BASIC Associates: Progress on Cellulosic Ethanol Plugs On

Friday, October 22, 2010

Progress on Cellulosic Ethanol Plugs On

By Robin J. Johnson, Ph.D.

On Monday, October 14, investors learned that INEOS New Planet BioEnergy has received key permits for its commercial scale cellulosic ethanol plant in Indian River County, Florida. Expected to be completed some time in 2012, the plant will convert wastes and energy crops to 8 million gallons of ethanol per year and 6 megawatts of electricity. INEOS New Planet BioEnergy is a joint venture between INEOS Bio and New Planet Energy and is using INEOS Bio's unique combination of thermochemical and biochemical processes to make ethanol.

Many of the currently operating cellulosic ethanol plants use a combination of enzymatic or chemical hydrolysis followed by fermentation using a microorganism. Companies in North America pursuing this technology include Fiberight, AE Biofuels, KL Energy, DuPont Danisco Cellulosic Ethanol, and Iogen. Other companies such as POET and BlueFire Ethanol have similar plants in development. Recently, Brazilian oil giant, Petrobras, teamed up with enzyme powerhouse, Novozymes, to develop a cellulosic ethanol project for processing sugarcane bagasse. (Petrobras also has a joint development agreement for cellulosic ethanol with KL Energy.)

An alternate strategy used by some companies including INEOS Bio, substitutes a thermochemical process, gasification, for the initial hydrolysis step. The product of gasification is synthesis gas (sometimes erroneously called synthetic gas), or syngas. INEOS Bio Ethanol technology employs a patented microorganism, Clostridium ljungdahlii, which is capable of fermenting carbon monoxide and hydrogen in syngas to ethanol. Other companies using gasification as a first step in cellulosic ethanol production include Range Fuels, which broke ground on its commercial plant in 2007, and Enerkem, which has a demonstration-scale plant in operation, a commercial plant under construction, and a commercial plant in the planning stages. Both of these companies use chemical catalytic processes to convert syngas to fuel.

Gasification has several key advantages over typical hydrolysis processes. It is claimed that almost any carbon-containing material can be gasified, though in actuality different materials yield syngas with varying compositions. The reaction itself gives off heat which can be used for drying the starting materials or for generating electricity. Finally, cleaned syngas has a number of other possible uses besides conversion to ethanol. It can be burned to produce heat or catalytically converted to other fuels and chemicals.

The Energy Independence and Security Act of 2007 established a 2011 volume target for cellulosic biofuels in the US of 250 million gallons. As of July 2010, the EPA estimated the market availability for cellulosic biofuels in 2011 to be 5-17.1 million gallons. News of progress on cellulosic biofuels plants is certainly welcome in the face of the glacial progress of the industry to date.

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About BASIC

Unlike other investor services, BASIC Associates focuses not on the financials, but on the science behind various R&D initiatives in bioproducts. Sound science, after all, is the ultimate driver of profitability in the industry. We believe that a superior understanding of the science behind the business model reduces uncertainty and risk and allows for better decision-making by investors and stakeholders.

The principals at BASIC Associates use their doctoral training, coupled with years of experience researching and writing about biofuels, biochemicals, and other bioproducts, to provide an accessible science-oriented analysis of companies and projects in this growing market.

Meet the Principals

Robin J. Johnson, Ph.D.

Dr. Johnson is a cofounder of BASIC Associates. She previously worked as a curator for Garbrook Knowledge Resources, which she joined in March of 2007. Prior to joining Garbrook, she was a Scientist at Genstruct, a systems biology company that creates computer models of biological pathways, and a curator/editor at Incyte and later Biobase, working on the Proteome BiKnowledge Library. (Proteome was a successful knowledge company that provided comprehensive annotation of the proteomes of a variety of organisms, including humans.) As an assistant Professor of Biochemistry at Boston University School of Medicine from 1985-2003, Dr. Johnson taught Medical School and did research in the field of cellular neurobiology. She has numerous publications to her credit. Dr. Johnson received her B.S. in Biology from the State University of New York at Stony Brook and her Ph.D. in Anatomy from Boston University. Her postdoctoral studies of viral infection in the nervous system were performed at Yale University School of Medicine Section of Cell Biology.

Daniela Sciaky, Ph.D.

Dr. Sciaky, a cofounder of BASIC Associates, is a scientific expert in plant biotechnology and biofuels and bioproduct processes. From 2006 to 2010, she was the senior content expert at Garbrook Knowledge Resources, where she contributed her expertise to the gathering and organization of biofuels and bioproduct information. From 1998 to 2006, she curated the scientific literature on a wide variety of topics, including plant and yeast molecular biology, helping to develop content for the Proteome databases. She has also held research positions with Children's Hospital of Cincinnati and Albany Medical College and faculty and research positions at the University of Cincinnati and Brookhaven National Laboratory. During the course of her career, Dr. Sciaky has served as a peer reviewer for the US Department of Agriculture, the National Science Foundation, and the US Department of Energy, in addition to reviewing papers for the The Plant Cell, Biochemistry, Planta, Nucleic Acids Research, Plasmid, Bio/Technology and BioScience journals.

Dr. Sciaky received her M.S. and Ph.D. in Genetics from Washington State University and her B.S. in Biology from the State University of New York at Stony Brook. She did post-doctoral research at the Cold Spring Harbor Laboratory, NY. She has presented at numerous scientific conferences and is well published in plant disease and natural systems as well as other fields.

Henrique Oliveira, MBA

Henrique, a cofounder of BASIC Associates, worked as a curator for Garbrook Knowledge Resources from 2008 to 2010. A citizen of both Brazil and the United States, he received his MBA in Finance in 2008 from the Stephen M. Ross School of Business at the University of Michigan in Ann Arbor, where he was awarded a fellowship by the University’s William Davidson Institute to conduct research on Brazil’s 35-year experience with biofuels. As a Fellow of the Institute, Henrique spent several months in 2007 touring biofuel facilities in Brazil with Tom MacDonald, a senior researcher with the California Energy Commission and the head of MacDonald Associates, a boutique consulting firm specializing in alcohol transportation fuel.

Prior to joining Garbrook, Henrique worked as a consultant for Hart Energy’s Global Biofuels Center. He has extensive business experience in Brazil and has authored a number of reports on the country's biofuels industry, which, because of its size and depth, impacts alternative energy initiatives worldwide. Henrique has also written editorials on the Brazilian ethanol and sugar industry for various publications.