Biofuels from 5000'

Biofuels are being used at 30,000' as airlines (and aircraft manufacturers) explore options for growing rather than drilling for Jet A feedstock. (They will actually be used at much higher altitudes if the DoD’s efforts to develop bio-JP5 and JP8 for military aircraft bear fruit.)

However, this week I gave a 5,000' overview of the biofuel industry to first year students at KGI, the Keck Graduate Institute of Applied Life Sciences. Although our college is primarily oriented towards biotech and big pharma, there is a substantial pocket of interest in biofuels.

The one hour talk was intended to help students understand the various economic, technical, and political issues regarding biofuels. It started with an overview of US energy usage, and the factors driving interest in renewable energy in the 1970s and today. It reminded students — some of whom are in their first semester of business classes — that preferences for commodities like energy are usually driven by price.

Why Biofuels? Why Now?

Even more so than solar, biofuels compete directly with oil. As a nice chart from oilism.com illustrates, the big issue is that across the past 40 years, almost every attempt to predict oil prices from the past has failed.

I still need to understand the technology better. My students are helping me learn more here, since our grad students with undergrad biochemistry or chemical engineering majors know far more about the science than I do. (Some of them are leveraging this expertise to get internships and jobs in the industry.)

In pulling together the talk, the one thing that was striking was how dependent the industry is today on policy. For example, on Wednesday Jim Lane of Biofuels Digest listed the 10 hottest topics facing the biofuels industry today — of which only four (or five) are under the control of private industry:

1. RFS. Hold or Fold? Critics want to scrap the Renewable Fuel Standard. …
2. Can Obama find the $510 million? The DOE, USDA and US Navy each pledged $170 million toward scale-up funding of advanced biofuels, for defense purposes. …
3. Elections. … Numerous Republican candidates … have decided to oppose ethanol subsidies.
4. Fuels, or chems, or something else? There’s been such a proliferation this year in target products, it hardly seems apt to call this publication Biofuels Digest anymore. …
5. The EPA’s attitude on waivers. WIll the EPA continue to enforce the RFS mandate for advanced biofuels based on production capacity …
6. RIN prices. Ethanol RINs remain at prices so low they hardly matter, but biodiesel RINs have been on a roller coaster…
7. BRICs and mortar. [interest in BRIC countries.]
8. Freshwater, arable land, potassium, phosphorus, nitrogen. … what about the looming shortages in freshwater, and nutrients such as phosphorus?
9. Feedstock development. … Where is all the low-cost camelina, jatropha, algae and so on? …
10. Money. … [As Phycal’s Kevin Berner said, “at scale, any advanced biofuels project is a capital pig.” For $100 million, you can finance maybe 20 strong pilots

At KGI, we’ve had two biofuels speakers so far this year, and expect another 3 or 4 before the year is out. I’m sure we’ll have more to report in the coming months.