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By Robert Rapier on Jan 27, 2011 with 65 responses

Vinod Khosla and the Gasification/Fermentation Debate

Vinod Khosla Prognosticates

Vinod Khosla is once more offering up his prognostications on the future of the energy business:

What Matters in Biofuels?

Given the likely continued dominance of the internal combustion engine, cellulosic and sugar-derived fuels offer one of the lowest risk advances to quickly and affordably achieve low-carbon transportation.

I predict that long before 2022, half a dozen technologies within and outside our portfolio will be market competitive and will blow away the cost structure of corn ethanol.

In the same article, he offers his view on those he deems energy Luddites:

The old fashioned bias among traditionalists, mostly Luddites unfamiliar with the vibrant new research especially in startups, is that Fischer-Tropsch synthesis (FT) of liquid hydrocarbons from gasified coal and biomass is the only path to producing enough fuel to replace conventional crude oil. Frankly, this is nonsense. Many also assert that biofuels cannot scale to the quantity needed without impacting food availability, but the data suggest otherwise and I briefly discuss this below.

In a separate article that announced a new round of loan guarantees for renewable energy companies — including $250 million for Coskata — Khosla predicts that catalytic technologies will need to switch to fermentation technologies:

USDA, DOE announce $646M in advanced biofuels loan guarantees

7. Where is Range Fuels in all this, which received a loan guarantee from the USDA but has been reportedly in various kinds of distress.

Secretary Vilsack yesterday said that “we are hopeful that Range will work through its technology problem which are at the heart of the concerns”. The problems appear to center, to an extent, on the company’s gasifier technology. According to one Digest source, “before it was ever built, it was known by many that it would have performance issues given the past failures of the technology in small scale with low hydrocarbon loaded fuels.”

Vinod Khosla, a lead investor in Range, commented: “Technologies like Range that started with chemical catalysis will need to switch over to newer fermentation technologies.”

Enerkem, Coskata and INEOS are all deploying variations on gasification technologies. So that’s something to watch. The good news – there are a lot of alternatives in the gasification area, with Coskata among other companies looking at the ClearFuels technology, for example.

In a nutshell, I view this as hogwash for reasons I detail below. But I am certainly not the only one. The just-issued RAND report Alternative Fuels for Military Applications (the subject of an upcoming essay) had this to say: “Fischer-Tropsch fuels are the most promising near-term options for meeting the Department of Defense’s needs cleanly and affordably.”

Someone is terribly wrong in their projections.

Vinod Khosla’s Prognostication Record

Let me state that I firmly disagree with Khosla’s statement that catalytic processes will have to switch to fermentation technologies. (In fact, he is backing KiOR, which is a catalytic process). But any time someone is making predictions, I like to know how they have fared on previous predictions. So let’s have a look at Khosla’s track record on predicting energy trends.

In a 2006 article that Khosla wrote for Wired magazine — My Big Biofuels Bet — Khosla made a number of comments that are worth examining. The article begins:

IT MAY SURPRISE YOU TO learn that the most promising solution to our nation’s energy crisis begins in the bowels of a waste trough, under the slotted concrete floor of a giant pen that holds 28,000 Angus, Hereford, and Charolais beef cattle. But for some time now, I’ve been searching for a renewable fuel that could realistically replace the 140 billion gallons of gasoline consumed in the US each year. And now I believe the key to producing this fuel starts with cow manure – because this waste powers a facility that turns corn into ethanol.

The company that Khosla is referring to here was called E3 Biofuels. And this — according to Khosla — was the most promising solution to our nation’s energy crisis. He made a number of specific claims around E3, devoting about a quarter of the essay to them. Among other things, he wrote:

A company called E3 Biofuels is about to fire up the most energy-efficient corn ethanol facility in the country: a $75 million state-of the-art biorefinery and feedlot capable of producing 25 million gallons of ethanol a year. What’s more, it will run on methane gas produced from cow manure. The super-efficient operation capitalizes on a closed loop of resources available here on the prairie – cattle (fed on corn), manure (from the cows), and corn (fed into the ethanol distiller). The output: a potential gusher of renewable, energy-efficient transportation fuel.

The ethanol made here is not only clean but also cheap – this is perhaps the first ethanol plant to achieve both. More important, it is an early demon­stration of the great potential of biohols – liquid fuels derived from biomass for internal combustion engines. The facility is the first data point in what I call the biohol trajectory. (See “March of the Biohols,” page 143.) Like Moore’s law, this trajectory tracks a steady increase in performance, affordability, and, importantly, yield per acre of farmland.

E3 Biofuels achieves what’s known as a positive energy balance. For every BTU of energy used to run the ethanol plant, five BTUs are produced. A typical corn ethanol plant produces 1.3 to 1.8 BTUs for every BTU of fossil fuel input, including the energy required to grow the corn. (Gasoline has half the efficiency of corn ethanol, producing 0.8 BTUs for every BTU input.)

The E3 Biofuels plant in Mead, Nebraska which was supposed to produce ethanol for 75 cents per gallon. The company declared bankruptcy after running into mechanical problems.

So what became of this amazing company that was going to produce (Khosla wrote the essay as if they were already producing) 5 BTUs of ethanol for every BTU used to run the plant — and do so for 75 cents a gallon? Despite all the hype Khosla heaped on the company — considered by Khosla to be the most promising solution to the nation’s energy woes — one year after he wrote this article E3 Biofuels declared bankruptcy. Not exactly a ringing endorsement of Khosla’s prognostication skills in the energy sector.

But it gets better (or worse, depending on your perspective). Khosla also heaped enormous praise on a company called Kergy, later renamed Range Fuels:

IN THE CORNER of an unmarked warehouse tucked away in an industrial neighborhood north of Denver, a new company called Kergy has what is, to my knowledge, the first anaerobic thermal conversion machine (which explains why Khosla Ventures is a seed investor).

Khosla apparently had no idea that there were literally thousands of “anaerobic thermal conversion machines” (gasifiers) in operation around the world, so he invested in something that he thought was new and novel. So if a Luddite is someone who is unfamiliar with “vibrant new research especially in startups”, what are we to make of someone who is completely unfamiliar with existing technology and therefore doesn’t know when something is actually new and novel?

To me, this is Khosla’s problem in a nutshell. He disregards (or in this case, was ignorant of) technologies that came before he decided to become involved in the energy business, despite the fact that existing technologies provide (and will continue to provide) the vast majority of the world’s power. But he convinced people that should have known better, and went about reinventing the wheel on other people’s dimes. Further, most of what he considers “vibrant and new” has been worked on for many years at big companies around the world — but they generally don’t follow the “hype, hype, hype” model so you don’t hear about them. And in many cases, the research ended because the path led to “not commercially viable.”

Khosla went on to explain why the Kergy approach would be better than fermentation:

Kergy’s machine is special because it makes cellulosic ethanol through anaerobic thermal conversion rather than through fermentation or acid hydrolysis. It does not need organisms or enzymes to do its work. Biomass is heated in an oxygen-free environment to produce carbon monoxide and hydrogen. Once that happens, “the world is your oyster,” says Bud Klepper, the engineer who invented this device. The carbon monoxide and hydrogen are then reconstituted into various alcohols – like ethanol. Better still, fermentation and acid hydrol­ysis can take days to occur, but thermal conversion breaks down organic matter and converts it to ethanol in minutes.

And the inventor of the gasifier, Bud Klepper, was ominously quoted: “We (Kergy/Range Fuels) could double the ethanol output of the Mead facility.” The output of the Mead facility (the E3 Biofuels plant) is zero, so it turns out that Klepper may be a better prognosticator than Khosla. But I get ahead of myself. The hype continued:

In back of Kergy’s warehouse, workers are busy putting the finishing touches on a beautified and expanded version of his original thermal convertor. The new one is made out of lustrous red I-beams, shiny metal tanks and coils, bright blue metallic joints, and a porous metal-grating floor. The whole thing is 14 feet high, 40 feet long, and 25 feet wide and is capable of producing 15,000 gallons of ethanol a day. And the machine can be scaled for far more capacity.

And cost is a big advantage. “Our ethanol from biomass should be competitive in costs with corn ethanol,” says Kergy CEO Mitch Mandich, who gave up several CEO opportunities at large public companies to run Kergy. The technology is exciting enough that Arie Geertsema – director of the University of Kentucky’s Center for Applied Energy Research and formerly managing director of the corporate R&D Division of Sasol, the most experienced gasification com­pany in the world – was excited enough by the tech­nology to give up his position and join Kergy.

Range Fuels' cellulosic biofuels plant during construction in Soperton, Georgia. The company recently announced that the facility is closing down after producing only one batch of ethanol.

OK, enough documentation about the hype. There are lots more stories and articles out there proclaiming that Range Fuels would be the answers to the country’s energy problems — fueled by hype from Vinod Khosla and Mitch Mandich. We all know how this has turned out. After years of delays, cost overruns, and capacity projections that were continually reduced, Range Fuels recently announced that they can’t go on. Further, once they do close the doors, they will have only reportedly produced one batch of ethanol:

Range Fuels Closing Georgia Cellulosic Ethanol Plant

Cellulosic ethanol company Range Fuels is closing its Soperton, Georgia facility after completing it first batch of ethanol, according to story posted by Georgia Public Broadcasting.

The firm, which has received more than $300 million dollars in state, federal and private funding, will lay off the majority of its workers and shutter operations, while it attempts to raise more money and address technical issues.

Range Fuel technical advisor Bud Klepper–who founded the company under the name Kergy–said the first ethanol run completes a demonstration agreement made with the federal government.

“This run campaign is to demonstrate that facet of the technology and when we’re done doing that then we’ll shut down,” he told GPB.

In 2007, the company received $76 million from the Department of Energy, which was followed by an $80 million loan guarantee from the Department of Agriculture in 2010. Range Fuels is also backed by Khosla Ventures, Passport Capital, BlueMountain, Leaf Clean Energy Company and Pacific Capital Group.

So What?

So what’s my point? My point is that Khosla has influenced the direction of our energy policy, and despite his failed prognostications he is still attempting to drive dollars in a specific direction. He is lobbying for money to be spent in certain areas, just as he did for Range Fuels five years ago. The question I would ask is “Why should anyone listen to him?” Political leaders listened to him in 2006. Why? He had done very well in the computer sector — co-founding Sun Microsystems — so he had credibility there. But why should we expect someone to have competence in one sector just because they have competence in an unrelated sector? An example I sometimes use is that my dentist is a competent person as far as dentistry goes, but I wouldn’t go see him if I was having a heart attack. His competence is based on his education and experience in a specific field. Khosla’s proven track record is not in the energy business, yet policymakers gave him what he wanted with respect to Range Fuels, and the result has been the evaporation of hundreds of millions of dollars in public and private funds.

