BioCycle November 2009, Vol. 50, No. 11, p. 40
Permitting challenges and the credit crisis have delayed Bluefire Ethanol’s plans to build two facilities producing cellulosic ethanol from green wastes.
AMONG the cellulosic ethanol projects receiving millions of dollars from the U.S. Department of Energy (DOE) to develop and commercialize biofuels production is BlueFire Ethanol. What makes BlueFire interesting for BioCycle to track is that the technology utilizes the cellulosic fraction of the municipal solid waste stream – including yard trimmings – as its primary feedstock.
BlueFire Ethanol, based in Irvine, California, plans to construct its first small-scale commercial biorefinery in Lancaster, located 70 miles north of Los Angeles. The facility will produce 3.9 million gallons per year (mmgy) of cellulosic ethanol from the “green” portion of MSW diverted from landfills. As it turns out, permitting challenges and the credit crisis have delayed construction of the Lancaster plant.
In mid-October, the company announced the relocation of its second plant, originally planned for California, to Fulton, Mississippi. BlueFire had received a $40 million grant from the DOE in February 2007 to develop the plant. (See “Commercializing Cellulosic Ethanol,” BioCycle November 2008. At press time, BlueFire announced that it had received a $3.8 million reimbursement from DOE to use for preconstruction activities in Fulton.) It will convert green and wood wastes into 18 mmgy of ethanol. Company CEO Arnold Klann hopes new Federal grants and loan guarantees for its first facility, and the strategic relocation of the second, will get both projects back on track.
BlueFire’s process employs acid hydrolysis and fermentation to convert the green portion of MSW, along with wood and agricultural wastes, into cellulosic ethanol. Feedstocks for the process are first cleaned to remove dirt and inorganic materials, such as glass and plastic, and then ground to the proper particle size.
The material is treated with concentrated sulfuric acid to separate the cellulose and hemicellulose portions of the biomass from the lignin. The mixture then undergoes hydrolysis to breakdown the chemical bonds of the cellulose and hemicellulose, producing simple sugars for fermentation. Insoluble materials, primarily lignin, are separated from the mixture by filtering and pressing.
The resulting solution is separated into acid and sugar components using a chromatographic system, which concentrates and recycles 98 percent of the sulfuric acid for reuse. Acid remaining in the sugar solution is neutralized with lime to create hydrated gypsum. Traditional fermentation and distillation techniques are used to produce ethanol from the sugar.
Lignin, a by-product of the process, will be burned in solid fuel boilers. For a small facility such as Lancaster, sufficient lignin will be produced to satisfy about 70 percent of the plant’s thermal and electrical requirements. Larger facilities, in the 55 mmgy range, will generate 20 to 30 percent more energy than required to run the plants, Klann explains. Other by-products include agricultural grade gypsum that can be used as a soil amendment and yeast, which can be sold as animal feed.
FEEDSTOCK AND PLANT CAPACITY
BlueFire envisions building ethanol plants in three standard sizes. Lancaster, with a capacity of 3.9 mmgy, represents the smallest scale plant that is economically viable. The plant will process 150 to 170 tons/day of feedstock consisting of nonrecyclable paper, wood wastes, grass clippings, brush, tree prunings and landscaping residues diverted from the two nearby landfills.
BlueFire’s process produces about 70 gallons of ethanol per ton of this type of feedstock. Yields are dependent on feedstock composition. “If we use agricultural residues, the yield would be higher at 90 gallons/ton,” Klann explains.
Fulton represents the next increment in plant size, with a capacity of 18 mmgy. A community of roughly half a million people will be required to provide feedstock for this sized plant. Larger capacity plants producing 55 mmpy would need a city the size of Houston, Tampa or Miami with a population of one million or more.
BlueFire estimates that it will be able to convert green MSW to ethanol for about $1.50/gallon at the Lancaster plant. The increased scale of the Fulton plant will lower the cost to between $1.00 and $1.10/gallon.
BlueFire selected the Lancaster location because of its proximity to Los Angeles and two nearby landfills. But plans to locate facilities in California have been a two edged sword. California is a perfect market for the technology because of the amount of curbside and primary source separation of waste materials. On the other hand the state has some of the strictest emission rules in the country and obtaining air permits can take a significant amount of time.
