Can Biofuels Make a Comeback?

Len Rand, CEO of xF Technologies, says his company has come up with a material that can dramatically reduce the particulate matter in diesel emissions.

It also fights corrosion.

And it can be used as a food additive.

“It can smell like almonds…anise,” he said.

The magic material is furoate ester, a multipurpose industrial chemical that the Albuquerque-based company says it can make from corn stover or some other relatively low cost biomass through an innovative two-step process. The chemical can be added to diesel or gas—a 5% blend with diesel will cut particulate matter in half—as well as biodiesel. The FDA has declared it safe to eat. It is also hydrophobic and works across a wide range of temperatures.

And at scale, it will be economical, he says: volume production costs will be under $2 per gallon, a figure that includes an estimate for the cost of the waste biomass. Biochar, a byproduct of the process, can be sold to farmers as a soil supplement for $100 a ton. Put another way, the revenue from biochar will cut the cost of fuel by about 8 cents per gallon.

“There is the lack of a good oxygenate that doesn’t harm diesel,” said Rand, who back in the late 90s sold communications chip company NetBoost to Intel.

Former IT executive?  Biofuel?  Compelling economic claims and performance benefits? Some of you no doubt are already thinking “Haven’t we seen this movie before?”  In fact, the Advanced Bioeconomy Leadership Conference in San Francisco opened on the same day that Kior, a company that Vinod Khosla once championed as the future of fuel, filed for bankruptcy protection.

Rand and others will certainly acknowledge that it is a challenging market, and oil hovering around $80 a barrel makes investors skittish. But give biofuel execs credit: they learn from the past. Much of the activity centers around developing fuels and chemicals out of waste products and virtually everyone is adopting strategies to minimize the capital requirements to get their technology to market. Many say they will deliver modular processing units to market that will allow for distributed production. Many are also probably also better categorized as alt feedstock fuels rather than biofuels because they rely on methane or CO2 from any source.

XT, for instance, won’t even try to build plants. It plans on licensing its technology, mostly to people who can incorporate it into existing facilities. A former VC, Rand asserted that trying to raise money to build facilities would be the “death knell” for start ups.

Similarly, Liquid Light will try to commercialize its CO2-to-fuel process by leveraging existing plants. The company, which raised $15 million earlier this year from VantagePoint Capital Partners among others, uses electrochemical processes to turn CO2 into ethylene glycol, which serves as a foundation for a number of materials. The original idea for the process dates back to 1870, said CEO Kyle Teamey.

“Carbon dioxide is a cheap form of carbon available in huge quantities. We turn it from being a liability into an asset,” he said. “We minimize the amount of electricity needed to make CO2 into something valuable. It is almost like artificial photosynthesis.”

Another advantage: industrial carbon dioxide streams are somewhat predictable, unlike the output of an oil or gas well. Price fluctuations, therefore, could be less extreme.

Kiverdi and LanzaTech, meanwhile, say they have created microbes convert carbon dioxide into fuels and other marketable materials. The companies use the same low cost feedstock as Liquid Light, but they harness metabolic processes.

In a similar vein, Mango Materials says it can make PHA, a biodegradable plastic that is more tough and reliable than many of the consumer bio plastics of today, out of methane escaping from landfills. Enough methane leaks from landfills in the U.S. to make 3 million plastic bottles a year, said CEO Molly Morse.

Methane sold to generate electricity fetches around 25 cents per pound, Morse added. As a feedstock for PHA it is worth about $1.35 per pound. She further added that most biogas today has not market value because most people don’t capture it.

And, who knows? Over time, the current economic circumstances in the oil industry could help. The G20 economies will spend $88 billion a year on fossil fuel exploration, according to a new study from the Overseas Development Institute and Oil Change International. Forbes energy reporter Chris Hellman pointed out earlier, the average oil company generates around $15 per barrel in net when oil sells for $100 a barrel.  (It’s a great article—you should read it.) If the price drops to $90, profits drop to $5 a barrel, or by 67%.

Higher costs? Lower profits? Huge multibillion dollar processing plants? Maybe trying to extract energy from garbage will start to look like the safer option as time goes on.

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Michael Kanellos is the Vice President of Editorial and Green Technology at Eastwick, an integrated marketing firm specializing in high technology clients. Before Eastwick, he spent twenty years reporting on solar, gadgets, energy efficiency, agriculture, semiconductors and the internationalization of the tech industry for CNET, Greentech Media, Forbes, The New York Times, Computer Reseller News and other publications. To reach him, please contact him at kanellos@gmail.com

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