Here we are in 2011, and Khosla is once again telling us what the future holds. He tells us that gasification/catalysis isn’t the future, that fermentation is the future. He tells us that those who think otherwise are Luddites. Here is what I would say to Mr. Khosla. He once hoped that Range Fuels could produce 15,000 gallons per day, and because they failed to deliver he has written off gasification/catalysis. But Shell’s Bintulu facility that I recently visited has produced 15,000 barrels per day (1 barrel = 42 gallons) for many years via the gasification/catalysis process that Khosla believes isn’t viable. Sasol, at their Secunda facility, produces 160,000 barrels per day of synthetic fuels via the gasification/catalysis process that Khosla disregards. Those are not pie-in-the-sky or overhyped examples of what could be; those are real, operating facilities that are producing liquid fuels today at scales beyond Khosla’s imagination.

So I believe Khosla is dead wrong. The fermentation technologies are still very much an open question, for reasons I have covered many times. Water soluble fuels such as ethanol are very energy intensive to extract from a fermentation process, particularly ones like cellulosic ethanol that result in a very dilute beer. Imagine taking a bottle of Bud Light and extracting the ethanol for use as fuel, and you have an idea of the challenge that cellulosic ethanol faces. Biological processes can also only access a fraction of the biomass (cellulose and sometimes the hemicellulose), whereas gasification can process all of the organic material (including lignin).

There are no assurances that unproven routes will ever be commercially viable, and if the man who hyped E3 Biofuels and Range Fuels claims otherwise why should I believe him? He may be a super nice guy and a genius in the field where he made his fortune, but he is still a novice in the energy field. His track record to date on energy prognostication speaks for itself, and thus his predictions are not necessarily reliable. He has placed a lot of bets on things that he thinks might pan out (and I sincerely hope some of them do), but we have already seen the wreckage of his initial bets. If he treats his own money as venture capital, that’s his business. But I don’t want to see tax dollars treated in this way, as was the case with Range Fuels.

However, I should make it clear that I am very much in favor of funding research across the energy spectrum, and that includes fermentation processes. Where Khosla and I part ways is with his insistence that commercially unproven technologies are the future while we ignore processes that are commercially proven today. After all, we have heard that story once before, and we — taxpayers and private investors — are hundreds of millions of dollars poorer for having listened to it. Our energy policy is too important to be based on hype, and we have to make sure that credibility has been earned before allowing someone to unduly influence the spending of tax dollars.

  1. By Oxymaven on February 5, 2011 at 10:10 pm

    Of course this debate now also needs to factor in yesterday’s announcement by Kior that they’ve got a term sheet from DoE for up to $1 bil in loan guarantee towards 4 facilities (250 MMGY) is pretty remarkable, and incredibly puzzling?  Maybe Khosla wins this debate? Or maybe this is just more huge hype from one of his ‘big biofuels bets’?  

    I find it very strange that DoE would want to potentially commit that much government backing to a single company / technology, especially for several first or second of kind facilities?  If Kior can be as profitable as they indicate, why would they need any government backing for subsequent plants?  I’m guessing that based on past examples, this is probably more on the hype side, and probably the actual loan guarantee will be much smaller and for a single facility.

    If this goes through at anywhere near the $1 bil level, I would find the DoE and USDA decision-making process to be hugely curious, and would love to have a lot more transparency on what’s going on so Congress and the rest of us can get a clearer picture of where we’re at these technologies and how far we have to go.  Seems like DoE would be better off funding a broader array of technologies instead of putting $1 billion towards KiOR.

    I’ve also seen some recent articles suggesting that KiOR has already started construction on its first plant ($110 mil, ~10 MMGY) in Columbus MS, but can find little evidence of that in the local papers.  Seems like before they can access the $70 mil the state of MS is promising, they’ll have to identify an off-take agreement with oil company who will do the final processing of their ‘renewable crude’.  And KiOR says the first plant is not part of the DoE loan guarantee initiative.  So why would DoE help to fund their 2nd plant when the first one has not even been built and demonstrated that it’s viable??

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  2. By paul-n on January 27, 2011 at 4:49 am

    A very good summary of the past performance of this guys ventures, though he would, of course, say that does not necessarily indicate future returns.

    Even though Khosla’s original company, Sun Microsystems, actually produced something useful, his business model since has been the same as so many dot coms, and produced about as much.

     

    While I would like to think his ventures should not not get any more funding on principle, the real principle that needs to be followed is on merit, not hype – hopefully we will see more of that.

    In that article he goes on about how plant breeding/GE will make marginal land produce amazing things, and quotes, on biomass feedstocks, a very optimistic figure of 5tons/ac/yr of biomass feedstock from “marginal and abandoned lands”. If the land can produce that, it is certainly not marginal, and would be unlikely to have been abandoned.

     

     

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  3. By Sam salamay on January 27, 2011 at 8:35 am

    VK would not offer us “the time of day” when we approached him 2 years back. His “pie in the sky” offerings have wasted billions of dollars. For a mere 3 million to fund our “on-the-farm” economic development model, we can achieve low-cost ethanol production whereas thousands of farmers will simply harvest sweet sorghum on marginal land and prosper. Our simplicity has been ignored due to its distributed generation solution. Go to http://www.epecholdings.com to see an immediate solution to accelerate energy independence one community at a time and please stay away from the corporate greed and ridiculous attitudes of “so-called” visionaries.

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  4. By FRANKOK on January 27, 2011 at 9:08 am

    OK Roger – what do you really think about his three new suggestions – Enerkem, Coskata and INEOS.
    I would expect one to survive – hope it is Coskata to protect my meager $ stock in http://www.alternrg.com who bought Westinghouse Plasma, a spinoff from what was one of the greatest USA companies until they went astray with real estate and other boondoggles.

    See report on Austrailia’s GM Holden to use the Coskata demo plant in Madison, PA
    http://www.citizen.on.ca/news/…..g_arm.html

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  5. By flee on January 27, 2011 at 9:10 am

    Khosla, not afraid to go public with his best in time knowledge. The E3 model effective for farm scale ethanol since EPA may force methane digestors for farm animal rearing. This technology more cost effective with starch ethanol production, WDGs, farm fuel, field irrigation and bio active fertilizer co products all with zero transportation cost. Permitting and compliance costs were a nightmare for big industrial operations.

    His prognostication of higher costs of petrol while bio-fuel costs decrease appear on target. I agree the ICE will have a long future, especially that REMs mining is very environmentally unfriendly. Cellulosic fuel energy sector appears to have achieved a justifiable reputation for increase trajectory of market share. Twelve competing technologies with varying strategies of which he believes 50% will be successful. Fuel market will be so strong, even the not so efficient will be dragged along. Coal probably in the mix per the gasification fermentation technology (Lanzateck, Coskata) and may be a better use than typically combustion process. The gasification fermentation process superior per environmental concerns. Khosla puts environmental impact at top of list for viable fuel production. He hates corn ethanol as well, with little acknowledgement of value of feed market development.

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  6. By Kit P on January 27, 2011 at 9:19 am

    “thousands of farmers will simply harvest sweet sorghum on marginal land and prosper”

     

    So Sam, how well does sorghum grow in Minnesota?

     

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  7. By flee on January 27, 2011 at 9:52 am

    Sam salamay said:

    VK would not offer us “the time of day” when we approached him 2 years back. His “pie in the sky” offerings have wasted billions of dollars. For a mere 3 million to fund our “on-the-farm” economic development model, we can achieve low-cost ethanol production whereas thousands of farmers will simply harvest sweet sorghum on marginal land and prosper. Our simplicity has been ignored due to its distributed generation solution. Go to http://www.epecholdings.com to see an immediate solution to accelerate energy independence one community at a time and please stay away from the corporate greed and ridiculous attitudes of “so-called” visionaries.

    Corporations either private or public gain the upper hand as they have much power to gain publicity and political good will. Big business have more assets to solve problems and exploit advantages. These companies can’t exploit a small farm operation business for big profits, even if the business model good for environment and local communities. Even environmental juggernauts lose power and influence if adapting small solutions. Federal politics lose power as well. No deep pockets to pick or hold ransom. Big government needs big business. Good for them to have a really big successful business to malign, with the ensuing need for federal protection i.e. tobacco, oil. coal, auto, utilities, and large corporations.

    We do need to change business as usual and demand small business receive most favored status. Much like micro brewery, farm market, credit union, status. These business need very little regulation other normal market approval.  

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  8. By Sam Salamay on January 27, 2011 at 9:56 am

    Kit, one crop turn in Minnesota. In warmer climates, 2 or even 3 crop turns. We are concentrating on southern states as the ROI is more attractive. For corn belt areas, SS on marginal land will add to corn yields. SS grows in 3 to 4 months with little water and soil. Our modular model sets up in a couple of weeks and hopefully we can build one soon. You know the saying, “if we build it, they will come.” Henry Ford and Thomas Edison all over again in lieu of Rockefeller and Standard Oil and Tesla. It’s time we all wake up to growing and not mining and decentralization and not centralized power.

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  9. By rrapier on January 27, 2011 at 1:42 pm

    flee said:

    Khosla, not afraid to go public with his best in time knowledge.


     

    The problem, as demonstrated with what he stated about gasifiers when he was pushing Range Fuels, is that his “best in time knowledge” isn’t always very good. He has demonstrated himself to lack knowledge in many areas, yet he still speaks with authority. My concern is that he helps steer our energy policy off course.

    RR

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  10. By Rufus on January 27, 2011 at 10:30 am

    Right now, Inbicon is the only model working.

    Keep an eye on Poet. If they start building Project Liberty the deal will work. If they don’t? . . . . . . . . might be a good time to “go fishing.”

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  11. By Kit P on January 27, 2011 at 10:32 am

    “ROI is more attractive”

     

    Thanks for the feedback Sam you were doing fine until this,

     

    “It’s time we all wake up to growing and not mining and decentralization and not centralized power.”

     

    Is there a reason why we can not do both? The evolution of energy production is moved from ‘decentralization’ to ‘centralized’ for many good reasons. The nature of biomass requires a certain smaller scale when transporting by ICE driven trucks. There are many hazards associated with energy production with transportation being the biggest factor.

     

    One of the failings of many renewable energy advocates is not understanding that there is not a lower environmental and safety standard. If you mention ‘corporate greed’ in one post and ROI in the next, my BS meter starts to move but your have not moved it very far.

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  12. By Rufus on January 27, 2011 at 10:38 am

    Sam, am I correct in believing that Sweet Sorghum must be “processed” within a couple of weeks of being harvested?

    If this is true, isn’t it pretty expensive having your facility sitting idle for 10, or 11 months out of the year?

    What does this do to your “Capital Costs” on a per gallon basis?

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  13. By Sam Salamay on January 27, 2011 at 10:49 am

    Kit and Rufus. ROI for the farmer, shared within the community, which is why southern farmers can produce 2 or 3 crop turns for yearlong production. See the website. We are A solution, not THE solution. Millions of acres are available in southern states for SS. With economies of scale, each 2mgy modular plant will cost under 1 million. At $1 per gallon, you can see the value here. I am not here to argue but rather to inform. My partners and BOD’s are the experts. I am simply the messenger.

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  14. By Rufus on January 27, 2011 at 10:58 am

    Sam, we’re not trying to “argue” with you. We’re searching for information. I am very much “on your side.” However, if you’re going to make a serious claim you have to be willing to answer questions.

