Aviation Biofuels Barriers to Adoption and Value Chain Risk Mitigation

Aviation Biofuels Barriers to Adoption and Value Chain Risk Mitigation

© 2010 UOP LLC. All rights reserved. UOP 5191-01

Advanced Biofuels Leadership Conference21 April 2011Jim Rekoske, VP & GMHoneywell’s UOP

Value Chain in Biofuel Production

Long, fractured value chain in several distinct industries: Rural real estate / farming Biotechnology Oleo Chemicals Refining and Chemicals Fuels Marketing

Land Owners

Energy CropGrowth &

Development

Oil Production&

Pre-purificationConversion Distribution

to Market

Many stakeholders = added transactions costs

General Observations

Value Chain in Biofuel Production

Land Owners

Energy CropGrowth &

Development

Oil Production&

Pre-purificationConversion Distribution

to Market

Sustainability, Energy Security, Rural Development

• Competing uses for land, other resources; aversion to “new”, production and scheduling risks

• Technical risks, capital access, deployment between food / fuel

• Competitive equipment uses, technology need for fuels

• Technology risks – will it work

• Market demand at pricing which permits value creation for the chain

Biofuel and Fossil Fuel Comparison

Land Owners

Energy CropGrowth &

Development

Oil Production&

Pre-purificationConversion Distribution

to Market

Risk throughout the value chain in biofuels

Mineral RightsOwners

Exploration&

Production

Logistics/

TransportConversion Distribution

to Market

Highly Integrated Majors

Outcomes Outcomes Outcomes Outcomes

Risk Profile

Outcomes Outcomes OutcomesOutcomes

Risk Profile

Barriers and Tools to Manage Risks

Feedstock– Can I acquire sufficient feed

at manageable price while limiting commodity risk?

Technology– Does the technology work as

advertised? Market

– What combination of price and volume will the market demand?

Financial– Can a sufficient financial

return be made available to compensate the risks?

Partnerships

Demonstrations

Policy stability “Market Leader” Advantaged Pricing

Financial risk mitigation, performance guarantees, loan guarantees, stable partners / customers

Barriers Tools

Most elements in place – environment improving

Valero + Darling =Diamond Green Diesel LLC Announced in January 2011, Diamond Green Diesel, LLC

plans to construct a 10,000 BPSD Ecofining Unit in the US

Backup Material

Honeywell Overview

$33 B Broad and Diverse Businesses, Technologies and Products

38%38%

16%16%

32%

14%Aerospace

SpecialtyMaterials

Automationand Control Solutions

Transportation and Power Systems

UOP Overview

• Since 2005, a Honeywell Company –part of Specialty Materials business unit

• Leading supplier and licensor of processing technology, catalysts, adsorbents, process plants, and technical services to the petroleum refining, petrochemical, and gas processing industries.

• UOP Technology Furnishes: 60% of the world’s gasoline; 85% of the world’sbiodegradable detergents; 60% of the world’s para-xylene.

• 3400 employees worldwide.• Strong relationships with leading

refining and petrochemical customers worldwide.

Biofuels: Next in a Series of Solutions

2003 National Medal of Technology Recipient

Refining Gas Processing Petrochemicals Renewable Energy

“Other” Oils: Camelina, Jatropha

Lignocellulosic Biomass, Algal Oils

Second Generation

Oxygenated Biofuels

BiodieselEthanol

Hydrocarbon Biofuels

JetDiesel Gasoline

FirstGeneration

Natural Oils FromVegetables and Greases

Fuel & Power

Fuel & Power

Renewable Energy

Honeywell Renewable Fuels Vision

Building on 96 years of petrochemical industry technology and expertise Produce real “drop-in” fuels instead of fuel additives/blends Leverage existing refining, transportation, energy, biomass handling

infrastructure to lower capital costs, minimize value chain disruptions, and reduce investment risk

Focus on path toward second generation feed stocks and chemicals

Sustainable Technologies – Feedstock Flexible / 2nd Generation

UOP/Eni EcofiningTM

Process

UOP/Eni EcofiningTM

Process

Natural Oil/Fats

Renewable Jet Process

Renewable Jet Process

RTP®

(Pyrolysis)RTP®

(Pyrolysis)

Hydrogen

Natural Oil/Fats

Hydrogen

Biomass

Honeywell Green DieselTM

Honeywell Green JetTM

Green Power / Fuel Oil (now)

Green Fuels (2013)

Upgrading ProcessUpgrading Process

Envergent Technologies – UOP/Ensyn JV

Green Jet (if req)

