Renewable Surprise: Big New Biomass In Georgia

http://www.earthtechling.com/2013/08/renewable-surprise-big-new-biomass-in-georgia/

by Pete Danko

Posted on August 16th, 2013 

The latest federal accounting of new electrical generation going into service is another disappointing one for renewable energy, after last month’s downer, as natural gas dominated new capacity added in July.

According to the Federal Energy Regulatory Commission [PDF], 199 megawatts of new capacity came online in July and 144 of it was natural gas.

Loblolly pine is the most commercially important tree species in the southeastern United States (image via Wikimedia Commons)

In a surprise, the big contributor to new renewables in the past month wasn’t wind or solar but was biomass:  a 40-megawatt biomass system, using logging residual, at Graphic Packaging International’s operation in Macon County, Georgia.

When the company announced the project several years ago it said that by upping its investment in biomass – which was already being used to generate 90 percent of the paperboard mill’s process steam and 60 percent of its electrical power – it would be able to idle a coal-fired boiler. That would trim greenhouse gas emissions by 50,000 tons per year. Electricity produced would also reduce its grid load enough to curtail another 340,000 tons of CO2 emissions.

The company had said the high-efficiency biomass boiler and 40-MW turbine generator would cost as much as $80 million, but would “further the Company’s sustainability strategy, reduce energy costs and to improve the profitability of the Macon mill in advance of expected increases in electricity costs.”

New wind was nonexistent in July, as the industry continues to realign after last year’s near-death production tax credit experience. Through the first seven months of the year, wind has added 959 MW compared to 3,773 MW in the same period last year.

Solar came through with 11 MW in July, giving it 1,071 MW for the year, ahead of last year’s 842 MW at the same point in the year. Remember, that’s utility scale solar; the smaller stuff on residences and businesses, of which there is oodles going in, isn’t counted in that figure.

Petroleum groups ask EPA for relief from biofuel mandate

http://thehill.com/blogs/e2-wire/e2-wire/316927-petroleum-groups-ask-epa-for-relief-from-biofuel-mandate

By Zack Colman - 08/13/13 06:07 PM ET

The petroleum industry formally asked the Obama administration on Tuesday to lower the amount of corn-based ethanol refiners must blend into transportation fuel in 2014.

Failing to adjust the Renewable Fuel Standard’s blending targets could result in “severe harm to the U.S. economy” resulting from higher gasoline prices, the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) said in comments regarding a request for a waiver from the rule.

The groups' claim of economic damage relied on an API-commissioned NERA Economic Consulting study that said leaving the fuel mandate intact could raise diesel costs 300 percent and gasoline costs 30 percent in 2015.

The request from the oil trade organizations comes as the Environmental Protection Agency is showing it might bend on the fuel mandate.

Created in 2005 and expanded two years later, the rule calls for blending 36 billion gallons of biofuel into traditional transportation fuel by 2022. It’s at the center of an intense lobbying and political fight that’s drawing attention on Capitol Hill.

The EPA acknowledged last week that refiners could approach the “blend wall” in meeting the federal biofuel-blending mandate’s accelerating targets. It said it would consider tinkering with the requirements for next year to accommodate those concerns.

 

 That term refers to the point at which the oil industry says refiners would need to produce gasoline with higher ethanol concentrations than the market-standard 10 percent mix. 

 

In their formal waiver request, the groups asked the EPA to lower the Renewable Fuel Standard’s blending requirements to below 10 percent of gasoline to avoid the blend wall.

Honoring the waiver would eliminate 3.35 billion of the 18.15 billion gallons of corn-based ethanol called for in 2014, providing “short-term relief” from the rule, said Bob Greco, API downstream group director, in a statement.

The petroleum industry and automakers have warned fuel blends with a 15 percent ethanol concentration, known as E15, could damage car engines. They also say tankers and gas stations don’t have the infrastructure to support the fuel.

The biofuel industry has rejected those claims. It contends that E15 is safe, noting that the EPA has approved E15 for use in cars made in 2001 or later.

Biofuel groups pushed back against the waiver request, saying that it was designed to protect the profits of oil producers and refiners.

“The actions by API and AFPM are designed with one goal in mind — to eliminate any competition from clean, green biofuels in the liquid transportation fuels marketplace,” Tom Buis, chief executive of corn ethanol group Growth Energy, said in a Tuesday statement.

The EPA has so far rejected all previous Renewable Fuel Standard waiver requests, which have centered on the corn-based ethanol that dominates the biofuel market.

Last year, poultry and meat producers failed to secure a waiver when they argued the mandate was pushing corn prices upward and harming their businesses. And several state governors also unsuccessfully lobbied the EPA for relief on those grounds.

The waiver requests are just one example of how the mandate has come under fire in Washington, D.C.

