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Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
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1
Introduction

In 1998, the U.S. Department of Energy (DOE) Office of Fuels Development (OFD) requested that the National Research Council (NRC) evaluate the OFD's research and development (R&D) strategy and directions for biomass-derived ethanol (bioethanol) and biodiesel transportation fuels. The NRC formed the Committee to Review DOE's R&D Strategy for Biomass-Derived Ethanol and Biodiesel Transportation Fuels to conduct the study, and this report documents the committee's findings and recommendations. (See Appendix A for biographical sketches of the committee members.)

The OFD, which is part of the DOE' s Office of Transportation Technologies, has an annual budget of $41.8 million to oversee the federal government's program to make ethanol from cellulosic biomass a practical and affordable alternative to gasoline. The OFD works with the DOE national laboratories, other DOE offices, the U.S. Department of Agriculture (USDA), universities, and corporations to develop technologies that would enable a bioethanol industry to become a mature market.

Through its National Biomass Ethanol Program, the OFD manages R&D by government and industry-government partnerships for the development of a cellulosic ethanol industry. The mission of the National Biomass Ethanol Program is to promote the development of a robust industry by facilitating the commercialization of technologies to produce cost-competitive ethanol for use as an alternative transportation fuel. OFD' s working definition of biomass is plant matter produced by photosynthetic uptake of carbon from the atmosphere (OFD, 1998). Most biomass material consists of plant cell walls, referred to as lignocellulosics or cellulosics. Biomass as defined here does not include corn grain.

OFD's major R&D programs are the development of biomass feedstock at Oak Ridge National Laboratory (ORNL) and the development of biomass-conversion technologies at the National Renewable Energy Laboratory (NREL). The ORNL feedstock development program is cofunded by the DOE Office of Power Technologies, which contributed 55 percent of its funding in fiscal year 1999. Of the total $41.8 million budget, approximately $2.8 million is allocated to ORNL, and $36 million is allocated to NREL. NREL's budget includes a $14 million congressional mandate to support three cellulose-to-ethanol manufacturing facilities.

R&D at ORNL is directed toward the development and refinement of environmentally sound agriculture and silviculture systems for the production, harvesting, and handling of a reliable supply of perennial biomass feedstocks. The feedstock base has been expanded through breeding and selection to increase feedstock productivity over a broad range of climates and soil types and to optimize conversion to ethanol. Improvements have also been made in technologies for the environmentally acceptable collection and handling of existing low-value feedstocks, such as residues from the agriculture and forest industries,

The objective of the biomass-to-ethanol conversion program (centered at NREL) is to develop cost-effective conversion technologies for the production of ethanol from cellulose and hemicellulose fractions of biomass that will ultimately lead to the establishment of a major domestic biofuels industry. Initial R&D was focused on improving the efficiency of biomass-to-ethanol conversion processes for existing low-value biomass feedstock. Technology transfer projects have focused on taking the processes developed in the laboratory and, working with industrial partners, establishing commercial-scale test facilities to validate the economic viability of production processes.

PRODUCTION AND MANUFACTURE OF BIOETHANOL

Biofuels, such as ethanol, methanol, and other chemicals, are derived from plant matter, or biomass. Plants grow through photosynthesis, in which sunlight acts as the energy source for combining carbon dioxide from the atmosphere, water, and nutrients from the soil into complex organic energy-containing molecules (e.g., sugars, carbohydrates, cellulose). Much of the biomass in plants goes into the fibrous cellulosic part of the plant and not into the seed.

Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×

A number of feedstocks can be used to produce biofuels, all of which are derived from plants. The most common biofuel in recent years has been ethanol. In the United States, approximately 1.8 billion gallons (6.8 billion liters) of liquid ethanol were manufactured in 1996-1997 from the starch in corn kernels (RFA, 1999); in Brazil, approximately 14 billion liters of ethanol were produced from sugarcane in 1996-1997 (PCAST, 1999). Trees, as well as switchgrass, are being developed for cellulose-to-ethanol manufacture and as a fuel source for electric power generation. Eventually, crops might be grown for the sole purpose of producing fuels. For example, poplar or willow trees might be grown on energy plantations. In the near term, OFD appears to consider poplars as coproduct systems, in which the fiber can be used for material production and the residuals for bioenergy production.

