biomass magazine

5 |2010 BIOMASS MAGAZINE 1

INSIDE: USDA TO REVISE BIOMASS CROP ASSISTANCE PROGRAM

April 2010

www.BiomassMagazine.com

Algae’s AllureMajor Companies are Investing

Millions in Algae ProjectsDespite Uncertainties Surrounding

its Commercial Viability

SERVICES:Detailed Design • EPC • CM • Studies • Owner & Bank Engineering

CLIENTELE:Utilities • IPPs • Industry • Universities • OEMs • Banks/Investors

PROJECTS:Biomass • Solar (Thermal & PV) • Wind • Simple & Combined Cycle • Fluidized Bed/PC/Stoker BoilersBiofuels • Landfill Gas • MSW • Gasification • Pyrolysis • Plant Improvements • Air Pollution ControlEngine-Generators • CHP/Cogeneration • Energy Savings • Facilities/Buildings & Systems

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INSIDE APRIL 2010 VOLUME 4 ISSUE 04

FEATURES. . . . . . . . . . . . . . . . . . . . .

32 INDUSTRY Biofuels or BustWhat will it take to effi ciently produce and convert algae into biofuels on a commercial level? While numerous companies, universities and government agencies have recognized algae’s potential, challenges remain and no timeline has been established for its commercial debut.By Lisa Gibson

38 DEBATE Open Ponds Versus Closed Bioreactors Debate over which is the most cost-effective, sustainable method for mass producing algae is still raging. Is it open ponds, closed bioreactors or a combination of both? By Anna Austin

44 POLICY BCAP Rule Revisions Several issues have surfaced since the Biomass Crop Assistance Program was launched. The USDA is now taking comments and making changes to the proposed rule, which was released in early February, and has frozen the program until the fi nal rule is released.By Anna Austin

CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . .

50 WOODY BIOMASS The Business of Growing Eucalyptus for BiomassEucalyptus trees are a promising biomass feedstock for renewable energy production in the Southern U.S., as they can be produced and delivered at a competitive cost compared with the delivered cost of grasses and other hardwoods.By Ronalds Gonzalez, Jeff Wright and Daniel Saloni

54 ALGAE The Great Green Hope: The Corporate Love Affair With AlgaeThe jury is still out on whether algae can live up to its hype, but its potential can’t be taken lightly as the federal government and several major companies are investing millions in algae-related projects.By Todd Taylor

56 INTELLECTUAL PROPERTY IP Pitfalls in Talking With OthersCompanies wishing to safeguard confi dential information and protect intellectual property rights when reaching out to third parties to solve research and development issues need to know who they can talk to and under what conditions. By Richard B. Hoffman

INDUSTRY | PAGE 32

DEPARTMENTS. . . . . . . . . . . . . . . . . . . . .

06 Editor’s NoteAssessing Algae's PotentialBy Rona Johnson

07 Advertiser Index 08 Industry Events

09 BPA UpdateBiomass Power Improves ForestHealth, Benefi ts the EnvironmentBy Bob Cleaves

11 EERC UpdateCalifornia Dreamin’: Dealing with BiosolidsBy Chris Zygarlicke

13 BTEC UpdateBiomass for Heat: The Forgotten Renewable?By Kyle Gibeault

15 Legal PerspectivesFederal Regulation of GHGEmissions Continues to GrowBy Anna Wildeman and David Crass

16 Business Briefs

18 Biobytes

20 Industry News

60 Marketplace


INSIDE: USDA TO REVISE BIOMASS CROP ASSISTANCE PROGRAM

April 2010

www.BiomassMagazine.com

Algae’s AllureMajor Companies are Investing

Millions in Algae Projects,Despite Uncertainties Surrounding

its Commercial Viability

ON THE COVERAlgae production in Solix Biofuels’ proprietary photobioreactors at its demonstration plant in southern ColoradoPHOTO: SOLIX BIOFUELS

6 BIOMASS MAGAZINE 5|2010

Powering Up With Biomass

his month’s issue is about biomass power and I believe there has been a positive shift in the way people view biomass power plants, mainly be-cause of the industry’s potential for job creation.

In Florida, the Senate Energy Committee passed Senate Bill 1186, which would ease the develop-ment of renewable energy. Although Florida doesn’t have a renewable energy portfolio, this is a step in the right direc-tion in terms of stimulating project development.

In Wisconsin, a bill passed in the Assembly would provide a tax credit for logging businesses that purchase heavy equipment that can be used to harvest woody bio-mass. At press time in Mid-April, this bill was on its way to the Senate. Hopefully it has become law by the time you read this.

In New York, the New York State Energy Research and Development Authority and state Public Service commission awarded $204 million for renewable energy projects, including NRG Energy Inc.’s plan to cofi re with biomass at its Dunkirk Generating Station. I should also mention that last year New York increased its RPS last year from 25 percent to 30 percent of electricity generated from renewable sources by 2015.

In Washington, Gov. Christine Gregoire signed a bill that allows the Washington Depart-ment of Resources to provide fi ve-year contracts for long-term biomass supply (see “Wash-ington passes forest biomass contract law” on page 42).

This is just a smattering of what’s happening in state legislatures and I’m sure there are several provisions and new laws that I’ve overlooked.

This by no means gives biomass power projects the green light in some areas, however, as there are still pockets of resistance, which you can read about in associate editor Lisa Gibson’s feature “Facing the Vocal Opposition” on page 58. Even in the midst of intense opposition there is hope. In fact, I just read an opinion piece in the Wasaudailyherald.com in Wausau, Wis, in support of the proposed Rothschild, Wis., biomass plant, which has been hotly contested. I was especially please to see this written in response to residents’ pollu-tion concerns: “The fi rst is a fear of pollution. This has the simplest answer: It is a misplace feature. This plant would burn only woody biomass—not other, dirtier forms of biomass—and would do so according to co9ntemporary emissions standards.” This article was written by the newspaper’s editorial board after meeting with executives from the Domtar paper mill where the projects is being proposed and developer We Energies.

This just proves that sometimes reaching out and making the case for clean-burning, job-creating biomass energy to intelligent, open-minded, well-intentioned people works. As Brian Manthey, We spokesman, said in Gibson’s article when talking about providing information and answering questions posed by the public: “The burden of proof is on us.” If they can’t come to the project developers for information they will get it elsewhere.

T

Rona JohnsonEditor

[email protected]

editor’sNOTE


advertiserINDEX

2010 International BIOMASS 64Conference & Expo

2010 Advanced Biofuels Workshop 63

2010 Fuel Ethanol Workshop & Expo 12

2010 Northeast Biomass Conference & Expo 2

2010 Southeast Biomass Conference & Expo 14

Advanced Trailer Industries 46

Agra Industries 40

Algal BIomass Organization 4

Amandus Kahl GmbH & Co. 28

BIBB Engineers Architects & Constructors 3

BRUKS Rockwood 36

Buhler Inc. 43

Burns & McDonnell 60

Central Boiler 48

Christianson & Associates, PLLP 31

Continental Biomass Industries 29

Detroit Stoker Company 41

Energy & Environmental Research Center 10

EISENMANN Corporation 49

Ethanol Producer Magazine 51

Frazier, Barnes & Associates, LLC 37

Husch Blackwell Sanders, LLP 61

Indeck Power Equipment Co. 24

Industrial GHG Solutions Magazine 50

Morbark, Inc. 42

The NanoSteel Company 25

The Teaford Co. Inc. 34

Verdant Environmental Services 35

West Salem Machinery 47

EDITORIAL

EDITOR Rona Johnson [email protected]

ASSOCIATE EDITORSAnna Austin [email protected] Gibson [email protected]

COPY EDITOR Jan Tellmann [email protected]

ART

ART DIRECTOR Jaci Satterlund [email protected]

GRAPHIC DESIGNERSElizabeth Burslie [email protected] Melquist [email protected]

PUBLISHING & SALES

CHAIRMANMike Bryan [email protected]

CEOJoe Bryan [email protected]

VICE PRESIDENTTom Bryan [email protected]

VICE PRESIDENT, SALES & MARKETINGMatthew Spoor [email protected]

EXECUTIVE ACCOUNT MANAGERHoward Brockhouse [email protected]

SENIOR ACCOUNT MANAGER Jeremy Hanson [email protected]

ACCOUNT MANAGERSMarty Steen [email protected] Brown [email protected] Shields [email protected]

CIRCULATION MANAGER Jessica Beaudry [email protected]

SUBSCRIBER ACQUISITION MANAGER Jason Smith [email protected]

ADVERTISING COORDINATORMarla DeFoe [email protected]

Subscriptions Subscriptions to Bio-mass Magazine are $24.95 per year in the U.S; $39.95 in Canada and Mex-ico; and $49.95 outside North Amer-ica. Subscriptions can be completed online at www.BiomassMagazine.com or subscribe over the phone at (701) 746-8385.

Back Issues & Reprints Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more informa-tion, contact us at (701) 746-8385 or [email protected].

Advertising Biomass Magazine pro-vides a specifi c topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To fi nd out more about Biomass Magazine advertising opportunities, please con-tact us at (701) 746-8385 or [email protected].

Letters to the Editor We welcome let-ters to the editor. Send to Biomass Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to [email protected]. Please include your name, address and phone num-ber. Letters may be edited for clarity and/or space.

Cert no. SCS-COC-00648

5th International Congress Fuel Bioethanol-2010

April 13-15, 2010 Moscow World Trade CenterMoscow, RussiaMore than 300 participants from 20 countries attended this event in 2009, making it the premier event for any organization involved in the rapidly ma-turing biofuels markets in the former Soviet Union. This event will be hosted by the Russian Biofuels Association, and presentations will include new process technologies and feedstocks, cellulosic ethanol, biobutanol and other second-generation biofuels.+7 495 585-5449www.biofuels.ru

2nd Algae World Europe

April 22-23, 2010 Conrad Brussels-Ballroom ABBrussels, BelgiumThis conference focuses on the entire algae value chain and its commercial viability. The program takes a holistic approach and offers an exceptional broad view of algae’s diversity and end-products. The topics are carefully selected to give you a deeper understanding of the biology, engineering, marketing and fi nancial aspects of algae commercialization.+65 6346 9114www.cmtevents.com

2010 International Biomass Conference & Expo

May 4-6, 2010 Minneapolis Convention CenterMinneapolis, MinnesotaThis Biomass Magazine-sponsored conference will unite current and future producers of biomass-derived power, fuels and chemicals with waste gen-erators, energy crop growers, municipal leaders, utility executives, technol-ogy providers, equipment manufacturers, project developers, investors and policymakers. Future and existing biofuels and biomass power producers will be able to network with waste generators and other industry suppliers and technology providers as well as utility executives, researchers, policy-makers, investors, project developers and farmers.(701) 746-8385www.biomassconference.com

2010 International Fuel Ethanol Workshop & Expo

June 14-17, 2010 America’s CenterSt. Louis, MissouriThe FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-busi-ness environment. It is the largest, longest-running ethanol conference in the world. The event delivers timely presentations with a strong focus on commercial-scale ethanol production, new technology, and near-term re-search and development.(701) 746-8385www.fuelethanolworkshop.com

Biomass ’10: Renewable Power,Fuels, and Chemicals Workshop

July 20-21, 2010Alerus CenterGrand Forks, North DakotaIn its eighth year, this workshop offers a cutting-edge two-day technical program and exhibit show with national experts who focus on biomass pro-duction (plant matter such as straw, corn and wood residue) and biomass conversion to power, transportation fuels and chemicals. The workshop will be geared toward industry, research entities, government, community and economic development corporations, fi nancial institutions and landowners. Topics will include trends and opportunities in utilizing biomass, renewable policies and incentives, renewable fuels, fi nancing biomass-related proj-ects, biorefi nery chemicals and products, biomass for heat and electricity, biomass feedstocks and algae.(701) 777-5000www.undeerc.org/biomass10

Northeast Biomass Conference & Expo

August 4-6, 2010Westin Copley Plaza HotelBoston, MassachusettsWith an exclusive focus on biomass utilization in the Northeast U.S., this Biomass Magazine-sponsored event will connect current and future pro-ducers of biomass-derived electricity, industrial heat and power, and ad-vanced biofuels, with waste generators, aggregators, growers, municipal leaders, utilities, technology providers, equipment manufacturers, investors and policymakers.(701) 746-8385http://ne.biomassconference.com

2010 Farm to Fuel Summit

August 11-13, 2010 Rosen Shingle CreekOrlando, FloridaThis fi fth annual summit will be an opportunity for industry leaders and stakeholders to learn, network and strategize to advance the development of renewable energy in Florida. Florida’s Farm to Fuel Initiative was devel-oped to promote the production and distribution of renewable energy from Florida-grown crops, agricultural wastes and other biomass. More than 500 attendees from academia, industry and government participated in last year’s summit.(850) 488-0646www.fl oridafarmtofuel.com/summit_2010.htm

Gasifi cation Technologies 2010 Conference

October 31-November 3, 2010 Marriott Wardman Park HotelWashington, D.C.The GTC is the largest gasifi cation event in the world, attracting speakers and participants from the Americas, Europe, China and India. The GTC pro-vides a single venue for participants to learn what is new in the gasifi cation industry and why it is important. Speakers will address all aspects of the industry, from cutting-edge improvements in technology, through projects in development worldwide to updates on operations of plants based on coal, petroleum residues, biomass and secondary materials.(703) 276-0110www.gasifi cation.org

industry events


4|2010 BIOMASS MAGAZINE 9

Increasing America’s use of biomass power will improve the health of our nation’s forests and reduce the amount of greenhouse gases released into the at-mosphere.

On average, the biomass power industry removes 68.8 million tons of forest waste annually, improv-ing forest health and dramatically reducing the threat of forest fi res. This forest waste includes dead debris and brush left to rot on the forest fl oor. Clearing this debris is a part of regular forest maintenance and is frequently done by state forest services in the form of open burns. By using this waste to generate electric-ity, the biomass power industry is preventing the need for open burns and signifi cantly reducing the risk and spread of forest fi res.

Waste byproducts from other industries and or-ganic waste from the forest fl oor continue to be the only economically viable fuel sources for biomass power.

Areas of the country that have robust forest-based industries often create the biomass necessary to oper-ate and sustain a power plant. Biomass power facilities cannot operate at a loss. If there are not sustainable resources available in the surrounding area, biomass power plants will not be built. The decision is whether to allow these woody byproducts to decompose, or in-stead use them to generate clean, renewable electricity.

A 2008 Pacifi c Institute study found electricity generated from woody biomass to be “carbon neutral” because the carbon that is released is already part of the atmospheric carbon cycle. For example, fossil fuels increase the level of carbon in our atmosphere because their carbon has been sequestered for centuries deep in the Earth. Biomass power taps into a fuel supply that is already actively releasing methane and carbon during the decomposition process. This carbon is already in the atmospheric cycle, and biomass power plants sim-ply use it to create electricity.

Furthermore, by removing de-composing waste debris from the forest fl oor and using it to generate electricity, the biomass power indus-try eliminates the harmful methane that would have otherwise been re-leased during this decomposition. Generating electricity from biomass power actually reduces the amount of greenhouse gases that would have been emitted if the material simply de-composed on the forest fl oor. What’s more, the electricity generated from clean biomass will reduce demand for other dirtier sources of energy. In this way, biomass power is without question carbon neutral, and in many cases reduces greenhouse gases.

The forest products industry plants trees as part of a continued devotion to forest health. By planting these trees, the industry is ensuring the forest will fl our-ish and produce a steady supply of waste debris and other organic biomass in the future. Replanting trees, however, is not the reason that biomass power is car-bon neutral.

Biomass power is carbon neutral electricity gener-ated from renewable organic waste that would other-wise be dumped in landfi lls, openly burned or left as fodder for forest fi res. Increasing our use of clean, re-newable biomass power by tapping into vast resources, particularly in the Southeast U.S., will reduce carbon emissions, improve forest health, and move America closer to energy independence. BIO

Bob Cleaves is president and CEO of the Biomass Pow-er Association. To learn more about biomass power, please visit www.USABiomass.org.

B P AUPDATE

Biomass Power Improves Forest Health, Benefi ts the Environment

Bob Cleavespresident and CEO, BPA

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EERCUPDATE

At a recent conference in Texas, I was so im-pressed by a presentation on waste-to-energy that I’m setting aside my original idea for this column and reporting instead on what I learned in the presentation.

California, as we all know, is the quintessen-tial center of clean energy and environmentally sound practice. It’s also the setting for one of the Rolling Stone’s 500 greatest songs of all time by the Mamas & the Papas—California Dreamin’. So when the hauling of hundreds of truckloads of biosolids (type of sewage sludge) from Ventura, Calif., to a central California landfi ll (150 miles) became too problematic, the Ventura Regional Sanitation District decided to deal with the prob-lem. Their solution: process the biosolids into a more benign fodder at a closer facility—using very little if any fossil fuel to accomplish the task. That’s dreaming.

The solution involved four major elements: a closer existing landfi ll, two 80-ton per day batch dryers, nine microturbines, and $19 million. Sounds simple doesn’t it?

