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August 2006

Bioamss Initiative Newsletter

Feature Article August 2006

 
Recent literature discusses advances in bioenergy and biobased products.

Gaurav Bisht
BCS, Incorporated

The Biomass R&D Initiative was established with the objective of developing technologies and processes necessary for abundant commercial production of biobased fuels and products at prices competitive with fossil fuels. With increasing demand and price of fossil fuels, there has been a growing interest in the topic and an increasing number of reports and articles published regarding biomass. These publications address policy, future expansion, R&D, bioproducts feasibility, and feedstock availability. These analyses add to the body of knowledge on biobased-related opportunities and challenges from several perspectives. They also help us gauge how far biomass has come and what still needs to be done. At the same time, these analyses provide a means to evaluate the success of the Biomass R&D Initiative. Below are three pertinent examples of recently published reports. (To see complete text, click on the title.)

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A High Growth Strategy for Ethanol
The Aspen Institute's "A High Growth Strategy for Ethanol" report was based on a discussion amongst leaders from government, agriculture, environmental, energy, security, and academic sectors. The discussion was to develop a consensus on appropriate policy steps to accelerate the transition from fossil fuels to sustainable and secure fuels for transportation. The report highlights the rising price of oil and the potential of ethanol, both cellulosic and corn based, to replace most of the oil consumed for transportation. It recommends that the U.S. adopt a very ambitious goal of producing 100 billion gallons per year of ethanol by 2025, the equivalent of half of today's U.S. gasoline consumption or nearly 25 percent of today's overall U.S. oil use. To reach this goal the report emphasizes the need to accomplish the following:

  • Expand the total supply of feedstock available for ethanol by improving yield per acre and using some Conservation Reserve Program land for energy crops.
  • Introduce more flex fuel vehicles and service stations.
  • Assure investor and developers in the ethanol, auto manufacturing, and service station industries that there will be sustained effort to expand ethanol use even when oil prices slump.
  • Increase public awareness.
Agriculture-Based Renewable Energy Production
The Congressional Research Service's (CRS) report for Congress, "Agriculture-Based Renewable Energy Production," looks at agriculture's role in producing energy and biobased products. It discusses the viability of corn ethanol, cellulosic ethanol and biodiesel as transport fuels and the capability of the U.S. agricultural industry to supply demands for feedstock. Currently corn ethanol is the major form of biofuels used in the U.S. today, with corn accounting for 95 percent of the feedstocks used in ethanol production. Although government subsidies have made ethanol more competitive with gasoline, the report notes that any disruption or shortage in corn will dramatically increase the price of corn ethanol, because feedstock price is the single largest expense of corn ethanol production. Finally, although corn prices are more stable compared with gas prices, the increasing demand for ethanol could put pressure on corn demand and thereby increase prices.

The CRS report notes corn ethanol has an estimated net energy balance of 34 percent gain compared to higher gains for other biofuels, yet it is much better than gasoline's 19 percent net loss. According to the report, cellulosic ethanol is the best biofuel option with a potential net energy balance of 100% gain, but this requires major improvement in cellulose hydrolysis. Cellulosic ethanol is made from cellulose-based feedstocks like switchgrass and native grasses which can grow on marginal land and are not used for feed. The only problem is that the cellulose needs to be hydrolyzed to simple sugars before conversion to ethanol and current methods are very expensive. However, recent experiments with enzymatic hydrolysis have proven very successful in reducing costs of producing ethanol. If enzymatic hydrolysis becomes commercial, it would dramatically reduce ethanol price and increase ethanol yield. Currently, only one commercial cellulosic ethanol plant exists in Canada and none in the U.S. except for pilot plants.

The CRS report also discusses biodiesel which is derived from animal fat or vegetable oil, but 90 percent of U.S. biodiesel is derived from soybeans. Biodiesel has many benefits over its petroleum counterpart by being nontoxic, biodegradable, and sulfur and aromatics free, while providing similar fuel economy and better lubricity. It can run in conventional diesel engines with little or no changes. Biodiesel production and use has increased considerably due to major motor liners adapting it and through government tax incentives and subsidies. Biodiesel is also cost beneficial to produce due to the fact that there are many commercial byproducts that can be produced from soybeans. However, biodiesel production could quickly strain available feedstock supplies and push vegetable prices significantly higher due to the low elasticity in demand for vegetable oils in food consumption. This may also simultaneously disrupt the feed markets. The acreage available to grow soy for energy, without encroaching on land used for food crops, is also limited as in the case for corn.

