The 'Peak' Role of Biofuels

Experts may not see eye-to-eye on peak oil projections, but most now agree the world's near- and long-term energy needs will be met by an increasingly diverse portfolio of fossil fuels and renewable energy. At the Energy & Environmental Research Center's inaugural biomass conference, it was made clear that biodiesel can play a key role in this mixed-and-matched energy future.
By Tom Bryan | August 01, 2006
Soon after Thomas Edison patented his first invention-the electric vote recorder-in 1868, he was informed that, despite his ingenuity, Congress was unwilling to mass produce the novel machine. As it were, Edison's unsolicited device simply recorded votes too fast, worked too well and was no doubt ahead of its time. Dejected, Edison vowed he'd never again invent anything unless it had, as he put it, "commercial demand." That simple rule of thumb-avoid inventing things people don't want-is as relevant today as it was 138 years ago, yet it is an entrepreneurial guideline too often learned the hard way in both science and business.

Gerald Groenewold, director of the University of North Dakota's Energy & Environmental Research Center (EERC), harkened back to Edison's lesson in the opening minutes of a conference titled, "Biomass '06: Power, Fuels and Chemicals," as he explained the EERC's position on novel and emergent biomass technologies and applications. The two-day conference, held July 18-19 at the EERC's recently expanded headquarters in Grand Forks, N.D., featured presentations on all things biomass, ranging from the gasification of lignocellulosic feedstocks to the manufacturing of biomaterials. Biodiesel received considerable attention during the first day's proceedings. Archer Daniels Midland Co. (ADM), Cargill Inc. and other companies dispatched representatives to the EERC to discuss biodiesel production, current research and development priorities, emerging opportunities, and of course, challenges facing the industry.

In his opening statements, Groenewold said the EERC is not simply a research and development center, but rather a "research, development, demonstration and commercialization" center-what he dubbed an RDD&C facility. The EERC was defederalized years ago and has achieved considerable success predominantly through private industry partnerships. The facility had 435 contracts worth approximately $135 million last year, and Groenewold told the audience of nearly 200 that he credits the EERC's success to an unyielding commitment to "practical, entrepreneurial, market-driven research" aimed at producing commercial results. That, he said, means the EERC and its private industry partners often assume the risk and involvedness that come with demonstration and commercialization. "The world is full of research and development centers. When I hear people say they work in research and development, I say, 'I'm sorry you stopped with the easy stuff.'" Groenewold quipped.

Groenewold's frank, entrepreneurial style worked well to set the workshop's pragmatic tone. Indeed, speakers who followed, including Cargill's Ian Purtle, echoed Groenewold's advocacy of private and public sector partnerships designed to expedite commercialization-or simply make it possible. "At Cargill, we believe the strength and nature of partnerships are critical to optimizing the outcomes of the research and development projects we undertake," Purtle said.

Those who spoke principally about biodiesel on July 18, did so in largely broad contexts, discussing the renewable fuel's past, present and future in a way that was clearly linked to the scope and overarching viability of global biomass utilization. Fittingly, those biodiesel-related presentations-as well as the questions and answer periods that followed-seemed never to disconnect from the veracity of the world's fossil fuel dependence. The future of oil, speakers agreed, means everything to the viability of biomass utilization. The questions at hand, they said, include: How much oil does the world have? How soon will oil start to run out? Indeed, has the long decline already begun? "We live in a world that is increasingly susceptible to high energy prices," Groenewold said, adding that he personally does not believe there is a lack of petroleum on Earth. "Contrary to popular opinion, there is not a shortage of [carbon] molecules. There's a lot of petroleum out there. What the real problem is, is that there is a lack of 'rate of flow' of those molecules to the surface of the Earth where people can obtain and use them." In other words, what the EERC's director believes is that the world's easy-to-get oil has, in fact, already been obtained-or is being obtained. On the other hand, he said, there is an enormous amount of hard-to-get oil that still remains within the Earth. Speeding up the rate at which that oil flows from potentially dwindling reserves is, in fact, the real test. "If technology can enhance the rate of flow, then the whole equation is going to change," Groenewold said. "But right now, the rate of flow is restricted in most places [of the world], and so we are focused on a wide array of alternative energy sources."

