About this episode
In the second of our two part series with Paul Bryan, formerly of Chevron, US DOE, SANDIA and now with Origin Material, we hear about some of his experiences and reflections on the role of feedstock, its implications on refinery processes, and the role of (US) federal policy in the emerging biobased economy.
CB: Hello everyone, and welcome to Tech Transfer Talk. I’m your host, Cameron Begley, and we’re very lucky to be rejoined by Paul Bryan, who shared his thoughts on the right bio stuff and the role of the desperate customer when we last spoke to him. Paul, I wanted to continue our discussion today and explore a little bit more around feedstock and refinery, and indeed the role that federal policies have in bringing the bio-based economy together. From a BTO perspective, perhaps more than the Chevron perspective, when you looked at that portfolio of investments that you were placing on behalf of the US. Government, and then you thought about feedstock and the time it takes for changes in farming systems and agricultural production systems to take hold, what good things, what challenging things did you find on the feedstock side when looking to get, perhaps not so much your investments made but more getting those investments through into the hands of people that could deploy them?
PB: Yeah, that’s a really important point, Cameron. So maybe in no particular order. Because of the, I would say the great enthusiasm for massive scale, at the time I was at BTO, now this is 2010 through 2012, at the time I was at BTO, there really wasn’t much interest in wastes, other than truly massive waste streams like corn stover, which is energetically be equal to the energy value in the corn, if not greater. But in terms of mixed urban waste and waste from things like forest thinnings or mills where timber was produced, things like that, there tended not to be much enthusiasm for that. But to me that’s the low hanging fruit. And I think the enthusiasm outstripped reality. in the sense that we weren’t going to jump immediately from no biomass economy to hundreds of millions of acres of switchgrass.
PB: So that was one thing. Around that time, the transition did start to occur of there being more acceptance of waste as a feedstock. There is even with something like corn stover, there is the issue of whether we call it waste, but is it truly sustainable? So, there was a fair amount of work. The second or the first revision of the so called Billion-Ton Report was underway during the time I was there. And there was quite a bit of work of understanding you just how much corn stover can we remove from a cornfield without damaging the ongoing health of the soil? And even then, what do we have to do to compensate? And so, I think they worked to a level of removal that was possible and some additional fertilisation would be required to make up for removing that. So those are the kinds of things you have to look at . The other one that, and picking on switch grass, again, miscanthus would be another example. Farmers are not stodgy people, okay? They’re not stuck in the mud ,except if they bring their tractor out too early in the spring, maybe, but figuratively, they’re not stuck in the mud business.
CB: They are businessmen and businesswomen.
PB: Exactly. They’re smart. And you think about does the oil industry take risks? Farmers take all sorts of risks. And so, the thing with switchgrass and miscanthus, that has been an obstacle, is they are perennial crops. And that is great from a biomass lifecycle analysis perspective. But for a farmer who has to plant and devote maybe six or seven or eight years to turning a net profit on that acreage, it’s a hell of a risk. You come in with some sorghum, which can be an energy crop, which is an annual, and farmers will say, yeah, all right, I’ll take a section over here and I’ll plant some sorghum on that, and we’ll see how it goes. And if it doesn’t work out next year, I’ll plant something else. So, the difference in mindset between farmers that grow annual row crops and asking them to take on a multi-year perennial, of course, that is what sugar cane is.
PB: Nothing new to sugar cane farmers, but to a corn farmer, a wheat farmer, soybean farmer, a non-annual crop is a hell of a thing.
CB: Yeah. The sugar cane analogy struck me as you were saying that, that it’s just standard operating procedure in the tropics. You move into temperate and it’s a completely flipped mindset. And without, without any, that’s just what it is. Yeah. Fascinating.
PB: And then the final thing that I’ll comment on is, I felt like at that time, and maybe it’s turning around, I felt like there was probably not enough emphasis on wood as a feedstock. And it’s kind of ironic. Anytime you try to cut down a tree, someone is aghast. But the grasslands where we grow corn and soybeans are every bit as much a natural ecology, or they were as the forests are and were. So, the distinction between tree farms where it’s just another farm, you happen to be growing trees as opposed to an actual natural forest, that grows to maturity, you manage it little or not at all. And it is a very diverse natural economy, as opposed to a tree farm, which is typically a single species that is cultivated, harvested, cultivated, harvested. It just happens to be the harvest is every 25 years, not once a year. So, there are a lot of advantages to these feedstocks. In particular, the fact that you get away from the storage problem. If you have a crop like switchgrass that’s harvested pretty much once a year, okay, you harvest it all, but you’re going to process it over 365 days. Where do you put it? With a forest, you can harvest the tree anytime you can get machinery out into the forest.