The House Energy and Commerce Committee has pledged to overhaul the rule, saying that the mandate’s goals are unrealistic.

Corn-based ethanol has kept pace with original projections, but many next-generation biofuels have fallen well short of the marks Congress laid out when it expanded the mandate 2007.

Many lawmakers also say the intent of the law — to wean the U.S. off foreign fuels and drive down greenhouse gas emissions — can be accomplished with domestically produced natural gas and oil discovered since the rule was last updated.

But biofuel groups contend next-generation biofuels are just starting to come online in commercial quantities. They say changing the mandate would threaten economic development in rural communities that have come to depend on the biofuel industry.

— This story was updated at 2:56 p.m. on Aug. 14.

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.

LanzaTech CEO: Need Biofuels, Oil & All of the Above

http://domesticfuel.com/2013/04/19/lanzatech-ceo-need-biofuels-oil-all-of-the-above/

Posted by John Davis – April 19th, 2013



While some of the talk at the recent Advanced Biofuels Leadership Conference has focused on pointing fingers at the oil companies and some of the oil companies pointing back, at least one biofuel provider was saying we need them both. Jennifer Holmgren (shown holding an award for being one of the movers and shakers in the biofuel world), the CEO of LanzaTech, a company that turns carbon monoxide into ethanol, wants to take an “all-of-the-above” approach.

“It is so important for us to get as much energy and fuel into the pool that we need to have all of the solutions that can provide sustainable fuels at the table,” including natural gas, petroleum, algae, biomass, among others, she says … all providing economic, social and environmental sustainability.

Jennifer admits that is easy to say but tough to do. She says we need to look at the current state as part of a long journey to commercialize these processes. She adds that both sides need to tone down their rhetoric and recognize that oil is not going away, but it’s not enough to meet all of our energy needs.

“If you can get both sides to agree that oil doesn’t give us all the answers but is a necessary piece of the equation, I think we’ll be fine,” she says.

Jennifer is encouraged that so many oil companies attended the ABLC and are involved in the renewable energy business. She believes it’s a good start of better trust and patience between biofuels and Big Oil.

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.

 

First Commercial Cellulosic Ethanol Plant in US Goes Bankrupt

http://www.energytribune.com/75180/first-commercial-cellulosic-ethanol-plant-in-us-goes-bankrupt

Posted date: March 20, 2013

By Robert Rapier

Ed. note: This piece was first ptublished on Robert Rapier’s R-Squared Energy Blog.

First Qualifying Cellulosic Ethanol

 

Last year, to much fanfare, the first batch of qualifying cellulosic ethanol was produced (i.e., it qualified for credits under the EPA program for certifying ethanol for sales). I reported on the development at that time.

Western Biomass Energy LLC, a subsidiary of Blue Sugars Corporation (previously KL Energy) reported the major milestone of claiming the first cellulosic ethanol tax credits under the RFS2 for a 20,069 gallon batch of cellulosic ethanol produced from bagasse (sugar cane waste) in April 2012.

However, regular readers are aware that for years I have been deeply skeptical that cellulosic ethanol as envisioned by — and ultimately mandated by — the US government will be an economic and scalable fuel option. The obstacles to success are significant, and I have described them in detail on many occasions.

Nevertheless, there is the possibility that in some niche applications that modest amounts of cellulosic ethanol may be produced for sale. One of those niches is from waste biomass such as bagasse that is produced during the processing of sugarcane. But in general – despite the proclamations from promoters like Vinod Khosla – the chemistry and physics are formidable obstacles working against the success of cellulosic ethanol. I will state in no uncertain terms that I don’t believe it can ever be mass-produced more cheaply than corn ethanol, and that industry’s financial trouble are well-documented.

Another Reality Check

 

I was extremely skeptical that the batch of cellulosic ethanol produced by Western Biomass was anything more than a publicity stunt rather than an indication that they had actually managed to conquer the economics of the process. My skepticism was heightened when they never produced another qualifying batch for the rest of the year, and that one batch they did produce was exported to Brazil to be used at the Rio+20 Conference.

Now comes news that Western Biomass Energy has filed for Chapter 11 bankruptcy protection. In my column in which I reported on the initial production of cellulosic ethanol from Western Biomass, I noted:

Cellulosic ethanol commercialization still faces a number of challenges. Capital and operating costs are expected to remain higher than for corn ethanol producers, and even they are currently struggling with low margins. The ethanol market also faces the hurdle of the blend wall, which makes it difficult to expand domestic production without increases in E15 and E85 consumption, and/or ethanol exports.

It will continue to be true that as long as the US government incentivizes these ventures, companies will continue to pursue them. But I believe it is also true that every gallon of production they make will be produced at a significant per gallon loss. Mother nature simply didn’t design cellulose to be easily accessible, and extracting the cellulose, converting the cellulose into sugars, fermenting those sugars to ethanol, and finally purifying that ethanol will continue to be capital and energy-intensive operations.

