Ten Organizational Design Models to align structure and operations to busines...
C riley 2005
1. Biorefineries of the Future
Envisioned by
DOE’s Biomass Program
CDMA Fall 2005 Meeting
New Revenues from Sustainable
Industrial Biotechnology and Renewables
September 28, 2005
Cynthia Riley, P. E.
Lead Systems Integrator
2. Outline
• Why Biomass ?
• OBP Overview
– Biomass Resources
– Biorefinery Deployment Pathways
– Sugar Lignin Conversion Platform
– Systems Analysis incl. Life Cycle Assessment
– Stage Gate Approach
– Deployment Barriers
• Government Policy/Initiatives
– Energy Policy Act of 2005 and OBP NOPI
– Other Federal Agency Collaborations
3. Unique Role of Biomass
While the growing need for sustainable
electric power can be met by other
renewables…
Biomass is our only
renewable source of
carbon-based fuels and
chemicals
Addressing National Needs
•Energy Security and diversity
•Charts on needed capacity, high utilization rates, high imports, national feed stock availability
•Availability and price of imports
•Presently 1.6 billion gal of ethanol produced yearly, Replacement of MTBE with ethanol will double that amount (6 million gal of bio-diesel)
•9,000 MW Biobased power today with an additional 1,000 MW from the Forest and Paper Products industry
•Environmental Concerns
•Waste Utilization
•Livestock and poultry waste
•MSW
•Biogas/methane from land fills and the availability of landfills
•Direct or co-firing with bio substantial reduction in greenhouse gasses
•Near zero CO2 emissions due to closed carbon cycle
•10 –20% reduction in NOx (gasification coal co-firing poplar)
•Reduce SO2 emissions by 80-97%
•Low sulfur fuel
•Complement forest management practices
•Rural Economies
•If $20/ton of biomass, increased biomass use represents over $4 billion per year in new revenues for rural economies. If two thirds of the idle land were used to grow energy cropos those 35 million acres could product between 15 and 35 billion gallons of ethanol each year.
•Over the past 20 years, investors have installed 730 bioenergy electric generating facilities, and 58 ethanol production plants. Investments in the residue-based industry have created 66,000 jobs and a net annual income of $2 billion.
DELIVERED COST OF FUELS/ENERGY, $$/MMBTU:
(mostly AEO 2001)
Electricity Mix = 19.5
Coal = 1.23
Nat Gas = 4.05
Biomass (dry) = 2.81
Ethanol = 14.42
Gasoline = 9.45
Oil = 7.44
The need for bioenergy and bioproducts is driven in large part due to increased growth in electric capacity requirements, increased reliance on imported oil, and the need to boost farm income and reverse the decline in the U.S. agriculture trade surplus.
Electric Power - EIA projects that about 1300 new power plants could be needed by 2020 to provide the estimated 1060 GW of electricity generating capacity that will need to be in place by that time. There is a major shortfall that needs to be filled. Current capacity levels are 754 MW. Cumulative planned additions through 2020 are only 14.8 GW where as cumulative planned retirements are 69.4 GW. (Source: EIA/Annual Energy Outlook Table A9)
The Opportunity? There are over 370 GW of unplanned capacity which will need to be filled. There are significant opportunities for biomass power technologies to fill part of this gap.
Fuels and Products - New sources of domestic fuels are needed. The U.S. is becoming increasingly reliant on both imported crude oil and imported refined petroleum products.
•Domestic crude oil production is projected to decrease from nearly 6 million barrels per day currently to about 5 million barrels per day in 2020. Crude oil imports are about 8.9 million barrels per day and account for about 60% of our crude oil supplies. This is projected to increase to over 12 million barrels per day by 2020 and account for 71% of our total crude oil supplies.