CB: Yeah. Yeah. And then chip it or leave it as logs and have it sitting there and it’s all okay.
PB: Right. And it doesn’t even have to sit there for that long. You store it on the stump, as they say, you don’t cut it until you need it.
CB: Don’t cut it until you need it. Yeah. Just in time feedstock.
CB: I think the miscanthus switchgrass story has another dimension which I’d like to explore, and maybe it’s more a contemporary issue now than perhaps it was in 2010-12. So, in 2010-12, I think we can say we saw the first sign to the food versus fuel conversation really hoving into view very strongly, and quite understandably and quite reasonably. There’s another conversation that I’ve heard starting to take place now in, say, the last two or three years, where, given the amount of waste feedstock, the ones that you in fact just referred to earlier, Paul, around getting more interested in waste, with enough waste feedstock around, is there still an opportunity for dedicated energy crops or dedicated energy feedstock crops which are very vanilla in flavor, like they are lignocellulose feedstocks, there might be more specialised ones around. There are cover crops and such things but is there a role for pure energy feedstocks now, given the pressures and challenges we still have with food, and also the fact that people are now turning to some of these waste streams and seeing them as quite viable alternative feedstocks?
PB: So that’s a very broad question. Food versus fuel is a bit of a red herring. The issue with food at present is not capacity, it’s the economics. If the hungry people had money to buy food, somebody would grow it and get it to them. There’s not – you’re nowhere near the capacity of the world to produce food. It’s just that farmers have a tough enough time as it is selling their product for what they sell it for. Today, they can’t sell it for less. But there are, unfortunately, a lot of people in the world who can’t pay what food costs. So, yeah, I think it’s a little bit of, in some cases, a purposeful distraction to try to blame the generic problem of getting enough food to everyone in the world. Now, there are cases where it absolutely has been a problem. The European expansion of biodiesel blending requirement at one point drove vegetable oil prices very high. And because vegetable oil is cooking oil, vegetable oil is often a disproportionate impact on poor people because cooking oil is a cash cost, and it’s a cash cost that is set on a global market. So, the Europeans very rightly recognised that,and they backed off. There was another case where speculation, as much as actual profit, actual production, drove prices of corn high on the commodity markets. Now, this is yellow number two corn. People do not eat yellow number two corn. But in parts of Latin America, the price of white corn, which is used to make tortillas, was indexed to yellow number two. And so, when yellow number two went through the roof, so did white corn. And again, people who are having a tough time getting by to begin with, suddenly their tortillas cost two or three times as much. It’s a real problem. It’s not theoretical to them. And so, it’s important to recognise and if possible, decouple that food, the white corn, and decouple that from yellow number two so that these people are not at the whim of the fluctuations in the commodity market for yellow number two.
CB: I was just going to say, Paul, that’s a very interesting distinction between the biophysical production system, and the trading and regulatory system. So what you’ve just described, what I think you’ve just described there, Paul, is in principle, biophysically, the carrying capacity that we have should be able to feed, and potentially fuel and clothe the people that live on the planet. But we have economic and regulatory distortions. Economic in the case of hooking the white corn price onto the American yellow corn, and regulatory in the sense that the Europeans made a decision to drive a certain policy and then, as you say, they corrected their trajectory. But it’s interesting how you decouple the two, and that decoupling is an important part of the conversation.
PB: Yeah, absolutely. A far more distant future and theoretical thing that occurred to me some years ago is, when we look to ferment cellulosic sugar made from lignocellulosic biomass, that’s fine, because lignocellulosic biomass is not edible by humans. But let food supplies get tight enough, somebody’s going to look at that plant and say, you know, they’re in the middle, that’s sugar, that is edible. Nobody thinks about it that way. They’re trying to make the crop edible for yeast, but it is also a sugar that’s digestible ,certainly by animals, but also by people as well. And so, it could become a point of contention, somebody’s making money turning that sugar into fuel. But if food supplies get tight enough, does that mean that the responsible thing, the socially responsible thing is to divert it to replace human food or animal feed?