Investors Should be Cautious

 

In addition to Western Biomass, one other company has produced qualifying cellulosic fuel. Vinod Khosla-backed KiOR announced earnings this week, while at the same time announcing that they had shipped their first batch of qualifying cellulosic diesel. This was presented as great news, and KiOR’s share price initially surged on the news. But a closer reading of their financial statement signals the kind of warning flags about KiOR that I have been waving for over a year:

The Pasadena, Texas-based firm lost $0.28 per share during the fourth quarter, falling short of the $0.15 per share loss in Q4 2011. However, it beat the Wall Street consensus of a loss of $0.32 per share.

 Fourth quarter revenue rounded out at $87,000 – the company’s first revenue since   inception. This fell drastically short of the $1.62 million analysts hoped for.

So, revenues were 95% less than expected. Yikes. Also the company’s cash and cash equivalents declined by $91 million over the previous year, down to $41 million. KiOR’s clock is ticking. They will likely find more investors willing to take a chance on them, but even though I have a couple of friends who work there, I am not optimistic about their long-term chances of competing in the motor fuel arena. As long as natural gas prices remain low, they will probably limp along, but their heavy dependence on cheap natural gas is a risk factor unrecognized by most investors.

Biofuels Digest’s 10-Minute Guide to Obama’s New Energy Policy

http://www.biofuelsdigest.com/bdigest/2013/03/18/biofuels-digests-10-minute-guide-to-the-obama-administrations-new-energy-policy/

Jim Lane | March 18, 2013 

 

Major push from Obama on energy. 

 

From DOE: “Liquid fuels demand can be sufficiently reduced so that biomass can meet all liquid fuel needs.”

 

What’s up? What is an Energy Security Trust, anyway? The Digest’s 10-Minute Guide tells all.

 

In an address at the Argonne National Laboratories on Friday, President Obama said:

“You see, after years of talking about it, we’re finally poised to take control of our energy future.  We produce more oil than we have in 15 years.  We import less oil than we have in 20 years…But the only way we’re going to break this cycle of spiking gas prices for good is to shift our cars and trucks off of oil for good.  That’s why, in my State of the Union Address, I called on Congress to set up an Energy Security Trust to fund research into new technologies that will help us reach that goal.

“I’m proposing that we take some of our oil and gas revenues from public lands and put it towards research that will benefit the public, so that we can support American ingenuity without adding a dime to our deficit…devising new ways to fuel our cars and trucks with new sources of clean energy – like advanced biofuels and natural gas – so drivers can one day go coast-to-coast without using a drop of oil.

“And in the meantime, let’s keep moving forward on an all-of-the-above energy strategy.  A strategy where we produce more oil and gas here at home, but also more biofuels and fuel-efficient vehicles; more solar power and wind power. We can do this.”

A companion study released the the Department of Energy was, in its way, more ambitious and more specific: “TEF does not project that all liquid fuels will be eliminated from the future transportation sector, but rather that demand can be sufficiently reduced so that biomass can meet all liquid fuel needs.”

The Energy Security Trust. Is it a new idea? 

No. In his 2013 State of the Union address, President Obama called on Congress to create an Energy Security Trust Fund, which would free American families and business from painful spikes in gas prices. The President’s plan builds on an idea that has bipartisan support from experts including retired admirals and generals and leading CEOs, and it focuses on one goal: shifting America’s cars and trucks off oil entirely.

 

How does it work?

Over 10 years, the Energy Security Trust will provide $2 billion for critical, cutting-edge research focused on developing cost-effective transportation alternatives. The investments will support research into a range of technologies – things like advanced vehicles that run on electricity, homegrown biofuels, and domestically produced natural gas. It will also help fund a small number of real-world experiments that try different transportation techniques in cities and towns around the country using advanced vehicles at scale.

 

Does it involve new taxes?

No. The funding will be provided by revenues from federal oil and gas development, and will not add any additional costs to the federal budget.

 

President Obama’s complete remarks are where?

They’re here.

 

Does the White House’s have a short take on the Energy Security Trust?

Yep. Here you are.

 

What is the Transport Energy Futures (TEF) study?

It’s a new study from the U.S. Department of Energy, the National Renewable Energy Laboratory, and Argonne National Laboratory that finds the United States has the potential to reduce petroleum use and greenhouse gas (GHG) emissions in the transportation sector by more than 80% by 2050 – and proposes pathways towards that goal.

 

What is the strategy?

• Stopping Growth in Transportation Sector Energy Use
• Using More Biofuels
• Expanding Electric and Hydrogen Technologies

 

What’s the overall 15-point Obama Energy Strategy, again?

