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  Geotimes - March 2007 - Integrating Biofuels into the Fuel Supply
FEATURE
Integrating Biofuels into the Fuel Supply
Rick Zalesky

Cellulosic Ethanol: The “Holy Grail” of Biomass


Soybeans
Biodiesel produced from soybeans is considered a first-generation biofuel. These biofuels play an important but limited role in the future fuel supply, due in part to factors that restrict the production of their feedstocks for energy. Photograph is courtesy of Chevron.

It’s 2030 and you are driving across town. You glance at your vehicle’s fuel gauge and see it’s time to fill up. But where and with what?

Perhaps you will pull up your fuel-cell car at a service station’s hydrogen pump or plug in your hybrid at home to take advantage of off-peak electrical rates. But more than likely, your car will still be powered by some type of liquid fuel — perhaps a blend of gasoline and ethanol, or diesel and biodiesel.

No matter what fuel you use, you’ll want to find it easily and fill up quickly and safely with a product of consistent quality. In sum, you’ll want the fueling process to be as easy and seamless as it has always been.

That’s the challenge for an energy company like Chevron. How do we prepare to meet the demand for transportation fuels 20 to 30 years from now, knowing that we may need to adjust many, if not most, of our assumptions in the interim?

Yet we are reasonably sure of three things.

One: The world’s demand for energy, including transportation fuels, will continue to soar, due to rapid population growth (an additional 1.4 billion people over the next 20 years, according to the United Nations) and booming economic development in countries such as China and India. In 2004, the world consumed about 82 million barrels of oil equivalent each day. Consumption is expected to escalate to 115 million barrels per day by 2030 — an increase of more than 40 percent in 25 years.

Two: Supplies of conventional oil and gas will remain tight as geopolitical forces constrain exploration and production, and as we are driven to search for additional supplies in challenging environments, such as the Arctic (see Geotimes, November 2006), oil sands (see story, this issue) and ultradeep water (see story, this issue).

And three: Oil and gas will remain the predominant energy sources for many more years. Over the past century, the industry has improved the way we find, produce, transport, blend, store and use these hydrocarbons. Today we do these things more efficiently than ever, thanks to rapid advances in technology. In addition, petroleum fuels have high energy density, producing more energy per unit of volume than other energy sources, such as hydrogen and ethanol.

Yet conventional oil cannot satisfy all the projected demand, especially for transportation fuels. By 2030, we are expected to suffer a shortfall of 10 to 15 million barrels a day that will have to be met from other sources, such as heavy oil, natural gas, coal and biomass. Unfortunately, given the magnitude of the demand, there is no single, silver-bullet solution.

To that end, the energy industry is working on all of these solutions. Energy saved through efficiency — finding ways to use less energy to achieve a given result — is the most important source we have. In other words, we must make the energy we do have work better. That’s the top priority.

Of tantamount importance is finding new energy sources. One source of particular interest is biofuels: By converting biomass — plant or animal matter — into biofuels, we think that we can meet an increasingly significant portion of the projected demand for transportation fuel.

An enormous, collaborative task
Every day, the United States consumes about 380 million gallons of gasoline and 112 million gallons of diesel for transportation. In contrast, every day we produce just 9.3 million gallons of ethanol and about 200,000 gallons of biodiesel. To look at it another way, a typical ethanol plant makes in one year what a large gasoline refinery produces in one day. That disparity gives an idea of the enormous task of integrating biofuels into America’s transportation fuel portfolio.

Galveston Bay Biodiesel Groundbreaking
Among other projects, Chevron is investing in Galveston Bay Biodiesel, which is building a biodiesel production and distribution facility that will have the potential to produce 100 million gallons of biodiesel a year. Photograph is courtesy of Chevron.

The challenges are varied and great. The next generation of biofuels must be commercially viable. The elements of a sustainable new fuel supply system that can survive the ups and downs of the economy and endure for many decades without direct intervention and support must be determined. And somehow, we have to predict which businesses will still be reliably operating and supplying fuel 30 or 40 years from now.

