Fram Renewable Fuels Invests $91 Million To Expand Its Manufacturing Facility In Hazlehurst, Georgia

http://www.areadevelopment.com/newsItems/9-14-2012/fram-renewable-fuels-expansion-jeff-davis-county-hazlehurst-georgia883351.shtml

Area Development Online News Desk (09/14/2012)

Fram Renewable Fuels, a company that supplies of wood pellet fuel, will invest $91 million to expand its operations and open a second production plant in the Jeff Davis County city of Hazlehurst, Georgia, creating 80 new jobs.

“Alternative energy manufacturers such as Fram Renewable Fuels help keep Georgia top of mind as a strategic location for this industry, increasing our prominence around the world as a go-to location for these businesses,” Gov. Nathan Deal said. “Georgia is fortunate to have an abundance of forestry resources for Fram to expand its wood pellet operations, and meet the growing needs of its global customers.”

Headquartered in Richmond Hill, Fram Renewable Fuels currently operates Appling County Pellets in Baxley, a few miles east of its proposed plant in Hazlehurst. Fram said its new plant in Hazlehurst will help the company meet the expanded needs of its customers in Europe that use wood pellets for energy utilities. This plant will have a total production capacity of 500,000 metric tons of wood pellets per year, and will use pine logs and sawmill residuals as feedstock. Upon completion of the new manufacturing plant, Fram will be positioned among the top wood pellet export companies in the United States, exporting more than 900,000 metric tons of wood pellets annually.

“This is another step toward Fram’s mission to be a significant, reliable and cost effective supplier of wood pellets, and we are very happy that we were able to locate in an area where we already have roots,” said Fram President Harold Arnold. “The pellet business will continue to be a learning process and is no ‘walk in the park.’”

Fram’s Hazlehurst wood pellet manufacturing plant will be strategically located in South Georgia’s “wood basket,” providing efficient access to that region’s raw materials and other forestry products. This location also provides the company with convenient access by rail to the Port of Brunswick, where Fram will export its finished wood pellets to Europe from the port’s Logistec Terminal.

The Governor’s Office said in addition to the direct jobs to be created, this expansion is expected to lead to the creation of indirect job opportunities in South Georgia’s forestry industry to support the new pellet plant as increased amounts of wood are harvested to supply the plant. These new opportunities are expected to have a near-immediate impact in communities throughout this region of the state.

The Georgia Department of Economic Development said it collaborated with the Joint Development Authority of Jeff Davis County, Hazlehurst and Denton to manage this project, which also received a loan guarantee from the US Department of Agriculture as part of a Farm Bill to support establishment of renewable energy.

“This expansion is significant not only for Fram Renewable Fuels, but also for Georgia’s growing alternative energy sector,” said GDEcD Commissioner Chris Cummiskey. “From our plentiful natural resources to our high-performing logistics infrastructure, Georgia is uniquely positioned to be the best place for wood pellet manufacturers to operate. As the global demand for this product grows, we look forward to partnering with Fram and others in this industry to create future opportunities.”

One of the Decade's Biggest Examples of Wasteful Government Spending

http://moneymorning.com/2012/08/31/one-of-the-decades-biggest-examples-of-wasteful-government-spending/

August 31, 2012

 

By David Zeiler, Associate Editor, Money Morning

In February we told you that despite nearing $15 trillion in debt - now close to $16 trillion - the U.S. government decided to spend $592,000 last year to figure out why chimpanzees throw poop.

Now we've discovered yet another example of wasteful government spending that has burned up more than $1.5 billion of your tax dollars - with nothing to show for it.

We're talking about the fruitless pursuit of a biofuel known as cellulosic ethanol, surely one of the greatest government boondoggles of the past decade.

Cellulosic Ethanol Production: What You're Paying For

Both Republican and Democratic administrations have showered companies with grants and loan subsidies with the goal of turning materials like wood chips and switch grass into an ethanol fuel that could be used in automobiles.

 

 The 2007 Energy Independence and Security Act was so optimistic government spending could jump-start this unproven technology that it projected annual cellulosic ethanol production of 250 million gallons by 2011, 500 million gallons by 2012, and 1 billion gallons by 2013.

For good measure, the law also required oil refineries to buy the cellulosic ethanol to mix with their gasoline products, just as they do now with corn-based ethanol.

But five years and more than $1.5 billion later, cellulosic ethanol production is just a drop in the bucket.

Literally.

Until this year, no cellulosic ethanol had been commercially produced. So far this year, the sum total is 20,000 gallons produced in April (none was produced in May or June, the latest months for which data is available). 

 

That amounts to 0.04% of 2012's quota. 

Meanwhile, the government keeps throwing more tax dollars into the black hole of cellulosic ethanol, hoping someone will figure it out.

The Costly Dream of Cellulosic Ethanol 

 

Back in 2007, about a half-dozen companies received most of the initial wave of government spending to launch cellulosic ethanol production.

