Sundrop Fuels To Build Nation's First Commercial Biofuels Plant In Louisiana

http://www.huffingtonpost.com/2012/05/24/sundrop-fuels-to-build-na_n_1543759.html

Posted: 05/24/2012 4:29 pm Updated: 05/24/2012 4:29 pm

A Colorado-based biofuels company announced a partnership Wednesday to build what will be the nation's first commercial biofuels plant with an expected capacity for producing about 3,500 barrels of renewable gasoline per day.

Sundrop Fuels, Inc., based in Longmont, Colo., expects to break ground on the $450 million plant planned near Alexandria, La. in December, about 200 miles northwest of New Orleans.

According to the Longmont TimesCall, Sundrop's technology was partially developed at CU Boulder and the National Renewable Energy Laboratories.

A press release states the company is partnering with German-based technology and engineering supplier ThyssenKrupp Uhde to complete designs for the plant.

The plant will convert sustainable forest residues and thinnings with natural gas into bio-based "green gasoline" using a production path that integrates gasification, gas purification, methanol synthesis and a methanol-to-gasoline process. The planned result will be ready-to-use inexpensive car fuel.

Brent Shanks, a chemical engineer at Iowa State University who studies and develops the conversion from biomass to fuels tells Biomass Magazine that green gasoline provides an alternative to ethanol:

That's significant partially because, looking forward to biofuels, the key question is what is the right biofuel? Ethanol and biodiesel have been initially selected because the technology is known. As we go forward talking about second-generation biofuels, it's a broader picture we need to consider. It is important as a country to have a portfolio of approaches for second-generation biofuels.

Part of the problem with ethanol is a concern that it has to be diluted with gasoline to be useable in current engine systems, it's corrosive, and among scientists it's still proving to be a disappointment.
From a 2006 study by Proceedings of the National Academy of Sciences of the United States of America:

Even dedicating all U.S. corn and soybean production to biofuels would meet only 12% of gasoline demand and 6% of diesel demand.

Sundrop Fuels' process involves a high-speed radiant particle heat transfer, also called their RP Reactor, to gassify cellulosic biomass material at very high temperatures. The result is a molecular structure that looks like conventional gasoline, and the company claims it requires less water to produce.

The company plans to follow up the facility with larger-scale plants to produce a combined production capacity of more than one billion gallons by 2020.

Sundrop Fuels Moving Forward With 'Green Gas' Plant Near Alexandria

http://www.cenlachamber.org/Chamber/ChamberNews/Newsroom/tabid/812/EntryId/650/Sundrop-Fuels-Moving-Forward-With-Green-Gas-Plant-Near-Alexandria.aspx

by Billy Gunn, The Town Talk, Alexandria, Louisiana, May 22, 2012 -- 

Sundrop Fuels will announce today that it has entered a partnership with worldwide engineering and technology firm ThyssenKrupp Uhde for construction of its planned "green gasoline" production plant north of Alexandria.

In an email to The Town, Talk Sundrop also said it remained confident that beleaguered Chesapeake Energy's current problems would not stop construction. Chesapeake, an Oklahoma City-based natural gas exploration and production company, pledged $155 million last summer to buy half of Sundrop.

Chesapeake's stock has fallen precipitously in the past months as the company and its chief executive, Aubrey McClendon, deal with 10-year-low natural gas prices and questions about spending, corporate governance and immediate cash shortfalls.

"Chesapeake Energy is in full support; its internal situation does not affect our company or business strategy," Sundrop spokesman Steven Silvers said in an email.

A Chesapeake spokesman did not immediately return a request for comment Tuesday.

Silvers said Sundrop will complete financing for the plant in the fourth quarter of this year.

Louisiana Department of Economic Development Secretary Stephen Moret said Sundrop has told his office that Chesapeake's investment "is secure" and that the project "remains on track."

Construction for the plant will be in December on a 1,200-acre spread near Cowboy Town, with plant completion sometime in 2014, Silvers said.

Sundrop announced its plans to build the plant Nov. 22, 2011. The company will announce today a partnership with Uhde Corporation of America, a unit of ThyssenKrupp Uhde USA Inc. 

ThyssenKrupp Uhde provides engineering for chemical plants and refineries worldwide.

"More than 70 engineers from the two companies are now working together to complete designs for the Sundrop Fuels plant, which should begin construction late this year," Sundrop said.

The biofuels plant will be "the nation's first bona fide commercial 'green gasoline' production facility," the company said. It will yield "up to 50 million gallons of renewable gasoline annually while also serving as proving ground for Sundrop Fuels' proprietary biomass conversion technologies" for use in future plants, the company said.

Sundrop's technology will combine "forest residues and thinnings" with natural gas in an extra-hot process that the company has said wastes nothing and produces inexpensive car-ready fuel.