1. Challenges Americans to double renewable electricity generation again by 2020.
2. Directs the Interior Department to make energy project permitting more robust.
3. Commits to safer production and cleaner electricity from natural gas.
4. Supports a responsible nuclear waste strategy.
5. Sets a goal to cut net oil imports in half by the end of the decade.
6. Commits to partnering with the private sector to adopt natural gas and other alternative fuels in the Nation’s trucking fleet.
7. Establishes a new goal to double American energy productivity by 2030.
8. Challenges States to Cut Energy Waste and Support Energy Efficiency and Modernize the Grid.
9. Commits to build on the success of existing partnerships with the public and private sector to use energy wisely.
10. Calls for sustained investments in technologies that promote maximum productivity of energy use and reduce waste.
11. Leads efforts through the Clean Energy Ministerial and other fora to promote energy efficiency and the development and deployment of clean energy.
12. Works through the G20 and other fora toward the global phase out of inefficient fossil fuel subsidies.
13. Promotes safe and responsible oil and natural gas development.
14. Updates our international capabilities to strengthen energy security.
15. Supports American nuclear exports.

 

Where’s the Fact Sheet on that?

Right here.

 

Why the transport sector, specifically?

The transportation sector accounts for 71% of total U.S. petroleum consumption and 33% of U.S. total carbon emissions.

 

What are the 9 Interconnected reports that make up the overall TEF study?

1. Deployment pathways issues including the development of, transition to, and challenges of advanced technology
2. Non-cost barriers to advanced vehicles such as range anxiety, refueling availability, technology reliability, and consumer familiarity.
3. Opportunities to improve non-light-duty vehicle efficiency for medium- and heavy-duty trucks, off-road vehicles and equipment, aircraft, marine vessels, and railways
4. Opportunities for switching modes of transporting freight, such as moving freight from trucks to rail and ships.
5. Infrastructure expansion required for deployment of low-GHG fuels, including electricity, biofuels, hydrogen, and natural gas
6. Balance of biomass resource demand and supply, including allocations for various transportation fuels, electric generation, and other applications.
7. Opportunities to save energy and abate GHG emissions through community development and built environment strategies
8. Trip reduction through mass transit, tele-working, tele-shopping, carpooling, and improvement of vehicle performance through efficient driving
9. Freight demand patterns, including trends in operational needs and projections of future use levels.

 

How much biofuels use does the TEF study anticipate?

Up to 100 percent of fuel needs, if the US hits its 2050 fuel efficiency, hydrogen fuel, and electrification goals as well. Even at the EIA baseline projected fuel demand in 2050, biofuels could supply as much as 50 percent of the jet fuel market, and 30 percent of the gasoline and diesel markets if EERE biofuel technology goals are met. Getting to the point where biomass could provide 100 percent of vehicle liquid fuels requires reducing the need for fuel through the efficiency and demand management measures described above, including deployment of electricity or hydrogen fuel alternatives.

 

Will this require an avalanche of infrastructure?

Some. “While new fuel types require new infrastructure, the share of infrastructure cost within total fuel costs is very small (1.5-3 percent), and these costs can be made up for in fuel cost savings of more efficient advanced vehicles.”

 

Where can I start to dig deeper into the overall plan and the TEF study?

You can start here at the TEF home page.

 

Who was responsible for TEF?

TEF is a collaboration between EERE, the National Renewable Energy Laboratory (NREL), and Argonne National Laboratory (ANL). The project benefitted from the input provided by a steering committee that included some of the nation’s foremost experts on transportation energy from the Environmental Protection Agency (EPA), the U.S. Department of Transportation (DOT), academic researchers, and industry associations.

 

What is NEPA and what is happening there?

NEPA is the National Environmental Policy Act of 1970, a product of the Nixon Administration.

 

Er, Nixon? What’s new there?

The President’s strategy includes requiring federal agencies, under NEPA’s authority, to include climate change impact in reviewing proposed projects. For example — leases to drill for coal, or export coal to China, or construct oil pipelines like the Keystone XL pipeline, could be reviewed not only for air pollution and water fouling, but for overall greenhouse gas impact.

 

Are the changes in NEPA reviews ho-hum, or a big deal?

Big deal. Brendan Cummings, senior counsel for the Center for Biological Diversity told Bloomberg that the result will be “a major shakeup in how agencies conduct NEPA” reviews.

 

Does the President have this authority under NEPA?

Generally, yes. NEPA grants a right of Federal review of proposed projects for environmental impact — and climate change certainly falls broadly within that category. The devil is going to be in the details — after all, how much specific contribution to a problem like climate change be attributed to a single project?

 

Is a NEPA review capable of derailing a project?