Satisfying permitting requirements has not been a problem for BlueFire. Boilers employed at Lancaster will utilize selective catalytic reduction to lower nitrogen oxide emissions. The facility will also capture sulfur dioxide emissions.
But it took 20 months to obtain the air permits for Lancaster from the Antelope Valley Air Quality Management District. “Getting through the CEQA (California Environmental Quality Act) process was just ridiculous,” Klann says. “The problems we dealt with had nothing to do with the technology or the plant. It had everything to do with the process.”
The cost of doing business in California has also increased due to a recently enacted law that temporarily raises the state sales tax. The increases are expected to add over $1 million to the cost of the Lancaster facility, he adds.
The difficulties in obtaining air permits and the sales tax increase led BlueFire to the decision to relocate its second planned facility from California to Mississippi. DOE approved the site change. Klann expects the permitting process to go more smoothly in Mississippi. “We should be through the permitting process by February of next year,” he says. Groundbreaking is scheduled for the summer if financing and permitting go as planned.
The Fulton plant will be located adjacent to a wood processing facility and utilize wood wastes as its primary feedstock. “We are going to be processing the slash that comes out of the forests,” Klann explains. “Disposal of the waste is really becoming a problem for them.” Currently the wastes are either sent to landfills or go into low value products.
Financing commercial scale plants employing first-of-a-kind technology is always difficult. But BlueFire’s problems obtaining funding for Lancaster have been compounded by the credit crisis and ensuing economic downturn. “We had lined up private equity as well as debt, but then the debt market really started changing,” Klann explains. “We saw this reticence developing and liquidity really started to be a problem. Then all of a sudden the equity started shorting up. All this was leading up to the meltdown last September and October.”
The latest round of DOE grants and loan guarantees could provide the funding needed to jumpstart Lancaster. In May 2009, DOE announced plans to provide $768.5 million from the American Recovery and Reinvestment Act to accelerate advanced biofuels research and development and funding of commercial-scale biorefinery demonstration projects. DOE expects to award $480 million in grants to 10 to 20 pilot and demonstration scale biorefineries that will be operational in the next three years. Pilot scale facilities can receive up to $25 million and demonstration plants up to $50 million. Another $176.5 million will be used to increase the funding ceilings for two or more demonstration or commercial scale facilities that were already selected and awarded grants within the past two years. The remaining $130 million will support biofuels research and development.
BlueFire has applied for and received notification that it is shortlisted for a DOE grant for Lancaster. “We are reasonably comfortable that we are sitting on a pretty good position on the grant,” Klann says. The company has also applied for a DOE loan guarantee for the facility. “We have all the engineering finished and meet the criteria of being shovel ready,” he adds.
Klann is confident that he can move forward with Lancaster if the company is awarded the DOE grant and loan guarantees. Total costs for the facility are currently estimated at $100 million, although actual figures will be determined by commodity prices when actual orders are placed. “The price of steel is moving all over the place at this time,” he says.
The Fulton project, with an expected price tag over $200 million, will be financed with a stock offering at the corporate level and the previously granted DOE loan guarantee. “Between the loan guarantee and the additional equity we can meet all the financing requirements for Fulton,” Klann says.
Beyond ethanol production, BlueFire plans on producing biodiesel and biojet fuel through partnerships with other companies. In May, the company announced that San Francisco-based Solazyme is testing sugars produced by BlueFire’s process for compatibility with its renewable oil process. Solazyme is developing a process that uses microalgae to convert biomass directly into oil.
The idea would be to integrate the BlueFire process to produce sugars to grow algae. “It would be our front end and their backend,” Klann explains. “When you have sugars as an intermediate step you can go in multiple directions. Ultimately, it will be a mix of fuels that we are looking at.”
Diane Greer is a Contributing Editor to BioCycle.
November 19, 2009 | General
Cellulosic Ethanol Plants Inch Forward
BioCycle November 2009, Vol. 50, No. 11, p. 40