Second of three stories about airline biofuels. Click here for the first part.
SOUTH SAN FRANCISCO, Calif. -- The future of aviation fuels is cooking in a bland office park here in the biotech Silicon Valley, about 10 miles south of San Francisco.
In vertical tanks similar to those used by brewers, genetically engineered algae are gorging on sugar, converting it to a common type of oil. In only a few days, the microscopic organisms will become bloated, with upward of 75 percent of their body weight made of oil.
The algae cook is Solazyme Inc., which has learned to tailor the oil for aviation with properties not unlike petroleum-based fuel. In 2011, United Airlines Inc. flew the first commercial U.S. flight on a 50-50 blend of gasoline and Solazyme's algae-derived jet fuel.
Although the operation here isn't commercial-scale, airlines are excited by the technology's prospects.
"They've figured it out, from our perspective, how to get to commercial," said Jimmy Samartzis, managing director of global sustainability for United Airlines.
Solazyme is among a handful of advanced biofuel producers working on different technologies to scale up production of jet fuel from renewable materials.
Companies are in various stages of commercialization and are working with feedstocks that range from woody biomass to municipal trash and technologies that include fermentation, thermochemical processes and alcohol-to-jet. The fuels, though made from different technologies, have two things in common: Unlike ethanol, they are all drop-in fuels that can be used in existing infrastructure. And they are made from feedstocks other than corn.
The road isn't easy: Capital costs for most advanced biofuel producers are high, and aviation fuels face competition from diesel and other markets that are more profitable in the short term for producers.
Still, companies like Solazyme say they see long-term opportunity in the demand from the aviation industry, which is looking toward biofuel to deal with escalating fuel costs, a growing customer base, and both internal goals and regulatory pressure to cap carbon dioxide emissions.
"You can see the inherent approval in this industry that people [in the aviation industry] have," said Graham Ellis, vice president of business development at Solazyme. "They want to make this happen, they have made it happen, and now it's simply a matter of completing the scale-up."
To Solazyme co-founder and CEO Jonathan Wolfson, the first to successfully scale up technology will be companies that deal in triglycerides, the oil produced by the algae in Solazyme's vats.
The oil compounds, consisting of a glyceride attached to three fatty acids in the shape of an E, are some of the most abundant substances on Earth.
"The largest-volume liquid on the planet is water. The second-largest is petroleum. The third is a cheat; it's liquid natural gas. But the fourth is triglyceride," Wolfson said in a recent interview. "All plant oil and all animal fat are triglycerides. It is the only one of those four liquids that is a direct ingredient in every major market."
Tricks of the trade
At Solazyme's pilot plant in South San Francisco, after the algae are filled with oil, they are removed from the fermentation tanks and fed into a dryer. A dry mixture of cells appears on the other end, and from that Solazyme extracts the oil.
Solazyme's trick is that the company has figured out how to tailor the triglycerides to different types of products by genetically engineering the algae strains. The company can make oils, for example, that are especially tailored to soap to improve lathering performance.
For jet fuel, tailoring allows Solazyme to address a main market barrier to producing aviation biofuels: the yield loss in making jet fuel compared with making diesel.
In general, companies have so far moved faster to produce diesel than they have to produce jet fuel, finding the former more attractive. Diesel has a much larger market, and natural triglycerides are typically about 20 carbons in length, longer than the 14- to 18-carbon chain needed to make jet fuel.
Through tailoring, "we can drop the chain length right down into the jet range, and all of a sudden, for the first time, the world has a perfect triglyceride oil tailor-made for making jet at high yield," Ellis said. "Theoretically, you can make jet at the same cost as diesel today by utilizing our type of technology because we can make the right oil up front and boost the yields accordingly."
In labs that span the second floor of the building that houses the fermentation tanks, Solazyme scientists have screened hundreds of thousands of different strains of algae to find optimal varieties. Pipettes and vials line countertops, and scientists hover over small versions of the fermentation tanks on the floor below.
"We're tweaking it," Ellis said. "What can we do to get algae to produce more oil, to do it faster, to do a different chain length, a different composition? That's what's going on here. This is really creating new bugs, or advancing the bugs we've got, and making sure we've got a good selection ready" for commercialization.
