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Biomass feedstocks are marked by their tremendous diversity, which makes them rather difficult to characterize as a whole. Biomass in the form of wood or dried leaves has of course been consumed as fuel throughout all of human history, but its use as a source of refined liquid or gaseous fuels is quite new.
In the past biomass feedstocks have not generally been cost competitive with conventional fossil fuel feedstocks in the production of refined fuels, but if pricing trends continue for petroleum and natural gas, the current disparity could entirely disappear or even reverse itself. But here one cannot generalize, but must consider each individual feedstock separately.
A Surfeit of Candidates
The term biomass itself applies to any tissue produced by a living organism, and, in terms of the biofuel industry, biomass also includes manmade substances derived from living tissues such as leather, textiles, paper, etc., and food, as well as industrial byproducts resulting from the processing of biomass to manufacture useful items or prepared foods.
The major categories of biomass feedstock are as follows:
Food crops used for fuel production: this group in turn consists of three subcategories, grains, oil crops, and sugar crops.
Starchy grains are primarily used in the production of ethanol, not because they are necessarily the most cost effective feedstock for this product, but because the technology for rendering grains into ethanol is so very well established. Our expectation is that the use of grains for this purpose will increase rapidly over the course of the next several years, but that a downward trend will ultimately manifest itself as more cost-effective feedstocks and the technologies to exploit them come into play. Grains are expensive to cultivate with modern energy intensive agricultural methods, and we believe that more value may be realized by selling grains for food, especially with the continued growth of world population.
Today many American farmers are enamored of the notion of producing fuel feedstocks, believing that the current absence of liquid fuel surpluses will continue and will promote a permanent seller’s market for their products. While we believe that there is some truth to this notion, we are doubtful that grain will remain cost competitive with other biomass feedstocks on a long term basis. It follows that anyone investing in corn or soy bean futures with the idea that these crops will eventually replace petroleum as energy sources is apt to be badly disappointed in the long run.
The second major subcategory of food crops is comprised of the oil crops, primarily oil seeds. These include soy beans, cotton seed, pumpkin seed, sunflower seed, rape seed, peanuts, and palm oil, among others. These crops are mainly used to produce biodiesel by means of a chemical process known as transesterification, described elsewhere on this Website. In addition, many other oily feedstocks have been suggested for use in biodiesel manufacturing, including oils from the artichoke, castor bean, kukui nut, radish, mustard tree, pencil bush, jojoba bean, and olive tree, as well as from the tung, karanj, and neem plants.
Numerous high value uses for plant oils exist apart from fuel production, and these include the manufacture of prepared foods, cosmetics, lubricants, plastics, resins, detergents, salad oil, and cooking oil. The industries that make these products compete with fuel and enjoy a formidable competitive advantage in as much as the buyers in these markets are willing to pay relatively high prices for the oils.
The generally bad economics of oil crop based biodiesel: In order to become competitive outside of the green fuel niche it has staked out for itself, the biodiesel industry needs to see much lower feedstock prices than it is seeing right now. The likelihood of that happening is fairly low in our estimation. It is true that one of the major markets of the oil seed producers, that for trans fats, is likely to decline, but all of the others will only grow larger, and will compete for the fairly limited supply of vegetable oils produced in the world. And they will surely win that competition.
Some biofuel producers see salvation in the substitution of exotic, inedible, easily cultivated oily plants such as the jatropha tree and the Chinese tallow tree for the more familiar edible oil crops. We believe, in fact, that such exotic fuel crops will be cultivated extensively, but we are dubious as to the possibility that biodiesel will ever achieve majority status as an alternative fuel, though thriving local manufacturing concerns serving markets in developing countries are a possibility. Transesterification, simply put, does not use of the whole plant or even most of the biomass in the plant, and thus biodiesel is a singularly inefficient mechanism for capturing solar energy and converting it into chemical energy. Such considerations are explored more fully in the section on biodiesel within the overall category of refined products.
Three sugar crops are of significant interest to biofuel producers, sugar cane, sugar beets, and sorghum.
