05/17/2010 draft – do not cite or quote for npc study discussion only 1 national petroleum council...

05/17/2010DRAFT – DO NOT CITE OR QUOTE

For NPC Study Discussion Only1

National Petroleum CouncilFuture Transportation Fuels Study

Biofuels Sub-Task Group – Framing Update for CSC

May 13, 2010

1

05/17/2010

Biofuels Sub-Task Group – Initial Membeship

Todd Werpy, Chair Archer Daniels Midland Company

Tom Binder Archer Daniels Midland Company

David Blatnik Marathon oil Corporation

Joseph Caggiano, Chevron Corporation

Dawn Manley Sandia Laboratories

John Reese Shell Oil Products US

Jim Richardson Chevron Corporation

David Stern ExxonMobil Corporation

Puneet Verma Chevron Corporation

ADD ADDITIONAL DIVERSITY

DRAFT – DO NOT CITE OR QUOTE For NPC Study Discussion Only

04/30/2010 3

Biofuels Sub-Task Group – A Value Chain / System Approach

Source Transport Process Convert DistributeFeedstock

Supply Demand

VolumesAvailability

Billion Ton Study

• Logistics• Transportation• Existing

Infrastructure• Storage

ContractingBiomass Types

BiotechnologyThermal-Chemistry

SeparationsRecovery

• Logistics• Transportation• Existing

Infrastructure• Storage

Pretreatment


Raw Material

Cost Metric e.g. Cost /bbl

Energy Efficiency Metric e.g. Efficiency ratio

Etc.

04/30/2010 4

Biofuels Sub-Task Group – Initial Focus on Process and Conversion

BiotechnologyFuel Types

*Ethanol*Butanol

*Isobutanol*Algal Oils

*Isoprenoids

Thermal-ChemistryFuel Types

*Pyrolysis Oil*Mixed Alcohols*Hydrocarbons

*BioDiesel*Green Diesel*HTL Liquids*FT Liquids

SeparationsRecovery

*Low energy processes

*Membranes*Reactive distillation

*Novel extractions


04/30/2010 5

Biofuels Sub-Task Group – Critical Expertise Required

BiotechnologyResources

*Biologists*Biotechnologist

*Engineers*Modelers

Thermal-ChemistryFuel Types

*Chemists*Catalyst Experts

*Gasification Experts

*Engineers*Modelers

SeparationsRecovery

*Chemists*Engineers*Modelers*Material Scientists


05/12/2010

Coordinating Sub-Committee and Task Group Study Timeline

Coordinating Subcommittee Meetings

Supply & Infrastructure Task Group Supply & InfrastructureTechnology Task Group Technology

Biofuels Sub Task Group BiofuelsFossil Liquids Sub Task Group Fossil LiquidsElectric Sub Task Group ElectricNatural Gas Sub Task Group Natural GasEngine/Vehicle Sub Task Group Engine /Vehicle2050 Fuels Sub Task Group 2050 Fuels

Define Fuel Characteristics of Interest

Demand Task Group Demand

Integration and Iterations of ScenariosDemand Task Group DemandSupply & Infrastructure Task Group Supply & InfrastructureTechnology Task Group

Sub Task Groups

Develop and Pilot Sensitivity Analysis / Scenarios

Submit Draft and Final Report to Study Committee

3Q112Q10

Staffing

Study Activity

NPC Council Meeting

Communications and Outreach

Executive Committee Meeting

Staffing of Task Groups and Sub Task Groups

4Q113Q10 4Q10 1Q11 2Q11

Base Case and Acceleration Analysis (Discovery)

Validate, Review and Document Validate, Review and Document

Base Case and Acceleration Analysis

Communication and Outreach

Integrate and Iterate

Develop and Pilot Sensitivity Analysis / Scenarios

TechnologySub Task Groups

Characteristics

04/30/2010 7

Team

Resources Identified

and Secured

Sub-Task Group Kick

Off Complete

Frame and Framing

Questions Developed

Preliminary Overall Plan

Agreed

Key Decisions Defined

Key Milestones Established

Interfaces and

Boundaries Clarified

Base Case Findings

Established

Accelerated Case and Options

Developed

Infrastructure and Supply

Fuels Characteristics

Biofuels TBD TBD

Electric By End May

By End June

TBD TBD

Fossil Fuels By End May

By End June

TBD TBD

Natural Gas By End May

By End June

TBD TBD

Engine / Vehicle By End May

By End June

TBD TBD

2050 Fuels By end July

By End August

TBD TBD

Key Task Group Interfaces

Technology TBD TBD

Demand TBD TBD

Other TBD TBD TBD

Completed or on track

Plans under way, some work still required

Conceptual plans only Not applicable

Progress Tracking Chart – Biofuels Sub-Task Group

05/17/2010DRAFT – DO NOT CITE OR QUOTE

For NPC Study Discussion Only8

Secretary Chu’s Guiding Questions

1. Define criteria for 2030 transportation fuels and relative improvement– Environment less GHG, land and water use– Security available resources, reliable infrastructure– Economic capital investment, operating costs, achievable at scale,

competitive,subsidy requirements

2. Describe 2030 baseline for transportation fuels based upon available studies

3. Identify technological advances, changes in supply, infrastructure and demand that could accelerate the transition to a more environmentally friendly, secure and economically competitive fuel mix

