Paul O’Connor: Don’t Give Up on Advanced Biofuels

Recently, I spoke with Paul O’Connor, an expert in heavy oil conversion processes and refining catalysts As many of you know, he was formerly with Shell and Akzo Nobel, Albemarle and he formed BIOeCON, a company focused on the economical conversion of biomass to renewable fuels. BIOeCON and Khosla Ventures founded KiOR to develop and commercialize the Fluidized Biomass Fluid Catalytic Cracking (BFCC) process to produce renewable oil products. We spoke about his experiences in trying to commercialize advanced biofuels and his new venture, Antecy. What follows are highlights from the interview. You can listen or download the podcast below or listen to it in ITunes.

On Antecy:

Antecy is not really biofuels anymore. In principle all photosynthetic materials and biomass have been formed by solar energy in photosynthesis and what in fact came up time and time again is that really we’re only taking a fraction of the solar energy. Let’s say for instance for sugarcane is 1% which is captured and then converted into biomass at which time we can convert into oil and in fossil fuels. The same happens in nature has all the time so it’s not a problem. So in billions of years a lot of fossil fuels have built up and the reason we are getting in trouble with the carbon balance is when we try to burn it in a couple of hundred years.

 

But if you look at solar efficiency and nowadays you can capture up to 20% solar energy already with photovoltaics and they’re talking about and demonstrating 40% so solar energy, solar electricity, is really becoming cheaper and cheaper. I believe that solar and wind energy is going to really compete in this area with a production of local hydrogen and if we can convert it into fuels again, methanol, diesel and so, that that will really be a high efficiency weight and for solar energy into fuels.

 

So in my view and that’s my vision is that future energy storage is not a lithium battery but a fuel cell running on low carbon methanol, or any other liquid fuel which has a higher energy density and overall more efficient. You say, well there’s enough CO2 but to do this, to convert CO2 to methanol or renewable hydrogen you need concentrated and clean CO2 and that technology is not really available yet. So this is where Antecy has developed a new technology to capture CO2 and with the low amounts of energy required and using environmental friendly systems so that once we have renewable energy we can make hydrogen and hydrogen becomes cheaper and with CO2 from fuel gas or even from open air we can get CO2 concentrated, converted into methanol. The unique features of our technology is that it’s low cost, it requires low amount of low value heat and very important is we’re not using any toxic materials.

On KiOR:

It started as an adventure, a dream come true and so I made the big jump leaving Albemarle at the time and starting my own business.  In 2005, I got the opportunity by a friend on the financial side to develop my ideas together with a group of really the best scientists in Europe and within a year we showed that we could have some breakthroughs, that was in 2006. Then, in 2007 after trips to the states we got full support from Vinod Khosla to move ahead to further develop and commercialize the technology. So that is — what more can you ask for? I mean, it was a dream come true.

 

What I remember was when we made the first oil also of good quality, I said business is hard but then I thought, oh now we’ve proven it can be done it can only be successful. But really Tammy, it slowly started to turn into a nightmare and I still do not understand exactly why but the original idea which we had coming from BIOeCON were put aside and not only the ideas but also the network… At a certain moment the people in Houston were separating us and you cannot really believe it but certain moments you the European scientists were not even allowed to visit Houston anymore because of so called “security issues.”

 

“As if…” you know, as if the guys in Houston have more knowledge in our biomass conversion than the people who really developed it. It’s very strange.  They thought they had invented their own process and so at that moment KiOR took a kind of a different turn. I think it’s important for me to say this because on the technology side I believe it still can work. But they took a short cut and they neglected what many people now see as the most important part which is the biomass pretreatment step.

 

… They kept on the same road, and yes, it unfortunately hit the wall. So that’s very sad. Not only for the people there, but for all of us, for the whole industry because I think — and that’s the thing which hurts me the most — that it has hurt the whole industry. People say, oh you know, you see, it can’t be done and that is the wrong conclusion. I think that’s the wrong conclusion.

On the Biggest Lesson from KiOR:

I think the biggest lesson in all this really — it’s very obvious — but sometimes you have to go to the basics and you have to keep an eye on having the technology right and the business case right and questioning that time and time again and keep questioning that. So you need to have an open debate with the right people using your critical skills and keep questioning what’s going on. What’s the reality check? We like to tell the good stories about fantastic results but no, I want to know what’s wrong. What can be improved?  Shell has a system of doing what they call a technical risk registry to go through everything which can go wrong and check what can go wrong, what can go wrong and how can we fix it? You need to keep doing that. The moment you lose it out of eye you take a risk and then hidden problems arise.  So: if you have a problem put it on the table.

 

If the problem is hidden intentionally or unintentionally at a certain time it will come out of the swamp and it will kill you because it will be a monster. So that is the lesson and of course we all like to hear the good news. That’s the way the world works. But, as a good leader you have to also want to hear the bad news because that’s where you can make progress and fix things.

On the Problem with Commercializing Advanced Biofuels:

Before you even talk about policy, the problem comes back to the people, entrepreneurs and investors who have been really very disillusioned because of the failures. That is making it very difficult to convince people that, okay, now we have the solution and now it’s like some people have nearly given up on it. A while ago I spoke with one expert, a real expert in this field of one of the large oil and energy companies, and he told me you know Paul, I think it’ll take another 10 years before biomass conversion is mature enough to apply commercially.

 

I think he was just depressed because of all the bad news but that’s a barrier which we will need to challenge to be able to convince the people, the entrepreneurs and the investors that okay, we have learned from our failures and the improvements that we have in mind now have a bigger chance of success and with less risks… We can wait and ask for changes in policy but I think we have to do something from the people who are developing who have to give the policymakers the option and show that there are some new things which are possible and credible, of course.