July 1, 2007 9:01 PM PDT
Squeezing more fuel out of scraps
The company, which was developed from research at Iowa State University, has devised a catalyst that allows fuel refiners to mix different types of oils together in the same manufacturing process. Currently, it's not easy for biodiesel manufacturers to process animal and vegetable oils together. The catalyst also eliminates a step in the oil-to-biodiesel process.
In all, the catalyst could cut processing prices by 30 cents a gallon, CEO Larry Lenhart said in an interview.
"Think of this nanocatalyst as an omnivore," said Erik Straser, a partner at Mohr Davidow Ventures, which was the lead investor in a $3 million initial round of funding for the company.
Mohr Davidow also announced it is participating in funding for ZeaChem, which says it has come up with a process that can extract far more ethanol out of rotting vegetable matter than competitors' processes. Using ZeaChem's method, nearly all of the carbon out of a pile of vegetable matter gets turned into fuel. Right now about one-third of the carbon in the corn ethanol process winds up as worthless carbon dioxide, which then adds to the levels of greenhouse gases.
ZeaChem hopes to have a million-gallon-a-year facility up and running in 12 to 18 months.
"There is no 'Frankenbug'," Straser said, referring to how some companies hope to create synthetic microbes to process cellulosic ethanol. "The enzyme cocktail is much simpler here. It works on a wider variety of feedstocks too."
Both companies are hoping to succeed by reducing the financial risks facing biofuel manufacturers. Although public support for cleaner fuels is strong, turning a profit isn't easy, even with subsidies that range from 50 cents to $1 a gallon.
Both biodiesel and ethanol are dependent upon feedstocks such as palm oil, sugarcane, and corn, which can fluctuate wildly in price and erode margins. Corn has doubled in price, from $2 a bushel to $4 a bushel, in the U.S. in the past year and whacked the profits of ethanol producers. Increased biodiesel demand is expected to make cooking oil prices spike in the coming years.
To ameliorate these problems, researchers are trying to come up with feedstocks with almost no value (like wood chips) instead of food crops (like corn), to reduce the amount of energy required to produce fuel, or figure out better ways of using the byproducts that result from the manufacturing process.
Ideally, the Catilin catalyst will let biodiesel refiners select from a wider variety of feedstocks, particularly the lower value ones such as old chicken fat. It also lowers the capital expenditure because one processing line can be used for a wider variety of oils.
Although the U.S. consumes a lot of meat, the store of leftover animal fat isn't large enough to get the country off of imported oil. Even if all the animal fat and tallow from slaughterhouses were converted to biodiesel, it would produce only a billion or so gallons of fuel a year, or about a percent of the amount of diesel consumed, according to statistics from University of Minnesota professor Vernon Eidman. Still, a billion gallons of fuel a year could sell for about $3 billion. To capitalize on the opportunity, pork and poultry giant Tyson Foods and ConocoPhilips announced plans to build a refinery.
The catalyst also isn't absorbed by the oil, so it can be reused. Straser further asserted that the catalyst will cut the costs of biodiesel refiners that mix meat and vegetable oils as well as those that want to stay vegetarian.
How does it work? The catalyst is a hollow, porous sphere. The outside of the sphere reacts with one type of oil to strip away glycerol while the inside sphere reacts with a different oil.
ZeaChem, meanwhile, has created an enzyme that converts plant matter made of sugar into acetic acid, which is then used in the ethanol conversion process. The techniques used by the company result in less carbon being burned off. ZeaChem's system also takes advantage of lignin, a high-energy material in plants that is extracted during the initial stages of making cellulosic ethanol and reused in a later part of the process.
What's more attractive: biodiesel or ethanol? Straser says his firm is investing in both, but indicated that biodiesel may have a lead. Ethanol, after all, is mostly being emphasized in the U.S. and Brazil and is not as popular globally.
"Net, net, it's a better fuel," he said. "Overall, the world is turning toward diesel."
Others, such as Michele Rubino of Navigant Consulting, side with ethanol, noting that the subsidies are higher on some types of biodiesel.