No. A NEPA review is, at the end of the day, aimed at producing a thorough vetting process, rather than a specific outcome. Projects go through NEPA reviews — there is a robust commentary opportunity — but regulators, in the end, make decisions on permits. NEPA does establish a forum for introducing or reviewing data that will be used in a regulator’s decision — or, in lawsuits that may be filed to reverse a ruling.

 

Overall, is there going to be opposition from the right on the Energy Security Trust?

Forbes’ Houston-based energy columnist Christopher Helman writes: “This is a terrible idea — and a backdoor to the imposition of a nationwide carbon tax — that congress should not allow to pass.

“There is absolutely no reason why we need a dedicated Energy Security Trust to fund the national labs, or to fund any kind of alternative energy research. If congress wants to fund research it can pass a bill to fund research…Isn’t congressional appropriation how the federal government is supposed to pay for such stuff?

“Then consider that the Department of Energy has in recent years built up an insanely terrible record of wasting taxpayer money by directing funds to private companies, many of which have simply gone belly up (but not before paying lavish bonuses to executives).

 

Why is there opposition from the left?

Here’s some flavor. “This approach will only encourage more dirty energy production…[and] doesn’t create any additional cost for using fossil fuels, thus creating no incentive for firms to divert resources into safer, cleaner and more renewable sources of energy,” Tyson Slocum, director of Public Citizen’s energy program, told bizjournals.com.
 

LanzaTech Announces Datuk Ir. (Dr) Abdul Rahim Hj Hashim, President of Malaysian Gas Association, to Board of Directors

http://www.marketwatch.com/story/lanzatech-announces-datuk-ir-dr-abdul-rahim-hj-hashim-president-of-malaysian-gas-association-to-board-of-directors-2013-03-11

36 Year Veteran of Oil & Gas Industry Will Help Company Accelerate Commercialization of Novel Technology to Convert Unused Gas Streams Into Marketable Commodities 

 

ROSELLE, IL, Mar 11, 2013 (MARKETWIRE via COMTEX) -- LanzaTech, a producer of low-carbon fuels and chemicals from carbon-containing gases, announced the appointment of Datuk Ir. (Dr) Abdul Rahim Hj Hashim, the current President of the Malaysian Gas Association, former Chief Executive of PETRONAS Oil Refinery and a 36 year oil and gas industry veteran to its board of directors. 

"As we take our technology further into the fuel production value chain, Datuk Rahim's extensive leadership experience in the oil and gas industry will be incredibly valuable," said Jennifer Holmgren, CEO of LanzaTech. "In addition to the significant potential to create marketable commodities from industrial waste streams containing carbon monoxide, we are seeing increasing opportunity to leverage our technology with underutilized, or otherwise unusable gas streams." 

Datuk Rahim, the President of the Malaysian Gas Association, began his career in PETRONAS soon after graduating from the University of Birmingham, UK in electrical and electronics engineering. Throughout his 36 years of involvement in the oil and gas industry, he has held a number of high profile positions of increasing responsibility. As Vice President at PETRONAS for 10 years, he covered three different portfolios: Vice President of Human Resource Management for the PETRONAS Group for four years; vice president of the Gas Business for three years and Vice President for Research and Technology for three years. In addition, Managing Director and Chief Executive Officer of PETRONAS Oil Refinery (Melaka) Sdn Bhd as well as Managing Director and Chief Executive Officer of Malaysian Refining Company Sdn Bhd (MRC). 

While serving in PETRONAS, he also held several key positions in a variety of gas industry organizations, both in Malaysia and at an international level including serving as President of the Asia Pacific Natural Gas Vehicle Association (ANGVA) and President of the International Gas Union (IGU). A professional engineer, Datuk Rahim serves on the Board of Engineers (BOE), Malaysia and also the Chairman of the Engineering Accreditation Council (EAC) Malaysia. He is also an Associate Member of the American Institute of Chemical Engineers. In 1997, he completed the Advanced Management Program at Harvard Business School. 

"I've been very impressed with the progress LanzaTech has made to date developing and scaling its core technology to convert waste gases into renewable fuels and chemicals," said Datuk Rahim. "I look forward to helping the company extend that platform into new feedstocks, including CO2, methane and other carbon sources as well as new end products." 

In 2012, LanzaTech partnered with PETRONAS to develop new approaches to effectively capture carbon, with an initial focus on using CO2 from a variety of sources including refinery off gases and natural gas wells to produce acetic acid, a high value chemical with applications in the polymers and plastics markets. 

About LanzaTech 

LanzaTech is a leader in gas fermentation technology. It provides novel and economic routes to fuels and high value chemicals from waste gas streams. LanzaTech's unique process provides a sustainable pathway to produce platform chemicals that serve as building blocks to products that have become indispensable in our lives such as rubber, plastics, synthetic fibers and fuels. 

LanzaTech's technology solutions mitigate carbon emissions from industry without impacting adversely food or land security.

