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DuPont Biofuels Exec Outlines Company’s Growth Plans

Dupont2
DuPont’s strategy laid across the biofuels value chain. Click to enlarge.

DuPont is focused on three strategic initiatives within the biofuels industry, according to one of its bioproducts executives: developing enhanced crop hybrids (inputs) that result in higher fuel yields; developing microbes for the production of cellulosic ethanol at a price point competitive with corn ethanol; and developing microbes for the production of biobutanol at a price point equivalent to that of ethanol. (Earlier post.)

Speaking to the Citigroup “Ethanol on the Cob Conference” today, DuPont Bio-Based Materials Vice President and General Manager John Ranieri described the biofuels industry as large, growing and necessary, and said that DuPont is determined to be a major player in the field.

The key to the entire program, from DuPont’s perspective, is genetic engineering.

Today you can go in and tinker with a microbe to make things of value to the market.

—John Ranieri

On the inputs side, DuPont subsidiary Pioneer Hi-Bred International is sifting through its library of hybrids to find those with specialized grain properties that improve the efficiency of ethanol production by yielding more starch (which yields more sugar, hence more ethanol), being easier to process or yielding enhanced co-products.

Pioneer now has corn hybrids with 2-4% higher fermentation yield and high fermentation rate.

Ranieri described cellulosic ethanol as “the flywheel” to get biofuel production to the volumes required to represent a significant displacement of petroleum fuel. DuPont sees the cellulosic opportunity as multi-faceted.

First is the enhancement of ethanol yield from corn through the processing of the pericarp—a cellulosic wrapper on each kernel of corn. Being able to convert the pericarp to ethanol would add an additional 40 gallons per acre of ethanol yield. On top of that, being able to process the corn stover would add another 155 gallons per acre of ethanol to the corn ethanol yield. Subsequent to that would come the ability to process multiple types of biomass feedstock.

Successfully producing cellulosic ethanol will require, according to Ranieri:

  • Effective collection of the biomass or energy crop;
  • Cost-effective enzymatic hydrolysis to prepare the celluose; and
  • Microbes engineered to ingest and convert C5 and C6 sugars.
Dupontzmobilis

DuPont and the US Department of Energy are jointly funding a four-year research program to develop technology to convert corn stover into ethanol. Diversa is partnering with DuPont on the enzyme front, and DuPont has successfully engineered Zymomonas mobilis for full conversion of C5 (xylose) and C6 (glucose) sugars at high titers. (See chart at right.)

This work is aligned with the company’s larger strategy to develop technologies that can convert broader ranges of cellulosic crops and biomass into biofuels and biochemicals.

Ranieri positioned DuPont’s biobutanol work, now being furthered in a partnership with BP (earlier post), as an opportunity to bring something of value to the marketplace.

Biobutanol offers a number of clear benefits over ethanol:

  • With a higher energy density, it improves fuel efficiency (better miles per gallon) compared to ethanol.

  • It improves blend flexibility, allowing higher biofuels blends with gasoline;

  • It lowers the vapor pressure of fuel blends when co-blended with ethanol; and

  • It can be piped through the existing pipeline infrastructure.

The basic goal of the DuPont-BP partnership is to develop a microbe that can produce biobutanol at the same cost as ethanol production.

The real driver here is an economic driver. Can you engineer the microbe to produce butanol at a very high level? If you can, you have a very nice differentiated offering...it’s all about production.

—John Ranieri

Resources:

Comments

Angelo

This approach seems to make a lot of sense....they are working from all angles and should be commended.

Cervus

DuPont and BP are the only big players investing R&D into biobutanol that I know of. Way to go. With any luck they'll get the first fuels to market within a couple years.

Sid Hoffman

I'm no fan of DuPont or BP, but to be honest, if they're the only way bio-butanol ever makes it to market cost-competitive with gasoline then more power to them. It makes more sense than ethanol on many levels (other than cost, which they hope to change) and offers a more realistic gateway away from oil for our transportation fuels.

dan

"...price point equivalent to that of ethanol."

Uhh?!? Why not shoot for cheaper than ethanol, wouldn't that be a more attractive product. Beyond all the other reasons butanol looks superior to ethanol.

Angelo

There is one thing I always fail to understand - why is it always assumed that biofuels have to be cheaper than their petrol equivilents? I mean, it's apples and oranges. Why are they so sure consumers wouldn't pay $4/gallon for Biobutanol right now? I would. I feel like there is a huge void in market research. Consumers will pay a premium for many reasons. Market research that may have been valid 2 years ago is completely outdated, in my humble opinion.

