MAKE something people want to buy at a price they can afford. Hardly a
revolutionary business strategy, but one that the American biofuels
industry has, to date, eschewed. Now a new wave of companies think that
they have the technology to change the game and make unsubsidised
profits. If they can do so reliably, and on a large scale, biofuels may
have a lot more success in freeing the world from fossil fuels than they
have had until now.
The original 1970s appeal of biofuels was the opportunity to stick up
a finger or two, depending on the local bodily idiom, to the oil
sheikhs. Over time, the opportunity to fight global warming added to the
original energy-security appeal. Make petrol out of plants in a
sufficiently clever way and you can drive around with no net emissions
of carbon dioxide as well as no net payments to the mad, the bad and the
greedy. A great idea all round, then.
Sadly, in America, it did not work out like that. First, the fuel was
not petrol. Instead, it was ethanol, which stores less energy per
litre, tends to absorb water and is corrosive; people will use it only
if it is cheap or if you force them to through mandatory blending. In
Brazil, which turned to biofuels after the 1970s oil shocks, the price
of ethanol eventually became low enough for the fuel to find a market,
thanks to highly productive sugar plantations and distilleries powered
by the pulp left when that sugar was extracted from its cane. As a
result Brazil is now a biofuels superpower. North American ethanol is
mostly made from corn (maize), which is less efficient, and often
produced in distilleries powered by coal; it is thus neither as cheap
nor as environmentally benign. But American agribusiness, which knows a
good thing when it sees one, used its political clout to arrange
subsidies and tariffs that made corn-ethanol profitable and that kept
out the alternative from Brazil.
This still left the problem: using corn limits the size of the
industry and pits it against the interests of people who want food.
Boosters claimed that cellulose, from which the stalks, leaves and wood
of plants are made, could if suitably treated become a substitute for
the starch in corn. Both starch and cellulose consist of sugar
molecules, linked together in different ways, and sugar is what
fermentation feeds on. But cellulosic biofuel has so far failed, on an
epic scale, to deliver. At the moment, only a handful of factories
around the world produce biofuel from cellulose. And that fuel is still
ethanol.
This is what companies working on a new generation of biofuels want
to change. Instead of ethanol, they plan to make hydrocarbons, molecules
chemically much more similar to those that already power planes, trains
and automobiles. These will, they say, be “drop-in” fuels, any quantity
of which can be put into the appropriate fuel tanks and pipelines with
no fuss whatsoever. For that reason alone, they are worth more than
ethanol.
Appropriately designed drop-in fuels can substitute for diesel and
aviation fuel, which ethanol cannot. That increases the size of the
potential market. They also have advantages on the production side.
Because crude oils from different places have different chemical
compositions, containing some molecules engines won’t like, oil
refineries today need to do a lot of careful tweaking. The same applies
to the production of biodiesel from plant oils. Genetically engineered
bugs making hydrocarbons more or less from scratch could guarantee
consistent quality without the hassle, thus perhaps commanding a premium
with no extra effort. Meanwhile the feedstock could be nice and cheap:
Brazilian sugar. Tariffs that block Brazilian ethanol from northern
markets do not apply to drop-in hydrocarbons.
Scale models
If this approach works, it will not only be beneficial in its own
right—modestly reducing greenhouse-gas emissions while making money for
its investors—it will also provide a lasting market incentive to
scientists to devise better ways of turning cellulose into sugar. This
gives the prospects for this generation of biofuels a plausibility that
was missing from its predecessors. The drop-in firms are starting to
come out of the laboratory, float themselves on the stockmarket, team up
with oil companies and build their first factories. The dice, in other
words, are rolling.
One of the leaders of the drop-in drive is Alan Shaw, the boss of
Codexis, a firm based in Redwood City, California, which makes
specialised enzymes that perform tricky chemical conversions. In Dr
Shaw’s opinion, the industry’s problem has not been bad products so much
as a failure to think big.
Dr Shaw proposes to remedy that. In collaboration with Shell, an
Anglo-Dutch oil company, and Cosan, Brazil’s third-largest sugar
producer, he plans to build a factory capable of producing 400m litres
(2.5m barrels, or 105m gallons) of drop-in fuel every year. The other
companies will provide money, reaction vessels and sugar. He will
provide the enzymes and genetically engineered bacteria needed to make a
drop-in fuel.