Rather than growing a dedicated energy crop for fuels manufacture, residues from various production processes could be used as biomass feedstocks. Large amounts of biomass are left in the field after conventional food crops have been harvested or after trees have been cut by the forest products industry. These residues range from sugarcane bagasse, rice straw, wood mill residues, and corn stover to forest residues from logging and other activities. Although estimates vary with region and local soil conditions, approximately 100 million metric tons of corn residue in the United States are potentially available as biomass feedstock for ethanol manufacture. This estimate is based on the assumption that 30 percent of the corn residues are left in the field to conserve soil and water (NRC, 1999c). Residues that have already been collected have the advantage of low cost. Municipal waste, which contains organic matter, such as paper, paper products, wood, and other organic materials, is another potential source of feedstock. Because some wastes come from many sources, the composition of municipal waste can be heterogeneous (NRC, 1999c). Therefore, the economic viability of using municipal waste is limited because solid wastes often contain materials that could be hazardous or that could increase processing costs.

Producing a liquid fuel from biomass entails several processing steps. If a dedicated crop is used, it must be planted, fertilized, possibly irrigated, and harvested, much like a conventional food crop. Feedstock collection costs can increase exponentially with distance, sharply constraining the optimal size of a plant (Sperling, 1988). Therefore, the costs of collection will limit the distance and area over which a crop might be harvested and collected. The collected biomass constitutes a cellulosic biomass feedstock that must then be pretreated.

Many pretreatments, including biological, chemical, physical, and thermal processes, have been investigated, but none has been demonstrated at a commercial scale. OFD's current pretreatment breakdown involves milling and exposure to acids and heat to reduce the size of the plant fibers, break down sugars from a portion of the material to yield fermentable sugars, and make their component parts more accessible to conversion processes. During hydrolysis, feedstock components, primarily polymers of glucose and pentoses, are hydrolyzed by acids and/or enzymes to fermentable sugar monomers to produce sugars that can be fermented into ethanol. Because cellulose polymers are more difficult to hydrolyze than pentosan polymers, in current practice cellulose is hydrolyzed after pentose. The NREL model under development includes a simultaneous saccharification and fermentation (SSF) process, in which hydrolysis and fermentation take place in the same reactor. The process of fermentation involves using yeast or other microorganisms to convert sugar into ethanol, carbon dioxide, and other minor components. The fermented mixture is then distilled to remove the ethanol from the water and then dewatered via azeotropic distillation or an adsorption process.

The ethanol must then be transported to service stations for distribution by pipeline, truck, barge, or railroad. Obviously, each step, from the planting to final distribution, will entail some cost, and much of OFD's R&D is intended to reduce the costs of the steps that contribute most to the cost of the overall process (see Figure 1-1).

Another approach to producing ethanol from cellulosic biomass is gasification of the biomass to synthesis gas followed by microbial fermentation to form ethanol. Methanol can also be produced from the gasification of biomass using inorganic catalysts. The dominant cost factors in the production of methanol are associated with the production of synthesis gas. The OFD program is not currently developing gasification technologies for cellulosics-to-methanol conversion (Lynd, 1996; Wyman et al., 1992). The projected costs of producing ethanol from biological processes and methanol from gasification using current technologies are comparable. No significant cost reductions are projected for producing methanol by mature gasification technologies. After more than two decades of R&D on gasification, DOE concluded in the mid-1990s that biomass-based methanol would not be competitive with methanol manufactured from natural gas.

ROLE OF GOVERNMENT

The motivation for developing bioethanol as a transportation fuel is based on concerns about energy security, environmental quality, economic competitiveness, and stabilization of the agricultural sector. Congress has addressed environmental and energy security concerns through several mandates, including the Alternative Motor Fuels Act of 1988, the Clean Air Act Amendments of 1990, and the Energy Policy Act of 1992.

The Alternative Motor Fuels Act of 1988 encourages the development and widespread use of alternate fuels, including methanol, ethanol, and natural gas, as transportation fuels. It directs DOE to work with federal agencies to administer programs to encourage the development of alternative fuels and the production of alternative-fueled vehicles.

Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×

FIGURE 1-1 Relative costs of processing steps in the NREL bioethanol process of 1991. Source: Wyman, 1999.

