The War of the Alcohols

Many years ago when celebrated author Elmore Leonard was first getting into crime fiction, he wrote a novel entitled The Moonshine War which was later turned into an okay motion picture. The novel is a wonderful picture of the illicit liquor business in southern Illinois circa 1930, a business in which my own ancestors were involved, incidentally. I recommend the book to all and sundry. But notwithstanding its title, the piece that follows in this periodical has nothing to do with good old boys and revenuers and pitched battles with aerial bombardment and machinegun fire which actually did occur in the Little Egypt area near the Arkansas border back in the Prohibition era. No, what we’re talking about here is a different kind of war, a war for supremacy in the alternative fuels business involving arcane production techniques and exotic catalysts and megabuck investment from billionaires and oil companies.

So who are the warriors in this conflict?

That’s kind of like asking who’s fighting in Iraq’s civil war. A civil war makes sense when there are just two combatants. When there’s a whole bunch it’s more like a barroom brawl. Still, I think we can identify the chief contestants here, those being ethanol, methanol, butanol, and the so-called mixed alcohols.

Right now the incipient buzz is around butanol. There’s quite a bit in the blogosphere already, and advocating butanol over ethanol is supposed to indicate that you’re a highly knowledgeable industry insider for whom cellulosic ethanol is already old hat and hydrogen is so nineteen nineties that you can’t even be bothered with it.

Unfortunately buzz and business success do not necessarily correlate. So let’s ignore the buzz and take a long look at how these various alcohols perform and how they’re manufactured. Only then can you name your poison.

Emerging from the Alcoholic Stupor

There are lots of different types of alcohol—methanol, ethanol, propynol, butanol, heptanol, and sexanol, to name just a few. All are fairly simple, chemically active organic compounds containing oxygen. Within the compound the OH group is functionally the most important.

Alcohols are classified according to the number of carbon atoms they contain. Methanol has only one, while ethanol has two, propynol three, and butanol four. Butanol and the sequence of alcohols with progressively more carbon atoms are known as the heavy alcohols.

Each form of alcohol has different properties, but all are clear liquids with high energy contents which burn fiercely and completely. All make good fuels for internal combustion engines.

To date, methanol and ethanol have attracted most of the alt fuels advocacy, probably because both are relatively cheap to manufacture and both are already produced on a massive scale for other applications, and hence an infrastructure of sorts is already in place. The fact that both have industrial lobbies behind them doesn’t hurt either. Ethanol, of course, has an agricultural lobby as well which probably accounts for its current ascendancy over methanol.

Among the first four, the iso-alcohols are not really in contention as fuels for a number of reasons, so that leaves methanol, ethanol, and butanol. Of these, methanol is the cheapest to make if coal or natural gas are utilized as feedstocks, while butanol presents the overall most favorable performance profile, that is, it more nearly resembles gasoline than the others. Unfortunately, no one has conclusively demonstrated a low cost technique for manufacturing butanol, though there are a lot of claims of breakthroughs emanating from academic research organizations and various startups looking for venture funding.
Butanol – May the Buzz Be with You

Butanol, as a matter of interest, has about 90% the energy content of gasoline, has a high octane rating, is no more toxic than ethanol, does not attract water, is not particularly corrosive, and does not present the cold start problems of ethanol. It is also readily biodegradable, and it has a good emissions profile. Since it can be manufactured entirely from renewable sources, it can also be carbon neutral.

Great stuff. If only one could make it on the cheap. And there are people who say they can. Dave Ramey of Environmental Energy, Greg Giese of Oceanethanol, and Sammy Pierce of Energenetics make that claim. Ramey heads an underfunded startup, Giese runs another, better funded startup, while Pierce captains a twenty-seven year old biochemistry company active in the food industry. There are also a number of academics researching this area and presumably looking to launch companies if the opportunity presents itself. Virgin Fuels, headed by Virgin Airlines founder and Green billionaire Sir Richard Branson is also interested in butanol, though it has yet to include any butanol startups in its portfolio.

Perhaps more significantly, Dow Chemical and British Petroleum have formed a partnership for producing butanol from cellulosic sources. Our intelligence is that the group has been provided with fairly ample resources and employs roughly thirty research chemists. Dow already has a lot of experience in manufacturing mixed heavy alcohols, discussed in a later section, and of course BP has the worldwide distribution network and experience in branding. More important, both command major financial resources.

Currently butanol is made from petroleum, and sells for about $3.50 per gallon. It used to be produced by fermenting sugars with clostridium bacteria serving as the agent of fermentation, but yields were low, with only a few percent of the sugar being converted before the butanol itself exerted an inhibiting effect upon the bacteria. Economics were predictably poor. Interestingly, a number of the experimental techniques still rely on clostridium, and strive to improve upon the conversion efficiency. Energenetics claims to have doubled the yield of process and lowered the cost by nearly a factor of four.

So who if anyone has a viable production technology? For my money, Energenetics talks the best game, but, as with everyone else, their technology is unproven commercially. Interestingly and not surprisingly, everyone in the nearly nonexistent butanol fuel business knows everyone else, and they all backbite one another while at the same time collaborating clandestinely. It’s a funny business.

What is even more interesting is that if you talk to people in the cellulosic ethanol camp, you’ll find that most readily admit to butanol’s superiority as a fuel over ethanol. Again and again people would say, “if only the economics were better?”

