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Update on CWT IPO

A couple of months ago, in response to a story that Changing World Technologies was going to file an IPO to help commercialize their TPD technology, I reposted my story:

TDP: The Next Big Thing

Turns out they decided against the IPO. Bankruptcy seemed the better option:

Renewable Environmental Solutions owner closes plant in Missouri, files for bankruptcy

Changing World Technologies Inc., based in West Hempstead, N.Y., filed for Chapter 11 protection Wednesday in the U.S. Bankruptcy Court for the Southern District of New York.

In a news release, the company, which owns the Renewable Environmental Solutions plant in Carthage, said it was trying to reorganize its business and find new financing “to fund its operations going forward and to move ahead with its expansion strategy.”

The company said in filings with the Securities and Exchange Commission that it had lost $18.8 million for the nine months ending Sept. 30 and had an accumulated deficit of $117.8 million.

They have had a long fall from the cover of Discover magazine, where they were going to be the solution to the world’s energy problems. Let’s review some of the quotes from that initial article, and then consider the fact that the company never made a dime:

“This is a solution to three of the biggest problems facing mankind,” says Brian Appel, chairman and CEO of Changing World Technologies, the company that built this pilot plant and has just completed its first industrial-size installation in Missouri. “This process can deal with the world’s waste. It can supplement our dwindling supplies of oil. And it can slow down global warming.”

Pardon me, says a reporter, shivering in the frigid dawn, but that sounds too good to be true. “Everybody says that,” says Appel. “The potential is unbelievable,” says Michael Roberts, a senior chemical engineer for the Gas Technology Institute, an energy research group. “You’re not only cleaning up waste; you’re talking about distributed generation of oil all over the world.”

“This is not an incremental change. This is a big, new step,” agrees Alf Andreassen, a venture capitalist with the Paladin Capital Group and a former Bell Laboratories director. “We will be able to make oil for $8 to $12 a barrel,” says Paul Baskis, the inventor of the process. “We are going to be able to switch to a carbohydrate economy.”

And it will be profitable, promises Appel. “We’ve done so much testing in Philadelphia, we already know the costs,” he says. “This is our first-out plant, and we estimate we’ll make oil at $15 a barrel. In three to five years, we’ll drop that to $10, the same as a medium-size oil exploration and production company. And it will get cheaper from there.”

CWT and their TDP promises are the poster child for the strategy of “overhype your technology to pull in investors, and hope the technological problems are resolved.” They had endorsements from lots of people, and a gushing article in Discover. But reporters and investors didn’t ask the right questions, and they didn’t do their due diligence, and the result was a lot of dollars flushed down the toilet.

The sad thing is, history is repeating itself right now with most of these cellulosic ethanol and algal biodiesel companies. They all have a great story to tell, they are all going to solve the world’s energy problems, and the majority of them will be bankrupt inside of 5 years.

March 13, 2009 Posted by | bankruptcy, Changing World Technologies, Thermal Depolymerization | 87 Comments

How To Sniff Out a Fraud

I tend to get a lot of e-mails from people either claiming to have invented the next big thing in alternative energy, or from people who want to know if a particular company has something that seems worthwhile. Generally, I can sniff out the scams and pseudoscientists pretty quickly. There are lots of telltale signs.

In general there will be no patents, nor patents pending. They will often tell tales of having their invention suppressed. A secret catalyst or secret formulation is another frequent theme. (People too often ascribe magical properties to catalysts. Catalysts can speed up a reaction, but they do not allow you to get around the laws of thermodynamics.) Scam companies will often incorporate a hot buzzword into their company name or the name of their technology, like ‘nano…’ (implying nanotechnology). Claims that the technology will solve the world’s energy crisis are all too common. Many times, it simply comes down to “if it seems too good to be true…” However, I normally give people the benefit of the doubt and I investigate further.

Sometimes a scam isn’t easy to sniff out, and sometimes an invention is a real breakthrough. Since I have often been asked about how to sort the wheat from the chaff, I will document a recent investigation into a company that looked promising at first glance. The company first came to my attention via a poster at The Oil Drum who posted a link about a company called AlphaKat. Here was the post:

I have a member on my website board who is pushing really hard biomass gasification as means to save us all. Here’s the company he mentioned earlier with process capable of using everything one can think about:

http://alphakat.de/index.php?option=com_content&task=blogcategory&id=37&

Can anyone give some comments about this?a few Utube videos full of high optimism also…

http://www.youtube.com/watch?v=DJQuVkwkp3A
http://www.youtube.com/watch?v=qXk6iO-pKaM&feature=related
http://www.youtube.com/watch?v=RwKSwfsJ73I&feature=related

sounds too good to be true – therefore it is?

I checked out some of the videos, which sounded intriguing but highly improbable. Regardless, I did some digging. The technology was invented by a German named Christian Koch. Dr. Koch had teamed with Austrian immigrant Michael Spitzauer to bring the technology to the U.S. Dr. Koch has a U.S. patent pending on the process (United States Patent Application 20050115871). You can see interviews (in English) with both Dr. Koch and Spitzauer here:

Interviews with Koch and Spitzauer

I noticed a couple of things when I read through the patent. First, the claims that were being made were that it could turn any biomass into diesel, but the patent seems to indicate that you must start with an oil of some type. The technology sounds very much like thermal depolymerization (TDP), which as we know works (except not on things like woody biomass), but is not economical. It was certainly not a biomass gasification process. However, there is nothing that I am aware of that is capable of unraveling cellulose and turning it into a fuel in 3 minutes. So it definitely sounded too good to be true.

This sounded interesting, so I worked my way to the website of Michael Spitzauer. The website is incredibly cheesy, poorly designed, and full of fractured English. If you dig, you can see that he has made his wife – a former cocktail waitress – a Senior Vice President of the company. Technical expertise among the team seems to be in very short supply. I also spotted the tell-tale buzzword “Nano”-diesel:

Green Power Inc

At this point, things are starting to smell funny. Digging a little deeper, I found that Spitzauer has been convicted of fraud, and has been involved in multiple shady dealings. He was also scammed by a Nigerian advance fee scheme, so may not be the sharpest knife in the drawer:

Austrian Fights Extradition

Something’s Rotten – Green Power

Yet Another Gas Scam? – Discussion on Snopes’ Message Board

Trash-to-diesel technology raises eyebrows

In that last link, he says the oil companies are out to get him, and this is why his past has been exposed:

“The big oil companies in Europe and this country have made threats to us, but even if they would do something to our lives, this company will go on,” Spitzauer said. “Our plant works, and we will make diesel for the people.”

But doubts have been raised about the claims made for Green Power’s technology and about Spitzauer’s personal history — a history that includes a fraud conviction in his native Austria, a lengthy extradition battle in a separate case, and the bankruptcy of his previous business venture.

In an interview, Spitzauer, 38, said none of that was relevant to Green Power and its prospects. “What easier way is there to discredit somebody than to look at something in their past?” he said. “We are here for the future.”

So, we have a process that sounds too good to be true and the involvement of a convicted fraudster who is now saying the oil companies are out to get him. Not knowing more, I would steer clear. This all sounds much like the claims that Xethanol was making. Some of their key players had been previously accused of fraud as well. What happened? Their claims fell apart, and Xethanol finally went bankrupt (as I had predicted) because they couldn’t do what they said they could do:

Xethanol Now Defunct

Finally, I should point out that Michael Spitzauer has had a falling out with Dr. Koch. So it is still possible – albeit I think remotely – that Dr. Koch’s original invention is what he claims it is. But, if you want to put the technology to a real test, run some biomass through the machine that is spiked with a radioisotope (maybe C14) that would show up in the product. I will bet money that the spiked carbon doesn’t show up in the hydrocarbon, and that will be the end of that. If I were a prospective investor, I would insist upon such a test.

This particular case turned up a lot of dirt pretty easily once I started digging. It isn’t always that easy. But there are a still a good number of people who are convinced that this is for real. I think it is very telling, though, that skepticism runs high among the chemists and chemical engineers mentioned in the various links. But as I said, one can design tests to prove or disprove the claims.

March 9, 2009 Posted by | Alphakat, fraud, scams, Thermal Depolymerization | 73 Comments

TDP Chemistry

While the most recent two posts (here and here) on Changing World Technologies’ thermal depolymerization (TDP) process were reposts, this one has not been previously posted here. Regular reader “Optimist” was initially optimistic about the TDP technology. During his investigation, he went through the chemistry of the process, and came away feeling a bit short-changed.

——————-

Perhaps the confusion about reasonable yields from TDP can be addressed by looking at the chemistry, as proposed by Dr. Adams at http://web.mit.edu/10.391J/www/0405SE05adams.pdf (RR: now hosted at) http://ergosphere.files.wordpress.com/2007/04/tdp_0405se05adams.pdf. As I see it, the conversion can be presented as three chemical reactions: hydrolysis, decarboxylation, and product degradation (for lack of a better term).

1. Hydrolysis (aka depolymerization)

H2-C-O-R
…….|
..H-C-O-R + 3H2O => C3H8O3 (glycerol) + 3 CH3-(CH2)14-COOH
…….|
H2-C-O-R

where R = CO-(CH2)14-CH3

Of course, there are many different fatty acids that occur, rather than the palmitic acid (C16) shown. However, for the sake of calculating the yield, the choice of fatty acid (typically in the C12 – C18 range) would have a fairly minor affect. Thus, palmitic acid will be used as an example.

