The European wood pellets market: towards a dependency on imports?

http://www.ihb.de/wood/news/European_wood_pellets_market_34659.html

• October 31, 2013

In the past few years, EU's quest to limit its dependency on fossil fuels and to cut CO2 emissions, has brought renewable energy on the peak of the European most successful market developments. While most of the wood industry was struggling with the effects of the financial crisis and a critical drop in consumption, the wood energy sector was setting new records every year.

And indeed the numbers are impressive: in just six years, wood pellets consumption has increased more than 3 times ( from 4,6 mil. tons in 2006, to 14,3 mil. tons in 2012). In the same period, production tripled (3,5 mil. tons, up to 10 million), while imports rose five times (from just 800,000 tons in 2006, to 4,4 mil. tons in 2012). But so far, the potential of the market hasn't reached its limits, as future expectations surpass any of these recent evolutions.

The annual 2013 EU biofuels report forecasts that by 2020, pellet consumption in Europe will be somewhere in the range of 50 to 80 mil. tons per year (2012: 14,3 mil.). Both the advantage of pellet use in heating systems, as well as many power plants are trying to reduce the usage of coal and switch to renewable energy are major factors that will contribute to this upsurge.

However, the European pellet market is facing a dillema: the relatively high costs of wood pellets in Europe have resulted in a massive increase in imports, especially from North America, where raw-material costs are lesser than in the EU. In addition, the two largest pellet pellet producers in the EU, Germany and Sweden, have either slowed down or decreased their production. The consequence is that, in 2012, intra-EU trade of pellets declined by -12%, meanwhile purchases from North America jumped 44%.

Recently, US and Canada have expanded their production capacities, gaining some important shares on the European pellet market. Their combined market share has jumped from 28% in 2011, to 37% in 2012, reaching an all-time record of 43% in the seven months of 2013. But clearly the US exports are rising at a higher pace than the Canadian ones. Last year, the US almost doubled its pellet deliveries to Europe becoming, in just one year, EU's main source of wood pellets. Moreover, in January-July 2013, US pellet shipments to EU further grew by 74% over the same period of 2012, totaling 1,67 million tons.

New pellet plants projects where announced during 2013 in the US, with almost 1,5 mil. tons of new pellets ready to be shipped in Europe in the next years. UK's Drax started construction of two pellet plants (one in Louisiana and the other in Mississippi) with a joint capacity of 900,000 tons per year. Also, Viridis Energy, a Canadian company, already started pellet production in August at its facility in Middle Musquodoboiin/Canada. The production will reach 120,000 tons of pellets per year.

BlueFire Renewables Inc. has integrated a synergistic wood pellet production plant to its facility in Fulton, Mississippi. The reconfigured design will be a 9 million gallon per year ethanol plant integrated with a 400,000 ton per year wood pellet plant. The company says that the pellets will be sold under long term contracts into the European mandated renewable energy market.

The outlook for the upcoming years is interconnected to some factors such as the ability of the EU countries to satisfy internal demand. Although with an expected 4-6 times rise in demand, it is obvious that EU's pellet production will not be able to keep up the pace and will become partially dependent on imports. Already, with recent new pellet plants construction announced in the US, some market predictions estimate that by 2014, the US will cover more than half of all European pellet imports, which means almost 25% of the overall consumption.

Current market shares in the European wood pellets market

TOP 10 Origins	Jan.-July 2013
Wood pellets imported by EU from	Quantity/tons	Market share%
United States	1,679,196	26.2%
Canada	1,117,162	17.4%
Latvia	657,509	10.2%
Estonia	386,055	6.03%
Russia	343,115	5.36%
Germany	302,403	4.72%
Portugal	287,018	4.48%
Austria	221,144	4.45%
Romania	197,060	3.07%
Lithuania	106,519	1.66%

Central Louisiana making gains in biomass industry

http://www.thetowntalk.com/article/20130723/BUSINESS/307160021/Central-Louisiana-making-gains-biomass-industry

 Written by Jeff Matthews

Jul. 23, 2013   |   

 

Sundrop Fuels CEO Wayne Simmons (center) announces in 2011 that his company would build a $450 million biofuels plant in Rapides Station. The plant is expected to employ about 150 people and begin operation in late 2015. / Town Talk file photo

Central Louisiana appears to have struck gold, and workers don’t even have to dig for it. It’s just lying on the ground.

The area has very quickly grabbed a significant share in the emerging biomass manufacturing market, with three large plant projects announced in the past 19 months.


Local economic developers are optimistic that more activity is on the horizon.

“We’re still seeing an unusual amount of opportunity in that area,” said Jim Clinton, president and chief executive officer of Central Louisiana Economic Development Alliance. “I don’t think this will be the last opportunity we see.”

All three projects are manufacturing plants that use wood products — mostly things that have been looked at as waste, such as leftover shavings or parts of the tree unsuitable for making lumber — in some way to create fuel that is more environmentally friendly than traditional fossil fuel.

Colorado-based startup Sundrop Fuels. Inc. announced in late 2011 that it is building the pilot plant for its “green gasoline” in the Rapides Station area near Boyce. The plant is expected to employ about 150 people and begin operation in late 2015.


The fuel can be used like normal transportation fuel, but instead of being refined from petroleum, it is produced in a unique gasification process using natural gas and woody biomass.


The plant is expected to produce about 60 million gallons of fuel per year. But that’s just the beginning. Sundrop is hoping its new technology takes off and the company can follow through on building as many as four more plants, each producing more than 200 million gallons of fuel per year. 

Local economic developers would love to see one of those “megaplants” going up next to the pilot plant off Interstate 49.


In April, wood pellet manufacturing giant German Pellets breathed life back into the tiny LaSalle Parish town of Urania when it announced a $300 million plant there.

The plant will be on the site of the former Louisiana Pacific and Georgia Pacific plant that closed in 2002. It is expected to create 500 jobs and come online next spring.

Wood pellets are used extensively in other parts of the world, particularly Europe, to generate electricity and heat. They are most commonly made by pressing wood shavings and sawdust into a globe or cylinder shape.

The facility in Urania is billed as the world’s largest pellet plant. It is expected to produce one million tons of pellets per year.

Most recently, Hinterland LLC announced plans to build a pellet manufacturing plant in Vidalia.


The facility at Vidalia Industrial Park is expected to cost more than $100 million and employ more than 50 people. It has access to the developing Port of Vidalia.

“I tell people wood is our oil,” said Rick Ranson, vice president of the regional development alliance in Alexandria.
 

“Biomass certainly going back several years has been identified by state and local entities as a target,” Clinton said. “Our wood base, our resources give us a position of strength in the field.”

Sundrop Fuels selects contractor for inaugural plant

http://www.biomassmagazine.com/articles/9189/sundrop-fuels-selects-contractor-for-inaugural-plant

By Sun Drop Fuels Inc. | July 12, 2013

Sundrop Fuels Inc., a privately-held advanced biofuels company, announced that it has engaged international engineering and construction firm IHI E&C International Corporation, a U.S. subsidiary of Tokyo-based IHI Corporation, as contractor of choice for its inaugural facility near Alexandria, La.

The combined commercial and demonstration plant will annually produce about 60 million gallons of finished gasoline from natural gas while providing the platform for Sundrop Fuels to prove its proprietary gasification technology for making renewable “green gasoline” from woody biomass.

The success of Sundrop Fuels’ integrated commercial and demonstration plant will put in motion the company’s plan to build a series of renewable gasoline “megaplants,” each producing more than 200 million gallons of drop-in cellulosic biofuel annually. Sundrop Fuels expects to eventually have four such facilities in operation, representing a combined production capacity of more than one billion gallons – a significant percentage of the total cellulosic advanced biofuels goal set by the nation’s Renewable Fuels Standard (RFS).

