As some of you may know, I am writing the renewable diesel chapter for a book on renewable energy. My submission is due at the end of July. The chapter is well underway, but I have a nagging feeling that I am forgetting to address something. So, I wanted to share the outline I have, and see if anyone has any comments. If you know of a substantial feedstock that I have missed, or can think of some things you think should be covered in a specific section, let me know.

For instance, in the section on environmental considerations, I am going to point out that tropical forest is being cut down to produce palm plantations for palm oil. On the other hand, biodiesel, unlike petroleum diesel, is non-toxic. What else? Are there specific, little known facts about rapeseed oil that I should include? Just things like that. Basically, if you were reading a comprehensive story about renewable diesel, what specifically would you hope to see covered? To my knowledge, what I am writing has not been comprehensively covered before. I don’t know of any other work that has an extensive compare/contrast between biodiesel, SVO, green diesel, etc. I think many people hear “biodiesel”, and think it’s all the same.

The intent here is to provide a completely objective view of renewable diesel as an option in the future. I will cover pros and cons. As I said, the chapter is well underway, and I have portions of all sections done. But I just want to make sure I haven’t overlooked anything major. I can’t share any of the actual writing, as one stipulation is that this material may not have been published elsewhere. But here is the outline I have at the moment:

Renewable Diesel

Straight Vegetable Oil (SVO)

Biodiesel

• Definition/Production Process
• Fuel Characteristics
• Energy Return
• Glycerin Byproduct

Green Diesel

• Definition/Production
• Hydroprocessing
• Gasification/Fischer-Tropsch

Feedstocks

• Soybean Oil
• Palm Oil
• Rapeseed Oil
• Jatropha
• Algae
• Animal Fats

Environmental Considerations

I have written a few posts in the past about Jatropha curcas, a tropical shrub with the potential to make an important contribution to our fuel supplies. (See here and here for previous essays concerning jatropha). While I believe that the present status of jatropha has been exaggerated, I believe the potential is enormous. I want to devote the next couple of essays to why I believe this.

In this essay, I want to provide a synopsis of jatropha by supplying an excerpt from the chapter on renewable diesel that I wrote for Biofuels, Solar and Wind as Renewable Energy Systems: Benefits and Risks. I will fill in some details in the next essay.

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7.1.1 Jatropha

Jatropha curcas is a non-edible shrub native to tropical America, but now found throughout tropical and subtropical regions of Africa and Asia (Augustus et al. 2002). Jatropha is well-suited for growing in arid conditions, has low moisture requirements (Sirisomboon et al. 2007), and may be used to reclaim marginal, desert, or degraded land (Wood 2005). The oil content of the seeds ranges from 30% to 50%, and the unmodified oil has been shown to perform adequately as a 50/50 blend with petroleum diesel (Pramanik 2003). However, as is the case with other bio-oils, the viscosity of the unmodified oil is much higher than for petroleum diesel. The heating value and cetane number for jatropha oil are also lower than for petroleum diesel. This means it is preferable to process the raw oil into biodiesel or green diesel.

Jatropha appears to have several advantages as a renewable diesel feedstock. Because it is both non-edible and can be grown on marginal lands, it is potentially a sustainable biofuel that will not compete with food crops. This is not the case with biofuels derived from soybeans, rapeseed, or palm.

Jatropha seed yields can vary over a very large range – from 0.5 tons per hectare under arid conditions to 12 tons per hectare under optimum conditions (Francis et al. 2005). However, if marginal land is to be used, then yields in the lower range will probably by typical. Makkar et al. determined that the kernel represents 61.3% of the seed weight, and that the lipid concentration represented 53.0% of the kernel weight (Makkar et al. 1997). Therefore, one might conservatively estimate that the average oil yield per hectare of jatropha on marginal, non-irrigated land may be 0.5 tons times 61.3% times 53.0%, or 0.162 tons of oil per hectare. Jatropha oil contains about 90% of the energy density of petroleum diesel, so the energy equivalent yield is reduced by an additional 10% to 0.146 tons per hectare. While this is substantially less than the oil production of soybeans, rapeseed, or palm oil, the potential for production on marginal land may give jatropha a distinct advantage over the higher-producing oil crops.

A commercial venture was announced in June 2007 between BP and D1 Oils to develop jatropha biodiesel (BP 2007). The companies announced that they will invest $160 million with the stated intent of becoming the largest jatropha biodiesel producer in the world. The venture intends to produce volumes of up to 2 million tons of biodiesel per year.

Jatropha has one significant downside. Jatropha seeds and leaves are toxic to humans and livestock. This led the Australian government to ban the plant in 2006. It was declared an invasive species, and ‘too risky for Western Australian agriculture and the environment here’ (DAFWA 2006).

While jatropha has intriguing potential, a number of research challenges remain. Because of the toxicity issues, the potential for detoxification should be studied (Heller 1996). Furthermore, a systematic study of the factors influencing oil yields should be undertaken, because higher yields are probably needed before jatropha can contribute significantly to world distillate supplies (see Calculation 1). Finally, it may be worthwhile to study the potential for jatropha varieties that thrive in more temperate climates, as jatropha is presently limited to tropical climates.

7.1.2 Calculations

Calculation 1: Consider the potential for displacing 10% of the world’s distillate demand of 1.1 billion tons per year with jatropha oil. To replace 10% of the world’s distillate demand will require 110 million tons of distillate to be replaced. Jatropha, with about 10% less energy than petroleum distillates, will require 122 million tons on a gross replacement basis (i.e., not considering energy inputs). On marginal, non-irrigated land the yields will likely be at the bottom of the range of observed yields. At a yield of 0.146 tons per hectare (the lower range of yields), this would require 836 million hectares, which is greater than the 700 million hectares currently occupied by permanent crops.

An estimated 2 billion hectares of land is considered to be degraded and perhaps suitable for jatropha cultivation (Oldeman et al. 1991). There are also an estimated 1.66 billion hectares in Africa that are deemed suitable for jatropha production (Parsons 2005). This could provide a valuable cash crop for African farmers. But, until an estimate is made of the energy inputs required to process and distribute the jatropha-derived fuel on a widespread basis – especially on marginal land – the real potential for adding to the world’s net distillate supply is unknown.

