2011 Wisconsin Bioenergy Initiative Replacing the Crude Oil: Energy and Economic Security Competitive Advantage and Lower Carbon
Lee Edwards Virent CEO 6 October 2011 © 2011 – Virent, Inc.
Slide 1
Overview
• The case for Biofuels and Bioproducts • Conversion Technologies and Products • Supporting Industry Scale-Up
© 2011 – Virent, Inc.
Slide 2
History of US Energy Consumption
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Slide 3
Energy Use Per Capita
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Slide 4
2009 Regional Shares of World Oil Reserves, Production and Consumption
Data Source: ENI World Oil & Gas Review
© 2011 – Virent, Inc.
Slide 5
U.S. Crude Oil Supply
© 2011 – Virent, Inc.
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Carbon Dioxide Emissions By Sector
By Country
Source: Japanese Ministry of Land, Infrastructure, Transport and Tourism, 2006 © 2011 – Virent, Inc.
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US Liquid Fuels Consumption 1970-2035
U.S. EIA, Annual Energy Outlook 2011 © 2011 – Virent, Inc.
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U.S. Feedstocks Potential Fuel Impact 23 % Percent of US Liquid Fuel Demand
12 %
2%
© 2011 – Virent, Inc.
Slide 9
World Oil Price Scenarios
U.S. EIA, Annual Energy Outlook 2011 © 2011 – Virent, Inc.
Slide 10
Value of US Crude Oil Imports
Inflationadjusted annual value in billions of dollars. Constant dollars valued in the year 2000
SOURCE: U.S. Energy Information Administration, Annual Energy Review 2008, DOE/ EIA-0384(2008) (Washington, DC, 2009), p. 81 © 2011 – Virent, Inc.
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Economic Costs of Petroleum Dependence
“…the rising price of oil acts like a tax on the U.S. consumer. $75 billion is taken out of our purchasing power for every $10 increase in a barrel of oil.“ - Fred Smith, CEO of FedEx
© 2011 – Virent, Inc.
Slide 12
Fuel Cost of Military Action
About $500 billion annually, plus indirect and long-term costs, such as lost productivity and future disability costs from military casualties. Estimated to be $140 per barrel or $3.33/gallon of gasoline Transportation Cost and Benefit Analysis II – Resource Consumption External Costs Victoria Transport Policy Institute (www.vtpi.org)
© 2011 – Virent, Inc.
Slide 13
Energy as a Competitive Advantage
• Minimize Exposure to Petroleum Price • Rural Development – agriculture advantage • Jobs at Biorefineries stay local • US Technology Leadership from Global Deployment
© 2011 – Virent, Inc.
Slide 14
Advantaged Biofuels Abundant Feedstocks • Deployment Flexibility • Low Cost • Low Volatility
Advantaged Products • Customer Pull • ‘Drop-In’ • Large Markets • Low Carbon
© 2011 – Virent, Inc.
Conversion Technology • Yield • Scalability • IP Position • Product Quality
Economic Returns •Capital and Cash Costs •Customer Off-Take •Strategic Partners •Stable Policies Slide 15
Fuels and Chemicals from Biomass FischerTropsch
CH2
Diesel Jet Fuel
Syngas Gasification
Fermentation
CH3O0.5 Ethanol
CO + H2
Biomass
Pyrolysis
Bio-oils
Catalysis
CH3O0.5 Methanol Ethanol
Refining
CH2
Liquid Fuels
CH1.6O0.4
CH1.4O0.6
Fermentation
Virent’s BioForming® Process
© 2011 – Virent, Inc.
Sugars
CH3O0.5 Ethanol Butanol CH2 Hydrocarbons
Hydrolysis CH2O
Aqueous Phase Reforming
CH2 CH3O0.5
Gasoline, Jet, Diesel, Chemicals, Alcohols, Hydrogen Slide 16
Secure and Sustainable Energy Virent Technology can Replace > 90% of the Barrel
The US consumes over 18 million barrels of oil per day. 49% is imported from foreign countries. In the USA, E-15 and B20 combined would be 10% crude displacement © 2011 – Virent, Inc.
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Virent at a glance The global leader in catalytic biorefinery research, development, and commercialization
Employees
Partners & Investors
115 Employees
Financial
> $76 MM in Private Funding > $61 MM in Gov & Industry © 2011 – Virent, Inc.
