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Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
Techno-economic and Market Analysis of
Pathways from Syngas to Fuels and Chemicals
TC Biomass 2013 Chicago, Illinois
Michael Talmadge, Abhijit Dutta & Richard Bain
September 4, 2013
2
Objective
Assess the economics of producing fuels and chemicals from
biomass-derived synthesis gas.
Process economics based on literature (consistent TEA assumptions)
Perform more rigorous TEA on promising pathways
o Biochemical conversion of syngas to ethanol and higher alcohols
o Ethanol and higher alcohols to infrastructure-compatible hydrocarbons
Simple product market analyses


What can we do with syngas?
3
Simplified TEA model
Inputs from literature sources
o Feedstock rate and properties (heating value)
o Product yields
o Operating costs (variable & fixed)
o Capital costs
Common scaling assumptions
o Capital scaling exponents
o Economies of scale for fixed operating costs
Operating and financing assumptions for n
th
plant and
pioneer plant
Minimum Product Selling Price
literature values average, standard deviation & 90% confidence intervals
Analysis Approach
4
n
th
Plant Assumptions
Parameter Value
Basis year for analysis 2011
Feedstock processing capacity 2,000 Dry Tonnes / SD
Feedstock cost (woody biomass) $75 / Dry Tonne
Debt / equity for plant financing 60% / 40%
Internal rate of return (after-tax) for equity financing 10%
Annual interest rate and term for debt financing 8% / 10 years
Total income tax rate 35%
Plant life
30 years
Plant depreciation schedule
7-year IRS MACRS
MACRS = Modified Accelerated Cost Recovery System
Reliability of operations / on-stream factor
0.90
Site development costs
4% of ISBL Installed Capital
Working capital
5% of Fixed Capital Investment
Indirect costs for capital project
60% of Total Direct Costs
Capital equipment capacity scaling exponent 0.70
5
Internal Rate of Return (IRR): 10% 25%
Capital Costs:
Pioneer Plant Escalation 210% of n
th
Plant Estimates (Merrow et al, Rand, 1981)
Reliability of Operations / On-Stream Factor:
Initial value of 0.5 (Merrow et al, Rand, 1981)
Increasing to 0.9 per experience curve (Heinen, SRI Consulting, 2001)








Pioneer Plant Assumptions
O
n
-
S
t
r
e
a
m

F
a
c
t
o
r

Year of Plant Operation
0.0
0.2
0.4
0.6
0.8
1.0
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
~
6
Fuel Pathways Explored
Ethanol & C3+
Alcohols
Hydrocarbons
(FT Gasoline, Diesel,
Jet, Lubricants)
Synthetic
Natural Gas
Dimethyl Ether
(DME)
Syngas
Gasoline
(MTG)
Triptyls
Olefins
(MTO)
Ethanol
Methanol
Syngas
Fermentation
Butanol
2,3-Butanediol
7
Chemical Pathways Explored
Hydrocarbons
(FT Lubes, Waxes)
Acetic
Anhydride
Propylene
(MTO)
Formaldehyde
Ethylene
(MTO)
Hydrogen
Ethyl
Acetate
Formic
Acid
Methyl
Formate
Ethylene
Glycol
Acetic
Acid
Acetic Acid
Syngas
Fermentation
PHA
(Polyhydroxyalkanoates)
Syngas
Methyl-
Amines
Methanol
Urea
Ammonia
DME
Aldehydes
(Oxosynthesis)
8
Major Pathway Categories Explored
Synthetic Natural Gas via Methanation of Syngas
Ethanol
o Catalytic Mixed Alcohol Synthesis
o Syngas Fermentation *
Hydrocarbons
o Fischer-Tropsch
o Methanol to Naphtha Hydrocarbons
o Ethanol & Higher Alcohols to Hydrocarbons *
Hydrogen via Steam Reforming, WGS & Purification
Methanol via Catalytic Methanol Synthesis
* Pathways explored by NREL through Aspen modeling and rigorous TEA.
9
Synthetic Natural Gas
Methanation of Syngas
10
0
5
10
15
20
25
30
35
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Synthetic Natural Gas
2
0
1
1