“With IHI E&C’s talent and resources, Sundrop Fuels looks forward to formally breaking ground on the final stepping-stone toward becoming a major producer of affordable, drop-in biofuel,” said Sundrop Fuels CEO Wayne Simmons. “It has extensive experience and a long history of successful project execution in plants with similar configurations and process units.”

”We are very excited to be involved in this gas to gasoline commercial project that utilizes proven technologies for the conversion of natural gas, first to methanol, and then to gasoline,” said Glyn Rodgers, IHI E&C President.

Located one mile west of Alexandria in Boyce, Louisiana, Sundrop Fuels has begun site preparation on the combined commercial and demonstration plant, which will occupy approximately 100 of the 1,213 acres that the company purchased in February. Formal construction is scheduled to begin late this year, with operations expected to begin at the end of 2015.

Dogwood Alliance launches campaign against logging for energy

http://www.mountainx.com/article/50340/Dogwood-Alliance-launches-campaign-against-logging-for-energy

By David Forbes on 05/29/2013 04:05 AM

From the Dogwood Alliance:

May 28, 2013 – Southern forests are being burned for electricity, and a new campaign announced today aims to put an end to it. Dogwood Alliance and the Natural Resources Defense Council (NRDC) have launched “Our Forests Aren’t Fuel” to raise awareness of an alarming and rapidly-growing practice of logging forests and burning the trees as fuel to generate electricity

At the forefront of burning trees logged from Southern forests for electricity are some of Europe’s largest utility companies, including Drax, Electrobel and RWE. Rising demand by these companies has resulted in the rapid expansion of wood pellet exports from the Southern US. The American South is now the largest exporter of wood pellets in the world. Recent analyses indicate there are twenty-four pellet facilities currently operating in the Southeast, and sixteen additional plants planned for construction in the near-term. Market analysts project that annual exports of wood pellets from the South will more than triple from 1.3 million tons in 2012 to nearly 6 million tons by 2015. All of the South’s largest domestic utilities, including Dominion Resources and Duke Energy, are also beginning to burn wood with plans for expansion in the future.

“This rapidly expanding trend of burning trees for energy will both accelerate climate change and destroy forests,” said Danna Smith, Executive Director of Dogwood Alliance. “Southern forests not only protect us from climate change, but protect our drinking water, provide habitat for wildlife and contribute to our quality of life. We need these companies to stop burning trees for electricity and embrace a clean energy future that helps to protect, rather than destroy forests.”

“With the advancement of clean, renewable energy alternatives, the growing practice of burning trees for electricity is a major step in the wrong direction,” said Debbie Hammel, Senior Resource Specialist of the Natural Resources Defense Council. “Our Forests Aren’t Fuel lets the public know about the extent of this ecological devastation and calls on utilities to end the practice. It’s an even dirtier form of energy production than burning fossil fuels, it destroys valuable southern ecosystems, and it isn’t necessary.”

Energy from burning trees – or biomass – has been widely promoted as a form of renewable energy along with technologies like solar, wind, and geothermal. Over the past two years, however, mounting scientific evidence has discredited biomass from forests as a clean, renewable fuel. Recent scientific reports document that burning whole trees to produce electricity actually increases greenhouse gas pollution in the near-term compared with fossil fuels and emits higher levels of multiple air pollutants. This fact, combined with the negative impacts to water resources and wildlife associated with industrial logging have discredited whole trees as a clean fuel source. But current European and U.S. renewable energy policies and subsidies encourage the burning of trees as a “renewable” source of energy for power generation, helping to facilitate the rapid increase in demand for trees from Southern forests to burn in power plants.

Consequently, a new industry is spawning in the South. Companies like Maryland-based Enviva, the South’s largest pellet manufacturer, are grinding whole trees into wood pellets to be burned in power stations in Europe while also supplying wood to domestic utilities like Dominion Resources. New evidence that Enviva may be relying at least in part on the harvesting of wetland forests has recently emerged. Georgia Biomass, a wholly-owned subsidiary of the German utility RWE Innogy, is also manufacturing millions of tons of wood pellets annually to be burned in European biomass facilities.

“Our Forests Aren’t Fuel” organizers reveal the scope and scale of the growing biomass industry through a series of case studies on the campaign website that include wood pellet manufacturers, domestic utilities, and European utilities. Particular emphasis is placed on the following companies:

· Enviva - one of the largest manufacturers of wood pellets in the U.S. and Europe, with manufacturing facilities and partner facilities in Mississippi, North Carolina and Virginia. The Bethesda, Maryland-based company has an annual production capacity of more than 590,000 tons. It also operates a deep water terminal at the Port of Chesapeake, which has the capacity to receive and store up to three million tons of woody biomass annually. Much of its product is sold and shipped to European utilities, like Drax. Leftover biomass “residues,” like tree tops and limbs, are sold to domestic utilities, like Dominion Resources.

· Drax – major United Kingdom-based utility that recently shifted focus from co-firing biomass in coal power plants to full conversion of its largest plant to biomass. Drax has begun building pellet mills directly through its wholly owned subsidiary Drax Biomass. In December, 2012, Drax announced it will build Amite BioEnergy pellet mill in Gloster, Mississippi, and Morehouse BioEnergy in Bastrop, Louisiana, to supply wood pellets for use in its power plants, with production set to begin in 2014.

· Dominion Resources – the Richmond, Virginia-based utility recently launched several biomass operations that could well rely on whole trees in the near future. Its 83 megawatt plant in Pittsylvania, Virginia, is one of the largest biomass power stations on the east coast. Dominion is also converting three existing peak power coal-fired power stations into full-time biomass-burning facilities. The utility currently sources much of its biomass material as “residues” from wood pellet manufacturers like Enviva that export the bulk of its product to European markets. Should the supply of these residuals become limited, Dominion’s operations could increasingly rely on burning whole trees.

Full case studies for companies driving the biomass industry can be found on the “Our Forests Aren’t Fuel” website, http://www.dogwoodalliance.org/campaigns/bioenergy/, along with recommended actions for those concerned about losing southern forests for electricity, and a list of more than 70 supporting environmental groups.

German company to open wood pellet factory in Urania

http://www.thetowntalk.com/article/20130418/BUSINESS/304180018/German-company-open-wood-pellet-factory-Urania?nclick_check=1

Apr 18, 2013
Written by Jeff Matthews

The world’s largest wood pellet plant is coming to one of the smallest towns in Central Louisiana.

German Pellets will begin work immediately on a $300 million plant in Urania that is expected to create 500 jobs, officials with the company and Central Louisiana Economic Development Alliance announced Wednesday. The plant is expected to be operational in the spring of 2014.


“We are ecstatic about the decision by German Pellets to locate in Urania,” said Rick Ranson, vice president-major employers for CLEDA. “German Pellets is a premier company and this is an historic announcement, not only for Urania and LaSalle Parish, but also the entire Central Louisiana region.”


“Pellet consumption worldwide is on the rise, especially in Europe,” said German Pellets Chief Executive Officer Peter Leibold. “This means that the construction of large production capacities is necessary.”


Demand for wood pellets from the European power plant market for the generation of electricity has risen sharply, according to a company release. There is also increasing demand for the product to generate heat for private consumers and larger scale users such as schools and hospitals.


Wood pellets are made from wood shavings and sawdust pressed into a cylindrical shape. The plant in Urania is expected to produce one million tons of pellets per year.


It’s the second major project recently announced in Central Louisiana involving the wood industry and renewable energy. Sundrop Fuels is building a plant near Alexandria that will convert wood waste and natural gas into gasoline.


CLEDA officials are hoping to see more in the future.

“There’s a lot of activity in that sector, so this is an important play for us,” said CLEDA President Jim Clinton. “Plus, it’s foreign direct investment. That’s what you always like to see, bringing in capital from outside the region.”


“I tell people wood is our oil,” Ranson said.

Founded in 2005, German Pellets is the leading manufacturer of wood pellets in Europe. Its first U.S. plant — in Woodville, Texas — has roughly half the capacity of the planned plant in Urania.

