Estes has worked as a top executive in global chemicals companies for more than 20 years, leading teams to identify commercial opportunities in the U.S., Latin America, Asia, and Europe. After receiving a B.S. in horticulture and an M.S. in plant pathology, she did further business training at Berkeley, Harvard, Stanford and Wharton before serving as an executive at Syngenta, DuPont Cellulosic Ethanol, Codexis, and GranBio.
Among other positions, she served as vice president of commercial development for DuPont’s cellulosic ethanol division and as vice president of strategic planning and technology at Codexis, which offers custom enzyme and biocatalyst services to industries from pharma to biofuels.
Until late December 2014 she was the U.S. managing director of Granbio, a privately held Brazilian company that recently completed a cellulosic ethanol plant expected to produce 22 million gallons per year. While still at GranBio, Estes talked with writer Katherine Griffin about the company and the state of the cellulosic energy market.
The new plant has gotten a lot of attention lately. Longer term, what is GranBio’s mission?
Bernardo Gradin, the company’s founder, comes from the petrochemical industry. When he started the company in 2011, he was looking at building chemical plants based on biomass. No one was ready to build a plant. That’s why he started on cellulosic ethanol. The plan is to invest $2 billion over the next eight years, to build 10 cellulosic ethanol plants like the one we’ve built in Brazil, and five chemical plants.
The drive is to make products that would normally be made from petrochemicals that will have a much smaller carbon footprint. Right now, we’re using what’s left over from the harvesting and processing of sugarcane. We are working on energy cane, which would be a very high-yielding biomass that we would plant in areas that have been overgrazed, so you’re not taking away really good land that could be used for something else.
How will GranBio’s plans be affected if the EPA makes a drastic change to the cellulosic ethanol mandate?
Certainly when we started building the plant—like everyone who was starting to build—we were expecting the high value from the RINs [renewable identification numbers]. And now if they keep the proposed value from the RVO [renewable volume obligations], we’re all very concerned that that will hurt the market. Because that’s what really drives innovation and willingness to invest in the technology.
For us specifically, we will still be able to count the fuel as an advanced biofuel and get the D5 advanced biofuel RIN. We just don’t know if the D3, the cellulosic ethanol RIN, is going to have any value. We will bring the fuel into the U.S. anyway, to California. I’m spending lots of time right now in Sacramento getting the fuel registered to get the low carbon fuel standard value. That value, depending on the cost of carbon, will probably be higher than the D3 RIN value would be anyway.
A number of companies hoping to produce cellulosic biofuel have failed to cross the so-called “Valley of Death”—the hazardous period when emerging companies face difficulties in raising expansion capital to build their products at commercial scale. Why do you think some prominent advanced biofuel companies have failed to cross that valley?
The biggest problem is getting capital to build. Even plants with proven technologies, if they don’t have 50 or more engineers to deploy to make the thing work and then they start running out of money—it’s just hard. You need to try a bunch of different things. For some of the small biotech companies, there’s a different skillset between getting the technology to work at lab scale and being an engineering company and building a plant.
One thing we’ve got to our advantage is that Bernardo’s brother Miguel started another company, GranEnergia, at the same time as GranBio. That is our engineering procurement construction contractor. That’s a huge advantage, to have your brother be the one to call when something is not going right.
Kior’s problems, in particular, have gotten a lot of attention. What have you learned from watching its story unfold?
Kior was one of the companies that had venture capitalists involved early. And VCs are looking for short-term return. This is a long-term process. I’m not close enough to the technology to know what might have happened if they had more time and money.
Right now there appears to be great reluctance on Wall Street to invest in advanced biofuel equities, especially cellulosic biofuels. When and how do you think this situation may change?
Right now, DuPont is building a plant. Abengoa, Enerkem, Poet-DSM, Chemtex/Beta Renewables in Italy, and our plant all opened up in the last year and a half. When companies like DuPont build a plant and it runs, and POET, who knows ethanol, builds a plant and it runs, and billionaires like Guido for Chemtex and Bernardo for GranBio build their own plants and write the checks—if the plants are producing ethanol and it’s working and it’s economical and we have a good policy platform, Wall Street will follow.
