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Rentech Making Waves

The following story posed a bit of a dilemma for me. In my new role, there will be potential conflicts of interest in some of the stories I may post, and until I elaborate on what I am doing, I am trying to avoid posting anything that might fall into that category.

When I first saw this story earlier today – and in fact received the press release from Rentech (RTK) – my first thought was that this sort of fell into that category. Why? Two reasons. First, Rentech’s Senior Vice President and Chief Technology Officer Harold Wright is my former manager and a friend. Second, in my new role I have interests that are of the same nature as some of Rentech’s. That means that we could be allies or we could be competitors, but I can’t say I am a disinterested party. So I finally decided that I should simply declare this, and post the story, which is really a culmination of several Rentech developments.

Having said that, Rentech has really been generating a lot of buzz lately. They are currently operating the only fully-integrated synthetic transportation fuels production facility in the U.S., and in partnership with ClearFuels Technology Inc., they are building a “20 ton-per-day biomass gasifier designed to produce syngas from bagasse, virgin wood waste and other cellulosic feedstocks at Rentech’s Product Demonstration Unit (PDU) in Colorado. The gasifier will be integrated with Rentech’s Fischer-Tropsch Process and UOP’s upgrading technology to produce renewable drop-in synthetic jet and diesel fuel at demonstration scale.”

Rentech also recently announced their Rialto Project, designed to “produce approximately 600 barrels per day of pure renewable synthetic fuels and export approximately 35 megawatts of renewable electric power.” They will use Rentech-SilvaGas biomass gasification technology, and green waste as the feedstock.

Today’s press release announced an off-take agreement with several airlines. You can read the press release below. Rentech stock was up 86% today on the news. They also announced a profit last week of $0.22 a share (triple analysts’ expectations), and were up 56% on that news.

I have strongly voiced my views that I believe the future belongs to gasification. Keep an eye on Rentech’s developments in this area.

——————————–

Rentech to Supply Renewable Synthetic Fuels to Eight Airlines for Ground Service Equipment Operations at Los Angeles International Airport

Initial Purchasers Include Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Southwest Airlines, United Airlines, UPS Airlines and US Airways, with Potential for Additional Purchasers

LOS ANGELES (August 18, 2009) – Rentech, Inc. (NYSE AMEX: RTK) announced today that it has signed an unprecedented multi-year agreement to supply eight airlines with up to 1.5 million gallons per year of renewable synthetic diesel (RenDiesel®) for ground service equipment operations at Los Angeles International Airport (LAX) beginning in late 2012, when the plant that will produce the fuel is scheduled to go into service.

The initial purchasers under the agreement with Aircraft Service International Group (ASIG), the entity that provides fueling services to many airlines that operate at LAX, are Alaska Airlines, American Airlines, Continental Airlines, Delta Air Lines, Southwest Airlines, United Airlines, UPS Airlines and US Airways. Additional airline purchasers of RenDiesel® can be added under the agreement with ASIG.

The agreement is the first of its kind to supply renewable synthetic fuels to multiple domestic airlines. The renewable RenDiesel® fuel to be supplied to the airlines would be produced from green waste at Rentech’s proposed Rialto Renewable Energy Center (Rialto Project). The renewable diesel fuel will have a carbon footprint of near zero. RenDiesel® exceeds all applicable fuels standards, is biodegradable and is virtually free of particulates, sulfur and aromatics. RenDiesel® is compatible with existing engines and pipelines, providing an immediate solution to the transportation sector’s requirements to meet targets established by California’s Low Carbon Fuel Standard.

D. Hunt Ramsbottom, President and Chief Executive Officer of Rentech said, “This commercial purchase contract among Rentech, ASIG and the airlines validates the growing demand for synthetic fuels produced by the Rentech Process. The low-emissions profile and near-zero carbon footprint of our renewable RenDiesel will guarantee that the LAX ground service vehicles using this fuel will be among the cleanest and greenest of their kind.” Mr. Ramsbottom continued, “We expect this agreement to serve as a model for future supply relationships at other airports and for other fuels, including Rentech’s synthetic jet fuel, which was recently approved for commercial airline use.”

