BASIC Associates: Drop-in Fuels from Butanol

Friday, November 5, 2010

Drop-in Fuels from Butanol

By Robin J. Johnson, Ph.D.

Despite a 55% drop in U.S. venture capital investment in the cleantech sector, new technologies in biofuels continue to appear on the horizon. One of these, drop-in fuels from biobutanol, has gained air time as players such as the U.S. Navy, and French oil giant TOTAL throw their support behind biobutanol development.

On November 3, 2010, Cobalt Technologies of California announced that it signed a Cooperative Research and Development Agreement (CRADA) with the U.S. Navy to develop jet and diesel fuels from biobutanol. Cobalt has developed a process for converting biomass to n-butanol (a butanol isoform) using a Clostridium bacterium that can metabolize both C5 and C6 sugars found in lignocellulosic materials. The technology for converting n-butanol (which has 4 carbons) to jet fuel (a mixture of hydrocarbons containing 6-16 carbons) and diesel fuel (a mixture of hydrocarbons containing 8-21 carbons) was developed by the U.S. Naval Air Warfare Center Weapons Division. Cobalt's biobutanol process employs a chemical process to extract sugars from biomass followed by continuous fermentation. Converting n-butanol to larger hydrocarbons involves a dehydration reaction that converts n-butanol to butene (a.k.a. butylene). Butene reacts with itself to form oligomers. Cobalt opened its pilot facility in Mountain View California in January of this year.

A similar story (though without the U.S. Navy support and with support from TOTAL) exists for a Colorado company, Gevo. Gevo produces isobutanol (another isoform of butanol) from sugar and grain crops using genetically modified yeast for the fermentation step. The company has demonstrated technology to convert isobutanol into aliphatic and aromatic hydrocarbons. Like Cobalt Technologies, Gevo's chemistry depends on an initial dehydration step where isobutanol is converted to isobutylene. Isobutylene can in turn be oligomerized to jet and diesel fuel blend stocks. In August of this year, Gevo filed a registration statement on form S-1 with the Securities and Exchange Commission for a proposed initial public offering of shares of its common stock. In September, the company acquired Agri-Energy's ethanol production plant in Luverne, MN in order to retrofit it for isobutanol production.

While many may decry the widespread use of biofuels in automobiles in the U.S., preferring development of electric cars, it is clear that certain modes of transport (airplanes, trucks, freight trains, freighters) will depend for quite some time upon the energy density contained in chemical bonds. It is for these applications that drop-in biofuels hold the most promise.

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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.