Policy risk is still the issue. We need a platform of policy to drive the investment. That will be a problem in the U.S. because the EPA is being so cautious. It’s heartbreaking to me that we are on the brink of being successful and we are having the policy rug pulled out from under us. A lot of it is environmental backsliding. We’ve seen for decades that when the economy is not going well, people forget that they care about the environment.
In Brazil, 87 percent of the autos and trucks are flex-fuel vehicles. What does the U.S. need to do to make this a reality?
I don’t see that happening in the U.S. We’ve had such a fight trying to get to 15 percent ethanol. With old cars, because ethanol is a solvent, there have been problems with hoses in some of the tubes. With new cars, the car companies are unwilling to give a warranty to run more than 10 percent ethanol. Is that because of the oil company lobby? I don’t know. In the U.S. we have more cars, more people, more powerful lobbyists for the oil companies. We might get to 15 percent. And there may be be a niche market for E85 (fuel that is 85 percent ethanol).
Are biofuels the best way to affect greenhouse gases in transportation?
Today it is the case because there are not a lot of other alternatives. Especially in California, if the Air Resources Board (ARB) could snap its fingers and make the whole fleet electric, that would be their choice. But they have to look at everything; there are issues with batteries . . . We will probably get there and there will be more electric cars, trucks, and planes. But for the next couple of decades, this is where we can have the effect. Especially second generation biofuels.
Globally, it sounds like California is an important part of the picture.
What’s great about California’s Low Carbon Fuel Standard is that you do a life cycle analysis and they give you a carbon intensity score. It depends on how much carbon you displaced. They don’t care how you did it. They’re not picking and choosing technologies. They have a model and whatever comes out, that’s what you get. We are working really closely with the ARB now because we are the first foreign-produced sale of ethanol that’s gone through. I have a lot of respect for the guys at the ARB. They are wanting to do what is right, because everything they do is setting precedents for everyone coming after.
What are some of the biggest myths about bioenergy among the general public?
Corn ethanol has gotten a bad reputation with the fuel-versus-food argument. I think that’s overblown. There is plenty of corn in Iowa. It’s not taking food out of people’s mouths. But is that the best use of fertile land?
There haven’t been enough cellulosic ethanol plants running for the public to understand what it can be. The four that will come online are being built in rural areas and they will produce jobs, they will produce less carbon and they’ll use residue that’s on the ground that otherwise would have been burned. As that story gets out, we will have a better understanding.
What drew you to the field of bioenergy, and GranBio in particular?
I started in agricultural biotech. My question was, what can we do to use food biotech to be better for the environment? That’s where I spent most of my career. Then I started working for a company in San Diego, looking at some enzyme technology and what we might do with it. That was at the very beginning of the biofuel industry, in 2002. I started going to Brazil, to see what we could do with the biomass lying around. At that time, it was the corn ethanol boom. I was thinking okay, fine, but what else can we do that may be a little more sustainable? That’s what drew me in. I love the agricultural part. I gave a talk in Philadelphia last week about what we’re doing with feedstock in GranBio that is so different from what is being done elsewhere. It’s great to talk about feedstock again. So different.
As for GranBio, there were so many reasons I wanted to work there. I had spent time in Brazil, and I really like the country, the people, and the culture. I had met officials there in my previous job. Bernardo and my boss are so wonderful and dedicated. And I had been working on cellulosic ethanol before the industry even existed. Colleagues have told me, ‘GranBio wasn’t hiring a person, it was hiring a network.’”
Biofuels Digest named you as among the top 100 people in the biofuels industry. There aren’t many women on the list. Have you encountered sexism in the bioenergy field?
A: That’s a slippery slope. (Laughs.)
For me, starting out in agriculture, a lot of people were one or two generations away from being farmers, and they had wives or daughters who would work on the farm. It was a little sexist, but more, it was like, “We’re all in it together.”
Now that I’m touching the oil and gas industry, it’s very different. There are fewer women. Biotech is very science-based and there are more women in science, but they tend to stay in the science part, not get into the business side. It’s been hard. I miss having female colleagues. That is starting to change—there are more women in the field now.