The project is part of a joint venture by Shell and Cosan; with a
capacity of more than 2 billion litres a year, it is the world’s largest
biofuel operation, and it owns a 16.4% stake in Codexis. At the moment,
the joint venture’s business is based on fermenting cane sugar into
ethanol, but the new plant would start changing that. Codexis’s enzymes
and bacteria can turn sugar into molecules called straight-chain alkanes
which have between 12 and 16 carbon atoms in them. Such alkanes are the
main ingredients of diesel fuel.
In April Codexis became the first start-up involved in drop-in fuels
to float itself on a stockmarket—which in this case was NASDAQ,
America’s main market for high-tech stocks. But it is not the last.
Another firm that recently completed its NASDAQ flotation is Amyris, of
Emeryville, which is also in the San Francisco Bay area. Amyris started
off using large-scale genetic engineering, also known as synthetic
biology, to create bugs that make a malaria drug. But now it, too, has a
product that it claims is a drop-in biodiesel. And it, too, has hooked
up with an oil company: Total, of France, which owns 17% of the firm.
Amyris’s biodiesel is made of more complicated molecules than
Codexis’s (they are known, technically, as terpenes), and the firm
employs genetically engineered yeast, rather than bacteria. But
Brazilian sugar is again used as the raw material. Amyris has formed a
joint venture with Santelisa Vale, Brazil’s second-largest sugar
company, and is busy refitting some of that firm’s ethanol plants in
order to make drop-in diesel.
The Codexis-Cosan-Shell partnership and the Amyris-Santelisa-Total
one are the furthest along of the drop-in fuel businesses, but others
are coming up on the rails. LS9, which is based in South San Francisco
(a separate municipality that has a cluster of biotech companies), also
uses bacteria to make straight-chain alkanes. It is converting a
fermentation plant in Florida into a test facility to see if what works
in the laboratory will work at scale. And Virent, based in Madison,
Wisconsin, is making alkanes out of sugars using a chemical, rather than
a biological, process.
Gevo, of Englewood, Colorado, which filed for flotation on NASDAQ in
August, is planning to make another type of post-ethanol fuel: butanol.
Like Codexis, it will use enzymes and genetically engineered bugs to do
this; like Amyris and LS9, it will retrofit existing ethanol plants to
keep the cost down. The aim is to turn out an annual 2 billion litres of
butanol by 2014. BP, a British petroleum company, is building a butanol
pilot plant to do this near Hull in the north of England and also has
big ambitions for the fuel.
Like ethanol, butanol is an alcohol. That means each of its molecules
contains an oxygen atom as well as the carbon and hydrogen found in an
alkane. Butanol, however, has four carbon atoms in its molecules,
whereas ethanol has two. That gives butanol more energy for a given mass
and makes it more alkane-like in its properties; nor does it absorb
water as readily as ethanol. Moreover, the production process for
butanol is more efficient than the processes that produce alkanes;
proportionately more of the energy from the feedstock (various crops for
Gevo, wheat for BP) ends up in the final fuel. And BP will certainly be
able to bring to the party the ambitious scale that Dr Shaw praises.
The last of the Bay-area drop-in contenders is, in many ways, the
most intriguing. Solazyme, another firm based in South San Francisco,
wants to use single-celled algae to make its fuel. This is not a new
idea. Craig Venter, who led the privately financed version of the Human
Genome Project, is trying it too, through his latest venture, Synthetic
Genomics, in San Diego. Synthetic Genomics is backed by the biggest oil
beast of them all, ExxonMobil—and several other firms have similar
ideas, if not the same heavyweight backing. Solazyme’s approach is
unusual, though. Instead of growing its algae in sunlit ponds it keeps
them in the dark and feeds them with sugar.
At first sight this seems bonkers. The attraction of algae would seem
to lie in the possibility that, since they photosynthesise, they could
be engineered to contain the whole sunlight-to-fuel process in one
genetically engineered package. Sunshine being free, this looked a
brilliant idea. But looks can be deceptive. If you keep your algae in
ponds the rays do not always strike them at the best angle and the algae
sometimes shade one another if they are growing densely.
Photobioreactors—complicated systems of transparent piping through which
alga-rich water is pumped—overcome those problems, but they cost a lot
and are hard to keep clean. Solazyme tried both of these approaches, and
almost went bankrupt in the process. Then its founders, Jonathan
Wolfson and Harrison Dillon, asked themselves whether it might not be
cheaper to ignore the photosynthetic step, buy the sugar that
photosynthesis produces instead, and concentrate on getting the algae to
turn it into oil.