The purpose of the Clean Air Act Amendments of 1990 was to improve the nation's air quality. Title I requires certain levels of oxygen in automotive fuel, which can be met with the addition of oxygenates, such as ethanol, to gasoline in areas that exceed public health standards for ozone and carbon monoxide (so-called nonattainment areas) as set by the Environmental Protection Agency.

The Energy Policy Act of 1992, Section 502(a), directs DOE to "establish a program to promote the development and use in light duty motor vehicles of domestic replacement fuels" and further states that the "program shall promote the replacement of petroleum motor fuels with replacement fuels to the maximum extent practicable." The program "shall, to the extent practicable, ensure the availability of those replacement fuels that will have the greatest impact of reducing oil imports, improving the health of our nation's economy and reducing greenhouse gas emissions."

Another issue related to the environmental and national security concerns addressed by Congress is the issue of externalities. Externalities include, for example, environmental damage caused by unpenalized or unregulated pollution. Environmental damage is not reflected in the cost to the polluter or the price of the product. An acknowledged role of government is to ensure that externalities are somehow incorporated into decisions about the investment and use of products and their production. For example, government regulations on the manufacture, use, and composition of fuels do incorporate some externalities into the price structure of fuels. The committee recognizes that changes in government regulations for biomass-based fuels could substantially change the relative market values of renewable and fossil fuels but has declined to speculate on possible changes. The projected market values in this report assume that no changes will be made in government policies with respect to externalities.

Another traditional role of government is supporting basic science and long-range R&D-especially in areas that are considered important to national policy but may not be of current interest to industry. The private sector has no incentive to invest in R&D on many long-range technologies although it is in society' s interest to prepare for an uncertain future by investigating promising advanced technologies. Underinvestment by the private sector may be attributable to the inability of a firm or a small group of firms to capture the return on its investments in R&D or to the incentive structure of a given sector of the economy that may inhibit investment in innovation, especially for the long term (PCAST, 1997).

STRATEGIC OBJECTIVES FOR THE OFFICE OF FUELS DEVELOPMENT

The OFD is pursuing strategic objectives to encourage the development of a bioethanol industry. Ethanol production is expected to progress from the exploitation of niche feedstock opportunities, such as agricultural residues (e.g.,

Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×

corn stover, sugarcane bagasse, rice straw, and wheat straw), forest softwood residues, softwood by-products of the pulp and paper industry, and municipal solid waste, to production based on dedicated energy crops. The following program objectives of the OFD are described in the National Biomass Ethanol Program Plan for Fiscal Years 1999-2005 (OFD, 1998):

  • Near-term objectives (2000-2003). Demonstrate the commercial-scale production of cellulosic ethanol by using one or more low-value waste feedstocks, such as agricultural or forest residues.

  • Midterm objectives (2005-2010). Demonstrate commercial-scale ethanol production for one or more ethanol plants using agricultural/forestry residues together with components of dedicated biomass supply systems, such as the energy crop switchgrass or residues from woody crops, that have been used for fiber.

  • Long-term objectives (2015-2020). Demonstrate that ethanol manufactured from dedicated energy crops, such as switchgrass and specific woody crops, is cost competitive with gasoline. Beyond 2010, OFD will seek cost reductions through genetic improvements in feedstocks to increase process efficiencies and enhance the value of coproducts.

To achieve these objectives, the OFD believes that it will have to (1) meet the technology cost-reduction targets demanded by the marketplace, (2) leverage the corn-ethanol industry's business and technical resources to expand the ethanol market base, and (3) engage in cost-shared demonstration projects with industrial partners to encourage the acceptance of new technology and reduce market barriers (OFD, 1998). The strategic objectives focus on early demonstration of the production of ethanol to meet congressional mandates, even though the government technology base is not adequate to ensure the widespread acceptance of an ethanol fuel at this time. In the committee' s view, a strong industrial R&D program to achieve significant advances in bioethanol production and feedstock production will require time to mature, especially to benefit from ongoing advances in genetic engineering. The OFD can enhance the effectiveness of an industrial R&D program by providing a solid scientific basis for reducing costs of bioethanol manufacturing and economic risks in the near term and support technology advancements in the long term.

Stage-and-Gate Process

The OFD uses a stage-and-gate process to measure progress toward meeting its R&D objectives (OFD, 1998). The stage-and-gate process is structured to facilitate the decision making at five stages, from process conceptualization through technology deployment. Information generated by this technical-economic model is used by OFD to measure economic progress at each stage of research and to ensure that research is focused on the most promising technologies.