CB: Well, there’s a very active market in the use of lignocellulose for feeding animals. That’s a well-established pattern.
PB: Yeah, indeed. But once you’ve converted to sugar for animals as well as humans, it becomes much more digestible. In other words, at a feed lot, you could potentially displace some of the grain that’s fed to animals with cellulosic sugar, whereas you can’t really displace it. I mean, for poultry and swine, for example, they can’t digest the lignocellulosic biomass, but they can certainly digest sugar.
CB: Yeah, absolutely.
PB: Let me get back to your original question, if I could-I know I digressed enormously there. I think in answer to your question, there isn’t a very broad market for energy feedstocks, for fuels and chemicals at the moment because the combination of prices of conventional resources and whatever regulatory incentives there are, that combination really doesn’t make it possible economically to convert on purpose lignocellulosic biomass. You have to get it very cheap, which means as a waste rather than as a crop, if you’re going to make those technologies work in today’s environment.
CB: Yeah, the related notion, I think, is one of building more value into that plant. So, if one thinks of the tropical scenario, which is sugar cane, you’ve got the sucrose which creates value, and then it’s what you with the rest. That opportunity isn’t quite so obvious in some of the temperate perennial crops. And therein, perhaps, lies part of the challenge of that value creation for the farmer.
PB: Yeah. Well, it’s fascinating the differences between sugar cane and corn, because sugar cane is much more productive per acre of usable energy in sugar terms compared to the starch and corn, and also, because the model of sugar cane process is you bring the bagasse to the factory site, you bring it to the crush mill along with the sugar. That’s the way it works. It’s not like corn stover, where the practice is to leave that material in the field, so you don’t have to create a separate logistical system. On the other hand, sugar cane, it basically starts to ferment the moment you harvest it. You’ve got a period of days at best, to process that material, whereas corn stored properly can last for years. So, it’s this really nice, stable, transportable, uniform feedstock format, which sugar cane is not. I mean, it’s uniform enough, but it’s anything but stable or transportable.
CB: And again, demonstrating that we haven’t got a perfect solution, we’ve got a set of solutions which have tradeoffs.
PB: Yeah. The other thing with, if you look at corn stover, there’s still controversy of whether you can remove it from the field and still have that field be sustainable. With sugar cane they’ve been removing bagasse from some field since the 1500s. So, I think we understand that one works.
CB: We understand sugar cane. We do. And that conversation of what gets left behind in annual crops, that’s a conversation that’s been had here in Australia around stubble and zero till farming. It’d be nearly 40 years ago now when big dust storms came through southeastern Australia and just took the topsoil. And taking that topsoil created a dramatic shift in practice around how much biomass is left behind and the amount of stubble. Similar conversation, I sense to that one around maize and corn production in the United States – how much do you leave behind?
PB: Oh, yeah. Well, the memories of the dust bowl have faded from living memories, but certainly there’s plentiful evidence of what went wrong there that was more associated, I believe, with wheat than with corn. But the same issue of, if a combination of a bad climate situation combines with poor agronomic practices, it can be an absolute disaster.
CB: Yeah, indeed, indeed. So, you’ve seen a lot of bio-based action, for want of a better word, over the last 13 or 14 years, really, since going back to the States post-Australia and taking up that biomass opportunity, biofuels opportunity within Chevron, where have you seen tech transfer working well?
PB: Well, I guess I’ve seen tech transfer working best along what I would call the natural trajectory. Whereas pretty much starting from President Bush’s State of the Union in 2006, there was an attempt to push it along an unnatural trajectory. So let me explain what I mean by that.
CB: Could you unpack that a little bit? That’s really interesting.
PB: Absolutely. Before Bush’s State of the Union address, there was work going on in cellulosic biofuel. Certainly, there was corn-based ethanol, and soy and other oil-based biodiesel being produced but there was really a very rapid ramp up after that point. And certainly, part of that was driven by funds made available at the DOE and the USDA. Important to recognise their contribution as well. But the thing is, they were trying to skip over the natural progression. Fermentation was already used for some very high value materials. It’s been used to make biological therapeutic agents in the pharmaceutical industry. It was used to make proteins, both for animal feed and for human consumption by fermentation. It’s used to make beer, for heaven’s sakes and obviously that’s a valuable product. Used to make Lysine protein for animal feed.