Sugar cane is by far the most interesting of the three, and is used for the production of ethanol. Brazil is the world leader in the production of fuel ethanol from sugar cane, and now produces it at a cost parity with gasoline—albeit only at the current elevated prices for the latter. Indeed, to date, Brazilian distilling techniques constitute the only proven biofuel production technology that can compete with petroleum without a subsidy. Incidentally, Brazilian researchers are engaged in the development of new types of sugar cane specifically intended for fuel production rather than sweeteners, and these strains are expected to improve further the economics of production.
We believe that sugar cane cultivation will increase markedly in the years to come to accommodate the rising demand for ethanol, but that the limited geographical range over which the plant can be raised will ultimately constrain the use of cane sugar in this application. The rise of other production technologies such as those for converting cellulose into sugars and for converting biogas directly into ethanol may also limit the importance of sugar cane as a feedstock, though the ease with which sugar juice may be made into ethanol and the favorable economics for raising sugar cane in appropriate climatic zones will ensure a continuing role for cane for the indefinite future.
Sugar beets are adapted to a far greater range of climates than is sugar cane, but the economics of beet sugar ethanol are notably poorer than is the case for cane. We might note parenthetically here that one company in North America, Atlantic Biomass, has developed a supposedly very cost effective means for converting beets into methanol, which in turn can be converted into gasoline by the Mobil process. If the Atlantic Biomass technology proves feasible, it could greatly stimulate sugar beet cultivation for the production of alternative fuels.
Sorghum is unusual in that it is high in both starch and sugar. Thus the ethanol producer can elect to utilize the sugar juice only, which is a simpler process, but wasteful, or to convert the starches in sorghum into sugars and treat sorghum essentially as a grain. For most of the relatively small amount of ethanol produced in the U.S. from sorghum, grain processing technologies are utilized. Breeders have developed essentially two separate strains of sorghum, one called sweet sorghum which is high in sugar, and the other called grain sorghum which is high in starch.
Sorghum itself is a hardy, heat and drought resistant crop cultivated primarily by subsistence farmers in tropical regions, though the crop can grow in the lower temperate zones and even endure freezing temperatures. Sorghum has not been extensively investigated as an ethanol feedstock, and rigorous economic analyses are lacking. We believe that the crop warrants much more research and would benefit from selective breeding.
Specialized Fuel Crops: most specialized fuel crops are what is known as short rotation—in other words, the crop can be grown and harvested fairly quickly and will generally thrive on relatively poor soil while requiring little rain. The jatropha tree and switchgrass are the major exceptions, both requiring five years to mature.
Such crops can be categorized in two ways, on the basis plant taxonomy, i.e. grasses, trees, algae, etc., or on the basis of the market served, be it ethanol, methanol, biogas, bio-synfuel, or biodiesel. We prefer the first mode of classification simply because many specialized fuel crops can be made to yield more than one refined product, and thus classification by product leads to much redundancy.
One very important caveat should be mentioned. When energy crops are harvested, all or most of the plant is removed from the soil. Since only hydrogen and carbon are desirable for the synthesis of fuels, other chemicals essential for maintaining the fertility of the soil such as potassium and iodine should not be removed. The easiest way to ensure that adequate nutrients remain is to allow the leaves to fall off of the harvested plant and decompose into the soil. This is easy to do when the fuel crop is a tree but difficult or impossible when grasses are the feedstock.
Algae: algae, the most primitive of photosynthetic plants, also happen to have the most rapid growth rates. Kelp, a type of algae found in the Pacific, can grow as much as several feet per day. No one is currently using kelp as a source of biomass for fuel, although much academic research has been devoted to the subject, but one company, Green Fuels, Inc., has developed a method of growing algae with carbon dioxide from factory smoke stack exhaust, a technology whose purpose is as much waste remediation as fuel production. Nevertheless, we do not see algae figuring prominently as a feedstock for the foreseeable future. Facilities for growing algae on a massive scale are virtually nonexistent, and to that extent algae cannot be considered a real crop.
Grasses and shrubs
Switchgrass, a hardy, widely distributed American prairie grass, is frequently advanced as an ideal source of biomass for fuel. Other candidates include miscanthus and Canary red grass, both Old World species. All of these grasses are drought and pest resistant and require little attention on the part of the grower and no fertilizer, and for all of these reasons they are cheap to cultivate. Their primary drawback is that they form a fairly dispersed and diffuse source of biomass. Individual plants are small, and the energy content of the dried grass is quite low compared to coal or petroleum or even sugar cane, for that matter, although selective breeding programs may result in big gains in this respect. Furthermore, processes for converting them into refined fuels are also fairly immature and involve several steps, each of which is capital intensive and energy intensive.