The stage-and-gate process requires go/no-go decisions at the following stages: concept development, qualification of opportunity, feasibility confirmation, process development, and commercial launch stages (OFD, 1998). In the concept development stage, the concept must be well enough described so that others can understand it and act upon it. Opportunities are qualified by OFD collaborators (e.g., industrial partners) who identify issues that must be resolved for the successful development and commercialization of promising technologies. Feasibility is achieved through demonstration or development of data that resolve the issues identified in the previous stage. Through development, technology processes and products are created, demonstrated at bench side, measured against performance requirements and risks identified and minimized. Commercial launch concludes the process with the design, construction, and start-up of an operational plant by industry. Passing from one stage to the next requires passing through a "gate" showing that each technical and business objective of that stage has been met. If the data do not pass a particular gate, then development of that concept is stopped. With each stage, the gate review criteria become more business oriented, and the level of management that approves the review is higher.

Process economics are updated as new data are developed using ASPEN Plus process simulation software to generate material and energy balances, design criteria for vendors, and other information to estimate capital requirements. As actual process data are developed and incorporated into the simulation, the estimate becomes more accurate.

The policy analysis system (POLYSYS) agricultural-sector model developed by the University of Tennessee provides some additional input to OFD on the relative profitability of bioenergy and conventional crops. The POLYSYS model simulates changes in policy, economic, resource, or environmental conditions and estimates the effects on the U.S. agricultural system. POLYSYS is a system of interdependent modules that simulate crop supply for 305 production regions; national crop demand and prices; national livestock supply; and agricultural income. POLYSYS analysis is currently under way to measure the effects of conversion of existing crops to fuel on crop production, allocation of land among crops, and returns to crops and farmers (APAC, 1999).

The approach outlined above provides a disciplined, rational way to manage R&D projects. Its validity, however, depends on the quality of the data and other information provided by investigators, especially the inputs to the ASPEN Plus model. Evaluating an untried approach to process improvement is difficult, however, so the program is focused on

Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×

FIGURE 1-2 Appropriations for the National Biomass Ethanol Program. Source: OFD, 1998.

improvements to known technologies as modeled by the new data, rather than on introducing new untried technologies.

BUDGET OF THE OFFICE OF FUELS DEVELOPMENT

The funding appropriated for the National Biomass Ethanol Program (Figure 1-2) was relatively stable from fiscal year 1994 to fiscal year 1998. Funding was increased in fiscal year 1999, and an additional increase has been requested for fiscal year 2000. Funding by program elements is shown in Table 1-1 (see Appendix B for details on the budget and program). Early demonstration of technologies and the involvement of industry are included in the congressional mandates. The request for $53.4 million in fiscal year 2000 for the OFD biofuels program includes $37.4 million for ethanol production, $1.0 million for biodiesel production, $5.5 million for feedstock production, $3.5 million for the regional biomass program, and $6.0 million for R&D on integrated bioenergy.

In 1999, the DOE launched a crosscutting Bioenergy Initiative supported by the biofuels (OFD's program), biopower, and industrial programs. The purpose of the initiative is to focus on technological advances that will foster an integrated and competitive bioindustry through partnering with industry. Through additional funding, DOE will allocate part of its budget to the development of key technologies and the coordination of all of DOE' s bioenergy-related R&D activities. A Bioenergy 2020 Action Plan (drafted in 1998) envisions a national partnership among federal agencies and the private sector for an integrated biomass industry that will produce power for homes, fuel for cars, and industrial chemicals from crops, trees, and residues (Reicher, 1998). Bioenergy 2020 will integrate the results of R&D from OFD with other DOE R&D programs in biomass power and the forest products and agricultural industries program to develop technologies for the production of combinations of fuels, power, chemicals, and other products from diverse feedstocks in different areas of the country.

STUDY GOALS

The committee was asked to evaluate the contribution and role of biofuels, biomass-derived ethanol, and biodiesel as transportation fuels in the domestic and international economies; review OFD's biofuels R&D strategy; and recommend, as appropriate, changes in this strategy and OFD's portfolio for R&D. The time frame considered by the committee extends out about 20 years. In the Statement of Task, the committee was asked to meet the following objectives.