$

/

M
S
c
f

Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Natural Gas Citygate Price (Dollars per Thousand Cubic Feet). Release Date: 7/31/2013.
Process Sources Min. Selling Price Range ($ / MScf)
Syngas to SNG via
methanation
McKeough & Kurkela, 2007
Mozaffarian et al, 2004
van der Drift et al, 2005
n
th
Plant 16.52 19.13
Pioneer 10% IRR 28.50 31.05
Pioneer 25% IRR 50.00 56.93
Pioneer 10% IRR 29.80 2.10
n
th
Plant 17.62 2.23
11
0
5
10
15
20
25
30
35
40
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
Techno-economic Analysis




Market Analysis

Synthetic Natural Gas
2
0
1
1

$

/

M
S
c
f

17.62 2.23
5.50
Average Product per Ton Biomass 11,440 Scf / Ton
U.S. Consumption (EIA, 2012) 25.5T Scf / Year
10% of U.S. Natural Gas Market 2.55T Scf / Year
Equivalent Biomass Consumption 223 MMTon / Year
Equivalent Biorefineries
310
2,000 Tonne / Day Facilities
29.80 2.10
53.50 5.70
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
12
Ethanol
Catalytic Mixed Alcohol Synthesis
Syngas Fermentation *
* Pathways explored by NREL through Aspen modeling and rigorous TEA.
13
0
2
4
6
8
10
12
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Ethanol via Mixed Alcohol Synthesis
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Syngas to ethanol
via catalytic mixed
alcohol synthesis
Dutta et al, 2011
Dutta & Phillips, 2009
Dutta et al, 2010
He & Zhang, 2011
Villanueva Perales et al, 2011
n
th
Plant 2.87 4.83
Pioneer 10% IRR 5.67 9.64
Pioneer 25% IRR 11.27 19.20
2
0
1
1

$

/

G
a
l
l
o
n

G
E

Pioneer 10% IRR 8.05 2.08
n
th
Plant 4.16 1.06
14
0
2
4
6
8
10
12
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Ethanol via Syngas Fermentation
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Ethanol via syngas
fermentation
Putsche,1999
van Kasteren & Verbene, 2005
Piccolo & Bezzo, 2007
n
th
Plant 3.67 5.08
Pioneer 10% IRR 6.11 8.99
Pioneer 25% IRR 11.07 17.02
2
0
1
1

$

/

G
a
l
l
o
n

G
E

Pioneer 10% IRR 7.14 1.82
n
th
Plant 4.32 0.83
15
Ethanol via Syngas Fermentation
NREL TEA Model
Design Report NREL/TP-5100-51400 utilized as basis through clean
compressed syngas from biomass.
Yield structures based on publications from LanzaTech & INEOS Bio.
Capital costs for fermenters, seed train and cell recovery developed by
Harris Group Inc.



Ethanol
C3+ Alcohols
Acetic Acid
Power
Syngas
Cleanup
Biomass
Gasification
Feed
Handling &
Preparation
Flue
Gas
Woody
Biomass
Syngas
Fermentation
Seed Train
Product
Recovery
Heat Integration, Power Generation & Other Utilities
16
nth-Plant MSP Pioneer Plant MSP nth-Plant MSP Pioneer Plant MSP
0
2
4
6
8
10
12
Market Price (4-Yr) Price Projection (4-Yr) nth-Plant MSP Pioneer Plant MSP
Techno-economic Analysis




Market Analysis

Ethanol
2
0
1
1

$

/

G
a
l
l
o
n

G
E

Mixed Alcohols
(Literature)
Syngas Fermentation
(Literature)
Syngas Fermentation
(NREL TEA)
Average Product per Ton Biomass 85 Gallons / Ton
U.S. Consumption (EIA, 2013) 13.0B Gallons / Year
50% of U.S. Fuel Ethanol Market 6.5B Gallons / Year
Equivalent Biomass Consumption 76 MMTon / Year
Equivalent Biorefineries
100
2,000 Tonne / Day Facilities
2.72
7.14
1.82
3.06
IRR = 10% 25% IRR = 10% 25% IRR = 10% 25%
4.16
1.06
4.32
0.83
15.76
4.11
8.05
2.08
12.59
3.93
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~
17
Hydrocarbons
Fischer-Tropsch
Methanol to Naphtha Hydrocarbons
Ethanol & Higher Alcohols to Hydrocarbons *
* Pathways explored by NREL through Aspen modeling and rigorous TEA.
18
0
1
2
3
4
5
6
7
8
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Fischer-Tropsch Hydrocarbons
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Hydrocarbons via
Fischer-Tropsch
synthesis
Hamelinck et al, 2003
Larson et al, 2009
McKeough & Kurkela, 2007
SRI PEP Yearbook, 2009
Udengaard, 2011
Byrne, 2011
Freeman, 2011
n
th
Plant 2.52 4.19
Pioneer 10% IRR 4.75 7.43
Pioneer 25% IRR 9.08 13.52
2
0
1
1