 

Hot sauce! 5 Lessons Louisiana can teach us about advanced bayoufuels

http://www.biofuelsdigest.com/bdigest/2013/03/07/hot-sauce-5-lessons-louisiana-can-teach-us-about-advanced-bayoufuels/

Jim Lane | March 7, 2013 

Louisiana — it’s as hot as cayenne pepper in biofuels capacity development, but there are cautionary tales hidden in the sauce.

 

When it comes to the first generation of ethanol and biodiesel-based biofuels, Louisiana didn’t figure much into the calculations — to date, there’s just the 5 million gallon (per year) Oswalt Bioenergy biodiesel plant in Lake Providence and the 15 Mgy Vanguard Synfuels in Pollock.

But since drop-in renewable fuels arrived, Louisiana hasn’t just been in the race, or near the front of the pack — it has become the Secretariat of project development — out in front by a mile. In all, more than 500 million gallons in advanced biofuels and chemicals project capacity announced — a 100-fold jump in the past five years.

Now — before booking your ticket down to Baton Rouge for the “renewable fuels forever” victory parade , let’s emphasize the phrase “project announcement”.

76 million gallons of that proposed capacity is currently completed (another 142 million expected to come online this year, and 50 million more in 2014, the rest we don’t have firm dates on as we await financing news). From that capacity, today, there’s not currently any commercial production — as Dynamic Fuels awaits better RIN price conditions (and the 1.5 mgy BP Biofuels plant in Jennings is a pilot plant used in research and development).

So, we can learn a lot down in the bayous about what works, and what’s problematic, in advanced biofuels development.

1. Smoke ‘em if you got ‘em

 

Louisiana has many blessings above and beyond Bourbon Street and cajun spices. Among them are an abundance of gases for sale — from hydrogen to natural gas; fats and greases from animal rendering, and a forestry sector that has fallen on tough times with the decline of newsprint. Buck Vandersteen, executive director of the Louisiana Forestry Association, spoke for a lot of these resources in observing, “We have to recognize our traditional industries and seek out new industries.”

The combination of rendering greases and hydrogen is, for now, the primary catalyst for growth — as Louisiana firms have perfected the art of purifying greases into renewable oils which are then hydrotreated to remove excess oxygen — voila, producing renewable diesel. Variations on this formula are the source of the Tyson-Syntroleum 75 million gallon plant in Geismar (Dynamic Fuels), the Valero-Darling 137 million gallon project in Norco (Diamond Green Diesel), the proposed Emerald Biofuels 85 million gallon project in Plaquemine, and the proposed D2 Renewable 150 million gallon project in Convent.

[Over in Pollock, Vanguard's been up to good things, too — introducing their own 2nd gen technology thermo-chemical solution (more about it here). Word is from Vanguard that they have the only catalyst that produces four non-sulfur alcohols simultaneously: 40% Ethanol, 40% Methanol, 15% Propanol and 5% Butanol. ]

In all, that’s just on 90 percent of the activity in the state. Most of the remainder comes from the Sundrop Fuels project near Alexandria. Using forest waste and hydrogen from natural gas, the plant will produce up to 50 MGy of renewable gasoline.  The biofuels plant will salvage wood waste in Central Louisiana and adjacent regions and also will extract hydrogen from abundant supplies of Louisiana natural gas, combining the hydrogen in a proprietary reactor with carbon extracted from wood waste. Construction is expected to be complete in 2014.


The projects pale with the scope of Sasol’s proposed $21 billion gas-to-liquids and ethane cracking plant proposed for Louisiana — but it goes to show you that there is nothing that stimulates activity more than an abundance of low-cost feedstocks.

2. In grease, color matters

 

White grease bad, yellow grease better, brown grease best.

Generally speaking, traditional biodiesel plants utilize choice white grease if they can utilize grease at all. Only a few companies have pioneered cost-effective technologies for making FAME biodiesel out of yellow greases — that been one of Renewable Energy Group’s great advantages, for example.

These days, white grease is expensive — and you don’t see much traditional biodiesel capacity being built in the bayous as a result.

Yellow greases — the economics used to be wonderful — now, not so much. Projects like Dynamic Fuels were based on those feedstocks — but these days, the price of the feedstock has made renewable diesel a tough economic proposition unless the RIN prices for renewable fuel credits, and other incentives like blenders credits, are available.

The next yellow grease project to come online will be Diamond Green Diesel, capable of producing over 9,300 barrels per day or 137 million gallons per year of renewable diesel on a site adjacent to Valero’s St. Charles refinery near Norco, Louisiana.  The facility will convert grease, primarily animal fats and used cooking oil supplied by Darling. Completion of the facility is expected to be imminent.


But the future may well be in brown grease – the really tough to use material – sludgy and klugy. That’s said to be the strategy for D2 Renewable, developing a 70 acre energy park, located in Convent, Louisiana.  The energy park will ultimately consist of five 30 million gallon refineries producing ASTM D 975 Renewable Ultra-Low Sulfur Diesel fuel.

3. RFS2 matters, RINs matter

 

As mentioned above, yellow grease is a tough business without good RIN prices and a strong RFS2 mandate to drive RIN values.

In December, Dynamic Fuels filed this with the SEC:

“The economics of the U.S. biomass based diesel industry are currently challenged by significantly lower RIN (renewable identification number) prices. D4 RIN prices averaged $1.39 for the first six months of 2012. As of December 10, 2012, the D4 RIN price was $0.56.   RIN prices at these levels have not been seen since the implementation of the RFS2 program by EPA in July of 2010.

“The regulatory framework underpinning biomass based diesel production remains intact.  The biomass based diesel mandate for 2013 is 1.28 billion gallons, or 28% above the 2012 mandate.  We expect markets to adjust positively in 2013 due to the higher mandate.”

Since then, Syntroleum has not indicated that they have re-started production.

4. Creative financing matters

Two of the most creative financing efforts in recent years are behind two of the next projects to come online in Louisiana.

Myriant’s Lake Providence, LA commercial plant will produce 30 million pounds of bio-succinic acid annually and construction is on-schedule for the planned commercial start-up in the first quarter of 2013.  Myriant is the first bio-based chemicals company to receive funding from USDA’s B&I Rural Development Loan Guarantee program — and a bond issue sold in by Stern Brothers.

As we wrote last June “We’re heard about the “3 Impossibles” for some time. Impossible to get a project without the term of the offtake being at least equivalent to the term of the debt. Impossible to get a project funded without the feedstock contracts covering the entire portion of the loan.

Impossible to get a project funded without the offtake 100% covered by contracts.

That may remain true for the bank side – but over here in bond world – the three Impossibles have been converted into the three “you’ll pay more, but it’s do-ables”. Here, there was first-timer risk.

Technology risk. Market risk. All absorbed in the rate.

Bonds are also expected to provide financing magic for Sundrop’s 50 million gallons renewable gasoline plant. Using forest waste and hydrogen from natural gas, their plant will produce up to 50 MGy of renewable gasoline.  The plant will cost $450 to $500 million to build and will be financed in part through the sale of tax-exempt Private Activity Bonds.

5. Long-term — diversify feedstocks

You’d think that with all that natgas, rendering grease and hydrogen that the state would rest on its laurels. Not so. In fact, the state has seen enough in the potential of renewables to double down on support for developing dedicated energy crops.

In January, the LSU AgCenter officially opened its pilot plant. The plant focuses on sweet sorghum, energy cane and other grasses to produce convertible sugars, fiber and bioproducts and can be scaled up to any capacity. The project is part of a larger USDA-funded five-year, $17.2 million grant.

Switchgrass is particularly in focus, as the grass is native to the Cajun prairie, and test plots are being co-planted with eastern cottonwood trees that could also be interesting feedstocks for the region.

The bottom line

The trend is clear. Assess immediate opportunities in abundant, low-cost feedstocks — but develop others with an eye on the future.