Glenn F. Tilton, Air Transport Association of America (ATA) Board Chairman and UAL Corporation Chairman, President and Chief Executive Officer, said, “We are proud to take part in this innovative, collective endeavor that, over time, will further reduce greenhouse gas emissions and improve local air quality through the use of greener fuels.” Mr. Tilton continued, “This transaction promises to be the first of many such green fuel purchase agreements by the commercial aviation industry. It exemplifies the ongoing commitment of airlines and energy suppliers to diversify our fuel sources while contributing to a cleaner environment and adding new jobs to the economy.”

ASIG is thrilled to have been instrumental in reaching this landmark deal with the airlines and Rentech, reinforcing our strong commitment to our airline customers and environmental stewardship,” said ASIG President Keith P. Ryan. “We are proud to be on the forefront of this innovative effort to advance aviation environmental progress.”

Gina Marie Lindsey, Executive Director of Los Angeles World Airports (LAWA), commented, “This collaborative effort is yet another environmentally friendly initiative that we and the airlines are pursuing at Los Angeles-area airports. It shows what we can accomplish by working together toward a common and necessary goal.”

Rentech is developing a commercial-scale facility in Rialto, California, to produce renewable electric power and the cleanest diesel in California, each with a carbon footprint near zero. The project is currently designed to produce approximately 600 barrels per day of renewable, ultra-clean synthetic fuels and 35 megawatts of renewable electricity (enough to power approximately. 30,000 homes), primarily from urban woody green waste, such as yard clippings. The facility is expected to come online in 2012.

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August 19, 2009 - Posted by | biomass gasification, btl, investing, Rentech

57 Comments

  1. Interesting post and thanks for listing possible future industry connections on this . Do you think that this LA airport agreement is driven by CA law, publicity or cost? Thanks, Jim Takchess

    Comment by Anonymous | August 19, 2009

  2. A 600 bbl per day plant is pretty insignificant. You can't achieve any kind of economy of scale at that size. To make money Rentech will need to maximize their revenue streams. Get people to pay YOU to take their yard waste as feedstock. Tipping fees in Pasadena are around $50-100 per ton. Rentech will need to market their diesel as a premium product that commands a higher price. If they can sell the CO2 for EOR and the slag as road materials, they may have a shot at making money. Plus they need to scoop up all the tax and other financial incentives. Interesting, but hardly a solution to the problem.

    Comment by KingofKaty | August 19, 2009

  3. @KingofKaty: I don't think RR was suggesting this is a "solution to the problem." Nevertheless, I think turning waste biomass efficiently into electricity and F-T fuels is a helluva lot better than turning corn into ethanol. I'm sure there are scaling issues, but doesn't every little bit help? Making efficient use of what we've got is the principle at work here.Robert: I curious as to how much waste biomass is theoretically available in North America, and how much F-T fuel could this potentially make? Steve Foster

    Comment by Anonymous | August 19, 2009

  4. Feeding the varied mix into a sealed gasifier is a challenge in itself.The ones I have looked at in the past such as the Lurgi dry ash, Texaco (now GE) and Shell certainly couldn't manage it.The quality of the slag would always be a big question with a varied feed mix as far as any end users go I expect. Roadways maintain strict control over the aggregate used.

    Comment by Russ | August 19, 2009

  5. nything done in California should be dismissed as so impractical that it will not be widely adopted.Decision makers in the public sector of California are not held accountable for how they spend others money. There are always press releases announcing the start of bold new projects but never announcing failure. “The facility is expected to come online in 2012.”I do not think so!

    Comment by Kit P | August 19, 2009

  6. A 600 bbl per day plant is pretty insignificant.Insignificant with respect to the amount of energy we consume. But not insignificant from the POV of demonstrating the concept at a larger scale. This would be the first such plant of its kind in the U.S., and while future plants will definitely need to be bigger to make much impact, you have to prove the concept out first. That's why this is significant. I will be watching them closely to see what they can achieve.RR

    Comment by Robert Rapier | August 19, 2009

  7. Do you think that this LA airport agreement is driven by CA law, publicity or cost?I would say it is driven by PR and law. I expect the production cost for the product will be quite a bit higher than for conventional fuel, but I don't have any inside knowledge on that. I think mainly they are positioning themselves for where they see the future headed.RR