    My first question would be: Why will your plant only cost $0.50 for one gallon/yr when all of the plants built since 2007 have been in the range of $2.00/annual gallon?

    And, what is the $1.00 per gallon that you are referencing?

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  15. By sam-salamay on January 27, 2011 at 11:25 am

    sorry for the replicate replies and my poor operation of the iPad. The modularity of our proposed EPU’s (ethanol production units) is the key to its low cost. The simplicity of the process of making SS ethanol has theoretically given us the $1 per gallon ethanol-produced cost. We will be pleased to discuss details but not on this venue. Contact us via our website.

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  16. By Rufus on January 27, 2011 at 12:00 pm

    You can’t do it that way, Sam. The man didn’t put his website up to be used as a spam target. If you make a claim “here,” you should explain it “Here.”

    You’ve got yourself a large audience, now explain your proposition.

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  17. By paul-n on January 27, 2011 at 5:40 pm

    My concern is that he helps steer our energy policy off course.

    Given that none of Khosla’s ventures have actually produced significant amounts of energy/fuel, I would say this statement is bang on.  The actual goal is to produce energy and he has so far come up with lots of ways to not do that.  I wonder what Jeff Broin, and other people who actually DO produce renewable fuels, think of Khosla?

     

     

     

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  18. By paul-n on January 27, 2011 at 5:52 pm

    Rufus wrote;

    Sam, am I correct in believing that Sweet Sorghum must be “processed” within a couple of weeks of being harvested?

    You can actually store sweet sorghum (and any other forage crop)  indefinitely, as wilted silage – windrow it in the field to dry it out for a few days, then collect and chop it, and store in airtight conditions (often buried bunkers) for years, if need be.  Cattle and dairy farmers do this all the time.

    There may be some conversion of sugar into starch – (as happens with corn on the cob) I don’t have any information on that, and the cows don;t care when they are eating the stuff.

     

    I did have some correspondence last fall on TOD with a farmer in Kansas who was growing sorghum that was sold to a local ethanol operation – he did say it was a better return/acre than corn.

    If we assume you can’t store the stuff, then there certainly is a capital cost issue, as your equipment must process a years worth of production in the space of probably four months (for 2-3 cuts) – it thus needs to be 3x the capacity which is probably double the cost – a significant disadvantage.

    I suppose, in theory, if the equipment is mobile, you could send it to Brazil and use it there in the southern summer – but there would have to be one very thorough quarantine and disinfection process when you bring it back.

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  19. By Benny BND Cole on January 27, 2011 at 6:07 pm

    I wish the biofuel crowd luck, but hope they expect to perform in the market.
    Meanwhile, you can make methanol from natural gas for $1.25 a gallon, and Methanex sells it for that price now. Now. Retail. Without federal help or subsidies. And we have natural gas up the wazoo for centuries.

    I prefer a move to PHEVs, making liquid fuel less critical. But at $1.25 a gallon for methanol, I wonder what biofuels have to offer.

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  20. By PeteS on January 27, 2011 at 10:59 pm

    Rufus said:

    You can’t do it that way, Sam. The man didn’t put his website up to be used as a spam target. If you make a claim “here,” you should explain it “Here.”

    You’ve got yourself a large audience, now explain your proposition.


     

    Excuse me while I scan the horizons for unicorns and flying pigs.

     

    Was that RUFUS that just said that?

     

    LaughLaughLaugh

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  21. By flee on January 28, 2011 at 8:51 am

    See your point, Robert, probably a lot of Algore within Khosla. The media hype to become popular, gain business fame, attract VC, and propel investment choices. Did notice he promotes regulations that benefit his business decisions.

    Khosla promoting his bio-fuel acuity evaluations and then goes on to disclose only 30% reliable until the FCU in production to evaluate. So, with limited evaluations and little inside the business access to technology capability he appears to be using the WAG system. Saying this, most will run to read his articles as he offers a rare commodity, investor insight evaluation upon the whole bio fuel sector.

    SS ethanol is interesting and a challenging feed stock. Capability to out do sugar cane, but the crop very unforgiving upon harvest. Peak sugar window measured in days. Economic advantages require on the farm processing. Juice must be within the beer process within days. So, low cost equipment a must, or utilize a service. This reminds me of grape harvest demands for Welshes. If I were in that business would look to separate the juicing and beer making from the processing. Let the farmer invest or purchase service of juicing, storage, fermenting operation, and processing of the stalk. The beer stores well. The sugary stalks chopped, centrifuged, dried, stored for fuel. Stalks could be processed at later time for more ethanol return or utilized as bio-fuel burning energy. Stalks would make a good home heating pellet fuel co-product.

    Upon a production schedule the mobile processing unit sets up shop for a period of time to process and transport ethanol fuel.

    India, is supposed to be investing in S.S. as it works for the poor rural farmer. They set up centralized processing plant and contract local farmer supplies. Some coordination of planting schedules to maximize production schedule. India, would be a good choice to develop this technology. Low cost, low regulation, and good engineering. Better chance to receive support. Iron out the process problems before entering the highly litigious, expensive, and regulated U.S. market. Good luck, hope it works well!

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  22. By Rufus on January 28, 2011 at 12:35 pm

    Some good thoughts, Flee.

    I am convinced (have been for years, actually) that “cellulosic” has to be a small-volume, local business.

    Sam mistook a desire for information with “an attempt to argue.”

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  23. By paul-n on January 28, 2011 at 5:13 pm

    most will run to read his {Khosla’s} articles as he offers a rare commodity, investor insight evaluation upon the whole bio fuel sector.

    But here’s the problem.  He is not an investor in the bio fuel sector – he has never produced any real amounts of bio fuel.  He is an investor in R&D companies, that hope to develop a process to produce bio fuel.  

     

    It is the equivalent of gold prospecting companies vs gold mining companies.  The sole purpose in life for a gold prospecting company is to discover enough gold to to sell to, or make them a worthwhile takeover target for, a larger gold mining/producing company.

    The difference is the gold prospectors do not try to kid anyone that they are gold producers.  To have a gold prospector, that has never found any gold to date, being regarded as a leading investor on gold production, is ludicrous, but we have the analagous situation with Khosla.  

    Of course, people/investors are free to listen to him and invest in his operations as they see fit – but the government should be more circumspect.

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  24. By carbonbridge on January 28, 2011 at 5:40 pm

    Robert Rapier said:

    Vinod Khosla, a lead investor in Range, commented: “Technologies like Range that started with chemical catalysis will need to switch over to newer fermentation technologies.”  In a nutshell, I view this as hogwash for reasons I detail below…. But I am certainly not the only one.


     

    RR:  I couldn’t agree with you more.  Mr. Khosla has used his high profile and deep personal pockets to sway and mislead publics, politicians and private investors.  Now, he’s misdiagnosing the technology mark once again by telling people what the continuing future of biofuels should look like.

    It is obvious that this gentleman is grabbing at straws – he’s playing high-stakes poker with taxpayer money in an industry which he is not at all familiar – and investors and gov’t employees should take heed.  We’ve previously read direct quotes from Mr. Khosla concerning his willingness to fund science experiments of which most will fail — hoping that just one or two will succeed in a very big and game-changing way.  This is fine.  He should use his own and other private investors dollars for such crap shoots – not public taxpayer funds.  Simply my own opinion.

    Personally, I’d like to know more about the first batch of ‘cellulosic ethanol’ which Range Fuels intends to produce in Sooperton, Georgia, before shutting down this $300M+ small pilot GTL ethanol plant.  His partner Bud Klepper (inventor of the wood chips gasifier which apparently won’t scale properly) has been quoted as saying that Range needs to produce some ‘ethanol’ to satisfy certain committments to the DOE.  I’ve also read that Range has not received all of their $76M in Federal DOE taxpayer grant money.  Is the balance of this $76M Federal grant going to be doled out after final proof of certain ‘ethanol’ science experiments?  Will Vinod’s next tactic be to hold the Federal Gov’t hostage for more money to continue expanding the ‘ligno-cellulosic ethanol proof-of-the-pudding’ being produced just prior to shutdown? 

    Like others, I can only guess…  Unlike others, I have not sought the opinions of any of Range’s 150 (former) employees with some GTL experience recruited from the world market.

    In reality, most folks curious about this company and its present staff layoffs amid equipment failures — are simply guessing.  As I’ve previously commented herein, ‘ligno-cellulosic ethanol’ is a buzzword which Range has tossed around for years when in fact, their intended biofuel output was not ligno-cell EtOH at all.  Simply read their purposefully published patent applications of which most are pending to learn more about the truth.  This recent setback for Range is hurting more than just themselves.

    From folks in Treutlen County, Georgia today:  We are wondering, if Range Fuels knew that problem way back when, why did they spend tens of millions of tax-payer dollars to build the plant?  Rapier wrote about the years of delays, cost overruns, and the volume estimates that were continually reduced. Range Fuels finally ran a “batch”, who knows how much?  Local leaders, all super nice guys, are to be complimented for trying to bring something good to Treutlen County, and fortunately the local investment was meager compared to that of the federal government (we, the taxpayers), – but we can’t brag on the lack of oversight.  Why wasn’t an expert in the technology retained to look over the whole project from the beginning?  Once Rapier’s blog posts started appearing in the TREUTLEN E-NEWS, why didn’t someone in local leadership give him a call?

    As for Mr. Khosla, our attitude and that of all of America should be “Fool us once, shame on you.  Fool us twice, shame on us.”

    http://treutlenenews.blogspot……alist.html

    Mark C. Radosevich
    Darby, Montana

    [link]      
  25. By Walt on January 29, 2011 at 9:55 am

    CarbonBridge said:

    Robert Rapier said:

    Vinod Khosla, a lead investor in Range, commented: “Technologies like Range that started with chemical catalysis will need to switch over to newer fermentation technologies.”  In a nutshell, I view this as hogwash for reasons I detail below…. But I am certainly not the only one.


     

    We’ve previously read direct quotes from Mr. Khosla concerning his willingness to fund science experiments of which most will fail — hoping that just one or two will succeed in a very big and game-changing way.  This is fine.  He should use his own and other private investors dollars for such crap shoots – not public taxpayer funds.  Simply my own opinion.

    As for Mr. Khosla, our attitude and that of all of America should be “Fool us once, shame on you.  Fool us twice, shame on us.”

    http://treutlenenews.blogspot……alist.html

    Mark C. Radosevich

    Darby, Montana


     

    Very interesting article.  Mark’s comments above, as well as the person posting on the treutleneews blog, are interesting.

    I certainly feel the government supporting new technology development and R&D is vital to growing the industry.  However, I am really surprised at the amount of money spent on that project.  That simply cannot be true.  How in the world was so much money spent on that project to make a batch of fuel, or even to start testing?  It completely bloes my mind.  Is it true that more government money was used than private money on Range Fuels since I’ve heard somewhere they spent up to $400 million?  There is no way the government gave them more money than private investors without knowing the technology was not proven.  My experience is that you cannot get $5 million without a proven technology from the government, so what on earth is going on…to get so much money without a proven technology.