We think that these grasses have a future in biofuel production, and that the processes for utilizing them will ultimately exhibit much better economics than, say, ethanol from corn or biodiesel from soy beans, but investments in this sector at present must be considered risky.
Shrubs are under-represented among potential biofuel feedstocks, but at least one, the hemp plant recommends itself. Fast growing, robust, and well suited to a variety of soil and climactic conditions, hemp is economical to raise and produces a range of high value products as well as serving as a fuel feedstock. Such products include hemp fiber and hemp oil, both of which have numerous consumer and industrial applications.
Commercial hemp raised for industrial uses represents a different strain of the same species raised to produce marijuana. Marijuana and commercial hemp are entirely different in appearance, however, and have been selectively bred for very different purposes. Commercial hemp contains almost no psycho-active alkaloids, and does not produce the familiar sappy leaves and buds of its distant, discredited cousin. Nevertheless, the cultivation of hemp of whatever kind has been forbidden by the Federal Government in the U.S., and it is unlikely that hemp-based fuel will appear any time soon, though recent legislative initiatives have given fresh hope to hemp growers.
Among shrubs and shrub-like plants, water hyacinth is also frequently advanced as biofuel source, but no one is harvesting it for that purpose currently. Most of the studies on water hyacinth as a fuel feedstock have been performed in Europe, and it is there that is most likely to be harvested for that purpose.
Several species of trees have been suggested as potential fuel crops, including willow, laurel, jatropha, and the Chinese tallow tree or candleberry.
Willow, poplar, eucalyptus, and laurel are chiefly valuable as sources of cellulose and hemicellulose for ethanol production; alternately, the entire plant may be liquefied or gasified by any of a number of different processes. At present, exploitation of this resource for fuel production is insignificant.
Jatropha, a tropical oil producing tree, is currently being cultivated commercially on a limited scale for biodiesel production, and vast new plantations are being set up in India and elsewhere in Southeast Asia. The relatively slow growth rate of this species means added risk for the investor, however, should the jatropha business fail to thrive. We happen to believe that at least a modest boom is likely, and that jatropha could well become the feedstock of choice for biodiesel, though quite a number of growers are betting on palm oil instead, since palm plantations allow them to hedge their risk by producing other sorts of products while still providing a low cost feedstock for biodiesel.
The Chinese tallow tree is potentially the best source of plant oil for biodiesel since it is large, very robust, and very fast growing. Moreover, it is extremely fertile and will quickly take over a tract of land with no assistance from the cultivator. But these strengths are also its drawbacks. The tallow tree is considered extremely invasive, and has already become a scourge in a number of Southern States. Many local governments are attempting, unsuccessfully, to exterminate it, and would scarcely welcome enormous plantations of the trees whose seeds could be dispersed far and wide by birds. We are frankly uncertain as to the near and midterm prospects of the tallow tree, and, in any case, we see methyl ester biodiesel as ultimately losing ground to other alternative fuels, and thus the prospects of a cheap though problematic source of plant oil diminishing.
Forest and Agricultural Waste
In sparsely populated northern countries with well developed timber industries, such as Canada and the Scandinavian countries, wood wastes such as chips and sawdust have the potential to replace a large portion of imported petroleum as a source for refined fuels. Particularly in Scandinavia and Germany, much research has been conducted toward developing thermal conversion processes that could yield liquid fuels for transportation. And, whereas both investors and politicians in the U.S. have embraced cellulosic alcohol as the preferred product to be derived from wood wastes, the Europeans have devoted equal attention to developing bio synfuels from biogas, a topic we cover in the section on finished products.
Of the more established methods for producing biogas, including direct gasification and pyrolysis followed by gasification, the economics appear uncertain at present, while the processes themselves produce residues that entail high maintenance costs for reactors and possibly significant waste disposal problems. Newer processes such as hydrothermal upgrading, liquefaction with hydrogenation, plasma gasification, and the unique Hydro-Max process developed by Alchemix Corporation may well yield better economics and present fewer problems having to do with wastes and equipment fouling, but since only pilot generation plants have been attempted, the cost effectiveness of the newer technologies cannot be assumed.