    Comment by Robert Rapier | August 19, 2009

  8. Robert: I curious as to how much waste biomass is theoretically available in North America, and how much F-T fuel could this potentially make?I am working on some calculations like that. There have been estimates of 1.3 billion tons of true waste biomass per year, but the logistical aspect of that is key. If the biomass isn't concentrated, it doesn't really matter how much there is. It could be break even on the energy unless the biomass consists of either concentrated sources or sources that are already being collected.RR

    Comment by Robert Rapier | August 19, 2009

  9. h. ramsbottom,CEO-RTK, has done a fantastic job of staff building and business planning/executing over the past several years. it has been a frustrating, but rewarding and learning journey for me as a stock holder. information from this blog site has been very valuable in keeping me on course.thank youfran

    Comment by Anonymous | August 19, 2009

  10. Fran: "H. Ramsbottom" would be Hunt Ramsbottom, the most unfortunately named CEO in a long time. Reminds me of a Los Angeles Dodgers prospect a few years back named "Titanus Boody." If memory serves correctly, Ramsbottom was running an auto parts company before this. It may be a major urban area such as Los Angeles will result in large amounts of collected biomass that can be converted into jet fuel, and I welcome it.My own "gut feeling" is that there is not enough energy content in biomass to warrant its collection, in general. In other words, just gathering the biomass will eat up too much energy, and then you have the conversion, etc.There may be some exceptions. Fast-growing trees in Southeast Asia, resulting in densely packed biomass, might work. In general, I think biofuels (in a free market) will only be derived from oil-bearing trees, such as palm oil, or pongamia pinatta.We know palm oil is a profitable crop already, and becomes more so when crude oil spikes. However, with PHEVs and CNGs, I expect a much smaller role for biofuels. There are 10 million CNG vehicles on the road globally already, and talk of epic NG supplies. Lithium batteries seem perched for bust-out improvements.The heroics necessary to make biofuels may not be necessary, and probably not validated by a free market.

    Comment by Benny "Boom, No Doom" Cole | August 19, 2009

  11. "Get people to pay YOU to take their yard waste as feedstock"A friend pays $40 a ton to dump the trees he cuts down at the landfill. Arborists do likewise across the country. I wish I had a nickle for every ton of trees that went to waste after hurricanes Katrina and Rita. Keep in mind that we don't need to replace all our fuel with any one method. With transportation going more electric,we don't even need to replace all our liquid fuel.

    Comment by Maury | August 19, 2009

  12. How would this be much different from the 400 bbl per day FT demonstration plant Harold Wright and others built in Ponca City in 2003? We already know how to do FT – we just can't build it cheaply enough. I don't see that Rentech has solved that problem.

    Comment by KingofKaty | August 19, 2009

  13. How would this be much different from the 400 bbl per day FT demonstration plant Harold Wright and others built in Ponca City in 2003?Hey, I was one of those "others." :-)The key difference of course is that we were doing natural gas at COP and Rentech is doing biomass. It is more difficult, and hasn't been proven on a very big scale. And there is no doubt it is more expensive – even than GTL. My expectation is that costs are going to be somewhere in the range of $5-10/gal. But as oil depletes, I think this becomes eventually economical.RR

    Comment by Robert Rapier | August 19, 2009

  14. MR. COLE–FORTUNATELY THE NATION'S TAXPAYERS HAVE BEEN PROPERLY TRAINED/MOTIVATED TO COVER MOST COLLECTION/DELIVERY COST. BIO WASTE AND FOSSIL ARE ACCEPTABLE INPUTS FOR RTK SYSTEMS. I SUGGEST SOME TIME SPENT ON THEIR PRESS RELEASES AND OTHER SEARCH MATERIALS TO GAIN PERSPECTIVE ON THE OPPORTUNITY.I CARE LITTLE ABOUT NAMES OR PRIORS OF CEOs, JUST RESULTS. AT THIS POINT, POTENTIAL RETURNS LOOK PROMISING. BUT, ONLY TIME WILL BE THE JUDGE.FRAN

    Comment by Anonymous | August 19, 2009

  15. Fran-As a taxpayer, I have not been trained to subsidize bad energy choices–just resigned. See ethanol.RR is talking $5 to $10 a gallon for Rentech fuel. Ouch. I wonde if oil will eve get that expensive. Other users (fleets to CNG, cars to PHEV) switch at much lower prices.A very possible scenario is that oil production falls more or less continuously from now, as no one is willing to pay the cost of extracting it–better choices are available.I am one whack-job liberal, but even I know the price signal is one of the smartest things man ever invented. Or maybe I am a whack-job conservative. Let Rentech deliver fuel on the open market without subsidy, and let's see what happens.