    Our small team is leaving again Monday to keep testing our GasTechno plant.  This week we completed our year-end financials, and have spent less than $2.5 million from formation (Sept. 2004) of the company to December 31, 2010.  Most of this has been paid to corporate & IP lawyers, outside consultants/experts/employees and building two small mobile testing plants on trailers.  I don’t want to even calculate the amount of hours wasted on writing grant applications that have been rejected over the past 6 years.  That grant phase has been our little money pit where you invest a lot and receive nothing in return.

    The amount of real data we are now gathering operating in the field is amazing.  This is nothing like the mountains of lab data and published reports we disclose in our patents, nor like all the testing in the garage facility over 3 months last year.  This is amazing data from an existing facility and is really making our mind work day and night to see the potential/obstacles.  Our budget so far for the current construction, operation and testing of the mobile trailer I started to build in the garage in July 2010 is an unacceptable $125,000 to-date.  The costs of this field testing now is less than $2,500 per week for materials, hotels, food, expenses, LP gas to stay warm in the trailers, plow snow, reverse freeze-ups, etc.

    I cannot imagine what someone does with $400 million dollars to build and test an unproven technology.  It is no wonder Khosla turned me down when I asked for a couple million to add to his lists of bleeding edge technologies (I saw his VC powerpoint showing all his investments and it is absolutely impressive).  He said no as my capital costs were too high once I added Oxygen unit to the system.  Ok, I thought…who are these experts working for him.  I cannot imagine how one claims to by 70% lower in CAPEX than FT, and watch the business model fall apart by adding an O2 plant on the front-end.  The FT plant uses O2 as well…except for Syntroleum…who is getting $100 million from the Chinese to build-out.

    Hmmm, if anyone has ever seen the financial breakdown on Range Fuels, I would love to read it and see where I am going wrong with my budget in trying to attract the silicon valley crowd who are throwing a lot of money at all these fuel technologies.  By the end of next week we should be able to show them some very interesting hard data in the field, and demonstrate nothing comes close under 30 mmscfd…except maybe Celanese.  The question is…I guess…not to prove technology merit…but how to structure the financials so everyone believes.  I need to see how Range Fuels was able to raise so much money (in their financials) as obviously (as I am here to testify) technology merit is a very low part of the equation.

     

    [link]      
  26. By Walt on January 29, 2011 at 10:45 am

    I have a question that I would like someone help me answer.

    If the new issue in the renewable fuels movement is the “Gasification/Fermentation Debate”, as it seems to be now defined by Khosla and everyone else that follows him, I would like to see any numbers on CAPEX and OPEX.

    Is there anyone reading this blog that have looked at both CAPEX and OPEX for each of these process technologies, and have proven the substantial value comparing one to the other?  Clearly, hundreds of millions and even billions will be poured into each of these branches of technology development around the world, and if this is the new debate coming out of Silicon Valley (and not Houston), I would love to see any study on side-by-side comparisons.  To spend (allegedly) $400 million on Range Fuels, lay everyone off and say they will need to shift their technology to the new Fementation movement is beyond my ability to understand without seeing hard numbers.

    Does anyone know if Nexant and CMAI or any other consultant has a report to purchase on these two technology comparisons?

    Granted…direct methane conversion is buried under the crap coming out of Silicon Valley, Houston and Washington (and Hawaii), but if the debate has now been framed by these two process technologies…great, now show me the numbers.

    [link]      
  27. By Rufus on January 29, 2011 at 11:51 am

    Walt, as nothing more than an interested civilian, let me say that I really believe they (TPTB) very much wanted the Big Ticket Gasification Projects to be the “Winner.” That’s just the way “Guvmint” is.

    A few of us ahem interested civilians cough have thought for quite a while that due to the logistics of the feedstock the smaller, distributive model was the most likely winner.

    When, first, Novozymes, and, then Dupont Danisco claimed dramatic 90% reductions in enzyme/gal costs we began to suspect that traditional fermentation methods would end up being the winner (esp. after Inbicon published info. on their “wheat straw to ethanol” project.)

    [link]      
  28. By Walt on January 29, 2011 at 2:28 pm

    Rufus said:

    Walt, as nothing more than an interested civilian, let me say that I really believe they (TPTB) very much wanted the Big Ticket Gasification Projects to be the “Winner.” That’s just the way “Guvmint” is.

    A few of us ahem interested civilians cough have thought for quite a while that due to the logistics of the feedstock the smaller, distributive model was the most likely winner.

    When, first, Novozymes, and, then Dupont Danisco claimed dramatic 90% reductions in enzyme/gal costs we began to suspect that traditional fermentation methods would end up being the winner (esp. after Inbicon published info. on their “wheat straw to ethanol” project.)


     

    Rufus,

    I remain fully open minded to any new innovation and encourage it.  However, what Robert posted above by Khosla stating that Range Fuels will likely need to go the fermentation route to be a serious player of sorts, and then the rebuttal by RR is that gasification (e.g. think of the Shell Pearl plant which cannot be compared as I said before as it is a fully integrated upstream/midstream/downstream/retail sales of GTL diesel at Shell’s stations economic model) is the proven solution for a large volume of fuels.  I totally agree that gasification/FT diesel/naptha is the winner on MASSIVE scales and any blogger who wants to promote Shell’s Pearl, Oryx GTL, Escravos GTL, etc. as commercial solutions…need to understand they are cash machines, but more so with higher oil prices and larger projects and cheap gas.  Shell Pearl is in a class by itself due to the full integration that few if any companies in the world could ever duplicate without the Qatar government support.  You are not going to do it in Russia, China or Australia…and certainly not where all the other major gas (or even coal resources) are located.  I’m waiting for an announcement shortly out of Canada I hear is coming, and maybe India…but they are nowhere near the size of Pearl, Oryx or Escravos as commercial models.

    The fact remains…Khosla does set the tone for all this money…as VC’s cling to him and Kleiner like they are some sort of deity experts in this sector, and if they are not clinging these two powerhouses, they cling to RR’s words.  I’m not sure what he is building in Hawaii, but when it is released publicly you can bet it should be world class and worthy of the harshest criticism.  Nobody will ever know (likely) what he is spending on the technology develop (like some of us bare ourselves to take the criticism on mismanagement of funds in IP/R&D/Technology development), but we certainly know that gasification technologies are the primary focus until someone announces something better than Khosla’s challenge.

    I would like to see the hard numbers on both.  I know very well the hard numbers on both methanol and GTL/FT technologies and their scales at various tipping points with cheap gas.  I have a “general” and “reasonable” study on those processes using microchannel reactors, and some of the hurdles to scale down/up, etc.  I know nothing about fermentation system development, but if it is the true “next generation” technology I would like to see the side-by-side comparison numbers on CAPEX and OPEX if anything has been published.

    [link]      
  29. By Rufus on January 29, 2011 at 2:52 pm

    Inbicon has “published” quite a bit (okay, maybe a small bit) about their technology, costs, and results on their website. Poet, Genera, et al seem to be basing their hopes on Inbicon’s experience.

    [link]      
  30. By russ-finley on January 29, 2011 at 3:33 pm

    It is a wise man who holds his critics close. If Khosla had a clue he would have hired RR long ago as a consultant. Ironic that he eventually gets the advice for free after it’s too late and he loses millions.

    The overarching concern with liquid biofuels is land use. Any scheme that requires lots of acreage to grow sugars for fermentation is doomed by price competiton for that land and water for food.

    I just finished writing  a review of Matt Ridley’s book The Rational Optimist. For an optimist, he sure is pessimistic about biofuels.

     

     

    [link]      
  31. By Walt on January 29, 2011 at 6:09 pm

    Rufus said:

    Inbicon has “published” quite a bit (okay, maybe a small bit) about their technology, costs, and results on their website. Poet, Genera, et al seem to be basing their hopes on Inbicon’s experience.


     

    Thank you.  One of the things that I requested when Nexant did their study for us on our technology was to do a “Comparative Study” using all the same base assumptions, and then go down the list of all known commercial technologies that convert methane to liquids, plus LNG.  This allowed us to have a side-by-side comparison rather than pull stuff from published reports.  The problem with published data is often they don’t give the scale, or the assumptions, but only the cost of production.  For example:

    “The Coskata process can produce ethanol almost anywhere in the world,
    using a wide range of feedstock, for less than US $1.00 per gallon. This
    technology makes the widespread use and availability of ethanol much
    more achievable.”….”Coskata is a biology-based renewable energy company for economies
    dependent on oil. Using proprietary microorganisms and transformative
    bioreactor designs, the company will produce ethanol for under US$1.00
    per gallon almost anywhere in the world, from a wide variety of input
    material.”

    http://www.coskata.com/media/i…..1E507A43A4

    So what is the scale?  In our study we assumed $1.50/mcf for flared gas cost, and 30 mmscfd feed rate.  The feed rate determined the scale for each plant, so it was a side-by-side comparison on CAPEX, OPEX and Cost of Production.

    I just would like to know how Gasification competes with Fermentation all assumptions being equal…without any subsidies or grants like in our study.

    [link]      
  32. By russ-finley on January 29, 2011 at 10:46 pm

    Just found this link over on the Revkin’s NYT opinion section:

    http://dotearth.blogs.nytimes……lear-push/

    Scroll down to comment #10.

    Khosla often uses the press to promote his investments.

    [link]      
  33. By rrapier on January 30, 2011 at 11:53 am

    Russ Finley said:

    Just found this link over on the Revkin’s NYT opinion section:

    http://dotearth.blogs.nytimes……lear-push/

    Scroll down to comment #10.

    Khosla often uses the press to promote his investments.


     

    From the link, Khosla claims:

    Kior produces a direct crude replacement or transportation fuel
    blendstock from any biomass, cost competitive with oil once the first
    plant is operational (early 2012).

    That is blatantly false. KiOR produces a pyrolysis oil, albeit one they claim is partially upgraded. But the carbon chain length in pyrolysis oil is very low relative to crude low, and pyrolsyis oil contains water and many oxygenated compounds like sugars, aldehydes, etc. He then shows his misunderstanding of Black Swans:

    We need to (and can) reinvent the infrastructure of society through the creation of Black Swan energy technologies.

    The thing about Black Swans is that you can’t seem to find them when you go looking for them. Black Swan events by definition are rare, hard to predict, and high impact. Khosla thinks these are simply low-probability events, and if he spreads enough money around he is going to get the high impact event he is looking for.

    RR

    [link]      
  34. By rrapier on January 30, 2011 at 11:55 am

    Russ Finley said:

    It is a wise man who holds his critics close. If Khosla had a clue he would have hired RR long ago as a consultant.


     

    Let’s just say that the matter has come up more than once. The problem is that I could not work for someone whose approach is so fundamentally different than my own. It is no coincidence that I work for someone who works hard to keep a very low public profile. Our motto is like Nike’s: “Just do it.” We will talk about it later, but you won’t see us issuing press releases in anticipation of what we are doing.

    RR

    [link]      
  35. By Walt on January 31, 2011 at 6:35 am

    Robert Rapier said:

    Russ Finley said:

    It is a wise man who holds his critics close. If Khosla had a clue he would have hired RR long ago as a consultant.


