biofuels: growing energy - national...
TRANSCRIPT
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BIOFUELS:GROWING ENERGYGovernment-University-Industry Research Roundtable Meeting (GUIRR)
February 19, 2007
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“Torn From The Headlines” Issues
Energy supply
Energy demand
Environmental impact
Energy security
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A Midwest Goldrush?
U.S. Corn Starch Ethanol Plants
Current installed capacity 5.5 B gallons/yr112 facilities
Capacity under construction 6.2 B gallons/yr77 new plants; 7 expansions source: Renewable Fuel Association
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Driving Corn Prices to Historic Highs
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Corn Starch v. Crude Oil
Cost of Carbon in Corn v. Crude Oil
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$30 $40 $50 $60 $70 $80 $90
Crude Oil Price ($/barrel)
Corn
Pric
e ($
/bus
hel)
Below the line, corn is acheaper source of carbon
Above the line, crude oil isa cheaper source of carbon
w/VEETC*
wo/VEETC*
* VEETC - Volumetric Ethanol Excise Tax Credit ($0.51/gal ethanol)
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2007 State Of The Union Address
“…we must increase the supply of alternative fuels, by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017 -- and that is nearly five times the current target.”
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It’s The Cellulose, Stupid
Biofuels produced incidentally to food-crop agriculture are suboptimal in several dimensions, but the cellulose from
engineered energy crops, processed in new ways, offers the prospect of significant improvement and material benefit for
transportation fuels.
Steven E. KooninChief Scientist, BP
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Cellulases Hemicellulases
Basic Carbohydrate Biochemistry
Sucrose (sugarcane) Starch (corn grain) Cellulose (cell walls)
amylase /glucoamylase
Biofuels
C6 fermentation/distillation
C5/C6 fermentation/distillation
sucrase
C6 fermentation/distillation
Biofuels Biofuels
Hemicellulose (cell walls)
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Plants Did Not Evolve To Serve Man
Genetic manipulation or “breeding” has been instrumental
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What Limits Crop Yields?
Germplasm
Biotic stress– Weeds– Insects– Fungi
Abiotic stress– Drought– Nitrogen– Temperature
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Technology Is Game Changing…
Adoption of hybrid genetics has tripled US corn yield since 1940
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Biotechnology Has Been Game Changing
• Reduced insecticide use• Reduced fungal infection• Lower aflatoxins
• Increased “con-till”• Reduced soil erosion
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A Third Technological Revolution
“Changes that will have effects comparable to those of the Industrial Revolution and the computer-based revolution are now beginning. The next great era, a genomics revolution, is in an early phase.
Thus far, the pharmacological potentials of genomics have been emphasized, but the greatest ultimate global impact of genomics will result from the manipulation of the DNA of plants.
Ultimately, the world will obtain most of its food, fuel, fiber, chemical feedstocks, and some of its pharmaceuticals from genetically altered vegetation and trees.” Philip H. Abelson, Editor
Science, March 1998
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Who is Ceres?
World’s leading plant genomics company– More plant genes-traits identified than any other entity
Monsanto’s largest external gene technology supplier– Technology and IP validated by $137M collaboration
Developer of dedicated energy crops leveraging technology platforms– Genes/traits for drought, biomass, nitrogen, composition, processing
etc. already identified
Exclusive R&D and commercialization partner of the Noble Foundation, foremost forage grass research institute in U.S.– Seed multiplication of improved commercial energy crops underway
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Plant Genomics is Game Changing
Acres Stress tolerance (e.g. drought, heat, cold, salt)
Growth on marginal acreage helps enable critical mass
Parts of the Equation Relevant Traits Impact
Tons per acre Increased yield (e.g. photosynthetic efficiency)
Lower production and transport costs and increased carbon sequestration
Dollars per acre Nutrient requirements (e.g. nitrogen utilization)
Lower fertilizer costs and less N2O emissions
Gallons per ton Composition & structure (e.g. C5/C6, cell wall structure)
Increase theoretical yield of ethanol per ton of biomass
Capital cost of refinery & variable cost per gallon
Composition, structure & enzyme production (e.g. cellulases)
Eliminate need for acid hydrolysis, reduce need for enzymes and bring actual yield closer to theoretical
Co-products Metabolic engineering & sequestration
Enhance overall economics
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Ceres’ High-Throughput Pipeline
Screen for Traits
Transform into Model Plant
Arabidopsis
Transform into Crops
Rice
Transform into Energy Crops
SwitchgrassMiscanthus
Identify cDNA
Various Plant Species
Move valuable gene-promoter combinations into cellulosic energy crops
(Proprietary)
Move successful gene-promoter combinations into commercial food crops
(150/qtr)
Define valuable gene-trait combinations via high-throughput screens
(3,600/qtr)
Transform gene-promoter combinations into model plant
(4,000/qtr)
Sequence & characterize
>70,000 genes
>10,000 promoters
Proprietary Genomic Technology Enables Rapid Product Development
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Ceres’ Comprehensive Gene Set Enables Systems Approach
Stand EstablishmentGermination rateCold germinationCold growthHerbicide tolerance