7.2 References

Augustus, G.S., Jayabalan, M., & Seiler, G.J. (2002). Evaluation and bioinduction of energy components of Jatropha curcas. Biomass and Bioenergy., 23, 161-164.

BP. (2007). BP and D1 Oils Form Joint Venture to Develop Jatropha Biodiesel Feedstock. Retrieved July 14, 2007 from the BP corporate web site: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7034453

DAFWA, Department of Agriculture and Food, Western Australia. (2006). Jatropha Banned in WA. Retrieved August 3, 2007 from http://www.agric.wa.gov.au/content/sust/biofuel/191006jatrophe.pdf

Francis, G., Edinger, R. & Becker, K. (2005). A concept for simultaneous wasteland reclamation, fuel production, and socio-economic development in degraded areas in India: Need, potential and perspectives of Jatropha plantations Natural Resources Forum 29 (1), 12–24.

Heller, J. (1996). Physic nut Jatropha Curcas L. Promoting the conservation and use of underutilized and neglected crops. Institute of Plant Genetics and Crop Plant Research (Gartersleben) and International Plant Genetic Resources Institute: Rome Vol. 1.

Makkar H., Becker K., Sporer F., & Wink M. (1997). Studies on the nutritive potential and toxic constituents of different provenances of Jatropha curcas. Journal of Agricultural Food Chemistry 45, 3152–3157.

Oldeman, L. R.,. Hakkeling R. T. A., & Sombroek, W. G. (1991). World Map of the Status of Human-induced Soil Degradation: An explanatory note. Wageningen, International Soil Reference and Information Centre, Nairobi, United Nations Environment Programme.

Parsons, K. (2005). Jatropha in Africa: Fighting the Desert & Creating Wealth. EcoWorld. Retrieved July 14, 2007, from http://www.ecoworld.com/home/articles2.cfm?tid=367

Pramanik, K. (2003). Properties and use of Jatropha curcas oil and diesel fuel blends in compression ignition engine. Renewable Energy Journal, 28, (2), 239–248.

Sirisomboon, P., Kitchaiya, P., Pholpho, T., & Mahuttanyavanitch, W. (2007). Physical and mechanical properties of Jatropha curcas L. fruits, nuts and kernels, Biosystems Engineering, 97, (2), 201-207.

Wood, P. (2005). Out of Africa: Could Jatropha vegetable oil be Europe’s biodiesel feedstock?, Refocus, 6 (4), 40-44.

The following is a guest post by John Benemann. John has many years of expertise in biomass conversion, and previously co-wrote a guest piece on cellulosic ethanol. On the subject of biodiesel from algae, he literally wrote the book.

I originally wrote an article over a year ago in which I mentioned the potential of algal biodiesel. I still believe, as I did then, that biodiesel (or more broadly, renewable diesel) is a far superior fuel to ethanol for reasons I outlined in that essay. However, over the past year, the more I learned about the prospects of biodiesel from algae, the more it started to look to me like cellulosic ethanol: Technically feasible? Yes. Commercially feasible? Nowhere close, and the prospects don’t look good any time soon. (However, as in the case of cellulosic ethanol, I believe the technology has some potential, so the government should fund the research).

This was a bit disheartening for me, because I had high hopes that we had an option for replacing a large amount of our fossil fuel usage with this renewable option. I no longer believe that, and recent work by Krassen Dimitrov (PDF warning) had reinforced my doubts. When I read the guest post at The Oil Drum by fireangel, “Has the Algae Cavalry Arrived“, my first thought was “Nice work.” My second thought was, “I should have jumped on this and investigated thoroughly eight months ago when those nagging doubts started to creep in.” One nagging question I have had since I first read about biodiesel from algae is “Why would NREL terminate the project if the prospects really were good?”

But should there be any further doubts, here is a guest post from a man who knows as much about this subject as anyone else in the world. And he bears bad news for those who had visions of driving around in algae-fueled transportation.

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I saw with some interest the guest post on “Has the Algae Cavalry Arrived” posted by Heading Out and written by fireangel about the claims being made by GreenFuel Technologies (GFT) Corporation. I have some standing in this matter, both as Manager of the International Network on Biofixation of Carbon Dioxide and Greenhouse Gas Abatement with Microalgae (operated by the Int. Energy Agency, Greenhouse Gas R&D Programme) and also as a researcher in this field for over 30 year. My comments here are my own, of course, and don’t necessarily reflect those of the GhG R&D Programme or others involved in the Biofixation Network. In brief:

1. The post by fireangel, based on the analysis by Dr. Krassen Dimitrov’s, is generally correct, although some details regarding algae physiology and mass culture are arguable. However, those would not change the general conclusions of this posting. Well done!

2. The claims for biodiesel production rates being made by GFT, among many others in this field, exceed anything based on biological or physical theory, as also pointed out in this posting. They are truly bizarre.

3. The use of closed photobioreactors (>$100+/m2) for such applications is totally absurd.

4. I am on the record as stating that this is “It’s bizarre; it’s totally absurd.” (see below article from the American Scientist last year, which quotes me to that effect. This was a correct quote, and in context).

5. Open ponds, at <$10/m2 can be as productive as closed photobioreactors. The arguments that closed systems are better than open ponds are incorrect – they both have their particular applications and benefits/drawbacks. It all depends on the situation and applications. The main difference is that open ponds are much cheaper.

6. Open ponds may plausibly be considered for algae biofuels production, but this assumes that indeed the required R&D is successful, a very BIG IF (but that is true of all R&D). But it is worthwhile trying, as we must try all plausible options. But we must also reject those that, as pointed out in this posting, violate first principles and have other major up-front failings.

7. I was the Principal Investigator and main author of the U.S. DOE Aquatic Species Program (ASP) Close-Out Report [RR: You can download this 328 page PDF, which I have actually read, here], and thus am rather familiar with it. The report was published by NREL with their own introduction that paints a perhaps somewhat too-positive picture in light of the actual data and results. Thus it should be used with some caution. This report was meant to just summarize the work done by the ASP, which spent about $100 million, (in today’s dollars) over about a decade and a half.

