Willow Trees for Fuel
The following article starts out great, because it is using scrap biomaterial such as wood chips and
sawdust. But then it gets into the concept of growing things to be used as feedstock. The basic
problem with this is the conversion efficiency of sunlight to wood is simply too low to compete with
solar cells and batteries once the battery technology improves. To construct an ethanol or biofuel plant
usually requires the investor to be convinced that the technology will be in service long enough to
amortize the cost of the plant. As long as your feedstock is waste material, you have a sound business
if you "lock up" the sources of waste at a low price.
In other words, this scheme might make sense up to the point where they state:
"Waste products alone won't be enough to satisfy this hearty appetite." which I highlighted in red so
that you can easily find where the program goes awry.
Once you have to grow your feedstock, it no longer makes sense. This is because you must compare
this technology with that of placing solar cells on that same ground and charging batteries.
The key point here is the amortization of the cost of the fuel manufacturing plant. Just because you
don't have the battery technology today, doesn't mean that it may not be feasible in the near future;
say six years or less. If you build a plant with a business plan that calls for the plant to be paid for
over 50 years and the plant is obsoleted by other technologies in 10 years, your business is headed for
bankruptcy. At this point in time with the technology moving so quickly, it is hard to imagine that one
will not be able to place solar cells on the ground where the trees might be planted and be able to
charge plug-in hybrid vehicles (PHEV) whilst they sit in their owners' garages.
Then he starts talking about how trees "reap considerable public subsidies". Which I highlighted in
blue. As soon as your technology is dependent on public subsidies, it means that it doesn't make
economic sense on its own. After his rhetoric builds on this public subsidy basis, he goes on to project
exporting this "technology" to the United States, where there is more arable land.
The theory is that now we are supposed to believe that they have a technology that won't compete
with food. "With numbers like these, BTL is the first plant-based liquid fuel that could constitute a
viable replacement for fossil fuels while not directly competing with food production."
Isn't it obvious that they are trying to tell us that land used to grow trees could not be used to grow
crops. Where are the intelligent science and engineering adults?
Here is the article:
http://www.spiegel.de/international/business/0,1518,druck-547312,00.html
Conventional biofuels like rapeseed oil and ethanol are ecologically problematic and threaten food supplies. Now a
Germany company says it has the solution: an advanced fuel made from wood and other non-food biomass.
The facility is fairly small. And even if all goes smoothly, its production will also be fairly modest -- just 13,500
metric tons of diesel fuel a year as compared with Germany's annual consumption of 30 million tons. Still, this tiny
refinery in the eastern German town of Freiberg has managed to attract a number of highly prominent visitors,
including the CEOs and leading researchers of both Mercedes and Volkswagen.
And they won't be the only ones at the facility's grand opening on Thursday. Top managers from Shell will be
there, as will German Chancellor Angela Merkel.
After all, the small cluster of concrete silos, combustion chambers and catalyzers owned by Choren Industries is
worth paying tribute to. The only facility of its kind in the world, it is designed to turn wood into fuel for cars --
and thus represents a decisive step toward so-called "second generation"
biofuels.
Over the past few weeks, support for conventional biofuels, such as rapeseed (canola) oil and ethanol, has reached
new lows, with many doubting whether they provide any benefits at all. Promoting these first generation biofuels
through tax incentives and compulsory admixtures has proven to be a misguided approach. But the fiasco was
perfectly predictable.
Correcting First-Generation Mistakes
Production levels are simply too low when fuels are derived exclusively from grains and tubers. The environmental
benefits have been limited, and may actually do more harm than good. Plus, biofuel doesn't sit quite right with
many engines. All of this has been known, and largely ignored, for years.
Now Choren wants to mark the dawn of a new age. The plant in Freiberg uses non-food biomass instead of
traditional crops and is the first of its kind to cross the threshold from theoretical research into industrial
production. This advanced refinery was designed to furnish proof that the new fuels are feasible -- and can be
produced on a much larger scale.
