8 PRC Energy Deals, Biobutanol Nears, Liposuction Fuels SUV, "Clean" Coal - What to Do?

Although cigarette smoking is on the decline in North America, that is not a trend matched in much of the rest of the world. In any case, most of you will likely know what a "butane" lighter is, and are aware that under pressure, inside the lighter, the butane is in liquid form, but that as it flows out of the lighter, it vaporizes and therefore burns easily. The closely chemical relative of butane is butanol, which is an alcohol due to its chemical structure, but very similar to butane except that at normal atmospheric temperature and pressure it is a liquid, like ethanol, not a gas. The odd thing about the previous sentence however is that butanol is, in fact, one of the most gas-like substances we know about, except in this case we are talking about gasoline. Unlike ethanol (also an alcohol, and in fact If they didn´t intentionally spoil the stuff you could drink it just like vodka) which has much lower energy content than gasoline, butanol is very close in total energy to normal gasoline.

Now, of course, the kind of butanol that is of particular interest today is butanol made from organic (plant) materials, which therefore is known as biobutanol. Yeah, yeah, I know, I´ve talked about biobutanol a lot of times before, but remember that sometimes the readers who stumble over these columns in archived form may be reading months later, and/or for the first time.

The reason I started my column today with a mention of biobutanol (other than it is a solution I look forward to seeing more from in the near future) it came to my attention today that BP (the former "British Petroleum", before "petroleum" became a "badword") has been calling people´s attention to biobutanol and their cooperative research with DuPont on the subject by a rather non-technical discussion of Biobutanol, here. (You need Adobe Reader to view the document which you may download for free at the adobe website, though these days most people already have it on their computer.)

Another story that rises a little above the "vegetable oil prices rise 20% during 2008" item in the Mumbai Business Standard, is the fact that the USDA (United States Department of Agriculture) has funded the creation of a small biodiesel plant in Central America. The biodiesel facility was actually created by the folks from Texas A&M (Texas Agricultural and Mechanical University) under a project called "Food for Progress" in a town called Masauga, Guatemala.

The article in the AgNews (from Texas A&M) goes on to include this quote: "This new biodiesel plant is an example of the USDA´s commitment to sustainable economic development through its investment in people," said Elizabeth Johnson, the agriculture department´s acting Under Secretary for Food Safety, during the facility´s opening ceremony on Dec. 3. "This investment has taken the form of education and technical assistance, and its goal is the prosperity of the citizens of Guatemala."

Although "New Energy Matters" (a paid subscription service from the United Kingdom) reported that an Indonesian firm had entered a $255MM deal to develop a biodiesel plant, this was really only one of 8 major deals in the energy field recently announced by the People´s Republic of China through their Ministry of Commerce. These eight deals range from coal mining, to oil and gas, and four power plants. Partners are equally varied including the China Development Bank, Indonesian PT Kurnia Selaras , TZE the Chinese telecommunications equipment provider, Shanghai Electric and Canada´s Husky Petroleum.

Also among this week´s announcements (this one carried by BusinessWire) was a rather short press release that PetroAlgae has raised an additional US$10 million from 2 previous investors. Funds from this additional investment are intended to launch a "commercialization" of PetroAlgae´s product. All-in-all a really small business news item, barely worthy of note, except that I really liked the positive outlook from Dr. John Scott, Chairman of the Board of PetroAlgae when he said, "As a result, 2009 could represent the breakthrough year not only for PetroAlgae but for the entire biodiesel and alternative energy markets." I certainly share Dr. Scott´s outlook for the coming year. I am sure it will be a significant one. How could it fail to be so with the Obama Administration´s commitment to green jobs, green fuels, and "green" cars. I wouldn´t want the good Dr. John to get the idea that he deserved sole credit for such a prediction, since, all prior optimism aside, the confluence of influences at this time almost guarantee this coming year will be "significant" even if it is not THE clear turning point in alternative energy and fuels.

I mean, after all, can next year be anything but a watershed year after 2008 became the year in which a Beverly Hills plastic surgeon announced that he was using fat from liposuction he was performing to fuel his SUV.

Here´s a number for you: DE-PS36-09GO99038 Now, what is it? That´s the "opportunity number" of a new federally funded program from the Department of Energy. This is a US$200 million program (projected over the next 6 years) to take "integrated biorefinery" technologies to their "next level" (whatever that may be). That is, if you have bench top proof of concept, they may fund you to a "pilot" project; if you have a pilot project running, you may apply to expand next to a "demonstration" project size. The place to look for this pot-o-gold is on "grants.gov" (that link leads directly to this particular offering, including links to the full description and to an "application" page -- no point wasting time if you are a ´ready-to-go´ enterprise, right?).