2. Decarboxylation

CH3-(CH2)14-COOH => CH3-(CH2)13-CH3 +CO2

3. Product Degradation

CH3-(CH2)13-CH3 => 7C + 8CH4

Product degradation is necessary to explain the presence of carbon and low BTU gas in the products from TDP. While the actual reactions are likely to be very complex, the balanced reaction shown will suffice for the purpose of calculating yields.

Assumptions

1. All available fat/oil undergoes hydrolysis and all the fatty acid thus produced undergoes decarboxylation.

2. Deciding what fraction of the product undergoes degradation is more difficult. From Figure 5, http://ergosphere.files.wordpress.com/2007/04/cwt_genconflasvegas3_3_04.pdf it appears that CWT was originally expecting about a 10:1 mass ratio between oil produced and carbon produced. Using this ratio, it is estimated that about 20% of the product undergoes degradation. The calculation below will illustrate how this leads to the desired 10:1 ratio.

3. The entire feedstock consists of oil/fat.

4. All separations are perfect, i.e. all the fatty acid from the first stage proceeds to the second stage and all remaining product is recovered as TDP/TCP-40 oil.

From these assumptions, it would be obvious that the calculated yield would represent a maximum theoretical yield, as separations in a real plant can never be 100% perfect and no waste feedstock is going to be 100% lipid.

Calculations

The original fat (glyceryl tripalmitate) has a molecular mass of 806, the final oil product 212. Since each unit of fat produces three units of oil, the yield (before degradation) is:

3 x 212/806 = 78.9%

Factoring in degradation, the remaining yield (80%) would be: 78.9 x 0.8 = 63.1%

Proceeding in this manner the yield of all products can be calculated. The results are summarized below. Note that water is consumed during hydrolysis, hence the negative yield.

Product Yield w/o degradation Yield with degradation
Oil 78.9% 63.1%
Carbon dioxide (CO2) 16.4% 16.4%
Methane (CH4) 0 9.5%
Carbon (C) 0 6.3%
Glycerol 11.4% 11.4%
Water -6.7% -6.7%
TOTAL 100.0% 100.0%
Total gas production 16.4% 25.9%

Now let us do some comparison to Figure 5, which Dr. Adams is still holding up as a valid mass balance for the TDP process. On the left we have 92.9 t/d entering the process and on the right we have 69.8 t/d of oil produced, thus allowing for a yield of 69.8/92.9 = 75.1%! As our calculations, show that would only be possible with very limited product degradation.

Now look at the fuel gas production, listed as 7.5 t/d for a yield of 8.1%. As our calculations show, even with no product degradation you will produce twice as much gas as that. With product degradation, we expect to see THREE times as much gas. Did CWT forget to factor in the CO2 that would be produced? Note that a lipid feedstock would contain oxygen which would not be present in the hydrocarbon product, and would have to the report to the fuel gas. At the same time the oxygen would limit the fuel content of the fuel gas. If the oxygen is in the form of CO2, it would have NO fuel value. If it is in the form of CO, it takes valuable carbon from the oil product.

Keep in mind, these are theoretical maximum yields. Look at the four assumptions. Most importantly, we have not factored in the fact that any protein in the feedstock is effectively lost as amino acid fertilizer. According to the label on the turkey, the feedstock is 2/3 protein. If true, yields would significantly below what has been shown above. [Proteins are polymers constructed out of 20 different monomers, a.k.a. amino acids, as discussed at Wikipedia: http://en.wikipedia.org/wiki/Amino_acids. Of the 20, only 9 are nonpolar, i.e. hydrophobic or fat soluble. While this does not mean that only 45% of hydrolyzed turkey protein would dissolve in fat (turkey protein may contain a greater/smaller fraction of the fat soluble amino acids), it does point to a limited contribution of protein to the hydrocarbon product. Especially if one bears in mind that each amino acid contains at least one -COOH group (which would convert to CO2), at least one -NH2 group (which would be released as ammonia) and two contain sulfur which would be released as H2S.]

Let us now consider the actual plant performance (300 bbl/d from 270 t/d of waste). 300 bbl/d x 42 gal/bbl x 7.05 lb/gal / 2,000 lb/ton = 44.4 t/d oil. Assuming CWT got the make-up of the feedstock (left hand side of Figure 5) right, 270 t/d of feedstock would consist of 44% organics or 119.4 t/d. Based on the maximum theoretical yield (with degradation), the feedstock must include at least 44.4/0.631 = 70.4 t/d of fat. Thus, in spite of what the label claims it appears that the feedstock is at least 70.4/119.4 = 59% fat.

Bottom line: CWT’s original mass balance of the TDP process is a flight of fantasy, most likely because they forgot about the CO2 that the process produces. By continuing to present this mass balance as representative of plant performance, they are deliberately misleading people. Specifically, they are claiming a conversion efficiency that simple chemistry proves impossible to achieve. They should by now be able to factor in the correct gas production, carbon production and unconverted organics reporting to the “fertilizer” stream. The fact that they are reluctant to do so speaks volumes.

As for the actual conversion efficiency, I think most people will agree that the main product of interest is the oil. Yes, energy in the gas and carbon products can be recovered, but the main excitement is about the oil. Energy in the high-quality fertilizer (all water soluble monomers) are effectively lost, as this energy will not be recovered by the TDP facility. (The energy in that fertilizer may save a plant using the fertilizer some energy, thus increasing the yield of such a crop plant.) Assuming the reported conversion (300 bbl/d from 270 t/d of waste) is correct, that would mean 158 MM BTU/h in the feedstock and 63.3 MM BTU/h in the oil, for a conversion efficiency of 40%. MUCH below the original claim of 85%!

February 3, 2009 Posted by | Changing World Technologies, Thermal Depolymerization | 26 Comments

Repost of TDP: What Went Wrong

The is Part II of my look at Changing World Technologies’ thermal depolymerization process. This essay came from a reader, and was originally posted on April 12, 2007.

But I also want to add some comments that regular reader “Optimist” added following the previous essay. First, those comments:

The 85% efficiency claim is based on a faulty mass balance. The faulty mass balance is the basis for an equally faulty energy balance. You can verify by comparing production data (bbl oil/ton of waste) to the mass balance (still) presented by CWT.

Contrary to what the breathless writers at Discover magazine believe, this technology is good only for recycling lipids (fats and oils) and the fat-soluble amino acids in protein. To understand why you need to follow the process flow diagram, which consists of three key steps:

1. Thermal Depolymerization (aka Dilute Acid Hydrolysis – yes, the process uses sulfuric acid).
2. Separation of water and fat/oil.
3. Decarboxylation of fatty acids to yield hycrocarbon (diesel) product.

Anything soluble in water goes into the effluent in step 2. That includes (but is not limited to) all carbohydrate and the bulk of the protein hydrolysis product (amino acids).

CWT cleverly states that this makes the effluent a high quality fertilizer. Probably true. But that high quality fertilizer contains BTUs not available as fuel (the main product).

Another comment from Optimist:

To their credit, Discover magazine did raise another issue: product quality: Fuel quality was another challenge. Changing World Technologies‘ thick, tarry fuel resembles boiler-grade fuel oil. One prospective buyer insisted on what the company called “unacceptable pricing terms” for its relatively unproven product. In the end, CWT sold only 93,000 of the 391,000 gallons of fuel it produced and earned just 99 cents for each one. At the time, wholesale fuel oil distributors were raking in $2.50 to $3.30 per gallon. Even with the $1-per-gallon U.S. biofuels tax credit for every gallon sold, Changing World Technologies paid more for Butterball’s turkey offal than it earned back in revenue. (Accounting for all its operating costs, the company lost $5,003,000 in the first quarter of 2008, though operating at a loss is not uncommon or necessarily a very bad sign for a technology startup.) Emphasis added.

Don’t worry – I’m sure next year they’ll be printing money…

In light of this, I am not sure why they think it’s a good idea to do an IPO now.

Now for the essay from a reader who provided some very specific details on what went wrong. He included a presentation in which he referred to several slides, and I will pull those out and post them so the references are clear. I will also insert some comments in the text [like this].

—————————————

Robert,

I enjoy your blog quite a lot. Intelligent analysis is rare. Coupled with unbiased interpretation it is almost an unknown.

Saw your discussion of TDP/TCP. Pretty much spot on. As a chemical engineer I thought you’d be interested in some deeper insights of how the process works. This is all information that used to be available on the web, but most of it has been removed.

Start with the lecture (attached) by Terry Adams, CWT technical officer at MIT in April 2005 – best TDP technical article I know of [I have searched for an online version of this, but to no avail. Perhaps using the Wayback Machine one could locate an online archive of the original presentation]. The way I understand it, the process basically consists of two thermal treatment steps. The first step (slide #13) is a low temp/high pressure step that causes hydrolysis of all the biological material. A check of steam tables confirms that pressure is just high enough to maintain liquid water at the temperature given.

Slide 13 of “The CWT Thermal Conversion Process” Presentation

The first stage is followed by separation (slide #3).

Slide 3 from “The CWT Thermal Conversion Process” Presentation

As indicated in slide #14 they have a clever way of flashing off some of the water and then using the steam to heat the feedstock [This sort of heat recovery is standard practice in the petrochemical industry]. This is at the heart of their claims about high efficiency: the steam is condensed, so most of the water in the feedstock is discharged as liquid. Calling it distilled water, is of course salesmen talk that would make a used car salesman’s eye’s water.