    Comment by Benny "Boom, No Doom" Cole | August 19, 2009

  16. $5 a gallon is only about $150 per barrel. We were almost there before the recession hit. You know the drill Benny. It all gets priced on that last barrels cost of production. Cheaper methods for making biodiesel will be more profitable,but it's only a matter of time before $5 a gallon rounds the bend.

    Comment by Maury | August 19, 2009

  17. Well maybe Rentech's plant might be different in that it doesn't have a tendency to go boom. Seriously, FT liquids from biomass is a business development problem, not a technical one. You are trading scale economies for cheap, but limited feedstock. You need to squeeze every drop of revenue and cost out of the process and shake the government money tree to even have a prayer of making it work.I've seen companies pour billions down the FT rathole thinking that the next technological breakthrough is just around the corner. I made a chart in my office with capital costs broken down by process unit. Even if you assume a breakthrough gasifier, or FT reactor, you still have to build the rest of the plant (oxygen unit, shift, acid gas removal, sulfur recovery, power block, pipelines, product storage, etc.). You still can't make $4 diesel using FT. Ask the Qatari's how it is working out for them.

    Comment by KingofKaty | August 19, 2009

  18. MR. COLE–AS I SAID, TIME WILL ADJUTICATE THE OUTCOME. MAY BOTH OUR BEST INTERESTS BE SERVED BY THOSE RESULTS.FRAN

    Comment by Anonymous | August 19, 2009

  19. Fran-I fear it will not be time, but rather politics and cronyism that determines the outcome. See "Bush and ethanol," in any good energy, agroculture and subsidy dictionary.

    Comment by Benny "Boom, No Doom" Cole | August 19, 2009

  20. "The facility is expected to come online in 2012."Interesting — the same year that that Mayan calendar supposedly comes to an end.More seriously, there are those who argue that Peak Oil is upon us already. No question that there will be tremendous changes in energy supply & use patterns over the next decade or two — and here we are in a world using approximately 80,000,000 Bbl/day celebrating the planned start-up of a 600 Bbl/day facility.We live in interesting times!

    Comment by Kinuachdrach | August 20, 2009

  21. Ethanol will not work below three bucks a gallon. So, many people say…..Ethanol is supposedly "dead".But, we are suddenly confronted with bio-mass to liquids which will deliver us from "the tyranny of corn ethanol" and can provide a product which will cost $5-10 dollars a gallon.An amazingly tortured system of "logic" is at work here.John

    Comment by Anonymous | August 20, 2009

  22. An amazingly tortured system of "logic" is at work here.It becomes a bit more clear if you know what you are talking about John. The major issue with ethanol is the required energy inputs. Cost is merely related to that. If you have a process that requires a lot of fossil energy inputs – as is the case with most corn ethanol production – it can't be a replacement for fossil fuels.If oil prices go to $150/bbl, corn ethanol is still going to struggle because of the energy input issues. Gasification starts to become more attractive because it doesn't rely heavily on fossil fuel inputs. That's the difference.Also, as I point out to people, two countries have turned to gasification during national emergencies to supply liquid fuels: Germany during WWII and South Africa during Apartheid. So we know that it works and is scalable. The same can't be said for something like cellulosic ethanol.RR

    Comment by Robert Rapier | August 20, 2009

  23. John, the last I looked (yesterday) the biorefineries were profitably (without any subsidies to themselves, or the farmers growing the corn) selling Ethanol for $1.53/gal. Add in $0.67/gal for Taxes, Transportation, and Profit, and the embedded cost at the pump would be $2.20/gal. (Again, without ANY TAX CREDITS, corn subsidies, etc.)Gasoline at the pump is in the area of $2.75/gal, today. Allowing 20% for lower mileage, and you get to $2.75 – $0.55 = $2.20/Gal.Corn Ethanol is "There," Today.