Plant designers are employing ThyssenKrupp Uhde's "High Temperature Winkler" gasification process in the drawings as well as Sundrop processes.

The plans are ambitious: After the Alexandria plant's 50 million gallon a year production, the company is to start work on bigger refineries that by 2020 will have production capacity of 1 billion gallons annually, Sundrop said.

Sundrop has not yet determined the sites of the future plants.

Last year local economic development officials and the Louisiana Department of Economic Development announced Sundrop's decision to locate on the acreage north of Alexandria off Interstate 49. They said then that once it's built the plant would employ 150 directly. There could be up to 1,100 indirect jobs created by the plant, officials said.

The plant is being built near a large-diameter natural gas pipeline that carries Haynesville Shale production from north Louisiana to processing facilities in south Louisiana. The pipeline will provide the natural gas needed for Sundrop's plant.

Greene County is location for company turning wood chips into fuel

  http://www.tuscaloosanews.com/article/20120506/NEWS12/120509887?p=3&tc=pg

Published: Sunday, May 6, 2012 at 3:30 a.m.

By Patrick Rupinski
Staff Writer 

 

Just days before Christmas, Coskata Inc., a young company based near Chicago, filed its plan to sell stock to the public for the first time.

Its goal is to raise $100 million in the stock sale and use some of that money and cash on hand, plus a $87.9 million U.S. Department of Agriculture-backed loan, to build its first commercial plant to make biofuel from wood wastes. Listed in its proposed initial public offering, or IPO, is the site for that proposed plant — Boligee, a town of several hundred people in Greene County.

Coskata is one of several bio-energy projects that have popped up in West Alabama within the past few years in an industry that is heating up big time. 

Biofuels Digest, a daily that follows the industry, noted that Coskata is the 14th biofuel company nationally to propose an IPO since the latest biofuels boom started two years ago.

No date has been set for when Coskata’s stock will go on sale, and Coskata spokesman Matthew Hargarten said the company could not discuss its plans other than to refer to information in its 189-page IPO statement, which details the project and the company’s history. Such no-comment periods are common when a company is about to trade stock for the first time.

But Coskata’s IPO statement outlines what could be happening during the next few years in Greene County.

“The initial production capacity of this facility, which we refer to as Flagship, will be 16 million gallons of ethanol per year,” its filing said. It said it expects to have that first-phase portion of the plant built by 2013 and operating shortly there-after. 

A second phase of construction will follow and be completed by 2015. That expansion will add capacity to produce another 62 million gallons of ethanol. “We expect to build out Flagship to achieve total production capacity of 78 million gallons of ethanol per year,” the IPO filing said, when the plant is in full operation.

The Warrenville, Ill., company made it clear why it picked Boligee: “The feedstock for this facility, wood chips and wood waste, is in plentiful supply in the region and allows us to capitalize on existing wood gathering and processing infrastructure,” the filing said.

“When fully built out, we expect Flagship to produce fuel-grade cellulosic ethanol at an unsubsidized cash operating cost of less than $1.50 per gallon.”

Ethanol is blended with gasoline. Most of the ethanol used now comes from corn, but biofuel companies are looking at other sources.

The forestry industry and its wood and wood products have long been a major part of Alabama’s economy. Renewable forests cover much of the state and thousands of jobs are tied to that abundant natural resource. That industry also is a major state exporter. 

Alabama’s Labor Market Report for April estimated 12,500 people work in wood product manufacturing. Another 12,300 Alabamians work in paper manufacturing, with 8,600 of those working in the state’s pulp, paper and paperboard mills.

A breakdown on how many people work in the state’s logging and forestry jobs was less precise. The report indicated natural resources, which includes logging, natural gas and oil production, has an estimated 6,400 workers.

Coskata’s IPO statement did not indicate how many employees it would have at the Boligee facility.

In January 2011, when the state announced the plant would be built in Boligee, state economic development officials estimated it could create about 300 construction jobs and could generate up to 700 jobs at the plant and in the harvesting and hauling of wood biomass once it is in full operation.

Coskata’s IPO filing said the company picked the Boligee site not only because of its proximity to a plentiful supply of wood chips and wood waste in West Alabama, but because it is close to large ethanol markets in what it described as “the under-supplied Southeast ethanol market.”

With a 10-percent ethanol blend with gasoline, the Southeast needs almost 1 billion gallons per year, it said.

Coskata also said it received strong support for the project from the state and county governments and that it has received the key permits for the plant, including air-operating and water-discharge permits.

Coskata is not the only company looking at West Alabama’s wood waste products as a source for fuel.

Tuscaloosa-based Westervelt Co. is building a plant in Aliceville in Pickens County that will make wood pellets that will be exported to Europe, where they will be burned at electrical utility plants.