Infrastructure
25x Development Pilot Plants 1x 10,000 gal/yr Demo Plant Slide 18
Organization Capabilities Catalytic Process Research Analytical
Feedstock
Techno‐ Economic Analysis
Process Development
Process Engineering
Operations Partnering
Employees from leading energy, agribusiness and chemical companies; start-ups; and research institutes © 2011 – Virent, Inc.
Slide 19 Slide 19
Virent’s BioForming® Technology Leading catalytic route to renewable hydrocarbon fuels and chemicals.
•
Fast and Robust – Inorganic Catalysts – Moderate Conditions – Industry Proven Scalability
•
Energy Efficient – Exothermic – Low Energy Separation – Low Carbon Footprint
•
Premium Drop-in Products – Tunable Platform – Infrastructure Compatible – Fuels and Chemicals
•
Feedstock Flexible – Conventional Sugars – Non-Food Sugars
Virent Biogasoline Demonstration Plant- Madison, WI
© 2011 – Virent, Inc.
Slide 20
BioForming® Concept
Biomass
Cane
Modified ZSM‐5
Aromatics Gasoline
26 Issued/Allowed Patents –
Biomass Sugar Cane
Reformate
APR
U.S. (13), South Africa (3), Australia (3), New Zealand (2), India (2), Japan, Canada and China
142 Pending Patent Applications – 22 U.S. and 120 Foreign Patent Applications
Corn Corn
© 2011 – Virent, Inc.
Condensation + Hydrotreating
Distillate
Jet Fuel Diesel
Slide 21
High quality, Drop-in Fuels
Premium Biogasoline – 120,000 Btu/gal
Virent fuel in Scuderia Ferrari race fuel © 2011 – Virent, Inc.
Virent Distillates meet ASTM Specifications
Energy dense, Drop‐in Fuels Slide 22
Bio-Based PX Press Release
Virent's plant-based para-xylene
© 2011 – Virent, Inc.
Slide 23
BioForming Refinery Break Even Cash cost break even for a Virent Bioforming refinery producing aromatic chemicals and biogasoline.
Net Sugar Cost, ¢/lb
25 20 15 10 5 60
70
80
90 100 Crude Oil, $/BBL
110
120
Notes: *Product Values utilize historic Crude to Product Value Ratios from Mid 2007 to Mid 2010 *Major Utilities Cost Assumptions of $6/mmbtu NG and $0.07/kw-hr *Includes Variable and Fixed costs
© 2011 – Virent, Inc.
Slide 24
Leadership in Sustainability
“…still on target to produce a 100% bio-based polyethylene terephthalate (PET) bottle by 2020”
Newly announced initiative to use plant based plastics in packaging
© 2011 – Virent, Inc.
Great Green Fleet
Objectives include being supplied 100 percent by renewable energy
Slide 25
Policy Leadership and Investment
• • • •
US Railroads Solar Power In Germany China with Solar and Wind France with Nuclear
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Slide 26
Building the Industry
Feedstock Pricing Risk
Technology/ Capital Eu Risk
Product Pricing Risk
Policy Risk
© 2011 – Virent, Inc.
Slide 27
Challenges to Sensible Policies
• • • • •
Fiscal realities Lack of long term stability Priorities for oil industry, electricity Renewables not yet fully valued Uneven success of implemented policies – Loan guarantees/grants – Volumetric Incentives • Short term – no certainty • Don’t reward performance
© 2011 – Virent, Inc.
Slide 28
State and Regional Incentives
• • • • • • •
Loans/Grants Product Payments Tax Exemptions/Reductions State Tax Credits & Deductions Renewable Fuel Use Standard State Fleet Requirements Funding for Workforce Training or Supply Chain Development
© 2011 – Virent, Inc.
Slide 29
Wisconsin Biomass
Benefits for Ag and Forestry sectors should: • Optimize land-use for food, feed, fiber, fertilizer, and energy needs • Secure biomass resources for products without other renewable sources • Support biorefinery investment with grants, loans, and tax policies to create jobs and rural growth © 2011 – Virent, Inc.
Slide 30
Summary
• Unique Opportunity for Bioproducts • Competitive Advantages Available • Collaboration & Leadership Required • Wisconsin Assets & Advantages
© 2011 – Virent, Inc.
Slide 31
Lee Edwards President and CEO Virent, Inc 3571 Anderson Street Madison, WI 53704 E‐Mail: lee_edwards@virent.com Phone: +1 (608) 237‐8606 Fax: +1 (608) 663‐1630 www.virent.com
.© 2011 – Virent, Inc.
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