4. Provide insight on government and industry investments which could increase the probability of technological advances

5. Provide insight on the environment impacts such as GHG, water and land use

6. Provide insight on acceptance of these accelerated transportation fuels

7. Consider 2050 – describe the potential 2030 interim states or scenarios which could accelerate progress to a more advanced fuels mix by 2050

8

04/30/2010 9

Biofuels Sub-Task Group – Draft Scope

In Scope (in frame or scope for Supply and Infrastructure Task Group):

•Biofuels products and full supply chain for biofuels

•Edible biomass

•All biofuels process technologies

•Implications of international policy on biofuels supply / demand for US

•Global available arable land, both in and out of current arable use

•Consideration of all co-products of the biofuels process i.e. waste as well as desired products

•Engine / vehicle systems

•Baseline with underlying assumptions

•Alternative (or ‘accelerated‘) cases for transportation fuel supply

•Non-US fuel supply

•Life cycle cost analysis •CSC FEEDBACK REQUESTED 5/13


04/30/2010 10

Biofuels Sub-Task Group – Draft Framing Questions

Draft Framing Questions:

1.How will we enhance the acceptability of biofuels?

2.Are there new possible synergies between fuels types

3.How to incentivize biofuels across all elements of the value chain e.g. from vehicle design, through

feedstock provision , and fuel production to end use

4.Is the fuel type more efficiently utilized in a regional or national model

5.How to address forward and backward compatibility of biofuels with engine types

6.What biofuels volumes can be supply at what cost and by when?

7.What is our defined base case and basis for selection?

8.How will biofuels meet actual demand by fuel/user type?

9.How do we meet current projections of demand by 2030?

i. What are the alternatives possible?

ii. Which biofuels/propulsion system combinations are capable of meeting commercially and

materially significant volume?

10.What constitutes a commercially and materially significant volume?

11.What are the characteristics of each biofuel (using the agreed fuel characteristics measures)?

12.How do we ensure eco-evolution of biofuels wit next generation engine design?

CSC FEEDBACK REQUESTED 5/13DRAFT – DO NOT CITE OR QUOTE

For NPC Study Discussion Only

04/30/2010 11

TO BE DEFINED

Biofuels Sub-Task Group – Draft Deliverables to Other Teams

Draft Deliverables To Others:

1.a

04/30/2010 12

TO BE FURTHER

DEFINED

Biofuels Sub-Task Group – Draft Deliverables from Other Teams

Draft Deliverables for Others:

1.When will advanced engine technology be available

2.What is the perspective on carbon capture for algae

3.Regional vs national implications for transportation (assumed mobility model)

05/17/2010

Biofuels Sub-Task Group - Future Meetings Calendar

Date Time (EST) Highlight

Biofuels Meetings

• Fri 30th April Biofuels Kick Off

• Wed 5th May 1:00 pm (3 hrs) Biofuels Framing Questions/Boundaries for CSC

• Wed 12th May 7:30 am (9 hrs) Biofuels Preliminary Overall Workplan

• Wk , 24 May TBD (2-3 hrs) Kick Off and Sub Task Group Leader Onboarding

• TBD

Regular Check Ins/ Standing meetings• Day (TBD) hour (TBD) Agenda (TBD), frequency = weekly

1313DRAFT – DO NOT CITE OR QUOTE

For NPC Study Discussion Only

04/30/2010 14

Biofuels Sub-Task Group- Appendices

04/30/2010 15

Biofuels Framing – Supply / Source Questions / Boundaries

Boundary (in frame or scope for Biofuels Study):•How much biofuels supply can be achieved•Primarily US sourced biomass but identify large global impacts on supply demand•Consider potential for other step out / unconventional source as a biofuel (e.g. algae, waste, etc)•Process robustness e.g. feedstock variability, feedstock composition•Need awareness of total biomass availability versus global food supply/demand position •Land application / utilization for fuel vs food or flexible food-fuel biomass•Availability of viable acreage•Optimization of plant scale / infrastructure relative to raw material source•Sourcing includes collection of raw material •Feedstock flexibility / versatility

e.g. co-location for biomass / coal production, co-generation of power (security / reliability of supply / production, for droughts etc)