Other companies are also working on tailoring oil, but Solazyme's algae technology is unusual in the field.
Wolfson and co-founder Harrison Dillon founded Solazyme in 2003 after discussing the possibility of using algae and molecular biology to produce fuels in college. The two began with a vision of growing algae in ponds and photobioreactors but realized about a year in that such processes would not work economically on a large scale to produce fuels and chemicals.
So they began to feed the algae sugars rather than have the algae do photosynthesis themselves to produce them. The shift in production method was a turning point, Wolfson says, because it enabled the company to use fermentation equipment that had been developed in other industries, such as beer, pharmaceuticals and animal feed. The tanks in the company's pilot plant in South San Francisco are, in fact, taken from those industries.
They are only a fraction of the size of the 500,000-liter tanks being constructed in a plant in Brazil, part of a joint venture between Solazyme and Bunge Ltd., a global agribusiness and food company. The tanks in Brazil, about 5 meters across and five stories high, will be the backbone of Solazyme's first commercial-scale facility, set to begin operating in late 2013 (Greenwire, Dec. 4, 2012).
Solazyme on Dec. 13 also announced that 500,000-liter tanks were successfully used for fermentation at a plant in Clinton, Iowa, that is owned by Archer Daniels Midland Co. Solazyme is expected to begin producing 20,000 metric tons of oil at the plant starting in 2014 and scale up to 100,000 metric tons, the same capacity as the Bunge facility.
But like many other companies working in advanced biofuels, Solazyme will not necessarily produce the oils needed for fuels at the plants, or right away, despite its involvement so far in testing in both commercial and military planes and a partnership with United Airlines.
"We haven't said publicly where we expect to enter the aviation market, and I think that we're not at a position to comment on that right now, either, other than to say that just as recently as this summer ... the Navy fighter jets and the helicopters were flying on our fuel," Wolfson said. "We continue to be demonstrating that our fuel is a complete drop-in replacement, not just with commercial aviation but with military aviation."
At the Brazil plant, Solazyme is focusing first on its commercial lines of cosmetics and food products that can be made from its tailored oils.
"Our focus has to be on, now that we've invested a decade in this technology and many hundreds of millions of dollars, our focus is on broad commercialization," Wolfson said. "Initially, your very first volumes here are a lot less likely to be fuels than they are some of the higher-value oil applications."
'Right market in the long term'
It's a similar story for other companies in advanced biofuels broadly. In the short term, the economics are more skewed toward chemicals than fuels, and in the fuels field they're more skewed toward ground-based biofuels rather than aviation biofuels.
Still, there are "parallel technology platforms which are now emerging" to commercialize aviation biofuels, Jim Rekoske, vice president and general manager of the renewable energy and chemicals business unit at UOP LLC, said at a recent conference in Washington, D.C.
Rekoske said that the opportunity for biofuels companies is in the long term. UOP, the refining technology subsidiary of Honeywell International Inc., is another major player in the renewable aviation fuels arena and is working on thermal processing technology to rapidly convert solid biomass like corn stover and forest materials into liquid fuel.
The company, which is largely a technology licenser to other companies in the field, is currently building a demonstration plant in Hawaii with a $25 million award from the Department of Energy. The plant, located at a Tesoro Corp. refinery, is producing fuel but will not be fully operational until 2014. The completed plant will be able to produce more transportation fuel per dry metric ton of biomass than traditional ethanol.
UOP also recently added an alcohol-to-jet process to its repertoire and submitted about 100 gallons of the fuel to the Federal Aviation Administration and Air Force research labs for testing. Rekoske says the company likely will be ready to license the technology by the middle of 2013.
Asked whether he believes cost-effective biofuels are feasible, Rekoske answered with what he called an "emphatic yes." In an interview in December, Rekoske said that he anticipates there will be some "short-term dysfunction."
"Long term is what you should be planning business for. There are other options for road transport -- electrify vehicles, use more barges and road transport -- but ultimately, if we want to continue to fly and travel rapidly, we're going to have to use jet," Rekoske said. "As far as the people in aviation told me, it's going to be difficult to electrify planes. So our view is that it's the right market in the long term."
There are several other companies working on aviation fuels, many of which are leading a broad push on ground-transportation biofuels.