    Comment by rufus | August 20, 2009

  24. Gasification starts to become more attractive because it doesn't rely heavily on fossil fuel inputs. That's the difference.——————————Please lay this out for us. Give us some figures,Just how is the bio-mass supposed to get to the plant ? At a price which subverts the cost of similar logistical expenses involved in making corn ethanol ? John

    Comment by Anonymous | August 20, 2009

  25. Just how is the bio-mass supposed to get to the plant ? At a price which subverts the cost of similar logistical expenses involved in making corn ethanol ?John, you are way, way off the mark. The energy inputs that make ethanol problematic long-term are the fact that corn is a heavy user of fertilizer (which is normally made from natural gas) and ethanol is coproduced with water (which takes a lot of energy to remove).Gasification, on the other hand, is self-sustaining. Heat is co-produced which is used to drive parts of the process. The difference between this and ethanol is night and day – which explains why countries cut off from fossil fuels turned to gasification and not ethanol.RR

    Comment by Robert Rapier | August 20, 2009

  26. the last I looked (yesterday) the biorefineries were profitably (without any subsidies to themselves, or the farmers growing the corn) selling Ethanol for $1.53/gal.You know that's not how the subsidies work. They incentivize the blender to buy the ethanol, thus propping up the price moreso than would be the case in an open market. As long as there is a blender's credit, you can't claim that the selling price for ethanol is sans subsidies.RR

    Comment by Robert Rapier | August 20, 2009

  27. $5 a gallon is only about $150 per barrel. We were almost there before the recession hit… it's only a matter of time before $5 a gallon rounds the bend.That's it exactly, Maury. If you believe that oil prices are headed to $150 or more per barrel in the long run, gasification makes sense. If oil prices are going to hang around $50, gasification can't compete. I think oil prices are headed higher in the long run, hence my support for gasification. I guess this isn't clear to people.RR

    Comment by Robert Rapier | August 20, 2009

  28. Gasoline at the pump is in the area of $2.75/gal, today. Allowing 20% for lower mileage, and you get to $2.75 – $0.55 = If you want to do that analysis correctly, look at ethanol and gasoline spot or futures, factor in the lower mileage and the subsidies (don't forget the state subsidies and other goodies; Minnesota for instance can't seem to get rid of theirs) and now you have a more appropriate comparison.But given that corn ethanol contains 70% or more embedded fossil fuel content, it will generally track fossil fuel prices as they go up and down.RR

    Comment by Robert Rapier | August 20, 2009

  29. Corn Ethanol is "There," Today.Rufus,I hear what you are saying. The idea that we should create a synthetic fuel which is more expensive to re-place a bio-fuel which is less expensive is beyond me.John

    Comment by Anonymous | August 20, 2009

  30. That's because you don't follow the energy inputs, John. If you did you could predict the future. You would also understand why countries cut off from fossil fuels turned to gasification. If fossil fuels become scarce, all will be clear to you.RR

    Comment by Robert Rapier | August 20, 2009

  31. Look Robert.Electric vehicles. That ends all arguments about crude oil, gasoline, biomass to liquids, FT processes. and all other strenuous efforts to perpetuate the oil age and the internal combustion engine. Just that simple.John

    Comment by Anonymous | August 20, 2009

  32. Well, the Blenders are making out like bandits, obviously. They're buying ethanol for a buck, fifty three, collecting a $0.46 "tax credit," paying $0.35 to $0.40 tax on it, paying a dime to twenty cents transportation, and selling it, blended with gasoline for anywhere from $2.40 to $2.80 to the retailers.Look, the point is, most blenders would rather not sell ethanol. But, they have to for two reasons. Most important, they have to, by law, and if their competition is underselling them by adding ethanol they have to compete. Anyhoo, the point I was making is that the Refineries can produce, and sell ethanol at $1.53 gal. Without subsidies.