•The U.S. is becoming increasingly reliant on imported refined petroleum products. Imports of refined petroleum products are projected to increase 6% annually from about 1.3 million barrels per day at present to over 4 million barrels per day in 2020. Compounding the problem of dependence upon imported petroleum products, is increasingly tight petroleum refinery capacity in the U.S. Refinery utilization rates have been above 91% each year since 1993 and are projected to remain between 92% and 95% over the next 20 years. (Source:
EIA/Annual Energy Outlook Table A11 and Petroleum Supply Annual Table S1)
The Opportunity? Increased production of domestic biofuels can help to offset a portion of crude oil, petrochemical, motor gasoline, and blending component imports.
Agriculture - Under current farm legislation and programs, assuming no supplemental payments, net cash farm income in 2001 is projected to be its lowest since 1994 and about $4 billion below the average of the 1990s. This is due primarily to a continued rise in production expenses and a decline in government payments. The U.S. agricultural trade balance with the rest of the world increased by almost $11 billion between 1990 and 1996, then declined by $14.4 billion between 1996 and 2001. This drop in the volume of exports was
compounded by a sharp decline in domestic commodity prices. These two factors have combined to severely depress net farm cash incomes since 1997. (Source: Economic Research Service, USDA)
The Opportunity? Increased demand for bioenergy and bioproduct feedstocks, in addition to ethanol, biopower, and other bioenergy/bioproduct manufacturing facilities in rural American can boost rural economies and exports.
5. US Vehicles per 1000 People (2002)
U.S. Vehicles per Thousand People
900.000
675.000
450.000
225.000
0
00
10
20
30
40
50
60
70
80
90
00
19
19
19
19
19
19
19
19
19
19
20
6. Historical U.S. Vehicles Compared to Vehicles
per 1000 People around the World - 2002
900.000 United States
Vehicles per 1000 People
675.000
u Industrialized Pacific
Western Europe
450.000
Middle East Eastern Europe
n
225.000
Africa Former USSR
Central & S. America
uu Developing Asia
China n u
n
0
00
10
20
30
40
50
60
70
80
90
00
19
19
19
19
19
19
19
19
19
19
20
9. OBP Mission And Strategic Goals
Mission: Partner with U.S. industry to foster
research and development on advanced
technologies that will transform our
abundant biomass resources into clean,
affordable, and domestically produced
biofuels, biopower, and high-value
bioproducts. The results will be economic
development, energy supply options, and
energy security.
Strategic Goals:
1) Reduce dependence on foreign petroleum.
2) Create a new, domestic bioindustry.
Unlike a Dept of defense program we are not procuring a product or capability for the federal governments sole use.
Instead we are trying to interest commercial industry to invest in and commercialize technologies for new and existing markets.
We have a strategy for this enabling position. In this case the government need to understand the drivers for industry, understand how they make funding
decisions, and present the opportunity in the language they understand. Our pathways, milestones, and decision points are based on sustainability, economics,
and return on investment.
10. New Domestic Bioindustry
PRODUCTS
Fuels:
– Ethanol
– Renewable Diesel
–Renewable Gasoline
– Hydrogen
Power:
– Electricity
– Heat (co-generation)
Chemicals
– Plastics
Biomass Conversion – Solvents
– Chemical Intermediates
Feedstock Processes – Phenolics
– Adhesives
– Furfural
– Trees – Fatty acids
- Enzymatic Fermentation – Acetic Acid
– Grasses - Gas/liquid Fermentation – Carbon black
– Agricultural Crops - Acid Hydrolysis/Fermentation – Paints
– Agricultural Residues - Gasification – Dyes, Pigments, and Ink
– Forest Residues - Pyrolysis – Detergents
– Animal Wastes – Etc.
- Combustion
– Municipal Solid Waste - Co-firing Food and Feed
Replaced corn (which is ok to) with stover and oil refinery with an ethanol plant. Biorefineries could potentially use complex processing strategies to efficiently produce a diverse and flexible mix
of conventional products, fuels, electricity, heat, chemicals, and material products from multiple biomass feedstocks. DOE is working to evaluate and develop the biorefinery concept into real
world models. Biorefineries in a simple form are present today in some agricultural and forest products facilities. These systems can be improved through better utilization of waste products and
by applying the lessons learned from existing facilities to other comparable situations. These facilities both convert wastes to fuel material, but also upgrade fuel materials to product raw
materials. These industries also produce by-products, which are commonly under-utilized or treated as waste. Finding higher value uses of these products as fuel and improving the processing
efficiency of existing facilities is a primary goal of the BioInitiative.
