The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Out of the Shell: Oil Giant's Big Biofuels Ambitions

In this era of "repeal the RFS" efforts from API, would you be surprised that Shell regards the US Renewable Fuel Standard as "one of the more effective frameworks out there"?

Truth be told, Shell has the size and global perspective that requires it to think long-term, and with complexity — about the global energy business. Accordingly, they see opportunities in ethanol, diesel, gasoline and jet fuel — and are investing across the board in advanced technologies.

To understand more of the what, why, where and when, we turned with Shell’s Vice President for Alternative Energy — who brought Shell’s plans and thinking, well, just a little more out of the shell.

Brazil vs Other Geographies

BD: Let’s talk about Brazil. Is this a case where Shell sees biofuels as a special opportunity within Brazil, or is Brazil the first of many countries.

MT: In 2001, we started working on our first advanced biofuels project, the first of many. Five years down the track, we realized the time scales were longer than expected, longer than any one expected.

We had the ambition to create a significant biofuels business by 2015, ten years out from that time.

We could see we weren’t going to get there on that timeline, while at the same time Brazil was emerging as a major player.

We had been active there in downstream for decades, almost a 100 years, and we had ambitions to grow market share there. The strategic thinking was to grow the downstream, and build a large biofuels manufacturing business with the best biofuels option available, sugarcane ethanol.

Cosan had the downstream presence and a large sugarcane ethanol business, and we could look at a combination in various ways. It made sense for Shell to develop more there — not only delivered for us as a first biofuels market — but it was a sizable downstream business for us, with lots of potential benefits. For example, how to deploy cellulosic.

The geography is more global. Our ambition is not limited to Brazil. Having delivered that venture, and its up and running — now we are back on to adding focus on North America and the EU.

Drop-in Fuels vs Novel Molecules

BD: Drop in fuels vs novel molecules like ethanol – you’re making ethanol, but also working on renewable gasoline, diesel and jet fuel with Virent. How do you see the different challenges and opportunities?

MT: A true drop in is chemically no different than any fuel component in the refinery. It’s another molecule can be easily blended at high ratios into gasoline or diesel, for example, without dedicated infrastructure. It’s a molecule that also has comparable energy density to diesel and gasoline, and other performance characteristics. Something really similar.

It’s self-explanatory why we need to do that. We’ve seen the blend wall emerge in the US sooner than anticipated — it is here and now. And we see similar issues in the EU for biodiesel, with limits there around B7 there. It’s clear to us that more compatible products – especially for markets like shipping or aviation – are needed. We need to find solutions for distillates. But we have not given up on ethanol either. We can see a role for ethanol in the mix — not limited to Brazil. Particularly if competitive on price — in spite of these constraints that the retail structure and the fleet impose.

With any product, but energy in particular, for a new technology to succeed it has to deliver on cost and performance and demonstrably better. In our sector, to displace oil without subsidy, clearly heavy costs can be imposed by infrastructure, or vehicles. You can point to drop-ins that minimize these challenges. But clearly Brazil has done it — succeeded in that challenge, even with ethanol.

The Virent Partnership for Renewable Drop-in Fuels

BD: The Virent partnership — its been marching along steadily — then, unusually, you accelerated with a decision to build your own pilot plant down in Houston to complement the work done in Madison. Why all the extra construction?

MT: The collaboration has been very successful for our point of view — its a very competent shop, in my opinion, and we are very pleased with the progress based on starch and sugars from cane or corn.

We had hoped that would be sufficient to build a business. But with the price of conventional sugars, it’s a challenge. We need something different to make it work for fuels — corn and cane sugars work better for chemicals [based on price]. So we needed to develop further a process that would start with biomass. We have the technology with Virent and the license. What we’ve done is to convert biomass as a front-end to the Virent process.

Making Renewable Sugars vs. Procuring from Others

BD: Why not turn to one of the many renewable sugar developers now emerging?

MT: There, we need to tailor the quality of the sugar for the process, and we need to have confidence in the developer. We decided to put our confidence in ourselves and our own technology. It’s one of the difficulties we all face. We are limited on plant scale because of the cost of transporting biomass, and we can’t afford too many process steps.