Neil

I would agree with Angelo that more and more people would be willing to pay a "green premium" (if required) to do something about CO2. You don't have to be a doom and gloomer on global warming to decide that maybe its a good idea to reduce CO2 just in case they are right. Me ... I'm going electric.

kevin

Angelo
Money rules most people live on a need level and will not pay a primium for a good cause.

allen Z

All this talk about fuel, but none about BTC (biomass to chemicals). Granted, the volume of fuel needed t run all the cars/trucks on the road is immense, but the chemical industry is nothing to neglect/trivialize. For example, the energy (natural gas/electricity) needed to make chemical fertilizers (food) competes with petroleum refining H2 needs, which competes with electricity, and heating demands from the rest of the economy. Shifting the source of organic compounds from CH4 to biomass (w/out increasing fertiizer demand too much) would help us wean ourselves from our addiction to fossil energy/hydrocarbons. It also makes financial sense for these companies, if started early and done right.

Andrey

They seems to base their “cellulosic ethanol offensive” on existed corn ethanol infrastructure. Makes sense.

Angelo

I cannot agree. Combined with the geopolitical issues that have never been so front and center as they are now, I think producers are severely underestimating consumer demand for this type of product (Biobutanol), even at premiums close to 50%. Look at the price ranges of the vehicles we buy. Yeah, it's not for everyone, but I cannot believe this could not be sold a profit at $4/gallon.

Harvey D.

An extra $1/gal to $2/gal (USA) progressive carbon tax on fossil liquid fuels could give ethanol-buthanol the required price advantage + essential support ($4+/gal) for PHEV implementation.

Reducing the current very high trade deficit and eliminating the requirement for further Oil wars are other worthwhile advantages.

How can politicians sell it to 100 million gas guzzler owners and win the next election?

Cervus

I'd pay $4 a gallon for a secure domestitc energy source. The question is: Are there enough people like me to constitute a viable market?

SJC

The only indication I can think of is green power in 1999. In California, people would pay about 20% premium for electricity that was generated from renewable sources. They had a waiting list, because there was not enough green power production.

Freedom_First

Adding more gasoline taxes hurts many people not including the rich, middle class professionals, white greenies, yuppies, internet savey, lefty, righty, collectivist demopublicans. end of rant.

Fortunately, there is a much better way to increase the supply and use of bio-fuels. Get the government out. Declare a free market which means that anyone will be allowed to produce and sell b-f and keep all the money they earn. Likewise, buyers won't have to pay b-f taxes. If no one is allowed to stand between producers and consumers of bio-fuels, no taxes -- fees -- licenses -- etc., producers and consumers will multiply like rabbits. Instead of adding more and more restraints, unleash human energy.

Unfortunately, many people think only in terms of government solutions just like they were trained to do in government schools. The results are more laws, wars, regulations, interventions, and taxes to pay for it all.

Freedom_First

Adding more gasoline taxes hurts many people not including the rich, middle class professionals, white greenies, yuppies, internet savey, lefty, righty, collectivist demopublicans. end of rant.

Fortunately, there is a much better way to increase the supply and use of bio-fuels. Get the government out. Declare a free market which means that anyone will be allowed to produce and sell b-f and keep all the money they earn. Likewise, buyers won't have to pay b-f taxes. If no one is allowed to stand between producers and consumers of bio-fuels, no taxes -- fees -- licenses -- etc., producers and consumers will multiply like rabbits. Instead of adding more and more restraints, unleash human energy.

Unfortunately, many people think only in terms of government solutions just like they were trained to do in government schools. The results are more laws, wars, regulations, interventions, and taxes to pay for it all.

Rafael Seidl

I'm hoping BP and DuPont will actually bring their biobutanol to the European market first. There is already an EU-wide policy of having refineries blend biofuels into the regular fuel grades, and butanol has virtually the same energy density and octane number as mineral gasoline.

This would eliminates the overheads and risk associated with having to set up a new distribution infrastructure. In most EU countries, all fuel grades on the market alreaddy contain at least some biofuel, so the industry has a ready-made captive market. It can spend its money on ramping up production rather than on generating demand. This may strike life-free-or-die types as the return of the Politburo but in Europe, the main issue is no longer persuading consumers of the merit of biofuels but rather, one of preventing the free rider syndrome.

Thanks to high taxation, Europeans are also used to paying very high prices at the pump ($6-$7 per US gallon). A 10% increase in the true cost of the product therefore corresponds to a consumer price increase of just 4-5%. This reduced price sensitivity to production cost should make it a little easier for biobutanol producers to ramp up the volume. That said, pols may still want to consider a tax incentive in the context of the "20 by 20" program to accelerate the transition towards renewables and actually meet the target.

By introducing biobutanol in a comparatively receptive market first, the biofuels industry could iron out the inevitable teething troubles with this new technology before attempting to penetrate the US market, where extreme consumer price sensitivity and entrenched ethanol producers represent much higher barriers to commercial success.

Andrey

Ethanol is not without it merits. It is way more effective oxygenate agent and octane booster then butanol, especially considering that in 2006 bioethanol will account for 4% of US gasoline while biobutanol share is zero. Prices for bulk ethanol fluctuated from 2.80 to 1.70 per gallon this year, without factoring in direct and indirect subsidies.

