One man’s junk, another man’s treasure? Looking at carbon monoxide and LanzaTech

What’s LanzaTech all about? How does it work and why? Here are answers for your questions.

Why don’t steel mills generate power for the grid — why make fuels instead of steam?

“The fact that many of these industrial facilities could be making electricity now, but are not, tells the story,” LanzaTech CEO Jennifer Holmgren told The Digest. “The question then, with respect to steel mill waste gas, is what provides the highest marginal value, financially/environmentally/socially. Our customers and partners have invested in us because they realize these three vectors (economics/environment/social good) are aligned in the LanzaTech process, where ethanol production provides a higher IRR, lower CO2 emissions, and lower SOx/NOx/particulate emissions when compared to electricity production. They also realize that ethanol is just one of many chemicals that we can produce.

Why not combust steel mill waste gas — or petroleum, for that matter? Isn’t the process simpler?

“The simplest chemical conversion is always combustion,” said Holmgren. “For example, refining petroleum into gasoline requires a greater energy input that combusting the petroleum into electricity. But there is a reason the refining industry exists, liquid fuels are needed.”

How does the IRR for liquid fuel production compare to power production?

“LanzaTech achieves a higher IRR,” Holmgren added, “because ethanol is more valuable than wholesale electricity and because the process efficiency is higher for ethanol production (up to 60%) than for electricity production (< 35%, and sometimes <<35%) as dilute gases combust very inefficiently, which is the cases for many industrial gas streams. LanzaTech is able to achieve a high process energy efficiency because our microbe is highly tolerant to ethanol so distillation energy requirements are quite low (<20% of the inherent energy in distilled ethanol product), and because our reactors are cooled by cooling towers which have extremely low energy input, and not chillers.

LanzaTech’s strategy of diversification, illustrated

Not all energy is created equal

“It is also worth noting that not all energy is created equal. When we integrate into an industrial site, the low-value waste heat that is used for distillation cannot be practically used for anything else, and therefore the energy required for distillation drops to 0-5%. Also, when considering this integration of these low temperature streams, the potential efficiency from electricity production drops even further. Additionally, China and India are experiencing rapid growth in liquid fuel demand. LanzaTech ethanol can be transported to these markets or globally, but the infrastructure is not there for selling electricity from these sites.

The company’s facility at Freedom Pines.

Sustainability

“While our fermenters release CO2 (similar to sugar fermentation) when using CO as a feedstock,” Holmgren noted, “there is net CO2 reduction when compared to business as usual, flaring or venting these gases. Further, as we react increasing amounts of H2 in our process (other industrial waste gases, MSW or biomass) our reactors become CO2 consuming, in addition to our process remaining net CO2 reducing. This is a consequence of thermodynamics; the process efficiency hasn’t changed, just the feedstock. Lastly, steel production is the 3rd largest stationary CO2 emitter (after electricity and cement), and LanzaTech’s solution has received a very positive response from this sector.

The health perspective

“From a human health perspective,” said Holmgren, “the local air quality is so bad worldwide that it caused 7 million deaths in 2012 (WHO). This is driven by SOx, NOx and particulate emissions. By converting these waste gases into ethanol, the LanzaTech process reduces each of SOx, NOx particulate emissions by > 90%. Unfortunately, further combustion of these waste gases into electricity would exacerbate these emissions. For our customers, they are keenly aware that the poor air quality locally poses a threat to business in some jurisdictions, and are doubly motivated to make a positive change.”

Let’s go specifically to items raised in the afore-mentioned articles and letters. We raised them individually in a Q&A with LanzaTech.

We’ll see

We’ll see if the process economics — and the general economic forces and choices at work on potential investors in the LanzaTech system — provide yields that result in a first commercial-scale plant for LanzaTech, and more to come.

We also will see if there are downstream uses for the CO2 released in fermentation systems that further improve the a) carbon footprint, b) economics and c) process efficiency. When it comes to monetizing CO2, there is no doubt that all fermentation technologies can get better at it. That’s one reason, for example, why ethanol producer Green Plains has invested in BioProcess Algae.

The good news is — if and when the company reaches scale — RSB has certified the 70-90% greenhouse gas emission reductions, compared to business as usual, for technology as it is today.

Economics vs efficiency

Based on process efficiency, it is more carbon-efficient to combust CO to make power.

By the same measure, it is more carbon-efficient to leave a tree in the ground instead of making paper from it. And it is certainly more process efficient to move wastewater back into homes and businesses without treating it.

So, why do we make paper? Why are trees felled? Why do we treat wastewater?

Here in Digestville we take the view that product demand (as expressed in the economic value is the driver, rather than efficiency)  — economics trump efficiency as a measuring stick for investment and deployment. Higher-value use cases will always trump lower-value use cases. Bottom line, people pay enough more for paper to compensate for the loss in yield compared to other uses.

It’s the reason that Farmer’s Markets exist, if you’ve ever visited one. It’s certainly less energy-efficient and process-efficient for farmers to individually schlepp goods into the city and runs tiny stands that sell directly to consumers. They do it because of the higher margins available in selling direct. That’s the power of economics vs the power of efficiency.