8. Microalgae biofuels generally, and algae biodiesel production specifically, is still a long-term R&D goal (likely about 10 years), that will require at least as much funding as the ASP, if not more, and success is, as for any R&D effort, rather uncertain.

9. Some near term applications can be considered, in wastewater treatment specifically (but, wait, do not rush to your nearest algae wastewater treatment ponds – there are thousands of these around, but they are mostly very small and their algae have little or no oil, at least the way that we operate those systems at present. Making oil from algae grown on wastewaters also still requires significant R&D).

10. There are now scores of venture-financed companies, university research groups, government labs, garage start-ups, GFT licensees, web sites, and on and on claiming that they have, can, may and/or will produce algae biodiesel, at low cost, high productivity, soon, etc. None are based on data, experience, reality or even a correct reading of the literature.

11. I am not aware of any work in this field done by Prof. Briggs at U. New Hampshire, outside from an old website that quotes the Aquatic Species Program Close Out Report. There is no basis for the projections he makes for very high biodiesel production rates.

12. Even if R&D proves successful and we can actually produce algae biofuels (maybe even biodiesel) economically (whatever the economics may be a decade or so from now), even then, I am sorry to say that due to resource (land, water, etc.) limitations, algae will not replace all our (or their) oil wells, cannot solve our entire global warming problem, or make me rich quick, at least not honestly. But maybe this technology could be developed in the next few years so that in the future it can make a contribution to our energy supplies, our environment and human welfare.

We will in the future need all such technologies and must in the present study and develop all those that appear at least on their face plausible. But we also must reject those, as in the present case, that are based on absurd claims (such as in this case of productivity) and bizarre contraptions (e.g. closed photobioreactors).

There are no silver bullets, no winner-take-all technologies, no technological fixes, the solution to our energy and environment crisis can only come from, in order, ‘demand’ management, efficiency improvements, and new energy supplies, to which, maybe, algae processes can contribute.

I hope that this posting helps persuade GFT, and all others in this “business”, to CEASE AND DESIST from the absurd and totally bizarre claims they are making. PLEASE!!

Cheers.

John R. Benemann, Ph.D.
jbenemann@aol.com

American Scientist Article Excerpt

The full article is:

Grow Your Own?

The excerpt to which Dr. Benemann referred:

The people now working on these and several similar commercial ventures are clearly eager to make growing algae a going business in this country. Yet it’s not hard to find experts who view such prospects as dim indeed. John R. Benemann, a private consultant in Walnut Creek, California, manages the International Network on Biofixation of CO2 and Greenhouse Gas Abatement with Microalgae for the International Energy Agency. He helped author the final report of the Aquatic Species Program and has decades of experience in this field. “Growing algae is cheap,” he says, but “certainly not as cheap as growing palm oil.” And he is particularly skeptical about attempts to make algal production more economical by using enclosed bioreactors (rather than open ponds, as were used for the Aquatic Species Program). He points out that Japan spent hundreds of millions of dollars on such research, which never went anywhere. Asked to comment about why there is so much effort in that direction now, he responds, “It’s bizarre; it’s totally absurd.”

First, thanks to all who contributed ideas. You may have an entirely different opinion on the most important energy stories. Feel free to share it. Many of these stories were contributed by various readers. Comments by readers are italicized. If you want to know who wrote what, you can see the entire comment thread here.

Here are my Top 10 Energy Stories of 2007

1. Oil price soars as media becomes Peak Oil aware

One reason I felt pretty safe in making the $1,000 bet on oil prices is that a move from $60 – the price in January – to $100 – the price at which I would lose the bet – would be unprecedented. Of course a worldwide peak in oil production will also be unprecedented, and I expect oil prices to soar when that happens. While I still don’t think we have quite peaked, what did happen is that Peak Oil awareness really hit the mainstream in 2007. I started noticing a great many stories on Peak Oil (and quite a few on Peak Lite), especially following the ASPO Conference in October. This was right in the middle of the sharp run-up in prices. So I believe that a major factor contributing to the fast run-up was the sudden realization by a critical mass of people that Peak Oil is on top of us. In that case, the value of oil will be much higher.

In addition to record oil prices, back in the spring we saw record-high gasoline prices as a result of sustained, record-low gasoline inventories. Conditions are currently favoring new record-high gasoline prices in 2008.

2. Criticism of biofuels mounts

The bloom comes off the biofuel rose. European studies showed oil-palm biodiesel was actually worse for the environment due to tropical rainforest destruction, and US corn ethanol plants lost money because of overbuilding. A general biofuel backlash took root due to higher food prices and other side effects.

While I was criticizing corn ethanol before criticizing corn ethanol was cool, in 2007 the media started asking critical questions about water usage, pollution from industrial corn farming, and the impact of ethanol mandates on food prices.

3. The Chevy Volt is announced

GM has dedicated a full product team and allocated a plant for mass production — the first time in history an electric car has achieved such status.

Years after GM killed the electric car, they are bringing it back in the form of the Chevy Volt. I have long advocated the need for the electrification of transportation as one of the key elements in any Peak Oil mitigation plan. Therefore, I am very pleased to see GM making another effort at electric cars.

4. Nanosolar begins to deliver

Cost-effective solar power would be a very big silver BB in a Peak Oil mitigation plan. Nanosolar has the potential to deliver a game-changing thin-film photovoltaic technology. If you don’t know much about Nanosolar, check out this interview with their CEO: 10 Questions for Nanosolar CEO Martin Roscheisen

However, the potential for cost effective solar power also highlights the desperate need to tackle and solve the problem of energy storage for intermittent sources of energy like wind and solar power. Hopefully we will see some breakthroughs there in 2007.

5. LS9 starts up

For years I have dreamed of a microbe that eats garbage and excretes hydrocarbons. The beauty of such a system would be that the hydrocarbons would just phase out of solution, thus ensuring a low-energy purification step. If you think about it, the concept is not that far-fetched. The human body produces fats and fatty acids that are not too far-removed from the hydrocarbons that make up gasoline or diesel. There is no reason, in principle, that a microbe couldn’t be designed to do just that.

The difficulty lies in understanding the metabolic pathways well enough to modify them to produce the target molecule without severely compromising or killing the microbe. This is exactly what LS9 – the “Renewable Petroleum Company”, is attempting to do. And they have certainly assembled a team that just may pull it off.