One company, Range Fuel, received a $76 million grant from the Energy Department and an $80 million loan guarantee from the Agriculture Department. Range's factory was supposed to process wood chips into 10 million gallons of ethanol a year.

The Range plant never produced any ethanol. Forced into liquidation, the Georgia factory was sold in January for $5.1 million.

Another company, Cello Energy, received no government money but was key to the EPA's rosy estimates of cellulosic ethanol production. Cello was projected to supply 70 million gallons in 2010, about 70% of that year's mandate. The company declared bankruptcy in 2010 without producing a drop.

The government brushed off those failures and instead turned its funding machine up a notch.

Last September, the Energy Department loaned Spanish-based Abengoa Energy $134 million to build a cellulosic ethanol plant in Kansas. Abengoa was also a recipient of a $76 million grant from the DOE back in 2007. 

The Energy Department said in December it would provide up to $80 million to help Mascoma build a cellulosic ethanol facility in Kinross, MI.

And just last week the Department of Agriculture announced a $99 million loan guarantee to Italian-owned Chemtex to build a plant in Sampson County, GA.

While it's possible the newer projects might bear fruit, it sure looks like the government is wastefully throwing good money after bad.

Forced to Buy a Biofuel That Doesn't Exist

Despite the lack of commercially available product, however, the Environmental Protection Agency (EPA) requires the oil companies to buy a fixed amount each year or pay a fine via "waiver credits."

Last year the EPA lowered the cellulosic ethanol requirement by nearly 98% to 6.6 million gallons. But with zero gallons available to purchase, the oil companies were forced to pay a $6.8 million penalty.

"As ludicrous as that sounds, it's fact," Charles Drevna, president of the National Petrochemicals and Refiners Association, told Fox News. "If it weren't so frustrating and infuriating, it would be comical."

For 2012, the EPA has lowered the requirement from 500 million gallons to 8.65 million gallons. However, with just 20,000 gallons produced so far, it looks like oil companies will again pay millions in penalties - for not buying something that's just plain unavailable.

"Congress subsidized a product that didn't exist, mandated its purchase though it still didn't exist, is punishing oil companies for not buying the product that doesn't exist, and is now doubling down on the subsidies in the hope that someday it might exist," scolded a Wall Street Journal editorial. "We'd call this the march of folly, but that's unfair to fools."

Why Cellulosic Ethanol Has Flopped

Turning grass and wood chips into a renewable fuel source sounds like a great way to reduce the country's dependence on fossil fuels, but making it a reality has proven very, very difficult.

Compared to corn-based ethanol, cellulosic ethanol is much more complicated to produce and costs about twice as much.

While cellulosic ethanol has existed in the laboratory for decades - the Germans first created it in 1898 -- the mass production riddle has remained unsolved.

That's also why relatively few private investors have gotten on board.

"It is expensive and it's difficult to do and it's relatively untried on a commercial scale," Ned Stowe, policy associate for the pro-renewable energy think tank, the Environmental and Energy Study Institute, told the Tampa Bay Times. "For private investors, it's seen as a risky venture because of the technological unknowns."

Solutions to those issues still may not make cellulosic ethanol viable as a significant fuel source.

Just to replace 10% of annual U.S gasoline consumption - about 13.4 billion gallons - cellulosic ethanol factories would need to process enough biomass each year to fill a line of semi-trucks stretching to the moon.

Last fall, the National Academy of Sciences weighed in with a report on the struggles of cellulosic ethanol. The main issue, NAS said, is "the high cost of producing cellulosic biofuels compared with petroleum-based fuels, and uncertainties in future biofuel markets."

In short, cellulosic ethanol isn't yet cheap enough relative to gasoline to make it a practical fuel option.

So, given the obvious futility of making this particular biofuel work, why does the government keep wasting money on it?

Politics, of course.

The government's generosity has helped the overall ethanol industry become a $42 billion behemoth that also happens to employ about 90,000 Americans. And farmers have become very fond of the various government subsidies they receive for growing ethanol "feedstock" such as corn.

"Ethanol would likely disappear from the market place absent federal subsidies and mandates," Sterling Burnett, senior fellow at the National Center for Policy Analysis, told Forbes. "Like so much of the federal pork bestowed upon special interests, ethanol is bad for the economy, bad for consumers and bad for the environment."

 

Largest Pellet Plant Opens at Waycross

http://woodbioenergymagazine.com/blog/2011/largest-pellet-plant-opens-at-waycross/

May 11, 2011

Largest Pellet Plant Opens at Waycross

 

Georgia Biomass held its official ribbon cutting ceremony in mid-May at its new operation just outside Waycross, Ga., hosting dignitaries and officials from around the world at the opening of the world’s largest wood fuel pellet plant. The facility, scheduled to be at full capacity by this fall, can produce up to 750,000 metric tons annually.

