Canada’s wasted fuel potential

We’re falling short on research and development of alternative energy sources

If you’ve read this column often enough you know I have gone on and on about the “green highway” being more about new fuels than new vehicles.

In the United States, you see lots of progress in alternative fuels where the issue is more political than environmental and is usually talked about in terms of energy security and cutting off funds from the petro-dictators and sponsors of terrorism. As a result there are huge sums being invested in alternative energy research in the U.S.

Every week there are new announcements and new hype about some miracle fuel or another. Recently it was about genetically modified micro-organisms that make petroleum from carbon dioxide, water and sunlight. Well, what could be better if it works and if it’s scalable.

It may take years to find out. Meanwhile, there are proven technologies available off the shelf that, if integrated properly, will produce almost limitless quantities of non-fossil fuel.

In Canada, we have the oil sands – which, with some imagination, they’re trying to label “ethical oil” – but also a huge forest products industry. It’s the biggest net exporter the country has and pulls in north of $50-billion in revenue annually. That’s from the products, but there’s also the waste. The forestry slash (waste wood) is 15 to 25 per cent of total volume, plus mill residues, plus the gigantic amount of pine beetle damaged trees. This stuff converts to fuel that you can put in your gas tank.

“There’s no black magic about it,” says George Stanko, president of Sarnia-based CORE BioFuel Inc. Stanko is a chemical engineer who managed large-scale industrial chemical plants for Dow Chemical for more than 20 years and now he’s trying to commercialize a biomass to gasoline production process with a start-up company.

“We use technology that is industrially proven and available now. Our process is designed to produce 307 litres of 92 octane gasoline per metric tonne of wood fibre.”

You have no doubt heard of cellulosic ethanol, which is the ethanol that is not made from food crops like corn. There are different ways to go about it but the well-established one is through converting the fibre through gasification into “syngas,” which is then further processed into ethanol. Ethanol is a gasoline replacement that is not without its problems; it is less energy dense than gasoline plus it attracts and holds water. The proprietary CORE method goes past the ethanol stage to produce gasoline that can go straight into the tank.

CORE has raised some money through a limited partnership and recently got a small equity investment from the Sustainable Chemistry Alliance which is a not-for-profit supported by a federal Centre of Excellence and some industry money. The investment is peanuts compared to the money CORE needs to build a plant but the endorsement is important because of the high-powered advisory board at the alliance.

Meanwhile in the U.S., Mascoma Corp., one of the many companies working on cellulosic fuel, just landed up to $50-million in investment from Valero, the big oil refiner, and an agreement from it to buy all the ethanol the proposed new plant can produce.

Mascoma, like CORE, plans to process wood waste and is going after all the generous loan guarantees that are available from the U.S. Department of Energy. Mascoma previously raised $30-million from early-stage investors like Khosla Ventures and Kleiner Perkins. There are other well-funded U.S. companies moving toward commercialization: BlueFire Ethanol, which processes grasses, and POET and Abengoa, which use corn cobs and stover.

There is certainly more venture capital available in the U.S. for alternative fuel development, much of which is driven by a federal alternative mandate. A federal law required gasoline refiners to blend in 250 million gallons of cellulosic ethanol this year, but with so little available the Environmental Protection Agency reduced that quota to a more realistic six million gallons.

There’s billions in government R&D money for the “ethical” oil sands but Canada’s much larger forest products industry doesn’t appear to see its potential as an energy producer. CORE is struggling for investment and the U.S. is likely where it will have to find it.

source: theglobeandmail