It was determined that an old landfi ll closer to Ventura than the other “long-haul” landfi ll had enough inherent gas to sustain gas burners on the two batch dryers plus power nine 250-kilo-watt microturbines for a total of 2.32 megawatts of electricity. Within two years, the gas extraction pipes, gas treatment systems (to remove water, sulfur and siloxane), blower/compressor units (to fi re the burners and the turbines), batch dryers, and receiving hoppers were all installed. Southern California Edison and other entities provided in-centives and a million-dollar grant, and the project was installed with likely payoff in about 10 years.

The process seems fairly effi cient. Biosolids are hauled to this closer facility and dumped into receiving hoppers where they are dried to a dirt-like material consisting of 70 percent solids and no pathogens. The U.S. EPA Class A recyclable solids are currently used as daily cover for garbage material entering the landfi ll. In the future, these

solids may also serve as fer-tilizer or biomass fuel. Wa-ter that is extracted is used as dust suppressant. About one-third of the electricity produced by the microtur-bines is used to power the facility.

This project has taken a problematic biosolids waste and turned it into a fuel for a money-making, renewable-energy-producing power plant. Greenhouse gases have been substantially reduced by converting biosolids- and landfi ll material-derived methane to carbon dioxide and by reducing transportation fuel consumption.

Advances at the Energy & Environmental Research Center give this project an opportunity to push the economics even more into the black, especially for regions that don’t have southern California incentives. One way to improve on the cost return for this model might be to improve on the landfi ll gas cleanup technology. EERC has performed extensive research in gas cleanup sys-tems and sees that technology as a developmental area.

In short, this particular situation with the proximity of the existing landfi ll, southern Cali-fornia incentives, and fi nancial backing may not be the same in other regions of the U.S. But the simple concept of using renewable energy to drive off moisture from wet “biomass-like” ma-terial is not only a concept worth dreamin’ about, it’s worth repeating. BIO

Chris Zygarlicke is a senior research manager at the EERC. Reach him at [email protected] or (701) 777-5123.

California Dreamin’: Dealing with Biosolids

Chris Zygarlickesenior research manager, EERC


BTECUPDATE

Widespread use of biomass for heat in the U.S. would reduce greenhouse gas (GHG) emissions, decrease our dependence on foreign fossil fuels and create jobs in rural communities hardest hit by the recession. And yet, despite these benefi ts, biomass thermal energy has been largely overlooked in the discussion on how to address America’s energy challenges.

Thermal energy, or heat, represents roughly one-third of total U.S. energy consumption. It is used daily by homes, businesses and industrial facilities across the country, most frequently for space heating, water heating or industrial pro-cesses. Biomass, ever versatile, can be an effi cient source of renewable energy for all of these heating needs.

For such a large end-use, it is astonishing how little at-tention thermal energy has been given in the U.S. To date, nearly all of the government grants and incentives for re-newable energy support the electricity and transportation sectors. Renewable sources of thermal energy, such as bio-mass, have largely been forgotten.

In spite of this policy disparity, a few more than 1 mil-lion U.S. homes, universities, hospitals and other organiza-tions have installed biomass heating systems. The most advanced of these stoves, boilers, and furnaces convert biomass into useful thermal energy at up to 90 percent ef-fi ciency. Additionally, these heating systems typically offset fuels such as heating oil or propane, improving our nation’s energy independence while reducing GHG emissions.

The story of biomass thermal industry is impressive, but the fact is that biomass resources will not be directed to their most effi cient uses without technology-neutral energy policy. And the current reality is that less-effi cient electric-ity and transportation end-uses for biomass are heavily in-centivized at both the state and federal levels. Incentives in one sector impact the pricing of raw biomass materials in all other sectors. America needs a level playing fi eld, where biomass thermal can compete on its merits with biomass power and transportation fuels.

So why has this not happened already? Part of the rea-son is that until recently there was no organization to con-nect and coordinate the inherently disaggregated industry. The Biomass Thermal Energy Council was formed in Janu-ary 2009 to fi ll this need. BTEC represents biomass produc-ers, fuel refi ners, appliance manufacturers, distributors, and other organizations in the biomass thermal supply chain.

These members use the full range of biomass feedstocks, including wood residues, agricultural residues and purpose-grown energy crops. At the time of this writing, we have 77 members in 29 U.S. states and four countries.

Our mission is to advance the use of biomass for heat and other thermal energy applications, includ-ing combined heat and power. We ad-vocate for public policies that recognize the energy savings and effi ciencies that can be provided through these uses.

Last year, one of our notable accomplishments was getting an amendment included in the proposed compre-hensive Senate energy bill, the American Clean Energy Leadership Act. This amendment, introduced by U.S. Sen. Jeanne Shaheen, D-N.H., will establish telescoping renew-able energy credits for the useful electric and thermal output of biomass facilities. If passed, this bill will create renewable energy credits for biomass energy that are directly tied to the effi ciency of the facility.

Our efforts are focused on directing biomass resources to their most effi cient uses. Some of our other legislative initiatives include production tax credits for renewable ther-mal energy and the expansion of investment tax credits for biomass heating systems. We are also working to raise the profi le of biomass thermal energy at U.S. DOE and USDA and their respective sub-agencies.

We are beginning to engage in education, outreach, research and analysis on behalf of the industry. By raising awareness and improving the quality of market data, we aim to provide consumers, investors and policymakers with the information they need to make sound decisions regarding biomass thermal energy.

Biomass thermal energy has enormous potential. The use of biomass for heating offsets imported fossil fuels, reduces GHGs, creates jobs and promotes the sustainable use of our natural resources. Instead of being the forgot-ten renewable, biomass thermal must be a key element in America’s energy future.

Kyle Gibeault is the deputy director for the Biomass Thermal Energy Council. Reach him at [email protected] or (202) 596-3974, ext. 327.

Biomass for Heat: The Forgotten Renewable?

Kyle Gibeaultdirector, BTEC

BTEC

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November 2 - 4, 2010Hyatt Regency Atlanta

Atlanta, Georgia

www.biomassconference.com/southeast

Visit www.biomassconference.com/southeast and:View interactive exhibitor mapSee conference sponsors and review sponsor benefitsRegister to attendExplore conference agendaAnd much more!


LEGALperspectives

iomass market drivers—such as re-newable portfolio standards and the potential to generate carbon credits for greenhouse gas (GHG) emis-

sion reductions—are not getting much federal attention, but rather are ramping up on state and regional levels. In contrast, regulation of GHG emissions is getting attention at the fed-eral level. Recently, federal agencies such as the Securities and Exchange Commission and the Council on Environmental Quality, have issued guidance that may require private corporations and the federal government to evaluate and re-port on potential impacts from climate change and GHG emissions. The most important fed-eral action, however, is the U.S. EPA’s impend-ing GHG regulation.

In the fi rst quarter of 2009, EPA issued a determination, known as the endangerment fi nding, that GHGs may reasonably be antici-pated to endanger public health and welfare. EPA’s endangerment fi nding provides the foundation for EPA to regulate GHGs pursu-ant to its Clean Air Act authority. Although the endangerment fi nding has been challenged by industry groups and several states in U.S. Circuit Courts of Appeals and by Sen. Lisa Murkowski, R-Alaska, in Congress, it appears EPA will con-tinue to develop a comprehensive GHG regula-tory scheme until Congress acts to prevent such regulation.

Since issuing its endangerment fi nding, EPA fi nalized the mandatory GHG monitor-ing and reporting rule, which required certain GHG sources to begin emissions monitor-

ing on Jan. 1 and requires subject sources to submit annual reports starting in March 2011. EPA has also proposed two rules that would regulate—within the existing CAA regulatory framework—GHGs from mobile sources and stationary sources. It is these two proposed rules that are generating the most concern.

In February, EPA Administrator Lisa Jack-son issued a letter responding to economic con-cerns of several U.S. senators and outlining the agency’s timeline for fi nalizing rules to regulate GHG emissions within the CAA framework. As indicated in its September 2009 proposed rule and reiterated in Jackson’s letter, EPA, in coor-dination with the federal Department of Trans-portation, intends to fi nalize the mobile source rule in late March. The EPA mobile source rule will set GHG emission standards for light-duty motor vehicles and the DOT standard will raise the nationwide fuel-economy standards for ve-hicles starting with model year 2012.

According to EPA interpretation, fi nalizing the mobile source rule will trigger a requirement to also regulate GHG emissions from stationary sources under the CAA. EPA intends to fi nalize what is known as a “tailoring rule,” at the same time it fi nalizes the mobile source rule, to limit the number of stationary sources immediately subject to CAA regulation. If GHG emissions from stationary sources are made subject to the CAA without the tailoring rule, EPA estimates the number of facilities required to obtain CAA permits would increase by tens of thousands, paralyzing federal and state regulatory agencies charged with processing permit applications.

EPA has indicated that the fi nal tailoring rule will not require any stationary sources to comply with CAA regulations until 2011, and then only sources that are currently subject to CAA permits will be required to account for GHG emissions. Between the end of 2011 and 2013, EPA expects to phase-in CAA per-mit coverage to “other large sources” of GHG emissions. It is unclear at this point what will be considered a large source, but Jackson indicated that, between 2011 and 2013, the GHG emis-sion threshold to trigger CAA requirements will be “substantially higher than the 25,000 ton lim-it that EPA originally proposed.” The smallest sources of GHG emissions are not expected to be subject to CAA requirements until at least 2016.

In President Obama’s proposed federal budget, EPA is slated to receive $47 million to implement GHG regulations; of that, $4 mil-lion will be allocated to implement the GHG monitoring and reporting rule; and $43 million will be allocated to implement the GHG regula-tions described above. So, unless Congress acts to prevent it, EPA regulations should be in full swing by 2011.

Anna Wildeman is a member of Michael Best & Friedrich’s land and resources practice group. Reach her at [email protected] or (608) 283-0109.

David Crass is a leader in the fi rm’s renew-able energy practice. Reach him at [email protected] or (608) 283-2267.

Federal Regulation of GHG Emissions Continues to Grow By Anna Wildeman and David Crass

David Crassattorney,Michael Best & Friedrich

Anna Wildemanattorney,Michael Best & Friedrich

B


Cereplast hires sales, marketing veteran

Cereplast Inc., a manufacturer of pro-prietary biobased, sustainable plastics, has appointed David J. Homyak as West Coast regional director, sales and marketing. He has been an executive level sales professional for more than 30 years. His numerous successes in the plastics industry include leading a 210 percent business growth over a four-year period while serving as western business region general manager for General Electric Plas-tics; the development of 20 million pounds of product growth in new market opportunities for PolyOne; and his efforts to put Spectra Color on a course to exceed its sales goals by $50 million by 2012. BIO

business BRIEFSGTE’s SC offi ce awarded qualitymanagement system certifi cation

Gas Turbine Effi ciency plc announced that the Interna-tional Organization for Standardization (ISO) has awarded the company the ISO 9001:2008 certifi cation for its Fuels and Combustion Facility in Duncan, S.C. With the ISO certifi cation, GTE validates meeting international requirements for its total quality management systems, which are particularly important to engineering and technology companies. GTE’s South Caro-lina offi ce is its third ISO 9001:2008 certifi ed location, joining the Orlando, Fla., and Järfälla, Sweden, facilities. BIO

Terrabon relocates to accommodate growth Terrabon Inc., a waste-to-fuel conversion technology compa-

ny, has relocated its corporate headquarters to 20329 State Highway 249, Suite 350, Houston, Texas 77070, in the Chasewood Technol-ogy Park. The company’s phone number will also change to (281) 803-5960. According to Terrabon CEO Gary W. Luce, the new of-fi ces will accommodate the company’s current staff and will enable further expansion for future growth. The company was formerly located at 20333 State Highway 249, Suite 200. BIO

Biomass moisture meter ensures fair pricing

Fast, accurate and easy to use, Electromatic Equipment Co.’s new Check Line BM2 biomass moisture meter measures the moisture con-tent of wood chips, barks, wood, straw or miscanthus pellets, elephant grass, wood shavings and saw dust. It allows moisture-related machinery issues to be detected early before se-

rious problems arise. It also helps biomass producers, suppliers and end-users ensure that they are not paying for excessive wa-ter content. To learn more, go to www.checkline.com. BIO

GTI and partners win transportation award Climate Change Business Journal, a climate change industry

publication, awarded Gas Technology Institute and partners a Technology Merit award in the transportation category for the business achievement awards. Nominated by the climate change and environmental industry, winners were honored ei-ther for business performance in the form of revenue growth, or for gaining traction in new service practices, new technol-ogy or unique projects. GTI, Linde North America and Waste Management Inc. earned the award for building and starting up the world’s largest facility for converting landfi ll gas to liquefi ed natural gas, at the Altamont landfi ll near Livermore, Calif. The Altamont project was also recognized by the U.S. EPA as one of the Landfi ll Methane Outreach Program winning Projects of the Year for its innovation in generating renewable energy and reducing greenhouse gas emissions. BIO

Glycos Biotechnologies appoints CEO, expands management team

Glycos Biotechnologies Inc. a bio-chemical company, appointed Rich Cilento as CEO. A venture adviser for DFJ Mercury and an executive chairman for GlycosBio, Cilento will now be responsible for the daily operations of the company. With more than 20 years of leadership and technical experi-ence in the petroleum, alternative energy, information technology and biotechnology industries, Cilento has a proven track record of creating and managing successful busi-nesses. GlycosBio also appointed Daniel J. Monticello, as vice president, research and development. Monticello will be responsible for directing the lab operations for Glycos-Bio, including research, development and the overall efforts associated with scale-up and commercialization of GlycosBio’s proprietary microbe technology. In addition, he will be responsible for overseeing GlycosBio’s ongoing demonstration and commercialization efforts in Latin America. BIO

Cilento

Monticello

Homyak


BinMaster appoints sales managerfor Latin America, Caribbean

BinMaster Level Controls has an-nounced the appointment of Doris Sotelo as sales manager for Latin America and the Caribbean. She will be responsible for ex-panding BinMaster sales in the territory and growing and supporting BinMaster’s distrib-utor network in the region. Doris is multi-lingual and has almost 10 years of international sales experience in Latin America and Asia, where she has been responsible for developing dealer and distributor networks and providing sales support in the telecommunications industry. BIO

business BRIEFS

Purolite, TransBiodiesel announce joint technology effort

Purolite and TransBiodiesel announced a joint effort to manufacture and market enzyme loaded ion exchange resins to replace traditional transesterifi cation processes. “Our enzyme loaded ion exchange resin replaces the use of sodium methy-late and provides the simultaneous esterifi cation of free fatty acid and transesterifi cation of fats and oils,” said Don Brodie, vice president of operations at Purolite. The resulting biodie-sel is easy to separate from crude glycerin because of the ab-sence of emulsifying soaps. Crude glycerin is signifi cantly free of contaminants and can be more readily refi ned. The use of low-grade oil feedstocks, especially those with free fatty acid higher than 3 percent and even up to 100 percent can now be employed. BIO

Veraventure, others invest in MHG SystemsVeraventure Oy and a group of other investors have made a

capital investment in MHG Systems Ltd., which produces bioen-ergy enterprise resource planning (ERP) systems. “The investment made by Veraventure and other investors will speed up the commer-cialization of MHG’s ERP solution in selected and rapidly growing target markets,” said Seppo Huurinainen, the managing director of MHG Systems. “The solution is already available in 13 languages. In addition to money, the new investors will also bring about new business know-how, which is required especially for achieving rapid international growth.” BIO

Evolugate announces advisory board appointments

Evolugate LLC, a biotechnology company, announced the ap-pointments of Russell J. Howard and Terrance J. Bruggeman to its advisory board. Howard currently serves as CEO of Oakbio Inc., and is on the boards of several leading companies and foundations in the biotechnology industry. He brings scientifi c and operational expertise having served as CEO of Maxygen Inc. Bruggeman’s experience managing biotechnology companies, including Diversa Inc. (now Verenium Inc.) will be an asset to Evolugate. He currently serves as executive chairman of BioTork, the spin-off company recently created from Evolugate, to capitalize on the biofuels op-portunity. He also serves on a number of industry, corporate and nonprofi t boards. BIO

Qteros names SawkaVP of business development

Qteros Inc. announced that Mick Sawka has joined the company as vice president, business development, to help accelerate the company’s technology and commercial initiatives in the worldwide cellulosic ethanol marketplace. Sawka’s 19-year experience in the specialty chemicals industry includes negotiating and leading numerous large-scale strategic partnerships, alliances, and acquisitions as well as com-plex product introductions throughout the world. Additionally, he has been responsible for the development of numerous tech-nology platforms and associated strategic business plans within both development-stage and large-scale specialty chemical orga-nizations. BIO

MSU renames biomass centerWith a goal to move away from nonrenewable resources,

the Michigan Agricultural Experiment Station has renamed its Escanaba, Mich., facility to better refl ect its vision for the future. The new name, Michigan State University For-est Biomass Innovation Center, is closer to its overall mis-sion, said Ray Miller, the MSU forest biomass development coordinator. The facility, where several types of renewable resources that could be used as an alternative energy source for Michigan are analyzed, was formerly known as the Upper Peninsula Tree Improvement Center. BIO

Sawka

Sotelo


Massachusetts-based Con-verted Organics Inc. will use addi-tional manufacturing equipment at its Woodbridge, N.J., organic fertilizer manufacturing facility to boost food waste processing rates. The company is conducting new tests designed to enhance its ability to process food waste into fertilizer and soil amendments.