6. Range Fuels breaks ground

In November Range Fuels – formerly Vinod Khosla’s Kergy venture – announced the groundbreaking of the first commercial “cellulosic” ethanol plant in the U.S. While I dispute the terminology (as I explained in this essay, it is actually a gasification process, which is not specific to cellulose), the process does have a chance to be a success in the long-run. Short-term, I believe they will remain highly dependent on generous subsidies because the capital costs for gasification processes are so high. But on down the road I think gasification makes a lot more sense than most fermentation processes.

One thing that I would have done differently would have been to produce diesel instead of ethanol. Once syngas is produced in a gasification step, there are many different products that can be made. It is not particularly efficient to produce ethanol in this process, but this is the kind of thing you end up with when the government is picking technology winners.

I do think Range Fuels has a high likelihood of becoming a significant technology. What little information is available certainly sounds promising, including the result from EBMUD that the Klepper gasifier was the most efficient.

7. First application for US nuclear plant in 30 years

NRG announces first application for US nuclear plant in 30 years:

NRG South Texas Nuclear

They propose to use GE’s Advanced Boiling Water Reactor technology.

My personal belief is that we are going to need nuclear power to continue making a significant contribution toward our electricity needs. This will be especially true if electric transport takes hold. Therefore, I think it is a very big story that 2007 saw the first application for a new U.S. nuclear plant in 30 years.

8. Carbon capture & sequestration moves forward

The FutureGen alliance announces the site for its demonstration plant on Tuesday, Dec. 18:

FutureGen Announcement

For those not familiar with it, FutureGen is a clean coal demonstration plant that will include carbon capture and sequestration. There are 4 finalist sites. Two in Illinois and two in Texas. The purpose of the project is to demonstrate commercial scale CCS technology.

FutureGen selected Mattoon, IL for their site.

FutureGen runs a combined cycle instead of the single cycle of existing coal plants. Combined cycle plants can achieve 50-60% thermal efficiency vs. the 33% typical of single cycle, so it’s quite possible FutureGen will deliver more kWh/ton of coal than existing plants.

9. Progress on next generation biofuels

The biofuel spotlight turned to the future. Dozens of startups focused on cellulosic ethanol, gasification and other next-gen processes competed for headlines with “green diesel”, butanol and other biofuel initiatives from the oil majors.

Most of the oil majors have taken a pass on the ethanol craze, but they are looking at other biofuels. 2007 saw announcements from BP that they would team with D1 Oils to produce biodiesel from jatropha; from ConocoPhillips that they would team with Tyson Foods to produce “green diesel” from waste animal fats; and that BP and Dupont would team up to produce bio-butanol. (I wrote a reality check on bio-butanol here).

10. US Navy funds Bussard Fusion

I think you have to include the US Navy funding Bussard Fusion in there:

http://www.defensenews.com/story.php?F=3139619&C=navwar

Bussard died a couple months ago. I had really given up on fusion, but his work actually appears to have a reasonable change to work. Hopefully with more funding his team will be able to make it work.

Yes, Dr. Bussard’s work will be carried on. First step is to construct WB-7 and replicate the results achieved with WB-6. Hopefully by the end of April 2008. If that works, then on to WB-8, and then an actual power generating plant.

The rest of the list (in no particular order), many of which could have easily been in the Top 10 list:

11. King Coal is still king

If we look for the stories that did not attract attention, surely one of the big ones has to be the continued surprising vitality of the international coal industry. King Coal has officially been dead for a long time. Who would have predicted that, 10 years after Kyoto, coal would once more be where it’s at, supplying more Btus to the world than ever before?

12. US Coal Plant cancellations, headlined by TXU cancelling 8 of 11 planned plants.

CO2, the primary driver behind the other half of our top 10 stories, has long played in Europe but will only achieve global influence by spreading through the US into the developing world. 2007’s coal plant cancellations marked the tipping point.

13. Al Gore wins Nobel Prize for work on Global Warming

Gore’s tireless efforts to educate the world on Global Warming was recognized with this year’s Nobel Peace Prize. Tiny Carthage, Tennessee now claims two Nobel Laureates. (Cordell Hull is the other).

14. Shell releases details of their shale oil process

Probably the most important energy announcement was Shell’s release of info on their proprietary in-situ process for generating oil from oil shale. Could open a whole new branch of the oil industry, put a cap on the price of oil from conventional fields, and thereby inject some realism into windy dreams. But it turns out that Shell has been working towards this for about a quarter of a century. “Incremental advances” indeed!

15. Resource nationalization grows

While the seizure of the assets of international oil companies by Hugo Chavez got the most press, many other countries are moving to nationalize their oil resources. Many other countries, and even states like Alaska, are also passing laws to increase their tax revenues from the extraction of oil. The U.S. needs to sit up and take notice, because this will further constrain supplies. We can’t continue to count on a steady supply of oil from countries who don’t like us, yet we lack the political will to reduce our dependence on these countries.

16. New efficiency record for silicon PV – 42.8 percent from sunlight at standard terrestrial conditions

http://www.physorg.com/news104501218.html

The highly efficient VHESC solar cell uses a novel lateral optical concentrating system that splits solar light into three different energy bins of high, medium and low, and directs them onto cells of various light sensitive materials to cover the solar spectrum. The system delivers variable concentrations to the different solar cell elements. The concentrator is stationary with a wide acceptance angle optical system that captures large amounts of light and eliminates the need for complicated tracking devices.

In a way I find the Nanosolar story more compelling since they are actually in commercial production now. Still, the prospect of high efficiency PV without using exotic and/or toxic materials gives me hope.

17. Manpower shortages in the energy sector

Big Oil’s Talent Hunt

From the article:

ConocoPhillips (COP) has grand plans. With demand for oil soaring, the company announced on Dec. 7 that it will boost its exploration and production budget by 8%, to $11 billion, a war chest intended to fund massive projects from Canada to China to the Caspian Sea.

But there’s a potential obstacle to the company’s vision: not enough people to get the work done. Half of Conoco’s employees are eligible for retirement within five years. Unless older workers can be replaced, Conoco’s expansion could be costlier and slower than planned. In an interview with BusinessWeek, CEO James J. Mulva said that the lack of talent is one of the most dangerous threats to his company’s long-term health. “People are a big concern,” he said.