Boundary Issues for Further Discussion (Is it in or out of Biofuels Study boundary?):•Is edible biomass in scope (vs only non-edible biomass)?•Use of internationally sourced sugarcane for US processing?•Use of US food based materials relative to global food supply/demand position?•Cost of emissions

Framing Questions:•What is the economic radius for biomass supply to processing / conversion infrastructure?•Is there a relevance threshold e.g. must be able to meet x% of supply by 2030/2050

Relevant Study Materials•90 billion gallon study (GM/Sandia)•1 billion tonne DOE Study


04/30/2010 16

Biofuels Framing – Raw Material Transport Questions / Boundaries

Boundary (in frame or scope for Biofuels Study):•Clarification: This ‘transport’ element covers raw material transport in the value chain•Cost to transport•Energy required to transport•Cost to value ratio for end product (i.e. economic / environmentally appropriate radius to harvest –transport-process –distribute •Practical operating transport radius for infrastructure•Implications of above on scale of infrastructure •Storage (for raw feedstock to deliver system reliability / ratability)

Physical availability of storage Cost Shelf life of feedstock• Regional / seasonal variability of feedstock and implications for product quality / reliability• Is a ‘spoke and hub’ or more local /regional model appropriate versus a broader ‘final fuel’ model (this connects to

the question on scale and ‘practical radius’)• Opportunity to increase density of load prior to transport• Understanding of existing transport infrastructure constraints • Optimum degree of pre-processing prior to or during transport

Boundary Issues for Further Discussion (Is it in or out of Biofuels Study boundary?):•System and Value Chain Component Efficiencies – is this a separate / overarching theme e.g.

Cost to value ratio Radius of transportation Cost of emissions

Framing Questions:•.•MOVE - Can we create a biofuels business model that is sustainable for 30+ years (possible critical success factor)Relevant Study Materials•.


04/30/2010 17

Biofuels Framing – Process Questions / Boundaries

Boundary (in frame or scope for Biofuels Study):•Next Phase of Study – thresholds / barriers relevant to differentiate / assess process options•Process robustness e.g. how robust from year to year e.g process reliability, ability to use multiple biomass feedstocks•Understanding of water use characteristic•Consideration of co-products and waste •All process technologies are in scope

Boundary Issues for Further Discussion (Is it in or out of Biofuels Study boundary?):•Should we use a boundary condition or study threshold based on efficiency of process•Cost is not seen as a boundary as it may be too constraining at this phase when the timeframe extends to 2050 •Are process and conversion separate parts of the value chain or combined (for this study)

Framing Questions:•.Need to include some Technology related questions

Relevant Study Materials•.


04/30/2010 18

Biofuels Framing – Conversion Questions / Boundaries

Boundary (in frame or scope for Biofuels Study):•Energy yield vs. energy utilized to produce i.e. the Fuel Value Chain energy balance •What flexibility is possible on the conversion process e.g. for supply quality or product quality and to flex between diesel and gasoline (ICE) fuels •Assume no boundaries to technology in the data gathering/due diligence of the first phase of the study•Can methanol be a viable fuel for direct use (it offers the most simple conversion process from syngas)•Bio fuels to syngas – implications of policy e.g. recent decision by China on coal to syngas •Assessment of state of technology development and future state (overall)•Assessment of potential for solutions that can be deployed to commercial scale / meaningful scale by 2030 or accelerated to before 2030•Identify co-processing opportunities / needs•Assessment of waste product implications as well as desired products from any process•Conversion does not include blending, blending is in distribution•Define the hurdles, timeframe, and accelerators for deploying technology to achieve meaningful scale (overall)•How can barriers to progress from the complexity or ‘newness’ of any process be overcome, what are the related time implications (overall)•What is the efficient build / growth rate for biofuels (overall) •How to compare costs within each process/conversion type during the ‘synthesis of studies’ (overall)

Boundary Issues for Further Discussion (Is it in or out of Biofuels Study boundary?):•.