    Comment by rufus | August 20, 2009

  33. Rufus,The same logistical problems involved in ethanol production are also involved in bio-mass to liquids.In the end ethanol is just "bio-mass to liquids" without all the convoluted nonsense.John

    Comment by Anonymous | August 20, 2009

  34. The "fossil fuel" inputs to ethanol are, almost entirely, nat gas. Nat gas is not a great transportation fuel, but it Is a great "boiler" fuel. And, right now, it's very cheap, and there seems to be a great abundance of it.The future, however, is definitely trending toward "biomass" for energy. Now, you Can make a valid argument that there is five, or six thousand btus of nat gas embedded in the fertilizer required for a gallon of ethanol, but I think it's instrumental to notice that the farmers have cut back, substantially, "Again," this year on their fertilizer; and they're getting ready to produce Record Yields. In any case, we continue to beat a "dead horse." We're producing at present about 80% of All the corn ethanol we're going to produce. From here on out, we're looking at cellulosic, and other solutions.

    Comment by rufus | August 20, 2009

  35. John, you've got it about right. Actually, I'm a fan of ALL of it. I've said it before, and I'll say it again."The ONLY thing I'm Against is Imported Oil."I think the Volt is a game-changer. I believe it will be great for a considerable segment of the population living primarily in Large Southern Cities. I hope they get "Algae" to work. "Gassification" suits me to a T.I think "Cellulosic" might end up being a major player; but, any wino's guess would be as good as mine on that. I'm just tired of shipping the wealth of the Nation to Saudi Arabia, and Iraq. And, paying with our kids' blood for the right to do so.

    Comment by rufus | August 20, 2009

  36. Here's the link to Ethanol Futures. Looks like the "front month" closed at $1.57 Gallon, today.Bloomberg has the front month RBOB gasoline contract at $2.03 as of a couple of minutes, ago.

    Comment by rufus | August 20, 2009

  37. "I'm just tired of shipping the wealth of the Nation to Saudi Arabia, and Iraq.And, paying with our kids' blood for the right to do so."Rufus,As a vet (Phu Bai) I understand and agree. The people who make bombs usually do not get blown up by them.John

    Comment by Anonymous | August 20, 2009

  38. Phu Bai.Truly nasty piece of real estate. Semper Fi

    Comment by rufus | August 20, 2009

  39. Electric is only part of the solution imo John. The US would still import oil if all our cars and trucks were electric. 10-15 years after peak oil,there won't be enough oil to meet industrial and chemical demand,much less transportation needs. If we could transition our fleet overnight,it would buy us a lot of time,but that's not possible. Even if electric vehicles were the only choice on car lots today,it would still take 10 years to transition half the fleet.

    Comment by Maury | August 20, 2009

  40. Check out this 2006 interview with Colin Campbell. He predicted a price spike,the recession,and even oil's collapse to $20 or $30 a barrel. And then,another spike,another recession etc. etc. http://tinyurl.com/n9natl

    Comment by Maury | August 20, 2009

  41. rufus writes: the last I looked (yesterday) the biorefineries were profitably (without any subsidies to themselves, or the farmers growing the corn) selling Ethanol for $1.53/gal.I thought we established there was still $1.86 billion in corn subsidies to farmers.http://i-r-squared.blogspot.com/2009/07/king-corn-and-big-oil.html#7161520767435165539r: In any case, we continue to beat a "dead horse." We're producing at present about 80% of All the corn ethanol we're going to produce. From here on out, we're looking at cellulosic, and other solutions.I'd like to think there's a little more room than 20% more. Not sure how much more. But "peak corn ethanol", interesting concept.

    Comment by Clee | August 20, 2009

  42. it makes one wonder how many have been listening all these months. or is there another cause for concern? numeration has become a lost competencey? replaced by endless argumentation?sad, regardless the reason.fran

    Comment by Anonymous | August 20, 2009

  43. http://www.biomassmagazine.com/article.jsp?article_id=2671"The required technologies to enhance syngas levels are not commercially available"As a result, Rentech spent several months developing its own syngas conditioning and clean-up technologies, which are currently patent-pending, Ramsbottom said"Ramsbottom's statements seem strange in this article. The several months to develop new conditioning and cleanup technologies is clearly meant for air head investors.People have been working on this type of thing for 100 years but they come up with new and in several months! Wow!The bubbling bed reactor concept has been in use for a long time and has proven problematic in every case that I am aware of.They may make it but what I see on the net makes one wonder – are they really just miners.