Converted Organics cur-rently processes approximately 100 tons of food waste per week at the Woodbridge plant, and ex-pects to process approximately

175 tons per week by the end of the fi rst quarter of this year. The company uses its proprietary High Temperature Liquid Com-posting system, a proven micro-bial digestion technology, to pro-cess various biodegradable food wastes into dry pellet and liquid concentrate organic fertilizers. Converted Organics sells and distributes its environmentally friendly fertilizer or biostimulant to the retail, turf management and agribusiness markets.

Converted Organics increases food waste processing

BIObytes Biomass News Briefs

The California Public Utilities Commission has approved a 15-year power purchase agreement (PPA) between Pacifi c Gas and Electric Co. and Mt. Poso Cogeneration plant LLC near Ba-kersfi eld, Calif.

The contract will allow the Mt. Poso plant, which is managed by Kern County-based Millennium Energy LLC, to be converted to a 44-megawatt biomass power plant that will be fueled with urban and agricultural wood waste. Mt. Poso has been operat-ing as a coal-fi red base load cogeneration facility since 1989. The conversion is scheduled to be completed by 2012.

California coal plant PPA allows biomass conversion

Innovia Films has achieved CarbonNeutral certifi cation for its NatureFlex range of food packaging fi lms, made of a transparent cellulose base manufactured from sustainable wood pulp. The announcement could help the development of anaerobic digestion, according to Innovia.

Food packaging fi lm is dif-fi cult to segregate and recycle economically. But packaging from a biopolymer can go into an anaerobic digester along

with the food waste, simplifying waste disposal for consumers, diverting biodegradable waste from landfi lls and providing renewable low-carbon energy, according to Innovia.

By adding specially formu-lated biodegradable and com-postable surface layers, Innovia is able to control the moisture permeability of these fi lms to produce material suitable across a whole range of applications.

NatureFlex could help AD developmentOhio-based AdvanceBio

LLC is increasing its product line to include a bench-scale biomass pretreatment system for production of next-gener-ation cellulosic ethanol and re-newable chemicals. The systems are designed with researchers in mind, according to the com-pany.

The target market for the product includes developers of next-generation microorgan-isms, enzymes, feedstocks and crops, according to Advance-Bio. The company expects

the equipment will replace the batch steam guns currently used by researchers at universities and technology development companies.

The inclusion of the sys-tem extends the size range of development equipment of-fered from bench scale (11 ki-lograms per hour) to lab (75 kg/hr), to pilot (190 kg/hr). AdvanceBio also offers systems up to 600 tons per day for com-panies planning industrial-scale facilities.

Ohio company expands product line


The Philippines Depart-ment of Energy signed 112 renewable energy contracts Feb.1, including 22 for bio-mass, for a total of about 2,260 additional megawatts.

It was the third in a series of contract signings that will generate investments of about $1.5 billion. The DOE will raise $9 billion to $10 billion from renewable energy proj-ects in the next 10 years and will raise the generating capac-ity of renewable energy sourc-

es to 9,000 MW to effectively address the need for additional power generating capacity and the effects of climate change, according to the DOE.

During a Feb. 1 signing and announcement ceremony with Secretary Angelo T. Reyes, the Pricing Methodology and Rules of Qualifi ed End-users for Net Metering were like-wise endorsed to Reyes by the National Renewable Energy Board.

Philippines signs 112 renewable energy contracts

The advanced biofuel in-dustry is urging Congress to grant an investment tax credit to help producers develop commercial-scale projects. Advanced biofuel producers are eligible for a federal pro-duction tax credit, but the incentive is unused because there are no operating com-mercial-scale facilities.

Nearly 40 groups signed a letter pointing out that no

commercial cellulosic biore-fi neries will be commissioned before 2011 because of a lack of funding due to the economic downturn. Attract-ing private capital is virtually impossible, according to the letter, as conversion technolo-gies for advanced or cellulosic biofuels are precommercial and most investors are unwill-ing to take technology risks.

Biobased plastic manufac-turer Cereplast Inc. reported commencement of operations at its new production facility in Seymour, Ind., in the beginning of March.

The company also an-nounced the relocation of its corporate headquarters to El Se-

gundo, Calif., from Hawthorne, Calif. The new production facility occupies 110,000 square feet on a 14-acre site. It houses Cereplast’s bioplastic resin research and de-velopment operations as well as its state-of-the-art manufacturing equipment.

Advanced biofuel industry pushes for tax credit

Cereplast begins bioplastic production in Indiana

Indiana-based White Tech-nology LLC announced it will coordinate with affi liate Bianchi Energy Solutions to produce mass quantities of Miscanthus giganteus and Arundo donax (gi-ant reed) plantlets for sale in a complete planting, monitoring, harvesting and transport pack-age for the end user.

White Technology has an exclusive license from the Uni-

versity of South Carolina for a micropropagation technology for miscanthus and arundo and other potential energy crops. Having researched farming techniques for the grasses, Bianchi Energy Systems has determined that certain crop-specifi c techniques are required to ensure productive yields and has developed a turnkey energy crop offering.

Companies further energy crop micropropagation technology

Philippines


industry NEWS

Sweet sorghum studies yield notable resultsResearchers in Maryland studied the effects of delaying the harvest-

ing of sweet sorghum cane by one month and found it was benefi cial in cooler climates. The group is halfway through an additional project to evaluate long-term storage of sweet sorghum, results of which may help pave the way for an ethanol plant to be built in Maryland.

Last fall, Jeffrey Brenner of Solar Fruits Biofuels and research-ers from Salisbury University, the University of Maryland at College Park, the Lower Eastern Shore Research & Education Center and local farmers collaborated to perform fi eld trials to determine the effects of delaying the harvest of sweet sorghum cane by one month in cooler climates.

In preparation for the study, eight different varieties of sweet sor-ghum were established on one acre on a farm in Wicomico County in southeastern Maryland. “We did a comparison of an early harvest in September, and then a month-late harvest,” Brenner said. “We did that because sweet sorghum is mostly grown in tropical areas where it can be harvested multiple times per year. But here (in the Northeast) and in parts of the country that see colder climates, you’re not going to have more than one crop per year because of the short growing season.”

Generally, the research indicated that when comparing the har-vests, the delayed harvest resulted in a decrease in biomass, a decrease in juice volume and a decrease in sugar content, Brenner said. “When you looked at the total sugar and alcohol yield, there was a reduction of 14.5 percent from the fi rst harvest to the second, by delaying it approxi-mately one month,” he said.

However, when harvested early the researchers found that the sweet sorghum was much too wet, containing a moisture level of about 29.5 percent, signifi cantly above marketable grain levels. “By waiting a month and leaving it in the sun to dry, moisture levels came down to 18 percent, which is usable,” Brenner said. “So by waiting a month you’ve lost a little of your theoretical alcohol yield, but you’ve gained 1½ to two times (the amount) of grain per acre to be sold—so it’s reasonable to delay it for a month.”

The most recent study began in early November, and was per-formed mainly to investigate the “souring problem” of sweet sorghum, which happens when the crop is cut and left unprocessed for more than fi ve days. “This occurs in tropical or hot climates—the same thing hap-pens to sugarcane—where when you cut it, the sugar quickly disappears if you don’t get it processed and take the juice out.”

When sweet sorghum is crushed it becomes coated in bacteria, which access the juice inside of the plants and quickly divide, replicate and eat up the sugar. “So delaying your harvest will bring in a crop that doesn’t contain a lot of sugar,” Brenner said. The researchers aimed to

test the fi ve-day premise in cooler temperatures in which bacteria don’t effectively grow.

The researchers also wrapped 100-pound sweet sorghum bales in plastic, and plan to leave them for six months to compare with un-wrapped bales. After three months, results indicate that there is no sig-nifi cant loss of sugar or juice in the unwrapped bales compared with the wrapped bales. “This indicates that if you are up north, you may be able to plant more than your capacity, cut it and stockpile it like lumber, instead of using it all up right away,” Brenner said. “In places such as Louisiana and Florida they can’t do this, but they can plant three or four crops a year and harvest year-round.”

Overall, the group believes that if the remaining three months of data is consistent with the fi rst three months, stockpiling of long cane sweet sorghum could extend the operation of an ethanol plant in the northern climates beyond four months, which is what is currently thought possible with one crop per year.

Next year, the group will likely compare storing long cane sweet sorghum in billets (small chunks), different ways of making silage and temperature effects, Brenner said.

—Anna Austin

Researchers in Maryland determined that it’s reasonable to delay sweet sorghum cane harvest by one month to allow the crop to dry to marketable grain levels.


Mounting interest in agave as a biofuel feedstock could jump-start the Mexican industry, according to agave expert Arturo Valez Jimenez.

Agave thrives in Mexico and is traditionally used to produce liquors such as tequila. It has a rosette of thick fl eshy leaves, each of which usu-ally end in a sharp point with a spiny margin. Commonly mistaken for cacti, the agave plant is actually closely related to the lily and amaryllis families. The plants use water and soil more effi ciently than any other plant or tree in the world, Jimenez said. “This is a scientifi c fact—they don’t require watering or fertilizing and they can absorb carbon dioxide during the night,” he said. The plants annually produce up to 500 metric tons (551 tons) of biomass per hectare (2.47 acres), he added.

Jimenez developed The Agave Project, which began four years ago when he was the national administrative coordinator at the National Confederation of Forestry Producers in Mexico, with a goal to explore and promote the potential of the plant. He is now developing the proj-ect separately from the agency, and said the project extends into all 17 agave regions of Jalisco State (Central-Western Mexico) and will soon become nationwide. Jose Luis Ortega, a local congressman, Juan Frias of Bioenergy Solutions, Juan Villalvazo, a professor at the University of Guadalajara, the Mexican Agavaceas Net and the State Council of Agave Tequilana Producers are also participating in the project, he added.

Agave fi bers contain 65 percent to 78 percent cellulose, according to Jimenez. “With new technology, it is possible to break down more than 90 percent of the cellulose and hemicellulose structures, which will increase ethanol and other liquid biofuels from lignocellulosic biomass drastically,” he said. “Mascoma (Corp.) is assessing such technology.”

Mascoma research scientist Heidi Hau told Biomass Magazine that the company is currently evaluating agave as a potential feedstock, and has conducted some preliminary tests in-house that warrant further test-ing. “Although we are very much in the evaluation stage, we have not yet committed to a project,” she said. Jimenez said the Mexican Ministries of Economy and Agriculture are interested in having Mascoma visit Mexico for that purpose and are providing their assistance.

Beyond Mascoma, the Energy Biosciences Institute at the Uni-versity of Illinois is planning a small invitation-only agave workshop in Mexico. Researcher Sarah Davis said the institute may plan a larger meet-ing at a later date, depending on the outcome. Jimenez said he believes the workshop will be a leap forward in the research of agave for biofuel production.

Jimenez is also working with Washington-based Clearsky Energy Systems Inc., which is exploring the possibility of building municipal electricity-generating facilities that run on syngas produced from the gas-ifi cation of agave biomass. “They are also assessing a new technology for sustainable electricity generation that is cheaper than syngas, produces more energy and is cleaner,” he said.

Annually, Mexican agave could produce more than 5 billion met-ric tons of biomass, using only marginal land,” Jimenez said. “We have discussed producing huge quantities of biocrude and syngas in Mexico and to export it via PEMEX (Petroleum Mexico) to the U.S.” A biofuels director at a renewable energy laboratory in the U.S. indicated that agave biocrude could sell for the same price as oil, Jimenez said. “The Mexican government is very interested in biofuels production,” he added. “Mexi-can oil production at Cantarel fell 50 percent in just fi ve years and pro-duction is decreasing at an alarming rate of 14 percent annually.”

—Anna Austin

Jimenez stands in front of agave plants, which can produce up to 500 metric tons of biomass per hectare.

industry NEWS

Agave shows potential as biofuel feedstock

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industry NEWSUBC to install biomass gasifi er

Enerkem secures Waste Management as investor

A combined-heat-and-power (CHP) biomass gasifi cation system to be installed on the University of British Columbia campus in Van-couver will generate 2 megawatts of electricity, enough to power 1,500 homes. The UBC Bioenergy Research and Demonstration Project is a partnership with Vancouver-based Nexterra Systems Corp. and GE Energy.

The project has two main operating modes. The fi rst, a thermal-only system, will use Nexterra’s gasifi cation technology to produce syn-gas, which will be used to produce 20,000 pounds per hour of steam, replacing natural gas to meet heating needs, according to UBC. The second mode, dubbed the “Demonstration System,” will use Nexterra’s gas conditioning system and GE’s high-effi ciency gas engine to convert syngas to steam and electricity, satisfying up to 6 percent of the univer-sity’s electricity demand.

The system will require two to three truckloads of wood fuel per day, as much as possible sourced locally from British Columbia Aborigi-nal and First Nations communities. It will include clean surplus wood manufacturing material, whole-tree chips from beetle-killed and non-marketable timber, wood chips from saw mills and tree trimmings from the campus, according to UBC.

Upon approval, construction on the $26 million project could start in the second quarter of this year and be fi nished within 15 to 18 months, according to UBC. The school will pay $5.5 million of that cost with the rest coming from industry, federal and provincial governments, including the BC Bioenergy Network, Natural Resources Canada’s Clean Energy Fund, Sustainable Development Technology Canada and FPInnovations, according to the university. UBC will recover its portion from reduced natural gas consumption, lower fuel costs and reduced

carbon taxes. The 220-foot-long, 80-foot-wide and 4-story-tall building will be constructed using engineered wood products produced in Brit-ish Columbia.

The project also will provide learning and research opportunities for the school’s students and faculty. Research collaborators include the Institute for Resources, Environment and Sustainability, the Clean En-ergy Research Centre, the Centre for Interactive Research on Sustain-ability, the Faculty of Applied Science, the Pacifi c Insitute for Climate Studies, and the Sauder School of Business.

—Lisa Gibson

Canadian cellulosic ethanol producer Enerkem Inc. has attracted a new investor—North American waste and environmental services gi-ant Waste Management Inc.

Enerkem announced the closing of a new round of fi nanc-ing—$53.8 million Canadian ($50.9 million)—which comes from the company’s existing institutional investors Rho Ventures, Braemar En-ergy Ventures and BDR Capital, as well as fi rst-time investors Waste Management and Cycle Capital.

Waste Management stated that the investment will move the com-pany toward meeting three of its sustainability goals: doubling its renew-able energy production, tripling the amount of recyclables processed by 2020, and investing in emerging technologies for managing waste. Waste Management’s most recent renewable energy investment was in organic waste-to-biogas technology company Harvest Power.

A portion of Enerkem’s new funds, along with a $50 million U.S. DOE grant, will be used to initiate construction of a planned waste-to-biofuels plant in Pontotoc, Miss., which will serve as the company’s U.S. ethanol industry debut. It will be Enerkem’s second ethanol production facility, however, as it began operations in January 2009 at its commer-

cial-scale syngas-to-ethanol/methanol plant in Westbury, Quebec.The $250 million project will recycle and convert approximately

60 percent, or 189,000 tons, of the municipal solid waste at the Three Rivers Landfi ll, where the 20 MMgy facility will be built.

Signifi cant progress is being made on the development of the Mississippi project, according to Marie-Helene Labrie, Enerkem vice president of government affairs. “We have fi led our state environmental permit and are working with DOE to fi nalize the paperwork to put the $50 million in funding in place,” she told Biomass Magazine.

The company is also fi nalizing project agreements with tis partners, Labrie said. “The construction start date has not been decided upon yet as it is highly dependent on the completion, by DOE, of the review under the National Environmental Policy Act, a process of which we have limited control at this stage.”

Dino Mili, Enerkem’s vice president of business development, will be speaking at Biomass Magazine’s International Biomass Conference & Expo in Minneapolis May 4 to 6. He will be participating in a panel discussion titled “One Person’s Trash: Liquid Fuels from MSW.”

—Anna Austin

A CHP biomass gasifi cation system will be installed on the University of British Columbia campus. SOURCE: UBC


Vancourver-based Lignol Energy Corp. has signed a memorandum of understanding with enzyme giant Novozymes, and the two compa-nies have established the framework of a multiyear collaboration agree-ment to optimize the latest generation of Novozymes’ enzymes for use in Lignol’s cellulosic biofuel process.

The research on enzyme performance will begin this year at Lignol’s 100,000-liter-per-year (26,417 gallon) fully integrated pilot plant in Burn-aby, British Columbia. Final designs will be developed for a commercial demonstration plant and Lignol plans to build large-scale biorefi ner-ies that will utilize its process with Novozymes enzymes, although no timeline has been established yet, according to Ross MacLachlan, Lignol president and CEO. The company is in discussions with the U.S. DOE about funding for a plant that would be completed by the end of 2012, he added. No location has been established, but Lignol expects it will be built in the Pacifi c Northwest.