     

    Let’s just say that the matter has come up more than once. The problem is that I could not work for someone whose approach is so fundamentally different than my own. It is no coincidence that I work for someone who works hard to keep a very low public profile. Our motto is like Nike’s: “Just do it.” We will talk about it later, but you won’t see us issuing press releases in anticipation of what we are doing.

    RR


     

    Great, now do the same thing with little or no money or investment except what you can earn.  Remove the money variable, and don’t be surprised if you need to put together hard data, facts and truth to attract investment…whether from government or private sources.  Opps, and if a press release slips into the mix don’t be surprised…  It is one thing to control a major blog criticizing those spending money on new development, and sit back spending money in stealth mode to develop a solution.  Reminds me of our intelligence agencies when I travel the world meeting with various oil & gas players who make it clear money is available by the boat load, but you need to keep your mouth shut.  I never bought into that line of reasoning to get ahead, but in 20 years I’m happy to say the stealth world is growing immensly stronger now more than ever.

    I cannot wait Robert to see your announcement…like Nike’s release…I suspect it will blow us all away.  I do hope you release your budget too.

    [link]      
  36. By rrapier on January 31, 2011 at 12:30 pm

    Walt said:

    I cannot wait Robert to see your announcement…like Nike’s release…I suspect it will blow us all away.  I do hope you release your budget too.


     

    Walt, I think you misunderstand that nature of what we are doing. You will never see an announcement that says “We have now invented the wheel.” We are working quietly on a number of different things, and for the most part we will continue to work quietly. It may be as simple as developing local power generation in Mozambique or funding R&D efforts in certain areas, but we aren’t working on one big invention that we are waiting to unveil. Choren is pretty public (but still fairly tight-lipped about their work), but other than that we have said nothing about what we are doing. In the past year I have been to Central America, Europe, New Zealand, Canada, Malaysia, and all over the states in support of what we are doing, but those trips covered about half a dozen things that we are working on.

    RR

    [link]      
  37. By Walt on February 2, 2011 at 9:52 am

    Robert Rapier said:

    Choren is pretty public (but still fairly tight-lipped about their work), but other than that we have said nothing about what we are doing. In the past year I have been to Central America, Europe, New Zealand, Canada, Malaysia, and all over the states in support of what we are doing, but those trips covered about half a dozen things that we are working on.
    RR


     

    I did not know you were involved with Choren.  I just removed their website…they sound like a first class operation.  I assume you are involved in develop their new technologies?  You don’t have to answer if it is confidential.  Yes, I noticed you have been busy traveling internationally and I’m sure many of us look forward to any solutions you can bring to America as well.  Don’t keep us guessing forever!  If you have some public failures, it would not hurt you much.  Failure is a way to learn and improve.  Those who are always perfect in their decisions don’t really get much done in my experience…but they do bark the loudest.

    [link]      
  38. By sameer-kulkarni on February 3, 2011 at 11:13 am

    Robert, further to the discussion on Gasification vs Fermentation debate, would appreciate if you could share wid us some important aspects of Choren’s process like

    – Overall EROEI of BTL process

    – Qty of Co-products produced per gallon of Biofuel

    – Qty of surplus energy produced i.e Heat & Electric power

    – Theoretical & Actual yields of products per Ton of biomass

    – Can BTL process take in mixed Biomass & other wastes like MSW??

    – Water consumed & amount of waste water produced per gallon of biofuel. Also the effluent gases produced from the process.

    [link]      
  39. By sameer-kulkarni on February 3, 2011 at 12:12 pm

    Off topic but there is an another contender makin news here

    ‘http://technology.ienergysaver.com/tag/professor-stephen/’ & ‘http://www.cellaenergy.com/

     

    Quote: “UK-based Cella Energy has developed a synthetic fuel that could lead to US$1.50 per gallon gasoline.”

    “We have developed new micro-beads that can be used in an existing gasoline or petrol vehicle to replace oil-based fuels,” said Voller. “Early indications are that the micro-beads can be used in existing vehicles without engine modification.”

     

    Their trademark approach is encapsulating hydrogen in polymeric beads (plurality of beads results in liquid like fluid) . Encapsulation is traditionally employed in the Biotech industry for encaging enzymes, microbes, proteins etc., which are essentially HMW compounds, for prolonged activities. Wonder as to how they would arrest the smallest element Hydrogen @ 1.5 US$/gallon & scale up to millions of liters.

    [link]      
  40. By rrapier on February 3, 2011 at 12:45 pm

    SAM said:

    Robert, further to the discussion on Gasification vs Fermentation debate, would appreciate if you could share wid us some important aspects of Choren’s process like

    – Overall EROEI of BTL process

    – Qty of Co-products produced per gallon of Biofuel

    – Qty of surplus energy produced i.e Heat & Electric power

    – Theoretical & Actual yields of products per Ton of biomass

    – Can BTL process take in mixed Biomass & other wastes like MSW??

    – Water consumed & amount of waste water produced per gallon of biofuel. Also the effluent gases produced from the process.


     

    Hi SAM,

    I don’t officially speak on Choren’s behalf (my relationship is that I work for the majority owner), so I really can’t discuss technical details beyond what is publicly available. The answers to many of those questions can be found on their website, but some of that information hasn’t been released publicly to my knowledge.

    Regarding your other post, the public seems to be in love with the notion of $1 or $1.5 per gallon fuel. If someone comes out and makes a claim like that, they grab headlines. The problem is that they are never able to deliver. I think the reason is that many people in the lab don’t really have experience with scaling and building plants, so they underestimate the costs of actually delivering volumes at scale.

    RR

    [link]      
  41. By sameer-kulkarni on February 3, 2011 at 1:28 pm

    Robert Rapier said:


    Hi SAM,

    I don’t officially speak on Choren’s behalf (my relationship is that I work for the majority owner), so I really can’t discuss technical details beyond what is publicly available. The answers to many of those questions can be found on their website, but some of that information hasn’t been released publicly to my knowledge.

    Regarding your other post, the public seems to be in love with the notion of $1 or $1.5 per gallon fuel. If someone comes out and makes a claim like that, they grab headlines. The problem is that they are never able to deliver. I think the reason is that many people in the lab don’t really have experience with scaling and building plants, so they underestimate the costs of actually delivering volumes at scale.

    RR


     

    Hi Robert,

    I hope they release the numbers sooner or later on their website. Really curious to know the performance of the world’s first BTL plant. Would love to see > 50 Million gallons BTL plant in the near future. Anticipate they would crack the feedstock logistics problems.

     

    [link]      
  42. By Walt on February 4, 2011 at 8:25 am

    Robert Rapier said:

    Hi SAM,
    I don’t officially speak on Choren’s behalf (my relationship is that I work for the majority owner), so I really can’t discuss technical details beyond what is publicly available. The answers to many of those questions can be found on their website, but some of that information hasn’t been released publicly to my knowledge.

    RR


     

    Interesting…I can see why competitors are not going to get any widespread positive coverage outside the super majors.  I noticed I made a spelling error, I meant to say I “reviewed” their website, not “removed” it when I looked at Choren’s site.  This helps many of us, I’m sure, understand the fine line between being stealth about what you are doing with Choren’s majority owner, and what get put on the blog as positive developments in new technology development.

    [link]      
  43. By moiety on February 4, 2011 at 9:55 am

    SAM said:

    Robert, further to the discussion on Gasification vs Fermentation debate, would appreciate if you could share wid us some important aspects of Choren’s process like

    – Overall EROEI of BTL process

    etc


     

    While it would be possible for Choren (or anyone) to share some of that data with the public they will not as it is only proven for their plants and feedstock at the specific size they are working at (probably costs are not proven and there is an assumption usually from pilot to plant scale that manpower will decrease for e.g.). It would also give their competitors a very good idea of where they are with implementation thus scare off potential investors.

    The problem with underestimating costs are RR puts it are common in research. Technical problems are also very prevalent (which lead to higher costs…).  In many cases in research (early stage; lab scale) the process is described in very simple terms. Further the lab rig will have different issues (always manned) to a full scale (unmanned) so control systems and ways of operating cannot be used as a good basis for scale up.

    A simple example could be with washing clothes. On a lab scale you might hand wash for experiments. For modeling you will describe a washing machine (WM) as a series of pump and centrifuge stages. You will thus not be considering how these work together. Your expectations (say cleanliness versus cycle time) will be based on ideal experiments. In the real world WM, everything has to communicate with valves and timers (control systems) and there will also be safety systems involved as well as electrical inputs (also you do not sit by the WM while it is doing its thing). These are rarely if ever modeled.  In that sense it is hard therefore to cost these things or account for their impact even though you know that they are required..

    Then you will have a manager/person who has to sell this prodcut for further investment. Ideally this person will have a view to the future and has enough expertise to be critical of the design and see the items lacking and account for them somewhat. But he should not be too, say we say scientific in that he is too close to what is happening in the lab leaving him unable to look to the future process. The latter is a common problem where the new manager is very good scientifically but technically, he has relatively few ideas about how a plant works.

    In essence moving to the lab will lead to more troubleshooting and problems to solve and this is often grossly underestimated. I always use the general rule for opening a restaurant to get an idea; expect to make a loss for the first three months. Make sure you can afford this. Many times, research projects failre for failing to account for this buffer time.

    [link]      
  44. By sameer-kulkarni on February 4, 2011 at 11:48 am

    Moiety said:

    While it would be possible for Choren (or anyone) to share some of that data with the public they will not as it is only proven for their plants and feedstock at the specific size they are working at (probably costs are not proven and there is an assumption usually from pilot to plant scale that manpower will decrease for e.g.). It would also give their competitors a very good idea of where they are with implementation thus scare off potential investors.

     


     

    Well Choren (4.75 Mil Gal/year) & Inbicon (1.4 Mil Gal/year) should be credited for being the foremost players to produce 2nd generation biofuels at such an impressive semi-commercial scale. Concerning costs, I haven’t raised any query but I am quite sure they won’t go lower than the fossil derived fuels any time sooner. I guess the Biofuels costs will average out at around 5$/gal. I am already disbursing 5.2$/gal for petrol here in India today.

     

    My questions were from a purely academic point of view in order to establish a benchmark for comparing other contenders & further crystallize on the crucial differences between BTL & Fermentation process. Anyways I shall be patiently waiting for those numbers to get updated on their webpage.

    [link]      
  45. By rrapier on February 4, 2011 at 1:36 pm

    Walt said:

    Robert Rapier said:

    Hi SAM,

    I don’t officially speak on Choren’s behalf (my relationship is that I work for the majority owner), so I really can’t discuss technical details beyond what is publicly available. The answers to many of those questions can be found on their website, but some of that information hasn’t been released publicly to my knowledge.

    RR


     

    Interesting…I can see why competitors are not going to get any widespread positive coverage outside the super majors.


     

    Are you kidding me? I write more about competitors than I do about Choren. I tend to avoid discussing Choren at all. In fact, the only in-depth story I did on Choren was three years ago before I ever took on my current job. Since I took my current job in mid-August 2009, the only mentions of Choren have been in the context of explaining my relationship to them.

