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Reporting on biofuels demand

Hydrocarbon Engineering,

It is a trick worthy of Houdini; in the face of stagnant transportation fuel demand, biofuels consumption is skyrocketing. A mere five years ago, worldwide annual output of ethanol was approximately 500 000 bpd, and biodiesel 40 000 bpd. Together, they accounted for approximately 0.5% of world consumption. By the end of 2008 global production had doubled, to 1.1 million bpd. The US Energy Information Administration (EIA) estimates that, within 20 years, worldwide production should reach almost 6 million bpd.

Benefits of biofuels
There are many reasons for biofuels’ popularity. Biodiesel and ethanol, which are made from plants, are considered sustainable in that they do not draw down finite resources of oil and natural gas but rely on a renewable supply of crops and non-crop byproducts (biomass). Net lifecycle analysis of biofuels generally concludes that their impact on GHGs is neutral or beneficial in comparison to fossil fuels. Also, if biofuels are spilled, they do not contaminate ground or water.

But it is security of supply that is a major driver of biofuels. Starting in the 1970s, a series of supply disruptions and the growing dominance of politically unstable OPEC countries as sources of fossil fuels spurred consuming nations to support biofuels, which could be produced any place where plant feedstock was in abundance. In addition, minimum fuel contents for biofuels were established.

Problems with biofuels
Biodiesel has been known to gel at low temperatures and clog engine filters. Its energy content is approximately 11% less than petroleum diesel, making it less fuel efficient by volume. Biodiesel can also cross contaminate other fuels.

Ethanol’s energy content is also significantly lower; it takes approximately 1.5 ltr of ethanol to drive as far as 1 ltr of gasoline. Currently, no pipeline transportation network exists for biofuels. The infrastructure to create biofuels requires immense investment. There is pervasive evidence that biofuel production is driving up the cost of food.

Solutions are on the way
The energy sector is working with a wide range of partners to solve some of the major hurdles. In order to lower costs of transportation, Petrobras is building an ethanol pipeline from plants in central Brazil to consumers on the coast. Magellan Partners and POET Energy, are exploring a similar, dedicated ethanol pipeline network that would gather pure ethanol from production facilities in the Midwest and deliver it to refined product storage terminals in the US East Coast.

The EIA notes that cellulosic biomass has a supply potential of up to four times that of corn and there are companies actively investing in this. BP and Martek Biosciences Corp have signed a joint development agreement to convert sugars into biodiesel using microbes. But continued political popularity will be the biggest boost to biofuels for the foreseeable future.

Impact on refining
By any measure, refineries are having a tough year. But now, refinery companies are getting a reprieve from an unlikely source; biofuels. The global recession caught the biofuels sector in a financial bind of tight credit, high debt and low prices. Generous government subsidies related to GHG offsets are also lubricating refiners’ wheels.

Gordon Cope, Hydrocarbon Engineering Correspondent

You can read the full article in the January issue of Hydrocarbon engineering.

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