And at Westervelt’s Moundville sawmill in Hale County, turbines were added last year to produce electricity that is generated from the burning of sawdust and waste wood used to heat the plant’s wood-drying kilns. The turbines produce enough electricity to supply the power needs of 3,000 homes a year. Alabama Power Co. has teamed up with Westervelt on that project.

One uncertainty facing the bio-energy industry is the costs and availability of the fuel sources.

Several years ago, switchgrass was being hailed as a source of clean energy that could be used to generate electricity, and Alabama Power blended it with coal at its Gadsden generating plant.

New discoveries of natural gas, however, have made that cleaner-burning fuel a more economical energy source. 

“At this time, we are not using biomass at Plant Gadsden, which is currently using natural gas as its primary fuel versus coal or coal blended with biomass,” said Alabama Power spokesman Michael Sznajderman. “The plant has the ability to switch pretty easily from one fuel to another, so we could decide to utilize biomass again at the plant in the future.”

Some biomass is being used at the utility’s Coosa Pines facility in Childersburg, he said.

Wood waste products are not the only source of biofuel in West Alabama.

In Demopolis, Sweet Water Biofuels is converting fats from discarded catfish wastes at catfish processing plants into an advanced biofuel used in industrial generators. The company has about 50 employees in Alabama, and has begun collecting used cooking oil and grease from restaurants for conversion into its clean-burning biofuel, said Gene Pugh, the company’s regional sales manager.

 

 

 

Second Try: LanzaTech Grabs Failed Biofuel Refinery in Georgia Pine

http://news.nationalgeographic.com/news/energy/2012/01/12019-range-lanzatech-cellulosic-biofuel-ethanol/

Range Fuels attracted millions of dollars from private investors and both the Bush and Obama administrations before the failure of its Soperton, Georgia advanced biofuel plant. New Zealand's LanzaTech aims to coax success out of the plant with a different technology.

Photograph courtesy LanzaTech

Josie Garthwaite

For National Geographic News

Published January 19, 2012

The sandy soils of central Georgia nurture growth of bunchy wiregrass and longleaf pine. Here between the blackwater Ohoopee and Oconee rivers, about 160 miles (260 kilometers) southeast of Atlanta, a fortune has been sunk in hope of converting the abundant local biomass into fuel.

One of the more spectacular failures in the renewable energy industry—the Range Fuels collapse—played out here. Less renowned than the bankruptcy of Solyndra last September, Range’s failure that same month similarly involved the loss of millions of dollars in U.S. government funds and private investment, all wagered on an innovation that promised to propel an old technology to an exciting new level.

But where bankruptcy seems to have spelled the end for Solyndra and that California solar company’s technology, a new chapter is now being written in the effort to brew advanced biofuel in the “Million Pines City” of Soperton, Georgia.

Earlier this month, a New Zealand-based carbon-capture and energy startup called LanzaTech bought Range Fuels’ idle biorefinery in a foreclosure auction for just $5.1 million. That’s a bargain basement price, considering the money that Range Fuels had attracted from private investors and from both the Bush and Obama administrations for its cellulosic ethanol plant here: more than $160 million in venture capital, a $76 million grant from the U.S. Department of Energy in 2007, a $6.25 million grant from Georgia in 2008, and an $80 million loan guarantee from the U.S. Department of Agriculture in 2009.

LanzaTech says it has a business plan and technology that can coax success out of the Range Fuels plant. And one of the primary backers of LanzaTech’s efforts here is the same venture capitalist who helped bankroll and promote Range, technology investor Vinod Khosla. It’s now up to LanzaTech to see if it can turn the promise of Soperton into a real success for advanced biofuels and investors like Khosla.

High Hopes for Cellulosic

Producing ethanol from cellulosic plant sources has been seen as the Holy Grail of the renewable fuel industry. The U.S. corn belt may have perfected the art of fermenting its crop to produce fuel alcohol, but controversy abounds over the water use, the energy input for cultivating corn, and the limits and long-term viability of turning an edible product into fuel. That’s why President George Bush, in his 2006 State of the Union address, pledged to fund research to commercialize ethanol from non-edible plant material by 2012. Cellulosic ethanol companies also were in the first wave of alternative energy technologies backed by President Obama.

Although cellulosic ethanol can be produced in the laboratory and at pilot scale, the genetically engineered enzymes or heat needed to break down the plant material into sugars is expensive. Not a single company has succeeded in scaling up commercial cellulosic ethanol production in the United States six years after President Bush’s vow.