Be careful with technology development so that you can continue to access the lowest-cost feedstocks and use RINs as an equity sweetener for shareholders rather than as a necessary component of production – else you will see fits and starts in production, and costs will soar.

Above all, tap in to the bond market where possible and be as a creative in financing as you are in technology and feedstock. Put them all together — you might see a hundred-fold increase in capacity, as is expected for Louisiana — and ensure that that capacity once taken online, stays online.

BSPI announces Louisiana Company to hold pellet plant project.

http://www.biomasssecurepower.ca/News/News_2013-03-05/news_2013-03-05.html

NEWS - March 5, 2013

Abbotsford, British Columbia, March 05, 2013 - Biomass Secure Power Inc. (OTC:Pinksheet: “BMSPF”) (the “Company”) is pleased to provide shareholders with an update on the status of lease option at the Port of Greater Baton Rouge. The Company has set up a wholly owned subsidiary in the State of Louisiana to hold the pellet plant project, namely Biomass Power Louisiana L.L.C.

Biomass Power Louisiana L.L.C. effective March 1, 2013 has secured a six month option to lease the site on which they propose to build a pellet plant for a payment of $50,000. Plans are in place to build the plant in four phases over several years. The scopes for phase one will be released for tender April 2013 and construction is expected to commence summer 2013.

Phase one consists of three production lines each capable of producing 340,000 tonne per year of biomass pellets. When phase 1 is complete the company will have the capacity to produce one million tonnes of pellets per year. 

About the Company

Biomass Secure Power Inc. is incorporated in the Province of British Columbia. The Company has designed its biomass pellets plants to produce 340,000 tonnes of pellets per line. This allows the Company to leverage the engineering over multiple lines and several plants, as key equipment will be identical in each plant.  Public filings and financial information on the Company can be found at: www.sedar.com

Safe Harbour Statement: 

This information includes certain "forward-looking statements." The forward-looking statements reflect the beliefs, expectations, objectives and goals of the Company management with respect to future events and financial performance. They are based on assumptions and estimates, which are believed reasonable at the time such statements are made. However, actual results could differ materially from anticipated results.

On Behalf of the Board,

BIOMASS SECURE POWER INC.
"Jim Carroll"
Jim Carroll
President and CEO
Contact: 604 807 4957

Sundrop Fuels buys 1,213 acres for Alexandria-area biofuels plant

http://www.thetowntalk.com/article/20130301/BUSINESS/303010310/Sundrop-Fuels-buys-1-213-acres-Alexandria-area-biofuels-plant?nclick_check=1

Mar 1, 2013   

 

Sundrop Fuels Inc. of Longmont, Colo., bought 1,213 acres of land in Rapides Parish on Thursday on which to build a biofuels plant projected to cost as much as $500 million. The land is adjacent to the former Cowboy Town venue (above) off of Interstate 49 in Boyce, just north of Alexandria. Sundrop Fuels bought that 28-acre site earlier this year. / The Town Talk

 

Written by: Jeff Matthews

 Sundrop Fuels Inc. closed on the purchase of more than 1,213 acres of land in the Rapides Station area Thursday where the biofuels company plans to locate its plant manufacturing "green gasoline."

Sundrop Fuels has had an option on the property, owned by Ballina Farms, for more than a year while it moved forward with pre-construction efforts, including permitting. The sale price was $4,752,000, according to Rod Noles with NAI/Latter & Blum of Alexandria, who represented the property owners.


Sundrop, a Colorado-based biofuels startup, announced plans in late 2011 to build a $500 million pilot plant for its renewable fuel in the Alexandria area. It chose the Ballina Farms property, which is located off Interstate 49 just north of Alexandria in Rapides Parish.


The plant will use woody biomass and natural gas to produce liquid fuel­ -- billed as the world's first "green gasoline" -- ready to drop into a gas tank. Vehicles don't need to be modified to use it, and it doesn't need to be blended with petroleum-based gasoline.


Dirt work on the project could begin in April in advance of construction.

Sundrop also recently reached an agreement to buy the closed entertainment venue formerly known as Cowboy Town, which is bordered on three sides by the Ballina Farms property. The company bought Cowboy Town from Yahweh LLC, a venture by local businessmen James Greer and Richard Kyle, for $2.5 million.

The facility, now known as Sundrop Fuels Louisiana LLC headquarters, will contain offices as well as maintenance and fabrication operations.

 

Louisiana taxpayers helping Sundrop with project

 

Published Jan. 6, 2012:

ALEXANDRIA, La. -- Sundrop Fuels Inc., a Colorado-based renewable fuels company, will build its $450 million plant north of Alexandria with help from the state.

Louisiana taxpayers will fund $4.5 million to help with the costs of moving Sundrop's research and development department to Alexandria, and give performance-based grants totaling $14 million over 10 years based on employment figures, Louisiana Economic Development Secretary Stephen Moret said.

THE PROCESS

 

Sundrop Fuels Inc.'s technology converts wood waste such as branches and other low-grade tree parts into "green gasoline" -- transportation fuel able to be dropped into vehicles and pipelines like any petroleum refined gasoline.

Here's the process:

1. Biomass material is fed into Sundrop's proprietary RP Reactor. The reactor can be powered by high-temperature heat sources such as natural gas, concentrated solar power or electric power. The company currently finds natural gas to be the most effective heat source. Though the technology works with many different types of biomass, the planned facility in the Rapides Station area will use woody biomass.

2. Natural gas is added to the biomass as a second feedstock. Woody biomass by itself does not contain sufficient hydrogen to create a fuel usable in standard engines. In other biomass-to-fuel conversion processes, this has meant using twice as much biomass and discarding a large part of it. Adding natural gas corrects the hydrogen imbalance and allows nearly all the biomass to be used, rather than wasting a good portion of it.

3. Temperatures in the reactor of more than 1,300 degrees Celsius (2,372 degrees Fahrenheit) "gasify" the feedstock, creating synthetic gas.

4. Using a methanol-to-gasoline process developed by ExxonMobil, the synthetic gas is made into transportation fuels such as unleaded, diesel or aviation fuels. The fuel is ready to use and does not have to be blended into gasoline in the way that ethanol does (though much of it is expected to be sold to refineries for blending with traditional gasoline).

5. According to Sundrop officials, the green gasoline can be produced at prices competitive with petroleum refined gas, and the process dramatically reduces the amount of greenhouse gases released into the atmosphere compared to traditional gasoline refining.

Note: The Alexandria facility will not use all aspects of Sundrop's proprietary technology, as the larger planned future Sundrop plants will.

---The Town Talk

LSU AgCenter Commissions Advanced Biofuels Pilot Plant

http://www.biofuelsjournal.com/info/bf_articles.html?ID=129936

 Date Posted: January 28, 2013

St. Gabriel, LA—The fledgling biofuels and bioprocessing industry in the South took a step forward Friday, Jan. 25, with the formal commissioning of a pilot plant at the LSU AgCenter Audubon Sugar Institute.

This indicates success in several areas, said LSU AgCenter Vice Chancellor John Russin.

The infusion of federal funding will benefit the state and the sugar industry as well as the biofuels and bioprocessing industry and the rural economy, Russin said.

“This is an amalgam of a true team effort.”

The pilot plant is part of a larger project funded by a five-year, $17.2 million grant from the U.S. Department of Agriculture’s National Institute of Food and Agriculture through its agriculture and food research initiative, said William Goldner, national program leader for sustainable bioenergy in the USDA Institute of Bioenergy, Climate and Environment.

The grant came as a result of a competitive peer review of proposals to create regional systems for sustainable production of biofuels and biobased products, Goldner said.

“We want to enhance existing agriculture and improve opportunities for rural communities.”

Dedicated to producing biofuels and biochemicals from agricultural crops and byproducts, the pilot plant is the centerpiece of the AgCenter’s Sustainable Bioproducts Initiative, said AgCenter project director Vadim Kochergin.