So, there was already an existing industry based on conventional starch and sugar, not based on cellulose. And the natural progression would be to slowly move toward less and less valuable products as the technology improves and the industry experience curve is climbed. You would move from those things to specialty chemicals to commodity chemicals and then to fuels. What they tried to do was to jump immediately to fuels, which are the cheapest organic compounds on the face of the earth and skip over all those things in the middle. And the technology was just not ready for that jump at that time. And it still isn’t, in my view. Not entirely. We’ve made a lot of progress, but it was trying to force something. And at the same time, there was no political stomach really in either party for putting enough of an incentive on the bio-based fuels to make up the difference, because the outcome of that would be to greatly increase, for example, gasoline prices at the pump. And that’s political suicide, certainly in the US, I imagine Australia and a lot of other countries as well. So, there were some things around the margins. There were some mandates, there were some subsidies. Obviously, there was some cost assistance from the DOE and the USDA for people building pioneer plants, but nothing like enough to make up for the difference of that huge leap in technology that they were hoping people would make.
CB: So, a couple of pieces within that, I think, that are interesting to tease out, Paul. So one is that a regulatory or policy intervention, it’s really hard to have that and accelerate the natural learning curves that occur in these sorts of science areas and engineering technologies. The second thing is that ‘whole of barrel’ concept that we haven’t touched about yet but I think we’re about to, is by driving from a specialty chemicals perspective and then trying to jump to the end game which is an infinite amount of commodity. No thought was given to the overall value proposition of a refinery, a technology, a concept. And so, you got caught out trying to compete in the hardest possible market first.
PB: Yeah, that was certainly one of my pet ideas at the DOE. And again, I was not the first or only to have that notion, but it was one that I pushed very hard, coming as I do from the oil and gas world. I have a good understanding of a refinery takes in crude oil and it makes many products. American refineries were typically built to maximise gasoline production. And then they began, as some driving habits changed and as ethanol production ramped up, they began to encounter what they called demand destruction for their gasoline product. And you can go out into a refinery, and you can turn some knobs, and you can maybe buy and install some different equipment, and you can make less gasoline and more jet fuel and diesel fuel and other products, but there’s a limit. So, if we have, what is in effect, a national program to promote renewable fuels and it’s directed at only one product of the refining industry, it creates a pressure on the other products because they can only be made economically if the refiner can sell the gasoline part of their product line for a reasonable price. But of course, you make the economics harder on the biofuels because if a 300,000 barrel a day refinery has to make 50,000 barrels a day of gasoline, no matter how far they turn the valves and switches, if they must make 50,000 barrels a day, they will sell 50,000 barrels a day, no matter what the price.
CB: Yeah, in a way that going back to that, fork in the road from 2006, it set up a trajectory which was always going to be very hard to deliver upon because those steps were that ‘whole of barrel’, those intermediate products, the ethylene and the longer carbon chain molecules and jet fuel, which is now very popular point of attention right now within the bio-based industries world, all of those things sort of got stepped over the top of, in the pursuit of light vehicle fuels.
PB: Well, yeah. And not only that, this gets into another favorite topic of mine but the President, sort of ,directed people and eventually, the agencies he controlled, absolutely did direct people down the path of cellulosic ethanol, which to my mind is one of the least viable ways to make fuels out of biomass. Fermentation of cellulosic sugars was and remains deeply uneconomical. And there are better pathways. But instead of saying, look, we need to displace fossil fuels with renewable ones, he said ‘cellulosic ethanol’. And so that’s the starting gun and that’s the race that was run, and a lot of time and money and effort was wasted on what I consider to be an excessive focus on fermentation of cellulosic sugars.
CB: I’d like to then return to that idea of, okay so the pursuit of ethanol and cellulosic ethanol may not have been the best idea available in 2006? What was the best idea in 2006 and how did it play out?