Oil companies in fact were fined $6.8 million in 2011 for failure to meet the U.S. Environmental Protection Agency’s requirement that 6.6 million gallons of cellulosic ethanol be blended into gasoline and diesel last year. Indeed, that target marked a dramatic scaling back of the goal Congress set in 2007. Lawmakers originally envisioned that 250 million gallons of cellulosic biofuel would be helping to fuel U.S. vehicles by 2011. Although that goal proved overly ambitious (in part because Range Fuels failed to meet production estimates), it would have displaced only a small fraction of oil dependence in a nation that burned 8.8 million barrels, or 370 million gallons, of motor gasoline per day in 2011, according to the U.S. Energy Information Administration.

If things had gone as planned when Congress was setting cellulosic ethanol goals, a large volume of that advanced biofuel would have been produced in Soperton, the only incorporated town in Treutlen County, Georgia.

Range Fuels (formerly called Kergy, Inc.), of Broomfield, Colorado, set out to establish a biorefinery here that would produce 100 million gallons of cellulosic ethanol per year. There would be plenty of feedstock in the “Million Pines City," named after a local plantation where, in the late 1920s, a cotton farmer pioneered the cultivation of pine trees as a crop. Today, pine tree plantations dominate the landscape, and forestry makes up some 80 percent of all land use.

Range had a two-step process. First, it would use heat, pressure, and steam to produce synthetic gas from biomass. Step two would be converting the gas to ethanol using chemical catalysts.

Construction began in an industrial park here in November 2007, but by 2009 Range Fuels had fallen behind and dramatically reined in production goals. In August 2010, the company squeezed out its first batch of methanol, a wood alcohol fuel used in racing and some industrial applications. (Range Fuels said at the time that its methanol would be used to produce biodiesel.) But the facility ran into technical problems with the gasifiers and the system for feeding in biomass, and it never did produce any cellulosic ethanol that would substitute for the corn ethanol now used in cars and trucks.

Range Fuels closed the plant in January 2010, and filed for bankruptcy in September 2011. At the time of its failure, it had received only half of its expected federal grant and loan guarantee monies, amounting to a loss of more than $85 million in public funds. The USDA required the foreclosure sale this month to recoup some of its losses. “LanzaTech is just looking to capitalize on a bargain, really,” said Andrew Soare, an alternative fuels analyst with the research firm Lux Research.

The fact that Range Fuels and LanzaTech share a lead investor—Vinod Khosla’s Khosla Ventures—has raised eyebrows because LanzaTech bought the Soperton site for a fraction of the amount spent developing the facility. And both companies have talked about big dreams for the site. 

“Right now the equipment is sized on the order of 4 million gallons,” LanzaTech CEO Jennifer Holmgren said in an interview. “But, you know, some day I’d like to build bigger units there. It’s a lot of land. It’s a lot of wood residue. That site’s really not meant for a little facility. I can imagine making 100 million gallons of fuel there,” perhaps within five years.

A New Approach

However, the companies differ when it comes down to the process for transforming the biomass of Treutlen County, bordered by the Ohoopee and Oconee rivers, two tributaries of the mighty Altamaha. LanzaTech, which has named the old Range Fuels site Freedom Pines Biorefinery, plans to use a gasifier to produce synthetic gas from biomass. That much is the same. But while Range Fuels planned to use chemical catalysts for the next step, LanzaTech’s technology uses microbes (specialized through genetic modification and arrested evolution) to ferment the syngas.

At Freedom Pines, LanzaTech intends to initially produce chemicals such as butanol and propanol, rather than ethanol, which sells in high volume but is a product that results in a relatively low profit margin, Soare said. This is new ground for LanzaTech. Since its founding in 2005, LanzaTech has concentrated its efforts mainly on capturing carbon monoxide from industrial flues, and using its proprietary microbes to convert the gas into ethanol fuel.

“Our organism gets carbon and energy from a carbon monoxide molecule,” Holmgren said. “One of the best places to find carbon monoxide is in steel mills,” where the gas would normally be flared and released into the atmosphere as carbon dioxide. And one of the best places to find steel mills, she added, is China, which produces about half the world’s steel.

In Shanghai, LanzaTech recently started up a 100,000-gallon-per-year demo with Bao Steel. Speaking in a phone call from New Zealand, where 50 of LanzaTech’s 85 employees are based, Holmgren said LanzaTech’s first commercial facility would most likely be in China, with construction beginning as early as next year. LanzaTech also has industrial partners in India, where it’s using municipal solid waste as a feedstock. And in partnership with Virgin Atlantic, Swedish Biofuels, Boeing, and others, LanzaTech has also begun developing a renewable jet fuel using its microbe-based carbon-capture system.