This is not just a big oil story. Lack of workers is hitting all sectors of the energy industry. It seems that college students would rather be lawyers or investment bankers than scientists and engineers.

18. Texas surpassed California in wind energy

This signals a shift in wind from high-cost, subsidized eco-darling to cost-effective energy source. As the low-cost provider, wind now thrives in low bureaucracy states such as former oil-king Texas. Meanwhile high-regulation states such as California lag behind.

19. Potential PV improvement

Potential improvement on PV front

Transparent electrodes created from atom-thick carbon sheets could make solar cells and LCDs without depleting precious mineral resources, say researchers in Germany.

Solar cells, LCDs, and some other devices, must have transparent electrodes in parts of their designs to let light in or out. These electrodes are usually made from indium tin oxide (ITO) but experts calculate that there is only 10 years’ worth of indium left on the planet, with LCD panels consuming the majority of existing stocks.

“There is not enough indium on earth for the future development of devices using it,” says Linjie Zhi of the Max Planck Institute for Polymer Research in Mainz, Germany. “It is also not very stable, so you have to be careful during the fabrication process.”

20. Study analyzes off shore wind in US Northeast

http://www.physorg.com/news89650495.html

The wind resource off the Mid-Atlantic coast could supply the energy needs of nine states from Massachusetts to North Carolina, plus the District of Columbia–with enough left over to support a 50 percent increase in future energy demand–according to a study by researchers at the University of Delaware and Stanford University.

The study marks the first empirical analysis in the United States of a large-scale region’s potential offshore wind-energy supply using a model that links geophysics with wind-electric technology–and that defines where wind turbines at sea may be located in relation to water depth, geology and “exclusion zones” for bird flyways, shipping lanes and other uses.

21. A123Systems mass produces next generation lithium batteries

Shipping in DeWalt’s 2007 line of 36V cordless power tools, these new cells mark the 5th wave of rechargeable batteries (lead-acid, NiCad, NiMH, Li-ion and now advanced lithium). Advanced lithium chemistries from A123 and dozens of other vendors offer the possibility of cost-effective plug-in hybrids as well as applications in the electrical grid.

22. Electricity shortages, particularly in the developing world

Some appear to be related to climate change — droughts that require major hydro cutbacks. Some are clearly due to oil prices/supplies — poor countries that burn heavy diesel in their power plants and can’t afford it at the new world prices. Some are due to bad bets on fuel sources — natural gas generators put in, and the gas supply declining sooner than planned.

23. Solar thermal heats up

For decades the SEGS parabolic trough plant in California’s Mojave desert stood alone as the only large-scale CSP plant on earth, but 2007 saw a rebirth of this technology with the inauguration of the 64MW Nevada Solar One plant and construction of plants in Spain, Australia and elsewhere. California utilities have ordered up to 1750 MW of capacity from dish-Stirling purveyor Stirling Energy Systems and startups such as Ausra are pushing the price/performance barrier with linear Fresnel architectures.

24. First Solar market value hits $20 billion

As the first mass producer of non-silicon thin film PV, FSLR cashed in big-time in 2007. Their $1.40/W manufacturing cost is a huge competitive advantage, yielding fat profits and an eye-popping 200% growth rate. True to their name, First Solar got out of the gate first, but other non-Si players are still in the race. Companies using CIGS, including the much-hyped but yet-to-deliver Nanosolar, promise to break the $1/W barrier.

25. Cooper Pairs in insulators

http://www.aip.org/pnu/2007/split/849-1.html

One of the AIP’s top stories of the year, this discovery may well help us reach a better understanding of superconductivity and insulators both. Superconductivity is of course a holy grail in energy research, and while this discovery doesn’t directly lead to a room temp superconductor, it does add to the fundamental knowledge of material in the solid state.

26. Medvedev slated to take over from Putin

http://en.rian.ru/russia/20071217/92858987.html

Essentially Putin’s Russia will continue, and that has direct implication for all the fossil fuel industry in Asia, regarding everything from global warming to export control to defense postures. Putin’s Russia, one of an energy oligarchy, will continue to express those policies likely for a good portion of the 21st century.

27. Conditions in Iraq improve enough to get the oil industry back online

http://www.rigzone.com/news/article.asp?a_id=54099

Opening the possibility that Iraq just might return to a functioning member of OPEC has direct implications on the availability of oil for import around the world.

28. USAF test flight of transport aircraft C-17 using CTL synthetic fuel

http://www.enn.com/pollution/article/24117

This heralds the onset of CTL and likely portrays our (US) future over the next couple of decades.

29. And now, for my wildcat speculation of the most important news item:

Namibia: Expert Confident About Oil Reserves

Southwest Africa will turn out to be a major oil exporting region over the next couple of decades, slowing the decrease in available net exports of oil.

30. The response of the global economy to the large increase in oil prices

Most people would have probably assumed that $90 oil would have caused mayhem in the global economy a year or two ago. Yet the effect has been relatively muted. I think this says a lot about how effectively individuals, businesses (and hats off to alternative energy firms), and governments have responded to increasing oil prices over the long term. Oil now has a much smaller (I believe around 50%) impact per GDP than it did in the 1970’s in most of the big western economies, including the US.

31. Tesla troubles

A not-positive but nevertheless noteworthy story is Tesla Motors recent troubles with putting the final touches on its long-awaited car, particularly with the transmission failure and the management shuffling.

And I love this suggestion for 2008. What a great idea this would be:

My favorite energy story for 2008 would be — Congress recognizes they cannot pick winners, and instead sets up a multi-billion dollar X-Prize competition for the first three alternate energy sources to supply reliable commercial-scale power at costs competitive with fossils.

So those were the energy stories that I, or various readers thought were significant in 2007. Were there other significant stories that we missed?

Looking back at the list, many (most?) of the stories were not anticipated at the beginning of the year. So, who knows what 2008 will bring. Any thoughts?

