Appendix B Office of Fuels Development Fiscal Year 1999 Budget: Excerpt From U.S. Doe Budget Information

Total Biofuels Conversion Funding

$35,950,000

Advanced Fermentation Organisms R&D

Research and development of advanced fermentation organisms to improve process efficiency, including the development of Zymomonas mobilis with enhanced capabilities (FY 1998) and the development of organisms with increased stability and robustness, and ability to ferment mixed sugars from waste feedstocks and the model energy crop switchgrass (FY 1999) will improve process efficiency and lower the cost of ethanol production from biomass. Testing of these strains at pilot scale and small scale commercial facilities will be completed to demonstrate reliable performance of these first generation organisms. Research and development of advanced organisms (second generation), such as Lactobacillus, with greater efficiencies that can ferment additional biomass feedstocks provide further costs reductions and the potential for expanding biomass ethanol applications.

Subtotal

$2,200,000

Advanced Cellulose R&D

Analyses indicate that the production of ethanol, using enzymes for the breakdown of biomass materials to sugars for fermentation is limited to a great degree by the high cost of enzymes. Research and development partnerships with enzyme producers will provide highly productive, low cost cellulase systems. Collaborations with enzyme and biomass ethanol producers will accelerate the use of commercially available cellulase systems.

Subtotal

$4,547,000

Pretreatment R&D

Physical and/or chemical pretreatment of biomass facilitates enzyme and fermentation reactions, thereby improving process efficiency and lowering costs. An advanced pretreatment reactor, the countercurrent pretreatment reactor, was designed, fabricated and delivered to the National Renewable Energy Laboratory process development unit in FY 1998. In FY 1999, focus is on installation of the reactor system. In addition, bench scale testing of cost-effective technology for softwood feedstocks and potential chemical co-product, will improve process economics of producing ethanol from thinnings from forests.

Subtotal

$2,800,000

Consortium for Plant Biotechnology Research

The 50:50 cost-shared, long term R&D projects with The Consortium for Plant Biotechnology Research, Inc., (CPBR) for peer-reviewed university research will not be continued in order to focus on more applied research activities that support program goals and objectives.

Subtotal

$1,250,000

Integrated Process Development

In FY 1998 integrated bench-scale studies were conducted to evaluate and optimize unit operations, with emphasis on detoxification studies, to improve the overall process. The performance of a genetically improved fermentation organism capable of fermenting available sugars was validated at the bench scale. In FY 1999, integrated bench-scale studies will evaluate the overall process and performance of softwood thinning from private and public forests, including National Forests, in cooperation with industrial partners. Technologies for the coproduction of ethanol and high value products will be researched and developed by the Michigan Biotechnology Institute (MBI). DOE will provide $3.0 million to MBI, in accordance with Congressional guidance.

Subtotal

$11,500,000

Cellulose-to-Ethanol Production Facilities

Laying the groundwork for a broad-based cellulosic biomass-to-ethanol industry, cost-shared partnerships to design



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Review of the Research Strategy for Biomass-Derived Transportation Fuels Appendix B Office of Fuels Development Fiscal Year 1999 Budget: Excerpt From U.S. Doe Budget Information Total Biofuels Conversion Funding $35,950,000 Advanced Fermentation Organisms R&D Research and development of advanced fermentation organisms to improve process efficiency, including the development of Zymomonas mobilis with enhanced capabilities (FY 1998) and the development of organisms with increased stability and robustness, and ability to ferment mixed sugars from waste feedstocks and the model energy crop switchgrass (FY 1999) will improve process efficiency and lower the cost of ethanol production from biomass. Testing of these strains at pilot scale and small scale commercial facilities will be completed to demonstrate reliable performance of these first generation organisms. Research and development of advanced organisms (second generation), such as Lactobacillus, with greater efficiencies that can ferment additional biomass feedstocks provide further costs reductions and the potential for expanding biomass ethanol applications. Subtotal $2,200,000 Advanced Cellulose R&D Analyses indicate that the production of ethanol, using enzymes for the breakdown of biomass materials to sugars for fermentation is limited to a great degree by the high cost of enzymes. Research and development partnerships with enzyme producers will provide highly productive, low cost cellulase systems. Collaborations with enzyme and biomass ethanol producers will accelerate the use of commercially available cellulase systems. Subtotal $4,547,000 Pretreatment R&D Physical and/or chemical pretreatment of biomass facilitates enzyme and fermentation reactions, thereby improving process efficiency and lowering costs. An advanced pretreatment reactor, the countercurrent pretreatment reactor, was designed, fabricated and delivered to the National Renewable Energy Laboratory process development unit in FY 1998. In FY 1999, focus is on installation of the reactor system. In addition, bench scale testing of cost-effective technology for softwood feedstocks and potential chemical co-product, will improve process economics of producing ethanol from thinnings from forests. Subtotal $2,800,000 Consortium for Plant Biotechnology Research The 50:50 cost-shared, long term R&D projects with The Consortium for Plant Biotechnology Research, Inc., (CPBR) for peer-reviewed university research will not be continued in order to focus on more applied research activities that support program goals and objectives. Subtotal $1,250,000 Integrated Process Development In FY 1998 integrated bench-scale studies were conducted to evaluate and optimize unit operations, with emphasis on detoxification studies, to improve the overall process. The performance of a genetically improved fermentation organism capable of fermenting available sugars was validated at the bench scale. In FY 1999, integrated bench-scale studies will evaluate the overall process and performance of softwood thinning from private and public forests, including National Forests, in cooperation with industrial partners. Technologies for the coproduction of ethanol and high value products will be researched and developed by the Michigan Biotechnology Institute (MBI). DOE will provide $3.0 million to MBI, in accordance with Congressional guidance. Subtotal $11,500,000 Cellulose-to-Ethanol Production Facilities Laying the groundwork for a broad-based cellulosic biomass-to-ethanol industry, cost-shared partnerships to design

