Butanol as Fuel – View From the Field NREL March 11, 2010 Sam Nejame Promotum Thank you for having me here. I’m Sam Nejame and my company is Promotum, a consulting firm focused on commercialization of next gen biofuels and green routes to chemicals. We provide business development, corporate development, due diligence, strategic planning and other services that help grow companies and markets. Poll: Know your audience. Show of hands. How many policy? Commercialization? Scientists? 1 1

Agenda What is Butanol? Brief History ABE Process Today’s Butanol From Petroleum The Future of Butanol Fuels Questions 2 2

What is Butanol? Family of 4 Carbon Alcohols Most common forms are normal butanol (n-buoh) and iso-butanol (i-buoh)‏ n-buoh primarily used to make butyl acrylates for coatings and adhesives Both n-buoh and iso-buoh have good fuel properties 3 3

Butanol Physical & Fuel Properties Physical Property i-butanol n-butanol Ethanol Density at 20°C (g/cm³)‏ 0.802 0.810 0.794 Boiling Point at 1 atm (⁰C)‏ 108 118 78 Water Solubility at 20⁰C (g/100mL water)‏ 8.0 7.7 Miscible Net Heat of Combustion (BTU/gal)‏ 95,000 93,000 80,000 R+M/2 103.5 87 112 Blend RVP (psi at 100⁰F) 1 5.0 4.3 18-22 This is a good time to distinguish between n-buoh and iso-buoh. Both have similar energy content and vapor pressure and solubility characteristics, but iso has a higher octane number (R+M/2) and is a better choice for blending w/gasoline. n-buoh has higher a higher cetane number and is a better choice for blending with diesel. Promotum, Gevo 4 4

Summary Comparison Butanol to Ethanol Fuel Higher energy content Less hydrophilic More compatible w/oil infrastructure More compatible w/installed base of autos Reduces blend vapor pressure Less corrosive Iso-butanol works well with gasoline n-butanol works well with diesel Compatibility w/oil infrastructure. Butanols are not corrosive to aluminum (etoh is). Butanols are much less hydrophilic and can be transported through existing pipelines. Reduction in blend vapor pressure means fewer VOC emissions and lower cost formulations can be used in EPA non attainment areas. 5 5

Butanol a Brief History Acetone, Butanol, Ethanol (ABE) Process First Industrial Fermentation Commercialized (1918)‏ Clostridium acetobutylicum bacteria Acetone for Cordite Later butanol for butyl paint & coatings (1930’s)‏ RAF planes flew on butanol during WWII Petroleum based production becomes cheaper (1950s)‏ Fermentation of Clostridium for the production of acetone, n-buoh and etoh is the oldest industrial fermentative process. Originally utilized for the production of acetone and smokeless gunpowder. In the 1930s butanol’s value for paints and coatings was realized. Production of butanol via ABE continued up until the 1950s when the modern petro-chemical industry was born. China continues to use traditional ABE fermentation. 6 6

ABE Fermentation Reaction Kinetics Although ABE is no longer current technology it forms the basis of many new bio routes to butanol. Actually half a mixed acid fermentation: acetic, propionic, butyric. Metabolic shift conversion to acetone, butanol, etoh. Traditionally in a 3:6:1 ratio A:B:E Ramey & Yang 7 7

Problems w/Traditional ABE Process Toxicity to the organism Low product concentrations Low yield Toxicity to the organism (~1% concentration) impedes growth and product formation. Low product concentrations mean high water separation costs, Low yields increase size of all up front materials handling 8 8

Butanol Production From Petroleum (1950s-Present)‏ Production of Butanol by oxo Alcohol Process Players & Market Share US & Global Manufacturing Capacity Price history of butanol, ethanol, gasoline So what replaced ABE? The creation of the modern petro-chemical industry created a new cost effective route to butanol. 9 9

Butanol Production From the oxo Process At a refinery naptha is cracked to propylene Propylene is the primary raw material and cost driver of n-buoh production. The oxo process produces ~90% n-buoh and ~10% iso-buoh. Global market for nbuoh is 3.8 M mtons/Yr Global iso-buoh is ~ 0.4 M mtons/Yr Metex 10 10

Market Share of Leading n-Butanol Producers Biggest producers are German giant BASF and Dow Chemical. Metex 11 11

Global Butanol Industry Capacity - Facility Cost Curve Cash Cost ($ / mton)‏ Cost curve shows every butanol facility manufacturing capacity and cost of production. Each bar is a facility. Width is capacity. Height is cost. Least competitive plants (far right) are eastern European and Japanese plants. Cumulative Capacity (K mtons)‏ Source: Tetra Vitae, SRI; company analysis Assumptions: $70 oil, range of feedstock cost 12 12