You know that forever I have beaten the drum that high fossil fuel prices would make biofuels more expensive due to their poor EROEI. If you are unfamiliar with the argument, it is essentially that most biofuels have very high fossil fuel inputs (and thus a low energy return). That simply means that when fossil fuels get more expensive, biofuels eventually have to follow. I always thought it was funny when people thought just the opposite would happen: As fossil fuels get more expensive, biofuels become more competitive. That could very well be true if you had a ubiquitous source for biofuels that had minimal fossil fuel inputs. But that isn’t what we have. And the Wall Street Journal finally noticed:

Biofuel Costs Hurt Effort To Curb Oil Price

Rising costs of biofuels and other alternative energies are making them less viable as substitutes for crude oil, a development that could frustrate efforts to bring oil prices down in the years ahead.

A few years ago, many energy economists predicted that higher oil prices would ensure the success of alternative energies such as biodiesel or wind power by making them more financially attractive. In many cases, though, the opposite has occurred: Even as crude-oil prices approach $100 a barrel, some alternatives look less attractive than in the past.

Many energy economists predicted that, did they? I guess that’s why I am not an energy economist. That this would happen is a no-brainer, again because of the energy inputs. How they could get it so wrong is beyond me.

One reason: Energy demand is now so intense that supplies of just about every kind of fuel are in short supply, driving up prices of the raw materials involved in making many alternative energies.

It is the same across the energy industry. That’s why projects keep coming in over budget. That’s why GTL projects have been abandoned, and CTL can’t get off the ground. And that’s why I think Shell’s oil shale efforts are doomed. (I know that ethanol prices lately have collapsed, but with high energy and corn prices, their margins are getting crushed and a shakeout is inevitable).

The problem is most acute for crop-based alternative fuels, like ethanol and biodiesel, though it has also proved true to some degree for solar power, nuclear power and other competing energy sources. Biodiesel, a fuel made from farm crops like soybean oil and palm oil, was in some cases supposed to be economically competitive with crude-oil prices as low as $50 a barrel, according to analysts who studied the industry.

What a surprise. Who could have predicted that?

The following story from Bloomberg caught my eye today:

Ethanol Drives Up Food Commodity Prices

Some notable excerpts:

Nov. 22 (Bloomberg) — Global ethanol production is driving up prices for food commodities, from feed stocks such as sugar, to meat, said Datagro, Brazil’s biggest sugar-industry forecasting firm.

U.S. production, forecast to increase more than 70 percent by 2012, will use 37 percent of the country’s current corn supply to meet output needs, up 15 percent from 2006, Datagro said. Land for soy oilseeds is increasingly being diverted to grow corn, reducing soy supply and driving up animal feed prices, according to the company. In China, competing demand for corn from the food and ethanol industries may lead the country to reduce exports and become a corn importer, Datagro said.

I think food versus fuel is shaping up to be a serious problem. While this dilemma exists even for gasoline (higher gas prices drive up costs for farmers and stretch people’s budgets) the tradeoff needs to be a good one. But the Bloomberg article concludes:

World ethanol production is forecast to total 34.5 million liters in 2006, representing 3 percent of global demand for gasoline, according to Datagro.

They must mean 34.5 billion, not million. This doesn’t seem to me like a very good tradeoff. Drive food prices higher, and we have yet to displace 3% of global gasoline demand, let alone global fossil fuel demand (much of the world outside the U.S. is largely diesel-driven). For just the United States, 34.5 billion liters would only displace about 4.6% of our annual gasoline consumption (much less on a net basis; that is if we subtract out the fossil fuels that went into producing the ethanol).

I can think of solutions that don’t have the food versus fuel dilemma. As previously discussed, we can gasify biomass, turn it into electricity, and use that to drive our PHEVs. Or, we could do more to encourage conservation. What would it take to just get a 2% reduction in fossil fuel usage? We would get lower greenhouse gas emissions while reducing global demand for fossil fuels. Yet we will do it without driving up food prices. We could encourage a move toward diesel transportation, as they have done in Europe.

On the other hand, here is a story about a biofuel that I think makes good sense to pursue:

3 Malaysian palm oil entities to merge

KUALA LUMPUR, Malaysia – Three of Malaysia’s largest palm oil producers are to merge, Malaysia’s Deputy Prime Minister said Thursday, a fusion that could potentially create the world’s biggest biofuels company and its largest publicly-traded palm oil entity.

In this case, the biofuel in question, biodiesel, has a much higher BTU value than ethanol. A diesel engine is also much more efficient than a combustion engine. The producers of palm oil are tropical countries, many of them very poor African nations that could greatly benefit from new markets for palm oil. The major caveat, though, is that we have to be careful not to encourage the expansion of palm oil plantations as the expense of rain forest.

The following graph (source unknown) shows the potential of palm oil for biodiesel:

The palm oil yield is 6,000 liters per hectare. In comparison, the ethanol yield from corn is about 3,700 liters per hectare, yet the energy content is equivalent to less than 2000 liters an acre of plam oil. As stated previously, there is also an efficiency advantage from burning palm oil or palm oil-derived diesel in a diesel engine. The result is that it would only take about 1700 liters of palm oil to displace 3,700 liters of ethanol. (See this essay for why 1 gallon of biodiesel is worth 2.25 gallons of ethanol). Looking at that chart, that means that an acre of palm oil can displace over 3.5 acres of corn ethanol.

I have made the case before that the biofuel we should put the greatest effort into developing is biodiesel. I believe that biodiesel, along with sugarcane ethanol and a healthy dose of conservation, can go a long way toward weaning the world off of fossil fuels.

If we are to seriously encourage a move to biofuels, incentives are going to be required because the economics of biofuels just can’t compete with petroleum (regardless of what Vinod Khosla thinks). Eventually depletion will cause petroleum to become very expensive, and then the economics of certain biofuels (especially those with the best energy returns) are going to start looking a lot better. But if depletion occurs quickly, we are going to wish that we had provided encouragement for all sorts of alternatives. Of course not all alternatives are created equally, and there are often unintended consequences to deal with. But overall, Congress and now two administrations in a row have shown overwhelming support for incentivizing biofuel production. There is, however, one glaring exception.