LanzaTech’s acquisition of the Soperton facility will give the company a new measure of independence, according to Holmgren. “Imagine our situation,” she said. “We’re very excited about our work in the chemicals area, but the demos and commercial facilities are controlled by partners. And so we would have to ask them for permission. We would have to come to an agreement,” to begin proving LanzaTech's technology for biochemical production at any significant scale. “Why would somebody operating this big ethanol plant care about us showing our technology or doing all the process that’s required to deliver a chemicals play, right? We feel that as a company, we need to have the ability to control the larger asset.”

It’s a Gas

At the Freedom Pines Biorefinery, LanzaTech will be tackling a whole new process: the gasification step, which was such a headache for Range Fuels. Through its steel mill partners, Soare said, LanzaTech has “access to free feedstock. So it’s surprising to see them go after this. But in the context of how cheap it was, it did make sense.”

LanzaTech plans to try fixing the Range Fuels gasifier. If that fails, Holmgren said, LanzaTech will bring in a new gasifier from a partner. As Soare put it, “They’re not a gasification company. If they can’t get the gasifier to work, they’ll move on.” Soare expects that LanzaTech will spend no more than a few million dollars working on the old gasifier.

Either way, moving into chemicals production strikes Soare as a shrewd strategy that could position LanzaTech for some lucrative deals down the road. “Syngas to ethanol is a very challenging step,” he said. About a dozen companies are working on syngas to ethanol globally, and a few dozen are working on cellulosic ethanol generally. “If gasification companies are unsuccessful, like Range, and if LanzaTech shows its organism works, there could be licensing or acquisition opportunities. Competitors will likely look to LanzaTech to help them switch to chemical production if LanzaTech can demonstrate its technology works at the Soperton plant.”

As for the U.S. government’s hopes for cellulosic ethanol to enter the fuel market this year, the EPA’s analysis is that there are six U.S. companies—each with a differing technology—that could produce the advanced biofuel in 2012. Therefore, the EPA set a goal of blending 8.65 million gallons of cellulosic ethanol into motor fuel this year, over objections from the oil industry that technology wasn’t available for producing that volume. The EPA said the goal was important to ensure a viable market for cellulosic ethanol, and the growth of the industry as Congress intended.

At this point, not a drop is expected to come from Range Fuels’ former biorefinery, which the EPA had projected would contribute 1 million gallons of cellulosic fuel to the U.S. energy mix in 2011. The agency is counting on no fuel production at Soperton in 2012.

This story is part of a special series that explores energy issues. For more, visit The Great Energy Challenge.

The March on Georgia: Renmatix raises $50M; LanzaTech buys Range Fuels site

http://www.biofuelsdigest.com/bdigest/2012/01/04/the-march-on-georgia-renmatix-raises-50m-lanzatech-buys-range-fuels-site/

admin | January 4, 2012 

 Renmatix and LanzaTech announce major advances in Georgia on the same day. Big Mo’? What does it all mean?

 

Our old friend, Brian Westlake, re-surfaces again to help us figure it all out, and delve into the real story.

“Well, g’day, g’day, g’day, what’s all this confusion about Renmatix and LanzaTech?” So began my friend Brian Westlake.

“Jim, I figured you’d call, completely stumped as usual. Let’s sort you out, matey, and quickly. Let’s make it quick. The waves here at Byron Bay are compelling. Now, what exactly are you hearing about LanzaTech?”

I explained that in Georgia, LanzaTech bought the Range Fuels Soperton site for $5.1 million at an auction yesterday at the property.

“And yer question is ‘what’s the value proposition?’ Is this something Vinod Khosla shoved down their throats? Something along those lines, ay?”

Yep. Although there been some confusion, I mentioned, as to whether LanzaTech bought RangeFuels or just the Georgia site.

“Bought Range Fuels? That’s total bollocks, mate. You’ve been reading ICIS again. The company wasn’t up for auction, it was just the site.”

Range Fuels Rewind

 

For a moment, we went through the Range timeline. Range Fuels closed its doors last fall after attempts failed to refinance, or sell the company as a whole. Range had stopped making payments on its government-guaranteed loans, and found its payments under a DOE grant suspended after the company had ultimately failed in its demonstration project, which called for the catalytic conversion of syngas into ethanol.

“And you think Vinod is behind this?”

Well, people are talking.

“Aw, Jim, you need to get to know these people better. Not Vinod’s style to impose on his CEOs. Not Jennifer Holmgren’s style to lead her company down a path that advantaged one investor.”

OK, I can buy that.

$25M in infrastructure for a $5.1M check

 

“Here’s the thing. It’s a $5.1 million deal for, I don’t know, $20 or $25 million in site value. Jennifer would tell you, “why be patient?” when you can get all that, for that, and right away, instead of waiting 12-24 months for Christmas.”

But, she could have bought the project directly via the USDA. Why run the auction risk?

“Not at that price, cobber. Now, you’ve got this all wrong.  Consider this acquisition similar to the LS9 deal.

