RE: Ethanol to lignin ratio perspective..ErrataIn my post, I said .......................
"Its my understanding that ethanol production from non-food feedstocks , in the absence of commecial lignin byproducts, requires $125 oil to be a break-even business.
This translates into about $6.50 per gal as a rough break-even cost of ethanol production.
To be profitable, these production costs need to be reduced below the $ 5.00 per litre level and ideally to about $4.50 per gal. ........................."
This is not quite so, as I used the retail gasoline price.
I should have used the wholesale gasoline price.
Here in Canada, taxes account for about 32 % of the retail price.
This reduces the cost of gasoline to about $4.25 per gallon.
This must then be reduced by the refining margin, in order to arrive at the cost of gasoline production.
Refiners margins are highly variable, but 20 % mark-up seems to be close to the average.
This reduces the cost of gasoline production to about $3.50 per gal , for $125 per barrel oil...and its probbaly close to about $3 per gal at current WTI prices of about $110 per barrel.
As ethanol production from non-food feedstock is only breakeven at $125 oil, the cost of ethanol production is close to $4.25 per gal.
That is, lignin credits should be of the order of about
.80+ per gal of the ethanol production , in order to make such biofuel competitive with gasoline.
Given the example of credits accrueing from producing adhesive resins, it does appear as tho Lignol's proposed refinery should be profitable and competitive with refined gasoline.
It is becoming increasingly clear that first generation biofuel models ( ie those using food-based feedstocks such as corn ) cannot successfully compete with refined gasoline , in the absence of Govt subsidies.
Those subsidies do exist but are programmed to decline to zero over the next pentade or so.
Corn costs are expected to rise over this period, due to rapildy increasing food requirements of the worlds population.
Thats why we shall see a transition to non-food feedstock biofuel models...... , which are second generation .....over the coming years.
Lignol, with years of research behind its lignin model, is very well placed to be a leader of this second generation transition.