BioCycle February 2008, Vol. 49, No. 2, p. 45
One-day forum reviewed biomass availability, project financing and research developments, while highlighting companies’ projects.
ACROSS the country, steps are being taken at the state level to galvanize bioenergy and biofuel development. To jump start the action in New Jersey, The Clear Canopy, a marketing and communications company in Princeton, hosted a forum last October entitled, “The Perfect Storm: Bioenergy in New Jersey.” The conference highlighted the opportunities and challenges of bioenergy development and showcased companies implementing projects.
Margaret Brennan, Associate Director of the New Jersey Agricultural Experiment Station at Rutgers University, led off the proceedings with the findings of a study commissioned by the New Jersey Board of Public Utilities assessing the state’s biomass resources. According to the study, New Jersey produces an estimated 8.2 million dry tons (MDT) of biomass a year, of which 5.5 MDT is available for bioenergy. This level of recoverable biomass could produce 1,124 MW of power, about 9 percent of the state’s electrical consumption, or the equivalent of 311 million gallons of gasoline, about 5 percent of the transportation fuel consumed.
Several presentations looked at future trends and developments in biofuels production. Sebastian Douville, project engineer at Axios Energy in Mercerville, New Jersey stressed the importance of producing biodiesel from alternative feedstocks. “We can’t rely solely on vegetable oils to produce biodiesel,” Douville maintained. The current market for diesel fuel is 14 times larger than the vegetable oil market, so efforts are needed to identify alternative feedstocks, such as waste oil and fats, agricultural wastes, algae and high yield tropical crops.
Biodiesel also should be produced where it “makes sense financially, sustainably and logistically, as opposed to relying on subsidies and political opportunism,” he added. As an example, Douville cited the company’s current project in Tanzania employing jatropha, a fast growing perennial shrub, to produce biodiesel. The plant is drought resistant and can be grown in poor soils with little maintenance or fertilizer. Oil yields from the crop compare favorably to yields obtained from soy and canola.
Serpil Guran of the New Jersey Department of Environmental Protection’s Division of Science, Research and Technology spoke on the potential of second-generation biofuels, such as cellulosic ethanol produced from nonfood feedstocks using biochemical and thermochemical technologies, to reduce dependence on fossil fuels. Much of the current focus is on cellulosic ethanol produced via biological routes. This technology employs pretreatment processes to break down the complex cellulosic biomass structures, followed by enzymatic hydrolysis and fermentation processes. But Guran stressed that alternative thermochemical processes, such as gasification and pyrolysis, also offered efficient methods for producing fuels, energy and high value chemicals.
One session explored the challenges confronting companies developing biofuels and bioenergy projects. Dr. Stephen Paul, with the Princeton Plasma Physics Laboratory, started Trenton Fuel Works to develop so-called P-Series fuel in New Jersey. P-Series fuels blend natural gas liquids (pentanes), ethanol and a biomass-derived solvent (methyltetrahydrofuran or MeTHF) to create a high-octane fuel that can be used in flex-fuel vehicles and mixed with gasoline in any proportion. The proprietary chemical process can accommodate a wide range of feedstocks, including food waste, paper sludge and agricultural residues, and can even deal with contaminants. Using the process, one ton of wet biomass yields 33 gallons of fuel. Paul’s current challenge is the high cost of feedstock delivered to the firm’s facility.
Another company on the panel was Fuel Bio, which built the first biodiesel plant in the state, located in Elizabeth, on a brownfield site. The facility is the largest in the Northeast, according to Marty Borruso, the firm’s CEO. The plant can produce up to 50 million gallons of biodiesel a year from soybean oil. The firm has plans to build 10 facilities along the East Coast but is finding high feedstock prices are an obstacle to growth.
THE FINANCIAL PICTURE
Gelvin Stevenson, director of the New York-based Center for Economic & Environmental Partnership, Inc., gave an insightful and humorous presentation on the characteristics of successful, and not so successful, bioenergy start-ups. He stressed the need for a start-up to listen to the market, admit mistakes, continually reevaluate strategies and be nimble on its feet.
Funding is a critical component for emerging bioenergy companies. In talking to a number of ventures, Stevenson discovered that “everything takes longer than you planned, so you will always need more money than you thought.” His tongue-in-check advice was to either be independently wealthy, marry someone who is wealthy or raise plenty of capital. In a more serious vein, Stevenson reminded the audience, “if commercializing technology were easy, everyone would do it.” He believes that for a new company to be successful it needs to stay focused, devoting its attention to one opportunity at a time. Doing your homework and preparing financial forecasts and planning documents are essential to stay on track and deal with investors. Removing costs from the system is another critical element to success.