Currently commissioning a second pre-commercial facility in China using steel mill off gases for ethanol production, LanzaTech, a company founded in New Zealand, is now a global organization with full commercial operation targeted for 2014. More information is available at www.lanzatech.com

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.

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

EPA approves new cellulosic, advanced biofuel pathways

http://www.biomassmagazine.com/articles/8669/epa-approves-new-cellulosic-advanced-biofuel-pathways

By Erin Voegele | February 26, 2013

 

The U.S. EPA has published a new final rule, qualifying additional fuel pathways under the renewable fuel standard (RFS) for advanced biofuel, cellulosic biofuel and biomass-based diesel. The rulemaking covers two new feedstocks, camelina and energy cane. It also qualifies renewable gasoline and renewable gasoline blendstocks made from certain feedstocks as cellulosic biofuel.

Under the new rule, ethanol, renewable diesel (including jet fuel and heating oil) and renewable gasoline blendstock produced using energy cane feedstock can now qualify to generate cellulosic biofuel renewable identification numbers (RINs).

According to the EPA, for the purposes of this rulemaking, energy cane has been defined as a complex hybrid in the Saccharum genus that that has been bred to maximize cellulosic rather than sugar content.

Within the final rule, the EPA addresses several comments made by members of the public during the rulemaking process, including those related to invasiveness and land use change potential. The EPA states that energy cane does not raise significant concerns about the threat of invasiveness. Regarding land use change, the EPA specifies that energy cane is most likely to be grown on land once used for pasture, rice, commercial sod, cotton or alfalfa, which would have a less international direct impact than switchgrass because those commodities are not as widely traded as soybeans or wheat. “Given that energy cane will likely displace the least productive land first, EPA concludes that the land use GHG impact for energy cane per gallon should be no greater and likely less than estimated for switchgrass,” said the agency in the rulemaking.

According to the rule, EPA believes that cellulsoic biofuels produced from the cellulose, hemicellulose and lignin portions of energy cane will have similar or better lifecycle GHG impacts than biofuel produced from switchgrass.

Biodiesel and renewable diesel (including jet fuel and heating oil) made from camelina feedstock are now eligible for biomass-based diesel or advanced RINs. In addition, camelina-based naphtha and liquefied petroleum gas can qualify for advanced biofuel RINs.

While the EPA notes in the rulemaking that some parties submitting comments on the proposed camelina pathways expressed concern over the potential threat of invasiveness, the EPA states that it believes the production of camelina is unlikely to spread beyond the intended borders in which it is grown.

The EPA also specified that the crop is currently being grown on approximately 50,000 acres of land throughout Montana, Washington, North Dakota and South Dakota. Overall, the EPA estimates that approximately 9 million acres of land in a wheat/fallow rotation is available for camelina production nationwide.

“Current information suggestion that camelina will be produced on land that would otherwise remain fallow,” said EPA in the rulemaking. “Therefore, increased production of camelina-based renewable fuel is not expected to result in significant land use change emissions; however, the agency will continue to monitor volumes through EMTS to verify this assumption.”

Regarding renewable gasoline and renewable gasoline blendstocks, the rulemaking qualifies fuels produced from crop residue, slash, pre-commercial thinnings, tree residue, annual cover crops, and cellulosic components of separated yard waste, separated food waste and separated municipal solid waste (MWS). The rule also specifies that, when utilizing natural gas, biogas and/or biomass as the only process energy source, thermochemical pyrolysis, thermochemical gasification, biochemical direct fermentation, biochemical fermentation with catalytic upgrading can all be used with the listed feedstocks to generated fuel qualifying as cellulosic biofuel. In addition, any other process that uses biogas and/or biomass as the only process energy sources to convert the approved gasoline and renewable gasoline blendstock feedstocks into biofuel also qualifies for cellulosic RINs.

A full copy of the rulemaking is available on the EPA website.

The Compression Spread

http://www.biofuelsdigest.com/bdigest/2013/02/08/the-compression-spread/

 

Jim Lane | February 8, 2013 

 

You’ve heard about the crack spread, and the crush spread — as means to value oil refining and crop refining.

Let’s think about biomass densification and compression, and in that context, a little about KiOR.

You might have heard a little or a lot about KiOR — which is currently commissioning its first commercial-scale (11 million gallon) biofuels plant in Columbus, Mississippi.

Now, the oil industry might, via the American Petroleum Institute, be currently talking down the validity of the Renewable Fuel Standard — but it is not entirely clear that KIOR would have found the financing that it did without the EISA Act galvanizing investors into action.

KiOR’s secret sauce

 

Now, it is getting more clear — among all the glittering pieces of technology that the biofuels industry has developed — that the oil refining and marketing sector would really, really like to have invented KiOR’s BFCC unit — KiOR’s secret sauce.