Slide 14 of “The CWT Thermal Conversion Process” Presentation

But take a closer look: After separation only the “organic oil” goes to the second stage. After full hydrolysis (let’s just assume that for now) what monomers would be part of the organic oil? Fatty acids barely make it into this oil, due to the little known fact (see flow diagram on slide #11) that sulfuric acid is used to aid hydrolysis [If I had known that, I had forgotten about it. That does put quite a different spin on the whole process]. (DOE would call the first stage by another name: Dilute Acid Hydrolysis). Some fat-soluble amino acids. That’s it. (I bet you can figure out what cellulose fed to these two units would yield…) [It would interesting to see some yields on this. What I would really like to see is what they get if they threw corn in there. If their energy balances are really good – and even with all that has gone wrong they appear to be better than for corn ethanol – then I would like to see some experiments in that direction.]

Slide 11 of “The CWT Thermal Conversion Process” Presentation

Of course, CWT are master salesmen. The water-soluble amino acid and glycerol solution is not waste: it is a wonderful liquid fertilizer (slide #23). Talk about taking a lemon and making lemonade…

Slide 23 of “The CWT Thermal Conversion Process” Presentation

So, the “organic oil” goes to the second stage (high temperature/low pressure) where the fatty acids are decarboxylized (to yield oil) and some of the amino acids are deaminated and decarboxylized to yield who-knows-what (slide #15, point 2).

Slide 15 of “The CWT Thermal Conversion Process” Presentation

You raise the question of how on earth did CWT get their cost estimates so wrong. Well, a large factor in that would be overestimating yield (and per extension efficiency). CWT has long claimed that TDP has an energy efficiency of 85% (heading slide #12). Right there you smell a skunk. Now the dirty details.

Slide 12 of “The CWT Thermal Conversion Process” Presentation

The mass balance, slide #11 [posted earlier], shows that CWT probably did not take the CO2 that results from decarboxylation into account. This causes them to overestimate fuel production. You can easily do the calc’s I’m sure, but it is spelled out here. Apologies for the format, got mangled when they changed their format [That thread was a very good discussion on this issue; perhaps I will pull it out, reformat it, and post it at some point].

The energy balance, slide #12, does not include the energy present in the “liquid fertilizer”. What, all that glycerol and amino acids contain no energy? The water vapor also presents energy lost, even if it’s not much.

The mass and energy balances actually date from a previous publication (February and March 2004), also attached. One would expect that CWT would have discovered the error in the interceding year, and corrected it. I guess they were to busy ironing out the substantial start-up problems, such as the odor issue, you mentioned.

You may have notice a subtle shift between those two breathless Discover articles. Instead of producing 500 bbl from 210 tons of waste (first article), they now need 290 tons (20 tons of it pure pig fat), or a 28% reduction in oil yield. Instead of claiming 2.4 bbl/ton of waste, it is now 1.7 bbl/ton (validating an estimate of the maximum yield of ~2.0 bbl/to). Funny thing is Appel and his team still use the 2.4 figure in their financial analysis, even when it would help their argument to use the 1.7 real number. From the second Discover article: “‘We thought we would get $24 a ton for taking the waste,’ says Appel. ‘Instead we are paying $30 a ton.’ That alone raises his production costs about $22 a barrel.” How did they get to $22? ($24/ton + $30/ton)/2.4 bbl/ton = $22.50/bbl. Using the real number would yield: ($24/ton + $30/ton)/1.7 bbl/ton = $32/bbl. Also getting less yield would raise production cost in a number of ways, including the fact that they may be buying natural gas for heating…

So where does that leave TDP? No doubt it is not the silver bullet once claimed. None of the “anything” into oil that seduced Discover’s reporters. And costs are substantial. However, it seems like a good process for converting waste grease into liquid fuel. Much better than say biodiesel. Look at the feedstock (slide #6). How much cleaning (i.e. money and energy) would that stuff need to make it suitable as feedstock for a biodiesel plant? TDP uses sulfuric acid, whereas biodiesel uses methanol and a catalyst (usually NaOH). In terms of energy and money, I suspect TDP has the better input here. TDP yields a liquid fuel that is chemically almost identical to fossil diesel (without the sulfur and aromatics). TDP-40 can be blended with diesel in any ratio 1 to 100, without any issues. As Minnesota discovered last winter, biodiesel has some issues with cold weather. [Having worked in a Montana refinery, I can attest to the fact that winter properties for diesel are critical. I am aware that biodiesel has some problems with pour and cloud points in cold weather, limiting their usage to small blend fractions.]

Slide 6 of “The CWT Thermal Conversion Process” Presentation

The main threat to TDP, as I see it, is a process developed by Neste Oil, Finland, that I read about at GCC. Apparently this process allows an existing refinery to incorporate waste grease as a feedstock, without a radical change to the process (or a brand new SS plant). Even that process is not a slam-dunk, as I’ve seen reports of canceled projects.

So yes, you nailed it: these guys overpromised and underdelivered big time. But in terms of the big picture I give them some credit: at least we are not talking about food -> fuel (as with most of the biodiesel plants being built in Europe, proving that the food -> fuel madness is not endemic to North America). [Oh, I agree completely. It is not the process that I took issue with; in fact I do applaud their initiative. My concern was the completely willingness of so many to accept this as the solution to our energy problems. I see the same thing happening right now with cellulosic ethanol.] They probably help to advance the debate on waste -> energy quite a bit. And they do have a working plant, which is more than we can say about Washington’s next big thing, aka cellulosic ethanol. [I will probably write the same article on cellulosic ethanol in just a few years – overpromised and underdelivered. I see many parallels here.]

January 31, 2009 Posted by | biodiesel, Changing World Technologies, green diesel, reader submission, Thermal Depolymerization | 8 Comments

Repost of TDP: What Went Wrong

The is Part II of my look at Changing World Technologies’ thermal depolymerization process. This essay came from a reader, and was originally posted on April 12, 2007.

But I also want to add some comments that regular reader “Optimist” added following the previous essay. First, those comments:

The 85% efficiency claim is based on a faulty mass balance. The faulty mass balance is the basis for an equally faulty energy balance. You can verify by comparing production data (bbl oil/ton of waste) to the mass balance (still) presented by CWT.

Contrary to what the breathless writers at Discover magazine believe, this technology is good only for recycling lipids (fats and oils) and the fat-soluble amino acids in protein. To understand why you need to follow the process flow diagram, which consists of three key steps:

1. Thermal Depolymerization (aka Dilute Acid Hydrolysis – yes, the process uses sulfuric acid).
2. Separation of water and fat/oil.
3. Decarboxylation of fatty acids to yield hycrocarbon (diesel) product.

Anything soluble in water goes into the effluent in step 2. That includes (but is not limited to) all carbohydrate and the bulk of the protein hydrolysis product (amino acids).

CWT cleverly states that this makes the effluent a high quality fertilizer. Probably true. But that high quality fertilizer contains BTUs not available as fuel (the main product).

Another comment from Optimist:

To their credit, Discover magazine did raise another issue: product quality: Fuel quality was another challenge. Changing World Technologies‘ thick, tarry fuel resembles boiler-grade fuel oil. One prospective buyer insisted on what the company called “unacceptable pricing terms” for its relatively unproven product. In the end, CWT sold only 93,000 of the 391,000 gallons of fuel it produced and earned just 99 cents for each one. At the time, wholesale fuel oil distributors were raking in $2.50 to $3.30 per gallon. Even with the $1-per-gallon U.S. biofuels tax credit for every gallon sold, Changing World Technologies paid more for Butterball’s turkey offal than it earned back in revenue. (Accounting for all its operating costs, the company lost $5,003,000 in the first quarter of 2008, though operating at a loss is not uncommon or necessarily a very bad sign for a technology startup.) Emphasis added.

Don’t worry – I’m sure next year they’ll be printing money…

In light of this, I am not sure why they think it’s a good idea to do an IPO now.

Now for the essay from a reader who provided some very specific details on what went wrong. He included a presentation in which he referred to several slides, and I will pull those out and post them so the references are clear. I will also insert some comments in the text [like this].

—————————————

Robert,

I enjoy your blog quite a lot. Intelligent analysis is rare. Coupled with unbiased interpretation it is almost an unknown.

Saw your discussion of TDP/TCP. Pretty much spot on. As a chemical engineer I thought you’d be interested in some deeper insights of how the process works. This is all information that used to be available on the web, but most of it has been removed.

Start with the lecture (attached) by Terry Adams, CWT technical officer at MIT in April 2005 – best TDP technical article I know of [I have searched for an online version of this, but to no avail. Perhaps using the Wayback Machine one could locate an online archive of the original presentation]. The way I understand it, the process basically consists of two thermal treatment steps. The first step (slide #13) is a low temp/high pressure step that causes hydrolysis of all the biological material. A check of steam tables confirms that pressure is just high enough to maintain liquid water at the temperature given.

Slide 13 of “The CWT Thermal Conversion Process” Presentation

The first stage is followed by separation (slide #3).

Slide 3 from “The CWT Thermal Conversion Process” Presentation

As indicated in slide #14 they have a clever way of flashing off some of the water and then using the steam to heat the feedstock [This sort of heat recovery is standard practice in the petrochemical industry]. This is at the heart of their claims about high efficiency: the steam is condensed, so most of the water in the feedstock is discharged as liquid. Calling it distilled water, is of course salesmen talk that would make a used car salesman’s eye’s water.