Several presentations discussed one of the major obstacles confronting most biofuel and bioenergy start-ups – raising capital. Mick Gilbert, Vice President of Global Green Solutions in Vancouver, British Columbia, talked about his company’s efforts to raise money for its two processes, Vertigro and Greenstream. Vertigro is a process for mass producing algae for use in biofuels production and other coproducts. The system grows algae in high-density, closed-loop vertical bioreactors made from plastic sheeting. The sheets are hung within a greenhouse in a vertical orientation, which increases algae yields by increasing the surface area and the volume of the material exposed to sunlight. The Vertigro system uses little water and can be built on nonarable land. The company’s first test plant is located near El Paso, Texas.
Greenstream employs a cyclonic combustion process to burn agricultural and waste biomass feedstocks, producing process steam or electricity. Gilbert sees opportunities in markets with good supplies of waste biomass, high electricity costs, stringent air quality standards and high disposal fees, and in states with renewable portfolio standards. A typical Greenstream system can convert 100,000 tons/year of biomass into 12 to 15 MW of electricity or 160 million British thermal units per hour (MMBTUH).
Global Green Solutions has raised money in the Over the Counter stock market but requires additional funding to further develop, commercialize and finance projects for both technologies. The challenge is to get access to project debt and equity for growth while minimizing the amount of additional equity that needs to be raised by the company.
Converted Organics is constructing its first facility in Woodbridge, New Jersey. The company employs Enhanced Autogenous Thermophilic aerobic digestion to convert food waste into organic fertilizer. The waste is macerated before it is placed in the digester for six days, where it is heated and mixed with air and bacteria. Solids from the process are dried and pelletized, creating a granular fertilizer. The liquid effluent is concentrated and also sold as a fertilizer. Both commercial and consumer markets are being targeted.
The company tried to raise capital from a variety of sources, including private markets, but was unsuccessful, said Tom Buchanan, Vice President for communications and marketing. In the end, Converted Organics secured $17.5 million in tax-exempt fixed rate bonds from the New Jersey Economic Development Authority. This debt enabled the firm to take the unconventional route of filing for an initial public offering (IPO), raising $9.9 million. Buchanan’s advice from their experience is to be patient, develop multiple options and don’t always rely on conventional wisdom or textbook approaches to raise capital.
Other presentations looked at government policies to promote bioenergy development, partnership opportunities and brownfield development options for siting new facilities. Several speakers spoke of the need for a task force or think tank to spur statewide development efforts.
Diane Greer is a Contributing Editor to BioCycle. She can be reached at email@example.com.
Sidebar p. 46
CELLULOSIC ETHANOL DEVELOPMENTS
CELLULOSIC ethanol is now in production at a small-scale commercial waste wood facility near Upton, Wyoming. The plant was engineered and is operated by KL Process Design Group (KL), which has been working with the South Dakota School of Mines and Technology for six years, and is also involved with corn ethanol. The KL plant converts waste wood into a renewable fuel. “It is now possible to economically convert discarded wood into a clean burning, sustainable alternate motor fuel,” says Randy Kramer, President of KL.
KL is using proprietary technologies and newly developed enzymes. “In our experience with enzymes and ethanol production, we have incorporated proven technologies that have been utilized for years in other industries,” says Dave Litzen, Vice President of Process Engineering for KL. “Through these processes, we are releasing fermentable sugars hidden within the wood, without the use of environmentally unfriendly acids.” The current production facility is utilizing soft woods, but successful test runs have occurred making use of waste materials such as cardboard and paper. For more info, visit: www.klprocess.com
Pacific Ethanol Inc., the largest West Coast-based marketer and producer of ethanol, recently announced a U.S. Department of Energy (DOE) matching award totaling $24.32 million to build the first cellulosic ethanol demonstration plant in the Northwest United States. The plant will use wheat straw, wood chips and corn stover as feedstocks, and will be colocated at the site of Pacific Ethanol’s existing corn-based ethanol facility in Boardman, Oregon. Project partners are BioGasol ApS, which developed the proprietary technology, and the Joint BioEnergy Institute, which will be providing support, research and development on enzyme technology.
The pilot plant, designed to produce 2.7 million gallons of ethanol annually, will demonstrate the potential of the technology to produce ethanol from a diverse mixture of biomass readily available in the area. “Our strategy of destination plants has always been to exploit the vast amounts of biomass available for use in the regions where we operate,” says Neil Koehler, CEO of Pacific Ethanol. “Our objective is to utilize a successful cellulosic demonstration plant to scale up the technology throughout our network of production facilities.” – J.G.
February 25, 2008 | General
Confronting Challenges In Developing Bioenergy And Biofuel
BioCycle February 2008, Vol. 49, No. 2, p. 45