Cargill Dow is constructing a biorefinery to produce PLA from corn stover. The facility was dedicated earlier this month (April 2002) in Blair, NE. The facility will produce more than 300
million pounds (140,000 metric tons) of PLA annually and employ up to 100 workers. The plant will requires 40,000 bushels of locally grown corn a day to meet global production demands.
In 2000, Cargill Dow Polymers received $2.2 million under the BioInititative for its $4.6 million project “Bioenergy for Polylactic Acid, Ethanol, and Power”.
•Development of a process technology for the fermentation of corn fiber and corn stover to lactic acid for conversion to polylactic acid (PLA); ethanol; and other products.
•PLA has promising applications in food packaging; disposable products; and fibers for clothing, carpeting, and other applications. Future applications could include injection blow molded
bottles, foams, emulsions, and chemical intermediaries.
•The versatility and anticipated price and performance of PLA will enable it to displace a significant volume of fossil-fuel-based polymers in the future. Projections include
•Sales volume of 8 billion lbs/year by 2020 (Currently U.S. sales volume for plastics is about 70 billion lbs/year)
•Reduction of 10 million tons of CO2 emissions by 2020 (due to displacement of fossil-fuel based polymers).
•Ultimately, other sugar sources, such as residues from wheat and sugar beet production, will be used by Cargill Dow technology.
11. Biomass Resources and Issues
Crops •Quantity Available
Corn
Soybeans •Cost
Wheat
Barley –Production
Sugar Cane
–Collection and
Wood and Residues Transportation
Sawdust
Wood waste –Integrated Supply
Forest thinnings System
Agricultural Residues
Corn stover •Sustainability
Cereal straw
Sugarcane bagasse –Land, Air and Water
Animal waste Resources
Energy Crops
•Quality
Switchgrass –Composition
Hybrid poplar
Willow –Ease of Conversion
Point 3 areas with 1 example of each
Waste – sawdust
Ag residues – corn stover
Dedicated crops - switchgrass
12. Biomass Resource Base
DOE/USDA
• Land resources of the U.S. can Billion Ton
sustainably supply more than 1.3 Vision Paper
billion dry tons annually and still
continue to meet food, feed, and
export demands
• Realizing this potential will require
R&D, policy change, stakeholder
involvement
• Required changes are not
unreasonable given current trends
• Should be sufficient to replace 30%
of current US petroleum
requirements
13. Forest Resource Base
Potential nearly 370 million tons/year
80
Million dry tons per year
16 22
60
8
16 11
40 15
49 28
20
32
8
9 11
0
13%
5%
13%
3%
14%
19%
20%
13%
Growth
Unexploited
Existing use
14. Agricultural Resource Base
Potential exceeds 930 million tons/year
High crop yield increase 425 56 377
75
Land use change with perennial crops 27954 156
75
High crop yield increase 0 409 95
75
No land use changes 025054
75
0 250 500 7501000
Million dry tons per year
Crop residues Grain-ethanol Process residues/wastes
Perennial crops
15. Biomass Conversion Options
(OBP current emphasis shown)
Hydrolysis Sugars and
Lignin
Acids, enzymes
Gasification
Synthesis Gas
Feedstock
High heat, low Fuels
oxygen
production,
collection, Digestion Chemicals
Bio-gas
handling &
Bacteria
preparation Materials
Pyrolysis
Bio-Oil Electricity
Catalysis, heat,
pressure
Heat
Extraction Carbon-Rich
Mechanical, Chains
chemical
Separation Plant
Products
Mechanical,
chemical
16. Biorefinery Deployment Pathways
Pathways are tied to the
Grain Wet Mill
resource base and existing
industry market segments
Grain Dry Mill
where possible