Lignol’s biofuel conversion process uses hardwood chips now, but will begin running softwood later this year, according to MacLachlan. “Essentially, we fractionate the biomass into cellulose, hemicellulose and lignin such that each of these clean streams can be suitable for down-stream processing,” he said. The Burnaby pilot plant does not run on a full-time basis, MacLachlan said, as it is only used for test runs. Daily and weekly operation is meant to gather data for enhancements and provide information for engineering designs of commercial-scale plants.

“We are excited about the opportunity to collaborate with the world’s leading enzyme producer to optimize their latest technology for Lignol’s unique substrate,” MacLachlan said. “In doing so, we are remov-

ing a critical barrier to the commercialization of cellulosic ethanol. This marks a major step for our industry in achieving the cellulosic biofuel objectives set out by various governments throughout the world. Our integrated pilot is perfectly suited for this type of collaboration in which our industrial process is coupled with Novozymes’ biological technology to make cellulosic ethanol a commercial reality.” Confi rmation of af-fordable enzyme costs in an industrial facility is essential for commercial momentum, he added.

—Lisa Gibson

industry NEWS

Lignol and Novozymes team up

British Airways, Solena Group team up for waste-to-jet-fuel plantBritish Airways and Washington, D.C.-based Solena Group Inc.

have entered a joint venture to build a 16 MMgy waste-to-jet-fuel plant in eastern London.

The plant will process 500,000 metric tons (551,156 tons) of mu-nicipal solid waste (MSW) into fuel each year, employing Solena Group’s plasma gasifi cation technology and the Fischer Tropsch process to pro-duce the jet fuel and bionaptha, an oil blending component and feed-stock for the petrochemical industry.

British Airways, which has a goal to reduce its net carbon emissions 50 percent by 2050, has signed a letter of intent to purchase all fuel pro-duced at the plant to power part of its fl eet.

The Fischer-Tropsch process tail gas will be used to generate 20 megawatts of electricity, which will be exported to the national grid or converted into steam to be used in a district heating system. British Air-ways media relations associate James von der Fecht said the location of the plant is yet to be determined. “We have short-listed our site search down to four potential sites in the east of London,” he said. “We’re working very closely with the Greater London Authority on this project and they have been extremely supportive.”

Currently, waste disposal in London is paid for by local authorities through landfi ll taxes of about £40 (US $63) per metric ton, and will rise to £72 per metric ton between 2013 and 2014. The groups estimate the 500,000 metric ton waste requirement of the plant will save £36 million in landfi ll costs and could result in lower council taxes.

The project coincides with London’s Foodwaste to Fuel Alliance, a project announced last year by Mayor Boris Johnson to jump-start the conversion of the city’s food waste into renewable energy and reduce landfi ll rates and emissions through the construction of anaerobic diges-tion and biodiesel production facilities. According to the mayor’s offi ce, each year London generates 2.7 million metric tons of organic waste; the city landfi lls receive approximately 40 percent of it.

The Solena Group is fi nancing the building and subsequent opera-tions of the plant, according to von der Fecht, which is estimated to cost $280 million. He said the groups anticipate construction to commence in early 2012. The plant will take about two years to construct and British Airways hopes to begin receiving the fuel in 2014.

—Anna Austin

industry NEWSLS9 will produce biodiesel in Florida

California-based renewable petroleum company LS9 has se-cured an existing fermentation facility in Okeechobee, Fla., that it will retrofi t to produce its UltraClean Diesel and chemicals on a demonstration scale, followed by scale up to commercial produc-tion.

“The beauty of this facility is that it’s scalable,” said Jon Balles-teros, spokesperson for LS9. “It already has the large, commercial-scale equipment.” Using LS9’s proprietary one-step fermentation process, the demonstration facility will be producing 50,000 to 100,000 gallons of renewable transportation fuel by the end of the year, according to the company. After testing and demonstrations are complete, scale up can begin.

The demonstration plant will initially run on sugarcane syrup provided by local suppliers, Ballesteros said, but will also be uti-lized in testing other feedstocks such as wood chips and agricultural waste. “We will test and optimize the use of sugars derived from cellulosic biomass,” he said.

Ballesteros declined to release a cost estimate for the project. “But the facility has much of the equipment we need, so the retrofi t will not require extensive capital outlays,” he said. The six-month construction process will create 30 to 50 jobs, along with 15 to 20

once operational, according to LS9. Purchase agreements for the biodiesel are still being discussed with a number of interested par-ties, he added.

LS9 operates a pilot-scale plant in San Francisco with a 1,000-liter (264 gallons) fermenter. The company says its fermenta-tion process has higher yields and removes additional production costs associated with the multi-step processes required with other renewable diesel technologies. LS9 genetically engineers microor-ganisms to precisely produce fuels with desired properties such as cetane, volatility, oxidative stability and cold-fl ow, while offering an 85 percent reduction in greenhouse gas emissions, according to the company.

“The new facility will allow LS9 to demonstrate that our one-step manufacturing process is ready and capable of bringing low-cost, low-carbon fuels to market while creating and preserving jobs in the Okeechobee area,” said company CEO Bill Haywood. It’s a huge step for LS9 and represents a signifi cant promise for the U.S. biofuels sector, he said.

—Lisa Gibson

industry NEWS

GlycosBio technology nears commercializationTexas-based Glycos Biotechnologies Inc. is producing lactic acid and

advanced ethanol in a pilot commercial-size facility with the capacity to produce 150,000 liters (39,600 gallons) of chemicals. It’s a major bench-mark in the company’s quest to commercialize its microbial technology.

The biochemical company is metabolically engineering microbial strains to consume nonsugar-based, low-value feedstocks for the produc-tion of chemicals and advanced ethanol. Those feedstocks can include multiple waste streams, such as glycerin from the oleochemicals industry or free fatty acids, according to GlycosBio CEO Rich Cilento. So many biochemical companies focus on sugar-based feedstocks that they build fi erce competition and can hurt each others’ progress. “If a third of those companies are successful, it will really affect commodity prices for sugar,” he said. Not only does GylcosBio’s strategy eliminate the risks of sugar-only feedstocks, but it also provides product fl exibility and a larger ad-dressable market opportunity for producers, according to the company. In addition, the technology platform is cost competitive with the petro-chemical industry, while maintaining 45 percent to 55 percent gross mar-gins from plant operations.

Initially, GlycosBio used the common lab microbe E. coli in its pro-cess, but expanded its expertise and has been operating its pilot plant in Hempstead, Texas, since November 2009. “We have a portfolio of mi-croorganisms, both E. coli and non-E. coli,” Cilento said. “Our strategy

is to have a number of microorganisms that can create a portfolio of biochemicals.” The front end of the company’s process, which includes the microbe, feedstock and fermentation, is the same for any end product, although the microbe or feedstock will differ. But separation from the fer-mentation broth differs depending on the desired end products, Cilento said. The resulting specialty chemicals can be used as building blocks for a wide range of applications including biodegradable and non-degradable plastics, as well as for surfactants and fuels, according to the company.

GlycosBio’s strategy is to develop joint ventures with companies that produce waste streams compatible with its technology platform. Instead of licensing its process, GlycosBio will leverage the partners’ expertise and integrate its own technology for a shared plant. The company has es-tablished one partnership and another is close to fi nalization, but Cilento declined to release details. About four other partnerships are in early dis-cussion and Cilento hopes to have six to 10 ventures under construction or operating in the next 12 to 18 months.

“People are confi dent in investing in our technology,” he said. “Peo-ple with waste feedstocks are calling us and we’re at a point where we’re ready to help them make a product from their waste streams.”

—Lisa Gibson

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industry NEWSGenetic discovery may increase plant biomass

Verdezyne proves adipic acid production process

Scientists at the University of Manchester have identifi ed two genes that cause plants to grow outward and believe the research could be used to increase the biomass of trees used to produce bioenergy and for other purposes.

Professor Simon Turner said the project, funded by the Biotech-nology and Biological Sciences Research Council, began in 2003 with the initial intent of discovering how plants control the way in which cells divide. Turner and UM researcher Peter Etchells studied the plant Adra-bidopsis, which has a vascular system similar to that of a tree, in order to investigate the growth in its vascular bundles. They found that genes PXY and CLE41 directed the amount and direction of cell division, and by overexpressing CLE41, they saw a greater amount of growth. “We found that overexpressing one gene gives more cells, but they were very disorganized and not useful because the orientation is affected,” Turner said. “By understanding how the two genes control both the amount of cell division and the orientation of division that allows us to manipulate it in a useful way.”

Turner said it is diffi cult to quantify how much mass can be in-creased in Arabidopsis by gene manipulation, because some tissue un-

dergo cell divisions and radial growth that do not normally divide. “In vascular bundles, there are somewhere between two and three times as many cells,” he said. The team is now growing poplar trees in a labora-tory to determine whether they fi t the Arabidopsis model, and hope to use the results to develop a system to increase wood production.

As far as applicability toward other crops goes, Turner said apart from trees, the researchers know the method works in tobacco, and although tobacco is not currently grown as a biomass crop, that fact has instilled confi dence in the researchers that it will work in any dicot crop, such as soybeans or alfalfa. Dicots are fl owering plants that have two embryonic leaves or cotyledons, while monocots have one embryonic leaf. “What will happen in monocots such as maize or switchgrass is less clear, but we are currently testing this,” he said.

The research paper, called “The PXY-CLE41 receptor ligand pair defi nes a multifunctional pathway that controls the rate and orientation of vascular cell division,” was published online Feb. 10 in Development journal.

—Anna Austin

California-based Verdezyne Inc. has achieved proof of concept in developing a new biobased fermentation process for the production of adipic acid, and intends to partner for scale-up demonstration in the next year.

Using proprietary technologies, the company discovered and is engineering a proprietary metabolic pathway that can utilize sugar, plant-based oils or alkanes, according to Verdezyne. “We have so far produced adipic from alkanes and fatty acids,” said Damien Perriman, vice president of business development for Verdezyne. “We are leverag-ing the same organism and pathway to utilize sugar as well. Our goal is to deliver a process that enables the operator to select the appropriate feedstock for their region to maximize their profi t curve.”

Rather than manipulating one pathway gene at a time, the com-pany uses synthetic gene libraries to introduce diversity into a metabolic pathway, according to Verdezyne. Biological selection or high-through-put screening identifi es the most productive combination of pathway genes.

Verdezyne is still in discussions regarding a partnership for a pilot-scale project, Perriman said. “We plan to select a partner with the ex-pertise to work on fermentation optimization utilizing both alkane and sugar feedstocks,” he said. “The selected partner will determine location of facility, scale and timeline. Our proof of concept means we have

produced small amounts of adipic and our next milestone will be to boost productivity of the organism before entering pilot scale.”

The global adipic acid market was about $4.9 billion in 2009 with its two major applications being polyamides and polyurethanes. Adipic acid is an important engineering resin for markets such as automotive, footwear and construction, and is used in products such as carpets, coatings, furniture, bedding and automobile parts.

Estimates from Verdezyne indicate at least a 20 percent cost of manufacturing advantage for biobased adipic acid, depending on the feedstock, according to E. William Radany, president and CEO of Ver-dezyne. The company anticipates the growing consumption of adipic acid will exceed capacity by 2015, leading to a necessary increase in pro-duction facilities.

—Lisa Gibson


A federal renewable electricity standard (RES) of 25 percent by 2025 would create about 274,000 more renewable energy jobs and a cumulative 2.36 million job years of work by 2025 compared with no national policy, according to a recently released study commissioned by RES-Alliance for Jobs.

A federal RES would affect biomass, solar, hydro and wind power. “As tax credits expire, some of these industries will see job loss,” said Jay V. Paidipati, managing consultant for energy for Navigant Consulting Inc., which conducted the study. Therefore, a stable policy that looks at the long-term as well as the current is necessary.

The study concluded that a 25 percent RES would double the size of the biomass industry alone, creating about 60,000 jobs in a country suf-fering from an unemployment rate that hovers around 10 percent. Most of that plant and job creation would happen in the Southeast because of resource availability including waste wood. “We think the Southeast is undoubtedly and unequivocally the future of biomass power,” Bob Cleaves, CEO of the Biomass Power Association, said during a Feb. 4 press conference.

When the Public Utility Regulatory Policy Act was passed in 1978, the biomass industry grew signifi cantly, he said. “Overnight, our industry was born and 100 power plants were built.” He added that it can happen again and will with a federal RES. “Biomass is really a job creator and it’s a job creator in the Southeast,” he said, adding that the BPA is supportive of a meaningful long-term RES.

“Our plants last about 50 years and we really need a long-term policy to support that,” said Mark Pytosh, executive vice president and chief fi nancial offi cer for Covanta Energy, a waste-to-energy company.

Covanta operates about 45 waste-to-energy plants worldwide and Py-tosh said a long-term policy to support the capital-intensive industry and provide infrastructure is crucial. A 25 percent RES would require a $25 billion investment in waste-to-energy, but would mean the construction of about 60 new facilities and would double the industry, according to Pytosh. “We’re very excited and supportive of a long-term RES policy,” he said, adding that he hopes it comes through this year.

Stakeholders in the wind, hydro and solar industries participated in the conference, as well, all agreeing that a meaningful RES is benefi cial and important. “America owned this industry 20 years ago,” said Don Furman, senior vice president of development, transmission and policy for wind energy company Iberdrola Renewables. “We invented this in-dustry and now we’re giving it away because we haven’t had a national policy to support it.” Furman said China has pulled ahead in the wind en-ergy industry and also mentioned the benefi ts of PURPA, which seem to have dwindled. “It simply sets the goal and allows the market to work,” he said of an RES.

The study can be found at www.res-alliance.org/res-jobs-study.

—Lisa Gibson

industry NEWS

Study: Federal RES would create thousands of jobs

Senate passes tax credit extensionA one-year extension of the production tax credit for biomass

power facilities is included in the American Workers, State and Business Relief Act, which was approved by the Senate on March 10. The fi ve-year credit was originally included in the 2004 Jumpstart Our Business Strength Act and is crucial to the biomass power industry.

Under the new bill’s provisions, the credit period, which expired at the end of 2009, would be extended through 2010 for open-loop elec-tricity-producing facilities placed in service before Oct. 22, 2004, accord-ing to the U.S. Senate. It would also be retroactive to Jan. 1, 2010. The proposal carries an estimated cost of $105 million over 10 years.

The same extender was cut from the original jobs bill in Febru-ary, along with biodiesel credit extenders. Biomass Power Association President and CEO Bob Cleaves said the industry is glad to be included in the bill, but has been pushing for a full fi ve-year extension of the cred-its. “Clearly, this is a short-term extension,” he said. It doesn’t solve the longer-term challenges of the industry and we will be seeking in 2010 a longer extension than one year, but we are very pleased to be in the bill. It’s a refl ection of the support we’ve received in the Congress and we look forward to a swift passage of the legislation and extension of our benefi ts.”

More than 100 operating plants in the country count on the pro-duction tax credit, according to Cleaves. He has previously said that if an extension is not passed, it will have catastrophic consequences for the biomass power industry, which is responsible for about half of the renewable energy produced in the U.S.

The $150 billion piece of legislation also includes an extension through 2010 of $1-per-gallon tax credits for biodiesel, renewable diesel and diesel from biomass, as well as an extension of the 10-cents-per-gallon credit for small agri-diesel producers. The proposal comes at an estimated cost of $1 billion over 10 years, according to the U.S. Senate.

The House of Representatives passed the Tax Extenders Act of 2009 in December, without provisions for biomass power. “There has to be a meeting of the minds between two pieces of legislation that are different in scope,” Cleaves said. “The bottom line is, there has to be a meeting between the House and Senate so that there is one bill sent to the President and hopefully signed into law.”

The House and Senate versions of the legislation need to be recon-ciled into one bill that both chambers have to approve before it can be signed into law by President Obama.

—Lisa Gibson

industry NEWSSG Biofuels unveils jatropha cultivar

California-based SG Biofuels has launched JMax 100, a pro-prietary cultivar of jatropha optimized for growing conditions in Guatemala with yields 100 percent greater than existing varieties, according to the company.

SG Biofuels is a plant oil company specializing in the de-velopment of jatropha as a low-cost, sustainable source of oil and has the largest library of jatropha genetic materials in the world. JMax 100 is the fi rst elite cultivar developed through the company’s JMax Jatropha Optimization Platform, which provides growers and plantation developers with access to the highest-yielding and most profi table jatropha, the sequenced genome and advanced biotech and synthetic biology tools to develop cultivars specifi cally optimized for their unique growing conditions, ac-cording to SG Biofuels.

JMax 100 increases the profi tability of jatropha to greater than $400 per acre, more than 300 percent above existing com-mercial varieties. That equates to more than 350 gallons per acre at $1.39 per gallon, according to SG Biofuels. “JMax 100 is the tip of the iceberg in the development of jatropha as a renewable en-ergy crop,” said Kirk Haney, SG Biofuels president and CEO. He added that Guatemala has a head start, but the company antici-pates advancements through the JMax platform that will further

enhance the profi tability and productivity of jatropha for growers around the world.