As is the case with specialized fuel crops, the energy density of forest wastes is low and thus transport costs tend to be high. An added liability is the fact that scrap wood, with the exception of sawdust, must be milled—an energy intensive process that adds greatly to the cost of producing the fuel. Hydro-thermal upgrading, almost alone among conversion processes, does not require prior milling of woody feedstocks.
Agricultural wastes consist of parts of food crop plants that are not used for actual food products. These include rice husks, corn stover (stalks and leaves), and sugar bagasse (the fibrous residue left after cane juice is extracted).
Because agricultural wastes tend to be accumulated in considerable quantities at the site of food processing operations, they are ready at hand, so to speak, and, unlike feedstocks such as switchgrass and forest undergrowth, do not require energy intensive collection efforts. For that reason, they are very attractive. We believe that agricultural wastes are apt to become prime feedstocks for biofuel production in the future, but, at present they are chiefly useful in processes such as pyrolysis, gasification, and conversion of cellulose into sugars that are not fully proven commercially.
Landfill and Industrial Wastes
Numerous industrial processes, such as wood working, food processing, and paper making, produce hydrocarbon waste streams that may be converted into biofuels. Landfills also contain a high proportion of biomass as well as hydrocarbons in the form of petrochemicals such as plastics and synthetic resins.
Landfill waste is currently widely utilized in the production of biofuel in the form of biogas consisting of low purity methane produced by anaerobic digesters. This technology is mature and well established but is characterized by poor conversion efficiency, and our expectation is that more sophisticated processes such as gasification or hydro-thermal upgrading will begin to replace the digester in the future. Another possibility is that new high efficiency anaerobic digesters such as the Anaerobic Pump developed by Matrix Technologies, Inc. will come into play.
Biomass Economics – a Few Observations
In almost all cases the feedstock will be the principal determinant of the price for fuels derived from biomass—this according to almost every published scientific report on the subject. Thus it would behoove the biofuel producer to use the cheapest possible feedstock, or so it would seem. The issue, as it happens, is not nearly so simple, however.
We believe that the ease with which a feedstock may be processed to achieve the type of fuel desired is also of great significance. Biodiesel, for example, generally utilizes the most expensive feedstocks but is produced by a relatively simple process which entails only the following processes: pressing the oil from the feedstock, the mixing the oil with alcohol (usually methanol) and an alkaline catalyst, and then the removal of the glycerol which is the principal waste product. Which is why biodiesel is quite well established as a biofuel today. On the other hand, the production of synfuel—essentially gasoline, kerosene, and diesel—from biomass by the best proven techniques, involves the following complex sequence of processes: milling of the feedstock, followed by pyrolysis, followed by gasification, followed scrubbing of the syngas, followed by either the Mobil process which involves an intermediate step of manufacturing methanol from syngas or by the Fischer Tropsch process where the syngas is reacted with a catalyst under heat and pressure. Each process requires a separate unit of equipment, and thus capital cost will be many times higher than is the case for biodiesel. It should also be kept in mind that most of these processes produce a significant amount of wastes, some of which have the potential to damage the production equipment if it is not regularly brought off line and meticulously cleaned.
Most of the biofuel production processes developed to date are immature and have never been implemented on an industrial scale. That will change in the years to come, but at this point picking winners is difficult because predicting the pace of improvements is so problematic as is anticipating problems unforeseen by the developers.
Biomass Feedstocks in Summary
The central question in the alternative fuels business is the relative competitiveness of biomass feedstocks versus unconventional fossil fuels. That question, unfortunately, admits of no easy answer. While unconventional fossil fuels have been exploited on a limited scale for decades, and much investment has been made toward advancing both extraction techniques and processing technologies, sophisticated procedures for exploiting biomass are relatively recent. Because biomass, by its very nature, is more expensive to transport than fossil fuels, and available equipment is of vastly smaller scale than fossil fuel refining plants, biomass is more likely to assume importance in restricted local markets whose peculiarities may favor biomass even when its overall economics are unfavorable. For this reason biomass has been more the province of smaller entrepreneurial companies than has been unconventional fossil fuel. Investors should take note of this seminal difference between the two types of alternative fuel feedstocks.