Does this tell you something? If you’re an investor, and you’re approached by a guy who can demonstrate that he can produce butanol for a dollar a gallon, you might want to check your assets. You could have a winner. But even if a production technology seems promising, arriving at cost projections for large scale manufacturing is really difficult, especially when you’re discussing really very output plants which are normally required to achieve low cost production. What would be ideal from the perspective of the investor is someone showing up with a technology that didn’t require scaling up. Somebody who says, “I can make butanol for a dollar a gallon in facility you can build for a quarter million dollars at an output of a million gallons a year.” If such an individual can show the capital costs and operating costs for this little facility, which shouldn’t be that hard to do, then you might have the basis of a viable business there.

So who can do this? Nobody I’ve ever encountered, though both Energenetics and Oceanethanol make this claim. And even if they could, you’d only be at the beginning of your venture.

Marketing butanol as an independent would be very difficult—maybe not impossible, but definitely a hard row to hoe. Butanol is not certified as a motor fuel for automobiles in the U.S., and gaining certification is a lengthy and costly process. Even should one succeed there, persuading independent filling stations to put up sixty grand to convert a pump is a major undertaking, particularly when public awareness of butanol is close to nonexistent. And of course you have to determine just what vehicles could operate on just what proportions of butanol. There’s a lot of buzz about butanol being compatible with non-flex fuel gasoline engines, but it’s just that, buzz. No one has published any systematic research on the subject.

Of course, one could seek out niche markets like racing, recreational boating, and all terrain vehicles where the same rules don’t apply, and that would probably be the best course, but that would take a great deal of missionary work. You’d have to give a lot of fuel away and seek out the trend setters in each niche. It’s not something for the faint hearted. Butanol is in fact sold as an additive for race cars, but it’s way behind methanol in that market, and doesn’t seem to be gaining ground.

Absent a very imaginative viral marketing program, kind of like what Red Bull did for sports drinks, succeeding with a boutique fuel would be very difficult. Still in all, it might be the correct course.

On the other hand, if Dow and BP come in with a low ball price, they might be able to make butanol happen pretty quickly as a mainstream fuel, but even that would take a major, major marketing campaign.

Mixed Alcohols

“Oh, I know about those,” said one of my nontechnical friends when I broached the subject. “I remember drinking tequila sunrises and Singapore slings together one night. I woke up in a motel in Memphis fully clothed except that one shoe was missing and I was wearing someone else’s clothes.”

That’s not quite what the term means in respect to fuels. Instead mixed alcohols are combinations of alcohols of different molecular weights such ethanol, methanol, butanol, sexanol, and so forth, and have nothing to do with mixing one’s drinks. One such blend is actually on the market, Envirolene from Standard Alcohol, Inc. It’s got green dye in it and it looks a lot like absinthe taken neat. I imagine it has a similar kick but it probably doesn’t taste as good.

Most of the mixed alcohols are made more or less accidentally, as is the case with the MixAlco processor and the Pearson Technologies gasifier and catalytic reactor. In both cases the main objective is to make ethanol, but other types of alcohol are generated in the process. But in the Standard Alcohol process and in a similar process promoted by Fuel Energy, Inc., the whole object is to achieve a mix, not just a single compound. Both processes are based on work done by Dow Chemical in the nineteen eighties toward developing a fuel additive to replace MTBE. Standard Alcohol and Fuel Energy have other ideas, however.

Both aim to develop a replacement fuel for gasoline, one which will have even more favorable performance properties than butanol.

And Then There Was Methanol

Last month we reported actions on the part of the Chinese government in setting fuel standards for methanol, a move see as restoring a measure legitimacy for an alternative fuel that seemed clearly on the way out. And China could go this route in respect to a new liquid fuels regime, though it’s by no means certain. Methanol is relatively easy and cheap to make, especially from coal, and experimental techniques exist that could further lower the price. But nothing will change the fact that ethanol has only half the energy density of gasoline and is quite toxic. If methanol comes back in the fuel sector, it is probably coming back as a precursor to synthetic gasoline or di-methyl ether. But that remains to be seen.

Last Call for Alcohol

Alcohol is definitely where the action is in alt fuels today, though biodiesel is gaining on it. Ethanol is clearly in the ascendant, and methanol in decline, but what about the other alcohols, butanol and the mixed drinks?

Ethanol is not sufficiently well established to have secured its position in the marketplace long term. It has succeeded as a replacement fuel in only one place, Brazil, and the technologies that could propel it to a similar position in the U.S. are unproven. But it has already assembled an array of powerful supporters, major chemical companies, petroleum companies, plant engineering firms, farm cooperatives, and politicians. Mixed alcohols and butanol, whatever their performance advantages, are puny by comparison as an industry. Indeed they scarcely constitute an industry at all, consisting as they do of mostly tiny, mutually antagonistic companies with no ability or inclination to act collectively, no trade organizations, and few larger relationships that could enable them to exert influence on the transportation industry or the government.

So go with the incumbent, go with ethanol?

Maybe the problem with ethanol is that it is, to a considerable extent, an incumbent, and one where, most interestingly, the biggest companies are doing almost nothing to support the technological innovations that might make ethanol a real contender as replacement fuel which it isn’t today and can’t ever be with traditional production techniques. Revolutions are made by revolutionaries and surely a revolution is impending in transportation fuel. My guess is that the big money will be made on bets with very long odds.