SG Biofuels will continue to work with partners and collabo-rators to optimize JMax for region-specifi c planting through the establishment of in-region technology centers, it said. In addi-tion to its work in Guatemala, SG Biofuels is collaborating with the Hawaii Agriculture Research Center to develop a customized jatropha cultivar that can be used to the meet the demand for locally grown renewable fuel. Jatropha is a global market leader for fuel production and may be the only near-term solution for renewable fuel, Haney said. It can grow on marginal land and is limited only by a few factors, including its lack of tolerance for cold temperatures. But SG Biofuels’ research seeks to solve that problem, along with enhance other jatropha traits, such as oil con-tent and seed size.

The shrub is native to Central America and its seeds contain high amounts of oil that can be refi ned using existing technology to produce diesel fuel, jet fuel and specialty chemicals.

—Lisa Gibson

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industry NEWS

ISU will stack algae traitsA researcher at Iowa State University will use a $4.37 million

grant from the U.S. DOE to stack traits in Chlamydomonas alga that will improve oil yield, growth rate and offer better thermal resis-tance.

“The goal is really to develop it to be able to do breeding for microalgae,” said researcher Martin Spalding, professor and chair of genetics, development and cell biology, and a council member of ISU’s Plant Sciences Institute. His research will aim for treat-ment of the strain as any other terrestrial crop.

A more immediate goal for the three-year project is developing one or more strains that can compete for commercial biofuels pro-duction. “The algae we’re working with currently are not competi-tive with other strains for biofuels,” Spalding said. More important, he’d like to have a platform breeding stock at the end of the project that can be used to respond quickly to biofuel needs that may arise. “We hope to bring this alga to the point where we can tailor it to meet the needs of the industry,” he said.

Chlamydomonas alga is ideal for such research because it is the only type with a well-defi ned, mapped genome. “It’s an alga that’s been a model system used in biochemistry and genetics for years,” he said. “We have a sequenced genome, we understand the metabo-lism and we have the tools available to us to work with this alga.”

It’s also manipulable and scientists can create extensive mutant screens, from which they can select mutants that are able to produce more oil, Spalding said. “Rather than look for an alga that produces trait x or y and then trying to adapt each new strain to production, which is a very diffi cult process, we are manipulating Chlamydomonas to meet x and y,” he said.

Genetic modifi cation of algae does have its critics and Spalding said the fact that Chla-mydomonas alga is well-understood most likely will not ease oppo-nents’ fears. “This particular alga is neither more nor less of a con-cern for people with concerns about genetically modifi ed algae,” he said, adding that it’s important to note his research will not be done in open ponds. “It will be well contained and well controlled.”

The research will increase the number of favorable algae traits in the “toolbox,” Spalding said, and it will provide a more sustain-able and fl exible source for biofuel. “We see it as just the begin-ning,” he added.

—Lisa Gibson

Spalding


Project Apollo, a 25-megawatt biomass power plant to be built in Milwaukee, should be operational in late 2013, producing enough electricity to power 20,000 homes in the Milwaukee area, according to developer Alliance Federated Energy.

AFE plans to use Westinghouse Plasma Corp.’s plasma gasifi ca-tion technology to convert municipal and industrial wastes into syngas for energy. Several facilities around the world, such as in Japan, operate commercially with the technology, with several more in fi nal design or construction phases, including in India and Turkey, according to West-inghouse. AFE, established in 2005, develops and fi nances renewable energy projects in the Midwest, and provides development services for projects led by third parties through a network of independent consul-tants and contractors.

The $225 million Milwaukee plant, which will be built on a 25-acre industrial site, will be AFE’s fi rst project and CEO Christopher Malo-

ney calls the plasma gasifi cation technology the “ultimate in recycling.” The project will create more than 250 jobs during construction, along with another 45 full-time positions once operational, according to AFE. Badger Disposal of Wisconsin, one of the region’s leading industrial waste management services companies, has already committed to sup-ply about 30 percent of the waste feedstock for the facility. AFE is in discussions with third parties for the sale of syngas and electricity.

The fi rst phase of the facility is expected to process about 1,200 tons of waste per day, according to the company. AFE partner CorVal-Ryan, based in St. Paul, Minn., will design and fabricate the plant, and Los Angeles-based partner Aecom will provide technical, environmen-tal and management support services for the project.

—Lisa Gibson

Biochar technology company Dynamotive Energy Systems Corp. and environmental research company BlueLeaf Inc. have completed the second round of fi eld trials testing various effects of commercial-scale plantings of wood waste-derived biochar.

For the past two years, the companies have investigated the effects of Dynamotive’s CQuest Biochar on certain basic physicochemical and biological soil and plant parameters, as well as the ability of biochar to retain moisture in the soil, the infl uence of biochar on crop and biomass yields, the infl uence of biochar on soil respiration, and the effects of a handling and application method of biochar on the soil at commercial farming test plots in Québec, Canada.

The material used in the trials was produced in 2007 and kept in storage by Dynamotive until shipment to the trial site on May 16, 2008. The biochar was packaged at the production facility in 200-liter (55 gallon) steel drums, each containing approximately 55 kilograms (121 pounds) of biochar and shipped by truck to the farm trial site.

The biochar was distributed on the plots using a commercial lime spreader at a rate of 1.75 tons per acre, accounting for wind losses of fi ne material of about 30 percent. Last year’s results showed a plant den-sity increase of up to 41 percent using certain planting methods, with an overall average of a 24 percent plant density increase with biochar use, compared with the control plots. Among 2009 results was a 100 percent increase in biomass for a forage mixture, as well as increases in earthworm, nematode and mycorrhizal root colonization, which may suggest biochar could serve as a refuge for soil microbes.

Other conclusions of the study included: Best management techniques such as wetting the material prior

to handling must be developed because of large wind losses of the fi ne material.

Soybean and forage yields were improved, although forage qual-ity was slightly lower when biochar was applied. In the case of soybeans, the yield increase was brought about by greater plant population density,

and not greater seed production per plant. Biochar reduced total soil phosphorus content, which requires

further investigation given the soil is considered phosphorus-saturated and management is critical in the ecosystem.

The application of 1.75 tons per acre did not produce measur-able increases in total soil carbon or soil respiration, but statistical analy-ses could not be performed because of the lack of randomization and replication, therefore data must be considered preliminary and further fi eld studies are required to fully understand the effects of biochar ap-plication on soils of this temperate region. The application rate used was low and greater rates along with different biochar materials must be tested.

A copy of the full report may be accessed at www.dynamotive.com/assets/resources/BlueLeaf-Biochar-FT0809.pdf.

—Anna Austin

industry NEWSBiomass project proposed in Milwaukee

Dynamotive, BlueLeaf complete two-year biochar trial

The biochar was spread on the fi elds using a lime spreader at a rate of about 1.75 tons per acre.

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New alliance announces fi rst biomass projectThe fi rst project in a new alliance between John Deere and

Adage—a joint venture formed by Areva and Duke Energy—will result in a 55-megawatt biomass power plant in Mason County, Wash.

The $250 million plant will use woody biomass from lo-cal private forests, although Adage is still negotiating fuel sup-ply contracts, according to Jarret Adams, media representative for Areva. Adage is in the process of fi nalizing those contracts, along with power purchase agreements, and expects to begin construction on the facility late this year, with an operation date in late 2013, Adams said. The output will be enough to power about 40,000 homes. “Most of it, of course, is going to the local community,” he said.

In its fi rst 2½ years of construction and operation, the plant will generate $100 million in economic activity and create 700 direct and indirect jobs across the county, according to Adage. Once permanently operational, it will create a new economic in-centive for revitalizing Washington’s rural communities that will also help maintain forest health, according to the company.

The Mason County region is heavily wooded, making it a great location for such a plant, Adams said. It will be the second Adage endeavor, but the fi rst in the Pacifi c Northwest. Con-struction on Hamilton Biopower, in Hamilton County, Fla., will begin this year.

The alliance with John Deere will allow Adage access to woody biomass harvesting equipment that has been used in Eu-rope. “The alliance is to bring new technology and process inno-vation for fuel supply,” Adams said. The agreement allows Ad-

age to incorporate the 1490D Eco-III Energy Woody Harvester into this and any future biomass projects. “The Mason County project will be the fi rst to use the harvester,” he added. Washing-ton Gov. Christine Gregoire, Adage President Reed Wills, Jim Orr, director of worldwide marketing for John Deere Construc-tion & Forestry, along with legislators and forestry profession-als celebrated the alliance announcement Feb. 4 at an event in Olympia, Wash.

“Our alliance with John Deere will bring new innovation to the forest, enabling more sustainable biomass to be brought out of the woods and put to benefi cial use,” Wills said. “Expanding biomass utilization means healthier forests and new renewable energy, all while creating jobs in the forest.”

—Lisa Gibson

industry NEWS


INDUSTRY

Bio-Algae show enormous potential as a biofuel feedstock, prompting numerous companies to further develop production and conversion systems. But some researchers remain skeptical as large-scale commercialization of reliable processes seems a distant goal.

By Lisa Gibson

OriginOil Inc. has a comprehensive pilot plant system for algae growth and harvesting at its Los Angeles headquarters.

PHOTO: ORIGINOIL INC.

fuels


INDUSTRY

raits such as high oil content, carbon dioxide absorption, fuel effi ciency and rapid growth make algae a favorable component of biofuels. But effi cient processing, cultiva-tion, conversion, logistics, affordability and other issues

put large-scale, competitive production of algal biofuel on a timeline that raises questions about whether the feedstock will prove itself, or if it’s surrounded by too much hype.

“I think this is the year of the pilots,” says Riggs Eckelberry, president and CEO of California-based OriginOil Inc. The company is one of several working to optimize algae production for biofu-els and while Eckelberry recognizes that widespread production and competition with petroleum is 20 to 25 years away, he believes 2011 will bring about the fi rst small-scale commercial systems.

“Scaling up will require time,” he says. “It’s a lot of brick and mortar. I still see scale, commercial programs at three to fi ve years out. I think 2011 is going to be a very good year for showing that we’ve got commercial systems.” Demand from existing infrastructure including CO2 emitters such as ethanol plants and biorefi neries repre-sents the low-hanging fruit for algae production. Cultivation systems can be attached to those polluters and function as a blended revenue stream, as it is not at the mercy of fuel commodity prices. “Before algae become as big as petroleum, we’ll have lots of algae being used benefi cially to suck up CO2 and create local energy that can be con-sumed on the premises,” he says. “Algae production will be local. It will not be centralized.”

T


INDUSTRY

The Home Run for AlgaeCo-locating algae ponds at wastewater treatment plants would

allow larger-scale growth, while providing more money to the plants, along with benefi ts such as waste energy, CO2 absorption and nutri-ent cleaning. “The fact is, wastewater is the home run for algae,” Eckelberry says, adding that it provides the most bang for the buck currently. Cultivating algae in a wastewater environment is 20 percent more profi table than other processes, he says. “Wastewater treatment plants have lots of nutrients,” he says. “So algae solves the problem by eliminating the denitrifi cation stage.”

Researchers at the University of Virginia recommended co-lo-cation with wastewater treatment plants in a recent study, “Environ-mental Life Cycle Comparison of Algae to Other Bioenergy Feed-stocks.” Published in Environmental Science & Technology, the report found that algae cultivation (excluding conversion) consumes more energy, has higher greenhouse gas (GHG) emissions and uses more water than switchgrass, canola and corn. That environmental foot-print, researchers concluded, comes primarily from upstream impacts such as CO2 demand and fertilizer, two major barriers to commercial and widespread production that can be alleviated by co-location at wastewater treatment plants or other areas that emit CO2.

“We were surprised by what we found initially,” says Andres Cla-rens, assistant professor at the university’s civil and environmental engineering department and lead author of the paper. “At the end of the day, the main conclusions here were that algae cultivation, at least as it’s envisioned or was envisioned for much of the ’90s and recently, in terms of open ponds, has a big environmental footprint.” But terrestrial crop production has improved greatly with experience in the past 100 years and so can algae growth. “It’s a pretty clear up-ward trend,” Clarens says of other crops, such as corn. “I think we’re standing at the bottom of that hill with algae.”

The message of the paper is there’s some low-hanging fruit in algae production, Clarens says. “If we’re serious about algae, we need to fi nd a way to get nutrients from other sources, other than just dumping bags of fertilizer into the pond,” he says. “That’s never go-ing to be a winner from the environmental standpoint and probably not from a fi nancial standpoint, either.”

The team set the high heating value of each of the four feed-stocks tested as the basis for the study, instead of an equal weight measurement, and incorporated a sensitivity analysis to check fi nd-ings. A cradle-to-gate boundary was applied and includes all prod-uct processes upstream of delivered dry biomass. Although algae’s life-cycle analysis showed disappointing results, it has signifi cant ad-vantages in eutrophication potential and land use, the latter being invaluable. “We can fi gure out ways to deliver waste nutrients or what have you,” Clarens explains. “Land we can’t really improve on and algae are more effi cient.” In addition, algae yields four times as much biomass as the other crops.

Eutrophication impacts emerge upstream as runoff from the nutrient factory, Clarens says, leaving room for improvement there, also. “If we’re talking about really expanding our agricultural ef-forts to be able to grow fuel, not just food, then doing it in a way that doesn’t have the same impact on waterways I think is key,” he says. Algae could also be cultivated using existing nutrients at power plants, confi ned animal feedlots and coal power plants. “Even if we took all the nutrients from all the people in the U.S., we wouldn’t be able to grow enough algae to offset our energy needs,” Clarens says. “So we’re going to have to think of other ideas.”

Clarens acknowledges that plenty of hype surrounds algae and it’s not a silver bullet, but that doesn’t negate its potential. “One of the things we were thinking early on is if it’s as good as the claims fl oating around say, then we should quit our jobs and go do this be-


cause we could get really rich,” he laughs, adding that it doesn’t seem prudent without studies like this. “I’m optimistic and I think hope-fully this paper will help start a conversation about where we should be focusing our efforts.”

In response to the paper, Eckelberry says higher energy con-sumption by algae is not the fault of the organism, but the industrial process. “This study confi rms our fi ndings that a stand-alone algae production environment is not viable,” he says. “You can’t make algae in a vacuum.”

The energy cost of oil extraction with big machinery is a non-starter, according to Eckelberry. “You’re trying to squeeze the water out of the Kool-Aid,” he says, adding that OriginOil has developed an effi cient process for extraction, as have other companies. As far as water use is concerned, Eckelberry believes the focus should not be on how much, but what kind. “I think we need to step back a little bit and say, ‘Algae is benefi cial because it’s going to take the wastewater and the salt water and the brackish water nobody can drink and it’s going to remediate it.’”

Eckelberry argues that algae are not inherently higher GHG emitters than terrestrial crops, but emit a similar or smaller amount of pollutants when taking into account tractors harvesting up and down fi elds. “There’s no question that algae aren’t a virtuous cycle on greenhouse gases,” he says. “It’s the hope of the future.”

The study showed that a good portion of existing data for algae cultivation is extremely obsolete, he says, and a new, reliable model is needed. “It’s only a fl ag that says we didn’t know much before.”

A Productivity ModelThrough a multiphase project with the U.S. DOE’s Idaho Na-

tional Laboratory, OriginOil has developed the Algae Productivity Model, which lays out a path for commercial production. It can

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Sunrise Ridge Algae Inc.’s fi fth-generation algae production technology project is located at the Hornsby Bend Wastewater Sludge Treatment Facility in Austin, Texas.

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be viewed at the company’s Web site: www.originoil.com. Key variables of algae pro-ductivity identifi ed include algae concentra-tion at harvest, total volume available for algae growth, energy source, energy inputs, lipid content and lipid extraction effi ciency. A partnership with London-based consult-ing fi rm StrategicFit will help further devel-op that core model. “Ours is just a bunch of spreadsheets and it works, but they can help turn it into modules,” Eckelberry says.

Phase one of the Algae Productiv-ity Model included a comprehensive mass-

energy balance of OriginOil’s proprietary production process, which includes the He-lix Bioreactor and live or single-step extrac-tion.

The model concludes that profi tabil-ity requires co-location with benefi cial site hosts and a focus on high-value coproducts. Subsequently, the pursuit of fuel will require continued process optimization at all stages and incentives such as grants, subsidies and policy. “The end game is to allow ventures to be fi nanced based on reliable, bankable life-cycle analysis numbers,” Eckelberry says.

INDUSTRY

Besides this venture, the DOE has lent a helping hand to several algae endeav-ors. In January, it announced the recipients of more than $80 million in competitive federal funding for biofuels research and development, of which $44 million went to the National Alliance for Advanced Biofuels and Bioproducts for the commer-cialization of algae production, according to the DOE. The American Recovery and Reinvestment Act granted funds to Sunrise Ridge Algae Inc. in Houston, Texas, for the fi rst research and design phase of a project at Hornsby Bend Wastewater Sludge Treat-ment Facility in Austin, Texas. If awarded funding for more project phases—detailed design, construction and operation—Sun-rise Ridge plans to operate its system at a cement company in Buda, Texas.

The DOE has had a long-term inter-est in algae because of its potential and productivity compared with land-based plants. The Aquatic Species Program was a precursor to the current Biomass Pro-gram within the DOE and studied algae for biodiesel.