    Comment by Russ | August 20, 2009

  44. I fail to see anything to distinguish Rentech from the dozens of other alt fuels technology vendors who all like to tout that their process is 'here today' and will 'soon' be producing millions of barrels. ALL of them are 'making waves', but NONE of them can be shown to be head and shoulders above the others based on the limited info we have. God bless all of them, and I'm pretty sure a handful of them might actually become successful (especially if / when we return to $4 gas), but for sure 95% of them will join the ash heap of history. They are all just blowing smoke until they can find $$ to build a commercial scale facility and actually operate it profitably for a year or two AND THEN they will truly be 'making waves'.

    Comment by OxyMaven | August 20, 2009

  45. Mea Culpa, Clee. I forgot. $1.86 Billion did show up. I really don't see how that could be "supports" (it must be the remnants of some old program, and mayby "disaster relief," or something.)However, It IS there. That would add about $0.15/gal. So, maybe they still have fifteen cents to go.As for the 80%, the mandate is for 15 Billion Gallons/Yr from "Corn" ethanol. The Biorefineries are under construction to bring today's 11.532 production up to 14.5 Billion Gallon/Yr. That's pretty close to 80%.

    Comment by rufus | August 20, 2009

  46. KingofKaty:One of the solutions to balance of plant problems is building the gasifier/FT unit in a location that is not a greenfield. There are many projects out there which are colocating biorefineries with pulp mills. The pulp mills already are permitted, have oxygen plants, piping, rail and a biomass collections system. A 3,000 dry ton per day pulp mill already collects 12,000 tons of biomass per day (~50% yield, 50% moisture in incoming biomass). The remainder of the incoming biomass is burned in recovery boilers to supply steam and power to the mill. Subsituting a gasifier and FT for the recovery boiler should allow for coproductions of fuels while using excess heat to generate steam for the mill. This is the process Chemrec/volvo is looking at to produce DME in Sweden. Othere gasifier companies of interest in the PandP area are MTCI and Nexterra.

    Comment by tournamentmonkey | August 20, 2009

  47. TMonkey – we are looking at opportunities like that. 12,000 tons per day is in the neighborhood of what we need to achieve scale economies. The problem is there just isn't that many of them. Also the 50% water content is an issue. We have to add some additional water to biomass to make it into a slurry. Excess H2O messes up the gasification reaction and turns our expensive gasifiers into expensive steam generators. I was commenting on the idea that technology greatly improves either the gasification or FT section which makes the whole FT liquids project work – it won't. Site conditions and feed prep are maybe 10% of the cost of the project.

    Comment by KingofKaty | August 20, 2009

  48. OT but fun. This from Foreign Affairs magazine. Evidently, Europe has shale gas.I would say it is getting close to game over for OPEC."Shale resources are also widespread throughout Europe, and in the aftermath of Moscow’s hardball diplomacy vis-à-vis Ukraine in early 2008 and early 2009, interest is growing among European governments to find replacements for Russian supplies."We know what shale gas means. Glut. Also, Europeans are using CNG in cars and trucks already. The world is flooded with gas. I love that mess of a sentence, don't you?Evidently, the Aussies are developing a $50 billion field to supply India and China.

    Comment by Benny "Boom, No Doom" Cole | August 20, 2009

  49. OT, but read an interesting study. “Mercury in Fish, Bed Sediment, and Water from Streams Across the United States, 1998–2005”http://pubs.usgs.gov/sir/2009/5109/pdf/sir20095109.pdf “Women of child-bearing age and infants are particularly vulnerable to effects from consumption of Hg-contaminated fish (U.S. Environmental Protection Agency, 2001).”I maintain that it is not credible to for this vulnerable population to find enough game fish to eat resulting in a level of mercury above a threshold of harm. My theory is support by efforts by the CDC to find a smoking gun. Here is where to look. “The highest concentrations among all sampled sites occurred in fish from blackwater coastal-plain streams draining forested land or wetland in the eastern and southeastern United States, as well as from streams draining gold- or Hg-mined basins in the western United States.”Never the less, if less than 25% of fish exceed the EPA criteria (Fig. 6) it will be hard to find fish with too much mercury.“but some sites in this geochemically rich region are likely to be naturally enriched in Hg.”The reason for this type research is to better understand complex environmental system. “In recent decades, industrial Hg use and atmospheric Hg deposition have decreased in parts of the United States (Engstrom and Swain, 1997).”The key issue with mercury is how do we regulate industrial sources that are a small fraction of natural sources.