I have posed the question before of whether it ever makes sense to offer subsidies to oil companies. I would argue that it does if you want oil companies to do something that economics would otherwise argue against. As an example, let’s say in the name of energy security that Congress thought it was a good idea for oil companies to invest in solar. The oil companies wouldn’t be interested if production costs are higher than the price they expect to get for the panels. The only way Congress would convince them that they should do this is by offering an incentive to do so. Oil companies are not going to otherwise make decisions that are counter to the bottom line (unless of course they are mandated to do it, and that’s another matter altogether).

Such is the case with renewable diesel. Broadly speaking, there are two different kinds of renewable diesel. Biodiesel is normally produced by reacting methanol with animal fats or vegetable oil. (See the process description at Wikipedia). The product is actually an alkyl ester. More simply put, the product contains oxygen, and is structurally different from petroleum diesel. The structural differences can cause some problems in cold weather, and this limits the amount of biodiesel that can be blended into petroleum diesel.

The second kind of diesel is green diesel, which is chemically equivalent to petroleum diesel. This product contains no oxygen, and can be blended in any proportion with petroleum diesel. It can be made via gasification from any biomass (see the Choren process) or by hydrocracking the same fats and oils that you use to produce biodiesel. Besides the structural differences in the product, biodiesel results in a glycerin by-product whereas green diesel results in a propane by-product. (All of this is explained in more detail in my Renewable Diesel Primer).

In 2007, ConocoPhillips (Full disclosure: This is my former employer) and Tyson Foods announced a partnership in which COP would hydrocrack waste animal fats and oils provided by Tyson to make green diesel. Costs of production were around $40/bbl higher than for producing conventional diesel, but COP was able to take advantage of the $1/gal tax credit that Congress had put in place for renewable diesel to bring the costs down to parity with petroleum. Whereas corn farmers love our ethanol policy, ranchers were happy with this announcement because it afforded them an opportunity to participate in the biofuels market. Tyson Foods was also happy to have another outlet for their oils, as this would take some of the sting out of higher corn prices which had cut into their bottom line.

The fact that an oil company would benefit from “their” tax credit sent the biofuel lobby into a tizzy. They asked why an oil company should be allowed a tax credit for doing this. My answer was the same one I have earlier: To get them to do something that wouldn’t otherwise make economic sense. We can have a different debate on the wisdom of the incentive itself (i.e., unintended consequences), but if the goal is to incentivize the production of biofuels, you shouldn’t selectively decide who gets the tax credit. The 1st generation biodiesel industry wanted special treatment (a $1/gallon subsidy advantage over anyone else who might like to compete against them) and they cranked up the lobbying machine.

Democrats were particularly outraged, with Lloyd Doggett of Texas suggesting that oil companies benefiting from this tax credit was a case of legislative abuse. (Especially ironic that he is going after a Texas company, mostly to the benefit of companies operating outside of Texas). They promised to correct this by making sure only targeted companies (i.e., anyone but oil companies) could take advantage of the credit. While ConocoPhillips explained that this project would simply not be profitable without the credit, the Senate called them on it and voted to kill the tax credit. The assumption is that they either thought oil companies would subsidize a money-loser from some of their more profitable divisions, or they simply didn’t want oil companies to produce biofuel. The first assumption is naive, and the second implies that this isn’t about energy security at all, but about favoring special interests.

Yesterday, COP followed through by announcing that they were indeed going to idle the project. This is certainly a victory for less efficient 1st generation biodiesel producers, and it should also be a warning to those who think 1st generation corn ethanol is going to naturally lead to 2nd generation cellulosic ethanol. Besides the technical challenges in getting cellulosic to work commercially, cellulosic producers are going to run up against those same vested interests who wish to see the status quo maintained, and who will lobby to prevent anyone from taking away their market share.

I will repeat what someone wrote to me when Congress first announced their intentions to deny the credit: “It ain’t about the fuel… it’s about a piece of the pie.”

I have been saying this for months, and others are starting to realize the same thing:

Renewable Diesel: Biodiesel’ s Nightmare

I first heard of this process last October at an NREL presentation (they called it “Green diesel” and could not identify COP as the oil company they were dealing with,) but details remain sketchy. The fact that it refers to the process as a “proprietary thermal depolymerization production technology” and the fact that it is using existing refinery infrastructure should cause alarm to biodiesel firms, and investors.

Why should this cause alarm? Because COP claims its “renewable diesel” is chemically equivalent to conventional diesel. If this is true, it’s quite possible that it has a lower cloud point than biodiesel, and so could be used at a broader range of temperatures. In addition, since COP is using conventional refining equipment, they may also be achieving higher energy yields.

According to NREL’s Overview of Petroleum and Biodiesel Lifecycles, Biodiesel conversion requires 80 kJ of energy for every 1000 kJ of energy in the biodiesel, while petro-diesel requires only 64 kJ to produce an equivalent amount of fuel.

With the exception of small biodiesel producers using local and distributed biodiesel feedstocks such as waste vegetable oil from restaurants, I expect that petroleum refineries will end up having an economic advantage making renewable diesel in comparison to conventional biodiesel producers. This means that commodity oils, and fats available in large enough quantities to interest refineries will be bid up in price to a point where less efficient biodiesel producers will be unable to operate profitably.

I have said it before, and I reiterate: Biodiesel’s days are numbered.

Disclosure: I do own ConocoPhillips stock. As does Warren Buffet. And Jim Cramer. Must not forget about Mad Jim Cramer.

As I noted in my earlier essay More Reality Checks for Algal Biodiesel, I initially had high hopes for the idea that we might make significant amounts of biodiesel from algae. A few years ago I read Michael Briggs’ essay Widescale Biodiesel Production from Algae and thought he put together a compelling case that algae could power our transportation system. I even exchanged a few e-mails with him at one point in order to get a better perspective on his views.

Ah, but the devil is always in the details. And as I dug into the details, my hopes began to fade. I had conversations with researchers who let me know what some of the problems were, and some were potential show-stoppers. Krassen Dimitrov’s analysis of Greenfuel Technologies and their algae claims strongly suggested that photobioreactors (PBRs), as shown in the slide below from my ASPO presentation last year (Biofuels: Facts and Fallacies), have no future.