Groenewold went on to say biomass-derived fuels, power, chemicals and products-even when pooled with all other forms of renewable energy-are not a "silver bullet" solution to the world's energy needs. "A lot of people would like to believe we can go totally to renewable energy," he said. "I don't believe that's going to happen, not for a very, very long time anyway. We will continue to produce and consume a lot of petroleum energy for a long time to come-and our own research reflects that."

In fact, Groenewold said the Southern States Energy Board (SSEB), a group comprised of governors and state legislators from 16 southern states released a critically acclaimed study in mid-July that focused on America's liquid transportation fuel options. The "American Energy Security Study" presents a comprehensive plan for U.S. energy security through the production of clean liquid transportation fuels from domestic resources. The plan sets an aggressive timeline for achieving energy independence by 2030. The initiative outlines the costs, risks and national security implications of U.S. dependence on imported oil, and presents a national mission plan and supporting legislative agenda to secure energy stability and independence. Key elements of the plan include the creation of "alternative energy farms" that would utilize a variety of currently available technologies, large-scale implementation of coal-to-liquids processes to convert U.S. coal and oil shale resources into "ultra-clean fuels," extensive development of biomass to produce renewable liquid transportation fuels, increased transportation fuel efficiency, sensible energy conservation, and a legislative agenda that creates incentives for rapid deployment of domestic, energy resources. The initiative also backs innovative efforts to increase domestic enhanced oil recovery by injecting carbon dioxide into declining oil fields to release additional trapped oil and safely sequester the carbon dioxide underground.

"It may surprise some of you, but we here at EERC tend to agree with this study," Groenewold said, "We think biomass in the longer term, may provide perhaps 20 percent of the energy needs of this country." Therefore, while many energy experts believe the United States and the world will, for a long time, remain dependent on a wide range of energy technologies, fossil fuels will continue to be our primary source of energy. A world in which biomass energy has a one-fifth market share, however, may be music to the ears of those with a stake in biodiesel.
Purtle helped frame the connection between biomass utilization and the future of oil extraction and consumption by briefly discussing Hubbert's Peak, the peak oil production theory named for its developer, the late M. King Hubbert. He was a geophysicist who, in 1966, projected that the United States was about to reach peak domestic oil production. "Everybody thought he was a screwball," Purtle said. "He was absolutely right. In 1970, the United States reached its peak ability to produce oil."

Purtle went on to point out that the world currently consumes two barrels of oil for every barrel discovered. "It took 125 years to use the first trillion barrels of oil. We'll use the next trillion in 30," he said. Showing a graph depicting global oil extraction based on Hubbert's Peak theory (Figure 1), Purtle explained that by applying Hubbert's methodology today-and allowing for a variation of approximately 300 billion barrels of oil-world oil production will peak between 2007 and 2010. "I have really yet to find anyone, except maybe one person, who really seriously challenges Hubbert's Peak theory," Purtle said. "The only question is when it is going to happen. But that it will happen we can be clearly certain of."

In terms of biomass power, there is going to be a balance between fossil and biomass energy into the foreseeable future, according to Chris Zygarlicke, the EERC's deputy associate director for research. But why biomass now? Why is biomass suddenly part of the solution? Part of the answer, Zygarlicke said, is that the world is essentially running out of fossil fuels. "Eventually, we will run out," he said. "We only have what is locked up in the Earth-what was created millions of years ago. That's why renewable energy needs to be part of the picture now."