Nitrogen EconomyUptake and translocationReduction and partitioning
Stress ToleranceDrought tolerance and recoveryHeatColdSaltPhotoperiod
PhotosynthesisPlanting densityLight harvesting / utilizationChloroplast position and numberPEP carboxylase, SBPase, FBPase
Plant ArchitectureBranchingStalk thicknessRoot lengthStatureLeaf size / angle
Improved ProcessingLignin contentC6/C5 ratioCell structureOrgan structure
Hormone biologyBrassinolidesGibberellinsAuxin
ReproductionHeterosisGenetic confinement
*Picture of switchgrass growing in Ceres Greenhouse
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Increasing Tons per Acre…
Control TransgenicControl Transgenic
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The Tyranny of Distance
0
5
10
15
20
25
30
35
40
45
0 5 10 15 20
Yield (tons per acre)
Tran
spor
t Dis
tanc
e (m
iles)
Yield vs. Transport Distance* Yield vs. Harvest & Transport Costs*
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
0 5 10 15 20
Yield (tons per acre)
Har
vest
& T
rans
port
Cos
ts
(per
ton)
Yield density both reduces transport distance (thereby reducing transport cost) and improves economy of scale
for use of harvesting equipment
* Assumes a 10,000 ton/day processing facility with 50% of surrounding land used for biomass
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Reduced Agronomic Inputs…
Con
trol
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Expanding Usable Acres: Heat Stress
Arabidopsis geneControl
Arab gene Control Corn gene
RICE
TOMATO
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Control
Transgenic
Expanding Usable Acres: Drought
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Expanding Usable Acres: Cold Stress
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Improving Composition…
Genes for cell-wall biosynthesis in hand.
Actively screening plant lines for improved processing and energy content
Working with processing and enzyme companies to develop tailored solutions
Non-transgenic Wild type
Transgenic line increased lignin
deposition
Transgenic line decreased lignin
deposition
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Ceres-Noble Collaboration
Samuel Roberts Noble Foundation
Located in Ardmore, OK
World’s premier organization for conventional and molecular breeding of switchgrass and other perennial grass crops
Three divisions – Agriculture, Plant Science, Forage Improvement
~300 research, 435,000 sq ft of research space
10,000 acres of adjacent farm land
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Switchgrass in Oklahoma…
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Miscanthus in Illinois…
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Jefferson Would Have Loved Energy Crops!
“The greatest service a citizen can do for his country is to add a new crop for his countrymen.”
- Thomas Jefferson
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Energy Crops vs. Crude Oil
Cost of Carbon in Cellulosic Energy Crops v. Crude Oil
$-
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
$20 $30 $40 $50 $60 $70 $80 $90 $100 $110
Crude Oil Price ($/barrel)
Ener
gy C
rop
Pric
e ($
/ton)
Below the line, energy crops are a cheaper source of carbon
Above the line, crude oil isa cheaper source of carbon
w/VEETC*
wo/VEETC*
* VEETC - Volumetric Ethanol Excise Tax Credit ($0.51/gal ethanol)
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Total U.S. Acreage
Is There Enough Land?…
Corn
Wheat
Soybean
Cotton
CRP
0
20
40
60
80
100
120
2004/0
5200
5/06
2006/0
7200
7/08
2008/0
9200
9/10
2010/1
1201
1/12
2012/1
3201
3/14
2014/1
5
Mill
ions
of a
cres
U.S. Cropland Unused or Used for Export Crops
By 2017, 78M export acres plus 39M CRP acres could produce 384M gallons of ethanol per day or ~75% of current U.S. gasoline demand
Forest 760
Range 600
Crop 480
Other 460
Total = 2,300M acres
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Confidential. For your personal use only.
Food versus Fuel?
Land use choices: cultivate or not cultivateCropping choices: e.g. corn vs. cottonGermplasm choices: hybrids and biotechTechnology choices: US yields vs. ROWFood choices: animal protein vs. plant protein
Nearly all these choices are driven by market economics
Biofuel choices will be the same
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Will Markets Choose Wisely?…
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Let Entrepreneurs Innovate…
Improved pre-treatment technologies– Plant composition, ammonia
explosion, etc.
Improved biomass digesting enzymes– Reduced cost, enhanced
specific activity
Improved fermentation strains– C5 & C6 fermentation
pathways– Ethanol tolerance – Other fuel molecules– Consolidated bioprocessing
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What Should The Government Do?
Get 1st generation cellulosic biorefineries built– Loan guarantees and other incentives
Create market demand for cellulosic ethanol– Fuel standards, tax credits and other incentives
Fund basic research in biomass conversion– Do not compete with private enterprise
Help farmers grow energy crops– Agronomics, stand establishment, crop insurance
Give energy companies a reason to care– Allow SEC to count biomass as proven reserves
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Biomass as Reserves
1 acre100M acres
209 barrels of oil*20.9 billion barrels
12.98Royal Dutch Shell18.50BP
7.60Conoco Phillips9.95Chevron
22.20Exxon MobilProven Reserves (billion barrels)
* Assumes 10 yr contractSource: Energy Intelligence (data as of end of 2004)
==
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“The Stone Age did not end for lack of stone, and the Oil Age will end
long before the world runs out of oil.”Sheikh Zaki YamaniFormer Saudi Arabia Oil Minister
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THANK YOU