The facility is a venture of major German utility RWE and its bioenergy subsidiary, RWE Innogy. According to RWE Innogy CFO Hans Bunting, the Georgia Biomass project came in two months ahead of schedule and under budget. RWE COO Leonard Birnbaum noted the almost $200 million plant is only a small part of the $8 billion a year RWE invests worldwide, but is very important to the company, which is the world’s largest biomass buyer and biomass power producer. The company operates more than 50,000 giga watts of power capacity, “But the challenge is provide more of this energy sustainably,” he added.

A good portion of the plant’s output may be heading to RWE’s existing coal-fired plant in Tilbury, United Kingdom, which is being converted to biomass and would become the largest biomass-fired power plant in the world.

The first pellets were produced in March, and the Waycross facility is now ramping up toward full production. With an annual feedstock procurement budget of $40 million, the plant will take around 250 incoming log loads daily. The facility will take in more than 1 million metric tons of logs annually.

Local, regional and state officials were on hand for the ceremony, and project executives complimented all involved for creating a positive business environment that allowed the plant to go forward.

“Government doesn’t create jobs, but it can create an environment for jobs to flourish and then get out of the way,” said Georgia Lt. Gov. Casey Cagle. “We’re happy to welcome a world-class industry to a world-class state.”

Federal export initiative targets wood pellets and chips

http://biomassmagazine.com/articles/5164/federal-export-initiative-targets-wood-pellets-and-chips

 

By | December 09, 2010

• 
  The U.S. government anticipates a robust export market for wood pellets and chips as more countries expand their use of biomass for power.
  

A recent government report has targeted wood pellets as one of the most promising export markets for U.S. companies, and has indicated that the USDA will expand its annual report on biofuels to include analysis on biomass in the form of wood pellets and chips in relevant countries, to provide the U.S. industry and policymakers with information on the sector’s growth, export opportunities in emerging markets and policy updates.

The report is a result of the Renewable Energy and Energy Efficiency Export Initiative, a coordinated effort to promote renewable energy and energy efficiency exports in the U.S. Seven federal agencies, including the U.S. DOE and Department of Commerce, are collaborating on the program, which is part of President Obama’s National Export Initiative.

The NEI is divided into two parts—assessing current competitiveness of U.S. renewable energy and energy efficiency goods and services, and developing an action plan of new commitments that facilitate private-sector efforts to significantly increase U.S. renewable energy and energy efficiency exports within five years.

According to the RE&EE report, biomass equipment and feedstock exports from 2007 to 2009 were about twice the amount of imports. The U.S. exported $176.4 million in biomass energy equipment and feedstock in 2009, with an annual average growth of 54 percent between 2007 and 2009. Imports during the same period were $349.2 million worth of biomass equipment, with an average annual import growth of 28 percent.

The report goes on to recognize that  several countries are expanding their use of biomass for power, either by building biomass-specific power plants or by co-firing biomass in existing coal-based power plants. “Many European countries already obtain a substantial portion of their electricity from biomass, most notably Sweden, which produced more energy from biomass than from oil in 2009,” it stated. “Several developing countries have recently developed biomass power capacity, including Brazil, Costa Rica, India and Mexico, but developing countries that consume biomass resources often use their own domestic resources rather than import feedstock from the U.S.”

The U.S. currently exports wood pellets and wood chips to Europe for co-firing in existing coal plants, and as more countries enact carbon reduction requirements, co-firing could become increasingly common, the report says.  Future exports in the biomass industry are likely to be in the form of consulting, engineering, procurement and financial services, all industries in which the U.S. is likely to remain competitive. In addition, U.S. companies should find relevant export opportunities in countries with little available feedstock or without a local biomass industry, particularly if strong government policy in those countries supports the use of biomass for power.

For more on the Renewable Energy and Energy Efficiency Export Initiative, visit http://export.gov/reee/.

Alter NRG signs 22-month testing agreement extension with Coskata

  http://biofuelsdigest.com/bdigest/2010/09/24/alter-nrg-signs-22-month-testing-agreement-extension-with-coskata/

Thomas Saidak | September 24, 2010

In Canada, Alter NRG is pleased to announce it has signed a twenty-two month extension to its agreement with Coskata, to provide testing services to support Project Lighthouse for a minimum value to the Company of US$4.1 million and up to US$5.6 million if all contemplated tests are performed.

This includes monthly fixed payments totaling US$2.46 million over the term.  Lighthouse was completed in late 2009 and since that time, Alter NRG and Coskata have been converting woodchips into ethanol and optimizing the overall process. Alter NRG converts the woodchips into a clean tar free syngas and Coskata converts the syngas into ethanol using its patented biorefinery technology.

Mark Montemurro, CEO of Alter NRG, added “We are pleased to continue our relationship with Coskata, an acknowledged leader in second generation ethanol production. In the short-term the monthly fixed payments will cover our operating costs at the Westinghouse Plasma Centre. In the longer-term, the market for non-food based ethanol, which is mandated to grow by the US government, represents another market opportunity for Alter NRG.”