National Research Council Affirms Results of Forisk Liquid Biofuels Study

This week, the National Research Council (NRC), which operates as part of the US Academy of Sciences to advise Congress, published a study concluding that the United States will likely fail to satisfy its long-term Renewable Fuel Standards (RFS2) mandate for producing advanced biofuels from trees, grasses and crop waste.  In particular, the study cites the technological challenges of producing “next generation” ethanol.

The NRC research affirms the results of the study Forisk published in May 2011 with the Schiamberg Group which evaluated the wood-based transportation fuel sector in the United States.  While wood pellet and wood-to-electricity projects use established technologies proven at commercial scale, wood biofuel projects continue to face major technological, feedstock and policy challenges.  That said, there is a wide range of technologies and business models in development in the wood transportation fuels sector.

The study – Transportation Fuels from Wood: Investment and Market Implications of Current Projects and Technologies – includes the status of 36 cellulosic biofuel projects and estimated commercialization timelines for 12 technology approaches. While the NRC study addresses policy and sector-wide analysis and implications, the Forisk study emphasizes bioenergy and timberland investor implications by firm and project in the US.  Projects producing drop-in fuels appear to have superior potential for investors.   However, major technical hurdles will likely disrupt commercialization for most technologies under development.

While Forisk’s study finds an 11 year gap on average between estimated technology viability and firm announcements, it highlights promising approaches.   This includes the gasification technology under development by firms like Rentech and ClearFuels for diesel and/or jet fuel. INEOS New Planet, Rappaport Energy and Coskata, and Kior are pursuing innovative approaches using gasification and microbes, and catalytic fast pyrolysis.

For more information, please click here.

Wood Bioenergy: Impacts on Timberland Investors from Biofuels Projects

Questions and comments regarding a study we published with the Schiamberg Group have focused on (1) why a given wood-using transportation fuel project is different or “special” and (2) potential impacts to timberland investors and managers.   The study – Transportation Fuels from Wood: Investment and Market Implications of Current Projects and Technologies – includes the status of 36 cellulosic biofuel projects, estimated commercialization timelines for 12 technology approaches, and implications for bioenergy and timberland investors in the US.   These projects seek to convert wood to fuels including ethanol, butanol, diesel, gasoline, and jet fuel.

With respect to the exact and extraordinary circumstances associated with each wood biofuels project, we defer to the late Senator Daniel Patrick Moynihan, who said “Everyone is entitled to his own opinion, but not his own facts.”  Our research focused on verifiable, third-party sources to confirm the current status and commercial viability of known projects.  While our team, as forestry “enthusiasts”, would love to see growing demand for wood and the associated incentives to increase investments in forestry and forest health, a project cannot be considered viable until the relevant technology has been proven at commercial scale.   We encourage dialogue and will update our analysis as new facts present themselves.

For timberland investors, the overall, potential impacts from this sector appear modest, though specific local markets could benefit within the next ten years.  On a national scale, demonstration and commercial projects could use up to 8.8 million dry tons of wood per year by 2030. According to project announcements, this total wood demand would occur by 2018. A commercialization scenario projects 8.8 million dry tons of wood per year 11 years later in 2029. In other words, we estimate an 11 year lag between when the projects expect to operate and when our technology analysis indicates the technology could overcome hurdles and be viable at commercial scale.  This figure from the study illustrates the story:

The study models and graphs data for all US regions: the US South dominates the potential incremental wood use from the transportation fuel projects evaluated.  At the most basic unit of analysis, the local wood basket circling each liquid fuel project, the population of timberland owners and investors with significant exposure to potential increases in raw material demand from announced projects would include those with timberland investments in markets that include lower risk, higher potential projects.  These markets include Alabama; California; Michigan; Mississippi; and Tennessee.

While some projects show particular promise and advantages, our general results indicate that major technical hurdles will likely disrupt commercialization for most technologies under development.  For more information about this study, please click here.

Wood Transportation Fuels: Study Finds 11-Year Gap Between Announced Production and Viability of Technologies

Our team just published a study with the Schiamberg Group that evaluates the wood-based transportation fuel sector in the United States.  The study builds on Forisk’s tracking and screening of all operating and announced wood-using bioenergy projects in the US (453 projects as of April 28, 2011; click here for summary).  While wood pellet and wood-to-electricity projects use established technologies proven at commercial scale, wood biofuel projects continue to face major technological, feedstock and policy challenges.  That said, there is a wide range of technologies and business models in development in the wood transportation fuels sector.

The study – Transportation Fuels from Wood: Investment and Market Implications of Current Projects and Technologies – includes the status of 36 cellulosic biofuel projects, estimated commercialization timelines for 12 technology approaches, and implications for bioenergy and timberland investors.   The map shows all projects by location and size covered in the study.

Location of Operating and Announced Liquid Fuel Projects in US

These projects seek to convert wood to fuels including ethanol, butanol, diesel, gasoline, and jet fuel.  Projects producing drop-in fuels appear to have superior potential for investors.   However, major technical hurdles will likely disrupt commercialization for most technologies under development.

While the study finds an 11 year gap on average between estimated technology viability and firm announcements, it highlights promising approaches.   This includes the gasification technology under development by firms like Rentech and ClearFuels for diesel and/or jet fuel. INEOS New Planet, Rappaport Energy and Coskata, and Kior are pursuing innovative approaches using gasification and microbes, and catalytic fast pyrolysis.

For more information about this study, please click here.