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Today in this theEnergyCollective.com podcast, I'm joined by Nathan Schock, director of public relations for Poet, to discuss biofuels, the company's plans for a next-generation cellulosic ethanol biorefinery, and the future of the ethanol industry.
Listen to the podcast:
To date, Poet has focused on increasing the efficiency and cost-effectiveness of the biorefining process to keep costs economical, a process that has given Poet an edge and helped the grow into the leading producer of corn ethanol. Their efficient modern process melds automated production systems and high-tech, real-time data monitoring to keep production processes in optimal conditions, Schock says, as well as an intensive focus on new and novel enzymes that allow corn ethanol fermentation at room temperature. Lower process temps help Poet cut energy consumption in the refining process by 10-15% compared to many of their competitors. That cuts down energy costs and, since ethanol plants traditionally run on natural gas (or sometimes even coal), CO2 emissions as well. (Some of Poet's plants also capture CO2 from the fermentation process and sell the CO2 to the bottling industry for carbonation and one runs on solid waste and landfill gas for process energy, Schock notes.)Poet is now developing a commercial cellulosic ethanol production process that can expand the feedstocks that can be used to produce biofuels.
As Schock readily acknowledges, corn ethanol, while now a relatively significant niche contributor to the US fuel supply, is inherently limited by the need to convert only edible starches and sugars into fuel. Cellulosic ethanol, which can use abundant and diverse sources of cellulose are the key to going from niche fuel to major contributor to the US energy mix, Schock says.
According to Schock, after a year of operating Poet's small, pilot scale cellulosic ethanol facility in Emmetsburg, Iowa, grandly named Project Liberty, the company has already cut projected capital costs for the full-scale facility by 40% (down to a little over $200 million for the first 25 million gallon per year facility) and lowered projected production costs from about $4.13/gallon to about $2.35/gallon of cellulosic ethanol. At that price, Schock says it would still be about 50-75 cents per gallon more expensive to produce ethanol from cellulose than from corn kernels (depending on the fluctuation of corn prices), so Poet plans to shave down that price difference even more by the time they open their first facility, with additional cost reductions expected as they move into larger production scales with greater experience over the following four to five years.
Running the pilot-scale facility has also helped Poet and their network of corn suppliers gain experience efficiently harvesting, storing, and transporting corn cobs, the initial source of cellulose Poet plans to use in it's first commercial facilities. According to Poet, there's enough cellulose in the nation's corn cobs to produce about 5 billion gallons of fuel annually, enough to provide about 3.5% of current U.S. transportation fuels. That's not enough on it's own to move ethanol from niche to major energy source just yet, but corn cobs are just the first of many potential sources of cellulosic feedstock. A 2005 US Department of Agriculture and Department of Energy study estimated that 1.3 billion dry tons of biomass feedstocks, mostly cellulosic materials, could be sustainably harvested annually in the United States, enough to provide enough energy to displace about 30% of current U.S. petroleum consumption.
Poet is planning to begin construction of the full-scale, 25 million gallon per year, cellulosic ethanol facility later this year with the goal of commercial production at the facility by late 2012 or early 2013. Poet is partnering with the leading Danish bio-innovations firm, Novozymes, as they have in the past on corn ethanol production, to develop custom enzymes for their biochemical cellulosic ethanol production process.
When it opens, the facility will look a lot more like a complicated refinery - Poet calls it the "refinery of the future" - than a simple brewing fermentation process. Co-located next to the existing 50-million-gallon-per-year Emmetsburg corn ethanol facility, the integrated biorefinery will take multiple feedstocks in -- including corn kernels, cellulosic materials like corn cobs, stocks and other agricultural waste, and the non-fermentable lignin contained therein -- and produce a variety of products, including corn ethanol, cellulosic ethanol, animal feed, and, by burning the lignin, enough process heat, steam and electricity to power the facility, displace natural gas needs at the neighboring corn ethanol facility, and/or export extra electricity to the grid. The facility could also produce other useful products, like corn oil, bioplastics, or custom proteins used in products like edible pill casings.
An efficient biorefinery process fueled entirely by biomass (lignin) significantly changes the lifecycle CO2 profile of the ethanol production process. According to EPA's recent Renewable Fuel Standard rulemaking process, lifecycle CO2 emissions for modern corn ethanol facilities are about 20% lower than conventional gasoline (Poet claims their more efficient facilities, powered by natural gas, cut lifecycle CO2 emissions by roughly 50%-60% compared to gasoline). In contrast, EPA analysis of Poet's planned cellulosic ethanol facilities are net carbon negative (achieving a 130% reduction in lifecycle CO2, Schock says), since they are fully powered by the non-fermentable lignin in the feedstocks and produce enough process heat and electricity to offset additional carbon-based fuels outside the refinery gate.
Obstacles to full-scale commercial production of cellulosic ethanol obviously remain. According to Schock, major challenges include reducing enzyme costs and other production costs to get per-gallon costs closer to price points for conventional corn ethanol, as well as securing financing for this first of it's kind facility.
"Even absent the global financial meltdown we went through, it's very difficult to get financing for something this unique," Schock notes. "Everyone can't wait to finance the second plant."
Poet has submitted an application for the Department of Energy loan advanced energy technology loan guarantee program help secure financing for the facility. The firm has already been selected by DOE for an up to $80 million grant as part of a program to advance the commercialization of cellulosic ethanol
According to Schock, Poet's has a strong track record as a fully integrated biofuel producer with a history of "[brining together both the science and the engineering … taking a process and tinkering with it, perfecting it, [and] making it more cost effective." That makes Poet well positioned to reduce costs, overcome remaining technical hurdles and get full-scale, economical cellulosic ethanol production up and running, Schock says.
"But you've gotta get the steal in the ground first." That's what Poet is focused on today.
Listen to the full podcast interview and find out more about Poet's cellulosic ethanol plans, hear Schock defend the current excise tax credit for corn ethanol (which theEnergyCollective.com contributor Robert Rapier has argued is now a big waste of taxpayer dollars), and a discussion of the most important policy steps Washington can take to help innovative firms like Poet make commercial cellulosic ethanol production a reality.
If you have questions for Nathan Schock (or me), drop them in the comments here and I'll be sure Nathan takes a look. In addition to his work at Poet, Nathan is a passionate communicator on all things green, and you can follow Nathan on Twitter @NathanSchock and check out his writing at his personal blog, Greenway Communique, here.