$

/

G
a
l
l
o
n

G
E

Pioneer 10% IRR 5.63 1.53
n
th
Plant 3.09 0.96
19
0
1
2
3
4
5
6
7
8
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Methanol to Hydrocarbons
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Hydrocarbons via
methanol synthesis
and methanol
conversion
Phillips et al, 2011
Hindman, 2010
SRI PEP Report 191A, 1999
Udengaard, 2011
Jones & Zhu, 2009
Ahn et al, 2009
n
th
Plant 2.61 3.84
Pioneer 10% IRR 4.67 6.47
Pioneer 25% IRR 8.61 11.38
2
0
1
1

$

/

G
a
l
l
o
n

G
E

Pioneer 10% IRR 5.37 1.09
n
th
Plant 3.24 0.81
20
Ethanol & Higher Alcohols to Hydrocarbons
NREL TEA Model
Ethanol (and higher alcohol) intermediates for hydrocarbon fuel production.
Eliminates constraints of renewable ethanol blend limits.
Technology development taking place in academia, national labs and industry.
Co-Product(s)
Syngas
Cleanup
Biomass
Gasification
Feed
Handling &
Preparation
Flue
Gas
Woody
Biomass
Alcohol
Synthesis
Heat Integration, Power Generation & Other Utilities
Alcohol to
Hydrocarbon
Conversion
Hydrogen
Plant Naphtha
Mid-Distillates
Mixed C4
Mixed C3
Light Ends
Hydrocarbon
Product
Recovery
Natural Gas
Ethanol (and
C3+ Alcohol)
Intermediates
Alcohol
Separation
21
nth-Plant MSP Pioneer Plant MSP nth-Plant MSP Pioneer Plant MSP
0
1
2
3
4
5
6
7
8
Market Price (4-Yr) Price Projection (4-Yr) nth-Plant MSP Pioneer Plant MSP
Techno-economic Analysis




Market Analysis

Hydrocarbon Fuels
2
0
1
1

$

/

G
a
l
l
o
n

G
E

Average Product per Ton Biomass 65 Gallons / Ton
U.S. Consumption (EIA, 2013) 220B Gallons / Year
10% of U.S. Hydrocarbon Fuels Market 22B Gallons / Year
Equivalent Biomass Consumption 338 MMTon / Year
Equivalent Biorefineries
440
2,000 Tonne / Day Facilities
2.72
5.37
1.09
3.06
3.09
0.96
3.24
0.81
10.66
2.56
5.63
1.53
9.54
1.87
Fischer-Tropsch
(Literature)
MeOH to Hydrocarbons
(Literature)
EtOH to Hydrocarbons
(NREL TEA)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~
22
Hydrogen
Steam reforming, water-gas shift & purification
23
0
2
4
6
8
10
12
14
16
18
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Hydrogen
Historical Pricing Data Source: SRI CEH Marketing Research Report, July, 2010 Projected values based on ratios to EIA natural gas projections.