It will focus on processing sweet sorghum, energy cane and other grassy feedstocks into convertible sugars, fiber and bioproducts for further refining into butanol, gasoline, isoprene and biochemicals, he said.

The pilot plant is a scaled-down version of a typical sugar mill, said Juan Miguel Bueno, president and CEO of Manufacturera 3M, S.A. de C.V. in Cordoba, Mexico.

Bueno’s company fabricates sugar mills used in Louisiana, so his challenge was to design and produce the pilot plant.

“It’s exactly the same as a big mill but on a smaller scale,” Bueno said of the project that took about five months to engineer and manufacture.

“By developing new things, we can produce new energy and new resources,” he said.

The pilot plant is seen as a milestone for the project that Kochergin described as a “work in progress.”

“The facility can be scaled up to any capacity,” Kochergin said. “The focus is on primary processing of sweet sorghum, energy cane and other grassy feedstocks.

"We can facilitate projects targeting evaluation and validation of technologies as well as training of research and operating personnel.”

“This is a tremendous opportunity to identify potential feedstocks, not only for Louisiana but all of the South,” said Carrie Castille, associate commissioner for government affairs and science advisor in the Louisiana Department of Agriculture and Forestry.

“This project will provide long-term, lifecycle assessment for continued crop production with respect to weather,” Castille said.

Louisiana is in a unique position for feedstock production, and lifecycle assessment will provide information on how various crops perform during different weather patterns, such as drought.

“The benefits this facility will give to Louisiana landowners is forward thinking,” said Klein Kirby, chairman of A. Wilbert’s Sons, LLC, a leading Louisiana land development company.

“This is a huge tool for the Louisiana sugar industry, for the processors and for the landowners,” Kirby said.

For more information, call 225-578-5839.

Sundrop Fuels to buy Cowboy Town for $2.5 million

http://www.thetowntalk.com/article/20130103/NEWS01/301030310/Sundrop-Fuels-buy-Cowboy-Town-2-5-million?nclick_check=1

3:15 PM, Jan 3, 2013   |  

 

Sundrop Fuels Inc. is reportedly buying the former Cowboy Town property in Boyce. Sundrop plans to build a biofuel plant on land adjacent to the former entertainment venue. / Tia Owens-Powers/towens@thetowntalk.com

Written by Jeff Matthews

After years of uncertainty, Cowboy Town finally may have a long-term owner.

The former entertainment venue off Interstate 49 is being purchased by Sundrop Fuels, which plans to invest nearly half a billion dollars to develop a pilot plant for biofuel on adjacent land in the Rapides Station area.

The Cowboy Town property in Boyce includes nearly 28 acres and a building of approximately 200,000 square feet. The Rapides Parish Clerk of Court Office did not have a record of the transaction, but local real estate professional Rod Noles reported a sale price of $2.5 million on his radio show Wednesday.

Cowboy Town's most recent owner was Yahweh LLC, a venture by local businessmen James Greer and Richard Kyle. They purchased the property in March for $1.5 million, though there were significant additional costs involved, including liens.

Greer confirmed the sale but referred comment to Steven Silvers, director of corporate communications for Sundrop Fuels, who could not be reached Wednesday.

Before Yahweh bought the property, it was the subject of almost constant speculation, most of which turned out to be only that.

Cowboy Town opened in 2001 as a 4,000-seat venue for events such as rodeos and concerts. Its original announced value was $5 million. It lasted only a few months, though, before closing for financial reasons.

After talk of turning it into a training center for USA Boxing failed to materialize, it was purchased by businessman Ken Moran at a bankruptcy auction for $2.9 million in September 2004.

Under Moran's ownership, there was more talk about what Cowboy Town would or could be, but little action. Among the speculation was that a local institution of higher education would purchase the property, or that the parish would buy it was a replacement for the Rapides Coliseum.

The former Donahue Family Church in Pineville agreed to purchase the property for $4.85 million in 2007 and made an $800,000 down payment. That deal fell through, though, after a split in the church.

In 2011, a real estate agent representing Moran confirmed that an agreement to sell the venue was in place, but that, too, fell through.

Sundrop Fuels, a Colorado-based startup, announced plans in 2011 to build the first production facility of its vehicle-ready "green gasoline" in the Alexandria area. The fuel is produced from woody biomass and natural gas.

 

The $450 million plant will sit on more than 1,200 acres that surround the former Cowboy Town property.

University of Georgia Researchers to Examine Public Opinion on Biofuels Industry in Southeast

http://www.biofuelsjournal.com/info/bf_articles.html?ID=129046

Date Posted: December 18, 2012

Athens, GA—Public opinion and local support may very well be the linchpins that determine the future of bioenergy in the United States.

The Southeastern U.S. is poised to become a major producer of bioenergy, and a wide range of bioenergy technologies are now in various stages of development in the region.

Will residents support the new ventures?

Who will grow the biomass?

Will those in established industries fight against it?

These are but a few of the critical questions that citizens, policymakers and investors must answer if bioenergy is to become a viable alternative to fossil fuels.

Now, researchers from the University of Georgia and the U.S. Forest Service are conducting studies in locations throughout the biomass-rich Southeast to find answers to these questions and more.

They hope their unique method of investigation, using a mix of complementary ethnographic methods, will provide a detailed understanding of public opinion about bioenergy while also providing policymakers and business owners with the information they need to make sustainable energy production thrive in their communities.

"We're planning to work on the ground throughout the Southeast," said Sarah Hitchner, a co-investigator and post-doctoral research associate at UGA's Center for Integrative Conservation Research.

"A lot of people talk about biofuels as being an obvious win-win, but it's more complicated than that."

Beginning in Soperton, Ga.-formerly home to Range Fuels and now the Freedom Pines Biorefinery owned by LanzaTech-and then moving on to other areas in Georgia, Alabama, Mississippi, Louisiana, Florida and North Carolina, the researchers will participate in the daily activities of community members and conduct in-depth interviews with a variety of stakeholders, such as landowners, industry representatives, potential employees and county commissioners.

"A big part of this kind of research is to listen to as many perspectives as possible," said Peter Brosius, professor of anthropology in the Franklin College of Arts and Sciences, director of the Center for Integrative Conservation Research and co-investigator in the study.

"From there you begin to see patterns emerge."

This approach, which allows researchers to develop familiarity and rapport with community members over an extended period of time, gives them a more detailed understanding of the various points of view that might not be fully captured by other less comprehensive research methods such as phone interviews or mail-in surveys, Brosius said.

"Researchers across the world have been developing technologies for the conversion of biomass resources into energy and fuels, but we don't have a very good understanding of the effects that a large-scale biomass energy industry may have on the communities involved," said Ryan Adolphson, director of public service and outreach in the College of Engineering and associate director of the Bioenergy Systems Research Institute.

Adolphson works with Georgia companies and state and federal policymakers on bioenergy industry development.

"This study will make great strides toward helping us understand those effects and assist in the development of a more effective biomass energy industry," Adolphson said.

Supported by a grant from the U.S. Department of Agriculture's National Institute of Food and Agriculture, which funds research projects on sustainable bioenergy through its Agriculture and Food Research Initiative, this integrative research aims to explain not only whether people support or oppose bioenergy development, but also what led them to form their opinions and what policies, institutions and events may have influenced their decisions.

"USDA and President Obama are committed to producing clean energy right here at home, to not only break our dependence on foreign oil, but also boost rural economies," said Agriculture Secretary Tom Vilsack.

"These projects will give us the scientific information needed to support biofuel production and create co-products that will enhance the overall value of a bio-based economy.

"Today, with a strong and diversified U.S. agricultural sector, the American automobile industry has a greater incentive for expanding use of bio-based products while supporting good-paying jobs here in the United States."

The researchers stress that as alternative fuel and sustainable industry grow, it will become increasingly important for potential companies to identify and understand the social and economic factors working for and against new ventures.

"This research has the potential to inform the policy process, but we are also pioneering a new method that is applicable to other sustainability issues," Brosius said.