Slide 14 of “The CWT Thermal Conversion Process” Presentation

But take a closer look: After separation only the “organic oil” goes to the second stage. After full hydrolysis (let’s just assume that for now) what monomers would be part of the organic oil? Fatty acids barely make it into this oil, due to the little known fact (see flow diagram on slide #11) that sulfuric acid is used to aid hydrolysis [If I had known that, I had forgotten about it. That does put quite a different spin on the whole process]. (DOE would call the first stage by another name: Dilute Acid Hydrolysis). Some fat-soluble amino acids. That’s it. (I bet you can figure out what cellulose fed to these two units would yield…) [It would interesting to see some yields on this. What I would really like to see is what they get if they threw corn in there. If their energy balances are really good – and even with all that has gone wrong they appear to be better than for corn ethanol – then I would like to see some experiments in that direction.]

Slide 11 of “The CWT Thermal Conversion Process” Presentation

Of course, CWT are master salesmen. The water-soluble amino acid and glycerol solution is not waste: it is a wonderful liquid fertilizer (slide #23). Talk about taking a lemon and making lemonade…

Slide 23 of “The CWT Thermal Conversion Process” Presentation

So, the “organic oil” goes to the second stage (high temperature/low pressure) where the fatty acids are decarboxylized (to yield oil) and some of the amino acids are deaminated and decarboxylized to yield who-knows-what (slide #15, point 2).

Slide 15 of “The CWT Thermal Conversion Process” Presentation

You raise the question of how on earth did CWT get their cost estimates so wrong. Well, a large factor in that would be overestimating yield (and per extension efficiency). CWT has long claimed that TDP has an energy efficiency of 85% (heading slide #12). Right there you smell a skunk. Now the dirty details.

Slide 12 of “The CWT Thermal Conversion Process” Presentation

The mass balance, slide #11 [posted earlier], shows that CWT probably did not take the CO2 that results from decarboxylation into account. This causes them to overestimate fuel production. You can easily do the calc’s I’m sure, but it is spelled out here. Apologies for the format, got mangled when they changed their format [That thread was a very good discussion on this issue; perhaps I will pull it out, reformat it, and post it at some point].

The energy balance, slide #12, does not include the energy present in the “liquid fertilizer”. What, all that glycerol and amino acids contain no energy? The water vapor also presents energy lost, even if it’s not much.

The mass and energy balances actually date from a previous publication (February and March 2004), also attached. One would expect that CWT would have discovered the error in the interceding year, and corrected it. I guess they were to busy ironing out the substantial start-up problems, such as the odor issue, you mentioned.

You may have notice a subtle shift between those two breathless Discover articles. Instead of producing 500 bbl from 210 tons of waste (first article), they now need 290 tons (20 tons of it pure pig fat), or a 28% reduction in oil yield. Instead of claiming 2.4 bbl/ton of waste, it is now 1.7 bbl/ton (validating an estimate of the maximum yield of ~2.0 bbl/to). Funny thing is Appel and his team still use the 2.4 figure in their financial analysis, even when it would help their argument to use the 1.7 real number. From the second Discover article: “‘We thought we would get $24 a ton for taking the waste,’ says Appel. ‘Instead we are paying $30 a ton.’ That alone raises his production costs about $22 a barrel.” How did they get to $22? ($24/ton + $30/ton)/2.4 bbl/ton = $22.50/bbl. Using the real number would yield: ($24/ton + $30/ton)/1.7 bbl/ton = $32/bbl. Also getting less yield would raise production cost in a number of ways, including the fact that they may be buying natural gas for heating…

So where does that leave TDP? No doubt it is not the silver bullet once claimed. None of the “anything” into oil that seduced Discover’s reporters. And costs are substantial. However, it seems like a good process for converting waste grease into liquid fuel. Much better than say biodiesel. Look at the feedstock (slide #6). How much cleaning (i.e. money and energy) would that stuff need to make it suitable as feedstock for a biodiesel plant? TDP uses sulfuric acid, whereas biodiesel uses methanol and a catalyst (usually NaOH). In terms of energy and money, I suspect TDP has the better input here. TDP yields a liquid fuel that is chemically almost identical to fossil diesel (without the sulfur and aromatics). TDP-40 can be blended with diesel in any ratio 1 to 100, without any issues. As Minnesota discovered last winter, biodiesel has some issues with cold weather. [Having worked in a Montana refinery, I can attest to the fact that winter properties for diesel are critical. I am aware that biodiesel has some problems with pour and cloud points in cold weather, limiting their usage to small blend fractions.]

Slide 6 of “The CWT Thermal Conversion Process” Presentation

The main threat to TDP, as I see it, is a process developed by Neste Oil, Finland, that I read about at GCC. Apparently this process allows an existing refinery to incorporate waste grease as a feedstock, without a radical change to the process (or a brand new SS plant). Even that process is not a slam-dunk, as I’ve seen reports of canceled projects.

So yes, you nailed it: these guys overpromised and underdelivered big time. But in terms of the big picture I give them some credit: at least we are not talking about food -> fuel (as with most of the biodiesel plants being built in Europe, proving that the food -> fuel madness is not endemic to North America). [Oh, I agree completely. It is not the process that I took issue with; in fact I do applaud their initiative. My concern was the completely willingness of so many to accept this as the solution to our energy problems. I see the same thing happening right now with cellulosic ethanol.] They probably help to advance the debate on waste -> energy quite a bit. And they do have a working plant, which is more than we can say about Washington’s next big thing, aka cellulosic ethanol. [I will probably write the same article on cellulosic ethanol in just a few years – overpromised and underdelivered. I see many parallels here.]

January 31, 2009 Posted by | biodiesel, Changing World Technologies, green diesel, reader submission, Thermal Depolymerization | 8 Comments

Repost of TDP: The Next Big Thing

Because of the upcoming IPO for Changing World Technologies (See this story at Seeking Alpha) the articles that I wrote on the company are getting quite a bit of traffic. I thought I would bump them to the top for a review of who they are, what they do, and where things went wrong for them. The following essay was originally published on April 9, 2007. If you want to immediately read the sequel to this post, it was TDP: What Went Wrong. That post was written by a reader, and is full of slides and some very keen insight. I will bump it up to the top in a couple of days.

————————–

If you are a layperson, it may not be clear to you just how much of the current infatuation with cellulosic ethanol is hype, and how much is based on realistic assessments. So, I thought I would take you down memory lane and revisit another technology that was going to reduce our dependence on foreign oil.

The Hype: TDP Will Save the World

In May of 2003, Discover Magazine published Anything Into Oil. It was a look at a technology called thermal depolymerization (TDP), which could take any organic material and turn it into oil. This was a high profile write-up with a lot of hype, and the technology of Brian Appel and his company Changing World Technologies (CWT) was really going to change the world.

I remember the first time I read the article, and I thought to myself “Wow, this is really something special.” However, the hype of the technology didn’t quite match up with reality. Let’s take a look back at that original article, and see if we can draw some parallels with some of our current biofuels delusions.

The article starts off:

“This is a solution to three of the biggest problems facing mankind,” says Brian Appel, chairman and CEO of Changing World Technologies, the company that built this pilot plant and has just completed its first industrial-size installation in Missouri. “This process can deal with the world’s waste. It can supplement our dwindling supplies of oil. And it can slow down global warming.”

Pardon me, says a reporter, shivering in the frigid dawn, but that sounds too good to be true. “Everybody says that,” says Appel. He is a tall, affable entrepreneur who has assembled a team of scientists, former government leaders, and deep-pocketed investors to develop and sell what he calls the thermal depolymerization process, or TDP.

So far, so good. An entrepeneur (like Vinod Khosla), former government leaders (like Tom Daschle), and lots of deep-pocketed investors. The article opens with a little bit of hype, and follows with another liberal dose:

“The potential is unbelievable,” says Michael Roberts, a senior chemical engineer for the Gas Technology Institute, an energy research group. “You’re not only cleaning up waste; you’re talking about distributed generation of oil all over the world.”

“This is not an incremental change. This is a big, new step,” agrees Alf Andreassen, a venture capitalist with the Paladin Capital Group and a former Bell Laboratories director.

Yeah, but it’s got to be expensive, right? Not so:

Private investors, who have chipped in $40 million to develop the process, aren’t the only ones who are impressed. The federal government has granted more than $12 million to push the work along.

“We will be able to make oil for $8 to $12 a barrel,” says Paul Baskis, the inventor of the process. “We are going to be able to switch to a carbohydrate economy.”

The article goes on to explain that the technology originated back in the 1980’s:

Usually, the Btu content in the resulting oil or gas barely exceeds the amount needed to make the stuff. That’s the challenge that Baskis, a microbiologist and inventor who lives in Rantoul, Illinois, confronted in the late 1980s. He says he “had a flash” of insight about how to improve the basic ideas behind another inventor’s waste-reforming process.

“The prototype I saw produced a heavy, burned oil,” recalls Baskis. “I drew up an improvement and filed the first patents.” He spent the early 1990s wooing investors and, in 1996, met Appel, a former commodities trader. “I saw what this could be and took over the patents,” says Appel, who formed a partnership with the Gas Technology Institute and had a demonstration plant up and running by 1999.

