Problems and Opportunities in the Viola Section SWEA Assembly 2014 Wednesday, 11 June 2014 Sarnia, ON David Dodds, Dodds & Associates DODDS & ASSOCIATES © 2014 & DA Axioms (and qualifications) Corn ethanol is a fabulous success story. But there is more than corn, and more than fuel. If you are making a molecule, you are a chemist, doing chemistry. Synthetic biology is just chemistry conducted by other means. “Bio” does not change the molecule. Redox Balance It’s not the carbon, it’s the hydrogen. DODDS & ASSOCIATES © 2014 & DA Why? Markets want alternative to petrochemical feedstock • de-linking commodity chemical production from oil prices • Hedge against carbon taxes • Availability of feedstock from multiple locations; not just price, but supply-chain security Technical hurdles dropping • Molecular biology, biocatalysis, fermentation technology, petrochemical processes & engineering Opportunity to use under-utilized assets and existing infrastructure DODDS & ASSOCIATES © 2014 & DA Some History 1833: diastase (amylase) isolated from barley, shown to convert starch to sugar 1860: Pasteur showed yeast transforms sugar to alcohol and butanol (1861) 1860s: vitalistic and non-vitalistic theories of organized and un-organized "ferments” (Pasteur, Liebig, and Berzelius) 1876: Kühne coined term "enzyme" ("in yeast") for organized ferments 1881: Frémy and beginning of industrial production of lactic acid 1898: last vitalistic paper; F.R. Japp, Nature, 58, 482 (1898) 1905: biological production of acetone discovered by Shardinger 1912: Fernbach patents acetone and butanol production 1916: Immobilized invertase used industrially 1919: Weizmann patents acetone and butanol production (GB4845, US1315585) 1950: 2/3 of all US butanol (~30 MM lbs), 50% of ethanol (~225 MM gal) and 10% of acetone made from molasses & starch DODDS & ASSOCIATES © 2014 & DA We Have Done This Before H. Bunn, Industrial and Engineering Chemistry, 44(9), 2128 1952 DODDS & ASSOCIATES © 2014 & DA 2013 Numbers (US) Product Gasoline Heating Oil/Diesel Fuel Jet Fuel (Kerosene) Propane/Pr opylene NGL, Liquid Refinery Gases Still Gas Pe troche m icalFeedstock s Petroleum Coke Residual/Heavy Fuel Oil Asphalt and Road Oi Lubricants Miscellaneous Products Other Liquids Aviation Gasoline Special Naphthas Waxes Kerosene % of Total US Oil Consumption 47% 20% 8% 6% 6% 4% 2% 2% 2% 2% 1% 0.4% 0.4% 0.1% 0.04% 0.04% 0.02% EIA November 2013 www.eia.gov/dnav/pet/pet_sum_snd_d_nus _mbbl_m_cur.htm 75% vs 2% In 2005, ratio was 71% vs 3.5%, with economic impact of $365BB vs $375BB In 2013 had dropped to $255BB DODDS & ASSOCIATES © 2014 & DA Making, and buying, less…. ….losing integration and value www.eia.gov/dnav/pet/hist DODDS & ASSOCIATES © 2014 & DA Chemical Feedstock: (just corn, just glucose) US 2013 corn production; 13.8 BB bushels = 350 MM tonnes 1 tonne corn = 590 kgs glucose (C6H12O6) = 275 kgs “CH2 equivalent” = 2 bbl oil (1 bbl oil = 139 kgs) So current corn production on a simple “CH2” weight basis = 700 MM bbl oil US oil consumption (2012) = 18.5 MM bbl/day = 6.75 BB bbl/yr 2% of oil consumed is for chemical feedstocks = 0.135 BB bbl/yr • On a simple weight basis, ~20% of current US corn crop could theoretically satisfy US chemical feedstock production Currently, ~42% of current US corn crop goes to EtOH Estimated that the entire 1.3 BB tons annual renewable biomass would replace about half of the US transportation fuel DODDS & ASSOCIATES © 2014 & DA Problems Lack of Champion for Chemicals • US DoE has energy mandate, which includes fuels • USDA has biomass mandate - for eating, building, burning, etc. Lack of Standards • ASTM D6866 is fine, but not enough • What is “renewable”? “sequestered”? “bio-based”? Lack of Policy • US federal planning is minimal at best • RFS/RINS, TSCA, R&D tax credits Lack of Funding • The über problem (a product of taxation, R&D tax credit uncertainty, etc.) • Cost-sharing, incubators, consortia; these all cost money…. DODDS & ASSOCIATES © 2014 & DA The über Problem • 30 start-ups in the $BB Valuation Club; 1 bioenergy (#17), 1 solar (#29) • Trends in investment are short, fashionable, and risk-adverse • Money from the private sector (corporations) is very hard to attract DODDS & ASSOCIATES © 2014 & DA Operational Opportunities Advocacy • A champion for bio-based chemicals; an advocacy group • Need to address lack of policy by direct lobbying/politics New Paradigm for IP • Just equity for the licence fee • Royalties possible, but not until full commercial production; no minimums Incubators • Additional overhead for start-up is a non-starter today • Equity, with rent payments beginning and ramping up after 24 months Grants (US) • SBIR funding is great, but is US-only, and there is not enough • Other FOAs allow foreign entities • A vehicle for cost-sharing and the non-technical parts of the grant package DODDS & ASSOCIATES © 2014 & DA