Returning to Edison's rule of thumb about invention, Zygarlicke reiterated the need for focused RDD&C efforts on marketable products as the biomass utilization movement advances. "We need to be able to put our finger on these things and say, 'This makes sense,'" he advised. Building on Purtle's emphasis on the peak oil theory, Zygarlicke displayed a chart (Figure 2) showing that U.S. oil supplies have been steadily diminishing over the past three decades, as is widely known. Figure 2 also shows that global reserves have yet to peak. When will it happen? "You'll get a different answer depending on who you ask," Zygarlicke said. "Some say next year. Some say next week. Some say it's already happened. Some say we are 50 years away. There is no concrete answer, but everyone agrees that world oil reserves will peak just like the United States' reserves did 35 years ago."

With that in mind, the question at hand is what role will biomass-including biofuels-play in meeting the world's energy demands after peak oil production. Zygarlicke admitted biofuels currently play a minimal role in the world's transportation energy needs, but he made it clear that "minimal" does not equate to "insignificant." "Ethanol and biodiesel currently make up a tiny little piece of the pie compared to gasoline and diesel fuel," he said, explaining that biofuels have great potential, yet many hurdles to overcome to get to that 20 percent mark offered in the SSEB's energy initiative.

Understanding Why Before Knowing How
Groenewold, who initially urged conference attendees to explore the drivers behind the development of biomass energy, said domestic energy security, international trade, the environment, rural economic development, technological advancement and politics are perhaps each playing a role in driving the worldwide proliferation of biofuels. He said these so-called "drivers" determine the direction and ultimate nature of how biomass technology and commercial applications are developed. In other words, the "why" determines the "how." Understanding these drivers can help policy-makers, scientists and entrepreneurs avoid repeating the mistakes of the past, such as those made in the 1970s. "In the '70s, we focused on the increased production capacity of liquid fuels in the absence of fiscal responsibility," Groenewold said. "We don't want to go there again."
Purtle, a native of the Netherlands, said the energy crises of the late 1970s-something Americans often associate with long lines at gas stations and a transition to smaller, more fuel-efficient vehicles-actually had a more severe impact on Europe. In the Netherlands, he said, driving was actually restricted, and the energy crises took a heavy toll on the nation's economy. The Dutch began researching alternative fuels, but the effort was short-lived. Oil prices dropped, and so did the biomass-to-energy movement.

Now, of course, oil is again costly and in tight supply. What makes this new era of biomass energy development different, though, is the fact that so many interconnecting factors are working in favor of alternative energy. For example, the technological breakthroughs driving biomass utilization are numerous, and those involving agriculture are of the utmost significance. Purtle said the marked trend in improving crop yields, for example, has enormously positive consequences.

Likewise, Zygarlicke said, biomass-derived energy, by and large, produces less greenhouse gas emissions and harmful particulates than fossil- fuels. "Carbon dioxide, methane, chlorofluorocarbons and nitrous oxides are some of the major contributors to what's typically called the 'greenhouse effect,'" he said. "There's a lot of debate, but the key point is that methane and carbon dioxide are doing something. They are contributing to something. And they are definitely on the rise in our atmosphere."

Attributing the increase in greenhouse gases to the industrialization of the world, Zygarlyckie said there is now solid data showing that since the 1940s, the atmosphere has warmed up about 1 degree Fahrenheit. However, he said an important question about the global warming picture is whether the temperature increase is linear. "Is it linear?" he asked. "Or is it going up exponentially-like [the shape of] a hockey stick-that's something that's not clearly borne out and needs to be addressed."

That aside, Zygarlicke said it frustrates him to hear so many people hold global warming responsible for unusual weather. "I have a real beef with people who, every time the weather changes, blame it on global warming," he said. "I frankly don't think we can do that. I'm a geologist by training. I can look at the sediment and tell you we have had cycles like this over and over again throughout history-it's in the fossil record-and maybe we shouldn't jump to conclusions."