    I have written much more about Rentech, for instance, than Choren, and methanol has certainly gotten a lot of favorable coverage here. Mark R. has discussed the SACA process here numerous times.

    But you have a lot of gall claiming I am slanting coverage away from competitors when you got pretty good coverage yourself in this story:

    http://www.consumerenergyrepor…..avoritism/

    You have also been allowed to talk about your company and process in numerous posts here. Now, if you want to make insinuations, I will just go strip that video out, any references to your process, and I will stop allowing you to even discuss it. I tolerate a lot of things, but one thing I don’t tolerate is the sort of insinuation you made above — especially considering that the evidence is stacked against it.

    RR

     

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  46. By Walt on February 4, 2011 at 10:13 pm

    Robert Rapier said:

     

    Are you kidding me? I write more about competitors than I do about Choren. I tend to avoid discussing Choren at all. In fact, the only in-depth story I did on Choren was three years ago before I ever took on my current job. Since I took my current job in mid-August 2009, the only mentions of Choren have been in the context of explaining my relationship to them.

    I have written much more about Rentech, for instance, than Choren, and methanol has certainly gotten a lot of favorable coverage here. Mark R. has discussed the SACA process here numerous times.

    But you have a lot of gall claiming I am slanting coverage away from competitors when you got pretty good coverage yourself in this story:

    http://www.consumerenergyrepor…..avoritism/

    You have also been allowed to talk about your company and process in numerous posts here. Now, if you want to make insinuations, I will just go strip that video out, any references to your process, and I will stop allowing you to even discuss it. I tolerate a lot of things, but one thing I don’t tolerate is the sort of insinuation you made above — especially considering that the evidence is stacked against it.

    RR


     

    Robert, first thing.  I said “widespread positive coverage” on the blog.  This did not imply you were negative about competitors, and positive about Choren.  I never even heard of the company until you mentioned it this week.  Certainly, I was not aware of anything you wrote about them 3 years ago…since I only heard of you after the article was written and video was posted.  I believe it was Mark R. who mentioned that I should send my video to you as I recall…and I did not expecting certainly any coverage.  I’ve sent it to many publications with no coverage…including the methanol institute.  It was only after you published it did I get some emails from people saying they enjoyed it…and then later as I was posting to defend methanol was privately told to “go away”.  I thought about going away, but decided to stay and post as long as I could to defend not only methanol but the technology I was building.

    By the way, I do not consider Choren a competitor of mine…again, I have never heard of them before.  My competitors even in our 80 page disclosure document list all our competitors, detailed information on their technology and third-party validations of their/our comparisons.  I’m sorry to say Choren is not on the list.  Thus, I did not imply Choren was getting positive coverage, and we were getting negative coverage.  By competitors I meant most of what I read on this blog…which I assume would be cometitors of Choren and their gasification technologies.

    You may remove my video and comments if you have been offended.  While the flaring comments (basically calling me deceptive by unwilling or unable to provide more detailed data than the links to the source information) twisted my hair in a buch, I have appreciated being able to promote my technology on this blog.  I agree you do not have to let me post, nor certainly promote methanol or GasTechno here.

    This week in the field has silenced my critics to a large degree.  I brought back home probably two gallons of product from our production, and completed amazing tests on gas from before and after the JT separator.  I have never seen anything as beautiful for my investment over the past nearly 10 years since I first signed agreements on this research.  It has been a long and difficult struggle, and things changed in a dramatic way this week both in front of experienced operators, as well as some major skeptics who will take a second glance.  There are certainly some hurdles to overcome, but nothing like what existed in months/years past.  Methanol will still be unwanted to a large degree in America as a fuel additive or low cost replacement for some years to come, but making other high end fuels/chemicals will still be very viable with GasTechno.

    I still intend to read your commentaries knowing you are working for Choren indirectly, and take a different view from here forward.  I will not be offended if you remove my information and my comments (including this one).  I too like to say “Just Do It” with technologies, and especially without the amazing support you must get from your financial partner and Choren itself.  You guys are destined for great things I do not doubt.  I look forward to reading about them when you make them available publicly.

    [link]      
  47. By rrapier on February 5, 2011 at 4:05 am

    Walt said:


     

    Robert, first thing.  I said “widespread positive coverage” on the blog.  This did not imply you were negative about competitors, and positive about Choren. 

     


     

    But your contention is wrong. What you are suggesting is that I slant my blog coverage on the basis of my connection to Choren. That is insulting, especially given the fact that your claim of competitors not getting any coverage is wrong. As I noted, Rentech is a direct competitor and they have gotten plenty of favorable coverage. My relationship with Choren has zero influence on what I write, except for the fact that I don’t write about them.

    While the flaring comments (basically calling me deceptive by unwilling or unable to provide more detailed data than the links to the source information) twisted my hair in a buch…

    I sensed that, but you were simply paranoid. I didn’t call you deceptive, I was asking you for data; you were acting like I was out to trap you. My request for data was perfectly reasonable; the way you responded was not.

    Further, your whole take on the methanol business is paranoid. I have given methanol a great deal of favorable coverage, yet you are prone to complain that I don’t talk enough about methanol. Give it a rest.

    RR

    [link]      
  48. By Walt on February 5, 2011 at 6:47 am

    Robert Rapier said:

    I sensed that, but you were simply paranoid. I didn’t call you deceptive, I was asking you for data; you were acting like I was out to trap you. My request for data was perfectly reasonable; the way you responded was not.
    Further, your whole take on the methanol business is paranoid. I have given methanol a great deal of favorable coverage, yet you are prone to complain that I don’t talk enough about methanol. Give it a rest.

    RR


     

    Give me a break.  I told you there were flares beyond simple emergency flares.  You denied they existed in America on-shore.  This was untrue and you asked for proof.  I said I could take a picture of one, but that was not acceptable because you said that you don’t believe your eyes.  I gave you multiple links to the source data, but you rejected that because you found a policy ordinance that said flaring was not allowed except in emergencies.  I showed you the Michigan ordinance said flaring was allowed not just for flaring, but actually for wells in a certain Niagaran formation.  Your pride fills your writing as you are always right…and make sure that you go back to always quote yourself how right you are…and this is fine.  You are a well respected energy blogger, but you are not the type of personality who is going to take any negative rebuttle without a fight.  This is clear when I challenged you on the FACT that there is onshore flares.  To personally attack me calling me “paranoid” is an insult…but it will be effective in media circles.

    Regarding “paranoid” with the methanol industry…I have given a link to the lawsuit between Methanex and USA.  If you think I’m “paranoid” what do you think of the claims made by Methanex itself?  Right, I bet because they lost the case all the allegations are false.

    http://www.state.gov/s/l/c5818.htm

    I’ve worked in far too many markets around the world, for which you know nothing, and methanol is getting far too much positive coverage outside America.  You do two articles on Methanol, and pat yourself on the back.  Fair enough…I could not be more happy.  Calling me again paranoid is an insult.  I have been directly in this sector promoting methanol for years, and know first hand it is far more difficult to promote than ethanol, biodiesel, etc.  The lobby size at the methanol institute is a fraction of the size of both ethanol and biodiesel….don’t call me paranoid.  It is only intended to make your audience discount my integrity, and lift yours.  I would ask you please leave this message and not remove it.

    You have won this argument…I won’t challenge your claims any further on flares or your inaccurate knowledge of effective gas conversion technologies.  It is obvious Choren is a world-class leader in new technologies, and the majority owner has picked a winner in you.  I could not be more pleased that my comments might remain so people can have another view on gas or biomass conversion based upon hard numbers.

    [link]      
  49. By rrapier on February 5, 2011 at 5:14 pm

    Walt said:

    Robert Rapier said:

    I sensed that, but you were simply paranoid. I didn’t call you deceptive, I was asking you for data; you were acting like I was out to trap you. My request for data was perfectly reasonable; the way you responded was not.

    Further, your whole take on the methanol business is paranoid. I have given methanol a great deal of favorable coverage, yet you are prone to complain that I don’t talk enough about methanol. Give it a rest.

    RR


     

    Give me a break.  I told you there were flares beyond simple emergency flares.  You denied they existed in America on-shore.  This was untrue and you asked for proof.  I said I could take a picture of one, but that was not acceptable because you said that you don’t believe your eyes.


     

    Lies, lies, and more lies. I said to my knowledge onshore flaring isn’t allowed except in emergency situations. You started getting paranoid. I asked for data. You offered a picture, and links that didn’t contain any data (I cited some of the comments from some of them). Finally, after much back and forth and paranoia on your part, you linked to the EIA data, which was the sort of thing I asked for all along.

    You are a well respected energy blogger, but you are not the type of personality who is going to take any negative rebuttle without a fight.  This is clear when I challenged you on the FACT that there is onshore flares.  To personally attack me calling me “paranoid” is an insult…but it will be effective in media circles.

    More lies. The very fact that you think you were offering a rebuttal indicates that believed you were under attack, when all I was doing was asking for data. The reason I asked for data is because I wanted to know. When you finally posted the EIA data, I said “That’s the sort of thing I was asking for all along.” But you demonstrated a persecution complex, when I was simply asking for data. You think I was calling you a liar, when in fact I was simply asking for data. I kept repeatedly pointing this out — yet you kept acting as if you were under attack.

    Regarding “paranoid” with the methanol industry…I have given a link to the lawsuit between Methanex and USA.  If you think I’m “paranoid” what do you think of the claims made by Methanex itself? 

    You have displayed paranoia here on this site, as I talk positively about methanol quite a bit, yet you are apt to say “I can see why RR won’t talk about methanol” or paranoid things like “I can see why competitors don’t get broad coverage.” I have had multiple people e-mail me and say “What’s wrong with this guy?” In fact, it was someone else who first brought up to me your paranoia.

    You do two articles on Methanol, and pat yourself on the back. 

    You really should try to better inform yourself before mouthing off. In the past 5 years I have done numerous articles on methanol. I didn’t just “discover” methanol when you showed up. Yet you keep piping up asking why methanol isn’t getting more coverage.

    You have won this argument…I won’t challenge your claims any further on flares or your inaccurate knowledge of effective gas conversion technologies.  It is obvious Choren is a world-class leader in new technologies, and the majority owner has picked a winner in you. I could not be more pleased that my comments might remain so people can have another view on gas or biomass conversion based upon hard numbers.

    Your comments will remain, as they are a testament to your immaturity. But I am going back to edit the earlier post in which I mentioned your company. You aren’t going to come on here, insult me, and get any help from me. You are more than welcome to post here, but you can go promote your company somewhere else.

    You have won this argument…I won’t challenge your claims any further on flares or your inaccurate knowledge of effective gas conversion technologies.  It is obvious Choren is a world-class leader in new technologies, and the majority owner has picked a winner in you.

    Here you are now fixated on Choren, even though I don’t discuss them. You are acting like a petulant child. You talk about my “inaccurate knowledge of effective gas conversion technologies”, even though you have never pointed out inaccuracies. You talk about my “claims on flares”, even though “my claims” were a request for data.