Oil Seeds and Crops
Agricultural Residues
Lignocellulosic FS
Perennial Grasses
Pulp and Paper Mill
Forest Products Mill
Woody Energy Crops
Time
18. 3 Major Components of
Lignocellulosic Biomass
Lignin: 15-25%
Complex network of
aromatic compounds
“New clean coal”
High energy content
Treasure trove of
novel chemistry
Hemicellulose: 23-32%
A collection of unusual 5- and Cellulose: 38-50%
6-carbon sugars linked
together in long chains Long chains of glucose
Xylose is 2nd most abundant Most abundant form of
sugar in biosphere carbon in biosphere
19. Hydrolysis of Carbohydrates
Enzymatic
Pretreatment
Hydrolysis
60 g pretreated 27 g residue
solids (dry) solids (dry)
100 g raw process lignin
solids (dry) intermediate coproduct
feedstock
20. Not All Biomass is Created Equal
protein
100% chlorophyll
soil
acetyl
Uronic acids
ash
75% extractives
lignin
galactan
arabinan
mannan
xylan
50% glucan
25%
0%
poplar sawdust
corn stover (fresh) (fresh)
bagasse
22. Products from Lignin Intermediates
Power,
Sugars Combustion Heat
Carbohydrate
Hydrolysis
Lignin Syngas
Gasification
Intermediates
Low Molecular Wt. Products Pyrolysis Bio-oil/char
•Simple aromatics
•Quinones
•Hydroxylated aromatics Depolymerization
•Aromatic aldehydes Liquid Fuels
•Aromatic acids and diacids Hydroprocessing
•Aliphatic acids Residual solids to
combustion or
gasification
High Molecular Wt. Products Recovery
•Carbon fiber Lignin Products
•Polymer fillers and
•Thermoset resins Upgrading Residual solids to
•Wood adhesives and preservatives combustion or
gasification
23. Systems Analysis
Estimating Competitive Advantage and
Environmental Characteristics of
Technologies and Systems
Conceptual process engineering design and techno-economic analysis is used extensively in the Program to carry out the detailed technical and
financial assessments that are integral parts of the Stage Gate process. We practice a graded approach to these assessments meaning that as
the projects move along the development pathway, the assessments become more robust and hopefully, more accurate. The Program has
developed a series of detailed process models and assessment tools for the main process concepts under development. These tools are used
where appropriate. However, when new ideas or process concepts are being considered, these models and tools must be developed. The
information below describes the level of robustness appropriate for the assessments at each gate in the process.
25. Sustainable? Check the Life Cycle
Corn Stover Hydrolysis and
Fermentation
Biomass Transport Ethanol
Feedstock Feedstock Feedstock Fuel
Production Transport Conversion Distribution
One Mile
Traveled
Gasoline
Crude Oil Crude Transport by Oil Refining
Production barge, pipeline to Gasoline
26. LCA Energy & Climate Benefits
for Corn Stover to Ethanol & Power
Reduce oil consumption Reduce greenhouse gas
by 95% emissions by 106%
28. OBP Stage Gate Process
Includes early stage, high risk government-funded
technology R&D to insure alignment with industry
needs for later stage cooperative development and
commercialization.
“Industry
-driven
science”
29. Gate Decision Criteria: 7 Dimensions
1. Strategic Fit (look to OBP MYTP, EERE Plans)
2. Market/Customer
3. Technical Feasibility and Risks
4. Competitive Advantage
5. Environmental, Legal, Regulatory Compliance
6. Critical Success Factors and Showstoppers
7. Plan to Proceed
What we have found in our implementation is that Emphasis on identifying success factors and showstoppers has enabled us to identify what is most important
and prioritize our work.
