8
Key Challenges to Commercial Deployment

This chapter summarizes the challenges to commercial deployment of facilities for biochemical conversion of cellulosic biomass to ethanol and for thermochemical conversion of coal, biomass, or combined coal and biomass to liquid fuels.

CHALLENGE 1

Several technological and sociological issues pose a serious challenge to the development of the biomass-supply industry for the production of cellulosic biofuels:

  • Developing a systems approach through which farmers, biomass integrators, and those operating biofuel-conversion facilities can build a well-organized and sustainable cellulosic-ethanol industry that will address the relevant issues such as biofuel; soil, water, and air quality; carbon sequestration; wildlife habitat; rural development; and rural infrastructure—without creating unintended consequences through piecemeal development efforts.

  • Determining the full life-cycle greenhouse gas emissions of various biofuel crops.

  • Certifying the greenhouse gas benefits of different potential biofuel scenarios.

  • Overcoming the perception that crop residues and similar materials are literally “trash” or waste products and therefore have little or no value for farmers.



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8 Key Challenges to Commercial Deployment T his chapter summarizes the challenges to commercial deployment of facili- ties for biochemical conversion of cellulosic biomass to ethanol and for thermochemical conversion of coal, biomass, or combined coal and bio- mass to liquid fuels. CHALLENGE 1 Several technological and sociological issues pose a serious challenge to the devel- opment of the biomass-supply industry for the production of cellulosic biofuels: • Developing a systems approach through which farmers, biomass inte- grators, and those operating biofuel-conversion facilities can build a well-organized and sustainable cellulosic-ethanol industry that will address the relevant issues such as biofuel; soil, water, and air quality; carbon sequestration; wildlife habitat; rural development; and rural infrastructure—without creating unintended consequences through piecemeal development efforts. • Determining the full life-cycle greenhouse gas emissions of various bio- fuel crops. • Certifying the greenhouse gas benefits of different potential biofuel scenarios. • Overcoming the perception that crop residues and similar materials are literally “trash” or waste products and therefore have little or no value for farmers. 

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 Liquid Transportation Fuels from Coal and Biomass Those issues, although formidable, can be overcome by developing a systems approach that has multiple end points and that collectively can provide a variety of credits or incentives—such as carbon sequestration, water quality, soil quality, wildlife, and rural development—and thus strengthen the U.S. agricultural indus- try. Failure to link the various critical environmental, economic, and social needs and to address them as an integrated system could reduce the availability of bio- mass to amounts substantially below the 550 million tons technically deployable in 2020. CHALLENGE 2 If thermochemical conversion of coal or combined coal and biomass is to be important in reducing U.S. reliance on crude oil and reducing CO2 emission in the next 20–30 years, CCS will have to be shown to be safe and economically and politically viable. The capture of CO2 is proved, and commercial-scale demonstra- tion plants are needed to measure and improve cost and performance. Separate large-scale programs will be required to resolve storage and regulatory issues associated with geologic CO2 storage approaching an annual rate of gigatonnes. The analyses presented in this report assume that the viability of CCS will be dem- onstrated by 2015 so that integrated coal-to-liquid plants can start up by 2020. In that scenario, the first coal or coal-and-biomass gasification plant would not be in operation until 2020. The assumption of CCS demonstration by 2015 is ambitious and will require focused and aggressive government action to realize it. Uncertainty about the regulatory environment arising from concerns of the general public and policy makers have the potential to raise storage costs above the costs assumed in this report. Ultimate requirements for selection, design, monitoring, carbon-accounting procedures, liability, and associated regulatory frameworks are yet to be developed, and there is a potential for unanticipated delays in initiating demonstration projects and later in licensing individual commercial-scale projects. Large-scale demonstrations and establishment of procedures for operation and long-term monitoring of CCS projects have to be pursued aggressively in the next few years if thermochemical conversion of biomass and coal with CCS is to be ready for commercial deployment by 2020.

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Key Challenges to Commercial Deployment  CHALLENGE 3 Cellulosic ethanol is in the early stages of commercial development; a few com- mercial demonstration plants are expected to begin operations in the next several years. Over the next decade, process improvements in this generation of technol- ogy are expected to come from evolutionary developments and knowledge gained through commercial experience and increases in scale of operation. Incremental improvements in biochemical conversion technologies can be expected to reduce nonfeedstock process costs by about 25 percent by 2020 and 40 percent by 2035. It will take focused and sustained industrial and government action to achieve those cost reductions. The key technical issues to be resolved to achieve cost reductions are these: • More efficient pretreatment to free up celluloses and hemicelluloses and to enable more efficient downstream conversion. Improved pretreat- ment is not likely to reduce product cost substantially, because pretreat- ment cost is small relative to other costs. • Better enzymes that are not subject to end-product inhibition to improve the conversion process. • Maximizing of solids loading in the reactors. • Engineering of organisms that can ferment sugars in a toxic biomass hydrolysate and produce high concentrations of the final biofuel. Improving microorganism tolerance of toxicity is a key issue. CHALLENGE 4 An expanded ethanol transportation and distribution infrastructure will be required if ethanol is to be used in much greater amounts than now in light-duty vehicles. Ethanol cannot be transported in pipelines that are used for petroleum transport. It is currently transported by rail or barges, not by pipelines, because it is corrosive in the existing infrastructure and can damage seals, gaskets, and other equipment and induce stress-corrosion cracking in high-stress areas. If ethanol is to be used in fuel at concentrations higher than 20 percent (for example, E85, which is a blend of 85 percent ethanol and 15 percent gasoline), the number of refueling stations offering these options to alternative-fuel vehicles will have to be increased. To enable widespread availability of ethanol in the fuel system, the

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0 Liquid Transportation Fuels from Coal and Biomass challenge of fuel distriubtion must be addressed. However, if cellulosic biomass were dedicated to thermochemical conversion with a Fischer-Tropsch or metha- nol-to-gasoline process, the resulting fuels would be chemically equivalent to con- ventional gasoline and diesel, and the infrastructure challenge posed by the use of ethanol would be minimized. CHALLENGE 5 The panel’s analyses provide a snapshot of the potential costs of liquid fuels produced by biochemical or thermochemical conversion of biomass and thermo- chemical conversion of biomass and coal. Fuel costs are dynamic and fluctuate as a result of other externalities. With the wide variation in the prices of most com- modities, especially oil, investors will have to have confidence that such mandates as carbon caps, carbon tax, or tariffs on imported oil will ensure that alternative liquid transportation fuels can compete with fuels refined from crude oil. The price of carbon emission or the existence of fuel standards that require specified reductions in greenhouse gas life-cycle emissions from fuel will affect economic choices. Other economic issues are specific to particular types of plants. For bio- chemical conversion and thermochemical conversion plants that use biomass as feedstock, the volatility of feedstock costs is a concern: the supply and costs of feedstock can be affected dramatically by weather. For thermochemical conversion plants, the investment risk is considerable because of the high capital expenditure. Because a 50,000-bbl/d plant could cost $4–5 billion, the plants could be expected to approach a cost of $100,000 per daily barrel, which is about 6 times the capital investment cost for crude oil in deepwater Gulf of Mexico.