Some vocal E15 critics pinning hopes on isobutanol

Source: Amanda Peterka, E&E reporter • Posted: Wednesday, October 3, 2012

The boating industry has fought on Capitol Hill and in the courtroom against bids to add more ethanol to gasoline.

Worried that boat owners will fill their tanks with more ethanol than engines can handle, the industry maintains U.S. EPA blundered when it allowed the sale of E15, or gasoline blended with 15 percent ethanol. Tests show, boat makers say, that E15 can cause corrosion in small engines and increased emissions.

“We would love to see ethanol go away, at least from the perspective of E15,” said John McKnight, director of environmental and safety compliance at the National Marine Manufacturers Association.

But boat manufacturers and makers of other small engines say they are not against biofuels. They are just waiting, they say, for the right one to hit the market: isobutanol.

“Rather than just fight E15, we thought, ‘Let’s take a look at what else might be viable,'” said Jeff Wasil, an engineer at Bombardier Recreational Products Inc., a manufacturer of boat engines. “We’re excited about what we’re discovering here.

Isobutanol is one of four compounds of butanol, an alcohol with a four-carbon structure and, traditionally, a primary ingredient in Scotch whisky. When the oxygen molecule is removed, isobutanol becomes a building block for petrochemicals that can be turned into gasoline, jet fuel, rubber products and a wide variety of materials.

When made from cellulosic feedstocks like grasses and farm wastes, isobutanol is considered an advanced biofuel that can help refiners meet their targets under the federal renewable fuel standard.

While there is much more testing needed, the boat industry’s initial results from testing done last summer are promising.

Run for 50 hours in the Chesapeake Bay area on a fuel blend of 16.1 percent isobutanol and gasoline, two popular boat engines showed no signs of corrosion, increased emissions or engine knocking. The study’s findings, co-authored in part by McKnight and Wasil, will be presented next month at the Small Engine Technology Conference in Madison, Wis.

Those results prompted the Department of Energy to fund a follow-up study that looked this past summer at several more popular designs of boat engines, both on the water and in the lab. The study was carried out by the boat industry with oversight from Argonne National Laboratory near Chicago.

Results won’t be published until at least next year but are expected to show similar conclusions, Wasil and McKnight said.

In both sets of tests, the difference between midrange ethanol blends and isobutanol was like night and day, they say.

Because isobutanol contains less oxygen than ethanol, higher volumes can be used without concern — 10 percent ethanol is roughly equivalent to 16.1 percent isobutanol. The isobutanol blends also pack more energy than ethanol, though both are lower than straight gasoline.

With its four-carbon structure, isobutanol also stays mixed with gasoline in the presence of water, the testing found. Ethanol, a two-carbon atom, is hygroscopic — it attracts and holds water molecules, causing it to separate from gasoline when water is added.

That, the marine industry says, is a critical difference for boat owners.

“It’s a big thing. People leave their boats over the winter. You tend to get phase separation in the tank with ethanol,” McKnight said.

To be sure, gasoline blended with 10 percent ethanol works fine in boat engines; the problems start occurring when the blend is raised to 15 percent.

EPA has only approved E15 for use in cars from model years 2001 or newer — and not in boats. But the marine manufacturing industry is worried that EPA’s label warning owners not to use the fuel in unapproved vehicles won’t be enough to stop misfueling.

Other small-engine manufacturers have the same concerns.

“We’re really in a tough spot,” said Kris Kiser, president and CEO of the Outdoor Power Equipment Institute, which represents makers of mid-sized equipment. “You’ve always been able to put into the can whatever you put in the car. For the first time ever, that’s changed. We’re now running a fuel that’s legal for the marketplace that would literally destroy your boat and your equipment.”


Kiser also says he is excited about isobutanol. Briggs & Stratton, the world’s largest small-engine maker, last year tested isobutanol on a handful of its engines that are used in mowers, snow throwers, generators and other midrange-sized equipment.

Its results showed “great promise,” said Kiser. OPEI would “love to see an isobutanol or isobutanol-like substitute” in the market, he added.

Refiners would also prefer it over ethanol because of its higher energy content and lower oxygen levels, said Paul Beckwith, CEO of Butamax Advanced Biofuels LLC, a joint DuPont-BP venture working to commercialize isobutanol technology. Isobutanol blends are also not as volatile as ethanol blends, meaning lower-cost ingredients can be used in the blending of isobutanol with gasoline.

Since isobutanol is a drop-in fuel, it is also compatible in existing infrastructure.

“The area of pipeline compatibility is a big challenge for ethanol,” said Thomas Wallner, a mechanical engineer at Argonne’s Center for Transportation Research. “Living in the Midwest, you see a lot of rail cars because ethanol is primarily being moved around by rail cars. That is certainly a downside for ethanol.”

Separately, Argonne researchers have been testing isobutanol for use in cars. So far, isobutanol has performed similarly to ethanol in combustion engines, Wallner said. Its higher energy content, though, means that cars fueled with a blend of isobutanol-gasoline will go farther than cars fueled with a comparable ethanol blend.

But while the fuel’s potential has excited ethanol critics and some major biofuels players, there is still testing to do, and the fuel has yet to make a dent in a market that is currently saturated by corn ethanol

The only U.S. commercial isobutanol plant — constructed recently in Luverne, Minn., by Gevo Inc. out of a retrofitted ethanol plant — announced last week that it would switch from isobutanol production back to ethanol for economic reasons.

“We haven’t been able to achieve the consistency of operation that I’d like to see,” Gevo CEO Pat Gruber said in a conference call last week.

Gruber said that the plant will switch back to isobutanol production sometime next year, but he didn’t provide specifics for investors. In the day following the announcement, Gevo’s shares plummeted 35 percent.