Instead of sugar beets and rapeseed, the new plant processes wood as its raw material. In a pinch, it can also use
straw. Using these materials significantly increases the yields from cultivated areas. According to estimates
provided by the German Agency for Renewable Resources (FNR), the annual energy yields using the Choren
process, based on a Central European climate, are 4,000 liters of fuel per hectare (1,057 US gallons), which is up to
three times as much as previous biofuel production methods. What’s more, in contrast to production methods
using rapeseed oil and ethanol, this technique does not produce fuel of inferior quality. Choren manufactures
extremely pure diesel with virtually no sulfur. Moreover, these second generation biofuels do not harm particle
filters or engines and meet top emissions standards.
This groundbreaking technology is actually a wonder discovered through research in the former East Germany.
After World War II, the socialist state founded the German Fuel Institute in the mining town of Freiberg.
Motivated by concerns that the fledgling country could one day find itself cut off from oil supplies, chemists and
engineers worked to advance the coal conversion technology used in Nazi Germany. After all, there was no lack of
lignite -- also known as brown coal -- in the GDR.
Coal is nothing more than fossilized biomass -- a plant-based fuel. It didn't take long for the idea to make the leap
from the laboratories of the walled-in workers’ paradise to a new business venture in the free-market unified
Germany.
Finding Friends in the Right Places
Bodo Wolf worked his way through the ranks -- from coal miner to engineer -- and eventually became one of the
fuel institute's leading researchers. In 1990, just one year after the Wall came down, he and a group of colleagues
founded the company that would eventually become Choren. Wolf developed a technique based on the key elements
of the coal liquefaction process to transform wood into a synthesis gas that could be transformed in turn into a
liquid fuel (see graphic).
There followed a decade of difficult pioneering work accompanied by a growing realization that the limited
resources of a handful of scientists would never suffice to pull off such an ambitious project. By 2000, Wolf's
company was on the verge of bankruptcy when he convinced Hanns Arnt Vogels, the former CEO of the German
aerospace corporation MBB, that he had a winning idea.
Then the doors started opening. Big doors. Vogels had connections in the world of power and money. Soon Wolf
was pitching the concept to VW and Mercedes, who rapidly got on board as development partners. On the
investor front, Vogels rounded up a deep-pocketed posse of well-respected, retired captains of industry, including
former bank presidents and the distinguished green energy tycoon Michael Saalfeld.
Since then, €180 million ($285 million) has been injected into the Choren venture, says Tom Blades, who has led
the company for the past four years. The savvy Brit, who formerly worked for the oilfield drilling giant
Schlumberger, turned out to be just the man for one of the company’s major diplomatic missions: An oil company
had to come on board, ideally one that was a leader in green technology.
It took Blades a little over a year. In the summer of 2005, Shell acquired a stake in the company. The oil
corporation contributed a key component in the refining process, the Fischer-Tropsch technology, which converts
the synthesis gas into a BTL (biomass-to-liquid) fuel.
Researchers at the oil conglomerate appear to be completely convinced: “BTL is a dream fuel,” says Wolfgang
Warnecke, CEO of Shell Global Solutions in Hamburg, "the best of all the biofuels."
New Technologies, New Needs
Toward the end of the year, the plant at Freiberg will go into operation, fed primarily with old, untreated bits of
lumber and other scrap wood. It will take approximately five tons of dry material to produce one ton of fuel. The
small refinery will consume nearly 70,000 tons of waste wood a year. “It should be pretty easy for us to get our
hands on this amount,” says Michael Deutmeyer, who is responsible for supplying biomass to Choren.
It will be considerably more challenging to keep up with the needs for raw materials at the full-scale refineries
Choren is planning to build. The first of these larger plants should go into service in 2012 in the eastern German
city of Schwedt, right near the border with Poland. The planned facility will produce 200,000 tons of BTL diesel a
year -- and devour a million tons of wood and other dry material. Waste products alone won’t be enough to satisfy
this hearty appetite.
To meet this increased demand, Deutmeyer is planning to plant trees. Wood is the most suitable raw material for
biofuel processing. Three years ago, just east of Schwerin, the capital of the federal state of Mecklenburg-Western
Pomerania, Choren converted 20 hectares (50 acres) into experimental “rapid sapling-to-sawmill plantations,”
where willows and other fast-growing trees are flourishing.