Why? Because costs are about two orders of magnitude too high. More importantly, costs are tied to energy. That means that economic feasibility won’t come about if oil prices rise by one or two orders of magnitude. This is a show-stopper for the following reason. The amount of solar insolation falling on a square meter of land is known. The cost to build a square meter of PBRs is known. If, for example, a square meter of land might be expected to produce one gallon of algal biodiesel based on the sunlight falling on the surface, but the cost to build a square meter of PBR is $100, you have a problem. You can’t afford to spend $100 of capital to produce 1 gallon of biodiesel per year. (This is the thrust of Krassen’s analysis).

My previous essay hit on this, as Bryan Wilson, a co-founder of Solix, recently suggested they could produce algal biodiesel at a cost of $33/gal (because of very high energy inputs). Now comes a new report commissioned by the British Columbia Innovation Council (BCIC) et al. to examine the viability of an algal biodiesel industry in B.C. The conclusions were not optimistic. The full report (88 page PDF) is Microalgae Technologies and Processes for Biofuels/Bioenergy Production in British Columbia. I note that my friend John Benemann contributed to the report (and 3 people wanted to remain anonymous).

The study looked at photobioreactors (as seen in the graphic above), open raceways (something like a pond), and fermentors (as corn ethanol is produced). They estimated that the net cost of production per liter for PBRs was $24.60 ($93.23 US dollars/gallon), for open raceways it was $14.44 per liter, and for fermentors was $2.58 per liter.

Biodiesel Magazine also reported on the study:

A Sober Look at Biofuels From Algae

At least 15 companies are known to be pursuing the photobioreactor concept, mostly in Canada and the United States. There is no doubt that growing algae in photobioreactors is technically feasible since successful operations doing just that exist today. There are, however, serious challenges in making this process cost-effective for low-value products such as biofuels.

So, before throwing your money in with a company working on PBRs, make sure it’s money you won’t ever need again.

What about carbon credits? I have seen this mentioned as an additional benefit that might make the economics more favorable:

What about the value of sequestered carbon in algae-based biofuels? In short, there isn’t any. Atmospheric carbon is only sequestered for a short time until it’s burned in an engine. Under existing biofuels mandates in most industrialized countries, there will be no opportunity to sell carbon offsets unless fuel production is additional, or beyond such mandates.

But the technology will surely improve?

What about economies of scale or technology improvements? Economies of scale were considered in the analysis, using very generous assumptions. Some improvements could be made, including increased automation, genetically modified algae with higher oil yields and minimized light losses. On the other hand, the main components, such as concrete, glass and machinery, are unlikely to drop in price. Since there are limits to how much oil and starch algae can produce, the result is that photobioreactors can’t produce biofuels competitively today and are unlikely to do so in the future. It’s not slightly higher than fossil fuels, but by a factor of 10 to 15.

These results may come as a surprise to many. They were, however, confirmed by a number of independent sources. The study, although intended to examine the feasibility of algae cultivation for biofuels in British Columbia, has yielded findings that also apply to other regions and worldwide.

Sure, it’s in British Columbia, which is not the best place for year-round solar insolation. But double or even triple the amount of solar insolation and the economics don’t change enough to matter. So instead of producing biodiesel for $90 a gallon, you can produce it for $30. You still aren’t economical even if you could produce it for $5/gallon.

The fermentation concept appears to hold some promise, but if sunlight is not the energy source you need some other energy source that the algae can convert into oil. That doesn’t seem especially efficient, but they claim an energy balance of 1.93 (I think they can forget about that 2nd decimal point!) against only 1.23 for the PBRs. Still, 1.9 is on the low side of desirable, given that society is currently running off of an energy return in the 5-10 range.

I have done a lot of research lately into various alternative diesel technologies as I was working on my renewable diesel chapter. One thing that became very clear to me is that the world will not be able to displace more than a fraction of our petroleum usage with biofuels. I already knew that this was the case with ethanol, but now I believe that is true of all liquid fuels. Consider this sneak preview (still in draft form) from the book:

There are approximately 4 billion arable acres in the world. There are many different feed stocks from which to make renewable diesel, but most biodiesel is made from rapeseed oil. Rapeseed is an oilseed crop that is widespread, with relatively high oil production.

Consider how much petroleum could be displaced if all 4 billion acres of arable land were planted in rapeseed, or an energy crop with an oil productivity similar to rapeseed. The average rapeseed oil yield per year is 127 gallons/acre. On 4 billion acres, this works out to be 33 million barrels per day of rapeseed oil. The energy content of rapeseed oil is about 10% less than that of petroleum diesel, so the petroleum equivalent yield from planting all of the world’s arable land in one of the more popular biofuel options is just under 30 million barrels per day. This is just over a third of the world’s present usage of petroleum, 85 million barrels per day. Yet this is the gross yield. Because it takes energy to grow, harvest, and process biomass into fuel, the net yield will be lower, and in some cases may even be negative (i.e., more energy put into the process than is contained in the final product).

The fundamental problem here is that photosynthesis is not very efficient. Consider the rapeseed oil yield above. A reader at The Oil Drum made a table that is basically the solar capture/conversion to oil from various crops. I tried to recreate the table, but it was taking far too much time (Blogger has a terrible quirk about tables), so here is a link.

Basically, the gist is that only a few hundredths of a percent of the incoming solar energy gets converted into liquid fuels. Of course some did get converted into other biomass, which could be otherwise used for energy, but generally when an acre of rapeseed/canola is planted, we get about 0.06% conversion of the sun’s energy into oil. (This exercise can still be proven by assuming the theoretical limit for photosynthesis. One must just make more assumptions and it is not as easy to follow).

Consider now direct solar capture. Let’s not even consider the record 40+% efficiency that Spectrolab announced last year. Let’s not consider any of the more exotic technologies that are pushing the envelope on direct solar capture efficiency. BP’s run of the mill silicon solar cells operate with an efficiency of 15%. That’s about 250 times better than the solar to rapeseed oil route. Or, to put it a different way, you can produce the same amount of energy with direct solar capture in a 13 ft. by 13 ft. area that you can by photosynthesis in 1 acre of rapeseed. And odds are that you have a roof with an area that size, which could be used to capture energy without the need to use arable land.

Of course the disadvantages are 1). The costs for solar are still relatively high; 2). We have a liquid fuel infrastructure; 3). Storage is still a problem. But in the long run, I don’t see that we have any chance of maintaining that infrastructure. The future is solar.