And they were on the verge of printing money, planning to make oil for $15 a barrel (I thought it was $8-$12?):

And it will be profitable, promises Appel. “We’ve done so much testing in Philadelphia, we already know the costs,” he says. “This is our first-out plant, and we estimate we’ll make oil at $15 a barrel. In three to five years, we’ll drop that to $10, the same as a medium-size oil exploration and production company. And it will get cheaper from there.”

The Hype Begins to Unravel

Well, it’s been 3 to 5 years, and things have not worked out as planned. Costs were much, much higher than forecast. Unforeseen complications appeared. Small technical problems turned out to be big technical problems after the process was scaled up.

Let’s look at some of the issues. A Newsday article in 2004, while also full of hype, foretold of some potential problems:

Turning Garbage into Oil—and Cash

Appel and his financial backers have bet more than $66 million that the modern-day alchemy practiced by Changing World Technologies Inc. will revolutionize the way the world deals with its waste, reduce dependence on foreign oil, fight the spread of mad cow disease and even ease global warming.

Not bad for a 25-person company that Appel, who has no scientific training, runs from the top floor of a Hempstead Avenue china shop owned by his wife, Doreen.

No scientific training? Hmm. Where else have I seen amateurs jumping into an alternative fuel technology with both feet? Oh, yeah. Here and here. (I don’t mean to sound elitist, because amateurs have made valuable contributions in many fields. However, they are more likely to make mistakes/miscalculations than a professional).

The article continues with one more bit of hype that eventually turned out to be unfounded. More on this later:

Incredibly, the only “waste” that’s left behind is distilled water. There are no smokestacks bellowing chemical-laden smoke, and no pipes discharging fetid wastewater.

The article continues by indicating that despite the hype, there really isn’t that much that is known about the process:

Although Discover, Money and Scientific American magazines have all written wildly enthusiastic stories about the company recently — Money called it “The Next Big Thing” — competitors and independent researchers point out that Changing World Technologies has released very little information about the details of its patented process.

So the skeptics (AKA, naysayers) weigh in:

“You have to remember that people have been pressure-cooking different types of biomass for a long time now, and we really haven’t seen these kinds of breakthroughs,” said Ralph Overend, a leading authority in the bio-energy field and a research fellow at the National Renewable Energy Laboratory in Golden, Colo.

“People always stay skeptical until they can see the real data,” added Overend, editor of the academic journal Biomass & Bioenergy.

Appel said the company’s focus has been on building the Missouri plant, not on publishing scientific papers that he worries could tip off potential competitors.

And then there were those nagging cost issues:

Skeptics also wonder about the project’s profitability, and whether it can truly compete with traditional oil drillers and refiners.

Appel acknowledges that producing a barrel of oil through thermal conversion costs about 50 percent more than doing it by conventional refining.

Only 50% more?

And then he makes the mistake that so many others repeatedly make:

If the price of oil keeps rising, he said, so will profits.

This is the same mistake that proponents of tar sands, GTL, oil shale, cellulosic ethanol, and many others have run into. They believe that oil prices will rise, and yet their costs will magically remain where they were. In fact, what happens is that as oil prices rise, all the costs associated with these various projects rise. That’s why oil shale has been imminent for 100 years. That’s why ExxonMobil is scrapping GTL plans. And that’s why tar sands costs have skyrocketed. A poster at The Oil Drum has referred to this trend as The Law of Receding Horizons.

The Bloom Comes off the Rose

So, where does the technology stand today? How far off were those $8 or $15/bbl costs estimates? After all they had run the pilot plants. They had “done so much testing in Philadelphia“, they “already know the costs.” Turns out they didn’t:

Reports from 2005 summarized some economic setbacks which the Carthage plant encountered since its planning stages. It was thought that concern over mad cow disease would prevent the use of turkey waste and other animal products as cattle feed, and thus this waste would be free. As it turns out, turkey waste may still be used as feed in the United States, so that the facility must purchase that feed stock at a cost of $30 to $40 per ton, adding $15 to $20 per barrel to the cost of the oil. Final cost, as of January 2005, was $80/barrel ($1.90/gal).

$80 a barrel! That was an an order of magnitude higher than their earlier estimates. (Incidentally, if their process really worked as they claimed, they could just feed it corn and turn it into oil at a very high EROEI). Not only that, they obviously made more errors in their estimates than just presuming the feedstock would be free. Subtract that $20/bbl and you are still at $60 a barrel – 300% over their highest prior estimate of $15/bbl. Cellulosic ethanol hypesters, take note.

And there was more bad news:

Turkey-oil plant closed due to foul odors

SPRINGFIELD, Mo. – A foul-smelling plant that turns turkey byproducts into fuel oil was ordered closed by the governor Wednesday until the company finds a way to clear the air.

Renewable Environmental Solutions Inc. in the southwest Missouri community of Carthage had agreed in May to improve its odor-control systems after state and city officials sued, alleging the smell posed a public nuisance.

The company also was cited six times by state environmental officials this year, Gov. Matt Blunt said, but the smell continued.

Well, at least there were “no smokestacks bellowing chemical-laden smoke.”

The Lesson Here

CWT still exists as a company today. Like cellulosic ethanol, TDP is a technology that actually works. But the technology was hyped beyond reason. People did not apply enough skepticism before embracing the promise of the technology. It was really going to be “the next big thing.”

But costs and complications were grossly underestimated. They fell victim to The Law of Receding Horizons. They learned that the public doesn’t like smelly plants in their community. Discover ran an updated article in 2006 in which Appel admitted “We have made mistakes. We were too aggressive in our earlier projections.” The hype just ultimately did not match the reality. And while TDP may make some small contribution to our energy needs, it isn’t going to make any measurable dent in our fossil fuel usage.

But at least we have cellulosic ethanol, which I have heard really is “the next big thing.”

January 29, 2009 Posted by | cellulosic ethanol, Changing World Technologies, green diesel, Thermal Depolymerization | 18 Comments

TDP: What Went Wrong

I am still working on an essay on butanol, pentanol, and higher-chain alcohols, but it has been really difficult to find the information I am looking for. (But I have figured out why bio-butanol has not taken off). Regardless, I hope to complete it in a few days.

In the interim, in response to my TDP essay, I received a comprehensive e-mail from a reader who provided some very specific details on what went wrong. He included a presentation in which he referred to several slides, and I will pull those out and post them so the references are clear. I will also insert some comments in the text [like this].

—————————————

Robert,

I enjoy your blog quite a lot. Intelligent analysis is rare. Coupled with unbiased interpretation it is almost an unknown.

Saw your discussion of TDP/TCP. Pretty much spot on. As a chemical engineer I thought you’d be interested in some deeper insights of how the process works. This is all information that used to be available on the web, but most of it has been removed.

Start with the lecture (attached) by Terry Adams, CWT technical officer at MIT in April 2005 – best TDP technical article I know of [I have searched for an online version of this, but to no avail. Perhaps using the Wayback Machine one could locate an online archive of the original presentation]. The way I understand it, the process basically consists of two thermal treatment steps. The first step (slide #13) is a low temp/high pressure step that causes hydrolysis of all the biological material. A check of steam tables confirms that pressure is just high enough to maintain liquid water at the temperature given.

Slide 13 of “The CWT Thermal Conversion Process” Presentation

The first stage is followed by separation (slide #3).

Slide 3 from “The CWT Thermal Conversion Process” Presentation

As indicated in slide #14 they have a clever way of flashing off some of the water and then using the steam to heat the feedstock [This sort of heat recovery is standard practice in the petrochemical industry]. This is at the heart of their claims about high efficiency: the steam is condensed, so most of the water in the feedstock is discharged as liquid. Calling it distilled water, is of course salesmen talk that would make a used car salesman’s eye’s water.

Slide 14 of “The CWT Thermal Conversion Process” Presentation

But take a closer look: After separation only the “organic oil” goes to the second stage. After full hydrolysis (let’s just assume that for now) what monomers would be part of the organic oil? Fatty acids barely make it into this oil, due to the little known fact (see flow diagram on slide #11) that sulfuric acid is used to aid hydrolysis [If I had known that, I had forgotten about it. That does put quite a different spin on the whole process]. (DOE would call the first stage by another name: Dilute Acid Hydrolysis). Some fat-soluble amino acids. That’s it. (I bet you can figure out what cellulose fed to these two units would yield…) [It would interesting to see some yields on this. What I would really like to see is what they get if they threw corn in there. If their energy balances are really good – and even with all that has gone wrong they appear to be better than for corn ethanol – then I would like to see some experiments in that direction.]

Slide 11 of “The CWT Thermal Conversion Process” Presentation

Of course, CWT are master salesmen. The water-soluble amino acid and glycerol solution is not waste: it is a wonderful liquid fertilizer (slide #23). Talk about taking a lemon and making lemonade…

Slide 23 of “The CWT Thermal Conversion Process” Presentation

So, the “organic oil” goes to the second stage (high temperature/low pressure) where the fatty acids are decarboxylized (to yield oil) and some of the amino acids are deaminated and decarboxylized to yield who-knows-what (slide #15, point 2).

Slide 15 of “The CWT Thermal Conversion Process” Presentation

You raise the question of how on earth did CWT get their cost estimates so wrong. Well, a large factor in that would be overestimating yield (and per extension efficiency). CWT has long claimed that TDP has an energy efficiency of 85% (heading slide #12). Right there you smell a skunk. Now the dirty details.