Where that company picked up a 12 Mgy capacity site and fermentation infrastructure in Florida, last year, for under $3M, by cherry-picking a site out of foreclosure?

“There you go, much better already.”

Son of the Range gasifier

 

But what’s LanzaTech going to do with the Range Fuels gasifier?

“Ah, that’s right. Everyone’s got their knickers in a knot over the troubled Range gasifier, now in LanzaTech’s possession. But you don’t  need it, don;t you see. Whether it can produce beyond the 125 tons per day of biomass or so that it did demonstrate, well it's academic at the price they acquired the site.”

Academic?

“Jim, don’t you see? LanzaTech’s phone must be ringing off the hook with gasifier companies, vying for a partnership with LanzaTech. Especially now that they have branched out beyond industrial off-gases. Sean Simpson’s microorganism – and you know as a ridgy-didge Aussie I don’t hand out lollipops to Kiwis just for fun – that bug could well aim for other higher-value chemicals.

Isn’t LanzaTech looking more and more like Coskata?

 

“LanzaTech has one advantage you’re overlooking, They don’t have themselves embroiled in a trade secret dispute with INEOS Bio. But you’re missing the big picture. It’s not about Coskata. For that matter, there’s INEOS Bio active in that space, not to mention MSW-to-ethanol players such as Terrabon, Enerkem and Fulcrum, or wood-to-ethanol projects like Mascoma or American Process. It really doesn’t have much to do with all that.

So, what’s it about?

 

“Catch a clue, old mate. LanzaTech needs its own house, You’re all tied up in whether this is Vinod somehow escaping his fate on Range.

Their own house.

“Yeah. Let’s take the site LanzaTech is developing with Bao Steel in China to take advantage of waste gases from steel production.

Nice project that one.

“Well, try explaining to your new Chinese partners that you want to do some scale-up investigation on a new feedstock, one that isn’t off-gases from a steel blast furnace.”

Problematic, yes.

“Problematic?? Apoplectic! But you owe the duty to the LT shareholder to investigate all the possibilities inherent in the micro-organism. So there’s the problem of mixed objectives, disagreements and problems, avoided.”

What about jet fuel?

 

“And there’s another point. You’re coffee must be kicking in. It’s a site that can be utilized to make low-cost jet fuel from wood biomass in the US, for sale to the US military. Not to mention the bloody RFS.

The Renewable Fuel Standard

How is the RFS mixed up in this?

“You complete nimrod, how are you going to qualify a fuel made from industrial off-gases under RFS, when it specifies you have to make it from biomass? Where’s the biomass in a blast furnace?”

Ah.

Over to Renmatix

“Righto, I think we have you straightened out on that one. Now, what about Renmatix? What don’t you understand about that one?

Well, BASF announced plans to invest $30 million in the US technology firm Renmatix, as part of a new $50 million Series C investment round announced yesterday by Renmatix.

“Too right. Smart gang there at BASF. You didn’t believe me back in November when I said that BASF chairman Kurt Bock practically put it on a silver platter for you.

That’s right, what did they say?

“Only that they aim to grow 2 percentage points above chemical production and thus increase sales by an average of 6 percent per year until 2020. That’s a target of 115 billion euros. And they’re targeting emerging markets. And they are all over the sustainability angle. “Sustainability is becoming one of the main drivers of growth and value creation,” they said. Do you you need me to draw a map for you? They’re going to be looking at this sector to help them drive massive growth. That’s what I told you in November. You need to get the wax out of your ears.”

The Russians are coming

 

But who are the other investors? They raised $50 million, what about the other $20 million?

“Well, matey of mine, think Russia, that’s all I can tell you.”

Russia?

“They are streaming out of Russia, high net worths. China too. It’s built around key individuals, not some faceless Pushkin Equity Partners or Dostoyevsky Capital. Your CEOs and their boards will have to be all over them, but Renmatix clearly got the jump on a few companies. Wink-wink.”

What this country needs is a good five-cent sugar

 

What’s everyone’s interest in the low-cost cellulosic sugars that Renmatix makes? Why the heat right now?

“How dense can you be, Jimbo? If Renmatix’ technology works at scale, its a new game. Those are 4-cent sugars they propose to produce. Per pound. That’s well less than 40 cents per gallon for the feedstock. That’s like getting, say, 100,000 tons per year out of a full-scale Renmatix plant at the something like $20-$30 per bone dry ton of biomass. Plus, they’re talking less than $1.25 per gallon in capital costs. Total game-changers, those low-cost sugar companies. Keep your eye on all of them. Comet, Proterro, even Bluefire is getting into it.”

$20 per bone-dry tone. That’s cheap.

