Scott Johnson (photo courtesy of Sustainable Oils)

Sustainable Oils is a company focused on jet fuel from camelina.  As camelina is quickly becoming an important feedstock for jet fuel, the B-GC spoke to Scott Johnson, their President and General Manager understand the potential of this new biofuel.

:   Can you tell me a little about Sustainable Oils, including its history, its market and its business direction?

Scott Johnson: Sustainable Oils was formed as a Joint Venture in November 2007 by Targeted Growth Inc., a biotechnology company that had been working on camelina, and Green Earth Fuels LLC, one of the largest biodiesel producers in the U.S. who wanted to forward integrate into feedstocks.  With Targeted Growth’s camelina experience and its patented portfolio of techniques to improve yield, stress tolerance and overall vigor, and with Green Earth Fuels’ biodiesel expertise, Sustainable Oils was launched to develop the best seed for a feedstock as possible.

Sustainable Oils’ business process model has three steps to it.

1. We develop and sell certified seed for camelina so that farmers are assured of getting a good, clean seed which is guaranteed to germinate.
2. Then we contract back and pay for the farmers’ production.
3. Finally, we process the production into two products: meal, which we sell for chicken broiler feed, and oil for biofuel production.

Our primary model is to sell the feedstock, not necessarily the biofuel end product.

:  Sustainable Oils focuses on camelina.  Why camelina?  What are the advantages relative to corn, soybean or algae?  What are the applications for Sustainable Oils products?  Is it jetfuel, diesel fuel or gasoline?

Figure 1: Camelina growing in a Montana field (Courtesy of Sustainable Oil)

Scott Johnson: The biggest advantage of camelina is simply that it is not a food.  It is a crop imported into North America from the Mediterranean region and more recently from Eastern Europe.  It has existed for millennia, used as a lubricant or a fuel throughout history.  Because of its high oil content, it is a good producer of fuel relative to alternatives like canola oil.   We found that by using breeding techniques we could make significant improvements in the yield.  It was an opportunity to bring modern science to an ancient crop.  We also liked the agronomic characteristics of camelina.  It fits well into areas where the soil is not as fertile, where there is low precipitation, or where extreme temperatures are common.  In Montana for instance, where we have a significant portion of our production, the crop complements existing farm production.  In Montana, farmers go through a wheat/fallow rotation, and offering them camelina gives them another economic crop to fit into that rotation.

Compared to algae, camelina is available to be scaled up now.  I believe algae will be one of the significant solutions for biofuel in the future, however the technology has a way to go and will require significant investment and time before the hurdles are passed.  Camelina is here today, it can be scaled up today.    We are going to work hard on camelina, and we are going to keep an eye on the progress of algae-based biofuels, because  I think there is a place for both.  I don’t think there will be just one solution.

Currently our processing of camelina delivers high grade diesel and aviation fuel, and we have not engaged in processes other than those.  Our focus is to deliver fuel that is a drop-in replacement for existing systems and infrastructure.  We think it is a mistake to expect changes in a very efficient logistical process simply because you have a renewable fuel, so we are targeting to get as close as possible to a fuel that looks and operates exactly as the current products.  We know we can do that with diesel and aviation fuel.

In addition, camelina-based jet fuel reduces carbon emissions by about 80% compared to petroleum jet fuel.  That has attracted interest in airlines that fly over Europe as the European Union has approved emission penalties on airlines starting in 2012.

:  What are the economics for replacing jet fuel with a Camelina based biofuel?  What is the current yield Sustainable Oils has demonstrated in gallons/acre/year?   What does that mean for current cost/gallon?  What are the projected costs for Sustainable Oils product in 5 to 10 years?

Scott Johnson: Currently, we are in the early stages for the development of a consistent yield on camelina.  At this point, we have commercial fields that have yielded as much as 150 gallons/acre/year and others that have yielded only 25 gallons/acre/year.  We believe that in the near future we will be introducing seed that will be able to consistently deliver about 90 gallons/acre/year.  When we really have the process optimized, we will be close to a consistent 150 gallons/acre/year.  That could take ten years.

So those yields are critical for determining the competiveness of our biofuel.  Right now we are not competitive with jet fuel.  However, camelina is going to be one of the solutions.  It will never deliver thousands of gallons/acre, as is projected with algae-based oil, but it will be one of the solutions.  We believe we can be competitive down the road.

We also anticipate additional costs for the airlines’ use of oil in the future, when carbon taxes are levied that will foster the use of our camelina-based oil.  In the European Union they are already talking about taxing airlines for carbon emissions as they fly over European airspace.  So any cost premiums camelina jet fuel will have relative to petroleum will likely be more than offset by such incentives.

:    Sustainable Oils has won a contract to supply the US Air Force with 100,000 gallons of Camelina-based jet fuel and a separate contract with the US Navy for 40,000 gallons.  What kinds of tests will the US Air Force and Navy do with your product?  Will the engines be tested with 100% of your biofuel or a mix?

Scott Johnson: I don’t know the exact test protocols the Air Force and Navy will use, though I believe they will be testing blends.

What I do know is that the fuel that we supplied is a complete, drop-in replacement and not distinguishable in terms of performance from standard jet fuel.   Back in January, our camelina fuel was used in  a blend for  a Japan Airlines 747 flight.  I am absolutely confident that camelina-derived fuel is a drop-in replacement, but as the current supply is so limited, it will likely continue to be tested in blends.

I also want to clarify our supply chain.  Sustainable Oils contracts with UOP, a division of Honeywell, to refine our camelina oil into fuel suitable for jets.  We do not do the processing ourselves.  As I said before, our business model is to sell the feedstock.

I should also mention that Boeing has shown interest.  They are working in the interests of their customers, the airlines.  As such, we are in good communications with them.  They have toured through our facilities and have gained a real understanding of the potential of camelina.

:    Does the Federal government provide any other support for Sustainable Oils, either in terms of supporting R&D or in subsidies for biofuels?

Scott Johnson: No.  My philosophy is that we have to stand on our own two feet.  That being said, I believe it is in the public interest to support biofuels.

We appreciate some of the work that is being done to support farmers.  The state of Montana has been helpful to us by supporting approvals for animal feed so that we had a market for the meal we generate as part of our process.

I think there are a number of areas where the government plays a really key role.  The US government has throughout history supported the development of new energy industries, such as hydroelectric or nuclear energy, when it considered that support to be in our nation’s interest.   A similar investment in the diversification of biofuels is entirely consistent with steps the U.S. government has made in other industries.

:  Can you envision a time in the future when 100% of jet fuel is based on biofuels?  What kinds of innovation will it take to accomplish that goal?

Scott Johnson: I think it is possible, however, I don’t think that it is probable, mainly because the market is so large.  Every time a 747 takes off it carries 40,000 to 50,000 gallons of jet fuel, and a lot of flights are taking off every day.  There aren’t enough acres for me to make more than a contribution with camelina toward a solution.  But it is a start, and that is good.  And it extends the resources we have, it lowers the carbon footprint, it provides a renewable option and potentially more security for fuel.

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