The University of Nebraska-Lincoln will use $1.9 million in federal funding to help revamp a portion of its Beadle Center greenhouse to accommodate an algal bio-fuels research facility that will address three important goals: identify the best strains for maximum oil production; identify op-timal growing conditions; and modify the algae for maximum cell density, accord-ing to Paul Black, a lipid biochemist at the university. The team is currently working with a photobioreactor that is designed to increase cell density per unit volume from about two grams per liter to eight to 10 grams per liter, by exploring maxi-mum light and carbon dioxide conditions, Black said. Black expects that after about 10 months the scientists should have some compelling data, although a timeline has not been established.

Black and fellow scientists are working now with natural strains, but the possibility of genetic modifi cation exists, depending on what genes are turned on or off by cer-tain stimuli, such as light. “It depends on what we come across,” he said. “There’s a lot of serendipity in science.”


INDUSTRY

An Unnecessary RiskWhile many researchers are working

to optimize algal traits through genetic modifi cation (GMO), others express deep concerns with the practice, including de-stabilization of ecosystems, death of ben-efi cial species of natural algae, creation of toxic GMO algae species that can directly harm people, irreparable alteration of the environment, and many more.

“Let’s remember that algae are respon-sible for half of the oxygen on this Earth,” says Gerald Groenewold, director of the Energy & Environmental Research Center on the campus of the University of North Dakota. “It’s a fantastic group of species that are very important to life on Earth.” Several thousand species of algae are thought to exist and humans understand little about them, he adds, including the ex-tent of their interaction with the environ-ment. “Therefore, changing that interac-tion through genetic modifi cation creates a plethora of unknown consequences and probably some signifi cant risks. We don’t know where we’re going with this. We’re driving blind.”

An environmental risk assessment protocol for GMO algae does not exist, which Groenewold considers a worrisome reality. “In simple terms, I think what we’re doing is championing the creation of dan-gerous biohazards without having to ad-dress safety guidelines, because there is no guideline,” he says.

The tremendous growth rate of al-gae makes genetic modifi cation even more risky, as it would mean a “geometric spread” of any mistake, Groenewold ex-plains. Furthermore, signifi cant strides are being made in research with natural strains of the organism that are understood. “There is no necessity to pursue a far riskier GMO course of action when we’re having signifi cant success pursuing natural breeding,” he argues. “This is a Franken-steinian exercise.”

Genetic modifi cation of algae needs to be critically discussed and evaluated to avoid a “biological nightmare,” Groe-newold says. “It’s the most amazingly in-appropriate thing, frankly, I have seen in years under the heading of science,” he

says of GMO algae. “It’s very bad science in my opinion.”

RoadblocksWhile technological barriers to large-

scale commercialization of algae produc-tion for biofuels still exist, researchers are making advancements and the next step is to bring them together in a best-of-breed technology, Eckelberry says. “I have no doubt that the technologies are out there,” he says. “They just need to be melded and put to work … There are process issues, of

course, but there’s no question it’s got the potential.”

Black cites cell density, quality oil and oil extraction as major barriers. “I would say it will be fi ve to seven years before we really get to a point of making it commercially viable,” he says. “We’ve got some blocks in front of us, but they’re not insurmount-able.” BIO

Lisa Gibson is a Biomass Magazine associate editor. Reach her at [email protected] or (701) 738-4952.


DEBATE

Alpha cribs containing colonies of algae grow at the Colorado State University Engines and Energy Conversion Laboratory.

PHOTO: COLORADO STATE UNIVERSITY


DEBATE

There are pros and cons associated with the economic commercial production of algae using closed bioreactors and open ponds. Is one method superior, or is there room for both?

By Anna Austin

OPEN PONDS VERSUS CLOSED BIOREACTORS


he U.S. DOE’s National Renew-able Energy Laboratory conclud-ed in 1990 in its Aquatic Species Program close-out report that

open raceway ponds were the most viable so-lution for the mass production of algae for conversion into biofuels, but that it was much too early to determine whether open, closed or hybrid designs of growing algae would ul-timately prevail.

Generally, open ponds have been as-sociated with contamination issues, exces-sive space requirements and limited location possibilities due to climate. At the same time, closed bioreactors have mainly been consid-ered too expensive. There wasn’t much room for doubting the accuracy of NREL’s report, but have technological advancements in the past two decades leveled the playing fi eld? Perhaps, but companies today pursuing either route still face the same hurdles their prede-cessors did. Whether it takes fi ve, 10 or 20 years, the key to economic algae-based bio-fuel production is developing the most cost-effective growth model possible.

If light limitation is the main problem in achieving the commercial potential of algae in scaled commercial cultivation operations, Massachusetts-based Bodega Algae may have the solution, according to CEO Joseph Dahmen. In January, Bodega Algae and Big-elow Laboratory for Ocean Sciences in West Boothbay Harbor, Maine, received a six-month, $150,000 Small Business Innovation Research grant from the National Science Foundation to develop and test a prototype for growing high concentrations of algae for use as biofuel. More specifi cally, Bodega will use the funds to develop advanced photobio-reactors, and is making “big advancements,” Dahmen says.

Case Closed One of the major issues in the cultiva-

tion of microalgae is light limitation, Dahmen says. “This limits the effective photosynthetic volume to basically the area within fi ve cen-timeters of the surface of a pond,” he says. “Everything below that tends to be light pro-hibited because the top layer limits the light from getting in.” The same is true for photo-bioreactors, he adds. “So some people have tried various solutions like fl at plates or hang-

ing bags, and in effect, what they’ve done is limit the cultivation volumes in an attempt to drive up the surface area to volume ratio.”

These small volumes allow light to pen-etrate better, according to Dahmen, but the problem is that it may lead to biofouling (the attachment of organisms to a surface in con-tact with water for a period of time) and the cost of pumping the algae around through the small volumes increases. “We’re bringing the light to the algae with some proprietary optics that are internal within the reactor,” Dahmen says. “We have cultivation volumes that are lit within, so that allows us to cultivate very effi ciently—in effect, like three dimen-sions.”

The bioreactors Bodega is currently ex-perimenting with are bench units made of acrylic. In the long term, however, the com-pany is looking at shipping containers and possibly petroleum dissolute storage tanks.

Dahmen describes open ponds as a “fi rst-generation solution” to growing algae. “They’re very land intensive because the ef-fective cultivation area is limited to a very thin slice of growth medium, so the ponds have to expand, becoming very land hungry,” he says. “Also, if you look at the areas receiving high amounts of natural sunlight or insula-tion where ponds make the most sense, you run into tremendous problems with evapo-ration as well as cross-contamination of cultures. When you start talking about acres and acres of ponds 16 inches deep, you’ve increased the surface area to the point where land consumption is a huge problem.”

Open ponds are relatively cheap to build compared with bioreactors, though, Dahmen says. “But what we’re seeing is a real need for cost-effective photobioreactors that can ad-dress the capital expense issues while offering effi cient cultivation in large volumes.”

Numerous other companies share Dah-men’s perspectives, but have approached bioreactors in different ways. Solix Biofuels, recently named a part of the U.S. DOE’s $44 million National Alliance for Advanced Biofuels and Bioproducts consortium, has at-tracted much attention in the past few years. Along with Colorado State University, Solix has developed specialized photobioreactor systems composed of long, closed plastic bags containing algae, which fl oat in large

DEBATE

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water-fi lled metal tanks to control temperature and are injected with CO2 through tubing to optimize growth.

California-based OriginOil, another bioreactor contender, has a cooperative agreement with the U.S. DOE’s Idaho National Labora-tory for a multiphase algae research program. The company describes its Helix BioReactor as an advanced algae growth system that features a rotating vertical shaft with low-energy lights arranged in a helix/spiral pattern, resulting in a theoretically unlimited number of growth layers.

While these particular companies have focused on bioreactor development, some such as Washington-based Bioalgene Inc. have pursued both methods.

Open to PossibilitiesA few years ago, aircraft manufacturer Boeing hired Bioalgene

to survey indigenous strains of algae—regional strains that grow fast and produce many lipids—in the Northwest U.S., according to Bioal-gene CEO Stan Barnes. The company has leased a decommissioned wastewater plant where it is now testing selected strains. “These are natural strains that already have defense mechanisms against preda-tors and disease and can thrive in this region,” Barnes says. Now en-tering phase two of its research project, Bioalgene will grow algae in larger, 220,000-gallon ponds on a fi ve-acre tract at Boardman, Ore., to test variances in growing and harvesting methods.

Barnes says early on, the company built three bioreactors at Se-attle University, and though being able to grow pure strains was an advantage, capital costs to build, maintain and clean transparent sys-tems didn’t seem to be an economic pathway to high-volume algae production. Using NREL’s research as a basis for the company’s deci-sion to move forward with natural strains in open ponds, Barnes says Bioalgene utilized the already developed capabilities of algae to yield a simple system, rather than a complex system. “Evaporation is one of the things we’re concerned about though,” he tells Biomass Maga-zine. “The whole question of water management is a challenge, and I think you’ll have it anywhere. One big advantage a closed system has is no evaporation loss.”

Adequate temperature and sunlight are only available in certain regions for limited periods of time, but Barnes says one of the ben-efi ts Bioalgene will reap by growing algae at a coal-fi red power plant (besides using fl u gas emissions to accelerate growth) is that the pro-cess heat allows growth into December by warming water that is fed to the algae. “As long as the water is warm, there is plenty of light energy to keep the algae growing,” he says.

Although Bioalgene believes open ponds are the ultimate solu-tion, it will utilize closed reactors as nurseries to grow inoculation strains in pure forms before introducing them to ponds. “Overall, the potential for volume, we see, is more economical (in open ponds) than in large closed systems,” he says. Bioalgene expects its systems to be able to deliver more than 100,000 tons of algae per year.

But what if the algae are being produced for something other than oil? Jim Oyler, CEO of Utah-based Genifuel Corp., says the method of growing algae is relative to the intended use. Algae oil developers are looking to achieve the highest yields of oil possible

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using specifi c strains, but oil yields aren’t im-portant to Genifuel, as it is directly converting the algal biomass to natural gas via a gasifi ca-tion process developed by the DOE’s Pacifi c Northwest National Laboratory.

Room for Both Though Genifuel is focused on mass

rather than oil yields, growing the material as cheap and quickly as possible is imperative. The company has open raceway ponds in Utah, which are currently shut down for the

winter months, but produced algae last year. “In our case, we’re interested in growing the most biomass possible per unit of area in our ponds, so our goal is different than the goal of algae oil producers,” Oyler says. “We like fast-growing species and in many cases these are tough, aggressive types of algae. Many of the oil producers, especially when they are ge-netically modifi ed, can be somewhat delicate or vulnerable, and are easily taken over by weeds.”

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that they can get faster growth in bioreac-tors, while at the same time avoid problems that arise from outdoor production, includ-ing susceptibility to parasites and the poten-tial for aggressive species to take over. “The key question is, can you get enough additional productivity in bioreactors to offset the addi-tional cost?” Oyler says. “There are some very clever designs being developed. Solix Biofuels has a design that’s not too expensive—more expensive than open ponds—but it reduces capital costs in a productive way.”

Open ponds have not always been con-sistent, however, as they have peak productiv-ities that aren’t maintainable or achievable in most climates over extended periods of time. “There are also some very clever designs that overcome some of those problems,” Oyler says. “But in order for bioreactors to pay off, they’re going to have to achieve something in the order of double or triple the productiv-ity of an outdoor open pond. It’s yet to be proven that it can be done. Theoretically it might be possible, but no one’s actually dem-onstrated it at a commercial scale.”

Another advantage of closed systems is that they open up sunny, dry areas such as the Southwest to biofuel production. Open ponds are unlikely to work in the Southwest because the water loss is going to be enor-mous, Oyler says. “Photobioreactors keep water enclosed, but thermal management is still needed, because if you put an enclosed system out in the desert it’s going to get really, really hot in there.”

Although the problems of predators and weeds have been solved with bioreactors, such closed systems used to grow algae for other purposes have experienced problems with virus susceptibility and/or bacteria attacks, which can take the whole system down in a matter of hours. “There are ways to deal with that, but I don’t believe that it has ever been fully solved for long periods of time,” Oyler says. “Both ponds and bioreactors have ad-vantages and disadvantages right now. There’s more experience with outdoor systems, but the closed systems have the promise of higher sustained productivity, but only if they can overcome associated problems, especially thermal management or diseases.”

Al Darzins, principal group manager of NREL’s National Bioenergy Center, shares


Oyler’s sentiment. During the past couple of years, algae research has enjoyed a resurgence at NREL, including projects with Chevron Corp. and the Colorado Center for Biofuels and Biorefi ning, and Darzins says in the ex-tended future, both ways of producing algae will continue.

Back at It NREL is currently experimenting with

two algae production systems—in 270-liter ponds in a greenhouse, and small bioreactors that hold media to grow algae in artifi cial light with CO2. “When we start scaling both up to the commercial realm, though, that’s where the debate lies,” Darzins says. “It’s an argu-ment that has been heated for the past several years.”

When generating large amounts of algae outside in closed photobioreactors, conven-tional wisdom is that the materials that go into making them are going to be cost-prohibitive unless the fuel produced is cheap, according to Darzins. “If you’re making a value-added product that is worth a lot of money, then it might make sense to grow the algae in a closed photobioreactor,” he says. “Right now, most people think the cost-effective way will be open raceway ponds, but there are some companies such as Solix that are growing their organisms in kind of a hybrid cultivation technology. Solazyme is growing algae not with sunlight, but within closed fermentation tanks with sugar. Under those conditions you can get very high cell densities and very high amounts of oil produced, but the main ques-tions are, will that be cost effective and can you scale it up to be meaningful enough to displace the 40 billion-odd gallons of diesel we use here in the U.S.? Where are you go-ing to get your cheap sugars to let your algae grow?”

Some believe once lignocellulosic etha-nol technology is mature, the sugars extracted from corn stover and energy crops could be fed to bioreactors to reduce the cost of algae production. “That technology isn’t quite there yet either,” Darzins says. “There are a lot of different technologies that people are explor-ing but overall, the predominant method right now is open ponds.”

Darzins believes if someone can develop truly novel bioreactors that are inexpensive

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to make and maintain while isolating organ-isms that are very productive, then it might make sense to grow algae that way, especially in more northern latitudes. On whether ge-netically modifi ed organisms are productive or not, Darzins isn’t sold. “We think Mother Nature has been engineering biology for mil-lions and millions of years and there are some very interesting organisms that we just need to discover,” he says. “Over the past four years, algal biofuels have captured the public and sci-entifi c communities attention and [its viability]

really depends on whether we can produce it cost effectively and sustainably, from the as-pects of land usage, water usage and nutrient usage; we just have to make sure all that can be done without competing with agriculture. We haven’t heard the last of this debate, that’s for sure.” BIO

Anna Austin is a Biomass Magazine as-sociate editor. Reach her at [email protected] or (701) 738-4968.

POLICY



POLICY

The USDA released the proposed rule for the Biomass Crop Assistance Program in February and is now under pressure to make essential changes. Until the fi nal rules are determined, program payments and applications have been frozen.

By Anna Austin

BCAP Rule Revision


he long-awaited Biomass Crop Assistance Program proposed rule seems to have revived some interest and enthusiasm in the

program. At the same time, many are anx-ious for the proposed changes to be fi nal-ized, for further clarifi cations and for the current freeze on the program to cease.

Among several new provisions of the rule is a possible prohibition on wood waste and residue on federal and nonfed-eral lands that otherwise might be used for higher-value products. Kent Politsch, pub-lic affairs branch chief for USDA’s Farm Service Agency, says the prohibition pro-posal resulted because of concerns from segments of the wood industry, specifi -cally the pulp and pressboard/fi berboard manufacturers. “They say that the BCAP collection, harvest, storage and transport (CHST) matching funds were paying for forest items—chips, bark, excess wood, stumps and limbs that were knocked down in the forest and were generally cleaned up afterward—and therefore directly increas-ing prices and competition for a market that already was established, mostly the fi -berboard industry,” he says.

CHST funds allow matching pay-ments to eligible material owners of $1 per $1 paid per ton by the biomass con-

POLICY

T

Forest residue such as stumps and tree limbs are utilized by the fi berboard industry.


POLICY

version facility (BCF) to the producer, up to $45 per dry ton for a time limit of two years after the fi rst payment is made. In the case of particleboard makers, CHST funds could essentially double the price they typi-cally pay for the materials they use. As of Feb. 8, the USDA stopped accepting CHST applications until the fi nal BCAP rule is in place.

Politsch says the original intent of Congress allowing wood waste and residues to qualify for CHST funds was to appeal to the wood supply industry to clean up un-wanted debris that they assumed had no or little market value. “The fi berboard indus-try responded by saying that was an incor-rect assertion, and that there was already a market value for that stuff,” he says.

Tapping into TroubleComposite Panel Association President

Tom Julia tells Biomass Magazine that the in-dustry didn’t initially pick up on the BCAP program’s threat to its members, as the organization doesn’t track programs that come out of USDA because they usually don’t impact the wood products or forestry industries. “We understood BCAP to have a more agricultural orientation to foster new fuel sources, and we fi gured there would be a regulatory process before money was given out,” he says.