“Too right it is. I think Coskata is working with $55 per ton in its IPO, for a fuel that has an OPEX of $1.50 or less per gallon, according to the Coskata IPO.  You do the maths.”

What’s the Series C investment going towards – what do you hear?

“Don’t you talk to anyone anymore, Jim? Ask Mike Hamilton, the CEO over at Renmatix. Part of it will be equity, and there’ll be some technical development on other biomass.”

The BASF partnership

 

What about the relationship with BASF?

“Too soon to tell, isn’t it. They’ll both want a long-term relationship. Whether, and how, that spills over to a customer relationship, or technical partnership, that remains to be seen, ay?

Validating the industry

 

What do you think it says about Renmatix?

“It’s a complete validator of the technology. I mean, BASF, it’s not like they just parachuted into the space yesterday. It’s a $100 billion revenue company, with 100,000 people. They’re bigger than the global biofuels industry, all by their onesy. They’ve been watching it carefully, and putting their strategy together, for years. And they do their due diligence. That’s not someone else’s money they’re investing here – it’s hard yakka, making money in the chemicals business,. They’re not putting it into Renmatix on a finger-crossed basis. They are selective and diligent. But, it validates the whole space, really.”

Low-cost cellulosic sugars?

“No, you complete dolt, the whole space of biofuels and biomaterials. Look beyond how they are making the sausage – in this case, with a low-cost cellulosic sugar – and look at what they are trying to make. If BASF thought for a minute like those flaming idiots at the Wall Street Journal that there’s no hope in cellulose’s, this wouldn’t have happened.”

So, why Renmatix?

“It has to be the new management. Technology’s remarkable the same. Mike Hamilton’s an old sea dog in the chemicals business. They speak the same language now, as BASF. Sustainability. It’s a buzzword, but when you drill that down to providing a product from renewables at costs comparable to the old fossil fuels boys, Renmatix and BASF are completely on the same page. Everyone sees where it’s going, as far as the long-term value of trusting your company to the idea that someone ids going to be able to push a couple more holes in the ground and keep supplying you with low-cost fossil fuels, forever. It’s a non-starter.”

Cellulosics and the Journal

 

Er, what about those flaming idiots at the Wall Street Journal?

“Matey, it’s the editorial board. Do they ever come out of the cave? Their reporters are the real deal. But I wonder about that editorial page. That paper used to be about what companies like Dow, Dupont, Waste Management, and BASF were thinking. These days, the Journal must think that half the companies in their own Index are completely off their rocker. Here in Sydney we have the Financial Times, and they’re not making the same mistake. Everyone is jumping in.

“Which reminds me, time to jump back into the surf. We’re up at Byron, the surf is incredible. 1.5 meter swell from the east, should be over two meters by the weekend. Time to go now, over and out.”

Coskata Swings For Biofuel Fences With $100 Million IPO

http://seekingalpha.com/article/314865-coskata-swings-for-biofuel-fences-with-100-million-ipo

December 19, 2011

By Derek Mead


Another hot biofuel IPO has been announced: Coskata has filed with the SEC to raise up to $100 million, following Fulcrum's $115 million filing in September. The Warrenville, Illinois-based Coskata is the latest entrant in the race to produce cellulosic ethanol at industrial levels. According to its filing, Coskata's business plan focuses on utilizing low-cost feedstocks, like woody biomass and municipal waste, using a hybrid biothermal process to break down cellulose that Coskata claims produces extremely high yields.

Central to Coskata's potential is the company's technology platform. So far we've mostly seen biofuel companies trying to crack cellulose with either biochemical or thermochemical processes. As referenced in Coskata's S-1, research firm Sandia has projected biochemical and thermochemical conversion to be 55 and 74 gallons of ethanol per bone-dry ton of feedstock, respectively.

Coskata says it has hand-picked the best parts of both processes to develop its own platform, including developing its own microbes, which is expected to reduce the operating costs incurred from licensing biocatalysts from other firms. The firm predicts the platform will lead to yields of 100 gallons per ton of softwood, a number that's backed up by Sandia's estimates. That's an impressive claim, albeit as yet untested at a commercial level.

The company has tested its platform at its Pennsylvania demo facility for over 15,000 hours of ethanol production using wood waste, sorted municipal waste and natural gas as feedstock. Coskata plans on building its first commercial facility in Alabama, with a first-phase production goal of 16 million gallons per year (MGY), eventually ramping to 78 MGY upon addition of new production lines.

At 78 MGY, Coskata projects an unsubsidized cash operation cost of under $1.50 per gallon, assuming both a feedstock cost of $64 per ton (which is reasonable) and the company's high projected yield (which is yet to be seen). In comparison, Fulcrum said in its S-1 that it was shooting for ethanol under $1.30 a gallon at a lower 70-gallon-per-ton yield. Of course, until we see either company successful scaling up, we won't know whether or not either set of numbers means much. The market price for ethanol was around $2.71 a gallon as of December 9.