Which is what the firm now does. It also has a nice little earner in
the form of a contract with the American navy. The navy intends that, by
2020, half the fuel it uses (over six billion litres a year, mainly
diesel and jet fuel) will be from renewable sources. Over the past year
Solazyme has been providing it with trial quantities of both from its
production facilities in Pennsylvania and Iowa. The algal oils are not
themselves good fuel; but a refinery in Houston takes care of that,
producing shipshape alkanes of the sort the navy likes.
High-fibre diet
The success of all this obviously depends on the price of sugar,
which is rising. Historically, the cost of making Brazilian ethanol has
been about 26 cents a litre. Diesel will cost more, but petroleum-based
diesel sells in America for 57 cents a litre before distribution costs
and tax, so there should be room for profit. Nevertheless, if drop-in
fuels are to become a truly big business they need a wider range of
feedstocks.
Until recently, the assumption has been that cellulose would take
over from sugar and starch as the feedstock for making biofuels. Making
cellulose into sugar is technically possible, and many firms are working
on that possibility. Some are using enzymes. Some are using
micro-organisms. Still others have a hybrid approach, part
biotechnological and part traditional chemistry. And some go for pure
chemistry, breaking the cellulose down into a gaseous mixture of
hydrogen and carbon monoxide before building it back up into something
more useful.
The reason for this enthusiasm has been government mandates:
America’s Renewable Fuel Standard (RFS-2) and its European equivalent.
On pain of fines, but with the carrot of subsidies, these require that a
certain amount of renewable fuel be blended into petroleum-based fuels
over the next decade or so. RFs-2 calls for a 10% blend of cellulosic
fuel by 2022.
The targets in RFS-2, though, represent a huge climbdown. Its
predecessor, RFS-1, called for 379m litres of cellulosic ethanol to be
produced in 2010; RFS-2 mandates only 25m litres. The industry in fact
has a capacity of about 70m litres today, according to the Biotechnology
Industry Organisation (BIO), an American lobby group.
The reduced expectations reflect the fact that making fuel out of
cellulose turns out to be hard and costly. Today’s cellulosic ethanol is
competitive with the petrol it is supposed to displace only when the
price of crude oil reaches $120 a barrel. In Dr Shaw’s view, a lot can
be done by scaling up (and using the appropriate enzymes, of course,
which Codexis will be only too happy to sell you). And big plants will,
indeed, bring the price down—probably not to the point where cellulosic
ethanol can compete in a fair fight, but quite possibly to a level at
which fuel companies will make or buy the stuff rather than pay fines
for not doing so.
Phil New, the head of biofuels at BP, says his firm is determined to
comply with RFS-2. To that end it is planning a plant in Florida that
will have a capacity of 137m litres when it comes on stream in 2013. It
is one of seven cellulosic-ethanol fermentation plants with annual
capacities above 38m litres (that is, 10m gallons) which BIO says should
be running by 2013, with a further seven making ethanol using syngas
conversion. However, such claims are not that different from those made
three years ago—which singularly failed to bear fruit.
Grassed up
If things work out better this time, it still leaves the question of
where the cellulose is to come from. The answer is likely, in one form
or another, to be grass.
Though they look very different, sugar cane and corn are both
grasses. So is wheat, which is corn’s counterpart as the starch source
of choice in the EU. A simple way of garnering cellulose is to gather up
the leftovers when these crops have been processed—bagasse from sugar
cane, stover from corn and straw from wheat.
That is a start, but it will not be enough, Wood is a possibility,
particularly if it is dealt with chemically, rather than biologically
(much of the carbon in wood is in the form of lignin, a molecule that is
even tougher than cellulose). But energy-rich grasses look like the
best bet. Ceres, which is based in Thousand Oaks, California, has taken
several species of fast-growing grass, notably switchgrass and sorghum,
and supercharged them to grow even faster and put on more weight by
using a mixture of selective breeding and genetic engineering. Part of
America’s prairies, the firm hopes, will revert to grassland and provide
the cellulose that biofuels will need. The Energy Biosciences Institute
that BP is funding at the University of Illinois, in Urbana-Champaign,
is working on hybrid miscanthus, an ornamental grass that can produce
truly remarkable yields.
If the price were right, such energy crops might take America a fair
bit of the way to the “energy independence” that early proselytisers
for biofuels crowed about. A study carried out last year by Sandia
National Laboratories, an American government outfit, suggests that in
theory 285 billion litres of cellulosic biofuel a year could be
extracted from the country’s agriculture and forestry without breaking
too much sweat. That is 1.8 billion barrels, compared with American oil
imports of 4.3 billion barrels in 2009. Europe’s higher human-population
density leaves less space for energy crops. But there is clearly some
room for expansion in the Old World as well as the New.