So we need to integrate the steps to minimize the capital intensity, instead of marrying an external sugars process to ours., Now, we’re not saying that we have got the answer…

Looking at Feedstocks

BD: Feedstocks — what are you are looking at? Just bagasse, or more widely?

MT: We are looking widely at feedstocks — at those commonly found in North America. Clearly the US has a strategic intent to develop advanced biofuels and has regulatory structure to support that and the first developments.

Looking at Policy

BD: As we look at policy, what do you see as your core policy needs? Is stability the most important criteria? What about various new supports?

MT: We need a pathway that demonstrates what the strategic intent of US and EU is, through to 2030. We need a clear framework that runs out to then. We recognize that there are many competing technologies out there — some very strong in my opinion — and we aim to be competitive, too — we need
policies that balance [not picking technology winners] and “certainty”. That’s a difficult balance.

We think the RFS does a pretty good job. It’s one of the more effective frameworks. One thing we would like to know is what it will look like after 2022, because clearly these are 20-year investments.

Financial, Investment and Partnership Structures

BD: Structures. Shell’s been involved in JVs, strategic partnerships and in-house development of technologies. How do you look at the strategy for developing the right business structures?

MT: Well, start with the basic idea that form follows function. You decide what you want to do, then look at what structures work. We want to build, own and operate a significant biofuels business — to complement what we have in Brazil. At least as big as that.

How do we get there? In terms of how we develop, clearly we’ve had JVs, but we have moved towards making for ourselves. For specific items — for example, for biocatalysts we are now seeking to procure those now rather than develop. But in all areas, we play to our strengths, partner with others where it makes sense.

In deployment, when ready, then there will be a discussion around the resource partners. With forest or farmer partners — how broadly we would seek to operate for ourselves — for downstream needs? We are always testing.

This article was originally published on Biofuels Digest and was republished with permission.

Untitled Document

RELATED ARTICLES

States Already Seek To Delay Clean Power Plan

Andrew Harris, Bloomberg Fifteen states led by coal-rich West Virginia asked a federal court to stall Obama administration rules intended to c...

Campus Flora Fuels Research into Bioenergy-Inspired Energy Storage

Joe McCune, Missouri S&T Dr. Umit Koylu, a professor of mechanical and aerospace engineering at Missouri University of Science and Technology,...

Sugarcane Bioethanol Project in Sierra Leone Underscores the Challenge of Producing Bionergy in the Developing World

Andrew Burger West Africa may be one of the most difficult and dangerous regions of the world in which to work, posing challenges t...

Unlikely Allies in North Carolina Clean-Energy Fight

Mark Drajem, Bloomberg With North Carolina’s renewable energy mandate under assault from Republican legislators, green groups seeking to sav...

PRESS RELEASES

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

Appalachian's Energy Center assists counties with landfill gas to energy projects

The Appalachian Energy Center at Appalachian State University recently completed a proj...

Early Bird Registration Deadline for GRC Annual Meeting is This Week

The deadline for early-bird rates for registration for the biggest annual geothermal ev...

Redesigned HydroWorld.com Video Gallery

Hydropower news and information, and interesting promotional announcements are now avai...

FEATURED BLOGS

Transitioning to Net-Zero Living

Judith and Jeffrey adore living in Belfast, Maine – a quaint harbor town of Belfast, Maine. They previously res...

The True Cost of Electric Vehicles in Australia

In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported ...

The Coming Multi-trillion Dollar Energy Investment Drive

In coming years, a multi-trillion dollar low-emission energy investment drive will get underway. Three catalysts wil...

The Perfect Elevator Pitch

The elevator pitch is a concise statement that grabs attention and communicates value, ideally leading to a next step...

FINANCIAL NEWS

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

2015 AREDAY Summit

The 12th Annual AREDAY Summit, August 8-13th in Snowmass Colorado. Engag...

StartUp Green

AREI, American Renewable Energy Institute, in partnership with ...

SAP for Utilities

SAP for Utilities is North America’s most comprehensive utilities ...

COMPANY BLOGS

New coating extends cylinder life 8 times longer than traditional c...

Hydroelectric turbine systems operate in extremely harsh conditions. The...

Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

SAP for Utilities Blog

The Eventful Group produces the annual SAP for Utilites Conference ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS