Algal and Terrestrial Second-Generation Biofuels Chevron and the New Energy Equation

Paul Bryan VP Technology Chevron Biofuels & Steve Miller Chevron Fellow Chevron ETC

March 26, 2008 Scripps Institution of Oceanography

Chevron 2008

Global Energy Perspectives

Drivers:

Global growth in energy demand, fastest in China, India and Latin America; limits on light crude oil Increasing expectations surrounding climate change Concerns about national energy security in the USA & elsewhere (China, India, Australia) Economic development and jobs local, regional, national, industry sectors

2008 Chevron

As Demand Increases Diversification of Feedstocks will Occur

20 -

MMB/D
ls fue B io
i Li q u oas-t G ds

Shale Oil

Coal-toLiquids

0-

Extra-Heavy Oil and Bitumen 2010 2015 2020 2025 2030 Crude Oil
(~100 MMBPD)

2005

2008 Chevron

Source Data: Consultant Consensus

Biofuels Energy Balance

Btu Spent for One Btu Available at Fuel Pump Btu Spent for One Btu Available at Fuel Pump

Fossil Energy Added (NG + Coal + Petroleum) 2

Petroleum Energy Added 2

Fossil Energy Added (NG + Coal + Petroleum)

Petroleum Energy Added

1.5

1.5

Gasoline

Diesel

1 Corn Ethanol

Cellulosic Ethanol

Soy FAME Biodiesel

Soy FAME Biodiesel

Cellulosic Ethanol

Biomass FT Diesel

Gasoline

0.5

0.5

2008 Chevron

Source Data: Consultant Consensus

Biomass FT Diesel

Corn Ethanol

Diesel

CO2 Benefits from Biofuels

Wells to Wheels Greenhouse Gas Emissions
30 25 20 15 10 50-

Lb CO2 Equivalent Per Gallon

Gasoline

Corn Ethanol

Cellulosic Ethanol

Diesel

Soy FAME Biodiesel

Biomass FT Biodiesel

Per Gallon Gasoline Equivalent

2008 Chevron

Per Gallon Diesel Equivalent

Source Data: Consultant Consensus 5

Second Generation Technology Clusters

Feedstock

Technology

Product

Weak

Cost $ / gal

Scattered Strengths

Strong

Need to capture the entire value chain Technology / business weakness in key areas Seek technology & business ALLIANCES
2008 Chevron 6

Price $/gal

$ / dry ton

Biofuels Feedstocks
Scale & seasonality issues Collection costs Crop threats - weather, land, pests No Competition with food / feed crops Minimal impact on water resources Minimal impact on environment, including biodiversity Minimize Direct / Indirect LUC Impact Future: wastes and on-purpose energy crops:

2008 Chevron

Urban wastes (incl. paper, lumber) Forest slash Pulp & paper waste Ag waste (stover, straw, etc.) Jatropha & other new oil crops Switchgrass & other grasses / woods Micro-algae (in ponds or reactors) Energy crops (corn, cane, etc.)
7

Bioethanol Crop Yields (typical / speculative*)

Crop Corn (Yellow #2) Sugar Beets Sugar Cane (juice) Switchgrass Miscanthus Sugar Cane (total) Sugar Cane (total) US gal / acre-yr 420 700 870 ~1,000* ~1,500* ~1,900*(1) ~2,800*(2)

(1) Energy-balanced production plant (2) With external heat / power supply
2008 Chevron

Source Data: Consultant Consensus

A Preferred Feed for Biofuel Production

Long carbon chains are in jet/diesel boiling range

2008 Chevron

Can process (or crack to gasoline) in a refinery Lower oxygen / higher Btu than lignocellulosics Fully compatible with existing fleet & infrastructure Superior properties vs. FAME biodiesel Most compete with food Need to develop a major new source
9

Vegetable oils in limited supply

Biodiesel Crop Yields (typical / speculative*)

Crop Corn (Yellow #2) Soybeans Mustard seed Corn (Mavera Hybrid) Sunflowers Peanuts Rapeseed (canola) Jatropha Oil palm Micro-algae
2008 Chevron

US gal / acre-yr 18 48 61* 66* 102 113 127 202* 635 >7,000*****
Source Data: Consultant Consensus
10

Microalgae

2008 Chevron

11

Algae for Biofuels

Non-Competitive with food:

Can use otherwise non-productive land Needs no fresh water use saline aquifers or seawater

Up to 60 wt% yield is triglycerides, rest is mostly glucose polysaccharides. Not lignocellulosic. Some species yield hydrocarbons directly Up to 150x greater productivity per acre than soybeans

100 sq. miles could yield up to 500 MM gal/yr diesel

Consumes CO2 could site near CO2 source, e.g. near refinery, power plant, fermentor, or oil / gas field

2008 Chevron

Also can consume some other combustion byproducts

12

Some Issues with Commercialization

Strain development Recovery of algae from water Recovery of oil from algae Process control: Food vs. fuel applies to algae, too! Managing Heat balance (+/) Production facility Open ponds vs. enclosed photobioreactors vs. novel concepts
2008 Chevron 13

Production Facilities
Open ponds: Low CAPEX Other Issues: Enclosed photobioreactors: High CAPEX Solves most open-pond problems Temperature control can still be an issue Novel concepts: Plastic bags, pipes, trees, etc. Interesting / unproven
14

2008 Chevron

Evaporation Invasive species Containment of GMOs CO2 utilization Temperature control Nutrient control Pond depth tradeoffs

Algal Cultivation

Inexpensive culture systems using shallow (~10 cm deep) ponds stirred with paddle wheels use otherwise unproductive land
2008 Chevron 15

Saline Water Plentiful even in many arid regions of the USA

Saline aquifers in USA
Water with few competing uses Production opportunities from abandoned oil & gas wells Water resources show many intersections with cheap land & CO2 sources

2008 Chevron

16

Algae Oil Yield Advantage

Chart illustrates value add of algae to fuels process

Significantly reduced footprint for producing same amount of fuel

The amount of land required to replace 50% of the current petroleum diesel usage using corn, corn soybean, and algae.
2008 Chevron 17

National Renewable Energy Laboratory Chevron Algae CRADA Project

Multi-year collaboration Focus on liquid transportation fuels Opportunity to combine NRELs expertise in algae strain development and processing with Chevrons catalyst and refining technology and capabilities

2008 Chevron

18

Biofuels Conversion Technology

Create technologies to bring biofuels to an industrial scale:

2008 Chevron

Hydrolysis & fermentation Pyrolysis Gasification Emerging technology Catalytic conversion to transportation fuels Supporting technology
19

Current Research Alliances

Weyerhaeuser Broad Corp. Alliance / Biofuels Vertical Integration Only large, integrated forest product company remaining in USA; vast expertise in feedstock production, logistics, and processing. NREL Only U.S. National Lab devoted to renewable energy Second generation biofuels production from biologic pathways (e.g., algae); biomass-conversion technology. C2B2 Colorado Center for Biofuels & Biorefining Univ. of Colorado (Biotech., Process), Colorado State (Ag. Sci.) & Colorado School of Mines (Thermochemical Conversion); close connection with NREL UC Davis Ag. Sciences, Biotech, Crops & Fuels Policy California-based; biomass identification and development of technologies to grow, harvest and process into transportation fuels
Texas A&M Ag. Sciences, Energy Technology, Crop Dev.

Top Ag. Sciences Program; long experience with conventional fossil-based energy sources. Georgia Tech - Advanced Manufacturing Technologies Chemical characterization of feedstock, pretreatment, fermentation of enzyme hydrolyzed biomass to bioethanol

2008 Chevron

20

Strategic Alliances Across the Value Chain

Cr

op s/ Se ed s

Fe ed st oc

2008 Chevron

Pr et re at k m Su en pp t ly

Co nv er si on

Pr od

uc t
21