Framing Questions:•Should we set a threshold expectation on energy ration e.g. maximum unit energy use/unit energy generation ratio•.Need to include some Technology related questions

Relevant Study Materials•Auto-Oil study of 20 years ago


04/30/2010 19

Biofuels Framing – Distribution Questions / BoundariesBoundary (in frame or scope for Biofuels Study):•Differences in current fuels vs. projected fuels mix e.g. E20, etc•Implications for infrastructure and full cycle cost perspective•Regulatory implications and successes e.g. biofuels in Brazil, possibly CNG in Colombia, possibly diesel in Europe (overall)•Options for blending of flex fuel mix i.e. if ethanol is a larger component does the ethanol content require the infrastructure to be re-assessed as we move from gas with ethanol to ethanol with some gas•What are the step-out opportunities e.g. biomass to hydrogen•Who has jurisdiction on distribution networks is this regional / national etc•What is the right flex fuel mix•Who pays for the changes needed to meet new specs (may be a question for later).e.g. infrastructure changes•What is the mobility model versus a more hub and spoke assumption•Will we use existing infrastructure or build a parallel infrastructure for new biofuels•What are the fuel characteristics (note: this will help define the possibility of cross regional distribution) •What is the relevant timeline for developing vehicles and infrastructure•Who will have jurisdiction on pipelines•Assessment of ‘drop-in’ fuels implications•What would you do different with a ‘free drop’ on distribution and what is the optimum complementary model

Boundary Issues for Further Discussion (Is it in or out of Biofuels Study boundary?):•Are we free to consider meeting US demand needs with global biofuel supply e.g. imported ethanol

Framing Questions:•.

Relevant Study Materials•EPA Studies•Auto Oil Study •ARPA –E studies


04/30/2010 20

Biofuels Framing – Demand Questions / Boundaries

Boundary (in frame or scope for Biofuels Study):The following are questions that maybe raised with the Demand group•How much biofuels demand is expected•Fuel product demand split e.g. mogas vs diesel etc•Implications of fuels spoilt on biofuels needs/role e.g. if US stays gasoline long will ethanol solve any supply issues •Separate demand into Freight and Passenger and establish economic targets for production•Clarify in meeting demand what portion comes from non-US sources of finished product•Establish a common description for the fuels being discussed•Task for Next Phase – define the volume and charateristics (in terms of economics/environmental/security etc) for each fuel considered in the fuel mix•What degree of behavioral change is required to build acceptance by fuel type•Clarify expected modes of distribution based on expected user base (especially non passenger vehicles)•What is the preferred use / displacement model for biomass for transportation e.g. as a liquid fuel vs. as a power supply for electric vehicles

Boundary Issues for Further Discussion (Is it in or out of Biofuels Study boundary?):•Describe demand by regions – which regions?.

Framing Questions:•Need a model for fuel demand by type over time•What assessment should be made I offsetting demand vs growing supply•What are the predictions for vehicular advancement in the time frame under study•What is the economic window (i.e. the affordable / realistic cost to produce

Relevant Study Materials•.


04/30/2010 21

Biofuels Preliminary Work Breakdown

Tasks :

•Data Gathering – Joseph to share structured approach used on Hard Truths, also to

share the resources template

•Supply / Source/ Raw Material Transport – Todd/Tom to lead, David B involved

•Process/Conversion – TBD (possibly from Technology), David S involved

•Distribution – John Reese (tentative to be confirmed) to lead, David B involved

•Algae – David S/ David B to lead, Puneet involved

•Resources – Joseph to lead for university engagement

Possible future contacts

•Business associations

•Enrel


05/17/2010

Biofuels Sub-Task Group Action Items

• Develop contact list for Biofuels sub-task group

• List or link of studies – NPC site – guidance on copyright

• Send link for NPC site

• Definition – e.g. meaningful

• Block time for synthesizing / convergence on base case by end December

• Compare study assumptions vs actual

Are cost reasonable and holisitc

Provide transparency on assumptions

Consider bringing in key authors to present material

• Peaking power analogy in pursuit of reliability?

Used 2-3 days per month

Return security on investment

• Security – define how reliability relates to security

• Provide an alternate use for biofuels feedstock in years of plenty to ensure sufficient in years of need


05/17/2010

Biofuels Sub-Task Group Action Items

• IEA study – how should we formalize a relationship with the study

• Prepare request for resources especially for data gathering and data management

• Is this a ‘synthesis of studies’ rather than study of studies i.e. debiasing prior studies in search of common perspective

• Gathering original study material will take time, current plan timeline may need to adjust length assumed for initial due diligence phase (though not necessarily total duration)

• Technology challenges are not seen as insurmountable in biofuels

• Pursuit of full and detailed economic analysis and full life cycle analysis would be a significant undertaking

• Need to provide clear boundaries on the scope of any policy input

• Issue to address the compatibility / interdependency of fuel components in the fuels mix

• Assess study input based on set criteria in a similar way to Hard Truths

• Assess costs


04/30/2010 24

Biofuels Meeting 12th May – Plus / Delta

05/17/2010 draft – do not cite or quote for npc study discussion only 1 national petroleum council...

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