143 comments on Biofuel Conference Call Including a New Biodiesel from Algae
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143 comments on Biofuel Conference Call Including a New Biodiesel from Algae
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Alas, we can replace 20% of US petroleum usage by slowing down, but won't.
Gail, I am interested in how these projects are funded. Was there any discussion of this? The tried-and-true university lab to VC to IPO route seems too slow and inefficient, given the importance of the task, and a "Manhattan project" would produce too narrow a focus. Are you aware of any innovative funding approaches?
This kind of remarks always amazes me. They are perfectly valid but I always think we can't assume that because these are true now they will stay true forever. People won't slow down because they are in denial and don't see any harm. This will last only for so long.
There will come a day where it will dawn on the people that they cannot afford the price of gas and there are line ups at the gas station. It will dawn on them that there is a reason for the high price and line ups. Denial will no longer be a sustainable attitude. At this point some unthinkable things such as slowing down and taking the bike to go to work will become routine.
As long as the majority of the population has a death-grip on the past, it is going to be hard to get people to readily accept conservation.
Conservation doesn't sound like much fun to most people. They have never really been exposed to the possible alternative lifestyles that don't place industrial consumerism as the core pursuit. It is going to be hard for Westerners in partiular to accept it and there will be much social and economic disruption and chaos to go through to get to whatever it is on the other side. It is the most intersting times indeed.
Gail, I haven't gotten all the way through the call, yet; but, my impression was that the "Capital" Cost (basically, the Plant) of cellulosic is about twice the cost of corn. That jives with what I've been reading.
Companies like Bluefire, however, are projecting that they will be producing from MSW for about $1.00/gallon. BTW, they've been using this technology at a plant in Japan, producing about 1.4 Million gpy, for a couple of years.
Admittedly, the MSW (Municipal Solid Waste) Producers will have, by far, the lowest feedstock costs in the industry (in that, basically, in many cases, they're getting their feedstock for free;) but, I think the Gassifiers are, also, looking at a lower overall cost than the corn refiners.
You are probably right, it is the capital costs that are double. Producers who can get their feedstock for free are in good shape. They probably won't be a big share of the market.
It seems like the jury is still out on how much cellulosic ethanol feedstock from traditional sources will really costs. One issue is whether you really need fertilizer to make the process work, in the quantities people hope. This will add to the costs/feasibility. I know when they tried growing switchgrass in Iowa, the cost was (from memory) at least as high as that of corn--perhaps higher.
I don't know, Gail. We produce about 250 Million Tons of Solid Waste in the U.S. At 80 gal/ton that would be 20 Billion Gallons. That's about 1.3 Million barrels/day.
I think most of the energy "crops" will be grown in the south. The land is less valuable, and the climate is better. Ceres is talking 20 tons/acre in Fl. This would be between 1,600 and 2,000 gal/acre.
What I find intriguing about this process is every landfill will have a gassifier; and this means Every County will be able to raise twenty, or thirty thousand acres of Switchgrass, Miscanthus, etc. and have a close-by market for the product.
BTW, farmers have been baling hay for hundreds of years. It's not like they don't know how to work with biomass.
One thing that I think is being overlooked is that corn ethanol is creating an economic boom on the Plains! We should embrace this!
I don't want to hurt farmers, my family is from corn country in Indiana. However, corn ethanol is a poor choice for the long term because of the poor EROEI.
Industrial monoculture of corn would seem a poor choice if the goal is long-term sustainability of the soil.
Those few farm families who remain (most have left for the city) will not be building for future generations of farmers if they go down that path much longer.
The banks don't value sustainability. They just want that interest after the crop is sold this year. Farmers will grow as much as they can and sell as much as they can in order to pay the bank and still have a small profit. If someone is willing to buy the stover and straw for more than the cost of industrial fertilizer then that is what they will do. If someone will pay then to conserve soil, i.e. the taxpayers then that is what they will do. Somehow suburbanites don't understand the advantages of paying farmers not to grow on every square inch.