    If this is how you conduct yourself in the business world, that explains a lot. You do a very poor job of interpreting what people are saying to you, and then you see persecution.

    RR

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  50. By rrapier on February 6, 2011 at 1:04 pm

    Oxymaven said:

    Of course this debate now also needs to factor in yesterday’s announcement by Kior that they’ve got a term sheet from DoE for up to $1 bil in loan guarantee towards 4 facilities (250 MMGY) is pretty remarkable, and incredibly puzzling?  Maybe Khosla wins this debate? Or maybe this is just more huge hype from one of his ‘big biofuels bets’?  


     

    Let’s just say that some of the statements I have seen regarding KiOR are simply not true. They have hyped the product as a direct crude oil replacement when there will be significant differences in what they make and crude oil. But remember, Range Fuels kept getting money on the basis of the hype. If it worked then, then hyping works and people will continue to do it. However, I know how these things work, and I won’t be surprised if investors in Range sue on the basis of misrepresentation. Once these people get sued a few times, they will start to be more responsible in their claims (IMO).

    RR

    [link]      
  51. By Kit P on February 6, 2011 at 1:46 pm

    “I find it very strange that DoE would want to potentially commit that much government backing to a single company / technology, especially for several first or second of kind facilities?  If Kior can be as profitable as they indicate, why would they need any government backing for subsequent plants?”

     

    If you find it strange Oxymaven is most likely that you are poorly informed and do not understand how DOE loan guarantees work. DOE makes money on loan guarantees by carefully vetting projects and supporting projects which are most likely be profitable and pay back the loan.

     

    The purpose of the program is to reduce risk of high capital cost domestic production that are likely to succeed.

    [link]      
  52. By rrapier on February 6, 2011 at 2:11 pm

    Kit P said:

    DOE makes money on loan guarantees by carefully vetting projects and supporting projects which are most likely be profitable and pay back the loan.

    The purpose of the program is to reduce risk of high capital cost domestic production that are likely to succeed.


     

    Can you give an example of a biofuel project that falls into that category (been profitable and paid back the loan)? There may be some, but I can’t think of any.

    The program has only been in place since 2005, so you really can’t know yet whether they will make money or lose a lot of money until these projects are further along. But the very reason for needing a loan guarantee is that you have a project that is going to involve a high degree of uncertainty.

    RR

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  53. By Kit P on February 6, 2011 at 4:23 pm

    “But the very reason for needing a loan guarantee is that you have a project that is going to involve a high degree of uncertainty.”

     

    No actually, just more uncertainty than the established way of doing things. Of course there is no uncertainty about where the money goes when we buy imported oil.

    [link]      
  54. By carbonbridge on February 6, 2011 at 6:08 pm

    Robert Rapier said:

    Let’s just say that some of the statements I have seen regarding KiOR

    are simply not true. They have hyped the product as a direct crude oil

    replacement when there will be significant differences in what they make

    and crude oil. But remember, Range Fuels kept getting money on the

    basis of the hype. If it worked then, then hyping works and people will

    continue to do it. However, I know how these things work, and I won’t be

    surprised if investors in Range sue on the basis of misrepresentation.

    Once these people get sued a few times, they will start to be more

    responsible in their claims (IMO).

    RR


    10/4 RR.  

    Once again I agree completely with your statement above.  Amid the hype and real need for gov’t (taxpayer) guaranteed loans supporting new ‘what if’ types of biofuels — are a myriad of politicians, bankers and private investors who are understandably sooooo eager for something new and workable to arise from within the biofuels arena.  Plus something new, workable as a fuel (and seamless) which ALSO returns investors a wonderful profit! 

    Too bad that most of these citizens have NO CLUE on the front-end to what it is that they are actually evaluating from a practical standpoint.  Everyone interprets a prospectus’ spin from a hopeful attitude — OR they wouldn’t keep reading.

    Same citizens, bureaucrats and investors without chemical engineering background really have NO CLUE as to the mechanics involved with only partial catalytic oxidation when converting a particular raw feedstock into just what kind of new liquid OIL output.

    And herein I reference ‘renewable crude oil’ as KiOR’s process produces.  Such output of heavy bio-oils needs further conventional refining to then reassemble into either a renewable gasoline or a working flavor of longer-chained diesel molecules.  Unfortunately, both of these finished new end-fuel products WILL float-on-water and will not easily biodegrade.  Renewable gasoline or diesel are both quite similar to conventional petroleum-derived liquid fuels which this new renewable crude oil (once highgraded via additional refining) is designed to ‘drop into’ most easily and hopefully, also quite profitably.  

    What I’m going back to here are rudiments of basic beginnings.  And herein I urge reviewers to please examine a new ‘biofuel end product’ first from its ability to actually biodegrade. 

    Many alternative biofuels won’t biodegrade.  Both bio-derived OILS and synthetically-produced Fischer-Tropsch OILS are still float-on-water OILS — just like petroleum-derived OILS.  Oils, even biodiesel produced from plant oils or animal fats, does not readily biodegrade.  [Think back only to this past summer's Gulf Gusher for a moment.)  It takes a missing oxygen atom in the fuel recipe to initiate polarity / water solubility / thus biodegradability...  And what does this oxygen produce?  An oxycarbon alcohol or blend of water soluble ALCOHOLS...  Simply polar opposite herein of any brand of hydrocarbon OIL.

    Totally missing is this most obvious need for biodegradability of a new fuel replacement or a blendstock to diminishing volumes of peak oil.  I stress what is still missing in traditional project evaluations.  Such simple and critical evaluation integrating the defination of 'biodegradable' is missed by 99% of upfront evaluators.  Then,,, -- other investors start jumping in as the 'I'm aboard with the me too crowd,' simply wishing to go along with the next capital investment flow and hype runs wild.  But where might this cash flow go?  Down the drain as with Pacific Ethanol's funding drive or into your own bank account as a desired and well-earned downstream annual dividend?

    My point here isn't to denigrate a competitor.  It is simply to say "open up your eyes a little bit here" and begin by reviewing this firm's own web page with a certain wrinkle of achievement before further evaluating the big ticket spin elements contained within this recent news release...

    US DOE awards KiOR term sheet for loan guarantee supporting a more than $1B biofuels project; drop-in fuels from wood biomass   •   3 February 2011

    KiOR, Inc., a developer of a catalytic pyrolysis process to produce renewable oil from biomass, has received a term sheet for a loan guarantee from the US Department of Energy’s Loan Guarantee Program supporting a more than $1-billion biofuels project. The project would convert wood biomass into drop in biofuels such as gasoline and diesel fuel.  (Sounds interesting.)

    http://www.greencarcongress.co.....10203.html

    The clip directly below was copied from KiOR's web site this Sunday afternoon:

    "The [KiOR] holy grail is a renewable fuel that no one can tell is renewable.  Its price would be similar to that of a barrel of oil.  It would be dropped into existing pipelines, refineries and vehicle engines that already process millions of barrels of petroleum a day.”

    I will say this:  KiOR’s intended new fuel output is exactly bass-ackwards from that which Range Fuels had anticipated producing.  Both firms employ wood chips as carbon/hydrogen feedstock plus different thermal methods of separation of these active carbon/hydrogen building blocks derived from wood chips.  Both firms need gov’t loan guarantees.  And America (plus the world) continues to need workable solutions to begin supplementing crude oil in a very big way.  In fact, the U.S. Federal RFS mandate provides a rather generous $1.01 tax credit to assist such nobel, entrapreneural efforts to spearhead new “bio”-fuels. 

    And last:  I agree, it is a difficult time at best to secure Capex development funds to construct new biofuel facilities.  However:  The technical conversion processes involved and the new fuel end products produced along with profitability (or not) — are too difficult for most reviewers to ascertain.  RR’s earlier statements just above indicate that he ‘interprets’ some of the difficulties inherent within.  (RR has operated an oil refinery before…)  As the saying goes, Caveat Emptor!  And as such, a giant loan guarantee (if provided) by the Fed becomes anchored back to all of our pocketbooks. 

    Good day all…and keep your chins up!  :-)

    –Mark

    [link]      
  55. By oxymaven on February 6, 2011 at 7:51 pm

    I’m ok with DoE giving loan guarantees for a first of kind facility, even KiOR. What I don’t understand about KiOR’s supposed term sheet is why DoE would ever consider throwing in up to $1 billion towards a 2nd or 3rd of kind facility. Seems to me that private funding should be available if the 1st of kind facility is successful. If DoE is serious about backing KiOR with that much funding down the road, I really question their overall strategy. And if most of the yak about ‘up to’ $1 billion is KiOR hype, then DoE should step up and tell KiOR to pipe down.

    [link]      
  56. By rrapier on February 6, 2011 at 8:04 pm

    oxymaven said:

    I’m ok with DoE giving loan guarantees for a first of kind facility, even KiOR. What I don’t understand about KiOR’s supposed term sheet is why DoE would ever consider throwing in up to $1 billion towards a 2nd or 3rd of kind facility. Seems to me that private funding should be available if the 1st of kind facility is successful. If DoE is serious about backing KiOR with that much funding down the road, I really question their overall strategy. And if most of the yak about ‘up to’ $1 billion is KiOR hype, then DoE should step up and tell KiOR to pipe down.


     

    It may be like ExxonMobil’s much touted $600 million investment into algal fuels. The truth is that the initial investment was a small fraction of that, and $600 million was only going to be spent if multiple milestones were met. In other words, if this all works out and money is being made, more money will be invested. The KiOR deal is probably similarly structured.

    RR

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  57. By Kit P on February 6, 2011 at 8:06 pm

    Mark you should hope that you find some clueless folks to market to because you do not present a very good technical argument.

     

    The object of producing transportation fuels is to not dump it into the environment. The fate in the environment needs to be considered if fuel is spilled. The risk of fire or explosion must be considered. Toxicity must be considered. If you spill methanol on your skin or other wise ingest it, you will die or go blind. Biodegradability will be the least of your concerns. Either OSHA or the Chemical Safety Board will be investigating. Get a good lawyer.

     

    If you spill hydrocarbons into the environment without hurting anyone, EPA will make you clean it up and fine. All hydrocarbons are biodegradable. It is just a matter of how fast.

    [link]      
  58. By Walt on February 7, 2011 at 11:30 am

    Robert Rapier said:

     

    Lies, lies, and more lies. I said to my knowledge onshore flaring isn’t allowed except in emergency situations. You started getting paranoid. I asked for data. You offered a picture, and links that didn’t contain any data (I cited some of the comments from some of them). Finally, after much back and forth and paranoia on your part, you linked to the EIA data, which was the sort of thing I asked for all along.

    More lies. The very fact that you think you were offering a rebuttal indicates that believed you were under attack, when all I was doing was asking for data. The reason I asked for data is because I wanted to know. When you finally posted the EIA data, I said “That’s the sort of thing I was asking for all along.” But you demonstrated a persecution complex, when I was simply asking for data. You think I was calling you a liar, when in fact I was simply asking for data. I kept repeatedly pointing this out — yet you kept acting as if you were under attack.

    RR


     

    I do hope this message does not mess up with formatting….I’m not very good at formatting with this blog!

