As the fuel versus food debate intensifies, Oilprice.com takes a look at the top four advanced, non-food biofuels that may have a long-term potential to become commercially, and hopefully environmentally, viable.
The production of advanced biofuels was up this year by some 437 million gallons over last year, but economic challenges remain formidable and technology will be the key to unlocking potential. Perhaps things are so great right now for the advanced biofuels industry, but it will take time and patience to figure out how to appease both the market and Mother Nature.
Algae: Growing on Us
Algae produces some carbon dioxide when burned, but it takes the same carbon dioxide in to grow. So when algae farms grow massive quantities to be turned into biofuels, the end result is that they actually suck greenhouse gas out of the air. It also has other advantages over biofuels from corn or soybeans, in that it does not require soil or fresh water to grow. It also has the potential to produce more energy per hectare than any land crop.
Currently, the high cost of capital and operations limit bio-based materials and chemicals to a few facilities located where corn and cane are plentiful and cheap. Algae can change that and recent technological advances are promising. Testing is now being conducted for technology that could dewater algae and remove contaminants in the harvesting process. Water is a key drawback: It evaporates quickly from algae ponds and must be continually replenished, which makes its too expensive.
SBI energy research firm predicts a compound annual growth rate of 43.1% for algae biofuels (a $1.6 billion market by 2015) as the sector gets a boost from strategic partnerships and is weaned off government loans. SBI particularly lauds algae for its high yield per acre and low environmental impact.
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But there are a number of unanswered environmental questions. The idea is that algae would be grown in big, open ponds, and ecologists are questioning whether these new “microalgae” would spread and “mingle”, whether they would hybridize or evolve outside of a controlled environment. There are also concerns that the microalgae would be dispersed by wind or wildlife activity and upset the ecosystem or produce harmful toxins.
The key names to watch for algae developments are Sapphire, Solazyme, General Atomics.
We think algae biofuel development is still a good decade away from realizing its potential, but we believe it has the most potential of today’s advanced non-food biofuels.
Camelina: A New Aviation Buzz Word
Camelina is an oil seed that is being bandied about by the aviation industry as a potential game changer. Camelina is an annual plant with small, pale yellow flowers with four petals, reaching a height of up to 3 feet, with pea-shaped seed pods. They produce around 400,000 seeds per pound which contain 40% oil, as opposed to 20% oil with soybeans.
The seed is harvested dry using wheat combines and then crushed to extract oil, leaving behind some 70% of its original volume, which is then used as animal feed.
Camelina has the best prospects in the states of Washington and Montana, where they can be grown on dry, lower value land.
For now, the market for camelina is very small and farming of the plant is still minimal, meaning that it’s not worth it for farmers to grow the plant. Conversion of camelina to biojet fuel is still in the pilot stages.
Camelina is being developed by GenEx and BioJet.
Jatropha: Boom and Bust
Jatropha seeds come from a fast-growing, drought-resistant tree with poisonous leaves and fruit pod that contain large black seeds that yield oil when crushed. This oil is used to make soap and can be burnt in lamps. The tree is grown Indonesia, the Philippines, Cambodia, India and Latin America, largely in the tropics, but its needs are minimal and it can also survive in dry, sandy areas. Growing Jatropha to produce feedstock for bio-diesel is indeed economical in theory, but so far, it has been boom and bust.
At first Jatropha seemed destined for greatness. It looked set to outdo algae due to the slower pace of necessary technological developments, and was proven to have a higher biofuel yield than camelina. It took only a few years for the jatropha dream to collapse after investors threw tons of money at the idea in 2007-2008, particularly in Africa. In part, it was the financial crisis, but the bigger problem was that we learned that while jatropha could indeed be grown on dry, sandy, low-value land, it did not produce enough seeds inside its fruit pods to make mass biofuel production possible. Like traditional biofuels such as corn, it would have to be grown on high-value land intended for food crops.
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Not everyone has given up, though. In January this year, US-based SG Biofuels Inc. received $17 million in venture capital to fund research and international jatropha planting programs. Developers are hoping to discover how to get the plant to yield more seeds without competing for fertile, food-growing land.
Palm Oil: Environmentally Controversial
Palm oil has seen better days. Over the past week alone it has become mired in controversy. Environmentalists are on the offensive against Herakles Farms, an affiliate of US-based Harakles Capital, over massive land grabs in Cameroon for the development of the one of the world’s largest palm oil plantations.
While palm oil is cost-effective for use in biofuels and being cultivated in mass in Africa and Asia, they remain environmentally controversial, not least because they generally require the cutting down of rainforests or the draining of swamps.
The US Environmental Protection Agency (EPA) in January this year ruled that biodiesel made from palm oil failed to meet the requirements to be added to its renewable fuels program due to high greenhouse-gas emissions; to wit, about 17% more than emissions from traditional diesel fuel.