The website doesn't give too much information. One thing it does mention was that Chevron Technology Ventures is funding some of their work. They also have a page talking about their partnering strategies, but don't give much detail.
There are also several interesting looking videos on Solazyme's Media Page that may give some more insight. I haven't had a chance to look at them.
If this technology really works, it seems like a better use of biomass (or even corn) than most of the ethanol projects out there. For one thing, biodiesel is a better end product. For another, if the cost is lower, it probably is more efficient in its use of the feedstocks it is using. We already have a lot of sunk investment in corn ethanol, so I expect there will be desire by some to stay with what we have.
I agree that something like a "Manhatten project" probably makes sense, but I don't know precisely how. One of the catches is that we really have to be certain we have the right technology before we scale it up. Many people would like to scale up whatever their approach is.
One of the problems in assessing these non-public companies with undocumented claims is that although they may not have to attract more capital, they can have targets to meet to retain the funding they have.
A good example of this may be Nanosolar, where their claims have been subjected to heavy criticism, as they may have just produced a few panels at huge expense to reach their funding targets, and be a lot further from volume production than they are trying to apparently indicate.
Anyway, the point is that you can't necessarily trust the sort of claims Solazyme is making, even though they are not tryijng to attract public funding.
The claim is only as good as the data backing it up, and in this case it is thin, to say the least.
?
I read somewhere (Cnet I think) that because of the speed of the Nanosolar manufacturing process, they should be on target to produce more MW of solar PV panels from a single plant than the rest of the plants in the US put together. I seem to remember reading here on TOD, a discussion about how well their manufacturing was going and that they were able to run their "printing press" faster than originally planned. AFAIK they are definitely shipping in volume and the lack of news from them or their customers suggest that things are going at least as well as planned.
Alan from the islands
I have seen a lot of claims by Nanosolar, and not much backup.
I tend to agree with Katherine's comments here:
http://blogs.spectrum.ieee.org/articles/2008/07/first_solar_quest_for_th...
First Solar, in contrast, is very transparent and has audited accounts of it's strides in reducing costs.
Manhattan Project doesn't make sense. Cost didn't matter in MP. Getting the A-bomb before the Nazi did matter very much. Can you envision a real fuel project in which cost doesn't matter? I don't think so.
There was a 'getting the right technology' problem in MP. It concerned separating U235 from natural uranium. Several ways were proposed. The decision was to work on all of them in parallel.
Spot on! That's the reason why no government in the world is putting any meaningful sums inot alternative energy. You only need a rudimentary understanding of economics to realise that alternatives don't stack up compared to fossil fuels and it is unlikely they ever will. The argument about applying a carbon cost penalty, whichever way you do it, to make renewables more cost competitive misses the point that it is cheap, abundant, and apparently limitless, energy that has powered modern civilization to its current heights. Knock out any of those attributes and the whole thing will go out of balance and will fall over. It doesn't matter if renewables are abundant and limitless. If they are not cheap, the economics of BAU don't stack up.
What do you call "meaningful"? Germany is paying 5B euro/yr in alternative energy subsidies, and has become a world leader (in both installation and manufacturing) in them as a result.
The point of a carbon tax is to make the price of fossil fuels correctly take into account negative externalities such as pollution. That renewables will (typically) suffer much less from such a tax is in many ways coincidental.
And perhaps one needs a more nuanced understanding of economics to realize that the situation is not as clear-cut as that.
Term & Pitt:
I wrote my objection to Manhattan Project, because IMO, talk of Manhattan Project is a cover for wishful thinking that scientists in the laboratory will save use. All we, the people, have to do is throw money at the right collection of scientists.
Concerning your comments about taxes, etc.
In the future, the price of fossil oil will rise due to scarcity. If there is no substitute for fossil oil, price will rise without bound, ie really a LOT. If no substitute is found at any price, there will be massive demand destruction, population collapse, turmoil, etc. I happen to believe that there are already substitutes from known technologies that will come into play at some very high price. But not so high a price as to cause total collapse and extinction of human race. If I'm right in this, there will be serious turmoil and demand destruction, and a residue population will come into balance with this reduced supply of substitute synthetic oil. During the time of transition to synthetic oil, the prices of the synthetic and of real oil will be essentially the same.