Still, Gevo and competitor Butamax have high hopes for isobutanol.

“You should in no way hear or see that we are signaling lack of confidence in isobutanol production,” Gruber told investors on the call. “It’s all about doing the right thing and ensuring cash.”

Both companies have adopted a business model that involves retrofitting existing ethanol plants to be able to produce isobutanol (see sidebar).

Patent dispute

Butamax was formed in 2003 after DuPont’s success in commercializing propanediol, an organic compound used in the production of polymers, through biotechnology. Interested in pursuing other petroleum substitutes, DuPont approached BP, and the two agreed to work together, concluding a year later that isobutanol was an attractive fuel.

From one ‘game’ to another

Only slight modifications are needed to turn an ethanol plant into an isobutanol plant.

That gives isobutanol a big leg up in the advanced biofuels game, the two leading manufacturers of the fuel say.

The two, Gevo and Butamax Advanced Biofuels LLC, say the similarities allow shifts from traditional ethanol plants to isobutanol manufacturing with minimal costs.

“In the U.S., there’s so many ethanol plants that need help, and we can take them out of the ethanol game and put them in a different game,” Gevo CEO Pat Gruber said.

Converting an ethanol plant to isobutanol takes about a year and involves adding yeast that has been genetically modified to make isobutanol. Researchers have figured out a way to turn off the yeast’s ability to make ethanol and turn on its ability to make isobutanol.

New separation technology is also added in the retrofit to remove the isobutanol from water during production.

The fermentation process itself is very similar to that of ethanol and involves a lot of the same steps and most of the same equipment. The total conversion to isobutanol production cost Gevo $40 million at its plant in Luverne, Minn.

“It’s a huge advantage for the technology,” Butamax CEO Paul Beckwith said. “We can actually use virtually all of the existing equipment at the plant. We believe that biobutanol is, at least based on our technology, one of the very few advanced biofuel concepts that can be applied to existing facilities.”

Another advantage of the technology, Beckwith added, is that it can be applied equally to several feedstocks, including corn, sugar cane and cellulosic materials. While isobutanol plants will likely begin with corn as a feedstock, they will be able to transition to renewable materials when they become available

“The choice of butanol was driven by the view that this is the highest-value product and represented the best balance between product value and manufacturing cost,” said Beckwith of Butamax in a recent interview. “We still hold the view that basically the value of butanol in the market represents the best opportunity in terms of value creation.”

The companies began a research effort in 2004, received their first patent for the technology in 2005 and then formed Butamax in 2009 to commercialize the technology under a 50-50 joint venture.

Currently, 11 ethanol plants totaling 900 million gallons of yearly production have shown interest in allowing Butamax to convert their facilities to isobutanol production. Butamax is “on the verge” of breaking ground in its first commercial facility, Beckwith said.

Gevo, which was formed in 2005 and started to focus on isobutanol in 2007, completed its first retrofit in Luverne earlier this year and began producing isobutanol approximately 17 weeks ago. When fully operational, the plant is designed to produce 18 million gallons of isobutanol a year.

Gevo has also acquired through a joint venture a 55-million-gallon ethanol plant in Redfield, S.D., that it had planned to convert in 2013, but the delays at the Luverne plant have pushed back that schedule to 2014, according to analysts at Raymond James.

Analysts Pavel Mochanov and Stacey Hudson said the plant closure should be seen as the latest example of “the industry’s frustrating but inevitable growing pains.”

“This news is obviously unwelcome, but it’s not particularly surprising,” they wrote in a research report last week. “Scale-up of industrial biotech — including, but certainly not limited to, Gevo’s fermentation platform — almost always entails a longer than expected process of optimization before production rates reach target levels.”

While both Gevo and Butamax work separately to scale up isobutanol production, they also remain locked in a patent war over the technology.

Butamax filed an initial suit against Gevo in January 2011, and since then, each company has filed multiple lawsuits alleging infringement of patents. In the latest action, both companies sued each other on Aug. 14.

“We are very sure that they are infringing our technology, and we are very sure that we are not infringing theirs,” Gruber said that day on a call with investors. “Now, of course, they have their same opinion vice versa. That’s the reality of life.

“It’s undisputed that we were developing the technology before anyone else,” Beckwith said.

‘Stable policy is good’

The broader take-away from the patent dispute, isobutanol supporters say, is that the alternative fuel is one worth fighting over. Yet there is a divide between small-engine manufacturers and the isobutanol companies on just which direction the government should go to spur development of the technology.

The marine and small-engine industries believe there need to be long-term changes to the renewable fuel standard, the federal policy that mandates certain levels of production each year for traditional and advanced biofuels. The standard, says Kiser of OPEI, has spurred EPA to approve a fuel that is illegal to use in their engines.

“Legislatively, we’d like to see Congress take a timeout” and re-examine the standard, the marine association’s McKnight said

The boat industry has pushed its message on Capitol Hill, and Wasil said that it has generated some excitement about isobutanol from the House Science, Space and Technology Committee, which voted earlier this year along party lines to delay the introduction of E15 into the marketplace (Greenwire, Feb. 7).

Gevo and Butamax, on the other hand, say a stable policy is necessary to attract investment in the new technologies.

“Stable policy is good. Shifting policy is bad. It scares investors. It’s kind of as simple as that,” Gruber said at a recent press conference in Washington, D.C. “We need to be able to have a predictable industry.”

Both the engine groups and the companies acknowledge that there is still a long way to go for isobutanol in terms of both testing and commercialization.

“Right now, there’s not enough available to contribute in a significant meaningful way. It’s still early in the process,” Wasil said. “It’s exciting for us to be involved because we’re on the forefront of this new innovation. In my opinion, it’s going to build up to be a lot more important for us moving forward.”