Domestic Butanol Production Cumulative Capacity (K mtons)‏ DOMESTIC DEMAND exports Butanol Cash Cost ($ / mt)‏ Cumulative Capacity (K mtons)‏ Source: Tetra Vitae, SRI; company analysis Assumptions: $70 Oil 13 13

Chemical Strategies, Inc. Price of butanol is typically 2X-3X the price gasoline and ethanol. Chemical Strategies, Inc. 14 14

The Future of Bio-Butanol Fuels “Our goal is to build a supply chain from lignocellulose to butanol.” Tony Hayward, CEO British Petroleum So, who thinks there’s a business in butanol? 15 15

Summary Bio-Butanol Process Goals Power & Price of Biotechnology Tools... systems biology, pathway engineering... Over expression butanol Suppression of other pathways Organism tolerance Improving yield Increasing productivity (rate)‏ Flexible feedstocks What’s changed to make biological processes competitive again? 16 16

Status Domestic Butanol Companies Company Bug Bug Strategy Molecule Fermentation Process Separation Strategy Development Status Gevo Yeast GMO UCLA Valine metabolism iso-buoh Semi batch vacuum flash in situ removal followed by distillation trains 2010 Operating pilot in St. Johns, MO. 2011 Commercial Cobalt Biofuels Clostridium Non GMO strain reduced etoh and acetone n-buoh for blending w/gasoline, diesel, jet Continuous modified ABE Fermentation vapor compression distillation 2010 pilot 10-35k gpy 2011 demo 2-5m gpy 2012 commercial Tetra Vitae Clostridium beijerinckii Non GMO selected for reduced etoh production n-buoh and acetone 2:1 Semi batch "AB" Fermentation Carbon dioxide stripping continuous in situ removal followed by distillation trains 2009 300 liter bench 2010 10,000 liter pilot Butyl Fuel Clostridiums Aceto & tyro GMO & mutant strain n-buoh Continuous two stage dual path anaerobic fermentation stripping following immobilized cell bioreactors Unknown Syngas Biofuels Energy Fermentation of Syngas GMO Thermochemical catalyst NA 17 17

Status International Butanol Companies Company Bug Bug Strategy Molecule Fermentation Process Separation Strategy Development Status Butamax (DuPont/BP)‏ 1.Clostridium 2.E.Coli GMOs iso-buoh Semi batch continuous in situ removal followed by distillation trains 2010 Salt End Hull, UK 2013 Commercial Additional Feedstocks 2013+ Green Biologics (UK)‏ Clostridium. Mixed populations GMOs high tolerance (4%)‏ n-buoh Continuous fermentation In situ removal unknown. Building demo in India. Consulting w/Chinese firms Metex (FR)‏ "Well known bacteria“ Unkown Unknown Butalco (Switzerland)‏ Yeast unclear China Clostridium Currently selected strain. Migrating to GMOs Migrating from traditional ABE Fermentation. May include in situ removal 2010 100MM gpy traditional ABE. 201X migration beyond ABE. Plans to add 350 MM gpy new capacity. 18 18

Bio-Butanol Projecting the 3rd Wave An optimistic projection for the future of butanol manufacture and acceptance. Some predict the entire petro chemical butanol market will be replaced with bio-butanol in 5 years. Highly unlikely. 19 Green Biologics 19

Bio Iso-Butanol Fuel Commercialization Forecast ---$6bn chemicals------------------------------------------------- We are likely to see some ethanol facilities retrofitted by Gevo, Butamax and Cobalt. It is very possible we will see 4 or 5 (80MM gallon plants) go online They will initially sell into the chemicals market for isobutanol (and possibly n-buoh)‏ If the facilities are economical we will see them enter the fuels market within 10 years 20 Promotum 20

Thoughts on Butanol Adoption 1 Pricing/Economics have to work Markets for butanol, petroleum and sugar feedstocks change daily. 2 Avoid Food v. Fuel Round II Butanol is a better alcohol, but for now corn is still the feedstock 3 Tax credits, biorefinery grants, loan guarantees Need to be extended to butanol. Government and private investment are necc. 4 Enlist/Co-exist w/current ethanol producers Infighting will slow production & adoption. Oil companies like BP (Butamax) may not be politically correct market driver. 5 Autos/Engine makers must approve May be catalytic converter issues. Manufacturer's warrantees essential. 6 Consumer education Higher energy content means a gallon isn't a gallon. Odor maybe a problem. 7 Technology improvements must continue Anything beyond ethanol is new territory at this scale 21 21

Acknowledgements Jim Evangelow Chemical Strategies Gorden Cheng ChemaLogic Jay Kouba Tetra Vitae Hans Blachek University of Illinois-Urbana Adam Schubert Butamax Ron Bray SRI Consulting 22 22

Thank You Sam Nejame Promotum 617.576.9084 Sam@Promotum.com Twitter.com/renewables 23 23