state of algae technology and to determine the next steps toward commercialization.
DOE is specifically seeking feedback related to the following questions:
- What areas omitted by the Roadmap would be important in defining R&D needs as they pertain to the following topics?
a. Algae biology
b. Algae cultivation
c. Algae processing (harvesting and dewatering)
d. Extraction
e. Fuel conversion
f. Fuel end-use - Are there any additional, key areas that should be included or any areas that need further elaboration?
- Are there errors or misrepresentations of any information that need to be addressed?
- Is there over-representation of certain barrier areas relative to other areas that warrant editing?
To submit comments, complete the "Algal Road-Mapping: Request for Information (RFI) Response Form" and submit it as an attachment to an e-mail message addressed to algaeRFI@go.doe.gov
Comments must be provided by no later than 11:59 PM EDT on August 3, 2009.
$50 Million Allocated to Support Algae Research
As part of the DOE’s announcement last week to provide $786.5 million from the American Recovery and Reinvestment Act to accelerate advanced biofuels research and development, the DOE allocated $50 million to create an algae biofuels consortium to accelerate demonstration of algae biofuels. As many companies are working toward the commercialization of algae biofuels, this infusion of money into research and development will help to promote commercially feasible algae biofuels production.
Additionally, Prize Capital, LLC has announced the creation of a $10 million algae fuel prize that is focused on advanced algae biofuels technologies. While the final details of the competition have not been released, planning is underway.
Utah and the U.S. Department of Energy See Promise in Algae Research for Biofuel Production
On September 29, 2008, the U.S. Department of Energy announced a $900,000 government grant to Utah State University (USU) and Montana State University for the team's plan to grow species of algae that can thrive in geothermal vents and in the Great Salt Lake. This research is one of six biofuel projects throughout the country funded by the U.S. Department of Energy. The Utah Science Technology and Research (USTAR), a Utah legislative initiative, sees so much promise in this, and other USU biofuel research, that USTAR has awarded the USU Biofuels Program $6 million for five years. USTAR makes highly-selective, strategic investments in research with the potential to benefit Utah’s economy. The goal of biofuel research is to find or develop a renewable fuel that is dependable and economically viable. Algae that consumes carbon dioxide could be used to consume the carbon dioxide released from power plants’ waste gases and the oils produced would be converted into fuel. Using algae in this way requires an algae that can tolerate the high temperature environment of a power plant and therefore the research team is growing an algae in geothermal vents. In addition, the team is hoping to produce biofuels from algae grown in a saltwater environment, such as our oceans and the Great Salt Lake, which would spare tapping more valuable fresh water resources. There is great interest in this research because algae is not subject to the same problems of other biofuels and may very well prove a viable fuel source. Algae doesn’t compete with corn or other crops for good farmland and its production wouldn’t drive up food costs. Algae can produce up to 10,000 gallons of oil per acre. Any technological advances learned by this particular research is likely several years away, but USU plans to produce an algae-biodiesel that is cost-competitive by 2009.
Sapphire Energy Raises $100 Million for Algae Biofuel Development
Sapphire Energy, a start up located in San Diego, announced yesterday that it has raised over $100 million. Key investors include Cascade Investments LLC (Bill Gates' personal investment company) and Venrock (a Rockefeller family venture capital firm).
Sapphire Energy is using algae that has been genetically modified to produce maximum amounts of oil. The company hopes to reach commercial production in three to five years, and predicts that it will be able to produce crude oil at $50 to $80 a barrel. Now that Sapphire Energy has significant financial backing, its next challenge will be to make the economics of mass producing oil from algae work and proving that its technology is scaleable.
REG Algae Biodiesel Technology
Renewable Energy Group (REG) recently issued a press release announcing that REG has technology for refining and producing large volumes of algae biodiesel at a commercial scale. The press release stated that REG looks to initiate additional partnerships for commercial-scale production of algae biodiesel at volumes comparable to those from other vegetable and animal feedstocks now in use.
REG is one of many companies currently researching and developing technologies for producing algae-based fuel. Historically, algae oil production costs have been prohibitively high. With all of the recent advances in algae production systems and extraction technologies, however, it is hopeful that cost to produce algae oil will decrease to a point where it will be a cost-effective second generation feedstock.
Global Principles and Criteria for Sustainable Biofuels
The Roundtable on Sustainable Biofuels last week released Version 0.0 of its “Global Principles and Criteria for Sustainable Biofuels Production.” This diverse group includes representatives from World Wildlife Federation, BP, Bunge, the Dutch Ministry of Housing and the Environment, the Forest Stewardship Council, the University of California at Berkeley and the World Economic Forum. They have been hard at work for the past year establishing an objective framework for enabling a true cost benefit analysis of biofuels that incorporates environmental, economic and social justice criteria. They welcome input into their process and have opened the document for six months of feedback which can be provided via www.bioenergywiki.net
Hopefully, this process will yield substantial success. As an early participant in the US biodiesel industry, I can attest that the benefits of biofuels appeared quite compelling and almost self-evident as compared to conventional petroleum fuel. Those in the industry with a strong interest in environmental issues typically considered corn ethanol and soy biodiesel as transition fuels that would establish the viability of a more diverse transportation energy portfolio by leveraging the existing farm economy. After market entry with these transition fuels, the road would be paved for superior feedstocks as we are witnessing today with cellulosic material, waste feedstock material and even algae.
In retrospect, the Roundtable of Sustainable Biofuels should have been founded a decade ago rather than last year. With an earlier start, such an organization might have achieved great progress in injecting some objective criteria into the “food vs. fuel” debate and propelled the industry in a more sustainable direction. In the absence of these criteria, some of the debaters have used these crucial (and emotional) issues to advance their own agendas and the biofuels industry has lacked the framework to establish its own best practices.