Colorado-based Gevo Inc., for example, is also focusing on alcohol-to-jet. The company is built around isobutanol, a building block for petrochemicals that can be made from both traditional corn feedstocks and cellulosic materials (Greenwire, Oct. 10, 2012).
KiOR Inc. is leading a group of companies that is working to certify pyrolysis -- a thermal chemical technology -- for use in jet fuel under the ASTM process. Earlier this year, the Texas-based company announced it had started operating a plant in Mississippi that takes in plant-based feedstocks. The process, the company said, is capable of producing renewable crude oil in a matter of seconds.
Solena Fuels LLC of D.C. is using waste feedstocks to create jet fuel. Solena has a renewable plant in England that in December signed a purchase agreement with British Airways to supply jet fuel for the next 10 years. The company uses a Fischer-Tropsch process that converts the waste to synthesis gas and then into fuel through a combination of heat and catalysts.
Wisconsin-based Virent Inc., known mostly for its work producing plant-based plastic bottles, is working to produce jet fuel from pine tree sugars. Earlier this year, the company announced that it had successfully converted the biomass to jet fuel from a catalytic process in partnership with Virdia. The fuel passed testing at the Air Force Research Laboratory.
Aemetis Inc., based in California, has licensed technology from Chevron Lummus Global Biofuels that allows it to produce renewable jet fuel by engineering microbes and enzymes that is a 100 percent replacement for petroleum- and diesel-based fuel. The company has retrofitted and owns a 55-million-gallon plant in California.
'Tied up in Washington'
The push for aviation biofuels is being held back by policy uncertainty, said John Plaza, CEO of Imperium Renewables Inc. in Washington state, which is also working with Chicago-based LanzaTech NZ Ltd. on technology that will convert biomass-based alcohols to hydrocarbon fuels for aviation.
Imperium began the research in 2010 and received a $4 million grant from the Department of Energy in 2011 with LanzaTech, Boeing Co., the National Renewable Energy Laboratory and the Pacific Northwest National Laboratory.
Under the grant, LanzaTech produces the alcohol and hands it off to Imperium to convert to jet fuel. The labs and Boeing participate in testing. Plaza expects the fuel technology pathway to be certified by ASTM by late 2013 or early 2014 but says that Washington, D.C., has held up the industry.
"Overall, I think we're a couple of years behind where we hoped to be in 2010 and 2011, when things seemed to be brighter," Plaza said. "It's tied up in Washington. There's a stagnation in many industries as we wait for the government to figure out its role and how to subsidize the petroleum industry in the future. All of that combined together has created a lot of uncertainty for companies like Imperium and others to provide a solution."
But like other executives who have thrown their weight behind alternative fuels, he expressed optimism.
"While I'm frustrated that the pace of opportunity has been slower than we had hoped, longer term I still feel there's a tremendous potential for this industry," Plaza said.
The lack of commercial supply of aviation biofuels has also put airlines in a bind. The aviation industry has set goals of carbon-neutral growth by 2020 and a reduction in emissions by half by 2050 compared with 2005 levels, but it does not yet have the supply to get there.
United's Samartzis said he does not expect to see "truly commercial scale" of renewable jet fuel until at least 2014.
The problem is of the chicken-and-egg variety, said Carol Sim, director of environmental affairs at Alaska Airlines, which is involved with commercializing aviation biofuel in the Pacific Northwest.
"There's interest from feedstock suppliers, interest from the refining industry," she said, "but if they can't have some guarantee that there's going to be a market after they make the capital investment, they're hesitant to start the process.
"For us, although we are large in our region, we only have 3 percent of the domestic capacity in the passenger airline industry," Sim added. "Even though we may want to do something, from a national standpoint, we're a very small company. We just don't have the buying capacity to really influence much."
Solazyme's Wolfson said he can sympathize with doubters of the industry and the renewable fuel standard -- of which there are several in D.C. -- but points to the "enormous progress" made over the last few years.
"I think if you actually look at what's happened systemically over the last 10 years, just even over the last five, there's enormous progress," Wolfson said. "People said you can't even make a renewable jet fuel four years ago. Nobody had ever put them into a jet engine."
Up next: A look at how airlines are using regional partnerships to overcome obstacles to commercialization.