PB: Well, I think in 2006, considering there had been a fairly long period of doldrums for biomass to fuel in general, I think it would be fair to say, in 2006 there wasn’t an obvious best. So, to my way of thinking, it wasn’t that cellulosic ethanol was wrong, it was that a single-minded focus on that was wrong when there was still a lot of question about what was best, what could be the best. And they made significant strides in cellulosic ethanol, particularly with the cost of enzymes for hydrolysing, the biomass to fermentable sugars. It just turned out it wasn’t enough. And pathways along the lines of pyrolysis, hydro pyrolysis, hydrothermal liquefaction, pathways that are, require less investment at the small scale of initial processing, and technologies that utilise all of the biomass, including the lignin, those are much more promising if you’re going to try to meet the price point for fuels.
CB: So, what strikes me about that, Paul, is that cellulosic ethanol is not a technical failure in a lot of ways. In fact, perhaps in no way at all, that the technology has advanced and demonstrably advanced, and we are much better at it today than we were 15 years ago. However, the challenge is economically, as opposed to technically, it is not hitting the mark.
PB: Yeah, that is the problem. And one of the issues is that when you pay for a ton of biomass, you’re paying for the lignin too. And so, if you need a whole separate set of hardware to do anything useful with the lignin, that’s not economical. But generally speaking, they talk about the recalcitrance of biomass. It’s the part of the plant that nature worked very hard over millions of years to make undigestible. If it was digestible, everything from insects to worms to birds and mammals to bacteria and fungi, would be eating it all the time. And so, the woody parts of biomass have evolved to be difficult to deconstruct and when you look at the energy and especially the capital equipment that’s needed to do that, to turn it into something that’s fermentable, that a yeast can convert to ethanol or some other chemical, it’s just prohibitively expensive. And I’ve been looking at lots and lots of really, really smart people trying to improve that and I have yet to see anything that’s near the mark.
CB: Yeah, so it’s a really interesting study from a bench to scale scenario where it’s not, despite the very best efforts of a lot of really clever people, sometimes the problem does not get resolved economically.
PB: Yeah, obviously it’s a fool’s errand trying to say forever, but even after a long time and a lot of smart people and a lot of money spent, we aren’t there yet.
CB: I’m interested, as we draw to a close, Paul, from the experiences you’ve had, and we focused very much on the biomass DOE work and also Chevron today., we really haven’t spoken about your post DOE life, which is a story in itself, I think, but drawing all those that experience together, what are the one or two key thoughts that you have from your vantage point around things to do or not to do in this tech transfer space?
PB: That’s a complicated question. I think in the world I’ve been involved in the past 15 years, which is the biofuels and bioproducts world, I think that the real impediment to tech transfer is an uncertain business and regulatory environment. I think a lot of failure that I’ve seen is failure to attract private capital because there is too much non-technical risk. I guess if I want to come away from that with a message in general for the tech transfer world ,it is be very aware of the nontechnical risks. You may look at the market today for the thing that you have a better mousetrap, but somebody else has figured out how to eliminate mice once and for all. The better mouse trap is no longer such a valuable product. So, it’s a lot to ask of people who need to be experts in technology but to be aware of what other risks. One company I consulted for significantly was doing some fantastic technical work, but had then and for some period since trouble raising private money, and the reason was because they were basically developing a new product for a new market. So, there was the technology risk of can you make this for the price you say you can? But there was also the risk of ‘can we actually create the market that would be necessary to make this a valuable product’, and the multiplied probability of those two risks simply led to too low of a number as a percent chance of success for people to invest the kind of money that was necessary. Value your technical people and make them secure but be sure also to give them the guidance – part of having a secure job and being valued, and being given the resources they need, is that they absolutely have to be responsible to the needs of the organisation that’s doing that for them. So that’s a place where I think the technical people have to recognise that unless they’re funding their research out of their own pockets, they have to be sensitive to and responsive to the needs of the people that are funding the work. So mutual respect, I guess, is the answer there. It’s rarely going to happen in one direction only.
CB: Yeah, indeed, indeed. Paul, it’s been a pleasure talking with you at length about your experiences. We’re very appreciative of having you today and look forward to talking again soon.
PB: Well, Cameron, it’s always a pleasure to chat with you. More so when lubricated by beer and distracted by the footy, but I guess Zoom will have to do for now.
CB: It will have to do for now. Thanks, Paul.
PB: Thanks. Cheers.