The Down-select Debate
The down-select process means a lot to Tom Faust and John Holladay. They’ve spent many sleepless nights over the past eight months thinking about it. They’ve felt extreme enthusiasm over the opportunity such a process could bring to the advanced biofuel industry, and they’ve been plagued with anxiety wondering about unintended consequences it might breed. And why not? Faust, the principal investigator and consortium director for the National Advanced Biofuels Consortium, and Holladay, the chief technology officer for the NABC, have been given one of the most unprecedented tasks the industry has ever seen. Along with a team of experts compiled from nearly every major lab in the U.S., on Aug. 12 the NABC will do what it set out to do nearly eight months ago and pick from six of the most promising, innovative, and in some cases, the most commercially backed, and at least partially proven, technologies in existence.
The down-select process involves narrowing the field of choices, and Faust’s and Holladay’s duty of “picking” has nothing to do with favorites or any other form of subjectivity, Faust points out. Instead, it’s based on an intricate system and complex set of criteria that range from fuel quality to life-cycle analysis to economic viability, which Faust and his team worked on for nearly five months before the objectives of the NABC were ever even announced. Their objective is to down-select, based on the research efforts that will answer the questions posed by that complex system and criteria, which of the six advanced biofuel process strategies is the best. At least, as the guidelines of the program reveal, they attempt to select the best process strategies that can reach true commercialization and create a real impact in the shortest amount of time.
“I think that this is a bold adventure,” says Bruce Gates, chair of the NABC’s technology advisory council. Just look at the number of parties involved in the consortium, 17, and the companies that have agreed to work on the project: BP, Amyris Biotechnologies, Virent, UOP, NREL and several others. For Gates, the ability of the consortium members to work together and not “trip over each other’s feet” is quite a remarkable event. “If you look at the history about how advancements have been made in the area of fuels,” he says, “what you come up with is the word antitrust.” Oil companies have been restrained from working together, he says, “so you don’t find a history of consortium.” For Gates, that is the storyline of the NABC, the act of several companies, institutions and national labs working together without competing. The NABC is certainly a testament to strong leadership and lofty goals, but the real impact of the program may still be too difficult to quantify.
The Chosen Six
The six process strategies the NABC has been working with are: fermentation of lignocellulosic sugars; catalytic conversion of lignocellulosic sugars; catalytic fast pyrolysis; hydropyrolysis; hydrothermal liquefaction; and syngas to distillates. To even be chosen as one of the six, Faust and Holladay say, speaks to the real promise of those approaches to make an impact in the next few years, but choosing the partners who will help the NABC answer the questions linked to each approach was not easy. “We got a lot of frequent flier miles in putting this together,” Faust says. In addition to several face-to-face meetings with the potential partners on the project, meetings meant to feel out the willingness of the partners and their ability to contribute to the program, Faust and his team also performed a thorough assessment of a lot of factors. “People make some pretty ridiculous claims, and if there isn’t anything substantiated, then it calls into question the validity of those claims,” he says. So, one of those factors that helped the team to decipher which process strategies would make the initial six was based on the amount of available, yet credible, information on those particular processes.
In addition to the available information, the team would also identify the lead entities working on a given process strategy and gauge their willingness to share their intellectual property and other information for the benefit of the program. “We looked at environmental impact as well,” Faust adds, noting that every strategy will achieve at least a 50 percent greenhouse gas reduction when compared to petroleum-based gasoline. And on top of all those factors, they also tried to determine the scalability of each process, particularly in the refinery industry. “We wanted to leverage the existing refinery infrastructure,” he explains. “That is one of the challenges to rapid scale-up. In the freeze up of the capital markets…we wanted to look at technologies that could potentially maximize that leverage.”
Not everyone who Faust visited with, however, made the cut. Some of the candidates or companies that wanted to participate in the consortium were not chosen. “A lot of people ask us to give a prioritization of the factors,” he says, “but we really intentionally didn’t do so. We didn’t want to artificially weight one factor,” adding that, “we thought it was really the tandem of all those considerations.”
Along with all the time spent speaking with each possible partner in the project, Faust spent five full months creating an operations strategy and research approach that each project team would follow in the quest to learn everything there is to know about pyrolysis or syngas to distillates. “You’re never 100 percent sure about the decisions that you made,” he says about the early stages of the project, but he adds that, so far, “the data coming in shows we did.”
The Importance of Aug. 12
It should come as no surprise that Faust and his team want more time and more money to fully alleviate all of their scientific concerns related to the six process strategies. But, because the original proposal to the U.S. DOE stated that after one year, the team would announce from one to four process strategies that would be pursued further (and the others would be left behind), the plan is to make the tough decision on Aug. 12. And to say it is a tough decision might be an understatement. John Holladay says they have followed a very aggressive schedule up to this point, but, the down-select “will set the scope and focus of our work for the next two years.”
For the past few months, Holladay hasn’t been doing any real research on the processes, but instead, he’s been hammering out the criteria, along with help from the other members of the leadership team, that will be used to go from six to four or three, or whatever number of processes they settle on. And that, along with those unintended consequences Holladay and Faust mention might happen from the down-select process, is what keeps them up at night—and what makes the real impact of this whole project nearly impossible to predict. “I’d like to make a point on the down-select,” Holladay says. “This is not so much a grade of the process strategy as being promising or less promising. It is really to get some technology to move rapidly towards piloting. It’s really,” he says, “for a blend of both. What is the opportunity that each of these strategies have for a short-term piloting basis.”
That is the goal, as Faust puts it, to take one or more advanced biofuels or drop-in hydrocarbons and build a pilot-ready program in three years, and after those three years send out a “son or daughter” of the NABC in a semicomplete design package that can give companies like ICM a high level of confidence that the numbers in the lab can be duplicated on a large scale. Of course, they say, that is the great part of this consortium, but those that don’t make the down-select are what they worry about. “I’m really concerned that given this one year, we are going to down-select some technologies and risk putting a bad label on them.” A label, Faust believes, could wrongly make it to the investment community and significantly impede any financial progress a company based upon a nonselected technology company may have been making.
The whole consortium might be different if it were similar to other consortiums based on “scientific breakthroughs,” but in this case the NABC is about “commercial breakthroughs.” Because of the commercial nature of the work, Faust says each process team could have spent much more time tweaking and fine-tuning each strategy, but he adds this was not the point of the work. In August, the NABC team, the U.S. DOE and the rest of the country will be two years closer to having an exhaustively researched process strategy to produce a replacement for fossil-based fuel. While the three years might fly by for Faust, Holladay and the rest of the team, there is a lot to look forward to in August, and even beyond that. For one, to have the efforts in this area is a big win for the industry, as Gates explains.
“The impression I have,” he says, “is that if you just left it up to the large, established fuel companies, they might not be putting the resources in to really shake it out and realistically assess in a short time what we can do.” It might be hard to argue that considering the five Big Oil companies posted all-time record profits in the first quarter of this year.
And although not every process strategy backer will be happy about the down-select process, as Holladay infers, it doesn’t mean an end. “Some really promising and important information is being gleaned” from all the process strategies, “and it will give people a chance to build off that.”
Author: Luke Geiver
Associate Editor, Biorefining Magazine