MADISON – Lee Edwards, the chief executive officer at Virent Energy Systems in Madison and a veteran of 25 years in the energy business, is running an emerging company ranked among the hottest young biofuels firms in the country. Within the past year or so, Virent has won a Presidential Green Chemistry Challenge Award, been named a “technology pioneer” by the World Economic Forum and been touted in industry ratings of promising companies.
But as Edwards will be quick to add, the honors won’t mean all that much unless Virent’s formula for turning plant sugars into what is essentially gasoline can scale up from gallons per day to thousands and even hundreds of thousands of gallons per day.
Edwards, who was CEO of BP Solar’s $1 billion operation before joining Virent in January, made that point during a recent Wisconsin Innovation Network meeting in Madison. Virent aims to eventually produce fuels competitive with crude oil priced at $60 a barrel and is building a pilot plant in Madison that will turn corn and sugar beets into 10,000 gallons of fuel a year, with hopes of getting to a full 100-million-gallon-a-year production scale by 2015.
Can they do it? So far, investors as sophisticated as Shell, Cargill and Honda are betting “yes” because of the unique properties of the Virent process, which turns plant sugars into hydrocarbons much like those produced by petroleum refineries. Much still depends, however, on scaling the production.
The same challenge facing Virent confronts other biofuels companies in Wisconsin and beyond: Is the technology scalable – at a price that can compete with oil? It is also a challenge for federal and state policymakers, who should want alternative energy grant dollars to land with companies and technologies with the best chances of meeting the nation’s ambitious energy goals.
About 9 percent of the nation’s liquid fuel supply comes from biofuels, mostly ethanol produced from corn. By 2022, Congress has declared, biofuels production must reach 36 billion gallons. Today, the United States consumes about 138 billion gallons of gasoline each year.
Hitting the biofuels mandate in roughly a dozen years will test technologies, resources and production processes, not to mention political resolve. Some technologies now considered promising may fall by the wayside because the costs of production outweigh the energy produced. Other technologies once considered fanciful may emerge because they’re economical and produce a lot of fuel.
A recent example is Exxon’s foray into producing liquid transportation fuels from algae, or organisms in water than range from ordinary pond scum to seaweed. Working with genomics pioneer J. Craig Venter, Exxon will invest up to $600 million on developing an “oilgae” process that could lead to commercial-scale plants within 10 years.
… Or not. Much depends on whether projections about algae’s energy yields hold up. According to Exxon, algae could yield more than 2,000 gallons of fuel per acre of production, compared with 650 gallons for palm trees, 450 gallons for sugar cane and 250 gallons for corn. Algae may hold other advantages, such as its ability to soak up carbon dioxide.
Still, cost-effective mass production of algae has eluded researchers so far. It may be some time before it’s known that algae is better than switchgrass, or switchgrass is better than sugar cane, or sugar cane is better than wood waste, or that corn will ever be replaced, when it comes to mass production of biofuels.
Federal and state research dollars will be inevitably spread around to cover all those bets and more. Eventually, however, the winning wagers will land on technologies that can be scaled at the right economic and environmental costs.
Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.