Corn Ethanol Makers Weigh Switch to Butanol

Source: By HENRY FOUNTAIN, New York Times • Posted: Wednesday, October 24, 2012

Butamax Advanced Biofuels has developed a way to make butanol much as ethanol is made: yeast-based fermentation, followed by distillation.

NEARLY a decade after the adoption of federal renewable fuel standards led to a sharp increase in production of ethanol, some producers in the Corn Belt are considering making a different fuel. The fuel, butyl alcohol, or butanol, is worth more to refiners because it has more energy than ethanol, is easier to handle and more of it can be blended into each gallon of gasoline. But producing it will require costly retrofitting of ethanol plants, and plant capacity will be reduced.

Several companies are leading the push for butanol, including Gevo of Englewood, Colo., and Butamax Advanced Biofuels, a joint venture of BP and DuPont based in Wilmington, Del. They have developed ways to make butanol the same way ethanol is made, through yeast-based fermentation and then distillation.

“There are few if any new biofuel molecules that can be made from an existing ethanol plant,” said Paul Beckwith, chief executive of Butamax. “The beauty of what we’re offering is, it’s so similar.”

New butanol-specific plants could also be built, he said, including ones that, like cellulosic ethanol plants, use switch grass or other nonfood raw materials rather than corn.

Butamax is producing butanol at a demonstration plant in Hull, England. And in the United States, it has organized an alliance of ethanol producers who are considering making the shift. The idea, Mr. Beckwith said, is to convert many plants simultaneously, beginning in 2013.

Gevo began making butanol at a 22 million gallon a year ethanol plant in Luverne, Minn., in May, although it has now stopped production.

“We’re currently in the process of switching back to ethanol while we give engineering team to make some improvements,” said Chris Ryan, Gevo’s president.

The two companies also are involved in a legal dispute over patents that is working its way through the courts.

Brian D. Kletscher, chief executive of Highwater Ethanol in Lamberton, Minn., a member of Butamax’s alliance, said his company would talk with gasoline refiners before making a final decision to convert its plant. “We see a potentially valuable commodity here,” Mr. Kletscher said. “It could allow maybe a 20 to 30 percent increase in our margins. That’s the No. 1 thing that sparks us to look at it.”

Last year, Highwater used nearly 19 million bushels of corn to produce about 55 million gallons of ethanol, which was shipped by rail tankers to refineries on the East Coast. If the company decided to go ahead with conversion, the work would take up to a year, Mr. Kletscher said, although the plant would be shut only about two weeks.

Butamax estimates that converting an ethanol plant will cost 20 percent to 30 percent of a plant’s original price tag — perhaps $10 million to $15 million for one the size of Highwater’s, more for larger facilities. The conversion will also reduce a plant’s capacity about 20 percent, the company said, but the greater value of butanol should more than make up for the lost volume.

Mr. Ryan said Gevo’s conversion costs would be somewhat higher, at least initially. Most of the butanol produced at Luverne was sold to the chemical company Sasol, he said. Butanol has long been used in the chemical industry as a solvent.

But Mr. Ryan said Gevo was withholding some of the butanol to develop fuels, and it had a small contract with the Air Force to convert butanol to jet fuel.

Butanol offers several advantages to gasoline refiners, Mr. Beckwith said. It contains about 30 percent more energy than ethanol, and it can be blended with gasoline at a higher percentage — Butamax recommends 16 percent butanol, compared with the current 10 percent standard for ethanol. That would allow refiners to more quickly meet the Environmental Protection Agency’s renewable fuel standards, which were adopted in 2005 and mandate that transportation fuels contain increasing amounts of alternative fuels over time.

Because ethanol evaporates relatively easily, refiners have to remove some of the lighter components from their gasoline so the blended product meets air-quality standards. Butanol evaporates less readily, so refiners can leave many of these more volatile components in, saving money.

Michael McAdams, president of the Advanced Biofuels Association, an industry group, said butanol was a “drop-in” fuel, able to be used with existing gasoline pipelines and other equipment because it does not have a tendency to take up water, as ethanol does.

“It’s more fungible in the existing infrastructure,” he said. “You could blend it with gasoline and put it in a pipeline — no problem.”

Butanol would also help producers get around the so-called blend wall, Mr. McAdams said. Given the amount of gasoline used annually in the United States, and the blending limit of 10 percent ethanol, producers are close to their capacity limits, now about 13 billion gallons of ethanol a year.

With the 10 percent limitation, “you don’t have enough gasoline to put the ethanol in,” he said. “You don’t have that problem with butanol.”