Such cultivation, says Deutmeyer, requires significantly smaller amounts of pesticides and fertilizers than crops like
rapeseed. This type of forestry also reaps considerable public subsidies. The Ministry of Agriculture in the state of
Brandenburg has already indicated that it will provide government funds for the plantations destined to supply the
wood for a plant to be built in Schwedt. Up to 45 percent of the investments for saplings, preparations and soil-
improvement measures will derive their financing from state coffers.
The experimental fields in Mecklenburg have already been harvested once, the trees reduced to wood chips by a
special chopper from Sweden. The results look very promising. Annual yields of up to 20 tons of dry material per
hectare can be harvested from good soils. This would work out to a top production rate of four metric tons -- or
5,000 liters -- of BTL diesel. Until now, rapeseed fields that are comparable in area have only yielded 1,500 liters.
With numbers like these, BTL is the first plant-based liquid fuel that could constitute a viable replacement for fossil
fuels while not directly competing with food production. According to the FNR, up to six million hectares of land in
Germany could be used to grow energy-producing plants. This corresponds to over a third of the area currently
used for agriculture. The agency says this acreage could form the basis for BTL products to satisfy a quarter of
Germany’s domestic fuel needs. On a Europe-wide scale, the replacement potential could even reach as high as 40
percent, owing primarily to the vast areas available in the new EU states in Eastern Europe.
Chances in the American Heartland
Other parts of the world offer even larger expanses that could be put into play.
In comparison with Germany, which is relatively densely populated, the United States has seven times as much
farm- and pasture land per inhabitant. The Bush administration has recently been trying to use agro-energy policies
in an effort to reduce the country’s deplorable dependence on imports of foreign oil. Under the battle cry of
“freedom fuel,” the US government has so far put its money on ethanol derived from agricultural crops. Ethanol is
one of the products most simply derived from biomass, but it also numbers among the least efficient.
Vast tracts of land have already been wasted in this endeavor. Bread-basket states like Iowa have primarily fed
refineries that quench American gas guzzlers. There are currently 139 ethanol plants operating or under
construction in the US. As a result, grain prices have skyrocketed, which has -- among other problems -- already
triggered a tortilla crisis in Mexico as corn becomes unaffordable. But ethanol has proven to be a poor replacement
for gas and has captured only a small percentage of the fuel market.
Now, shortly before the end of his second term in office, Bush’s energy strategists have apparently recognized
their error. According to a strategy paper recently published by the US Congress, there are plans to boost
admixtures of biofuels in the US sevenfold to 136 billion liters (36 billion US gallons).
However, this will not be based on the old technologies. The strategy, which is now also officially supported by
Bush, foresees only minimal growth for conventional biofuels. By contrast, nearly two-thirds of the planned
production will be met by advanced biofuels using second generation technologies.
Ushering in New Technologies
US researchers are focusing primarily on cellulose ethanol, an enzyme technology that converts straw and wood
first to sugar and then to alcohol. Anything with high cellulose content could be used, including farming and
forestry waste products, which would produce far greater yields per acre. The prospect of manufacturing alcohol
with this method has attracted the attention of Shell, which has purchased a stake in a Canadian enzyme producer
Logen. So far, however, this partnership has produced research projects and feasibility studies, but no refineries.
This is where Choren has a clear advantage. The German technology is ready for production. And this has
prompted traditionally gasoline-fixated Americans to take an interest in BTL diesel. In a competition held last year
between 146 entrants, Choren emerged as the only foreign company in a group of winners to offer new energy
technologies. Washington wants to promote these new technologies quickly and effectively -- and without red tape.
Choren CEO Blades says a US government agency reviewed his company for just nine months. Soon thereafter
came the offer for a loan guarantee amounting to 90 percent of the investment costs of a BTL facility on American
soil.
It was quite another story with the bureaucratic agencies in Germany. In 2004, the company applied for a loan
covering 30 percent of the investment. The application process dragged on for two years and, in the end, turned
out to be totally superfluous: Choren didn’t need the state guarantee anymore.