Enzyme Catalysis: Tool to Make and Break Amygdalin Hydrogelators from Renewable Resources: A Delivery Model for Hydrophobic Drugs
The last article mentioned, "Enzyme Catalysis: Tool to Make and Break Amygdalin Hydrogelators from Renewable Resources: A Delivery Model for Hydrophobic Drugs" published recently in the Journal of the American Chemical Society, describes industrial or "white" biotechnology as making an increasingly important contribution to the development of a sustainable, biobased economy by an environmentally benign approach. This approach could have applications in developing cost-effective controlled drug delivery vehicles from renewable resources, with a potential impact on pharmaceutical research and molecular design and delivery strategies. The use of renewable resources for production of valuable chemical commodities is becoming a topic of great interest and fueling the promotion of the industrial biorefinery concept in which integrated processing of grains, oil seeds, and other biomass materials using enzymes and microorganisms yield a vast array of products in sectors such as chemical, food and feed, paper, textiles, and medicine.

The above reports help in evaluating from various perspectives the many opportunities and challenges remaining to be met regarding biobased fuel and products industry. More importantly, they highlight the growing interest in biofuels and biobased products and the growing biomass awareness.

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Bill # S. 1950
Sponsor: Sen Lugar, Richard G. [IN]
Summary: United States-India Energy Security Cooperation Act of 2006: To promote global energy security through increased cooperation between the United States and India in diversifying sources of energy, stimulating development of alternative fuels, developing and deploying technologies that promote the clean and efficient use of coal, and improving energy efficiency.
Last Action: 7/24/2006: Passed Senate with amendments by Unanimous Consent. 7/25/2006: Received in the House.

Bill # S. 2769
Sponsor: Sen Warner, John [VA]
Summary: Department of Energy National Security Act for Fiscal Year 2007: An original bill to authorize appropriations for fiscal year 2007 for defense activities of the Department of Energy, and for other purposes.
Last Action: 6/22/2006: Passed Senate with an amendment by Unanimous Consent. (text as passed Senate: CR 6/29/2006). 6/29/2006: Received in the House.

Bill # S. 3844
Sponsor: Sen Nelson, E. Benjamin [NE]
Summary:

Biofuels Investment Trust Fund Act: A bill to provide for the investment of all funds collected from the tariff on imports of ethanol in the research, development, and deployment of biofuels, especially cellulosic ethanol produced from biomass feedstocks.

Last Action: 9/5/2006: Referred to the Committee on Energy and Natural Resources.

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The Grain Prices graph shows the cost fluctuation of soybeans, the main biodiesel feedstock, and corn, the main ethanol feedstock. The tables show actual grain prices, indicators which may affect gasoline prices, and the production of ethanol. Fuel prices come from OPIS Ethanol and Biodiesel Report. Ethanol and RBOB Unl New York spot prices and SME Biodiesel Rack, Chicago, August 2006.
Cash Grain Prices Received by Farmers Aug 2006 Transportation Fuel Prices 2006 Transportation Fuel Prices
Grain Prices August 2005 August 2006 % Change
Corn 2.11 2.20
4%
Soybean 6.65 5.60 -16%
Fuel Supply August 2005 August 2006 % Change
Percent Refinery Utilization 94.6 91.7 -3.07%
Production by Product - Finished Motor Gasoline (Million Barrels) 8,682.5 9,132.8 5.19%
Stocks - Finished Motor Gasoline (Million Barrels) 136.4 119.9 -12.12%
Imports - Total Motor Gasoline (Million Barrels) 957.3 1,121.0 17.11%
Oxygenate Production May 2005 May 2006 % Change
Ethanol Production
(Million Barrels)
237 293 19.11%
MTBE Production
(Million Barrels)
141 89 -58.43%

Data Sources:
U.S. DOE-Energy Information Administration, "Weekly Petroleum Status Report", "Monthly Oxygenate Report"
USDA-National Agricultural Statistics Service, "Agricultural Prices," "Grain Stocks"

U.S. Historic Imports of Motor Gasoline U.S. Historic Finished Motor Gasline Products U.S. Historic Refinery Utilization U.S. Historic Stocks of Finished Motor Gasoline

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Ralph E. Powe Award
Description: This award supports Dr. Zhang's work to understand and make the best use of the enzymes that work together in the hydrolysis of cellulose -- that is, to breakdown tough plant material into soluble compounds that are ultimately converted into biofuel and other products.
Recipients: Y. H. Percival Zhang, College of Agriculture and Life Sciences, Virginia Polytechnic Institute and State University
Award Total: $5,000
Sponsoring Office: Oak Ridge Associated Universities
URL: http://filebox.vt.edu/users/ypzhang/research.htm
 

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