Continuing to explore the drivers of biomass energy, Everett Dobrinski, president and CEO of Dakota Skies Biodiesel, a biodiesel plant about to start construction in Minot, N.D., said a "perfect storm" has emerged in favor of biofuels-perhaps for biodiesel, in particular. "We have [petroleum] supply shortages again," Dobrinski said. "The hurricane season last year had a big impact on supply. Infrastructure is at maximum capacity. Pipelines are trying to squeeze more through. We're just at that place where we simply need more product." Dobrinski went on to say the political instability of the world's top oil-producing region is also driving the development of biofuels in several parts of the world. Environmental concerns are driving the movement, too, and in the United States, federal policy has boosted the financial viability of producing and using biofuels. "All of these things have given us a reason to start," he said, adding that since the federal biodiesel excise tax exemption was signed into law (and later extended), lenders and investors have been more trusting of biodiesel. "They don't like to take a chance on anything, so if you have some incentives-particularly long-term incentives-that's very positive."

Dobrinski, a farmer who has personally used B100, said biodiesel specifically has some unique drivers that are related to its natural lubricity. "Biodiesel puts back the lubricity that is removed when you take the sulfur out of diesel fuel," he said. "Reducing sulfur is good. Losing lubricity is bad. Biodiesel puts lubricity back, and in my opinion, also makes your engine more efficient."

Although biodiesel has less Btu's per gallon than petroleum diesel fuel, Dobrinski believes-and he's not alone on this- the renewable fuel can actually allow engines to operate above their power ratings due to the lubricity of the fuel. "More lubricity somehow makes the engine more efficient," he said, adding that added lubricity equals less friction, and less friction equals less maintenance.

Several of the speakers discussed the fact that biodiesel (and ethanol) may soon be competing against not only petroleum-derived fuels, but new forms of biomass-derived fuels. ADM scientist Paul Bloom explained that biodiesel is defined as a mono alkyl ester of long-chain fatty acids. "There may be biodiesel-like or diesel-like alternatives out there-and many of you have seen some of the technology-but it's not really defined as biodiesel. That doesn't mean a definition can't be changed."

Zygarlicke explained that the EERC has done extensive work in the area of gasification, the process of using thermal methods to convert a solid feedstock into a gas that can be cleaned, processed and separated for a variety of different power needs. "There are all sorts of options with that gas," he said. "You can run it into a small internal combustion engine; generate power to, for example, replace diesel in a diesel generator; run it into a solid oxide fuel cell for electricity generation take that gas and burn in an existing boiler; or do some other processing to make value-added chemicals. It's got a really good future."

Zygarlicke also briefly described Fischer Trophe technology and the arrival of butanol on the alternative fuels scene. "Maybe there are going to be other fuels and chemicals like butanol that are going to be complementing the production of ethanol and biodiesel," he said. "These are questions worth looking at."

Bloom said he is not only keeping an eye on novel alternative fuels, but the utilization of production feedstocks that he believes are inferior to the virgin vegetable oils used by ADM. Specifically, he said, palm oil is a major concern. "Not only is palm oil not the greatest oil for human consumption because it has high levels of unhealthy acid, but that aside, using palm oil for biodiesel is not a great idea either," Bloom said. "It doesn't meet the cold flow standards, so it really [shouldn't] be used directly for biodiesel." Bloom added that palm oil may be a good feedstock for biofuels used in stationary power generation in tropical climates.

Like the chance of butanol giving ethanol a run for its money, Bloom said there is an increasing amount of speculation about technologies that can directly convert vegetable oils into hydrocarbon-based diesel fuel through "hydrocracking." "Palm oil would be a good fit for those types of applications where you basically get the same sulfides of diesel fuel coming out," Bloom said.

Unique Perceptions on Byproduct Gluts
ADM, which has a fairly long history of producing biodiesel in Europe, now produces about 340 MMgy of biodiesel in Germany alone. In addition, Bloom said the company is building an 84 MMgy biodiesel plant in Velva, N.D., and has an ownership stake in a 30 MMgy biodiesel plant in Mexico, Mo. ADM also has several biodiesel plants in South America and Asia.