Process Sources Min. Selling Price Range ($ / MScf)
Syngas to H
2
via
steam reforming,
water-gas shift &
purification
Spath et al, 2005
McKeough & Kurkela, 2003
Williams et al, 1995
Hamelinck & Faaij, 2001
n
th
Plant 5.33 8.84
Pioneer 10% IRR 10.46 15.63
Pioneer 25% IRR 20.93 29.07
2
0
1
1

$

/

M
S
c
f

Pioneer 10% IRR 12.52 3.62
n
th
Plant 6.67 2.48
24
0
2
4
6
8
10
12
14
16
18
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
Techno-economic Analysis




Market Analysis

Hydrogen
2
0
1
1

$

/

M
S
c
f

6.67 2.48
5.95
Average Product per Ton Biomass 37,300 Scf / Ton
U.S. Consumption (EIA, 2013) 4.1T Scf / Year
10% of U.S. Hydrogen Market 0.41T Scf / Year
Equivalent Biomass Consumption 11 MMTon / Year
Equivalent Biorefineries
14
2,000 Tonne / Day Facilities
12.52 3.62
24.23 5.72
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
25
Methanol
Catalytic Methanol Synthesis
26
0.0
0.5
1.0
1.5
2.0
2.5
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Methanol
Historical Pricing Data Source: IHS CEH Marketing Research Report, 2013.

Contract
Spot
Process Sources Min. Selling Price Range ($ / Gal)
Syngas to methanol
via catalytic synthesis
Tarud & Phillips, 2011
McKeough & Kurkela, 2007
SRI PEP Yearbook, 2009
Williams et al, 1995
Hamelinck & Faaij, 2001
n
th
Plant 0.96 1.32
Pioneer 10% IRR 1.63 2.13
Pioneer 25% IRR 2.97 3.91
2
0
1
1

$

/

G
a
l
l
o
n

Pioneer 10% IRR 1.93 0.39
n
th
Plant 1.15 0.26
27
Techno-economic Analysis




Market Analysis

0.0
0.5
1.0
1.5
2.0
2.5
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
Methanol as Chemical Intermediate
2
0
1
1

$

/

M
S
c
f

1.15 0.26 1.16
Average Product per Ton Biomass 170 Gallons / Ton
U.S. Consumption (SRI / IHS, 2010) 1.9B Gallons / Year
10% of U.S. Methanol Market 0.19B Gallons / Year
Equivalent Biomass Consumption 1.1 MMTon / Year
Equivalent Biorefineries
1.4
2,000 Tonne / Day Facilities
1.93 0.39
3.41 0.64
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
28
Techno-economic Analysis




Market Analysis

Methanol as Fuel Intermediate
Average Product per Ton Biomass 65 Gallons / Ton
U.S. Consumption (EIA, 2013) 220B Gallons / Year
10% of U.S. Hydrocarbon Fuels Market 22B Gallons / Year
Equivalent Biomass Consumption 338 MMTon / Year
Equivalent Biorefineries
440
2,000 Tonne / Day Facilities
0.0
0.5
1.0
1.5
2.0
2.5
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
2
0
1
1

$

/

M
S
c
f

1.15 0.26 1.16
1.93 0.39
3.41 0.64
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
29
Conclusions
Hydrocarbon, ethanol and methanol economics can be
competitive for n
th
-plant.
Pioneer plant economics are challenged overall.
Market capacities do not constrain bio-product pathways in
major hydrocarbon fuel markets (natural gas, petroleum fuels).
With fixed ethanol blend limit, cellulosic pathways and grain-
derived product will compete for limited market.
Market capacities for methanol-derived chemicals are
constraining.
Syngas fermentation is potentially competitive, depending on
CO / H
2
conversion to product(s).
Methanol and ethanol are attractive intermediates for
production of infrastructure-compatible hydrocarbons.

30
Future Work
Develop design reports for selected biomass-to-hydrocarbon
fuel pathways under DOE-BETO directed efforts.
Apply simplified TEA and market analysis on emerging
pathways to identify economic feasibility in early stages of
development.
Explore opportunities to improve Pioneer Plant economics
o Biomass co-feeding opportunities (NG-Biomass to Liquids)
o Utilizing inexpensive feedstocks
o High-value co-products
o RIN credits


31
Acknowledgements
Abhijit Dutta and Richard Bain (co-authors)
Matt Worley and Ben Fierman of Harris Group
Inc, Atlanta, Georgia.
Bioenergy Technology Office (BETO) of the
United States Department of Energy
NREL Biorefinery Analysis and Thermochemical
Platform Teams
32
References
For a complete list of references utilized in this
analysis, please contact Mike Talmadge
(michael.talmadge@nrel.gov / 303-275-4632)