Biobutanol Close to Commercialization

STREATOR, Ill. (DTN) -- The U.S. biobutanol fuel industry is on the brink of commercialization as one company ramps up its commercial-scale refinery to full capacity by the end of this year.

Gevo's Luverne, Minn., converted ethanol plant is producing several hundred thousand gallons a month of biobutanol, an isobutanol alcohol fuel produced from corn feedstock through fermentation similar to the process that produces ethanol.

"We are producing a few hundred-thousand gallons a month now, then we'll ramp up to full capacity by end of the year at up to 1.4 million gallons month," Pat Gruber, CEO for Gevo, told Schneider Electric.

Gevo, based in Denver, Colo., is funded in part by Cargill, an international producer and marketer of food, agricultural, financial and industrial products and services and Total, a multinational energy company focusing on oil, gas, chemicals and new energy sources.

Gruber emphasized biobutanol is not intended to replace ethanol, but instead would likely find a niche market in the biofuel blendstock mandated by the Renewable Fuel Standard.

Gevo's business model calls for providing for an ethanol producer with either "bolt-on" technology to an existing ethanol plant to offer both blendstocks from the same corn feedstock or to outright convert the ethanol plant to produce biobutanol -- as Gevo did at Luverne. Gruber said his company is targeting distressed, smaller ethanol plants for outright conversion.

Gruber commented isobutanol has lower vapor pressure than ethanol.

"It has low vapor pressure, good octane, good energy content," Gruber said.

Because of its properties, gasoline refiners can formulate gasoline differently than with ethanol. While ethanol is blended at 10% in the majority of gasoline across America, biobutanol may be blended up to 16%, potentially staving off the blend wall challenge. In other words, an additional 6% of blendstock biofuel could be added to gasoline, effectively creating a new saturation point of 16% of the total gasoline pool, instead of 10% -- known as the blend wall.

Not only may biobutanol be blended into gasoline at a higher concentration with no engine modifications and no modifications to infrastructure such as pumps and pipelines, but it is assigned more credits for each gallon for RFS compliance than ethanol.

The RFS mandates 13.8 billion gallons of renewable fuel -- primarily satisfied with corn-based ethanol -- are blended into gasoline this year, more than 10% of this year's anticipated gasoline demand. And in 2014 the RFS increases, with gasoline demand expected to remain flat with this year. The 2013 shortfall of gasoline to blend may be made up in part with carryover Renewable Identification Numbers from 2012, the credits used by obligated parties -- refiners, blenders and importers -- to show compliance with RFS annual renewable fuel blending mandates.

Biobutanol, however, has a higher energy content and is assigned 1.3 RIN credits per gallon, while corn-based ethanol is equal to 1.0 RIN per gallon.

Lower Reid Vapor Pressure (RVP) is a key component of utilizing biobutanol in gasoline, said Sam Nejame, CEO for Promotum Consulting of Cambridge, Mass., a biofuels management consulting firm.

"Ethanol is 18 to 22 PSI [pounds per square inch]," Nejame said. "Isobutanol RVP is 5," Nejame said, adding that the Environmental Protection Agency's non-attainment zones for air quality require lower RVP in gasoline to meet federal standards.

RVP is a measure of a fuel's volatility and thereby affects the rate at which gasoline evaporates and emits volatile organic compounds that cause air pollution. In the summer, a lower RVP is required in gasoline because of a higher evaporation rate in warmer weather. During the summer, the EPA, through its authority under the Clean Air Act, require a number of states in the Southern U.S. or with high levels of pollution to sell finished gasoline (after blended with ethanol) with an RVP as low as 8.8. RVP levels are higher outside the summer months.

Adding biobutanol instead of ethanol to gasoline creates a formula below EPA requirements, eliminating the need for expensive reformulations, Nejame said.

In addition to automobile fuel, Gruber said, for marine and small engines, biobutanol can be blended instead of ethanol without ethanol's water soluble challenges.

"People don't like ethanol in boats," Gruber said. "Ethanol washes out of gasoline when in water. Storage tanks near marinas get water in them. Butanol does not separate in water. That's why the Coast Guard is testing our products."

Gevo is also looking to develop biobutanol for blending with jet fuel.

"Ultimately we will be cost-competitive for commercial airlines across the board," said Gruber.

RINs are assigned to jet fuel blended with biobutanol, an economic advantage for obligated parties who produce fuels that require RINs under the RFS.

"This takes into account RINs and a low-carbon footprint allowing jet fuel blended with biobutanol to be cost competitive or better," Gruber said.

Another player in commercial biobutanol industry is Butamax, a joint venture between global oil and gas producer and marketer BP and U.S. chemical manufacturer DuPont. Butamax would not comment for this story on their status of commercialization of isobutanol derived from biomass feedstocks.

Similar to ethanol, corn is not the only feedstock being considered for production of butanol alcohols.

Green Biologics, based in Gahanna, Ohio, seeks to convert biological feedstocks into normal butanol, different from isobutanol that is more tailored to the fuel market, saying there is a 10-billion-pound global market for n-butanol while isobutanol is closer to an 800-million-pound market. N-Butanol is a solvent useful in alcohols, ethers, glycols, and aromatic hydrocarbons. Its distinct odor, as opposed to isobutanol, precludes n-butanol from serving as a blendstock for fuel, said Joel Stone, president of Green Biologics.

Similar to Gevo, Green Biologics is looking at either a bolt-on technology to existing ethanol plants or to convert the plant outright.

"Our strategy is to either acquire or partner with existing ethanol assets in distress mode or who want to diversify risk," Stone said.

The company's process technology can convert any biological feedstock with C5 or C6 sugars, into butanol, including municipal solid waste, tree waste and other biomass.

Myke Feinman can be reached at myke.feinman@telventdtn.com

(BM/AG)

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