"There is a lot of activity right now in bioenergy with different plants being opened and a lot of proposed plants using a combination of private investment and government incentives to get started," said John Schelhas, a research forester with the U.S. Forest Service and project co-investigator.

"We're looking at specific sites where bioenergy development is taking place, and we're interested in talking with community members and landowners who have various degrees of investment and interest in bioenergy."

Ultimately, the researchers hope that this project will not only yield important information about the future of bioenergy in the South but also serve as a springboard for future research designed to examine the social complexities of bioenergy development by investigating diverse perspectives and interests within the communities in which these new and proposed facilities are embedded.

"It's essential to understand the way people perceive, understand and talk about biofuels as bioenergy industries develop in this region," Schelhas said.

"And it seems like we will be able to provide more clarity about that."

For more information, call 706-542-5222.

British firm to build Miss., La. wood pellet mills

http://www.sfgate.com/business/energy/article/British-firm-to-build-Miss-La-wood-pellet-mills-4117774.php

By JEFF AMY, Associated Press

Updated 1:57 am, Friday, December 14, 2012 

 JACKSON, Miss. (AP) — A British power generator will build a pair of mills in southwestern Mississippi and northeastern Louisiana to make wood pellets to burn for electricity in the United Kingdom.

A unit of Drax Group PLC will spend more than $200 million to build mills in Gloster, Miss., and near Bastrop, La., each capable of yearly production of 450,000 metric tons.

The company will invest $120 million in Louisiana, including $30 million to build an export terminal in Port Allen. Bar Littlefield, senior vice president of Drax Biomass International, says the investment in Mississippi will top $80 million.

Drax says it will hire 45 people in Gloster, 47 in Bastrop and 16 in Port Allen. On average in Louisiana, Drax plans to pay $35,000 a year, plus benefits. Pay levels for Mississippi were not released.

Loggers and truckers who will supply trees to be made into pellets will also get more work.
The company plans to start construction next year and begin production in 2014.

Wood pellets are burned by European power plants and industries in an attempt to cut carbon dioxide emissions. Because trees can be regrown, capturing carbon dioxide, burning wood is looked on favorably in attempts to reduce global warming. Drax owns the U.K.'s largest coal-fired power plant, producing 7 percent of the country's electricity.

In many cases, European power companies sign long-term contracts with American firms, which then build and operate the mills. Drax is taking a different course by building them directly.

Drax Biomass is focused on building and operating clean, safe manufacturing facilities that will support local economies, create long-term jobs and interface with local forest industry," CEO Chuck Davis said in a statement.

No pellet plants currently operate in Louisiana. In Mississippi, Enviva L.P. owns a 136,000-metric-ton plant in Wiggins and a 90,000-metric-ton plant in Amory. A number of such mills have been built across the Southeast, although paper mills often eye them warily because they compete for the same size trees.

International Paper Co. closed its Bastrop paper mill in 2009, slashing demand for pulpwood in the region. Gov. Bobby Jindal made new development in Morehouse Parish a priority when the closing was announced. "We committed to working together to get the people in this area back on their feet," Jindal, who made the announcement Thursday in Bastrop, said in a statement. "We talked about making the local communities in this area stronger than before."

Mississippi officials say loggers each year cut down trees equal to only half the amount of new growth, and they've lured other firms that use wood.

"With Mississippi's abundance of biomass resources, our state offers important advantages to businesses that rely on biomass for their operations," Mississippi Development Authority Director Brent Christensen said in a statement.

MDA spokeswoman Tammy Craft said Mississippi will provide Drax $2.63 million in Hurricane Katrina-related federal community aid to improve roads and other infrastructure, as well as $100,000 in cash. Also for infrastructure work, the town of Gloster will give $75,000 and Amite County will give $87,500.

Louisiana will give Drax $1.7 million in aid that wouldn't have to be repaid if the company meets job commitments. Drax is also eligible for benefits including a tax credit on capital investment worth up to $1.8 million, a 10-year property tax break and free job training.

The company will send pellets by rail from Bastrop and by truck from Gloster to Port Allen to load onto ships. In November, the Port of Greater Baton Rouge approved a lease with a Drax unit that will build three storage domes plus unloading conveyors on 10 acres of port property. The port expects revenue of $672,000 in 2014 and $1.6 million in 2015.

The New Syngas: New catalysts, opportunities for advanced biofuels

http://www.biofuelsdigest.com/bdigest/2012/11/26/the-new-syngas-new-catalysts-opportunities-for-advanced-biofuels/

Jim Lane | November 26, 2012 

 

Primus Green Energy looks to an improved syngas-to-gasoline process as a renewable fuel game-changer.

Back in the 1970s energy crisis, the Brazilian government now (famously) marched down their path towards energy independence via ethanol produced from sugarcane – but it is less well known that the New Zealand government embarked on a unique program of its own. They fostered the building of the Motunui Synthetic Fuels Plant, which opened in 1986 with a goal of converting natural gas to gasoline, via an intermediate conversion steps into syngas and then methanol.

Combined with investments in liquefied petroleum gas and compressed natural gas, New Zealand at one point reduced its dependency on imported oil from 85 percent to under 50 percent. When crude oil prices dropped dramatically in the mid-1990s, the Synfuel plant stopped making gasoline from natural gas for economic reasons.

The bottom line: there’s a known path from syngas to gasoline, that makes sense economically in given price conditions.

In the biofuels revolution, the primary focus has been not on producing methanol (and, ultimately, gasoline) from syngas, but primarily on the production of ethanol. Three of the major names in the field- LanzaTech, INEOS Bio and Coskata – developed pathways for fermenting syngas using proprietary micro-organisms. INEOS Bio’s first small commercial plant was completed this year in Florida, while LanzaTech and Coskata have completed demonstrations of their technology. ZeaChem developed a hybrid system that included thermochemically converting biomass to ethanol via syngas, too.

When interest in drop-in renewable fuels began to increase in the late 2000s — given the costs of infrastructure change that ethanol required to reach high blend rates with gasoline — syngas continued to appear in the technology paths of companies like Rentech and Velocys (using modified F-T technologies).

Then, in the past two years, Sundrop Fuels and Primus Green Energy emerged from stealth with technologies that produced renewable gasoline from wood biomass, by first making syngas, then methanol, then gasoline — and ultimately embraced a flexible feedstock strategy that included natural gas. Primus is expected to complete its demonstration-scale plant by the end of Q1 2013.

By now, we’ve gone full-circle with the technologies – back to the same ideas that drove the New Zealand project in days gone by. XTL technologies that utilize biomass, coal or gas to produce syngas – and thence a pathways to affordable fuels – are very much in vogue at the moment.
But as Robert Rapier pointed out recently in the Digest: “The two major problems with any of the XTL technologies are that capital costs are extremely high, and a long-term, cheap feedstock supply must be secured. Shell’s initial estimate for the [Pearl GTL] plant was $5 billion, but by the time the project was completed the costs were estimated to be around $20 billion.”

So, what can be done? One, in the US and Canada there is the startling differential between the cost (per MMBTU) or natural gas, compared to crude oil. Two, critical improvements in processing technology – in most cases, moving beyond traditional Fischer-Tropsch technologies – that make projects work economically at a more flexible range of scales (and thereby, reduce capex) as well as reducing the operating costs.

Primus Green Energy

Take Primus as an example. “a difference between us and FT,” notes CEO Robert Johnsen, one of the co-founders of Mascoma before moving to Primus last year, “is that we are competitive at 25 million gallon scale. Also, modularization could be an option.”

Last March in New Jersey, Primus announced that it has completed its third round of funding with the recent $12 million investment by IC Green Energy Ltd, the renewable energy arm of Israel Corp. Ltd. This latest investment brings the total of funds raised since 2007 to $40 million.

 Primus already has a pilot test plant in operation at its Hillsborough complex, and the company hopes to break ground in early 2013 on its first commercial plant.