I'm not worried about actual extinction of human race, but I do think that some government action might mitigate the transition. Taxes on carbon from fossil fuels seem to me to be a reasonable government action. The goal is a tax that is high enough to make an unsubsidized renewable fuel price competitive with the taxed fossil fuel. The tax could start small and rise over time until suppliers of alternative fuels actually enter the market. Once alternative fuels are established, the tax should be adjusted, up or down, to maintain some reasonable market share for the 'alternatives'. Eventually the fossil fuel will become so scarce that it is not competitive even with no special tax. The tax can be repealed. The transition has been made.
Making the tax correctly take into account negative externalities is economic doublespeak. The purpose of the tax is to encourage the move to alternatives fuels by shifting the prices in the marketplace. Talking about negative externalities opens the door to setting the tax too low to achieve its purpose. One can get a very low estimate for the required tax by not looking very hard for hidden externalities. People can be quite good at failing to find something that they don't want to find.
A problem with this proposal is what to do with the tax receipts. They would be a big windfall income for the government. I have no good ideas on how to keep these from being spent on goofy projects. And I think a big tax without commensurate spending might cripple the economy.
Its a puzzle.
I don't really expect this proposal to have much success. More likely will be subsidies for specific technologies that have well funded lobbies. And no tax to pay for the subsidies!!
To a large extent, yeah.
The problem here isn't really knowledge - we could replace oil with the technology we already have - it's more an issue of rebuilding and replacing large amounts of infrastructure. That's an industrial task, not an engineering one, so the Manhattan Project isn't really a good analogy.
It's reasonable even without worries about peaking fossil fuels. Carbon emissions are a negative externality, and so a tax that internalizes them would make the market more efficient. (And, no, that's not double-speak.)
The fact that it would move us significantly away from oil - as demonstrated by Europe - is a happy side-effect IMHO. And - as also demonstrated by Europe - it's possible to lower oil consumption an enormous amount by a tax like this, with a relatively minor impact on people. (Before someone tries, no, the US isn't "different" because it's big; over 100M Americans live in denser states than France, so density isn't the difference.)
Cut other taxes to make it revenue-neutral. That's the proposal I pretty much always see, and I'd argue it's the most sensible one. Indeed, it gives an opportunity to lower payroll and income taxes in favour of a consumption tax, which most economists would argue is an improvement in overall tax efficiency. Win-win.
Thanks for the link. I wonder if Chevron has selected this project because it doesn't rock their boat too much, rather than because the economics are favorable - a pitfall of the tax-deduction funding approach. If governments are going to provide matching funds and tax credits, what chance to truly disruptive technologies have?
I also wonder how the NPK nutrients get back to the field/forest in this approach, or have they considered that?
There is a definite advantage to technologies that are not too disruptive. They are easy to adopt quickly, without huge infrastructure changes. I think with the timing issues of peak oil, and the related financial problems. we really should be giving strong preference to technologies that are not too disruptive.
One of the advantages of the reported technology (assuming it works), is that the biodiesel can be blended in with the regular diesel and shipped through the pipeline. This would be much better than trying to ship huge quantities of ethanol around the country in railroad cars and trucks, and mix it in at the end. Also, engines don't have to be modified to receive higher blends.
I also wonder how the NPK nutrients get back to the field/forest in this approach, or have they considered that?
Mostly by truck, and rail, I'd imagine.
As Gail pointed out in the Q&A, there is an imbalance developing between ethanol, and diesel. As ethanol replaces more, and more gasoline the refiners are in a bind. Produce sufficient diesel, and get an oversupply of gasoline. Produce the right amount to gasoline, be undersupplied in diesel. If they can't hold ethanol back they need to find a little help in their diesel supply.
Toss in efficient driving across the board and that's closer to 50%. But keep it on the down-low, every gallon of gasoline not used keeps more than it's cost out of the economic sub-systems associated w/ it's production. Next time you decide to drive efficiently, stop and think of the billionaires.