  1. Examine the likely contribution that biofuels can make domestically and internationally in light of barriers (e.g., energy and economic costs, health impacts, environmental and land constraints, infrastructure, etc.) to their deployment and use, and experience that has been gained from past or current biofuels programs.

  2. Examine the benefits of the deployment and use of biofuels.

  3. Examine OFD's strategic focus for biofuels and concomitant R&D portfolio in light of potential opportunities.

  4. Identify strategic directions for biofuels development and deployment and make recommendations, as appropriate, for the biofuels program.

The committee held three meetings and was given a

Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×

TABLE 1-1 Funding Allocations for the Office of Fuels Development Biofuels Program

 

FY 1998 Appropriations

FY 1999 Appropriations

FY 2000 Budget Requests

Ethanol Production

 

 

 

Advanced fermentation organisms

$ 1,960

$ 2,200

$ 3,000

Advanced cellulase

2,455

4,547

5,500

Pretreatment

1,906

2,800

5,508

Consortium for plant biotechnology research

2,455

1,250

0

Integrated process development

8,265

11,500

11,500

Cellulose-to-ethanol production facilities

7,091

13,653

11,933

Feasibility studies

841

0

0

Subtotal

25,027

35,950

37,441

Biodiesel Production

 

 

 

Biodiesel production technologies

600

750

1,000

Waste oil assessment

200

 

 

Subtotal

800

750

1,000

Feedstock Production

 

 

 

Biomass feedstock development centers

1,600

1,600

4,000

Environmental effect of energy crop deployment

400

225

225

Energy crop seedling/planting stock selection

100

100

100

Large-scale woody crop plantation

150

125

125

Switchgrass variety testing and scale-up

200

500

500

Feedstock composition and multiproduct use

0

100

200

Mechanization

50

150

350

Subtotal

2,500

2,800

5,500

Regional Biomass Energy Program

 

 

 

Regional biomass resources

1,650

1,650

2,000

Biofuels production resources

350

600

1,500

Subtotal

2,000

2,250

3,500

Integrated Bioenergy Technology

 

 

6,000

Totals

30,327

41,750

53,441

 

Source: OFD.

number of presentations on OFD's biofuels program and related issues (see Appendix C). The committee used the information from these sessions as input to its deliberations.

This report focuses on the main components of OFD's bioethanol and biodiesel programs, most of which are directed toward the development of bioethanol technologies rather than biodiesel. Chapter 2 provides a brief history of the use of bioethanol as a transportation fuel and describes the market conditions for biomass-based ethanol. Chapter 3 addresses parts of the program related to feedstocks. Chapter 4 addresses biomass-to-ethanol conversion technologies. Chapter 5 addresses crosscutting program issues.

Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×
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Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×
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Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×
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Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×
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Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×
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Suggested Citation:"1 Introduction." National Research Council. 1999. Review of the Research Strategy for Biomass-Derived Transportation Fuels. Washington, DC: The National Academies Press. doi: 10.17226/9714.
×
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The Office of Fuels Development (OFD), a component of the U.S. Department of Energy's (DOE) Office of Transportation Technologies, manages the federal government's effort to make biomass-based ethanol (bioethanol) and biodiesel a practical and affordable alternative to gasoline. Through the National Biomass Ethanol Program, the OFD is overseeing key research and development (R&D) and industry-government partnerships for the establishment of a cellulosic biomass ethanol industry. Cellulosic biomass resources being investigated include agronomic and forest crop residues, woody crops, perennial grasses, and municipal wastes. Starch-based sources, such as cereal grains (e.g., corn grain), are not included in this program. The objective of the program is to promote the commercialization of enzyme-based technologies to produce cost-competitive bioethanol for use as transportation fuel.

The OFD requested that the National Research Council estimate the contribution and evaluate the role of biofuels (biomass-derived ethanol and biodiesel) as transportation fuels in the domestic and international economies, evaluate OFD's biofuels strategy, and recommend changes in this strategy and the R&D goals and portfolio of the OFD in the near-term to midterm time frame (about 20 years). During this period, a number of complex, interacting factors, including advances in the technologies used to produce biofuels at a competitive cost, the elimination of tax incentives, advances in vehicle and engine technologies, growing concerns about solid waste disposal and air pollution, and global measures to reduce emissions of greenhouse gases to the atmosphere, will affect the position of biofuels in transportation fuel markets.

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