RUS | ENG | All
Enter the email or login, that you used for registration.
If you do not remember your password, simply leave this field blank and you will receive a new, along with a link to activate.

Not registered yet?
Welcome!

2015-11-05 19:35:00

IT NEEDS $70

IT NEEDS $70

Advanced biofuel made from agricultural waste — the so called Holy Grail of the alternative energy industry — will not be competitive with conventional fuel until the oil is back to $70-$80 per barrel, DuPont has said.

This prediction from the US chemicals group, which last week formally opened the world's largest cellulosic ethanol plant, underscores the challenge facing makers of "second-generation" biofuels. After a decade pursuing an elusive production process, companies are finding their business models threatened by the changing economics of the industry — as well as the politics of the US.

DuPont's new $225m Iowa plant will, after some delay, begin making cellulosic ethanol next year, and the fuel is expected to result in 90 per cent fewer greenhouse gas emissions than conventional petrol.

Ethanol from the plant will be sold in California, which has mandated a 10 per cent reduction in the carbon intensity of transport fuels by 2020, through the addition of biofuels.

Jan Koninckx, DuPont's global head of biofuels, described the opening of the plant as a "historic day in technology". He said: "We're really reforming the transport energy sector . . . This is a phenomenal environmental benefit."

Using agricultural waste rather than fresh crops to make biofuel is difficult, though. At the plant DuPont will take corn waste left over from the harvest — leaves, husks, cobs and stalks, collectively known as "stover" — and turn its cellulose into ethanol. Other sources for cellulosic ethanol include bagasse, the waste cane left from sugar production, and specialist energy crops such as switchgrass.

Using waste as a feedstock in this way avoids many of the concerns raised by first-generation biofuels, particularly the worry that food production was being sacrificed to create fuel additives.

But the new cellulosic ethanol process needs advanced enzymes to release sugars held in the cellulose, and production levels in the US have been very low.

Only two plants are using this technology: one owned by Abengoa of Spain, and another that is a joint venture between Poet, the privately held ethanol producer, and Royal DSM, a Dutch technology company.

Both formally opened their plants a little over a year ago but, from January to September, only 1.65m gallons of cellulosic ethanol were produced in the US, according to the government's Environmental Protection Agency. That is 4 per cent of the volumes that the Poet and Abengoa plants were notionally capable of producing in that time.

DuPont claims to have a better understanding of the cellulosic ethanol production process. Nevertheless, Mr Koninckx acknowledged that the economics of cellulosic ethanol suggested it would not be competitive with oil-based fuels until the oil price had risen back above $70 a barrel.

With oil priced at around $50 now, it could easily rebound. But in the futures market Brent crude for delivery in December 2021 is trading at only $65 per barrel — suggesting cellulosic ethanol will need some sort of official support for several years.

In the US, demand for ethanol is mandated under the Renewable Fuel Standard, a regulation requiring a specified volume of biofuels to be blended into transport and jet fuels and heating oil.

However, this regulation has come under attack from the oil industry, food producers and environmentalists — and the EPA has launched a new inquiry into ethanol's emissions.

Ethanol production has also been hitting what is known as the blend wall — the 10 per cent legal maximum for ethanol content in US car fuel.

Peder Holk Nielsen, chief executive of Novozymes, the Danish enzyme technology company that supplies DuPont rivals such as Beta Renewables in Italy, says the important issue is funding the industry's growth.

"The second wave of plants could be 20 or 30 or 200 or 2,000," he says. "But that will not happen unless investors understand that the plants will have access to the market . . . not just today, but in 2025."

To instil confidence, he says, the US administration needs to retain and extend the Renewable Fuel Standard. But many Republicans and some Democratic politicians have been arguing that it should be cut back or scrapped.

Robert Rapier, an energy analyst, says the problem with cellulosic ethanol is the difficulty in processing and logistically managing high volumes of the plant waste. "Technically it works," he says. "Economically it's a very difficult proposition."

But Mr Holk Neilsen of Novozymes argues that the environmental benefits deserve continued support. "Solutions do exist for many of the problems we face," he adds. "It's about the political courage to implement them."

ft.com

-----

More: 

NO LOW OIL PRICES 

SAUDI DOWN $130 BLN 

EUROPE GAS PRICES UP 14% 

SAUDI DROPPED PRICES 

VITOL SEES $60

 

 

Tags: OIL, PRICES
Chronicle:
IT NEEDS $70
2021, August, 4, 12:14:00
HYDROGEN RUSSIA AND CIS, Moscow, 20-21 October 2021
International Conference and Exhibition ‘Hydrogen Russia and CIS’ brings together more than 200 senior executives of hydrogen production plants from Russia and the CIS
IT NEEDS $70
2021, August, 4, 12:13:00
ИНВЕСТИЦИОННЫЕ ПРОЕКТЫ УГОЛЬНЫХ ПРЕДПРИЯТИЙ РОССИИ
Команда Восток Капитал подготовила отчет по инвестиционным проектам угольных предприятий России, в котором представлены: Проекты по строительству новых угольных шахт и обогатительных фабрик Проекты по реконструкции существующих угольных разрезов Проекты по строительству и реконструкции морских портов и сопутствующей инфраструктуры
IT NEEDS $70
2021, August, 4, 12:10:00
AUSTRALIA'S SANTOS, OIL SEARCH MERGER A$21 BLN
Pro-forma market capitalisation of A$21 billion which would position the merged entity in the top-20 ASX-listed companies and the 20 largest global oil and gas companies
IT NEEDS $70
2021, August, 4, 12:05:00
TC ENERGY NET INCOME $982 MLN
TC Energy Corporation (TSX, NYSE: TRP) (TC Energy or the Company) announced net income attributable to common shares for second quarter 2021 of $982 million or $1.00 per share compared to net income of $1.3 billion or $1.36 per share for the same period in 2020.
IT NEEDS $70
2021, August, 4, 12:00:00
NOVATEK PROFIT RR 164.4 BLN
Profit attributable to shareholders of PAO NOVATEK increased to RR 99.3 billion (RR 33.07 per share) in the second quarter 2021 and to RR 164.4 billion (RR 54.76 per share) in the six months 2021 as compared to RR 41.6 billion and RR 10.9 billion, respectively, in the corresponding periods in 2020.
IT NEEDS $70
2021, August, 2, 12:45:00
OIL PRICE: BELOW $75
Brent slid by 74 cents, or 1%, to $74.67 a barrel, WTI dropped 70 cents, or 1%, to $73.25 a barrel.
IT NEEDS $70
2021, August, 2, 12:40:00
ЭНЕРГЕТИКА РОССИИ, ТУРЦИИ
Наиболее динамичной сферой сотрудничества России и Турции остаётся энергетическая отрасль.
All Publications »