With that in mind, let's look at Coskata's financials:

• Since its inception in 2006, Coskata has produced only $134,000 in net revenue, all of which came in 2010. Coskata has produced no revenue in 2011, according to its unaudited report.
• Coskata's net loss in 2010 was $28.7 million, and the firm lost $23.3 million (unaudited) through the first nine months of 2011.
• As of September 30, 2011, the company had an accumulated deficit of $88.2 million.
• Through September 2011, the company had raised a total of $120.9 million in paid-in capital, along with $280,000 in common and series A, B, C and D stock sales.
• Coskata has $18.9 million in cash, and total capitalization stands at $33.1 million.

The numbers don't look particularly stellar for Coskata, especially considering that in the five years since its inception it hasn't been able to capitalize on even niche markets -- like other biofuel aspirants have -- to build any meaningful revenue. The company acknowledges as such in its S-1, writing: “We are a development-stage company with a limited operating history.”

Additionally, the firm's risk factors are substantial. Like just about everyone in the biofuel sector, Coskata is vulnerable to volatile feedstock and oil prices, and has to sort out the construction of its commercial facility, as well. But the bigger issue for Coskata lies in its technology platform. The firm's hybrid solution does offer a promise of high yields, but being a proprietary platform, it is as yet untested at the commercial scale, and the company lacks experience in pulling this feat off with other platforms. Coskata also needs to find some sort of commercialization or research partnership with a larger firm to help secure financing and smooth the bumpy road to commercialization.

In the end, Coskata presents a bit of a quandary. The upside is that the firm is shooting for the current holy grail of biofuel production: a high-yield platform utilizing low-cost (and sometimes free) feedstock that isn't corn.

On the other hand, in just about every facet of operations, Coskata is untested at the commercial scale.

Jefferson County biomass plant to turn wood and tires into electricity

http://chronicle.augusta.com/news/2011-11-28/jefferson-county-biomass-plant-turn-wood-and-tires-electricity

Biomass plant would burn wood, tires in Wadley

By Rob Pavey, Staff Writer

Monday, Nov. 28, 2011

 

 A $70 million biomass plant that burns wood products and shredded tires to make electricity could bring about 25 jobs to Wadley, Ga.

 

“We plan to have it online by the end of 2013 but we’re shooting for summer of 2013,” said Rick Cashatt, CEO of North Star Renewable Energy, the Clayton, Ga., company proposing the project.

The company is working with Jefferson County officials to acquire 25 acres for the plant, which will require permits from Georgia’s Environmental Protection Division and has also raised questions among residents concerned about “tire derived fuels.”

According to the company, the plant would burn about 133,500 tons per year of forest products and about 38,500 tons per year of shredded tires to create about 24 megawatts of power.

“They were saying they could only do it if the state would accept the 20 percent tires as part of the mix of biomass,” said Geary Davis, a local resident who has joined environmental groups in questioning the project. “There are also concerns about ash, the source of the tires, air pollution and also the proximity of the plant to the Ogeechee River.”

Cashatt said pollution concerns over the use of tire derived fuel are unfounded.

“People think of tires being burned in a field somewhere and belching black smoke, but this is a controlled burn inside a boiler,” he said, adding that the tire fuel will be made elsewhere and brought to Jefferson County for use in the biomass plant.

Using tire fuel also makes the biomass mix burn hotter – and therefore cleaner – by eliminating incomplete combustion from using pure forest products that have a high moisture content, he said.

“This is a good environmental benefit a lot of people don’t realize,” he said.

The plant’s application for permits remains under review, said Eric Cornwell, stationary source permitting manager in the Georgia’s Environmental Protection Division’s Air Protection Branch.

State officials typically regulate particulate matter, sulfur dioxide, nitrogen oxides and other materials, he said, adding that the application also stipulates tire materials would be brought in as fuel and not shredded onsite.

Cornwell said there are about 10 biomass fuel power plants already permitted to operate in Georgia, but only one of them – a facility in Rabun Gap that burns exclusively wood products — is actually in operation.

Cashatt, whose company was also involved in developing the Rabun project with some investors from Virginia, said North Star examined 17 Georgia sites for potential biomass projects several years ago.

The list was later reduced to just five sites, and later to just three, including the one in Jefferson County.

“The 2008 recession stopped a lot of projects dead in their tracks,” he said. “Everyone had hoped this industry would really take off.”

One of the partners in the Wadley project is the U.S. Endowment for Forestry and Communities, a non-profit group based in Greenville, S.C., that works to promote forestry related jobs in rural areas, he said.