What is a BFCC? It is a fluidized-bed catalytic cracker that works with biomass (in KiOR’s case, they are working now with southern yellow pine they expect to obtain at $72 per bone-dry ton).



Why is it coveted? It takes biomass, which has low density, and liquifies it into an intermediate with very high energy density — and does so at a transformatively low cost. That intermediate can be hydrotreated into an in-spec drop-in fuel — either in the gasoline range, or diesel, or even jet.

Why is that important? Because it is expected to be available at a lower cost than the marginal cost of oil production — when taken to an appropriate scale.

Equally importantly — because it is produced from renewable biomass — it can help de-carbonize an atmosphere that is producing increasingly wacky weather.

The marginal cost of producing oil

 

In a world where oil prices are highly volatile, one statistic for price prediction has held true for a long time — and that it is averaged cost of marginal production of oil for the world’s 50 largest public oil companies.

What exactly does ” the marginal cost of production” mean? It is the cost of exploring and capturing the last barrel of oil needed to meet overall global demand.

Bernstein Research circulated a note last year estimating that the marginal cost of production (for the top 50 public companies — note that some national oilcos have very different cost structures) increased by 229 percent between 2001 and 2010. Meanwhile, oil prices increased by 228%. Eureka — a driver of long-term oil prices.

It stands to reason. If the oil price falls below the marginal cost of production – production stalls until the price rises. That’s simple economics.

All that lovely Bakken crude

 

Further, it is not as easy as many suppose to disrupt that price with, for example, an explosion of oil production in the Bakken oilfields of North Dakota or the tar sands of western Canada. Bakken crude sells at a very deep discount, already, to Brent Crude — the spread has exceeded $30 per barrel at times.

That’s because of the lack of pipeline and railcar capacity to move it to international markets.

Which brings us back to KiOR — and the possibility that, long-term, the future of the company may focus less on building complete field–to-wheels fuel capacity via hydrotreating intermediates onsite, at its own facilities.

It has a future — perhaps a very big one— not so much as a supplier of finished fuels to its own customer base of fuel buyers, but as a supplier of crude-equivalent feedstocks to existing refinery infrastructure.

That’s where that $92 a barrel becomes important — not the $100-$115 retail value of the barrel, but the production cost of that barrel.

Recovering prehistoric algae as an energy business

 

You see, at the end of the day what you get from punching holes in the ground (i.e. oil exploration) is a well tapping into some prehistoric algae which — over 60 million years or so — has been transformed by Nature into crude petroleum and natural gas.

Nature made the biomass for free — via its own cocktails of carbon dioxide, water, and trace nutrients. Then, Nature conveniently densified the biomass for free, too. What we pay for is the harvest — it’s the energy equivalent of hunter-gatherer.

With a barrel of oil, you get around 5.8 million BTUs. That’s around $15.86 per million BTUs for the marginal cost of production.

In the case of KiOR, you have to pay for the biomass — the aforementioned $72 for each bone-dry ton. In that ton, you start with 14-20 million BTUs. So, you are paying $3.60-$5.14 per million BTUs for the wood.

The problem is, you can’t burn wood in a car engine — and even if you could, you think range anxiety for battery-electric vehicles is bad. Sheesh!

So, here’s the challenge, and here’s the prize, and a caveat.

 

Challenge? Densify the wood biomass into a crude-equivalent refinery feedstock for less than $12.72 per ton of biomass, including your operating and capital costs and your cost of capital.

Prize? Well, the International Energy Agency expects that energy demand will rise some 50 percent over the next 25 years — rising demand that you can serve.

Caveat? Lowest-cost producer wins. No one is likely to buy your $92 per barrel intermediate if there’s a $90 barrel available.

Catalytic fast pyrolysis

 

Where does this all lead us? In the case of making crude-equivalent intermediates — catalytic fast pyrolysis has emerged, of late, as the lowest-cost path towards answering that challenge. It is not entirely clear this class of technologies will actually reach scale — and reach the targeted costs — and find boatloads of affordable capital any time soon. But the signs are quite encouraging.

Catalytic fast pyrolysis — that’s what KiOR does. That’s why so many people watch their development with such attention. Why there is such an intense interest in their progress that media have been snooping around the plants, trying to get information on production prior to the company’s quarterly earnings call (earnings are expected to be reported March 25, according to NASDAQ).

Other paths to biofuels heaven

 

Nor is it entirely certain that crude-equivalent intermediates are the only viable path to market. For instance — there is the entire class of alcohol fuels, which are controversial in the US and the EU because of infrastructure issues, but are well-established in Brazil.

Crude-equivalent intermediates certainly are attractive — if one of your goals is to avoid finding out how much the oil & gas industry is willing to spend to send you to the devil, if you come up with a technological path to affordable meeting transportation fuel demand that doesn’t pass through oil refineries.

