The Energy Blog

30 mgy Algal Biodiesel Refinery to be Built in Arizona

PetroSun, Inc. (PINK: PSUD) announced that its subsidiary, PetroSun BioFuels Refining, has entered into a joint venture to construct and operate a biodiesel refinery near Coolidge, Arizona. The feedstock for the refinery will be algal oil produced by PetroSun BioFuels at company owned and operated algae farms to be located in Arizona.

The refinery will have an annual production capacity of thirty million gallons and will produce 100% renewable biodiesel. PetroSun BioFuels will process the residual algae biomass into ethanol.

Petrosun claims that Independent studies have demonstrated that algae is capable of producing in excess of 30 times more oil per acre than corn and soybean crops.

In a Feb 2, 2007 announcement PetroSun, Inc.'s field testing of the cultivation of algae for biodiesel production has progressed to the final stage prior to the construction of a commercial cultivation facility. This final stage will consist of producing adequate algae paste to test the output and economics of several biodiesel refinery manufacturers now under consideration by Algae Biofuels, a wholly owned subsidiary of PetroSun, which will own and operate the production and refinery facilities.

Noted in Passing: Shell to Build Algae Test Facility

The International Hearld Tribune reported that Shell will build a facility in Hawaii to grow and test algae for its potential as a biofuel.

"This is a 2.5 hectare (6 acre) demonstration project, and it will take up to two years to complete," Shell spokeswoman Olga Gorodilina said of the project. Whether it proceeds further "will depend on the results," she said.  . . .

Shell will form a majority-owned joint venture to build the project with Delaware-based HR Biopetroleum Inc., which has expertise in growing algae.  . . .

"Algae have great potential as a sustainable feedstock for production of diesel-type fuels with a very small CO2 footprint," said Graeme Sweeney, a Shell executive overseeing the project, in a statement. "This demonstration will be an important test of the technology and, critically, of commercial viability".

Neste Oil to Build Largest Plant Producing Renewable Diesel

Neste Oil (Helsinki: NES1V.HE ) has announced plans to build a €550 million (US$810 million) NExBTL plant, the largest renewable diesel plant in the world, with a capacity of 800,000 t/a (12,150 bpd¹), located in Singapore, and using palm oil as feedstock. NExBTL technology, is the first commercial second generation biodiesel production process (Neste prefers to call it renewable diesel rather than biodiesel, because of its improved properties and the potential ability to be made from energy crops other than oil seeds or animal fat).

The first NExBTL facility, shown above, was commissioned in Finland at Neste Oil's Porvoo refinery in summer 2007, and a second is due to come on stream there in 2009. Both have an annual production capacity of 170,000 tons (2,580 bpd).

NExBTL Renewable Diesel, outperforms conventional fossil diesel fuel and can be used as such in existing vehicles and be distributed in existing logistics systems. It is a pure hydrocarbon with properties and quality similar to fossil diesel. Wider feedstock base can be utilized in the production process.  Due to quality, it is possible to blend tens of percents of NExBTL into diesel. The higher the NExBTL content is, the lower are the emissions.

Improved Strain of Camelina Developed for Biodiesel Feedstock

Targeted Growth, Inc. (TGI), a renewable energy bioscience company, and Green Earth Fuels, a biodiesel energy company, announced the formation of a joint venture called Sustainable Oils, Inc.. The new venture will produce and market up to 100 million gallons of Camelina-based biodiesel by 2010, launching the single largest U.S. contract for the unique biodiesel-specific feedstock. Nearly all of the initial Camelina production is expected to be grown in Montana.

Camelina, a distant relative to Canola, can grow on marginal land, requires minimal water or fertilizer, and can be harvested with traditional equipment. TGI has been perfecting Camelina for the past three years in greenhouse and field trials. Specifically, it has used non-transgenic molecular assisted breeding programs to create a crop that is well suited to Montana’s climate and soil and that produces high quality biodiesel.

“We have created a better feedstock for biodiesel,” said Tom Todaro, CEO of Targeted Growth. “Camelina can be rotated with current Montana crops, it grows in land with lower agricultural value, and it doesn’t significantly increase the use of fertilizer or irrigation water. We think this will be a model for the development and use of other biofuel-specific crops.”