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Review of the Research Strategy for Biomass-Derived Transportation Fuels and construct ethanol production facilities are being developed. In FY 1998, an additional commitment to design and construct biomass waste-to-ethanol facilities was obtained. DOE's commitment for the BC International project (BCI) that was initiated in FY 1997 was $4,00,000, with BCI costshare of $27,600,000, or 87 percent. An additional $750,000 was included under Biomass Power for the Gridley Project. A minimum 50 percent cost share was required from any partner entering into an agreement. In FY 1999 DOE's commitment with BCI for the Jennings, Louisiana plant will be completed, in accordance with Congressional language. An additional commitment with an industrial partner was established that will lead to the design and construction of an ethanol facility in Rio Linda, California. DOE share for the Rio Linda facility was $4,000,000, in accordance with Congressional language. An additional commitment with industry partners will be established that will lead to the design and construction of commercial demonstration facilities in targeted areas: California and Alaska. Subtotal $13,653,000 Switchgrass Variety Testing and Scale-up Research Switchgrass variety field tests are being conducted in the five major growing regions of the U.S. Field trials established at five USDA National Plant Materials Testing Centers will evaluate newly developed switchgrass liners. Cost-shared 100-300 acre scale-up plantings of switchgrass will be evaluated to provide yield, operational issues, and cost data. In FY 2000, field tests and scale up data will be collected and evaluated and field trial near waste-to-ethanol facilities/sites will be established. Subtotal $625,000 Feedstock Composition and Multiproduct Use Altering plant composition to improve conversion efficiencies will provide potential benefits and costs reductions in the production of fuels, chemicals and electricity. The tailoring of plants so that all components of the plant can effectively be used to produce multiple products will provide potential costs reductions and broader opportunities for adaptation of feedstock production systems. Subtotal $100,000 Mechanization Research Mechanization systems for energy crops to lower harvesting/handling cost, will address a major obstacle to the widespread use of energy crops. Cost-shared opportunities for switchgrass handling and storage specifically as a means of improving the ethanol production costs will be explored. Handling and storage systems for the use of agricultural residues to produce ethanol will improve costs and process efficiencies. Subtotal $150,000 Total Regional Biomass Energy Program (jointly funded with Biopower) $3,500,000 Regional Biomass Resource Activities Regionally-focused activities with State and local governments and industry will develop the capability to produce and use biomass resources for multiple products. Subtotal $2,000,000 Biofuels Production Activities Using the regional program infrastructure, support will be provided for cost-shared site studies for biofuels production facilities, including resource assessments and analyses of local, State, and regional nontechnical issues. The potential of biodiesel will be improved by testing new biodiesel fuel formulations to enhance fuel performance of high efficiency engines in collaboration with the Office of Heavy Vehicle Technologies, USDA, and the National Biodiesel Board. Subtotal $1,500,000 Total Biodiesel Funding $750,000 Biodiesel Production Technologies Based on a completed assessment, research and development will improve biodiesel process technology, using waste grease streams to lower production costs. In addition, improved oilseed production has the potential of lowering biodiesel production costs. Working with industry, activities to facilitate market penetration will lead to increased biodiesel production and use. Subtotal $750,000 Total Feedstock Production Funding (jointly funded with Biopower) $5,100,000 Biomass Feedstock Development Centers Research will be conducted to develop economically viable model energy crops at integrated biomass feedstock

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Review of the Research Strategy for Biomass-Derived Transportation Fuels development centers in the Pacific Northwest (poplars), Southeast (switchgrass), and Midwest/Plains States (switchgrass and poplars), where breeding to select for higher yields and other desirable traits is linked closely with studies on management, physiology, growth-limiting factors, and advanced biotechnology. Fields studies to evaluate nutrient effects on carbon sequestration and storage will provide additional vital information on energy crops. Subtotal $3,600,000 Environmental Effects of Energy Crop Deployment Research to evaluate the effects of large scale deployment of energy crops on the environment, such as water and soil quality, chemical fates, and biodiversity will provide credible data that could be used to guide deployment in a manner that ensures energy and environmental benefits. Subtotal $400,000 Energy Crop Seedling/Planting Stock Selection Research Advanced biotechnology and other methods will develop techniques that can be used to select energy crop seedlings or other planting stocks that are less susceptible to disease and/or pest, reducing the risk of mortality and increasing technical/economic viability. Desirable genotypes of switchgrass will be selected, propagated, and transferred to greenhouse/field tests to verify the selection process. Subtotal $100,000 Large Scale Woody Crop Plantation Research Research will be conducted to develop and evaluate management techniques to overcome the water use efficiency constraints in the Southeast. Technical assistance and cost sharing will be provided for existing large scale plantings in the Midwest/North Central region to obtain performance and cost data. Subtotal $125,000