Analysis is next
Next
Options Index
The following article starts out great, because it is using scrap biomaterial such as wood chips and
sawdust. But then it gets into the concept of growing things to be used as feedstock. The basic
problem with this is the conversion efficiency of sunlight to wood is simply too low to compete with
solar cells and batteries once the battery technology improves. To construct an ethanol or biofuel plant
usually requires the investor to be convinced that the technology will be in service long enough to
amortize the cost of the plant. As long as your feedstock is waste material, you have a sound business
if you "lock up" the sources of waste at a low price.
In other words, this scheme might make sense up to the point where they state:
"Waste products alone won't be enough to satisfy this hearty appetite." which I highlighted in red so
that you can easily find where the program goes awry.
Once you have to grow your feedstock, it no longer makes sense. This is because you must compare
this technology with that of placing solar cells on that same ground and charging batteries.
The key point here is the amortization of the cost of the fuel manufacturing plant. Just because you
don't have the battery technology today, doesn't mean that it may not be feasible in the near future;
say six years or less. If you build a plant with a business plan that calls for the plant to be paid for
over 50 years and the plant is obsoleted by other technologies in 10 years, your business is headed for
bankruptcy. At this point in time with the technology moving so quickly, it is hard to imagine that one
will not be able to place solar cells on the ground where the trees might be planted and be able to
charge plug-in hybrid vehicles (PHEV) whilst they sit in their owners' garages.
Then he starts talking about how trees "reap considerable public subsidies". Which I highlighted in
blue. As soon as your technology is dependent on public subsidies, it means that it doesn't make
economic sense on its own. After his rhetoric builds on this public subsidy basis, he goes on to project
exporting this "technology" to the United States, where there is more arable land.
The theory is that now we are supposed to believe that they have a technology that won't compete
with food. "With numbers like these, BTL is the first plant-based liquid fuel that could constitute a
viable replacement for fossil fuels while not directly competing with food production."
Isn't it obvious that they are trying to tell us that land used to grow trees could not be used to grow
crops. Where are the intelligent science and engineering adults?
Here is the article:
http://www.spiegel.de/international/business/0,1518,druck-547312,00.html
Conventional biofuels like rapeseed oil and ethanol are ecologically problematic and threaten food supplies. Now a
Germany company says it has the solution: an advanced fuel made from wood and other non-food biomass.
The facility is fairly small. And even if all goes smoothly, its production will also be fairly modest -- just 13,500
metric tons of diesel fuel a year as compared with Germany's annual consumption of 30 million tons. Still, this tiny
refinery in the eastern German town of Freiberg has managed to attract a number of highly prominent visitors,
including the CEOs and leading researchers of both Mercedes and Volkswagen.
And they won't be the only ones at the facility's grand opening on Thursday. Top managers from Shell will be
there, as will German Chancellor Angela Merkel.
After all, the small cluster of concrete silos, combustion chambers and catalyzers owned by Choren Industries is
worth paying tribute to. The only facility of its kind in the world, it is designed to turn wood into fuel for cars --
and thus represents a decisive step toward so-called "second generation"
biofuels.
Over the past few weeks, support for conventional biofuels, such as rapeseed (canola) oil and ethanol, has reached
new lows, with many doubting whether they provide any benefits at all. Promoting these first generation biofuels
through tax incentives and compulsory admixtures has proven to be a misguided approach. But the fiasco was
perfectly predictable.
Correcting First-Generation Mistakes
Production levels are simply too low when fuels are derived exclusively from grains and tubers. The environmental
benefits have been limited, and may actually do more harm than good. Plus, biofuel doesn't sit quite right with
many engines. All of this has been known, and largely ignored, for years.
Now Choren wants to mark the dawn of a new age. The plant in Freiberg uses non-food biomass instead of
traditional crops and is the first of its kind to cross the threshold from theoretical research into industrial
production. This advanced refinery was designed to furnish proof that the new fuels are feasible -- and can be
produced on a much larger scale.