The oil industry’s anguish over alcohols is as profound as the Prohibition Party’s anguish used to be.

Back to KiOR

 

So — that brings us back to KiOR, and its prospects. We’ll know quite a lot more on the next earnings call. For now, they are in the business of making finished fuels and earning revenues from RINs and fuel sales.

For sure, right now they are proving the validity of their process to investors. One might speculate that they are also surrounding their IP — their secret sauce — with a complete path to market so that never become the captive of a refiner & marketer who can form a barrier to entry between their crude and the downstream gas station. With ethanol producers we have seen, ahem, where that can lead.

Long-term — we don’t see a process that can turn that much southern yellow pine (and other biomass, down the line) into sub-$92 crude-equivalent intermediates having a market cap of $584 million, as KiOR has today. If the technology does not work out — well, it’s not very valuable, is it? But if it does work out – as sports broadcaster Keith Jackson used to say “Whoa, Nelly!”.

Why? Looked at it as a technology that converts resources into proved reserves (valued at, say, $20 per barrel, or the spread between Brent crude and the marginal cost of production) – KiOR is valued at around 29 million barrels of oil. That’s the volume of oil you get from converting 400,000 tons of wood into oil refining intermediates.

But there’s a lot more wood out there.

The above-ground oil field a/k/a the US wood basket

 

The US Department of Energy, in their Billion Ton update study in 2011, estimated that there would be 120 million tons of wood biomass available, per year, at $80 per ton, that could be sustainably used for bioenergy. The figure declines to around 85 million tons at $40 per ton.

That’s a big spread.

So — in all things biofuel – keep that cost of densification very much in your mind.

The Compression Spread

 

In traditional oil and agricultural economics, we think about the the cost of liberating a known molecule. In the new bioenergy — getting biomass sufficiently densified, via technology instead of Nature — may open the door to ultra low-cost feedstocks and some amazing upside value for the liberators and their inventions.

That’s the compression spread.
 

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.

Can KiOR soar?

http://www.biofuelsdigest.com/bdigest/2012/12/21/can-kior-soar/

Jim Lane | December 21, 2012 

 

By: Robert Rapier, Energy Trends Insider
Last month KiOR announced the start of production of biocrude from their Columbus, Mississippi plant. KiOR CEO Fred Cannon stated in an earnings call that when the product shipped it would be “the world’s first cellulosic gasoline and diesel fuel products.” While I can immediately think of at least 4 other companies who previously made cellulosic diesel and/or gasoline — Choren , Rentech, Envergent, and Community Power Corporation — we can forgive Mr. Cannon for this oversight in his excitement.

Some readers may recall that a year ago I argued that KiOR’s then $2 billion market capitalization was much too high based on the technical risks, the value of competing companies, and the fact that ultimately they were more like an oil refiner than a high tech company.

Since that column was published, the market cap of KiOR has plunged to $636 million. But now that production has begun, I have been asked several times whether my opinion of KiOR has changed. 

Bear in mind that my view was never that KiOR had an unworkable or unscalable technology (although a number of incorrect or misleading facts about the company’s process were widely reported). But my view was that they still had a very rough path to commercialization, and their value a year ago reflected the irrational exuberance that existed across the sector. I still believe that KiOR’s odds for long-term success are long, but they have hired competent people to give them the best chance of making it.

Initial production is an important milestone, but other important milestones are ahead. Many pitfalls await, and most companies in this space will fail to navigate them. But their technology is legitimate. Further, the Department of Energy forecast earlier this year that while the current cost to produce gasoline from pyrolysis oil is well above the cost to produce gasoline from petroleum, by 2017 the cost of pyrolysis-based gasoline is projected to fall to $2.32/gallon.

Biofuels Digest reported that KiOR’s projected production cost upon scale-up in 2013 would be $5.95/gallon. Further projections are that as they proceed up the learning curve and scale further that the cost of production would fall to $3.73 per gallon in 2014, and then to $2.62 per gallon at full-scale.

The company faces risks around biomass costs, natural gas costs (a very important input which becomes clear when one notices that reported fuel outputs of 11 million gallons per year have much greater energy content than the reported wood inputs of 500 bone dry tons per day), and their ability to raise additional funds that will be required for continued scale-up.

As a result, I think KiOR’s share price will continue to be volatile. In the short term, continued incentives for 2nd generations biofuels will help ease their burn rate. But as long as government support of 2nd generation biofuels remains after the fiscal cliff dust settles, KiOR has a realistic chance of crossing the Valley of Death and becoming a company that could maintain a viable business.

This article was republished with permission from Consumer Energy Report under a content partnership with Biofuels Digest, and originally appeared in Energy Trends Insider, a free newsletter from Consumer Energy Report focusing on financial and investment issues in the energy industry.

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.