The answers to such challenges are neither simple nor immediate. They lie within the complex and interrelated issues of technology, scale and infrastructure. The solutions will emerge gradually, step by step, from the ongoing collaborations among a wide range of players, including federal and state governments, local communities, and many different industries — auto, energy, agriculture, biotechnology and transportation, among others.

Many of these groups are working together for the first time to launch this new era in energy. For instance, the energy industry knows how to produce, transport and market fuels. But we don’t know how to grow, harvest and process energy crops and other biomass feedstocks. We look to the agricultural sector for that expertise.

It will take all of us, working in concert, to create a new supply system for biofuels that operates on an industrial scale — one that can deliver millions of barrels a day, tens of billions of gallons a year. We need to advance the fundamental science for biofuels and take advantage of the revolution in biotechnology to develop large feedstock resources and greatly expand production capacity.

While we can use some components of the current infrastructure for fuel production and distribution, substantial new infrastructure will need to be built as the use of biofuels expands. For instance, we need to develop better ways to transport the products to market. Today, large volumes of ethanol are moved mainly by rail, truck, or barge, which are expensive compared to the pipelines that transport oil and gas across the United States. Ethanol, however, can’t be used easily in the existing pipeline system because it absorbs water and impurities and can lead to pipeline corrosion.

The build-out of the biofuels infrastructure will likely be a staged process, a sequence of activities. For example, the federal government is already acting as the catalyst for developing the underlying science and technology. Within five years, we may see cellulosic ethanol demonstration plants at scale that incorporate some of these advanced technologies. Farmers may begin growing new energy crops, and other infrastructure components may emerge and evolve. Once the technology works, the production processes prove viable, and long-term operability is assured, investors may well provide the capital required to keep the process going.

The writing on the wall
Given that worldwide, Chevron produces 40 billion gallons of oil and gas a year, our position on biofuels may surprise people. Chevron, and probably other energy companies as well, are frequently asked why we are getting into biofuels. The answer should be obvious: As energy companies, our job first and foremost is to provide energy — whatever that energy source may be. Knowing that conventional energy sources aren’t going to last forever, we want to expand and diversify the energy supply, particularly by increasing the volume of renewable fuels in the U.S. transportation fuel supply. That requires going after the truly large remaining resources from which to make fuel.

“We are looking at underdeveloped resources that are comparable in size to the world’s current reserves of conventional oil — approximately one trillion barrels. We believe biofuels could be in that category,” says Dana Flanders, president of Chevron Technology Ventures.

We often hear that people think biofuels are in competition with oil and natural gas, but they’re not, Flanders says. “Quite the contrary, we see them as complementary. They are another component of the evolving fuel supply system,” he says.

To produce enough fuel to power tomorrow’s vehicles, we will need every molecule from every source we can think of. When it comes to conventional fuels versus alternative or renewable fuels, it’s not a question of either/or. The answer is, all of the above.

Recently Chevron, through various subsidiaries, launched a number of wide-ranging initiatives in the biofuels sector, including everything from partnering with business ventures to fuel flex-fuel cars, to partnering with universities to develop more efficient fuels.
n A biofuels business unit was formed to advance technology and pursue commercial opportunities in the United States related to the production and distribution of ethanol and biodiesel.

Infrastructure
Some critical factors need to be in place in order to make next-generation biofuels commercially viable, such as infrastructure. The infrastructure, including pipelines, used to transport large supplies of oil and gas throughout the country and throughout the world took 100 years to build. It remains to be seen how long it will take us to convert that infrastructure or build new infrastructure for transporting biofuels. Photograph is courtesy of Chevron.

Chevron is working with Ethanex to design and build at least three new ethanol plants in the Midwest and plan to use our engineering and project management capabilities to help build other advanced, integrated ethanol production facilities.