Green Diesel

GasificationGasification

SeparationSeparation

FT SynthesisFT Synthesis

ConversionConversion

Rentech / UOP Alliance

Green Fuels

UOP Renewable Fuel Technologies

Natural Oils v. Diesel and Jet Fuel

60 400 500 650 1000 1300Boiling Point, °F

Gasoline Diesel No. 2 Lubricating Oils Asphalt

Jet

300

Heavy Fuel OilsGases

Crude Oil

1 6 8 10 15 20 43 71Number of Carbon Atoms

Natural Fats and Oils

Nature stores excess energy in triglycerides – fats and oils

Triglycerides have chemical structures similar to diesel and jet fuel

− Less branched, but similar structrure

• Technology that produces a fully fungible hydrocarbon product

• Uses existing refining infrastructure, can be transported via pipeline, and can be used in existing automotive fleet

• Two units licensed in Europe with first commercial start-up in 2010

• Excellent blending component, allowing refiners to expand diesel pool by mixing in “bottoms”

• Can be used as an approach to increase refinery diesel output

Petrodiesel BiodieselGreen Diesel

NOx Baseline +10 Baseline or better

Cetane 40-55 50-65 75-90

Cold Flow Properties Baseline Needs

AdditivesBaseline or

better

Oxidative Stability Baseline Needs

AdditivesBaseline or

better

Natural Oil/ Grease

+Hydrogen

Green DieselGreen Diesel + nC3 & Naphtha

+ Glycerol Biodiesel (FAME)Biodiesel (FAME)

Natural Oil/ Grease

+ Methanol

Performance Comparison

Process Comparison vs. Biodiesel

+

H3C CH3

+

CH3CH3

CH3H3C

CH3 H3C

CH3

H3C CH3

CH3CH3

+

H3C CH3H3C CH3

+

CH3CH3

CH3H3C

CH3 H3C

CH3

+

CH3CH3

CH3H3C

CH3 H3C

CH3

H3C CH3

CH3CH3

H3C CH3

CH3CH3

H3C CH3H3C CH3

HC

O

O

O

O

O

O

CH3

CH2+CH3

CH3H2O

CO2 H3C

H3C H3C CH3

CH3H3C

HC

O

O

O

O

O

O

CH3

CH2+CH3

CH3H2O

CO2 H3C

H3C H3C CH3H3C CH3

CH3H3C CH3H3C

Reactor

System

Water

CO2

Propane & Light Ends

Diesel Product

Make-up Hydrogen

Separator

Vegetable Oil

Acid Gas Removal

Naphthaor Jet

Reactor

System

Water

CO2

Propane & Light Ends

Diesel Product

Make-up Hydrogen

Separator

Vegetable Oil

Acid Gas Removal

Naphthaor Jet

H2UOP Catalyst

Ecofing Process Chemistry and Flow Scheme

XX

UOP/ENI Ecofining™ Green Diesel

Initially a DARPA-funded project to develop process technology to produce military jet fuel (JP-8) from renewable sources

Targets maximum Green Jet production

Green Jet Fuel can meet all the key properties of petroleum derived aviation fuel, flash point, cold temperature performance, stability

Certification of Green Jet as a 50% blending component in progress

Deoxygenating/Isomerization

Deoxygenating/Isomerization

Built on UOP Refining Technology

Green DieselGreen Diesel

GreenJet

GreenJet

Natural Oil/ Grease

DARPA Project Partners

Deoxygenating/ Selective Cracking/

Isomerization

Deoxygenating/ Selective Cracking/

Isomerization

Natural Oil/ Grease

UOP Renewable Jet Process

Completed Flight Demonstrations

Feedstock: Jatropha oil

Feedstock: Jatropha and algal oil

Feedstock: Camelina, Jatropha and algal oil

Feedstock: Camelina

Feedstock: Jatropha oil

Royal Netherlands Air Force16 June 2010 Gilz Rijen Air Base Netherlands

Recent UOP Green Fuel Demonstrations

USAF A-10C25 March 2010 Eglin AFB

US Navy Green Hornet22 April 2010 Pax River NATC

USAF C-1727 August 2010Edwards AFB

US Navy RCB-X22 October 2010Naval Station Norfolk

F-15 III Strike Eagle25 October 2010 Eglin AFB

Deliveries exceeding 400k gallons in 2010

• UOP Alliance with Rentech• Gasification & Fischer-Tropsch technologies to convert biomass to

jet, diesel and naphtha• Utilize available forest and agricultural waste to create valuable fuels

Biomass to Liquid Biofuels through FT

Rentech Rialto Project640 bbls / day diesel35 MW electricityUOP licensed technology

Rentech Rialto Project640 bbls / day diesel35 MW electricityUOP licensed technology

Pyrolysis Oil

Solid Biomass

Commercially Proven Patented TechnologyENV 5233-04

510°C, <2 seconds Biomass converted to

liquid pyrolysis oil Fast fluidized bed, sand

as heat carrier High yields; >70 wt%

liquid on woody biomass

Rapid Thermal Processing (RTP™)