The CPA and its members met with the Offi ce of Management and Budget and USDA BCAP personnel last fall, Ju-lia says. “At that point, the staff who put BCAP together quickly admitted their mis-take. Knowing very little or nothing about the wood products or composite industry, they put everything they could think of on the eligible materials list without consider-ing the implications. They never met with stakeholders or asked questions or did an environmental impact statement.”

As CPA members understood it, the USDA was going to revisit BCAP criteria and request public comment before issuing funds, Julia says. At the end of November, a Notice of Funds Availability was released even though USDA was still sitting on the

regulations. “At that point, we intervened and met with members of Congress over the next month to warn them they were about to fail at what they wanted to accom-plish,” Julia says. “We support BCAP. It’s a great idea, but not if all that is really going to happen is that you’ll pay companies dou-ble for the materials they’re already selling to somebody else. There’d be no incentives to go out and develop a new fuel source when someone can get double what they’re getting now by selling it to somebody else.”

More Changes Aside from a prohibition on certain

wood materials, another proposed change in the rule is to increase the acceptable moisture content of the materials received. USDA reported that many respondents didn’t agree with the current system of measuring the moisture levels of biomass deliveries to meet the dry-ton measurement standard. A common industry practice is to measure in terms of green tons, which are generally assumed to possess a moisture level of 45 percent to 50 percent. In the rule, it is proposed to modify the require-ment for moisture testing and adopt the in-dustry standard.

Currently, the BCF is required to fi gure out the green ton to dry conversion. “This

‘We support BCAP. It’s a great idea, but not if all that is really going to happen is that you’ll pay companies double for the materials they’re already selling to somebody else.’

Tom Julia, president, Composite Panel Association


requirement may result in the need for facili-ties like our demonstration facility in Upton, Wyo., to purchase additional equipment or have facility personnel perform additional tasks,” says Steve Corcoran, CEO of KL Energy Corp. KL Energy has a qualifi ed cel-lulosic ethanol demonstration facility in Up-ton that utilizes wood waste as a feedstock. He says he is supportive of the suggested woody biomass sampling methodologies that follow standard probability sampling of materials, and moisture analysis that follows standard test methods for wood fuels.

Chippewa Valley Ethanol Co., a 48 MMgy ethanol plant in Benson, Minn, uses wood waste and corncobs as a power source via a gasifi cation technology. “There should be some type of allowable moisture to the program and we would certainly sup-port moisture of around 30 percent,” says Chad Friese, CVEC commodities manager and biomass delivery coordinator. “Forty [percent] to 50 percent seems a bit high. We currently have to use a shrink in order to bring the tons in line with the zero moisture, and we’re doing that with a straight mois-ture correction shrink, not a shrink factor, as no studies that I’m aware of have detailed what a shrink factor would be for biomass,” he says. “Due to the low density and high moisture of biomass products, transporta-tion is one of the biggest costs, so by shrink-ing excessively, we limit the value that can be offset to transport and reduce the effective draw area of a conversion facility.”

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pects of the rule also seems to be an issue of concern. “We’re concerned that there are still, even though it’s generally supportive of concepts we’ve enunciated, some that aren’t specifi c enough,” Julia says. “There should be some very bright lines for what materials are eligible for subsidy, and what are not. If the draft has too much ambigu-ity and subjectivity soon you’ll have people trying to take advantage of the system in a way they shouldn’t. Vagueness is a prescrip-tion for mischief. We don’t want to come back in three or six months and fi ght this battle again because someone has discov-ered a backdoor to access our materials.”

Corcoran says though KL Energy doesn’t typically use wood materials that are used for higher value-added production, he believes there needs to be clarifi cation of what is meant by “higher value-added pro-duction.”

Funding Freeze Without warning as of Feb. 8, the

USDA terminated CHST payments and in-dicated new applications for the payments would not be accepted until the fi nal rule is in place. “We didn’t press for that,” Ju-lia says. “But I suspect this is becoming a concern for parties who are legitimate benefi ciaries of BCAP. They stopped ev-erything cold instead of just changing the eligible materials list, until they put out the fi nal rule. It’s what should have done orig-inally but benefi ciaries anticipating this money aren’t getting it. There is a 60-day comment period, but realistically, there won’t be a fi nal rule until middle of this summer so money won’t be fl owing again for another four or fi ve months.”

Friese says that while it is under-standable adjustments need to be made to the program, CVEC hopes they will get it done as quickly as possible to get the program back on line and the CHST pay-ments reinstated.

Beyond CHST payments there are es-tablishment payments, which are a second aspect of BCAP funding and are more complicated to qualify for. Establishment payments, a part of BCAP that has not yet been initiated, would cover up to 75

‘People are going to get upset along the way, but it will settle down and be a very successful program.’

Kent Politsch, public affairs branch chief, USDA’s Farm Service Agency


percent of the cost of establishing eligible woody and nonwoody perennial crops, with annual payments for up to 15 years. To be eligible for these payments, pro-duction activities must take place in des-ignated project areas—areas which may be proposed by BCFs or by groups of producers. Qualifying for establishment or annual payments requires a producer to provide a description of the eligible land and eligible crops to be grown there, including maps to show current land use, roads, railroads, rivers, barge access, cost of land preparation, and evidence of a need for suffi cient equity. A letter of in-tent from a BCF indicating the facility intends to utilize the crops grown on the eligible land must also be provided, as well as solid evidence that the biomass conver-sion facility has enough equity to operate in the future if it isn’t in operation at the time of the proposal.

Although not defi nitive, BCAP does have an estimated cap. The USDA reported it intends to cap the cost of the BCAP pro-gram at $2.6 billion, including $2.1 billion for matching payments for biomass mate-rials over the next four years, $306 million for crop establishment over the next three years, and $219 million for annual pay-ments over the next 17 years.

The public comment period for the proposed ruling ends at the beginning of April, and the USDA is confi dent the kinks will be worked out in the long term. “It will take some time, there will be some hills, val-leys and bumps in the road,” Politsch says. “People are going to get upset along the way, but it will settle down and be a very successful program.” BIO

Anna Austin is a Biomass Magazine as-sociate editor. Reach her at [email protected] or (701) 738-4968.

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Renewable Energy Solutions


CONTRIBUTION

WOODY BIOMASS By Ronalds Gonzalez, Jeff Wright and Daniel Saloni

The Business of Growing Eucalyptus for Biomass Supplying biomass is a growing business, and rapid-growth eucalyptus in the Southern U.S. could be a source of low-cost delivered biomass.

he world is actively looking for ways to speed up the synergy in bioenergy from

biomass. Research is being de-veloped throughout the entire supply chain: growing, harvest-ing, delivery (freight and stor-age), and conversion of bio-mass into energy and delivery of the bioenergy produced to consumers.

Growing biomass and producing energy from it is a business. There are several well-known advantages in using local-ly produced bioenergy in terms of the environment, local eco-nomic growth and reduced de-pendence from less than reliable foreign oil suppliers. However, bioenergy from biomass will speed up only when the business becomes more profi table.

Table 1 shows key vari-ables considered as important fi nancial and cost drivers in the production and conversion of cellulosic biomass into ethanol in a dilute acid process. For the economics of a ferment-able process—as dilute acid pretreatment followed by en-zymatic hydrolysis, fermenta-tion [yeast] and distillation—the most important features

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Biomass Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

T Eucalyptus is a forest genus that meets most of the desired features for low-cost delivered biomass. Eucalyptus is indigenous to Australia, Indonesia and Papua New Guinea and it is the most frequently planted fast-growing hardwood in the world.

Wright, an adjunct professor at North Carolina State University, stands in front of 45-month-old eucalyptus trees being grown near Loxley, Ala., with a productivity of about 13 bone dry short tons per acre per year.

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of cellulosic biomass are the cost per bone dry short ton ($/BDT) and $/BDT of fer-mentable carbohydrates. The delivered cost, $/BDT, is the cost of plantation/crop es-tablishment and maintenance plus harvesting, freight, stor-age and profi t. The $/BDT of carbohydrate is the ratio of the biomass delivered cost and the

carbohydrate content. Thus if the delivered cost is $65/BDT and the fermentable carbohy-drate content is 60 percent, the $/BDT of carbohydrate is about $108.3.

The main objective is to lower the $/BDT of biomass delivered and the $/BDT of carbohydrate (Table 1). Lower-ing the $/BDT of fermentable

carbohydrate is possible either by increasing the amount of carbohydrate content in the biomass (using genotypes with desired component properties) or by reducing the delivered cost of biomass.

The $/BDT of delivered biomass is highly affected by biomass productivity (BDT/acre/year), rotation length and

plantation/crop establishment and maintenance. Highly pro-ductive species (more BDT per unit of area) will decrease the amount of acres required to supply a specifi c volume demand, reducing the invest-ment in land. Shorter rotation lengths in combination with high productivity will also re-sult in reducing the production area. Short rotation lengths are a desired feature in biomass and hence the importance of fast-growing species. Planta-tion/crop establishment and maintenance costs will directly impact the cost per BDT. An increment in investment in land for production would increase the minimum selling prices of biomass to achieve targeted fi nancial returns.

A longer annual harvest-ing season would provide more fl exibility in the harvest-ing activity, as well as labor and machine inputs, reduc-ing costs. Harvesting costs of well-known species are an advantage with respect to bioenergy crops that are not well understood. Experienced contractors and supply chain stakeholders exist for well-understood species. Materials such as wood that are denser than grass contain more mass of cellulose and carbohydrates per unit of volume and would thus cost less in freight.

Storage is an area in which more research is required. The current simulated storage costs of biomass for bioener-gy ranges from $6 to $12 per BDT (for a 12 percent internal rate of return (IRR) in storage as a separate business unit).


Table 1. Key variables in ethanol production from biomass

Figure 2. Eucalyptus biomass delivered costs and component costs ($/BDT) at 6 percent IRR at 7.5, 10 and 12.5 BDT/acre /year for eucalyptus plantations in the Southern U.S. (BDSC scenario).



This is mainly true for agricul-tural biomass where harvest-ing windows are only two to three months per year. Thus, large volumes are required to be stored to ensure year-round supply. For instance, a facility

processing 500,000 BDT per year, if fully supplied from, for example, switchgrass, requires more than 400,000 BDT of biomass to be stored. Besides the risk of fi re, insurance and handling costs will increase

the facilitiy’s working capital. Open fi eld or enclosed storage, which provides less degrada-tion of biomass carbohydrates at a higher capital expenditure (CAPEX), are storage alterna-tives. The trade off between storage CAPEX and biomass degradation must be mea-sured. In contrast, forest bio-mass from forest plantations can supply the required bio-mass year-round without ma-jor problems with well-known logistics and experienced sup-ply chain players.

Eucalyptus is a forest ge-nus that meets most of the desired features for low-cost delivered biomass. Eucalyptus is indigenous to Australia, In-donesia and Papua New Guin-ea and it is the most frequently planted fast-growing hardwood in the world. In addition, it is the main hardwood raw ma-terial supplied to the success-ful pulp and paper industry in Brazil, Portugal, South Africa, Uruguay and other countries. Eucalyptus was introduced in the U.S. in the 1870s. Re-centlty, genetic improvement has led to cold-tolerant, higher carbohydrate content and fast-growing genotypes (Figure 1). Cold-tolerant Eucalyptus is currently growing in pilot scale trials in South Carolina, Florida, Alabama, Georgia and Texas.

To better understand the business of growing eucalyp-tus for biomass, researchers have developed a simulation model consisting of a forestry division supplying a conver-sion facility. The main fi nan-cial indicators presented are

IRR, net present value (NPV), $/BDT of biomass delivered. The cash fl ow of the project was based on establishment and maintenance costs ob-tained from forest managers currently in business. Har-vesting costs and freight were obtained from harvesting con-tractors and freight/shipping companies. In the scenario presented, the biomass divi-sion supply chain (BDSC) land investment is not considered in the cash fl ow of the project. This article presents a sum-mary of fi nancial and technical analysis in biomass supply.

Delivered costs of eu-calyptus biomass ($/BDT) within 30 miles of the facility was back calculated for three biomass productivity rates per acre at 6 percent IRR. Figure 2 shows the delivered cost of eucalyptus biomass and com-ponent costs (within 30 miles) for three biomass productivity rates of 7.5 BDT/acre/year, 10 BDT/acre/year and 12.5 BDT/acre/year at 6 percent

Figure 3. Eucalyptus biomass delivered cost ($/BDT) at 6 percent, 8 percent and 10 percent IRR and at 7.5, 10 and 12.5 BDT/acre/year for eucalyptus plantations in the Southern U.S.

Figure 4. Effect of productivity (BDT/acre/year) on plantable area and land investment for eucalypt plantations in the Southern U.S.

Shorter rotation lengths, development of more freeze-tolerant seedlings, higher stand tree density together with other silviculture practices are being developed to improve plantation productivity. These outcomes indicate that eucalyptus is a promising biomass for bioenergy production in the Southern U.S.


IRR in the BDSC scenario. Higher biomass productiv-ity lowers the depletion cost. Harvesting is simulated to be constant.

The delivered cost of eu-calyptus biomass at three dif-ferent productivity rates of 7.5, 10 and 12.5 BDT/acre/year for three different inter-nal rates of return (6 percent, 8 percent and 10 percent) are given in Figure 3. The low-est delivered cost resulted in the least costly option at 12.5 BDT/acre/year and 6 percent IRR at $50.3/BDT, while the highest cost is for 7.5 BDT/acre/year at 10 percent IRR at $63.3/BDT.

An important consider-ation is the effect of biomass productivity per acre (BDT/acre/year) on the total amount of acres required to supply a specifi c amount of biomass. Figure 4 shows the amount of

plantable (net) acres required to supply 500,000 BDT/year. At 7.5 BDT/acre/year, the area required to supply that quantity is about 13,400 acres/year for a total of about 67,000 acres given the fi ve-year rota-tion. The investment in land for production may be as high as $67 million (at 7.5 BDT/acre/year, assuming land val-ue of $1,000/acre), while for higher productivities, an area of 8,040 acres to harvest each year for a total area of 40,200 acres decreases the land invest-ment to $40.2 million. This difference in land investment impacts the delivered cost to achieve a specifi c rate of re-turn, as the values used to cal-culate IRR and NPV are based on the free cash fl ow.

Another important vari-able affecting delivery cost is the amount of acres grow-ing the biomass/raw material

around the facility. The percent of covered area is determined based on the actual percent-age of acres of that specifi c biomass with supply agree-ments between the biorefi nery and the forestland owner(s) or biomass division(s). Figure 5 shows the effect of percent of cover area around the biomass facility on freight ($/BDT) and delivery cost ($/BDT deliv-ered), assuming a productivity of 10 BDT/acre/year and an-nual supply of 500,000 BDT/year. As presented in Figure 5, when the forest cover area increases from 5 percent to 25 percent, there is a dramatic drop in freight cost, ranging from $10 to $4/BDT. A direct consequence is observed in delivered price per BDT, rang-ing from $63.4 to $57.3/BDT in the investment supply chain scenario (where land invest-ment is considered in the cash fl ow analyses), and from $54 to $48/BDT in the BDSC sce-nario (where land investment is not included).

In ConclusionEucalyptus biomass can

be produced and delivered in Southern U.S. at a competitive cost when compared with cur-rent biomass delivered costs of grasses and other hardwoods. Simulated delivered cost of eucalyptus biomass may range from $50 to $60 per deliv-ered BDT (within 30 miles) depending on site productiv-ity (without considering land investment) at 6 percent IRR. When land investment was included in the analysis, deliv-ered biomass costs increase to

a range from $59 to $72 per delivered BDT depending on site productivity.

Site productivity greatly affects delivered cost, which is why a highly productive crop/plantation will reduce deliv-ered costs with fewer acres to plant/harvest. Delivered cost of eucalyptus biomass growing at 7.5 BDT/acre/year (freight distance of 30 miles and 6 percent IRR, BSC scenario) is around $59.4/BDT while for a site growing at 10 BDT/acre/year with the same IRR and without considering in-vestment in land, the biomass delivered cost is decreased to $53.4/BDT.

There are opportunities to reduce the delivered cost of eu-calyptus biomass while achiev-ing adequate IRR. Shorter ro-tation lengths, development of more freeze-tolerant seedlings, higher stand tree density to-gether with other silviculture practices are being developed to improve plantation produc-tivity. These outcomes indicate that eucalyptus is a promising biomass for bioenergy produc-tion in the Southern U.S. BIO

Ronalds Gonzalez is a doctoral candidate working on cellulosic ethanol from various feed-stocks at North Carolina State University in Raleigh. Dr. Jeff Wright is an adjunct professor at NCSU and Dr. Daniel Salo-ni is an assistant professor at NCSU working on supply chain and life-cycle analysis of woody biomass and biofuels. Reach them at [email protected], [email protected] and [email protected].


Figure 5. Effect of percent covered area on freight costs ($/BDT) and de-livered cost ($/BDT) in two scenarios ISC and BDSC evaluated at 10 BDT/acre/year and back calculated at 6 percent IRR.


