Emerging biofuels industry faces challenges

Source: By Doug Rich, High Plains Journal • Posted: Monday, February 23, 2015

Abengoa Bioenergy opened a plant in Hugoton, Kansas, last fall that turns biomass into ethanol. Chris Standlee, executive vice president of global affairs for Abengoa, discussed the challenges facing the implementation and development of advanced biofuels during the Kansas Commodity Classic.

“We take agricultural residues, for the most part wheat stubble, corn stover, sorghum stubble and some switch grass, extract the sugars that make up the cell walls and ferment that sugar into ethanol,” Standlee said.

Developing a balance of feedstocks is the first challenge. Standlee said one of the reasons Abengoa decided to locate its plant in southwest Kansas was the availability of residue from multiple crops likes wheat, corn and grain sorghum. This gives the company diversification in case there is a problem with one crop. In addition to these crops Abengoa has planted switch grass on their 400-acre site where the plant is located.

“Purdue University did a study in 2010 that said a single feedstock fuel plant has a 75 percent chance of bankruptcy,” Standlee said. “A multiple feedstock plant has a very slight chance of failure during the payback period.”

A feedstock fire at the Hugoton plant was an unexpected challenge for Abengoa. One way to avoid a future problem is to not store all of the feedstocks in one place. The Hugoton plant uses approximately 1,100 dry tons of biomass per day and 350,000 tons of biomass annually.

“We have a series of satellite storage areas that we own, operate and secure,” Standlee said.

Large bales of feedstock are stored in super stack rows 300 feet apart to prevent the spread of a feedstock fire. If a fire does start it should not affect more than one row of feedstock.

Standlee said Abengoa does not keep a lot of feedstock stored on site at the plant. The ideal solution is to reach an agreement with the farmer to store the product on his land then deliver it on an as needed basis throughout the year. Standlee said Abengoa only stores 10 to 12 days worth of feedstocks on site.

“Currently 70 to 80 percent of our feedstock is stored on farmer’s land,” Standlee said.

Because cellulosic ethanol production is a new industry it is dependent on legislation to break into the fuel business that is dominated by petroleum and that is a major challenge. The Renewable Fuels Standard is critical to their success.

Risk associated with weather is a challenge. Standlee said despite the fact that Abengoa operates 16 ethanol facilities around the world, some in very warm climates and some in very cold climates, it is always a little bit different when you are working with new technology. First generation ethanol made from corn takes about five days from start to finish. Second generation ethanol made from crop residue takes about seven days.

“One of the things this does is make the process more susceptible to cold weather,” Standlee said.

In a start-up operation in the middle of winter where the plant is continuously being started up, and shut down freeze damage is a challenge. Standlee said they spent the last month or two making sure they had enough insulation for the facilities.

Because cellulosic ethanol production is a new industry, it is dependent on legislation to break into the fuel business that is dominate by petroleum and that is a major challenge. The Renewable Fuels Standard is critical to Abengoa’s success.

“The RFS is the largest driver in the development of this industry,” Standlee said.

As part of the administration of the RFS the Environmental Protection Agency is supposed to issue annual volume requirements. Standlee said Abengoa has the same concerns as the rest of the ethanol industry with EPA in connection with its administration of the RFS.

“They have failed to issue timely annual volume requirements for the usage of renewable biofuels and they are very slow in issuing pathways,” Standlee said. “However, the most disturbing issue is their proposal to reduce volume requirements below statutory levels based upon a perceived infrastructure limitation designated as the blend wall. We believe this is beyond their statutory authority and not a valid reason for a reduction since one of the primary purposes of the law was to break through this 10 percent blend wall limit.”

This lack of support by EPA could stop further expansion of renewable fuels. Abengoa would like to build more second generation biofuel plants in the United States but until these issues are resolved it will look to other countries, like Brazil, for expansion.