Slide 12 of “The CWT Thermal Conversion Process” Presentation

The mass balance, slide #11 [posted earlier], shows that CWT probably did not take the CO2 that results from decarboxylation into account. This causes them to overestimate fuel production. You can easily do the calc’s I’m sure, but it is spelled out here. Apologies for the format, got mangled when they changed their format [That thread was a very good discussion on this issue; perhaps I will pull it out, reformat it, and post it at some point].

The energy balance, slide #12, does not include the energy present in the “liquid fertilizer”. What, all that glycerol and amino acids contain no energy? The water vapor also presents energy lost, even if it’s not much.

The mass and energy balances actually date from a previous publication (February and March 2004), also attached. One would expect that CWT would have discovered the error in the interceding year, and corrected it. I guess they were to busy ironing out the substantial start-up problems, such as the odor issue, you mentioned.

You may have notice a subtle shift between those two breathless Discover articles. Instead of producing 500 bbl from 210 tons of waste (first article), they now need 290 tons (20 tons of it pure pig fat), or a 28% reduction in oil yield. Instead of claiming 2.4 bbl/ton of waste, it is now 1.7 bbl/ton (validating an estimate of the maximum yield of ~2.0 bbl/to). Funny thing is Appel and his team still use the 2.4 figure in their financial analysis, even when it would help their argument to use the 1.7 real number. From the second Discover article: “‘We thought we would get $24 a ton for taking the waste,’ says Appel. ‘Instead we are paying $30 a ton.’ That alone raises his production costs about $22 a barrel.” How did they get to $22? ($24/ton + $30/ton)/2.4 bbl/ton = $22.50/bbl. Using the real number would yield: ($24/ton + $30/ton)/1.7 bbl/ton = $32/bbl. Also getting less yield would raise production cost in a number of ways, including the fact that they may be buying natural gas for heating…

So where does that leave TDP? No doubt it is not the silver bullet once claimed. None of the “anything” into oil that seduced Discover’s reporters. And costs are substantial. However, it seems like a good process for converting waste grease into liquid fuel. Much better than say biodiesel. Look at the feedstock (slide #6). How much cleaning (i.e. money and energy) would that stuff need to make it suitable as feedstock for a biodiesel plant? TDP uses sulfuric acid, whereas biodiesel uses methanol and a catalyst (usually NaOH). In terms of energy and money, I suspect TDP has the better input here. TDP yields a liquid fuel that is chemically almost identical to fossil diesel (without the sulfur and aromatics). TDP-40 can be blended with diesel in any ratio 1 to 100, without any issues. As Minnesota discovered last winter, biodiesel has some issues with cold weather. [Having worked in a Montana refinery, I can attest to the fact that winter properties for diesel are critical. I am aware that biodiesel has some problems with pour and cloud points in cold weather, limiting their usage to small blend fractions.]

Slide 6 of “The CWT Thermal Conversion Process” Presentation

The main threat to TDP, as I see it, is a process developed by Neste Oil, Finland, that I read about at GCC. Apparently this process allows an existing refinery to incorporate waste grease as a feedstock, without a radical change to the process (or a brand new SS plant). Even that process is not a slam-dunk, as I’ve seen reports of canceled projects.

So yes, you nailed it: these guys overpromised and underdelivered big time. But in terms of the big picture I give them some credit: at least we are not talking about food -> fuel (as with most of the biodiesel plants being built in Europe, proving that the food -> fuel madness is not endemic to North America). [Oh, I agree completely. It is not the process that I took issue with; in fact I do applaud their initiative. My concern was the completely willingness of so many to accept this as the solution to our energy problems. I see the same thing happening right now with cellulosic ethanol.] They probably help to advance the debate on waste -> energy quite a bit. And they do have a working plant, which is more than we can say about Washington’s next big thing, aka cellulosic ethanol. [I will probably write the same article on cellulosic ethanol in just a few years – overpromised and underdelivered. I see many parallels here.]

April 12, 2007 Posted by | biodiesel, Changing World Technologies, green diesel, reader submission, Thermal Depolymerization | 57 Comments

TDP: What Went Wrong

I am still working on an essay on butanol, pentanol, and higher-chain alcohols, but it has been really difficult to find the information I am looking for. (But I have figured out why bio-butanol has not taken off). Regardless, I hope to complete it in a few days.

In the interim, in response to my TDP essay, I received a comprehensive e-mail from a reader who provided some very specific details on what went wrong. He included a presentation in which he referred to several slides, and I will pull those out and post them so the references are clear. I will also insert some comments in the text [like this].

—————————————

Robert,

I enjoy your blog quite a lot. Intelligent analysis is rare. Coupled with unbiased interpretation it is almost an unknown.

Saw your discussion of TDP/TCP. Pretty much spot on. As a chemical engineer I thought you’d be interested in some deeper insights of how the process works. This is all information that used to be available on the web, but most of it has been removed.

Start with the lecture (attached) by Terry Adams, CWT technical officer at MIT in April 2005 – best TDP technical article I know of [I have searched for an online version of this, but to no avail. Perhaps using the Wayback Machine one could locate an online archive of the original presentation]. The way I understand it, the process basically consists of two thermal treatment steps. The first step (slide #13) is a low temp/high pressure step that causes hydrolysis of all the biological material. A check of steam tables confirms that pressure is just high enough to maintain liquid water at the temperature given.

Slide 13 of “The CWT Thermal Conversion Process” Presentation

The first stage is followed by separation (slide #3).

Slide 3 from “The CWT Thermal Conversion Process” Presentation

As indicated in slide #14 they have a clever way of flashing off some of the water and then using the steam to heat the feedstock [This sort of heat recovery is standard practice in the petrochemical industry]. This is at the heart of their claims about high efficiency: the steam is condensed, so most of the water in the feedstock is discharged as liquid. Calling it distilled water, is of course salesmen talk that would make a used car salesman’s eye’s water.

Slide 14 of “The CWT Thermal Conversion Process” Presentation

But take a closer look: After separation only the “organic oil” goes to the second stage. After full hydrolysis (let’s just assume that for now) what monomers would be part of the organic oil? Fatty acids barely make it into this oil, due to the little known fact (see flow diagram on slide #11) that sulfuric acid is used to aid hydrolysis [If I had known that, I had forgotten about it. That does put quite a different spin on the whole process]. (DOE would call the first stage by another name: Dilute Acid Hydrolysis). Some fat-soluble amino acids. That’s it. (I bet you can figure out what cellulose fed to these two units would yield…) [It would interesting to see some yields on this. What I would really like to see is what they get if they threw corn in there. If their energy balances are really good – and even with all that has gone wrong they appear to be better than for corn ethanol – then I would like to see some experiments in that direction.]

Slide 11 of “The CWT Thermal Conversion Process” Presentation

Of course, CWT are master salesmen. The water-soluble amino acid and glycerol solution is not waste: it is a wonderful liquid fertilizer (slide #23). Talk about taking a lemon and making lemonade…

Slide 23 of “The CWT Thermal Conversion Process” Presentation

So, the “organic oil” goes to the second stage (high temperature/low pressure) where the fatty acids are decarboxylized (to yield oil) and some of the amino acids are deaminated and decarboxylized to yield who-knows-what (slide #15, point 2).

Slide 15 of “The CWT Thermal Conversion Process” Presentation

You raise the question of how on earth did CWT get their cost estimates so wrong. Well, a large factor in that would be overestimating yield (and per extension efficiency). CWT has long claimed that TDP has an energy efficiency of 85% (heading slide #12). Right there you smell a skunk. Now the dirty details.

Slide 12 of “The CWT Thermal Conversion Process” Presentation

The mass balance, slide #11 [posted earlier], shows that CWT probably did not take the CO2 that results from decarboxylation into account. This causes them to overestimate fuel production. You can easily do the calc’s I’m sure, but it is spelled out here. Apologies for the format, got mangled when they changed their format [That thread was a very good discussion on this issue; perhaps I will pull it out, reformat it, and post it at some point].

The energy balance, slide #12, does not include the energy present in the “liquid fertilizer”. What, all that glycerol and amino acids contain no energy? The water vapor also presents energy lost, even if it’s not much.

The mass and energy balances actually date from a previous publication (February and March 2004), also attached. One would expect that CWT would have discovered the error in the interceding year, and corrected it. I guess they were to busy ironing out the substantial start-up problems, such as the odor issue, you mentioned.

You may have notice a subtle shift between those two breathless Discover articles. Instead of producing 500 bbl from 210 tons of waste (first article), they now need 290 tons (20 tons of it pure pig fat), or a 28% reduction in oil yield. Instead of claiming 2.4 bbl/ton of waste, it is now 1.7 bbl/ton (validating an estimate of the maximum yield of ~2.0 bbl/to). Funny thing is Appel and his team still use the 2.4 figure in their financial analysis, even when it would help their argument to use the 1.7 real number. From the second Discover article: “‘We thought we would get $24 a ton for taking the waste,’ says Appel. ‘Instead we are paying $30 a ton.’ That alone raises his production costs about $22 a barrel.” How did they get to $22? ($24/ton + $30/ton)/2.4 bbl/ton = $22.50/bbl. Using the real number would yield: ($24/ton + $30/ton)/1.7 bbl/ton = $32/bbl. Also getting less yield would raise production cost in a number of ways, including the fact that they may be buying natural gas for heating…

So where does that leave TDP? No doubt it is not the silver bullet once claimed. None of the “anything” into oil that seduced Discover’s reporters. And costs are substantial. However, it seems like a good process for converting waste grease into liquid fuel. Much better than say biodiesel. Look at the feedstock (slide #6). How much cleaning (i.e. money and energy) would that stuff need to make it suitable as feedstock for a biodiesel plant? TDP uses sulfuric acid, whereas biodiesel uses methanol and a catalyst (usually NaOH). In terms of energy and money, I suspect TDP has the better input here. TDP yields a liquid fuel that is chemically almost identical to fossil diesel (without the sulfur and aromatics). TDP-40 can be blended with diesel in any ratio 1 to 100, without any issues. As Minnesota discovered last winter, biodiesel has some issues with cold weather. [Having worked in a Montana refinery, I can attest to the fact that winter properties for diesel are critical. I am aware that biodiesel has some problems with pour and cloud points in cold weather, limiting their usage to small blend fractions.]