Instead of sugar beets and rapeseed, the new plant processes wood as its raw material. In a pinch, it can also use
straw. Using these materials significantly increases the yields from cultivated areas. According to estimates
provided by the German Agency for Renewable Resources (FNR), the annual energy yields using the Choren
process, based on a Central European climate, are 4,000 liters of fuel per hectare (1,057 US gallons), which is up to
three times as much as previous biofuel production methods. What’s more, in contrast to production methods
using rapeseed oil and ethanol, this technique does not produce fuel of inferior quality. Choren manufactures
extremely pure diesel with virtually no sulfur. Moreover, these second generation biofuels do not harm particle
filters or engines and meet top emissions standards.
This groundbreaking technology is actually a wonder discovered through research in the former East Germany.
After World War II, the socialist state founded the German Fuel Institute in the mining town of Freiberg.
Motivated by concerns that the fledgling country could one day find itself cut off from oil supplies, chemists and
engineers worked to advance the coal conversion technology used in Nazi Germany. After all, there was no lack of
lignite -- also known as brown coal -- in the GDR.
Coal is nothing more than fossilized biomass -- a plant-based fuel. It didn't take long for the idea to make the leap
from the laboratories of the walled-in workers’ paradise to a new business venture in the free-market unified
Germany.
Finding Friends in the Right Places
Bodo Wolf worked his way through the ranks -- from coal miner to engineer -- and eventually became one of the
fuel institute's leading researchers. In 1990, just one year after the Wall came down, he and a group of colleagues
founded the company that would eventually become Choren. Wolf developed a technique based on the key elements
of the coal liquefaction process to transform wood into a synthesis gas that could be transformed in turn into a
liquid fuel (see graphic).
There followed a decade of difficult pioneering work accompanied by a growing realization that the limited
resources of a handful of scientists would never suffice to pull off such an ambitious project. By 2000, Wolf's
company was on the verge of bankruptcy when he convinced Hanns Arnt Vogels, the former CEO of the German
aerospace corporation MBB, that he had a winning idea.
Then the doors started opening. Big doors. Vogels had connections in the world of power and money. Soon Wolf
was pitching the concept to VW and Mercedes, who rapidly got on board as development partners. On the
investor front, Vogels rounded up a deep-pocketed posse of well-respected, retired captains of industry, including
former bank presidents and the distinguished green energy tycoon Michael Saalfeld.
Since then, €180 million ($285 million) has been injected into the Choren venture, says Tom Blades, who has led
the company for the past four years. The savvy Brit, who formerly worked for the oilfield drilling giant
Schlumberger, turned out to be just the man for one of the company’s major diplomatic missions: An oil company
had to come on board, ideally one that was a leader in green technology.
It took Blades a little over a year. In the summer of 2005, Shell acquired a stake in the company. The oil
corporation contributed a key component in the refining process, the Fischer-Tropsch technology, which converts
the synthesis gas into a BTL (biomass-to-liquid) fuel.
Researchers at the oil conglomerate appear to be completely convinced: “BTL is a dream fuel,” says Wolfgang
Warnecke, CEO of Shell Global Solutions in Hamburg, "the best of all the biofuels."
New Technologies, New Needs
Toward the end of the year, the plant at Freiberg will go into operation, fed primarily with old, untreated bits of
lumber and other scrap wood. It will take approximately five tons of dry material to produce one ton of fuel. The
small refinery will consume nearly 70,000 tons of waste wood a year. “It should be pretty easy for us to get our
hands on this amount,” says Michael Deutmeyer, who is responsible for supplying biomass to Choren.
It will be considerably more challenging to keep up with the needs for raw materials at the full-scale refineries
Choren is planning to build. The first of these larger plants should go into service in 2012 in the eastern German
city of Schwedt, right near the border with Poland. The planned facility will produce 200,000 tons of BTL diesel a
year -- and devour a million tons of wood and other dry material. Waste products alone won’t be enough to satisfy
this hearty appetite.
To meet this increased demand, Deutmeyer is planning to plant trees. Wood is the most suitable raw material for
biofuel processing. Three years ago, just east of Schwerin, the capital of the federal state of Mecklenburg-Western
Pomerania, Choren converted 20 hectares (50 acres) into experimental “rapid sapling-to-sawmill plantations,”
where willows and other fast-growing trees are flourishing.
