Corn’s second act: biobutanol

By David Worthington | June 26, 2012, 6:42 PM PDT

Your fuel tank could be filled entirely by a corn product within a few years. A new drop-in biofuel replacement for gasoline, backed by BP and DuPont, is set to begin commercial production in 2014.

There is more corn grown in the United States used for ethanol fuel production than for livestock feed. Yet, ethanol arguably has a demand constraint: the so-called “blend wall,” and government subsidies are expiring.

Ethanol accounts for 10 percent of the U.S. fuel supply. E-10, a federal blending requirement, has become a standard. However, demand has hit a ceiling at 10 percent - the availability of E-85, a far richer blend, not withstanding.

It might sound like king corn is in trouble, but the reality is ethanol will live on. The Environmental Protection Agency could increase the requirement to 15 percent, and a rising federal alternative fuel mandate will guarantee future demand. There’s also an alternative path toward growth: biobutanol.

The benefit of using butanol is its impact on the manufacturing economics of refiners, saidButamax CEO, Paul Beckwith. Butanol is drop in fuel molecule that can be used in existing vehicles and fuel distribution infrastructure, he added.

That drop-in quality means that customers are prepared to pay more for it, Beckwith explained. “Biofuels and renewables can play a bigger role in terms of contribution towards the fuel supply in the USA, which at the moment, whilst significant, is limited by compatibility of vehicles and infrastructure.”