The company says that, at scale, it can produce gasoline at a price competitive with gasoline produced from petroleum at $60-$70 per barrel, based on a scale of 25-27 million gallons for its first commercial plant, and designs for up to four units with a capacity of 100 million gallons.

Feedstock flexibility

LanzaTech’s Jennifer Holmgren once warned the Digest. “it’s important not to marry a feedstock.”

That’s also the essence in Rapier’s warnings about the attractions of GTL technologies – going all-in on a feedstock whose price may flip into an unsustainable relationship to crude oil. So, it’s important to see the extension of technologies like Coskata, Primus and Sundrop into natural gas as a hedge against biomass prices rather than an abandonment of biomass.

The PGE technology

Conceptually, its not a difficult technology to understand.

First, biomass is gasified into syngas. If using natural gas, the NG is steam reformed into syngas using known technologies. Syngas is converted into methanol using known methanol synthesis and distillation technologies that companies like Johnson Matthey have provided for years. Finally, a variant of the ExxonMobil MTG (methanol-to-gasoline) process is used to make the final product.
Their secret sauce lies, as with many companies in the thermochemical space, in the proprietary catalysts and other improvements made in the basic process to make reactions faster and more efficient.

Greenfield or co-locate?

In the case of PGE, there are existing sources of syngas that might be tapped. “There is a whole menu of syngas options and sources I didn’t know about when we first set out to look at it,” said PGE’s Johnsen. “There’s waste syngas from industrial process, methane gas from MSW, syngas from coal. So, there’s an investigation that goes on to determine whether its better to purchase syngas over the fence, and achieve lower capex costs – or do a greenfield plant and produce syngas on site using known technologies.”

Geographies

In part, the decision rests not only on the geographies of syngas as a feedstock, but on the availability and cost of wood biomass and natural gas. In particular, its notable that Israel has had some startling natgas discoveries and Israeli investors are behind PGE.

“We have had some discussions re Israel,” Johnsen said, “and the issue is the sequence of building plants more than anything else. If I had my druthers, our first commercial would be one car ride from our facilities here [in New Jersey]. We’ve looked at Louisiana, Texas, the Upper Midwest and Pennsylvania, among other locations. Ideally, we’d like to have as many options to tap into natgas pipelines or any source of syngas available, and those industrial gases that become available to us.”

Capex

One of the compelling claims of the PGE technology is its low capex. “In this space,” said Johnsen, “costs for first plants between $10-$20 per gallon of capacity are common. But, the capital efficiency of this design gives us a capex of $10 per gallon or less. And, anyone in the alternative fuels space assumes that the 2nd and 3rd plant, even with same capacity, will cost 10-20 percent less. The first plants are burdened by redundancies , and with experience you can cast off some costs and get to a leaner, more realistic process design.”

The bottom line

There’s syngas, and the new syngas. The sources appear to be widespread, and the minimum scales for commercial viability appear to have come down sharply – and the emergence of low-cost natural gas has added new investor interest as well as a solid hedge against upside down biomass vs crude oil economics. The technologies are heading for commercial scale now – so we can expect to see them emerge by mid-decade, proven at scale, if they are able to convert investor interest into commitment, and prove out the technology at scale.
 

BP Cancels Florida Ethanol Plant, Extends Renewable Exit

http://www.businessweek.com/news/2012-10-25/bp-cancels-plans-to-build-florida-cellulosic-ethanol-plant

By Christopher Martin and Mario Parker on October 25, 2012

 BP Plc (BP/), Europe’s second-biggest oil producer, is abandoning a cellulosic ethanol project in the U.S., its second move in a year to scale back in renewable energy. 

The company canceled plans to build a $300 million cellulosic ethanol plant in Highlands County, Florida, to focus on “more attractive” projects, according to a statement on its website today.

BP doesn’t plan to build any commercial cellulosic ethanol facilities on its own, and will now focus its U.S. biofuel efforts on research and development and licensing its technology, Matt Hartwig, a spokesman, said today in an interview. The company decided in December to wind down its solar business, which had become unprofitable after prices plunged.

“Ethanol is not something a lot of people are interested in investing money in,” Mark Schultz, an analyst at Northstar Commodity Investment Co. in Minneapolis, said in an interview today.

“Corn-based ethanol hasn’t been profitable for about a year,” he said. BP is “seeing that this isn’t the right street to go down anymore.”

Cellulosic ethanol is a renewable fuel produced from inedible feedstocks such as waste and switchgrass. U.S. government mandates require that refiners blend 36 billion gallons (136 billion liters) of biofuels into their products annually by 2022. The Environmental Protection Agency has had to slash the targets for cellulosic ethanol because it isn’t yet commercially available.

Verenium Venture 

BP announced plans in 2008 to build the plant, which would have produced 36 million gallons of fuel a year. It formed a venture with biofuels company Verenium Corp. (VRNM) in 2009 to jointly build the plant in south-central Florida and each invested $22.5 million in the project. BP bought Verenium’s biofuels business for $98.3 million in September 2010.

“We believe it is in the best interest of our shareholders to redeploy the considerable capital required to build this facility,” Geoff Morrell, a BP spokesman, said in the statement.

BP continues to work with other renewable-fuel developers including its Butamax Advanced Biofuels LLC joint venture with DuPont Co., Hartwig said. It will continue to operate a cellulosic ethanol pilot plant in Louisiana and a research facility in San Diego, he said.

BP last year began exiting the global solar-energy industry after 40 years. Competition from Chinese manufacturers created a glut of panels, helping drive down prices 48 percent last year.

Royal Dutch Shell Plc (RDSA) is Europe’s biggest crude producer.

To contact the reporters on this story: Christopher Martin in New York at cmartin11@bloomberg.net; Mario Parker in Chicago at mparker22@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

Sundrop Fuels plant said to be on track in Rapides Parish

http://www.thetowntalk.com/article/20121022/NEWS01/210220312

7:30 AM, Oct 22, 2012

Sundrop Fuels Inc. has hired some plant managers and has started preliminary site work north of Alexandria, where construction on the company's $450 million synthetic gasoline plant is to begin early next year with completion in 2014.

The Colorado company, which chose Central Louisiana for its first commercial plant, continues financing negotiations with lenders. They're getting ready for robust activity on land the company bought near Cowboy Town, a closed entertainment venue in Rapides Station.

"2013 is going to be very busy," company spokesman Steven Silvers said.

Silvers said training for entry-level and other positions, to be done through the Louisiana Workforce Commission, should begin in late 2013. He said the training depends on the progress of construction.

Not quite one year ago, Louisiana Economic Development chief Stephen Moret and local economic development officials announced that Sundrop Fuels would locate its biofuels plant at a site off Interstate 49 north of Alexandria.

The company plans to use natural gas from a pipeline not far away, the woody biomass that is in abundance in Central Louisiana, and a whole lot of technology using heat and chemical interaction to produce car-ready synthetic gasoline.

The project is proceeding on schedule, Silver said.

To lure Sundrop, Louisiana offered incentives based on the jobs created:

Performance-based grants of $14 million over 10 years for building and financing costs.

$4.5 million for relocation costs of research and development operations and personnel to Louisiana.

Tax breaks.

Access to private activity bonds, which is a federal government program that allows companies to borrow money at lower interest rates.
To get the incentives, Sundrop agreed to locate in Rapides Parish, create 75 jobs before the end of 2013, and 150 by the end of 2014, according to information provided by LED last week.

The company also has until the end of 2014 to complete its investment of $450 million.

Some managers have been hired, including some who now live in or near Alexandria, Silvers said.

The company is advertising several high-level positions on its website at www.sundropfuels.com including site supervisor and plant managers.

State training for ground-level plant jobs could begin in late 2013.

"LED FastStart will be engaged with the Sundrop Fuels team to help recruit, train and certify a qualified workforce to staff the company's state-of-the-art biofuels refinery," said Jeff Lynn, executive director of workforce development at LED.