30. What does OBP stage gate do?
Helps define interfaces of Public, Private, and Joint Public-Private
research, development, demonstration and deployment activities
OBP Strategy:
• Core pre-competitive research to “enable” expanded bioindustry
• D, D & D through Public-Private Partnerships
31. Deployment Barriers
Private Cost-Share:
OBP Cost-Share:
Project Timeline:
Development Stages: Potential Future
Unexpected Cost: DOE/OBP Deployment Efforts
Risk Mitigation: (to overcome barriers)
Attainment of performance criteria
Development Costs
Delays in attainment of
Mechanical completion
performance criteria
Commissioning
Current Biorefinery
Projects
First Commercial Plant
Procurement
Basic Technology Proof of Demonstration Permitting &
R&D Development Concept Engineering Construction Operation
100% / 0% 80% / 20% 50% / 50% 20% / 80% Loan Guarantee Program/Risk Mitigation Pool
32. Deployment Barriers and Solutions
Barrier Solution Arena
Off-Take Agreements – Identify and secure off-take
Policy/Legislation/
markets for biobased technology
Market Risk Mandates – Quotas to purchase biobased technology Policy/Legislation
Incentives – Financial incentives to purchase biobased
Policy/Legislation
technology
Core Fundamental R&D – National Labs – no cost share OBP (+ other gov’t)
Applied Technology R&D Funding – 20% cost-share OBP (+ other gov’t)
Integrated Bench/Pilot-Scale R&D Funding – 50% cost-
Technical OBP (+ other gov’t)
share (Industry-led)
Risk
Commercially Viable Demonstrations – 80% cost-share
OBP
of demo proving market viability
Loan Guarantee Program – Finite guarantee program Policy/Legislation
mitigating construction & start-up risk DOE HQ
Commercial
Risk Risk Mitigation Pool – Resources to address corrective Policy/Legislation
actions needed to deploy new technology in later stage of
construction DOE HQ
33. Biomass Highlights in EPAct of 2005
(Authorization, not Appropriation)
• Renewable Fuel Standard (Sec 1501)
– 4 Billion gallons by 2006
– 8 Billion gallons by 2012
– Ethanol, biodiesel, anything renewable
– Cellulosic or waste derived ethanol counts 2.5X grain ethanol
– 250 Million gallons cellulosic ethanol by2013
• Bioenergy Progam (Sec 932)
– Fuels and energy from lignocellulosic biomass
– Technologies based on enzyme-based processing systems
– Cost-effective bioproducts
– Integrated Biorefinery Projects (~ 50% of $, more later)
• Loan Guarantee Programs (Sec 1511, 1516, 1703)
• Update of Biomass R&D Initiative of 2000 (Sec 306)
• Numerous other related RD&D, grant and incentive programs and
reports from DOE, USDA, EPA Policy
34. Notice of Program Interest (NOPI)
• Section 932 (d) of EPAct of 2005 requires a
solicitation of proposals for integrated biorefinery
demonstration projects within six months of the
signing of the Act.
• OBP has a NOPI open until Nov 3rd looking for
input on what the solicitation should cover.
• “Demonstration of Integrated Biorefinery
Operations for Producing Biofuels and Other
Products”
– Uses lignocellulosic or natural oil feedstocks
– Produces a biofuel and one or more chemical or
chemical intermediate coproducts
• Anticipate a Funding Opportunity Announcement
in Jan ‘06 – depending on Gov’t budget process
35. Federal Biomass Agency Collaborations
Biomass Research and Development Act of 2000
Biomass R&D Technical Advisory Committee
Biomass R&D Board
(DOE/USDA/EPA/NSF/DOI/OSTP/OFEE)
Farm Bill 2002, Title IX
Federal Procurement of Biobased Products (Section 9002)
Renewable Energy Systems and Energy Efficiency
Improvements (Section 9006)
Biomass Research and Development (Section 9008)
Continuation of the Bioenergy Program (Section 9010)
Healthy Forest Restoration Act of 2003, Title II
Memorandum of Understanding (MOU) for Woody
Biomass Utilization (DOE/USDA/DOI)
MOU for Biomass to Hydrogen (DOE/USDA)
36. Additional Information
• Biobased Products and Bioenergy
Initiative (DOE & USDA)