Beyond the rich countries, capacity is greater still. In a fit of
enthusiasm a few years ago Steven Chu, now America’s energy secretary,
floated the idea of a global glucose economy to replace oil. That is
going a bit far. Brazil is a well-governed country, but other parts of
the tropics, though endowed with sunshine and cheap land, are not always
the sorts of places that the wise investor would pile into. And
Brazil’s blessings in terms of oodles of land that can grow cane with no
irrigation are not widespread. Nevertheless, the country’s success
shows that international trade in biofuels is a possibility. If it
brought economic development to less favoured lands, that would surely
be welcome.
Drop in or drop out
Such a future, though, depends on cars continuing to be powered by
liquid fuels. A large shift to electric cars would put the kibosh on the
biofuel market as currently conceived by most of its supporters; but it
would not necessarily kill the principle of using plants to convert
sunlight into car-power. The goal of reducing emissions needs low-carbon
generators to power the grid the electric cars draw juice from. Put the
energy crops in generators instead of distilleries and off you go.
Richard Hamilton, the boss of Ceres, says he is indifferent as to
whether his grasses end up in petrol tanks or power stations. Others
think making them into electricity might be a better answer anyway. A
study published last year by Elliott Campbell, of the University of
California, Merced, and his colleagues suggested that turning crops into
electricity, not fuel, would propel America’s cars 80% farther and
reduce greenhouse-gas emissions even more. Electrons are easy to
transport and burning uses all of the fuel value of a plant—including
that stored in the lignin which current processing methods find hard to
deal with.
The electrification of cars, however the electricity might be
generated, would be the end of the road for ethanol. But not necessarily
for drop-ins. There is no realistic prospect for widespread electric
air travel: the jet engines on aircraft need the high-energy density
that only chemical fuels can provide. So if you want low-carbon flying,
drop-in biofuels are the only game in town. And civil aviation alone is
expected to use 250 billion litres of fuel this year, is growing fast
and could pay a premium if its emissions were subject to a cap or a tax.
Over the long run, the future for biofuels may be looking up.
Courtesy: The Economist 
In 2009 Harvard anthropologist Richard Wrangham offered a novel theory on the evolution of humans: Homo erectus could not have evolved nearly two million years ago without consuming cooked food. No way, he argued, could raw food have provided the calories necessary for the development of the human brain. Its digestion alone requires too much energy. But cooked food changed everything. It's much easier to digest, freeing up energy to fuel our brains, not our guts. "The extra energy gave the first cooks biological advantages," he wrote. "They survived and reproduced better than before. Their genes spread. Their bodies responded by biologically adapting to cooked food, shaped by natural selection to take maximum advantage of the new diet. There were changes in anatomy, physiology, ecology, life history, psychology and society."
Now a new paper published this week provides what the authors call "unambiguous evidence in the form of burned bone and ashed plant remains" that "burning events" occurred in Wonderwerk Cave, an archaeological site in South Africa, one million years ago. The archaeologists -- led by Francsco Berna of Boston University -- have been working in the cave, "an approximately 140-m-long phreatic tube," since 2004. Kate Wong explains at Scientific American:
Additionally, the team did not find traces of berlinite and hydroxylellestadite, two minerals that "characteristically form during spontaneous combustion of bat guano -- a rare event but one documented inside caves" (a very wonderful phrase if there ever was).
In 2009 Harvard anthropologist Richard Wrangham offered a novel theory on the evolution of humans: Homo erectus could not have evolved nearly two million years ago without consuming cooked food. No way, he argued, could raw food have provided the calories necessary for the development of the human brain. Its digestion alone requires too much energy. But cooked food changed everything. It's much easier to digest, freeing up energy to fuel our brains, not our guts. "The extra energy gave the first cooks biological advantages," he wrote. "They survived and reproduced better than before. Their genes spread. Their bodies responded by biologically adapting to cooked food, shaped by natural selection to take maximum advantage of the new diet. There were changes in anatomy, physiology, ecology, life history, psychology and society."
Now a new paper published this week provides what the authors call "unambiguous evidence in the form of burned bone and ashed plant remains" that "burning events" occurred in Wonderwerk Cave, an archaeological site in South Africa, one million years ago. The archaeologists -- led by Francsco Berna of Boston University -- have been working in the cave, "an approximately 140-m-long phreatic tube," since 2004. Kate Wong explains at Scientific American:
Additionally, the team did not find traces of berlinite and hydroxylellestadite, two minerals that "characteristically form during spontaneous combustion of bat guano -- a rare event but one documented inside caves" (a very wonderful phrase if there ever was).