Such cultivation, says Deutmeyer, requires significantly smaller amounts of pesticides and fertilizers than crops like
rapeseed. This type of forestry also reaps considerable public subsidies. The Ministry of Agriculture in the state of
Brandenburg has already indicated that it will provide government funds for the plantations destined to supply the
wood for a plant to be built in Schwedt. Up to 45 percent of the investments for saplings, preparations and soil-
improvement measures will derive their financing from state coffers.
The experimental fields in Mecklenburg have already been harvested once, the trees reduced to wood chips by a
special chopper from Sweden. The results look very promising. Annual yields of up to 20 tons of dry material per
hectare can be harvested from good soils. This would work out to a top production rate of four metric tons -- or
5,000 liters -- of BTL diesel. Until now, rapeseed fields that are comparable in area have only yielded 1,500 liters.
With numbers like these, BTL is the first plant-based liquid fuel that could constitute a viable replacement for fossil
fuels while not directly competing with food production. According to the FNR, up to six million hectares of land in
Germany could be used to grow energy-producing plants. This corresponds to over a third of the area currently
used for agriculture. The agency says this acreage could form the basis for BTL products to satisfy a quarter of
Germany’s domestic fuel needs. On a Europe-wide scale, the replacement potential could even reach as high as 40
percent, owing primarily to the vast areas available in the new EU states in Eastern Europe.
Chances in the American Heartland
Other parts of the world offer even larger expanses that could be put into play.
In comparison with Germany, which is relatively densely populated, the United States has seven times as much
farm- and pasture land per inhabitant. The Bush administration has recently been trying to use agro-energy policies
in an effort to reduce the country’s deplorable dependence on imports of foreign oil. Under the battle cry of
“freedom fuel,” the US government has so far put its money on ethanol derived from agricultural crops. Ethanol is
one of the products most simply derived from biomass, but it also numbers among the least efficient.
Vast tracts of land have already been wasted in this endeavor. Bread-basket states like Iowa have primarily fed
refineries that quench American gas guzzlers. There are currently 139 ethanol plants operating or under
construction in the US. As a result, grain prices have skyrocketed, which has -- among other problems -- already
triggered a tortilla crisis in Mexico as corn becomes unaffordable. But ethanol has proven to be a poor replacement
for gas and has captured only a small percentage of the fuel market.
Now, shortly before the end of his second term in office, Bush’s energy strategists have apparently recognized
their error. According to a strategy paper recently published by the US Congress, there are plans to boost
admixtures of biofuels in the US sevenfold to 136 billion liters (36 billion US gallons).
However, this will not be based on the old technologies. The strategy, which is now also officially supported by
Bush, foresees only minimal growth for conventional biofuels. By contrast, nearly two-thirds of the planned
production will be met by advanced biofuels using second generation technologies.
Ushering in New Technologies
US researchers are focusing primarily on cellulose ethanol, an enzyme technology that converts straw and wood
first to sugar and then to alcohol. Anything with high cellulose content could be used, including farming and
forestry waste products, which would produce far greater yields per acre. The prospect of manufacturing alcohol
with this method has attracted the attention of Shell, which has purchased a stake in a Canadian enzyme producer
Logen. So far, however, this partnership has produced research projects and feasibility studies, but no refineries.
This is where Choren has a clear advantage. The German technology is ready for production. And this has
prompted traditionally gasoline-fixated Americans to take an interest in BTL diesel. In a competition held last year
between 146 entrants, Choren emerged as the only foreign company in a group of winners to offer new energy
technologies. Washington wants to promote these new technologies quickly and effectively -- and without red tape.
Choren CEO Blades says a US government agency reviewed his company for just nine months. Soon thereafter
came the offer for a loan guarantee amounting to 90 percent of the investment costs of a BTL facility on American
soil.
It was quite another story with the bureaucratic agencies in Germany. In 2004, the company applied for a loan
covering 30 percent of the investment. The application process dragged on for two years and, in the end, turned
out to be totally superfluous: Choren didn’t need the state guarantee anymore.
Analysis is next
Next
Options Index
 | |  | |  | |  |