Answer the following question: Biotech Venture Capital is overinvested in biofuels. True or False?
Well, there is evidence that, along with the rest of the world, bioethanol venture capital investment is getting overheated. However that may be a distortion in the method of the data collection. At least one opinion (Rob Day) is that too much of venture capital investments in the old technology of corn-based ethanol capacity expansion is being lumped in with the rest of the biofuels investments, leading to the perception that the whole field is in an investment bubble relative to the eventual demand. Vinod Khosla is no dummy. He is still pumping money into ethanol, though he is clearly emphasizing the cellulosic, non-food feedstock approach to creating ethanolas the one that will eventually succeed.
I also want to shout it from the rooftops that Vinod Khosla has been a strong backer for the microfinance concept, and I greatly admire his contributions in this area. Biofuels by themselves may not change the world all that much, but microfinance can. I also like that microfinance and developing local biodiverified feedstocks for the energy industy can be mutually beneficial in striving for sustainable forms of development.
I do take exception to certain aspects of Dr. Khosla's latest interpretation of the biofuels future, however. In this document he takes the position that biodiesel will not be important to our transportation fuel consumption in the longer term because it cannot "scale" in terms of expansion of capacity becoming more economic. He actually advocates that the whole subsidy concept be scrapped unless we are backing a technology that can scale to become economically viable without subsidy in 5 to 7 years. I completely agree, except for the part about biodiesel not having a chance to scale to achieve greater economies. As I said, Vinod is no dummy, and maybe he is trying to divert attention away from the most promising method of biodiesel production that is currently available. But in his statement on biodiesel, Vinod says that current oil crops cannot be expected to produce more than, at most, 1000 gallons of fuel per acre. Meanwhile, he projects that ethanol, through a transition to cellulosic ethanol can be expected to provide something like 2500 to 3000 gallons per acre. That may be true, but according to my sources, jatropha curcas can produce 3000 gallons per acre now, and is projected to be as high as 5000 gallons per acre in a few years (actually 8 years if you want to be specific). And all that pales in comparison to the output you can get from oil-rich algae cultivation. Does algae cultivation "scale"? I haven't seen a lot of discussion on the "how" of algae cultivation techniques currently under development (or even currently in deployment) but what little I have seen certainly indicates that not only does it scale well, but it is actually very cheap. All you need is carbon dioxide, sunlight and land (or even just "space").
Okay, before your imagination runs away with you (as mine often does), I didn't mean "SPACE" as in "outer space", I meant physical space. Indeed my imagination did run away with me as I wrote this, and realizing it would be a good trick to "import" carbon dioxide to an orbiting space station and "export" fuel back to the planet's surface, I did realize that there are places on earth with immense amounts of sunshine available. I mentioned one of them a few weeks ago, the Peace River country in Northern Canada. They have 20 hours days in the summer. In an environment like that you could have rotating racks of algae getting (roughly) 10 hours of sun for each horizontal level, while transporting them along a vertically oblong course which is to say, much like an industrial drying oven, trays of algae could be circulated in such a way as to expose each one to sunlight for 10 out of the 20 hours of bright sunlight in a day. (Okay, you might have to go a little further North than Peace River, but you get the idea). For that matter you could just arrange multiple levels of static growing medium and direct sunlight onto them by appropriately parabolic mirrors. (Do you still call the outside of a parabolic shape a "parabola"? I'm not sure about that.) As I suggested a few weeks ago this could also be done in places like the newly irrigated (or about to be irrigated) portions of Southern Egypt. In any case, although some have seriously questioned the possible yield per acre from algae based oils, it is certainly conceivable that it can produce far more than any other source known at this time. "Research from the University of New Hampshire shows algae produces between 5,000 and 15,000 gallons of fuel per acre per year" according to Mark Capron. Mark signed his article "Mark E. Capron, of Ventura, is a professional engineer with the Ventura Regional Sanitation District". I spoke to him a few months ago, and he is an enthusiastic supporter not just of oil-from-algae, but the whole biofuels from waste concept.
According to a company called Diversified Energy, there are some 1.5 BILLION gallons of animal fats available in the USA every year, and those fats are prices, on average, about 30% below the costs of most vegetable oils. Sound like an opportunity? Well, you will recall that the Biodiesel industry was up in arms (hopefully they weren't getting their "arms" from the NRA) about the Tyson/ConocoPhillips alliance to produce biodiesel by simple hydrogenation of these oils. But on a somewhat different tack, Diversity Energy, in association with North Carolina State University have developed a process that incorporates what they call "existing commercial processes" or recent technology demonstrations by the university. The part that caught my attention was that they are actually aiming for a jet fuel grade of diesel/kerosene. This is not your homemade garage biodiesel. They use a process similar to our own (that is, DaoChi Energy of Arizona's design) of three steps, all anaerobic, and using pressure and catalysts. Since they are also intending to produce jet fuel grade product, perhaps I should be calling them competitors, as this target is so similar to DaoChi Energy, although to qualify for the federal tax incentives, we are actually producing a blendstock to be used in JP-8 or high quality on-road diesel fuels, JP-8 being the US military "battlefield fuel of the future", for both land and air based vehicles. But that is also exactly the point that Diversified Energy makes in stating that another co-product of their process is other very long carbon chain alkanes (20 carbons and more, in fact so many more that they refer to them as "n-alkanes") which could be reformed into other fuels, including gasoline. However they speak in terms of their main output product being jet fuel and low temperature additive for diesel fuels, in other words, blendstock for biodiesel without sacrificing the "green" aspect of the overall carbon profile of taking in only bioderived sources. The first stage takes "raw" input of vegetable oils or animal fats. Diversified Energy emphasizes the flexibility of this process to accommodate a wide variety to feedstocks. First stage processing is high pressure hydrolysis using the triglycerides and water, but without any air. The result is FFA (Free Fatty Acids) (the same as in Fatty Acid Methyl Ester, or "biodiesel"). At this point, however secondary processing is incurred. Their second stage is again pressurized heating, absent air, using a solvent and a catalyst. This produces the "n-alkanes". At this point there are two courses, one heading toward "other hydrocarbon biofuels" (including gasoline), the other, mainline process uses heat, pressure and catalysts to once again reform these alkanes into jet fuel grade diesel. They have filed for various patents on the process. What is "scary" is that, apart from the description of the feedstock, this exactly describes the DaoChi Energy process. The same one we have been promoting for over 2 and a half years now. The same process that consulting engineers Black and Veitch told Peoria (Arizona) Utility department engineers couldn't work (2 years ago).