• www.bioproducts-bioenergy.gov
• DOE Biomass Program
• www.eere.energy.gov/biomass/
38. How do we get from here to there?
Transition Modeling Approach
39. Collaborations with Starch Ethanol
Industry
• Biorefinery Projects
– Broin, Abengoa, ADM
• Bridge to the Corn Ethanol
– Purdue / Aventine wet mill
– Fiber conversion
• Others
– Cargill, Amoco, New Energy
Technology Demonstration
Risk Reduction
Value Addition
Co-location studies we are currently involved with or have been in the past. Corn fiber conversion and demonstration at semi-works scale in Pekin, IL via
subcontract. ADM is working towards this also (picture is PT tube reactor at Aventine). Dry mill co-location is collaboration w/ USDA to investigate
economics for different levels of co-location and integration. Power plant co-location studies complete.
40. DuPont-NREL Partnership:
Integrated Corn Biorefinery
• 4 year CRADA
• Goal:
Develop a Process Design Package for
farmers to produce fuels, chemicals and
power from entire corn plant
• Economic synergies being realized
chemicals
SoronaTM
corn Integrated
Corn bioethanol
Biorefinery
corn stover
(ICBR)
power
41. Forest Biorefinery Example
Liquid Fuels and
Syngas
Chemicals from:
BL Gasifier, and
Wood Residue
Gasifier
Black Liquor
& Residuals
Steam,
Power &
Chemicals
Extract portion of the
hemicellulose
Convert the extract to
Cellulose still used to Pulp
ethanol and chemicals
manufacture paper Manufacturing
courtesy of:
Del Raymond (Weyerhaeuser)
42. OMB R&D Investment Criteria
(select few)
Advanced Biomass R&D
Sugar Feedstocks Direct
and Bioconversion
Lignin
Sugar Intermediates Products
Platform
Residues
Fuels, Integrate
Combined Chemicals, Intermediates d
Heat &
Biomass Power
Materials & Carbon-
Intermediate based
Clean Gas s Refinerie
s
Thermochemical Direct
Platform Thermochemical
Conditioned Gas
or Bio-oils Products
Fossil
Systems Integration Resources
43. Challenges – Bioconversion
• Pretreatment
– Reduce cost of producing sugars for large volume, low cost
commodity fuels and chemicals.
• Catalysts
– Better chemical and biological catalysts needed for hydrolysis,
sugar utilization, lignin processing.
• Separations
– Improvements needed in all areas for efficiency and valuable
product recovery.
• Lower Capital and Operating Costs
– Handling of solids and concentrated slurries, and low cost
materials of construction.
• Integration of systems for chemicals, materials, fuels and
power
44. OMB R&D Investment Criteria
(select few)
• 2nd Generation Dry Mill Biorefinery - Broin and
Associates, Inc. is enhancing the economics of existing
ethanol dry mills by increasing ethanol yields and creating
additional co-products. Broin estimates that its process will
increase ethanol output at existing plants by approximately
10%-20% by 2006.
• New Biorefinery Platform Intermediate - Cargill, Inc. is
developing a biobased technology to produce a wide variety
of products based on 3-HP acid, produced by fermentation
of carbohydrates.
• Integrated Corn-Based Bio Refinery (ICBR) – DuPont is
developing is developing technology to convert corn and
stover into fermentable sugars for production of value-added
chemicals.
45. OMB R&D Investment Criteria
(select few)
• Making Industrial Biorefining Happen - Cargill Dow
LLC is developing process technology and sustainable
agricultural systems to economically produce sugars and
chemicals such as lactic acid and ethanol.
• Advanced Biorefining of Distiller's Grain and Corn
Stover Blends - Abengoa Bioenergy Corporation is
developing a novel biomass technology to use distiller's
grain and corn stover blends to achieve significantly higher
ethanol yields while maintaining the protein feed value.
• Separation of Corn Fiber and Conversion to Fuels and
Chemicals - The National Corn Growers Association, with
ADM and others, is developing an integrated process for
recovery of the hemicellulose, protein, and oil components
from corn fiber for conversion into value-added products.