"As the ramp-up date for hiring approaches, we'll provide more information to the public about recruitment, and training will be available at a later date," Lynn said.

Sundrop's partner, Chesapeake Energy, has pledged to pay $155 million for a 50 percent equity stake in Sundrop. Chesapeake said in its latest quarterly report that so far it had paid $65 million of the total, which it is giving to Sundrop in "tranches."

Chesapeake Energy has had cash and governance troubles, and its CEO Aubrey McClendon has been on the ropes. Activist investors are seeking more influence in the company, which is second only to ExxonMobil in production of natural gas.

Silvers said Chesapeake remains committed to Sundrop, and it'll be Chesapeake's natural gas that provides the fuel for heat needed to produce synthetic gasoline.

Silvers said the price Sundrop will pay for natural gas, a regional commodity that has fetched low prices the last year, will be a product of negotiations between the two partners.

"Those are things that are still being worked out," he said. "They are a partner with a vested interest in seeing Sundrop Fuel succeed as an alternative fuels company."

 

 

Local firms, leaders are clean-tech finalists

http://www.bcbr.com/article/20121012/NEWS/121019952

By Doug Storum October 12, 2012

DENVER - Three companies and three executives in the Boulder Valley are finalists in the Colorado Cleantech Association's annual awards program.

Boulder-based Albeo Technologies Inc. and Longmont-based Sundrop Fuels Inc. are the finalists in the High Impact Cleantech Company category, while Boulder-based Boulder Wind Power Inc. is a finalist in the Breakout Cleantech Company category.

Boulder Wind's co-founder and chief technology officer Sandy Butterfield is a finalist for Colorado Cleantech Entrepreneur of the Year, and Mark Verheyen, president and CEO of Longmont-based TerraLux Inc., is a finalist for Cleantech Executive of the Year. Robert Fenwick-Smith, founder and senior managing director of Aravaipa Ventures in Boulder, is a finalist for the Governor's Award for Excellence in Cleantech Leadership.

Company finalists were selected based on their ability to impact the marketplace with innovative clean technologies, and recognizes successful fundraising efforts, ability to scale their technology, and the company's statewide job creation success.

Individuals were selected for their commitment to expanding Colorado's clean-tech ecosystem and their devotion to the growth of their respective organizations. Finalists were selected by a group of industry peers consisting of entrepreneurial leaders, clean-tech CEOs and former award recipients.

The 2012 Colorado Cleantech Award Celebration will be held from 5 to 8 p.m., Monday, Oct. 22, at the Sheraton Downtown Denver Hotel.

The 2012 finalists are:

National Cleantech Leadership Award
Center for the New Energy Economy, Fort Collins
http://cnee.colostate.edu/index.html
Colorado Renewable Energy Collaboratory, Golden
http://www.coloradocollaboratory.org/
Ecotech Institute, Aurora
http://www.ecotechinstitute.com/

Governor's Award for Excellence in Cleantech Leadership
Robert Fenwick-Smith, Aravaipa Ventures, Boulder
http://www.aravaipaventures.com/
Doug Schatz, Ampt LLC, Fort Collins
http://www.ampt.com/

Cleantech Corporate Champion
Wells Fargo Bank
https://www.wellsfargo.com/

Cleantech Investor of the Year
9th Street Investments, Golden
http://9thstreetinvestments.com/
Access Venture Partners, Westminster
http://www.accessventurepartners.com/content/
Braemar Energy Ventures, New York, Boston, London
http://www.braemarenergy.com/
New Enterprise Associates, Menlo Park, California
http://www.nea.com/

High Impact Cleantech Company
Albeo Technologies Inc., Boulder
http://www.albeotech.com/
Sundrop Fuels Inc., Longmont
http://www.sundropfuels.com/

Breakout Cleantech Company
Boulder Wind Power Inc., Boulder
http://www.boulderwindpower.com/
ZeaChem Inc., Lakewood
http://www.zeachem.com/

Emerging Cleantech Company
Silver Bullet Water Treatment, Denver
http://silverbulletcorp.com/
SkyFuel Inc., Arvada
http://www.skyfuel.com/

Colorado Cleantech Entrepreneur of the Year
Sandy Butterfield, co-founder, CTO
Boulder Wind Power Inc., Boulder
http://www.boulderwindpower.com/
Hans Mueller, founder, vice president engineering
EcoVapor Recovery Systems LLC, Centennial
http://www.cleanlaunch.com/

Cleantech Executive of the Year
Joel Butler, CEO
Solix BioSystems Inc., Fort Collins
http://www.solixbiofuels.com/
Mark Verheyen, president, CEO
TerraLux Inc., Longmont
http://www.terralux.com/

Legislator of the Year
Colo. Rep. Brian Delgrosso, (R-Loveland)
http://www.briandelgrosso.com/

Sundrop Fuels plans to hire locally as much as possible for Alexandria-area plant

http://www.englandairpark.org/articles/2012/01/sundrop-fuels-plans-hire-locally-much-possible-alexandria-area-plant

Date: (?) 2012

Story Courtesy of The Town Talk
Written by Jeff Matthews

Officials from Sundrop Fuels Inc. as well as local and state government and business leaders agree wholeheartedly on this -- they would love to fill as many of the 150 jobs as possible at the company's planned biofuels plant near Alexandria with Louisiana natives.

"I'm tired of seeing our bright young people come home twice a year -- at Thanksgiving and Christmas -- before going back to Atlanta or Denver," Gov. Bobby Jindal said in a familiar refrain. "These are the kind of good-paying jobs that will keep Louisianians at home."

"We would be happy to find some good Louisiana graduates wasting time in Houston or Dallas who want to come back," said Sundrop Fuels Chief Executive Officer Wayne Simmons.

Sundrop Fuels announced in November it will build its first production facility off Interstate 49 in the Rapides Station area, north of Alexandria. The company is banking its future on the plant and its unique conversion process that turns biomass and natural gas into ready-to-use transportation fuel.

The plant is expected to employ approximately 150 people, with an average yearly salary of $58,000 a year. Economic development professionals have predicted it will create more than 1,000 other indirect jobs.

Sundrop is expected to break ground on the facility early this year.

"We're excited about the early impact, which is the construction impact," said Jim Clinton, president of Central Louisiana Economic Development Alliance. "We should do very well with that. You're talking about a $450 million project that local companies will be involved in. So just at the first cut, it's a really big hit up front. Then, of course, we're very pleased with the 150 jobs, and all the indirect jobs."

Simmons said hiring at the top level will start first, so those employees can work with the engineering and design team. From there, he said, it will be "a gradual ramp-up" to filling all the jobs.

"So if we hire at the senior level around mid-year, the end of the year would be the next tier," Simmons said. "The largest part of the hiring would be in 2013 with an eye to being completely staffed by early 2014."

Simmons said he expects the large part of the plant's work force to be from the area and the state.
"A couple of people will move down," he said. "But it's largely going to be indigenous."

"We shouldn't have any problems filling those jobs," Clinton said.

Simmons said about 90 of the facilities jobs will be operator jobs, with the rest broken down fairly evenly among engineering and supervisory/management.

"One of the challenges is this plant has a lot of different unit operators," he said. "It's a complex plant."

Simmons said a lot of training will be required. The state will be heavily involved through its FastStart workers training program.

Clinton welcomes the challenge of training workers for the plant.

He's particularly enthused about getting local educational entities involved and improving their capabilities to train skilled workers in the future. State education officials gave the go-ahead last year for Central Louisiana Technical College to expand into more of a full-service community and technical college to meet such challenges.

"Every time you do one of these things, you're building capacity for the next one," Clinton said.
Clinton, long a proponent of raising the knowledge base of the area work force, is also pleased at the large percentage of highly skilled jobs the plant will provide.

"These are significant jobs," Clinton said. "Engineering, chemical, technical-intensive jobs. That's a good thing. That's what you want in your work force."