Post by
birchjunk on Apr 18, 2011 7:34am
From Weekend Vancouver Sun
METRO VANCOUVER — Companies all over the world are chasing the next generation of biofuel — a cost-effective rendering of tough, fibrous plant materials such as wood pulp into liquid energy.
But only one, based in Burnaby, turns that business model on its ear by making ethanol the byproduct of an industrial process that focuses on the cultivation of a market for the natural glue, lignin, that wood pulp also contains. The plan is technically challenging but straightforward — find commercial applications for lignin and you will defray the prohibitive costs of making ethanol from wood pulp, or cellulose.
The conversion of plant material into ethanol is nothing special — ethanol’s other name is ethyl alcohol — but it’s much cheaper and faster to use grain as the feedstock to form the sugars that can be transformed into alcohol. Find a use for the other stuff in the pulp, and it may be possible to offset the greater expense associated with turning wood into the sugars needed to make ethanol.
It’s similar to a situation where a copper mining company uses the gold it finds in its raw ore to lower the overall cost of producing its copper.
Even with oil trading at close to $100 a barrel, Lignol Energy Corporation president and CEO Ross MacLachlan said during a recent tour of the company’s pilot-scale manufacturing plant near the British Columbia Institute of Technology, wood-based ethanol isn’t commercially competitive. At least not yet.
“From an industry perspective I think it’s fair to say that the cost curve is going to fall over time,” MacLachlan said. “So the real question is, in the long term, without the need for government incentives, where does this industry need to be for cellulosic ethanol to be cost-competitive and commercially viable?
“I think there is a consensus out there in the industry that [oil] needs to be well north of $100 a barrel.” Or else the price of cellulosic ethanol must drop.
According to a recent report from Scotia Capital, global biofuel production reached 22 billion gallons in 2009 — with 19 billion of that coming from food-based ethanol production.
The report’s authors, including Sam Kane, noted that there’s no evidence that any of the world’s largest oil and gas producers are comfortable with the situation; indeed, The Economist magazine recently described the use of corn and grain to make fuel as a major impediment to meeting global demand for food, both now and in the future.
By contrast, Scotia Capital noted, oil and gas producers are “all interested” in non-food biofuels. Scotia Capital noted a recent report in Biofuels Digest that there were by mid-2010 82 advanced biofuel projects aiming at 3.13 billion gallons of capacity by 2014, up from 67 projects in March 2010. Of the 25 new projects in that time span, 14 were focusing on cellulosic ethanol.
MacLachlan said that there’s no shortage of wood waste in British Columbia for making cellulosic ethanol. “If we were to process 2,000 tonnes of wood per day in the province, that would be roughly enough to meet the five-per-cent renewable fuel standard in B.C.
“They say that there is going to be about a billion cubic metres of wood out there [due to forest kills by the mountain pine beetle]. If you take about two-10ths of one per cent per year that’s enough to meet the five-per-cent renewable fuel standard for the province of B.C. Just to take a reasonable commercial amount of that [volume of available wood], presents B.C. and Canada generally with an enormous opportunity for export to the United States and to the world.”
Scotia Capital suggested that, at the present time, projects researching the production of ethanol from algae have an advantage over cellulosic ethanol. Lignol hopes to change that.
“We need to produce either an ethanol cost-effectively or we are going to need to effectively produce a chemical, such as lignin, that can hit and meet the specifications for an industrial application,” MacLachlan said.
“What we’ve done at Lignol is say, ‘What we are going to really do is try to get the most value we can out of that biomass, and recognizing that the value of fuel will always be trumped by the value of chemicals, we have decided to focus more on increasing the value of the chemical first, as the primary outlet — in this particular case derivatives of lignin.”
There have been some setbacks. “Ultimately the whole industry wants to get to cheap industrial sugars. Part of that cost component is made up of the enzyme costs. Just a few years ago all of the enzyme companies had said that by 2009, we should be able to get down to 10 cents per gallon of gasoline as our enzyme cost.
“Last year they were saying that by the end of 2011 we should be able to get to the 25- to 50-cent per gallon range.
“If you coupled that with the fact that oil prices were way off – they were not at $100 a barrel – it makes sales of ethanol very challenging in the near term.”
Lignol has some advantages over competitors, although investors are still waiting for profits. The company has decades of research behind it — General Electric was doing fuel-grade ethanol research here in the 1970s, followed by pulp mill operators Repap Enterprises at a cost of $100 million, and Lignol inherited all of that when it was formed a decade ago.
But it was not until the bottom fell out of the biofuel market in 2008, when oil prices crashed after the global economic meltdown, that the company decided to shift its mindset.
“I would say three or four years ago we were saying cellulosic ethanol is our primary product and lignin happens to be a byproduct that we are trying to make money out of,” MacLachlan said. “Today, we are saying lignin is our primary product.
“For every few cents more per pound that we can get from lignin it completely dwarfs the importance of how much more we have to sell the ethanol for.”
MacLachlan says the company’s ambition, as with biofuel, is to use lignin to grab market share from the petrochemical industry.
The company is marketing a pure form of lignin, which has the colour and texture of cocoa power in its dry form, and along with research partners is investigating applications for the aerospace industry, as a replacement for more expensive carbon fibre products, for wood adhesives, automotive coatings and paints, industrial foams and building materials.
“If you get right down to it, it’s not a price driven exercise. It’s more about stability. When they have these huge spikes in oil pricing they can’t necessarily pass those pricings on to their customers.
“So they are looking for more stable sources of materials that can go into their product line. But you have to be able to meet your standard. It can’t be less than. It has to be as good as.”
ssimpson@vancouversun.com
© Copyright (c) The Vancouver Sun
PreviousNext
Ross MacLachlan displays some lingin (in the tub) in his research facility in Burnaby on March 15, 2011. It is one of the finished products his company, Lingnol Energy Corp., produces.
Photograph by: wayne leidenfrost, Vancouver Sun