If the description of their technology gets you excited, you should talk to them about their "Centia" process. Then come talk to us about how to take something in the range of 70 to 80% of the costs out of the process.
Okay, enough fuels for today, let's talk about fueling the box office this summer. A whole handful of great movies are going to be coming your way very soon.
Harry Potter and the Deadly Hallows, the latest sequel: as remarkable as the books are, none of the screen translations has fallen significantly short, although since the 4th book expanded from less than 300 pages to more than 500, it did have to condense and prune. Expect no less with this one. The trailer looks like they have hit the mark again.
Fantastic Four have another episode this summer too, this one crossing comic book history to incorporate "Silver Surfer". I was not a big fan of Fantastic Four when I was a pre-teen/young teenager, and I just didn't get Silver Surfer at all. The special effects look good, but I can't count myself a fan of the movie yet. I think I'll wait for this one to come out on DVD. Simpsons didn't come around until much later in my life, and while I have enjoyed plenty of laughs with that family, I'll pass on the movie in favor of the DVD in this instance too.
Live Free or Die Hard has GOT to be good after such a long pause between installments. The trailer I saw was too dark (literally, not enough light on the screen) for any real clue about the quality of the movie, but Bruno Willis will likely serve up plenty of spine tingling moments with his reluctant hero cop character. There was one great stunt of a cop taking down a helicopter in the the Die Hard trailer that showed they were not stinting on the diesel fuel for pyrotechnics on this movie.
Bourne Ultimatum has both star writer and star star. The combination is explosive action and thrilling suspense. Hmmmm, sounds like a trend forming here. Apparently our hero has a problem that has never plagued me. Matt Damon's character (you may remember that "Bourne" is a fake identify given to him by others) says: "I remember. I remember everything." It appears that this statement is intended to cow his opponents. Like I said. That's never been a problem for me. I have a memory like Swiss ... give me a minute ... I'll remember it eventually, ummm, like Swiss ... oh, never mind, carry on.
Transformers is, speaking of "cheesey", not something I would rush to see under ordinary circumstances, but this film based on the Hasbro toys is not coming to us under ordinary circumstances. Again the trailer has one very memorable moment in which one of the machines (robots that, naturally, transform into various shapes and somehow sizes too, it seems) crawls out of very deep hole and plants its massive metal foot next to a touchingly symbolic portrait of innocence, a little girl with her stuff toy. The stark contrast in that image is what suggests that there may be more art in this movie that you might expect from the genre. That is due in part to the choice for director. Michael Bay has delivered some really fantastic action in the past, and it looks like he hasn't lost his touch on this one.
DISCLAIMER: I am making only an "informed assessment" (not reviews) here, since I haven't seen the films yet, but having spent a number of years working in and around Hollywood, I allow myself to skimp on spending at the box office myself unless the show has unusual promise. So I suppose Maggie and I will have at least 4 movie dates this summer.
Lastly, to end on a positive note: politics. (What? Politics? Positive?) (YUup, he said that.) The Democratic Party's presidential nominee candidates debated this weekend. CNN carried the whole thing live. We watched most of it. CNN's reporters were giving high marks to former Senator John Edwards for having made a few points relative to the prominent leaders in public opinion polls, Senator Clinton and Senator Obama. It was nice to see that Senator Edwards' wife Elizabeth was also looking healthy and vigorous when she spoke with Larry King after the debates. However, I saw the scoring a little differently. Governor Bill Richardson of New Mexico received kudos from Senator Clinton for his contributions to President Bill Clinton's government in his service to that administration, and was pointed to several times as an exemplary citizen to help heal the damage that the Bush administration has done to the prestige of America in the rest of the world. Bush has made us unwelcome by leading with his military rather than diplomacy. Governor Richardson, therefore was, in my opinion the one who gained the most ground. Unfortunately for him, however, Senator Obama and Senator Clinton both showed their superior skills in debate and public speaking, while they outshined all the others on the charisma scale.
I said I was ending on a positive note, and I meant it, because all the candidates seemed to agree that they would hold a place in their government for former President Bill Clinton. They all wanted to send him around the world with the message that this is not the America you have come to expect over the last 8 years (it will have been 8 by the time the new president takes office). This is the "old America" the peace-loving, helpful and generous partner in prosperity and development, health and business for which we used to be welcomed in most parts of the world. Indeed, Senator Clinton said she strongly believes we should engage the services and extensive experience of all our former presidents. I think I would suggest one exemption from that list.
Love,
Stafford "Doc" Williamson