“This deal allows us access to a high quality feedstock at an extraordinarily competitive price,” said Green Earth Fuels CEO Greg Bafalis. “There’s an advantage to being vertically integrated – it closely aligns our interests with those of our feedstock suppliers. And because Camelina exists outside of the traditional commodity market, it should not be as volatile as other feedstocks.”

Targeted Growth has spent years applying its suite of yield and trait technologies to Camelina to create the first Elite Camelina Seed. Green Earth Fuels opened one of the country’s largest biodiesel production facilities this month, in Houston, and is successfully developing additional projects to provide biodiesel that meets exceptional quality and ratability standards to leading energy companies.

This is a welcome addition to the feedstocks available for biodiesel. Until biodiesel from algae becomes a commercial reality, lower cost, higher yielding crops will improve the viability of biodiesel.

First Commercial Algae Facility Announced

In what would be a first, Green Star Products (GSPI) has announced that is building a commercial algae facility, located next to an existing biodiesel plant. Continuously harvesting algae from a pond or bioreactors appears to be the major technological step to be overcome before biodiesel production becomes feasible. It was not stated in the new press release what technology would be used to produce the algae. Presumably it would use its HAPS technology, shown above, which they describe as follows: "The GSPI (licensed) algae system (which) is a Hybrid Algae Production System (HAPS) that incorporates the controlled environment of the closed photobioreactors coupled with inexpensive construction technology to reduce the cost to a level very close to the open pond systems." However in a in a previous project, earlier post, (which has been canceled due to financial problems of the customer) the customer had negotiated with Greenfuels Technologies, previous post, to use their reactors. GSPI uses a low cost continuous flow reactor, earlier post, each rated at 10 million gallons per year, to make biodiesel. GSPI has also developed an algae strain, that it believes is superior to other strains.

Among the advantages of using algae to make biodiesel the three that stand out to me are 1) algae is a non-food feedstock 2) it can be produced on land that is not suitable for agriculture, such as in deserts 3) the amount of land required is much less than that for oilseed crops.

If all the technical problems are resolved the remaining issue is whether biodiesel can be produced economically, without subsidies. Through the use of their reactors and presumably HAPS, GSPI may obtain low enough costs to be competitive. Another problem is that GSPI is a penny stock and its financial future is unclear to me.  Its business plan appears to be to partner with someone with greater resources to build the plants, in return for its patents and knowhow, and then sharing the royalties from the biodiesel production with its partner. 

The following is a slightly edited version of the press release regarding the new algae production facility.

Green Star Products, Inc. (OTC:GSPI) announced that it has signed a contract to build a 100-acre Commercial Algae Facility in the Midwest.

Ethanol from Biodiesel Byproduct

Biotech reports that scientists have found a way to convert glycerin, a byproduct of biodiesel production into ethanol.

Ramon Gonzalez and Syed Shams Yazdani have identified the metabolic processes and conditions that allow a known strain of Escherichia coli to convert glycerin into ethanol through an anaerobic fermentation process.

Gonzalez found that ethanol from glycerol is 39 cents cheaper to produce than ethanol from corn. Feedstock costs per gallon were 53 cents for corn, versus 30 cents for glycerol. Per gallon operating costs were 52 cents for corn and just 36 cents for glycerol. . . . more

I would think this technology would only be applicable to larger biodiesel plants, of which there are not too many in the U.S., but probably more in Germany.

New Benefuel Refinery Targets Key Flaws in Biodiesel Production

Benefuel, Inc., announced on October 10 that it will build the world's first industrial-scale biodiesel refinery using a solid catalyst that converts low-grade fats and vegetable oils into biodiesel. The 10-million gallon a year plant, planned to be located in Seymour, Ind., eliminates the need for water in the refining process and produces a market-ready glycerin by-product.

Benefuel’s key technology innovation – the perfection of a solid catalyst, fixed bed reactor refining process – revolutionizes biodiesel production by eliminating demand for water, expanding the range of oil feedstock options and increasing the value of glycerin byproducts.

Advantages of the process include:

• Processing the broadest range of feedstocks with no pre-processing (up to 100% FFA’s).
• Eliminate the need for water washing or dry washing, as there is no caustic liquid catalyst to remove.
• Create an exceptionally high purity glycerin (98%+) resulting in significant economic benefits.
• Enables a continuous flow fuel-processing model that is not possible in traditional stirred tank reactors.
• Modular, portable and rapidly deployable
• Eliminate the possibility of out of specification fuel with an in-line, continuous automated quality monitoring system connected through Internet technologies, cutting labor costs and eliminating down time.