Slide 6 of “The CWT Thermal Conversion Process” Presentation

The main threat to TDP, as I see it, is a process developed by Neste Oil, Finland, that I read about at GCC. Apparently this process allows an existing refinery to incorporate waste grease as a feedstock, without a radical change to the process (or a brand new SS plant). Even that process is not a slam-dunk, as I’ve seen reports of canceled projects.

So yes, you nailed it: these guys overpromised and underdelivered big time. But in terms of the big picture I give them some credit: at least we are not talking about food -> fuel (as with most of the biodiesel plants being built in Europe, proving that the food -> fuel madness is not endemic to North America). [Oh, I agree completely. It is not the process that I took issue with; in fact I do applaud their initiative. My concern was the completely willingness of so many to accept this as the solution to our energy problems. I see the same thing happening right now with cellulosic ethanol.] They probably help to advance the debate on waste -> energy quite a bit. And they do have a working plant, which is more than we can say about Washington’s next big thing, aka cellulosic ethanol. [I will probably write the same article on cellulosic ethanol in just a few years – overpromised and underdelivered. I see many parallels here.]

April 12, 2007 Posted by | biodiesel, Changing World Technologies, green diesel, reader submission, Thermal Depolymerization | Comments Off on TDP: What Went Wrong

TDP: What Went Wrong

I am still working on an essay on butanol, pentanol, and higher-chain alcohols, but it has been really difficult to find the information I am looking for. (But I have figured out why bio-butanol has not taken off). Regardless, I hope to complete it in a few days.

In the interim, in response to my TDP essay, I received a comprehensive e-mail from a reader who provided some very specific details on what went wrong. He included a presentation in which he referred to several slides, and I will pull those out and post them so the references are clear. I will also insert some comments in the text [like this].

—————————————

Robert,

I enjoy your blog quite a lot. Intelligent analysis is rare. Coupled with unbiased interpretation it is almost an unknown.

Saw your discussion of TDP/TCP. Pretty much spot on. As a chemical engineer I thought you’d be interested in some deeper insights of how the process works. This is all information that used to be available on the web, but most of it has been removed.

Start with the lecture (attached) by Terry Adams, CWT technical officer at MIT in April 2005 – best TDP technical article I know of [I have searched for an online version of this, but to no avail. Perhaps using the Wayback Machine one could locate an online archive of the original presentation]. The way I understand it, the process basically consists of two thermal treatment steps. The first step (slide #13) is a low temp/high pressure step that causes hydrolysis of all the biological material. A check of steam tables confirms that pressure is just high enough to maintain liquid water at the temperature given.

Slide 13 of “The CWT Thermal Conversion Process” Presentation

The first stage is followed by separation (slide #3).

Slide 3 from “The CWT Thermal Conversion Process” Presentation

As indicated in slide #14 they have a clever way of flashing off some of the water and then using the steam to heat the feedstock [This sort of heat recovery is standard practice in the petrochemical industry]. This is at the heart of their claims about high efficiency: the steam is condensed, so most of the water in the feedstock is discharged as liquid. Calling it distilled water, is of course salesmen talk that would make a used car salesman’s eye’s water.

Slide 14 of “The CWT Thermal Conversion Process” Presentation

But take a closer look: After separation only the “organic oil” goes to the second stage. After full hydrolysis (let’s just assume that for now) what monomers would be part of the organic oil? Fatty acids barely make it into this oil, due to the little known fact (see flow diagram on slide #11) that sulfuric acid is used to aid hydrolysis [If I had known that, I had forgotten about it. That does put quite a different spin on the whole process]. (DOE would call the first stage by another name: Dilute Acid Hydrolysis). Some fat-soluble amino acids. That’s it. (I bet you can figure out what cellulose fed to these two units would yield…) [It would interesting to see some yields on this. What I would really like to see is what they get if they threw corn in there. If their energy balances are really good – and even with all that has gone wrong they appear to be better than for corn ethanol – then I would like to see some experiments in that direction.]

Slide 11 of “The CWT Thermal Conversion Process” Presentation

Of course, CWT are master salesmen. The water-soluble amino acid and glycerol solution is not waste: it is a wonderful liquid fertilizer (slide #23). Talk about taking a lemon and making lemonade…

Slide 23 of “The CWT Thermal Conversion Process” Presentation

So, the “organic oil” goes to the second stage (high temperature/low pressure) where the fatty acids are decarboxylized (to yield oil) and some of the amino acids are deaminated and decarboxylized to yield who-knows-what (slide #15, point 2).

Slide 15 of “The CWT Thermal Conversion Process” Presentation

You raise the question of how on earth did CWT get their cost estimates so wrong. Well, a large factor in that would be overestimating yield (and per extension efficiency). CWT has long claimed that TDP has an energy efficiency of 85% (heading slide #12). Right there you smell a skunk. Now the dirty details.

Slide 12 of “The CWT Thermal Conversion Process” Presentation

The mass balance, slide #11 [posted earlier], shows that CWT probably did not take the CO2 that results from decarboxylation into account. This causes them to overestimate fuel production. You can easily do the calc’s I’m sure, but it is spelled out here. Apologies for the format, got mangled when they changed their format [That thread was a very good discussion on this issue; perhaps I will pull it out, reformat it, and post it at some point].

The energy balance, slide #12, does not include the energy present in the “liquid fertilizer”. What, all that glycerol and amino acids contain no energy? The water vapor also presents energy lost, even if it’s not much.

The mass and energy balances actually date from a previous publication (February and March 2004), also attached. One would expect that CWT would have discovered the error in the interceding year, and corrected it. I guess they were to busy ironing out the substantial start-up problems, such as the odor issue, you mentioned.

You may have notice a subtle shift between those two breathless Discover articles. Instead of producing 500 bbl from 210 tons of waste (first article), they now need 290 tons (20 tons of it pure pig fat), or a 28% reduction in oil yield. Instead of claiming 2.4 bbl/ton of waste, it is now 1.7 bbl/ton (validating an estimate of the maximum yield of ~2.0 bbl/to). Funny thing is Appel and his team still use the 2.4 figure in their financial analysis, even when it would help their argument to use the 1.7 real number. From the second Discover article: “‘We thought we would get $24 a ton for taking the waste,’ says Appel. ‘Instead we are paying $30 a ton.’ That alone raises his production costs about $22 a barrel.” How did they get to $22? ($24/ton + $30/ton)/2.4 bbl/ton = $22.50/bbl. Using the real number would yield: ($24/ton + $30/ton)/1.7 bbl/ton = $32/bbl. Also getting less yield would raise production cost in a number of ways, including the fact that they may be buying natural gas for heating…

So where does that leave TDP? No doubt it is not the silver bullet once claimed. None of the “anything” into oil that seduced Discover’s reporters. And costs are substantial. However, it seems like a good process for converting waste grease into liquid fuel. Much better than say biodiesel. Look at the feedstock (slide #6). How much cleaning (i.e. money and energy) would that stuff need to make it suitable as feedstock for a biodiesel plant? TDP uses sulfuric acid, whereas biodiesel uses methanol and a catalyst (usually NaOH). In terms of energy and money, I suspect TDP has the better input here. TDP yields a liquid fuel that is chemically almost identical to fossil diesel (without the sulfur and aromatics). TDP-40 can be blended with diesel in any ratio 1 to 100, without any issues. As Minnesota discovered last winter, biodiesel has some issues with cold weather. [Having worked in a Montana refinery, I can attest to the fact that winter properties for diesel are critical. I am aware that biodiesel has some problems with pour and cloud points in cold weather, limiting their usage to small blend fractions.]

Slide 6 of “The CWT Thermal Conversion Process” Presentation

The main threat to TDP, as I see it, is a process developed by Neste Oil, Finland, that I read about at GCC. Apparently this process allows an existing refinery to incorporate waste grease as a feedstock, without a radical change to the process (or a brand new SS plant). Even that process is not a slam-dunk, as I’ve seen reports of canceled projects.

So yes, you nailed it: these guys overpromised and underdelivered big time. But in terms of the big picture I give them some credit: at least we are not talking about food -> fuel (as with most of the biodiesel plants being built in Europe, proving that the food -> fuel madness is not endemic to North America). [Oh, I agree completely. It is not the process that I took issue with; in fact I do applaud their initiative. My concern was the completely willingness of so many to accept this as the solution to our energy problems. I see the same thing happening right now with cellulosic ethanol.] They probably help to advance the debate on waste -> energy quite a bit. And they do have a working plant, which is more than we can say about Washington’s next big thing, aka cellulosic ethanol. [I will probably write the same article on cellulosic ethanol in just a few years – overpromised and underdelivered. I see many parallels here.]