Technical Opportunities “Lignin” DODDS & ASSOCIATES © 2014 & DA Lignin and Hemi-cellulose Hemi-cellulose • 15% (or more) of tree mass is recoverable • Extracted with hot water and easily depolymerized to 5-carbon sugars • Commercially valuable by-products; acetic acid, methanol, etc. Lignin • ~20% of all biomass • 1.3 BB tonnes renewable biomass each year in US = 260 MM tonnes lignin • US consumption of BTX, phenol, PTA is ~30MM tonnes • 10% efficiency across collection & conversion = ~300 MM tonnes • at 10% efficiency, we are just short of total replacement of the feedstock need for major aromatic chemicals • Phenylpropionic monomers hard to reach DODDS & ASSOCIATES © 2014 & DA Lignin Biochemistry 24-25 steps; ~70% average carbon efficiency DODDS & ASSOCIATES © 2014 & DA What is the value of this molecule? (ask your chemists) R1 , R2 , R3 = H, OH, OCH3 R4 = COOR, CH2OH Decarboxylation to styrenes Ring-opening with dioxygenases Not just woody biomass! Corn fiber contains 2-3% ferulic acid DODDS & ASSOCIATES © 2014 & DA Hemi-cellulose: (not glucose, not fermentation) Just four chemical processes applied to C5 monomers All amenable to continuous petrochemical process design ….but we need some hydrogen www.prnghrn.com; PCT/US/14/027269 DODDS & ASSOCIATES © 2014 & DA Redox & Hydrogen We generally want to make molecules more reduced than carbohydrates, which occupy the center of the redox range of carbon Biological pathways can use H2 gas, but other forms of reducing equivalents are far more common; NADH, NADPH, FMNH2 etc. and this is generated by oxidizing carbohydrate feedstock to CO2 This costs carbon! If we make hydrogen, we lose carbon. 3 O2 + C6H12O6 6 H2 + 6 CO2 1 mt H2 costs; • Carbohydrate at $400/mt • Electricity at $60/MW • Methane steam cracker DODDS & ASSOCIATES © 2014 $6000 $3200 ~$1800 & DA Why is Hydrogen Important? Ethanol (50%) 1 glucose 2 EtOH + 2 CO2 9 H2 + 1 glucose 3 EtOH Butanol (50%) 1 glucose 1 BuOH + H2O + 2 CO2 6 H2 + 1 glucose 1.5 BuOH + 4.5 H2O 1,4-BDO (100%) 11/12 glucose 1 BDO 10 H2 + 2 CO2 + 1 glucose 2 BDO + 0.5 H2O + 1.5 CO2 + 6 H2O Difficult to handle H2 gas in a fermentor; hazardous and gas/liquid transfer Electrochemical methods to add reducing equivalents avoids this, and allows “hydrogen distribution” via existing electrical grid WO2014/039767 and earlier work at MSU DODDS & ASSOCIATES © 2014 & DA Biocatalysis: An Overlooked Technology The use of biological catalysts - enzymes - as isolated catalysts under nonphysiological conditions The last 25 years have seen there increasing use in pharma especially Rapid advances in relevant biological platform technologies Almost completely unused in chemical industry, yet can be used in standard industrial catalytic process configurations These catalysts are just high molecular weight polyamides that do not contain precious metals… …and are getting much easier to make! DODDS & ASSOCIATES © 2014 & DA Extremely Rapid Technology Growth Publications Cost of Sequencing Published Protein Structures Many public databases with complete pathways www.genome.jp/kegg www.brenda-enzymes.info www.ncbi.nlm.nih.gov/genome www.yeastgenome.org Number 100k 10k 1990 DODDS & ASSOCIATES © 2014 2012 & DA Pharma Chemical Reactions: Biocatalysis Contribution 16 14 12 10 8 6 4 2 0 • Pharma has been busy building the technology base for ~25 years • Activities available in 2 weeks to 2 months; industrially relevant timing DODDS & ASSOCIATES © 2014 & DA Biocatalysis Applications Immobilized Cells for Continuous Processes • Catalyst containment and stability; avoids isolation & purification issues • Multiple reactions possible (metabolic pathways intact, including redox) Cell-free Process Configurations Protein engineering is available, practical and timely Use packed-bed reactors; same as petrochemical industry Easily scaled, stability needs to be in 6-month range Spatial separation of multiple enzyme steps Redox Chemistry Remains important and still difficult for chemists Electrochemical regeneration of cofactors DODDS & ASSOCIATES © 2014 & DA Our Opportunities • Advocacy: a champion for bio-based chemicals policy Do what the small company cannot; actions where organizational size and membership numbers really do matter • IP: New Paradigm for moving from academia to start-ups • Reconsideration of Incubators and their operation • A vehicle for handling the non-technical aspects of grants This has enormous value but is boring - and difficult. • A practical and unified message from our community We are distracted by biofuels. We need fixed policy. We need funds that actually reach the bench rather than supporting other organizational infrastructures. DODDS & ASSOCIATES © 2014 & DA David R. Dodds, Ph.D. Dodds & Associates LLC MOBILE 315 884 3703 / TWITTER drdodds4 ddodds@techdiligence.net www.techdiligence.net www.linkedin.com/in/techdiligence DODDS & ASSOCIATES © 2014 & DA