Investments were made in Galveston Bay Biodiesel, which is building a biodiesel production and distribution facility that will have the potential to produce 100 million gallons of biodiesel a year from soybeans and other renewable feedstocks. One of our main goals in the biodiesel area is to help produce fuel of consistent quality.

Chevron is working with General Motors and the state of California in a demonstration project of E85, a fuel blend of 85 percent ethanol and 15 percent gasoline. We are fueling a state-owned fleet of 50 flex-fuel vehicles with E85 and collecting data for a year in order to evaluate vehicle performance, logistics and emissions output.

A number of strategic research alliances have been established with leading institutions, including the U.S. Department of Energy’s National Renewable Energy Laboratory, the University of California at Davis and the Georgia Institute of Technology. This will broaden the choice of biofuel feedstocks and improve production processes, in particular on accelerating the development of cellulosic ethanol (see sidebar).

And this is just the beginning. As has always been the case in the energy industry, we will rely on ingenuity and technology to get us where we need to go. Biofuels are but one part of a larger story — the transition to a broader portfolio of efficient, environmentally favorable fuels, both petroleum- and biomass-based, that will supply tomorrow’s vehicles.

The challenge is immense and the timeframe is long. But the future that we envision inspires our efforts. We foresee a clean, efficient transportation system powered by a secure supply of affordable fuels. We firmly believe that come 2030, we will be providing exactly the fuels consumers need for whatever types of vehicles they’re driving.

The biofuels sector is racing to unlock the energy held within cellulose — the most abundant biological material on Earth, according to the U.S. Department of Energy (DOE).

The first-generation biofuels currently on the market in the United States — basically corn-based ethanol and soybean-based biodiesel — can play an important but limited role in the future fuel supply, due in part to factors that restrict the production of their feedstocks for energy. Thanks to virtually limitless quantities of low-cost feedstocks, only cellulosic ethanol could be produced in large enough volume to fundamentally change the game for liquid fuels. In fact, it has been called the “killer application” of biofuels.

Consider this forecast: DOE is looking to ethanol to be cost-competitive with gasoline by 2012, and by 2030 to displace 60 billion gallons, or 30 percent of the gasoline that the United States will consume by then.

But no cellulosic ethanol production plants are currently operating in the United States. In fact, much work remains to be done to improve biomass conversion technology, increase the yield and lower costs. These are the breakthroughs necessary to turn the promise of cellulosic ethanol into profits.

A major structural component in the cell walls of all plants, cellulose can be broken down into sugar molecules and then converted by microbes into ethanol. Scientists think that biotechnology could lead to the doubling or more, in some cases, of the current yield of biomass.

Researchers are investigating a wide range of potential feedstocks, including agricultural and forestry wastes, and fast-growing trees and grasses, such as poplar, willow and switchgrass. Municipal waste, too, could be a source of biomass, including restaurant and residential garbage, and paper and cardboard that is not suitable for recycling.

Compared to first-generation biofuels, cellulosic ethanol avoids the food-versus-fuel issue associated with feedstocks like corn and soybeans. It also squeezes additional value from waste products that otherwise would clog our landfills or go unused in fields and forests. In addition, farmers around the world could find new markets by growing dedicated energy crops for local biofuels producers. But, this is likely further into the future.

RZ

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Zalesky is vice president for Biofuels and Hydrogen, Chevron Technology Ventures, a wholly owned subsidiary of Chevron Corp.

Links:
"Building a Natural Gas Pipeline Through Earthquake Country," Geotimes, November 2006
"Sizing Up Oil on Alaska’s North Slope," Geotimes, November 2006
"Putting Utah on a Petroleum Map," Geotimes, March 2007 Print Exclusive
"Digging deep in the Gulf of Mexico," Geotimes, March 2007 Print Exclusive
"Weighing in on Renewable Energy Efficiency," Geotimes, August 2005

Chevron Technology Ventures
DOE Biomass Program
DOE Alternative Fuels Program

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