by Terry J. Mazanec (Lee Enterprises Consulting/Biofuels Digest) … Most modern refineries comprise more than 20 individual unit operations, each of which is a complex process on its own. And different refineries are optimized for different blends of crude oil, different product slates, and under different environmental and legal regulations. This network of over 700 highly sophisticated, rigorously optimized, and locally tuned facilities operating at massive scales make up the landscape in which biofuels must compete. Is it any wonder why biofuels have not made more than a token impact on the market?
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‘(P)eak oil’ will be a reality, although the date keeps receding into the future. Geopolitical events in the Middle East and Russia highlighted the need for fuel resources that are not subject to international manipulation. Calculations of the impact of CO2 and other GHGs on the world’s future climate raised additional concerns. All of these sparked a renewed, intense interest in alternative fuels, including biofuels.
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Fossil fuels account for about 80% of all of the world’s energy supply, a fraction that has remained essentially unchanged since 1970.
Now the world turns its lonely eyes to biofuels. The attraction of developing an alternative fuel source that is completely renewable, locally sourced, and morally uplifting due to its ability to impact CO2 and CH4 emissions, is inescapable.
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The critical realization that biofuels entrepreneurs need to come to is that the widespread displacement of petroleum will be a very long and difficult process for all the reasons cited above. Even Draconian government interventions can only make a small dent in the market and only in very limited geographies.
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Biofuels derived from renewable wastes from corn, wood processing, palm oil production, livestock, or MSW have received increasing attention since their use does not impact the food supply much, it at all. In addition, these cellulosic feedstocks can be made available in nearly steady streams of somewhat consistent quality or composition, so processing them is not plagued by the intermittent supply problem of wind or solar. Moreover, their carbon ‘savings’ are at least something, and possibly a great deal, depending on the assumptions of the study. So cellulosic biofuels, including cellulosic ethanol, biodiesel, biogas, and so on, have some notable advantages over competing renewable fuel sources; they are collectively referred to as ‘advanced biofuels.’
So what’s holding them back?
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The complexity of the mixture of components in any cellulosic feed produces a wide range of chemical and physical properties and reactivities, so they do not convert selectively to desirable products. Many of these materials – particularly lignin – are much more resistant to chemical breakdown into useful derivatives than are sugars.
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Petroleum resources are available in massive quantities at single sites. This allows producers to design single plants to handle large amounts of material.
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Biomass feedstocks are dispersed because they need large tracts of land to grow the crops. The biomass must be transported to a central processing point to be upgraded to fuels, and transport costs increase with distance. Thus there is a natural limit to the size of biomass upgrading plants that is set by the cost of transport and that limits the ability to take advantage of economies of scale. The largest ethanol plant in the US is ADM’s Decatur plant with a capacity of 375 million gallons per year, or 24,000 barrels per day. By contrast there are 76 US refineries (out of 137) with capacities of more than 100,000 bpd with a few over 400,000 bpd.
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How do the smaller refineries compete? All of these are older facilities so the investment has long since been paid off. Many of these are boutique facilities that focus on specific products like lube oils for specific markets or customers. And don’t forget that over 100 refineries have closed in the US since 1980, so they are a vanishing breed.
Finding an appropriate niche in the market seems to be the most viable strategy to establish a biorefinery. READ MORE