A couple of conversations I have had in the last couple of days reminded me that I used to feel that any energy "solution" that was based on "fossil carbon" was no solution at all. I still have a point of view that understands that sentiment, but I have softened my position on this issue. Sorry to you hardliners who will never speak to me again, but I recognized in my old attitude some of that impractical "utopia now or nothing" intransigence of my youthful "hippie" days. "If the system is ´broken´ don´t play," was the prevailing attitude of the "drop out, tune in, turn on" era of the late ´60´s and much of the ´70´s too. But with the onset of greater maturity, most of us came to believe that if the "system" is broken then the way to remedy that is to work within the system to effect the change we wanted to see. It was the same thing Gandhi had realized when he said, "Be the change you want to see in the world." I would be delighted if somehow we never saw a new coal-fired power plant in the world ever again. But I don´t think that is a realistic possibility. At the moment even convincing the majority of citizens to accept that global climate change is a crisis, or that global warming is a reality is proving nearly impossible, despite the attitudes and policies of the more enlightened (as we like to think of it) among us. So the alternative is to work within the system, to join with the forces promoting "clean coal." There´s no such thing as "green coal", but there is a "greener" fossil energy future that is possible, and with the power, money and momentum of the coal mining industry it is impossible to prevent all future coal burning enterprises. The result is that I have resolved to "join forces" with them, to try to steer them in as "green" a direction as my offerings will allow.

I am especially excited about being able to offer a "greener" vision to the Air Force´s Coal-to-Liquid program (by which they intend to be able to fuel their airplanes and more) starting with a CTL plant at the Malmstrom Air Force Base (on the edge of Great Falls) in Montana. However, Senator Henry Waxman has pointed out to the Air Force that 2007 legislation passed by Congress forbids the government from purchasing synthetic fuel that does not at least match the carbon footprint represented by petroleum products, according to that article linked above. Last year (well, actually "this" year of 2008, but it is almost 2009 already) the Air Force offered a 700 acre portion of the Air Base to private contractors on which to build a CTL facility. The plan was to offer this as a "free land" base, but without participation or financial support from the Air Force.

All of that seems to have stalled as a result of two events, Congressman Waxman´s opposition and William Anderson´s departure from the Air Force (Anderson was a principal proponent of synthetic fuels for the Air Force, CTL just being the most obvious source of "local" (i.e. not foreign) fuel sourcing. However, It also appears that the bill prohibits the federal government from purchasing alternative fuels that emit high "lifecycle" greenhouse gas. That interpretation opens the door for biomass to liquids using essentially the same process of gasification and Fischer-Tropsch conversion of syngas to kerosene (aka synjet). I have been working up some budgets recently to mitigate coal-fired power plant emissions, but the same numbers would also be valid for "greening up" the CTL process.

My "vision" of this is that in the short term, vast fields of algae ponds (preferably under greenhouses, but lacking those, at least open ponds) will absorb current carbon dioxide emissions and gradually, using biomass as a PORTION of the input to the combustion or gasification processes, the "lifecycle" profile of GHG is significantly lower. In the longer term, with expansion of the algae cultivation capacity, it would likely (in the loooonngg term) be possible to substitute algae biomass for ALL of the fossil carbon for both processes (power generation and gasification-to-liquid fuels).

Interesting coincidence was that Malmstrom was offering a patch of 700 acres. Our calculations showed that 1400 acres would produce enough algae (using our Concentrated Algae Cultivation System) to sequester about 40% of all the carbon dioxide from a 750 MW coal-fired power plant, while at the same time producing 46,000,000 gallons of biojet fuel, and about 1.26 million tons of biomass which could be used to produce an additional 140 MW of continuous electricity. We estimated the capital costs at about a little less than US$600,000,000 which is a tidy little sum, but penny ante stuff compared to the recent federal government bailout schemes and a mere 12% of the budget of the US$5 billion CTL plant planned by Baard Energy´s Ohio River Clean Fuels project. Even so, without any increase in the value/cost of jet fuel, this kind of operation could return about a 6% profit on that capital cost, and more like 16% if implemented as a less protected environment for the algae in "semi-covered" open ponds.

Something that SHOULD have been fueled by mystery failed to work up the steam needed to make the plot riveting was, unfortunately not sufficiently high octane. Overall it was enjoyable, but the latest Will Smith film entitled 7 Pounds just didn´t have the suspenseful quality that could have made it a much better film. Too much was given away too early, so the plot, while serviceable was pretty much a plodding through the expected events on the way to the forgone conclusion (which, by the way, was exactly what was revealed in the beginning). It doesn´t hurt that the rooting interest is Rosario Dawson whose beauty graced no less than 4 feature films during 2008, and that´s in addition to 30 episodes of Gemini Division which offers the "novelty" of being a "web-only" sci-fi detective drama series.

To end on an "up" note today, I´m going to just briefly mention that President Obama´s pick for Secretary of Energy is Dr. Steven Chu. He is 60-year-old Nobel laureate and director of the Lawrence Berkeley National Laboratory. He has long been a friend to, and an advocate of alternative liquid fuels.

Love and warm wishes,

Stafford "Doc" Williamson

http://daochienergy.com