CONTRIBUTION

ALGAE By Todd Taylor

Great Green Hope: The Corporate Love Affair With AlgaeAlgae may not be ready for commercialization yet, but the federal government and several large companies are investing in its potential as a drop-in fuel and for its use in the chemicals, feed, nutraceuticals and food industries.

he summer of 2009 was dubbed the “sum-mer of algae” as indus-try, venture capital and

the federal government commit-ted more than a billion dollars to algae-related projects. Some may wonder why all this attention and whether it is deserved?

If the interest of large oil, chemical and food companies is any indicator, the answer is yes. According to Mary Rosenthal, ex-ecutive director of the Algal Bio-mass Organization, the leading algae industry advocacy group, major companies are interested in

algae as a long-term feedstock that is 100 percent renewable, feeding off of readily available nutrients, using nonarable land and nonpo-table water. Algae provide com-panies a way to benefi cially re-duce their carbon footprint. Add to that the opportunity to grow green technology jobs and even a skeptic can see why the algae industry is important. The algae industry is focused on three areas: innovation, entrepreneurship and growth, and major companies want to tap those traits.

Algae-oriented companies, from producers to end-users, are

now interested in working with large corporations because of their ability to provide funding and research, as well as access to and logistics for market, and go-to-market strategies—in marked contrast to the early days of etha-nol and biodiesel when Big Oil was viewed as the enemy.

The largest share of the at-tention has been focused on algae biofuels as drop-in replacement fuels on a massive scale. There is also interest in the chemicals, feed, nutraceuticals and food industries, as the pathway to produce non-fuel algae-derived products may be simpler than fuels, the markets may be more readily accessible and the margins may be greater.

Investing in AlgaeExamples of corporate in-

terest in algae abound. The largest single investment in any biofuel feedstock or technology came last year when ExxonMobil sur-prisingly announced it was work-ing with Synthetic Genomics to jointly develop algae-based bio-fuels. Synthetic Genomics stands to receive up to $300 million in investments from ExxonMobil based on milestones.

“This investment is an im-portant addition to ExxonMo-bil’s ongoing efforts to advance breakthrough technologies to help meet the world’s energy challenges,” said Emil Jacobs, vice president of research and


T


development at ExxonMobil Re-search and Engineering Co. in a New York Times interview. “We believe that biofuel produced by algae could be a meaningful part of the solution in the future be-cause of its potential to be an ec-onomically viable, low-net carbon emission transportation fuel.”

For years, ExxonMobil has resisted investing in any form of renewable energy, its chairman famously comparing ethanol to moonshine. ExxonMobil chose algae as its feedstock due to its potential ability to achieve the scale needed to have a major im-pact in the transportation fuels market. “We literally looked at ev-ery option we could think of, with several key parameters in mind,” Jacobs said in the same interview. “Scale was the fi rst. For trans-portation fuels, if you can’t see whether you can scale a technol-ogy up, then you have to question whether you need to be involved at all.”

Valero Energy Corp. has in-vested in the recent $16 million fi nancing for Colorado’s Solix Biofuels. Valero says it is “one ini-tiative of many that we’re explor-ing.” Other biofuels initiatives include acquiring 10 corn ethanol facilities in an effort to own the production of the ethanol it is required to blend with its gaso-line. Investing in an algae-to-fuels company gives Valero another option to meet any renewable fuels requirements, reduce expo-sure to possible carbon costs, and serve as a possible hedge against dwindling oil supplies.

British Petroleum and Mar-tek Biosciences Corp. signed a joint development agreement to work on producing microbial oils for biofuels applications. “As an alternative to conventional vege-table oils, we believe sugar-to-die-

sel technology has the potential to deliver economic, sustainable and scaleable biodiesel supplies,” says Philip New, CEO BP Biofuels. BP has agreed to contribute up to $10 million to this initial phase of the collaboration.

Boeing has been heavily in-volved in algae related research and development, including par-ticipating in test fl ights for com-mercial aviation fueled in part by algae biofuels. Boeing was one of the founders of the ABO, seeing the vision for algal biomass as a long-term feedstock for jet fuel and knowing that it needed to be heavily involved in the develop-ment of this new industry.

UOP, a subsidiary of Hon-eywell, has been participating as a key processing partner for many of the largest algae companies and projects. UOP has been in-volved in most of the test fl ights for commercial and military avia-tion and is a participant in both of the recent U.S. DOE algae consortium awards.

Algenol Biofuels, whose al-gae excrete ethanol, is working with Dow Chemical to build a demonstration plant to produce up to 100,000 gallons of ethanol per year. Dow is interested in Al-genol in order to use the ethanol as an ingredient for plastics to replace the use of natural gas. Al-genol also has an agreement with Sonora Fields of Mexico to build an $850 million project that will deliver 1 billion gallons of etha-nol for transportation fuel use per year.

Food, Feed and the Environment

Mars Symbioscience Inc. is focused on a variety of technolo-gies related to human and animal nutrition and health, as well as environmental initiatives related

to maintaining clean water and air. Its interest in algae relates to potential uses in animal nutrition, nutraceuticals and for its ability to remove carbon, phosphorous and other nutrients from contam-inated water.

Cargill Inc., one of the world’s largest agribusinesses, has worked with a number of algae enterprises, including UOP, San-dia Labs, Arizona State Univer-sity, and the Defense Advanced Research Projects Agency. At a 2006 Cleantech panel, Luca Zul-lo, then director of bioenergy at Cargill, said that algae could help address “the 500-pound gorilla of the biofuel industry”— the moral and national security implications of developing crops for fuel, ver-sus food. “I think we fundamen-tally need to look for feedstocks that can help with this issue, feedstocks that use underutilized water and underutilized land.” While Cargill has given no signs that it will enter the algae biofuels business, it seems apparent that its capabilities in logistics, com-modities, energy marketing and worldwide reach mean that Car-gill could be a signifi cant player.

An example of focusing on underutilized water for algae proj-ects is the Metropolitan Council in St. Paul, Minn., pilot project for growing algae in a wastewa-ter treatment plant. The project is intended to test whether the system can remove nitrogen and phosphorus from wastewater while growing algae suitable for biofuels production. Municipal wastewater treatment plants of-fer a promising option for algae companies as there is a ready sup-ply of nutrients, carbon, heat and water. Algae could also help ad-dress increasingly stringent envi-ronmental regulations regarding phosphorous and nitrogen re-

moval, saving the council signifi -cant money in the future.

Utilities are also investigating using algae for carbon capture. Great River Energy, a Midwest-based utility, has teamed with Minnesota’s Ever Cat Fuels LLC to open a pilot plant at a coal-fi red power plant in western North Da-kota to test how algae can be used to capture carbon and then pro-cess the algae into biodiesel using Ever Cat’s processing technology. Algae have also crossed over into the ethanol industry. Green Plains Renewable Energy, a Nebraska-based multi-plant ethanol com-pany has teamed with BioPro-cessH2O, to build two pilot algae carbon capture plants to capture fermentation CO2. A number of companies have also investigated whether algae could be used as a supplementary feedstock for corn in fermentation-based etha-nol production.

There are many opportuni-ties in the algae world today, but a note of caution is in order. Many highly qualifi ed researchers cau-tion that the widespread com-mercial use of algae for biofuels could be 10 years away. Even nonfuel uses for chemicals, car-bon capture and nutraceuticals are problematic and not ready for commercialization. Issues such as energy balance, water usage, inva-sive species and land use must be addressed before algae can be the king of feedstocks. But it might not be a good idea to bet against so many of the world’s largest companies. BIO

Todd Taylor is a shareholder in Fredrikson & Byron’s corporate, renewable energy, securities and emerging business groups. Reach him at [email protected] or (612) 492-7355.

ALGAE By Todd Taylor


CONTRIBUTION

INTELLECTUAL PROPERTY By Richard B. Hoffman

IP Pitfalls in Talking With Others

People in the renewable energy and clean technology fi elds regularly need to speak with others outside their company for solutions to ongoing research and development problems. For innovators working on a new invention who realize the need to safeguard company confi dential information and intellectual property rights in their inventions, however, the question is: Whom can you safely talk to, when and under what conditions?

ften, innovators al-ready have concep-tual thoughts about how to solve a tech-

nical problem, yet they need to speak with a knowledgeable third party because given the multidisciplinary issues of a biofuel or clean technology in-novation, for example, an in-novator’s organization simply can’t supply all the technical requirements internally. Some

common reasons that innova-tors reach out to third parties for help include:

Putting the overall fi nal process together (e.g., adding specialized high-throughput material handling equipment between a pretreatment pro-cess and a gasifi cation process)

Needing more infor-mation on one given technical point that eludes them (e.g., what catalytic material/process

is best used to solve problem X in the gen-eral situation Y)

A s s i s t a n c e from a technical ex-pert, academic or consultant on just one portion of a multifea-tured pyrolysis or spe-cial enzyme invention

Testing ser-vices from a company having the facilities and equip-

ment to test a bioby-product or machine component

Engaging an outside engineering concern or vendor for technical assis-tance and/or to spec out or build a pilot-scale prototype

Discussions at a trade show with

vendors dealing in the same


ORichard Hoffman partner, Marshall, Gerstein & Borun LLP


biomass burner subject matter area

Requirements for spe-cialized performance/ability tests undertaken on a cellulosic ethanol prototype process

Innovators are increasingly sensitive to the fact that they need to be careful about how much information they divulge when making third-party inqui-ries to preserve confi dential-ity and protect their invention. Their company must retain sole control of using and commer-cializing the overall fi nal solu-tion to the problem at hand, and must own all the related in-tellectual property (IP) rights in the invention, even against any third party the company may contact or engage.

IP Problems Each of the above sce-

narios presents varying degrees of potential IP problems. Such problems typically arise when dealing with:

Academics: The need to collaborate with academics for help with your technical prob-lem can run several risks. For example, are you dealing with a professor as an individual, his private consulting company, or with the professor’s univer-sity employer? Are you actually talking to the professor in her role as part of a third-party-sponsored research program, perhaps funded by your arch-rival competitor? Clearly, care must be taken to identify with whom you are actually dealing and in what capacity as this will impact the type of IP rights that you are able to contractu-

ally obtain. A consulting agree-ment that specifi cally addresses confi dentiality and ownership of resultant IP rights is vital to clearly delineate each party’s expectations and obligations.

Outside experts, tech-nical consultants and en-gineering concerns: When initially contacting any of these entities, care should be taken to use appropriate confi den-tial disclosure agreements (aka nondisclosure agreements) di-rected towards protecting the innovator’s confi dential infor-mation (CI). If you engage the services of such entities, other agreements may be necessary to ensure ownership of result-ing IP, such as consulting, joint research and development, con-tract research, and engineering services agreements. With such agreements, one must ensure that any inventions created (i.e., novel solutions created by the third party to the technical problem at hand) are actually transferred over and owned by the innovator’s company, which is paying for the third party’s technical/engineering services. Such agreements should be in place early on, prior to any disclosures being made, and at a time when everyone is still enthused about working to-gether to solve the problem, rather than later when the par-ties have perhaps fallen out, or when the product/process has become so wildly success-ful that each party has differ-ent views on who contributed what and when to make the invention work.

Disclosures in these situ-

ations can be further com-plicated if the third party has specialized technical expertise, or owns pre-existing IP rights that it may bring to bear on solving the innovator’s prob-lem. In this scenario, the third party will likely require that it retains the right to use such background knowledge and IP rights, as well as any new infor-mation gleaned from the proj-ect at hand, for future clients. However, even in this situation the company’s goal of getting what it pays for when hiring engineering and expert time is still attainable. That is, at a minimum, even if the company cannot get outright ownership of all IP rights, it can certainly try to negotiate a royalty-free, nonexclusive, transferable li-cense to use the third party’s IP for the innovator’s own com-mercial purposes, and possibly even an exclusive license for its own fi eld of use. The company may also be able to negotiate ownership of the resultant IP rights, subject to a nonexclusive grant back to the third party for its own use.

Equipment builders, vendors and subcontrac-tors: Disclosures made to these entities can be fraught with IP problems. Perhaps the innovator needs special biofuel processing equipment to be de-signed and built, for example, to solve a technical problem or to fi nally make his or her inventive product/process suc-cessfully work. In such cases, it is always best to also pay for any needed engineering time to solve the special problem, and

have any engineering services agreement or purchase contract indicate that the innovator’s company shall own the design and related IP rights. That way, the equipment builder/design-er/vendor cannot then go and build the same equipment for your competitor.

Sometimes, vendors help solve a given technical prob-lem, for instance regarding how one of their machines or chemicals could be used by the inventor. In doing so, they might possibly become a joint inventor if they contribute to the conception of at least one claim of the resulting patent application. The default own-ership position under U.S. law is that absent an agreement or obligation to the contrary, an individual inventor solely owns his patent rights, and joint in-ventors each own an equal and undivided interest in and to the patent rights without account-ing to the others. Therefore, if the vendor is a joint inventor, then absent a contract that as-signs the resulting IP to your company, the vendor may be free to go to other customers, including your competitors, to make, use or sell the inventive idea. Similarly, subcontrac-tors who help solve a techni-cal problem for an innovation during their work, may wish to be able to get out and com-mercialize that solution further to other biomass or renewable energy entities similarly situ-ated to your company.

Thus, in advance of any disclosures of CI to equipment builders, vendors and subcon-




tractors, use written contracts detailing among other aspects that resulting IP rights are ex-clusively owned by the inven-tor’s company in consideration for the funds paid for such ser-vices.

Prospective joint ven-ture/business partners and sales negotiations: Often CI must be disclosed dur-ing negotiations for a product sale, or even the sale of a busi-ness. However, IP issues often arise if the parties decide not to work or go into business together or otherwise do not consummate the deal. There-fore, the parties should enter into the appropriate mutual confi dential disclosure, joint development, collaboration, or

other type of IP-based agree-ments that specifi cally address IP ownership and management of IP rights, confi dentiality and nonuse obligations, and termi-nation/winding down provi-sions (whom owns what if the deal falls apart). In appropriate settings, the third-party disclo-sures are sometimes made in stages, depending on how the negotiations are going. Also, so-called “no reverse engineer-ing” clauses can be included in such agreements, commonly in the nonuse obligations to pro-hibit a receiving party (of the innovator’s CI) from reverse engineering or otherwise deriv-ing the innovator’s CI or solu-tion, and then separately using or commercializing the same.

Testing companies and repair technicians: IP related problems can arise with these entities, as they necessarily will obtain access to the innovator company’s ongoing processes and production capabilities during their work, and may become aware of a technical problem being faced by the in-novator. Normally, the work of technicians (such as in merely assembling an invention, or in performing testing and experi-ments or repairs on it, i.e., as those whom do not contribute conceptually to an invention), does not result in joint inven-torship. However, problems can arise when the innovator’s prototype still does not work, or needs improvement. Then,

while the technician is making the prototype, or doing test-ing or repairs, they may be the one to fi nd a way to render the invention operable, and thus, may become a true inventor. The innovator here at a mini-mum needs to have binding confi dentiality obligations and ideally obtain an assignment of the technician’s invention rights. Preferably, such an agreement is already in place when fi rst retaining the testing agency or technician, and be-fore any such technicians ever access the innovator company’s facilities and CI.

Some companies may re-quire that any visitor or service technician entering its premises sign an entrance form includ-

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ing, among other provisions, confi dentiality and IP obliga-tions.

Software developer: Problems here can arise under the patent and copyright laws, where absent any contracts the third party (outside soft-ware developer), who creates the needed software to solve a problem presented by the inventor, normally owns the resultant software IP rights. Special “work for hire” or software development assign-ment agreements need to be used, so the innovator’s com-pany owns all the resultant IP rights. Also, if the software de-veloper will be using, in large part, any pre-existing software or processes on your project

that they previously developed, then at a minimum the inno-vator’s company will want to get a nonexclusive license to use that new solution created by the software developer for the innovator company’s own needs and fi eld-of-use, and ide-ally an exclusive license to the same if not outright owner-ship. For example, a problem can arise when a process con-trol software consultant takes a specialized software product they distribute, and then fur-ther customizes it to suit your own special processing needs or problems.

Customers and sales representatives: Customers are often the source of identi-fying real-life problems in one’s

industry, but they sometimes consider themselves joint in-ventors (or some other type of co-owner) of the innovator company’s solution. If pos-sible, consider drafting any re-lated patent applications on the innovator’s solution to exclude any technical input provided by a customer.

A company’s own sales representatives can create IP problems. For example, once sales representatives learn about technical problems and new solutions created within their own organization, they are often eager to share that news with their customer base, trade press and the industry. But sales representatives can also provide valuable information

about what customers think are the current problems and needs facing the industry. In any event, sales representatives need to be carefully trained to reveal little, and listen well, when it comes to product/technical needs and problems in their fi eld and ongoing inter-nal research and development efforts. BIO

This is the fi rst part of a two-part series on intellectual prop-erty rights. The second part will appear in the May issue of Biomass Magazine. Richard B. Hoffman is a partner at Mar-shall, Gerstein & Borun LLP. Reach him at [email protected] or (312) 474-6621.


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Documents

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