Freedom Fetish

I agree with Freedom First, my brother in freedom. Government should get out of the way and we'll be on biofuels lickety split.

Getting government out of the way solves every problem. In fact, I once had someone shoot me with an arrow? Instead of cutting off the arrowhead (as it had gone through the skin) then pulling out the two pieces, I simply eliminated government.

Not only did the whole arrow disappear magically, my arm became as strong as Popeye's.

Freedom Fetish

I agree with Freedom First, my brother in freedom. Government should get out of the way and we'll be on biofuels lickety split.

Getting government out of the way solves every problem. In fact, I once had someone shoot me with an arrow? Instead of cutting off the arrowhead (as it had gone through the skin) then pulling out the two pieces, I simply eliminated government.

Not only did the whole arrow disappear magically, my arm became as strong as Popeye's.

earl

There will be further energy bills in the next congressional session.Many are already being sold on alternatives due to a basket of issues.

I agree with Cervus on energy security.Many emphasize greeness.Others are for jobs for Americans.Lower deficit?There is a consensus building on building an alternative fuel infrastructure.I dont care that we may arrive at the same point for different reasons and I will pay a premium for all of the above reasons.

Freedom_First

Sorry about my double posts. I blame myself for not updating My Opera 6.0 software which is quite old.

"Getting government out of the way solves every problem. In fact, I once had someone shoot me with an arrow? Instead of cutting off the arrowhead (as it had gone through the skin) then pulling out the two pieces, I simply eliminated government."

This is a good reason to seperate school and state. There are graduates who are incapable of reasoned thought.

Pick a product that is widely used and not regulated.
For example, tomatoes. Anyone can grow and sell them without permits, licences, fees, taxes, etc. The result is that tomatoes are widely avaiable and cheap.
Now, regulate tomatoes with the same taxes, licenses, permits, fees, etc. that are used on alcohol. You would double or triple the price. For higher prices, have the government treat tomatoe plants like it currently treats hemp plants. You could raise the price of tomatoes to a thousand dollars. Then, clueless people like fetish will call for more government intervention to reduce the price.

Freedom Fetish

Once again, my ideological soulmate hit the nail on the head. What two things are more comparable than tomatoes and alcohol? I can't think of two better things to compare!

We shouldn't regulate food at all. If someone gets sick from rotten meat, the market will solve that by punishing the company - even if they're a monopoly. And there should be a free market for crack and heroin - with definitiely no restrictions about where it can be sold. Remember - regulation is evil!

This is totally off-topic, but have I ever mentioned that I once was having marital problems -- wife cheating on me, stealing money for crack, and so on. My solution? I eliminated government. Next thing I knew, she was in the kitchen, barefoot and pregnant, obeying my every need and desire.

BSC

Knowing DuPont's history of not being able to convert anything worthwhile from lab to commercial product in the recent years, I would be very surprised to see the bio-butanol from DuPont become reality.

transparent

For the Freedoms here I would suggest that each sitting on opposite ends of a balance pole would greatly assist the bicyclist across a tightrope. It seems clear that regulation is necessary to protect the general public, the people, whom are supposed to constitute the "government" from poor products and services. Obviously regulation becomes onerous when the "government" does so for verticle rather than horizontal benefit.

With regard to pricing biofuels - it would seem reasonable that to build market share for any new product it must generally compete on cost (in the US market anyway) first. Since most of the bio-refinement processes are significantly less costly than petro-refining, serving up bio-diesel in particular, at cost less than petro should motivate the market:
1) to adopt new hardware, flex, diesel, HEV
2) become "green" by lowering their fuel costs

Global Green's announcement today claims $20.00 per barrel for photo-bio-reactor oil on a commercial scale. Pass the savings into the market via small scale producers/sellers who can essentially sell fuel "by the side of the road" sorta like tomatos (via a certification process) and watch how many people start buying bio-capable diesels.

Freedom_First

"What two things are more comparable than tomatoes and alcohol?

I was giving an example of how a free market lowers prices and increases production while regulation and government control increases prices and lowers production. There is a free market in tomatoes which is why tomatoes are plentiful and cheap. Alcohol is highly regulated so the price that the consumer pays is a lot more than the cost of production. Drugs are even more regulated than alcohol which is why the price of drugs are astronomical. The free market price, the cost of production, of a pound of marijuana is only a few dollars. As a result of government laws and regulations, the price is a thousand times more.

In order to increase the production of Bio Fuels and lower the price, it makes a lot of sense to establish a free market in Bio Fuels.

"We shouldn't regulate food at all.

Many foods are not regulated. Have you never eaten food from a garden or farm stand? I have eighteen tomato plants in my backyard which are completely unregulated, no license, permits, or fees. I hope that you did not get sick everytime you ate your mother's cooking or friend's cooking because they were not licensed food providers.

"And there should be a free market for crack and heroin - with definitiely no restrictions about where it can be sold. Remember - regulation is evil!"

If I want to buy a plant-derived drug such as heroin or cocaine, why is that your business?

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