Despite the fact that many in the biodiesel industry are concerned about a possible glut of glycerol on the market due to increased biodiesel production, Bloom said he is more concerned about the amount of soybean and canola meal that will soon be entering the world feed market. "Everyone is so concerned about how much glycerol we are creating and what we are going to do with it," Bloom said. "What they are perhaps overseeing is how much meal is being liberated in this process. Think about the bean. In a bushel of beans, there are about 50 pounds of beans; there are about 11 pounds of crude oil and about 44 pounds of soybean meal in those beans. There is much more meal available than there is oil. We need to think about what we are going to do with all of that meal while we are developing biodiesel."

Bloom went on to say that concerns about oilseed availability worldwide are valid, even if oilseed production essentially doubles in the coming years. "The U.S. biodiesel industry produced some 75 MMgy in 2005," he said. "According to the National Biodiesel Board, there is about 700 MMgy that will be on line in the next 12 to 17 months. That's a pretty big jump, and we need to start asking where we are going to get all that oil."

Other speakers, also expressed concern about the growth of the biodiesel industry. For example, Bloom and others said that even a nationwide B2 requirement would need approximately 7.5 billion pounds of vegetable oil to meet that demand-out of an 18.7 billion-pound crop. "That's 40 percent of all the soybean oil that was produced in the United States last year just to get to a 2 percent inclusion rate in diesel fuel today," Bloom said. "That is a huge amount of oil, yet it's not too far off of what we would need to get to the 1 billion-gallon mark from what is already in production or under construction. Already we are looking at 700 million gallons."

Surprisingly, ADM is not as concerned about glycerin applications. Bloom said the company plans to produce industrial products like propylene glycol and other "large-volume" chemicals from the by-product. "I encourage you to go home and look at the products you have on your shelves," he said. "Propylene glycol is not just a deicer like you've probably heard, but it's in many of the end applications-fiberglass resins, personal care and cosmetics. Go home, look through the chemicals you have around your house. You'll see propylene glycol all over."

For ADM's future biodiesel neighbor in North Dakota, Dakota Skies Biodiesel, the opposite seems to be true. Dobrinski said Dakota Skies Biodiesel, which will be integrated with a canola-crushing facility, will take in about 350,000 metric tons of canola per year-or 11 million bushels. That will amount to approximately 150 metric tons of canola meal, but Dobrinski said he wasn't worried about finding takers. "Actually, the meal is pretty well spoken for already," he said, adding later that he is not so confident about the glycerin market. "There's an awful lot if it out there right now."

North Dakota's Flower Power
Due to the fact that the EERC's conference was held in North Dakota-the largest canola-producing state in the nation and the future home of two major canola-based biodiesel plants-it was not surprising that Dobrinski, Bloom and others touted the quality of canola seed oil as a superior production feedstock. In fact, canola has been proven to have very good traits for biodiesel production, especially when it comes to cold weather performance. "I don't have to tell [North Dakotans] about canola biodiesel, but I have to tell the rest of the country about canola biodiesel," Dobrinski said. "It is simply an outstanding oil to use for biodiesel in diesel fuel applications because of its low pour point-even outperforming soy."

Because canola oil is almost identical to the rapeseed oil grown in Europe and used there as the primary production feedstock for biodiesel, Dobrinski said he believes his company will be able to adopt the European biodiesel quality standard-EN14214. "We could adopt those standards without too much work," he said, acknowledging that the European standard is generally thought of as a little more stringent than the ASTM specification used in the United States and Canada. "Canola is simply a great feedstock to use in biodiesel. It has those properties that make it just a little bit better than some of the other oils."

Specifically, Dobrinski said canola has good cold flow properties and a high cetane value, which indicates how fast the molecule will ignite and compress. "You don't want something that is sluggish," he said. "You want something that will ignite fairly rapidly. Canola biodiesel has a cetane rating of 51-that's 51 out of 100. Premium-grade diesel fuel rates between 45 and 50 at the highest. So we are actually higher than premium diesel even with all the additives that are put in petroleum diesel to make it that way."

Tom Bryan is the editorial director of Biodiesel Magazine. Reach him at [email protected] or (701) 746-8385.
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