April 12, 2007 Posted by | biodiesel, Changing World Technologies, green diesel, reader submission, Thermal Depolymerization | 29 Comments

TDP: The Next Big Thing

If you are a layperson, it may not be clear to you just how much of the current infatuation with cellulosic ethanol is hype, and how much is based on realistic assessments. So, I thought I would take you down memory lane and revisit another technology that was going to reduce our dependence on foreign oil.

The Hype: TDP Will Save the World

In May of 2003, Discover Magazine published Anything Into Oil. It was a look at a technology called thermal depolymerization (TDP), which could take any organic material and turn it into oil. This was a high profile write-up with a lot of hype, and the technology of Brian Appel and his company Changing World Technologies (CWT) was really going to change the world.

I remember the first time I read the article, and I thought to myself “Wow, this is really something special.” However, the hype of the technology didn’t quite match up with reality. Let’s take a look back at that original article, and see if we can draw some parallels with some of our current biofuels delusions.

The article starts off:

“This is a solution to three of the biggest problems facing mankind,” says Brian Appel, chairman and CEO of Changing World Technologies, the company that built this pilot plant and has just completed its first industrial-size installation in Missouri. “This process can deal with the world’s waste. It can supplement our dwindling supplies of oil. And it can slow down global warming.”

Pardon me, says a reporter, shivering in the frigid dawn, but that sounds too good to be true. “Everybody says that,” says Appel. He is a tall, affable entrepreneur who has assembled a team of scientists, former government leaders, and deep-pocketed investors to develop and sell what he calls the thermal depolymerization process, or TDP.

So far, so good. An entrepeneur (like Vinod Khosla), former government leaders (like Tom Daschle), and lots of deep-pocketed investors. The article opens with a little bit of hype, and follows with another liberal dose:

“The potential is unbelievable,” says Michael Roberts, a senior chemical engineer for the Gas Technology Institute, an energy research group. “You’re not only cleaning up waste; you’re talking about distributed generation of oil all over the world.”

“This is not an incremental change. This is a big, new step,” agrees Alf Andreassen, a venture capitalist with the Paladin Capital Group and a former Bell Laboratories director.

Yeah, but it’s got to be expensive, right? Not so:

Private investors, who have chipped in $40 million to develop the process, aren’t the only ones who are impressed. The federal government has granted more than $12 million to push the work along.

“We will be able to make oil for $8 to $12 a barrel,” says Paul Baskis, the inventor of the process. “We are going to be able to switch to a carbohydrate economy.”

The article goes on to explain that the technology originated back in the 1980’s:

Usually, the Btu content in the resulting oil or gas barely exceeds the amount needed to make the stuff. That’s the challenge that Baskis, a microbiologist and inventor who lives in Rantoul, Illinois, confronted in the late 1980s. He says he “had a flash” of insight about how to improve the basic ideas behind another inventor’s waste-reforming process.

“The prototype I saw produced a heavy, burned oil,” recalls Baskis. “I drew up an improvement and filed the first patents.” He spent the early 1990s wooing investors and, in 1996, met Appel, a former commodities trader. “I saw what this could be and took over the patents,” says Appel, who formed a partnership with the Gas Technology Institute and had a demonstration plant up and running by 1999.

And they were on the verge of printing money, planning to make oil for $15 a barrel (I thought it was $8-$12?):

And it will be profitable, promises Appel. “We’ve done so much testing in Philadelphia, we already know the costs,” he says. “This is our first-out plant, and we estimate we’ll make oil at $15 a barrel. In three to five years, we’ll drop that to $10, the same as a medium-size oil exploration and production company. And it will get cheaper from there.”

The Hype Begins to Unravel

Well, it’s been 3 to 5 years, and things have not worked out as planned. Costs were much, much higher than forecast. Unforeseen complications appeared. Small technical problems turned out to be big technical problems after the process was scaled up.

Let’s look at some of the issues. A Newsday article in 2004, while also full of hype, foretold of some potential problems:

Turning Garbage into Oil—and Cash

Appel and his financial backers have bet more than $66 million that the modern-day alchemy practiced by Changing World Technologies Inc. will revolutionize the way the world deals with its waste, reduce dependence on foreign oil, fight the spread of mad cow disease and even ease global warming.

Not bad for a 25-person company that Appel, who has no scientific training, runs from the top floor of a Hempstead Avenue china shop owned by his wife, Doreen.

No scientific training? Hmm. Where else have I seen amateurs jumping into an alternative fuel technology with both feet? Oh, yeah. Here and here. (I don’t mean to sound elitist, because amateurs have made valuable contributions in many fields. However, they are more likely to make mistakes/miscalculations than a professional).

The article continues with one more bit of hype that eventually turned out to be unfounded. More on this later:

Incredibly, the only “waste” that’s left behind is distilled water. There are no smokestacks bellowing chemical-laden smoke, and no pipes discharging fetid wastewater.

The article continues by indicating that despite the hype, there really isn’t that much that is known about the process:

Although Discover, Money and Scientific American magazines have all written wildly enthusiastic stories about the company recently — Money called it “The Next Big Thing” — competitors and independent researchers point out that Changing World Technologies has released very little information about the details of its patented process.

So the skeptics (AKA, naysayers) weigh in:

“You have to remember that people have been pressure-cooking different types of biomass for a long time now, and we really haven’t seen these kinds of breakthroughs,” said Ralph Overend, a leading authority in the bio-energy field and a research fellow at the National Renewable Energy Laboratory in Golden, Colo.

“People always stay skeptical until they can see the real data,” added Overend, editor of the academic journal Biomass & Bioenergy.

Appel said the company’s focus has been on building the Missouri plant, not on publishing scientific papers that he worries could tip off potential competitors.

And then there were those nagging cost issues:

Skeptics also wonder about the project’s profitability, and whether it can truly compete with traditional oil drillers and refiners.

Appel acknowledges that producing a barrel of oil through thermal conversion costs about 50 percent more than doing it by conventional refining.

Only 50% more?

And then he makes the mistake that so many others repeatedly make:

If the price of oil keeps rising, he said, so will profits.

This is the same mistake that proponents of tar sands, GTL, oil shale, cellulosic ethanol, and many others have run into. They believe that oil prices will rise, and yet their costs will magically remain where they were. In fact, what happens is that as oil prices rise, all the costs associated with these various projects rise. That’s why oil shale has been imminent for 100 years. That’s why ExxonMobil is scrapping GTL plans. And that’s why tar sands costs have skyrocketed. A poster at The Oil Drum has referred to this trend as The Law of Receding Horizons.

The Bloom Comes off the Rose

So, where does the technology stand today? How far off were those $8 or $15/bbl costs estimates? After all they had run the pilot plants. They had “done so much testing in Philadelphia“, they “already know the costs.” Turns out they didn’t:

Reports from 2005 summarized some economic setbacks which the Carthage plant encountered since its planning stages. It was thought that concern over mad cow disease would prevent the use of turkey waste and other animal products as cattle feed, and thus this waste would be free. As it turns out, turkey waste may still be used as feed in the United States, so that the facility must purchase that feed stock at a cost of $30 to $40 per ton, adding $15 to $20 per barrel to the cost of the oil. Final cost, as of January 2005, was $80/barrel ($1.90/gal).

$80 a barrel! That was an an order of magnitude higher than their earlier estimates. (Incidentally, if their process really worked as they claimed, they could just feed it corn and turn it into oil at a very high EROEI). Not only that, they obviously made more errors in their estimates than just presuming the feedstock would be free. Subtract that $20/bbl and you are still at $60 a barrel – 300% over their highest prior estimate of $15/bbl. Cellulosic ethanol hypesters, take note.

And there was more bad news:

Turkey-oil plant closed due to foul odors

SPRINGFIELD, Mo. – A foul-smelling plant that turns turkey byproducts into fuel oil was ordered closed by the governor Wednesday until the company finds a way to clear the air.

Renewable Environmental Solutions Inc. in the southwest Missouri community of Carthage had agreed in May to improve its odor-control systems after state and city officials sued, alleging the smell posed a public nuisance.

The company also was cited six times by state environmental officials this year, Gov. Matt Blunt said, but the smell continued.

Well, at least there were “no smokestacks bellowing chemical-laden smoke.”

The Lesson Here

CWT still exists as a company today. Like cellulosic ethanol, TDP is a technology that actually works. But the technology was hyped beyond reason. People did not apply enough skepticism before embracing the promise of the technology. It was really going to be “the next big thing.”

But costs and complications were grossly underestimated. They fell victim to The Law of Receding Horizons. They learned that the public doesn’t like smelly plants in their community. Discover ran an updated article in 2006 in which Appel admitted “We have made mistakes. We were too aggressive in our earlier projections.” The hype just ultimately did not match the reality. And while TDP may make some small contribution to our energy needs, it isn’t going to make any measurable dent in our fossil fuel usage.

But at least we have cellulosic ethanol, which I have heard really is “the next big thing.”

Postscript

This essay will also appear at The Oil Drum within the next couple of days. That does not, however, mean that I am “back” at TOD. I will not be defending the essay there, as I currently don’t have the time nor the inclination to argue with 20 people. I have an agreement with the staff there that they can use any of my essays from here any time they want, and they wanted to post this one. It will probably be summer, when we have some real news out of Saudi Arabia, before I start posting again at TOD.

April 9, 2007 Posted by | cellulosic ethanol, Changing World Technologies, green diesel, Thermal Depolymerization | 42 Comments