Growth in Biofuels Production Remains Strong

Growth in the biofuel industry remains strong for both ethanol and biodiesel, according to a presss release for the Soyatech's Biofuels Index, newly updated for Q2 2007. However, the data also shows signs that the corn-based ethanol build out may be leveling off.

Soyatech's Biofuels Index, which tracks planned and actual build-out of biofuels production capacity, reports dramatic growth in planned capacity for ethanol plants over the past year, from 6.761 billion gallons per year (BGY) as of July 1, 2006, to 13.03 BGY as of July 1, 2007 - an increase of 93%. During this same period, growth in ethanol capacity under construction increased 199%, from 2.417 BGY to 7.226 BGY.

During Q2 2007, total online capacity for ethanol increased by 564 million gallons per year (MGY), or 10.7%, from 5.289 BGY to 5.853 BGY. Capacity in planning rose by approximately 6% during the quarter.

However, the Index also points to a slight leveling off in construction of ethanol plants during Q2 2007 - the first time since the Index began tracking these numbers. According to the Index, capacity under construction decreased slightly by 1.7%.

"While the percent change is too small and the time frame too short to identify this as a definitive trend, we understand from industry sources that it is more difficult to secure debt financing for new refineries due largely to increased equity requirements on the part of banks providing this funding. We suspect that an additional cause may be constraints on the amount of corn available as a feedstock to produce ethanol," said Jacob Golbitz, director of research for Soyatech and its parent company, HighQuest Partners.

D1 Oils, BP Form Joint Venture to Grow Jatropha for Biodiesel

D1 Oils plc, a UK-based producer of biodiesel, plans to establish a Joint Venture with BP to create a business in Jatropha curcas: D1-BP Fuel Crops Limited.

Jatropha is a drought resistant, inedible oilseed bearing tree which does not compete with food crops for good agricultural land or adversely impact the rainforest. It grows in tropical and sub-tropical regions and produces high yields of inedible vegetable oil that can be used to produce high-quality biodiesel. Jatropha can grow on a wide range of land types, including non-arable, marginal and waste land.

Under the terms of the agreement, BP and D1 Oils intend to invest around US$160 million (£80) million over the next five years. D1 Oils will contribute their 172,000 hectares of existing plantations in India, Southern Africa and South East Asia to the joint venture and the joint venture will have exclusive access to the elite jatropha seedlings produced through D1 Oils’ plant science program.

Highlights of the Agreement

Establishment of a 50:50 Joint Venture to undertake global planting of jatropha:

• Target to plant one million hectares over four years
• D1 contributes plantings to date and planting business
• BP contributes working capital of US$65 million (£32 million) through equity in the Joint Venture
• Total Joint Venture funding requirement of approximately US$160 million (£80 million) over five years
• Plant science remains 100% owned by D1
• D1 to grant BP an option to subscribe for new shares representing 16% of its enlarged share capital at an average price of 251 pence

Major global business to plant jatropha as sustainable biodiesel feedstock:

• Endorsement by BP of D1's sustainable feedstock strategy
• Potential to produce low-cost, volume supplies of inedible oil for biodiesel - Use of marginal and waste land and land unsuitable for arable crops
• No competition with high biodiversity value rainforest
• Significant job creation and value to local communities

GreenFuels Stumbles, CEO Replaced

The Boston Globe reported last week that, Robert Metcaff, a principal at Polaris Ventures, has replaced GreenFuels, (previous post) CEO Carry Bulluck as interim CEO. Polaris has invested $6.8 million in the algae to oil company.

Isaac Berzin, founder of Greenfuels, a chemical engineering researcher at MIT, developed a system that captures carbon dioxide from conventional electric power plants into a "bioreactor" that contains water and algae. The CO2 causes the algae to grow, and when harvested can be converted into biofuels. After successful testing in the laboratory, a pilot plant was built in Arizona. The pilot plant has been shut down because an unexpectedly high density limited light and nutrient supply, which caused the algae to start dying and was more costly than expected. Greenfuels has a test facility, shown above, at the APS’ Redhawk Power Plant, located about 50 miles west of Phoenix.

Metcalfe plans to institute an improved technology that costs less and allows for easier harvesting.

To conserve capital Metcaff has cut employment from 43 to 28.

Thanks to Rob Day for the tip