    Comment by Kit P | August 20, 2009

  50. Rufus,The Nazis used ethanol in WWIIEthanol is not a fad, nor a flash in the pan fuel that some Johnny-come-lately scientist dreamed up to save humanity from the oil companies. Distillers all over the world have been making this go-juice for a long time. The colorless, pleasant smelling substance has been lighting lamps for two hundred years, and the infant Automobile Industry suckled on this vegetable matter before it grew into the petroleum fed monster it has since become. Would it surprise you to know this strategic solution was also mankind’s first liquid rocket fuel? Well it’s true – the Nazis refined ethanol from sugar beets and used its energy to propel their dreaded V2 rockets towards England in the darkest days of World War II…………."Ethanol was easy to make and sugar beets were plentiful in Nazi Germany. Propelled by a mixture of ethanol and liquid oxygen, the V-2 rocket was the fastest weapon in the Nazi arsenal and could carry a thousand kilogram warhead over three hundred kilometers."I have seen pictures from WW2 of "ethanol stills" on the back of Nazi trucks which made ethanol from potatoes.Johnhttp://www.2people.org/pub/tag?tag=action:write%20environmental%20articles%20for%20local%20publications

    Comment by Anonymous | August 20, 2009

  51. @ John The Nazis used ethanol in WWIIA Google search of the above statement.A wonderful tool to eliminate redundancy of dialog – especially for newbies.

    Comment by RBM | August 20, 2009

  52. ___RBMYes. I sometimes use the R-aquared Google search before making a comment.You are correct,All of this has been discussed "ad nauseum" and has yet yielded no "consensus" or definitive opinion, whether the question is "the best, cheapest "clean" way to produce electricity" or "how to insure we can have inexpensive, unlimited supplies of liquid fuels to sustain the outmoded internal combustion engine."I don't see that R Squared Energy Blog has satisfactorily answered either of these questions.That's why everybody keeps blogging in their thoughts on the matter.John

    Comment by Anonymous | August 20, 2009

  53. Robert doesn't like ethanol,because he's looking at it from an engineer's perspective. It uses one fossil fuel to replace another,and it isn't as efficient to boot. Then there's the subsidy thing. My problem with that is,we're blessed with enough natural gas to last decades. Ethanol does displace imported oil. Yes,it would make more sense to use the natural gas in other ways. But,if we had any sense.we wouldn't have this oil addiction to begin with.

    Comment by Maury | August 20, 2009

  54. @ MauryYou know my opinion of ethanol exactly how ?

    Comment by RBM | August 20, 2009

  55. @ MauryExcuse me, wrong R …

    Comment by RBM | August 20, 2009

  56. Here's a really entertaining little Brief History of the Carbohydrate Economy.My favorite quote:Ironically, collodion never made it as a billiard ball: The plastic, whose scientific name is cellulose nitrate, is more popularly known as guncotton, a mild explosive. When a rack of cellulose nitrate pool balls was broken, a loud pop often resulted. Confusion and casualties ensued in saloons where patrons were not only drinking but sometimes armed.

    Comment by rufus | August 21, 2009

  57. Rufus,Just read The Once and Future Carbohydrate EconomyThe bit about the billiard balls was hilarious. Also Henry Fords car made out of hemp.Not long ago I watched a program on the Science Channel I think where some guy had come up with a plastic substrate for electronic circuit boards made from chicken feathers. It's cheaper to make than the petroleum based plastics now in use.From the article:"The best end product so far, using 30% keratin by weight, has a lower dielectric constant than conventional semiconductor insulator materials such as silicon dioxide or polyimides. For comparison, Wool says, whereas the dielectric constant of air is 1.0 and that of silicon dioxide is 3.8–4.2, keratin fibers have a dielectric constant of 1.6. That means electrons can move on the feather-based printed circuit boards at twice the speed as traditional circuit boards."Johnhttp://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1247399

    Comment by Anonymous | August 21, 2009


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