    Robert,

    I went back to read the thread where I posted on the gas flaring issue.  You asked the first question (3:18 PM, January 11, 2011). It is not true that I “started getting paranoid”.  The first 6 posts of mine/yours on the subject were friendly.  After my primary source data link (2:06 PM, January 15, 2011) Ronald said, “Wow, that is a very generous sharing of data, Walt!” 

    You said (2:52 PM, January 14, 2011), “Can you give me an actual onshore example — with the amount flared (and a source for the information)?”  That is what those links provided was the actual onshore examples.  They are in a database at the State level.  I am not aware of any “onshore examples” at the federal level.

    You corrected me by again asking for “examples” (11:41 AM, January 19, 2011):

    “Walt, I am just unaware of any examples. Reading through some (not
    yet all) of your links, it looks like the flaring is what I expect
    flaring to be associated with: Upset conditions. You can’t make any kind
    of business utilizing gas that is only available during process upsets.

    What I am looking for (and there may be an example within all of
    those links) is an example of an onshore operator flaring anything other
    than baseline amounts of natural gas (to keep the flare lit) during
    normal operating conditions. It isn’t that I agree or disagree; I am
    just unaware of this in the continental U.S. today. So a specific
    example would be most helpful.  For instance, one of your links explicitly states: “The operator
    of a gas gathering system, gas plant, gas compressor facility or other
    gas handling equipment not directly associated with lease production of
    gas, shall not intentionally allow gas to be released for a period of
    more than 24 hours after the start of an upset condition.”
    It
    allows an exception only during emergency conditions. I know that when I
    worked at both chemical plants and oil refineries, we had to report all
    flaring. So it is hard for me to understand how anyone could get away
    with simply flaring natural gas. RR”

    Again, the only examples I knew of were in those databases.  I responded (2:25 PM, January 19, 2011):

    “Robert,

    I will be on site next week and will take a picture.  It is a very
    large flare (probably 100,000 scfd) and email you.  There are flares
    everywhere in Michigan on oil fields…you can drive down I-75 and see
    them along side the highway.  I’m surprised you have never seen them
    except in emergency shut-downs.  Flares do not need to be operational at
    all facilities as some people imply.  Their are lots of facilities who
    have removed flares (like right here in Michigan at the Michcon
    facility) and only have a vent/flare stack in place for emergency
    shut-downs.  Oil fields are a bit more complicated.  I was talking with a
    guy in Kentucky on Monday that has flares on some oil fields, and he
    has not felt the pressure yet to deal with them, but he knows of
    Michigan is being more concerning.

    I’ll email you privately pictures next week.”

     

    You said (8:23 PM, January 20, 2011) “While a picture would be nice, I won’t be able to estimate flow or know
    whether an upset condition caused the flaring if it looks excessive…I just want actual, verifiable, and quantifiable examples.”

    The rest of the dialogue gets seems to get into the “paranoid” where I wrote (8:23 PM, January 20, 2011):

    “Robert,

    You are making me laugh.  I’ve been working with GGFR since 2006 on
    gas flaring reduction.  If you think you are going to go find flare data
    from the EPA that you can easily access you don’t need me.  Be my
    guest.  If you cannot find any EPA data, then you are right.  There are
    no flares in the USA onshore.  Congratulations.  I only believe what I
    see with my eyes…and these flares are not emergency…they run 24/7.”

     

    You said (2:48 PM, January 21, 2011)

    “Walt, I get the feeling that you think I am trying to trap you or
    trick you. I have not once denied what you are claiming, I am just
    asking for data. Flaring is regulated by the EPA. Either they have data
    on it, or someone is breaking the law and can be reported and dealt
    with. I don’t trust my eyes or your eyes more than I trust flow meters.
    What may look like a flaring situation may be the emergency flare —
    which does run 24/7. If someone is flaring 100,000 scf a day, there
    exists data for that.

    But so far you have given me no verifiable example of anyone flaring
    gas onshore (other than previously mentioned emergency flares). I have
    just gotten a lot of assurances that it happens. This is something that
    you have obviously spent a lot of time looking at, so I would have
    thought you could have pointed me right to the data. But the longer this
    dance goes on, the more puzzled I become.

    RR”

     

    I responded (7:22 PM, January 21, 2011)

    “Robert,

    I must be mistaken.  All the flares must be operating and reporting
    to EPA as emergency flares in America.  I’ve never been able to get the
    data from the EPA for emergency flares so you will need to do the
    research yourself.  In regard to exemptions, as I sent to you already in
    the link for Michigan, they can flare an allowance of associated from
    wells that produce from the Salina-Niagaran formations.  I would be
    surprised all the flares in that are exempted in the Salina-Niagaran
    formations are for emergency only, but you would have to ask the EPA. 
    This is a state exemption, not EPA.

    To avoid any more dancing, you will need to do the research yourself
    to get the lists of those who are flaring from the 3 states I provided,
    or contact the EPA directly.  The databases are available if you want to
    request them and pay for them in Louisiana and Texas. They are not
    easily available online for you to access…and if no flaring exists
    except for emergencies I would not waste time researching those sites.”

     

    You responded (1:41 PM, January 22, 2011):

    “I give up. You have claimed that natural gas flaring is going on. I
    have asked you for data. You have provided none, and now want me to do
    the research to back up your claims.

    I did send a note to one of my contacts at the EPA on this. I will
    let you know what he says. I also don’t believe a state can exempt
    anyone from an EPA requirement, otherwise California would have long ago
    exempted themselves from the ethanol requirement. They have requested
    waivers multiple times from the EPA but they weren’t granted. Why
    request a waiver if you can just exempt yourself?

    RR”

     

    I responded (4:36 PM, January 22, 2011)

    “If you just want all of flaring and venting for the USA it is located on this site.

    http://tonto.eia.doe.gov/dnav/…..mmcf_a.htm

    I believe various gas flaring and venting is reported to the states
    alone, but if you do find any EPA reporting files on individual wells,
    and they are all emergency than you have permission to publicly call me a
    liar and one who cannot back up my claims.  I gave you the resources
    and links for 3 states who have databases of companies flaring.  In
    Michigan they are exempt from the no flare regulation in a certain
    formation as explained in the legislation.  If the EPA is upset, they
    should sue Michigan to bring those operators in compliance and fine
    those operators.  I’ll leave that up to the justice department and your
    contacts if you know who might bring the suit.  I know they are exempt
    under State law as I see the flares.”

     

    Your wrote (8:56 PM, January 22, 2011)

    “That is more like what I was looking for. That does seem like an awful lot. Hopefully my guy at EPA can clarify.

    Thanks, RR”

     

    The rest is unimportant.  Your claims that I am just telling lies and am childish is fine.  I tried to provide you actual onshore examples of wells.  First, by the links to the databases containing the wells, then by a picture of a flare onshore.  The combined federal data reporting total per State for onshore and offshore was not (in my opinion) the specific site data onshore you were requesting.

    You have a very large audience and following (as you say with people writing you privately about my dialogue on this subject) and clearly many now will question not only my integrity, but the series of events which led into you calling me “paranoid” and a “liar”.

    It certainly will not help me, nor our technology, with gaining credibility in a very difficult market to raise funding.

    Therefore, please forgive me for my comments about you, and I will leave this last thread for people to judge for themselves.  I was not trying to be paranoid, but just trying to have you do the research to find the onsight example you were seeking.  It is not easy to get the data.

    I wish to drop the subject.  I will continue to read your blog from time-to-time, and may comment if I feel something I have would be helpful.

    In closing, I do want to rehighlight a point I made to anyone who wants to provide me the research.  I’m more into numbers than concepts of technology value since I know the costs of many processes.  This will be my last comment:

    “I have a question that I would like someone help me answer.

    If the new issue in the renewable fuels movement is the
    “Gasification/Fermentation Debate”, as it seems to be now defined by
    Khosla and everyone else that follows him, I would like to see any
    numbers on CAPEX and OPEX.

    Is there anyone reading this blog that have looked at both CAPEX and
    OPEX for each of these process technologies, and have proven the
    substantial value comparing one to the other?  Clearly, hundreds of
    millions and even billions will be poured into each of these branches of
    technology development around the world, and if this is the new debate
    coming out of Silicon Valley (and not Houston), I would love to see any
    study on side-by-side comparisons.  To spend (allegedly) $400 million on
    Range Fuels, lay everyone off and say they will need to shift their
    technology to the new Fementation movement is beyond my ability to
    understand without seeing hard numbers.”

    Thanks.

    Walt.

    [link]      
  59. By rrapier on February 7, 2011 at 1:14 pm

    Walt said:

    I went back to read the thread where I posted on the gas flaring issue.  You asked the first question (3:18 PM, January 11, 2011). It is not true that I “started getting paranoid”.  The first 6 posts of mine/yours on the subject were friendly.  After my primary source data link (2:06 PM, January 15, 2011) Ronald said, “Wow, that is a very generous sharing of data, Walt!” 


     

    Walt, I am well aware of how the exchange went. It was like a Laurel and Hardy routine. When you posted links, I started to look through them. I wasn’t finding any actual quantified examples, which is why I asked the question. Given that they were your links, I expected you would be able to go in and pull an example out. You interpreted my questions as “There are no examples” when I was only asking that you point me to an example — not a bunch of links where I would have to dig and dig to find one.

    I was just incredulous that despite my many requests for an example, your response was to keep pointing back at the links (what I would expect is that you just pulled one out and quoted it) and ultimately getting upset because of my request for data. A picture isn’t data. I was looking for somewhere that they logged this, which you finally provided with the EIA data (but only after becoming clearly annoyed and taking potshots at me). Further, you have just proven my point that I was making multiple requests for data, when you have characterized that as denial of the issue.

    You have a very large audience and following (as you say with people writing you privately about my dialogue on this subject) and clearly many now will question not only my integrity, but the series of events which led into you calling me “paranoid” and a “liar”.

    It certainly will not help me, nor our technology, with gaining credibility in a very difficult market to raise funding.

    I see this issue pretty simply. For a very long time now, you have made digs about my coverage; digs that in my view weren’t even slightly warranted. And that’s not just me; as I said I have had people write and ask “What’s this guy’s deal?” But if you keep poking a hornet’s nest, you will probably get stung. The latest comment about competitors not getting coverage was 1). False; 2). A challenge against my integrity to suggest I would use the blog in such a way.

    So any questions about YOU have been brought on by your comments here. Your childish digs at Choren are your responsibility, as are your childish digs at me.

    RR

     

    [link]      
  60. By Walt on February 7, 2011 at 1:29 pm

    Robert Rapier said:

    Walt, I am well aware of how the exchange went. It was like a Laurel and Hardy routine. When you posted links, I started to look through them. I wasn’t finding any actual quantified examples, which is why I asked the question. Given that they were your links, I expected you would be able to go in and pull an example out. You interpreted my questions as “There are no examples” when I was only asking that you point me to an example — not a bunch of links where I would have to dig and dig to find one.

    I was just incredulous that despite my many requests for an example, your response was to keep pointing back at the links (what I would expect is that you just pulled one out and quoted it) and ultimately getting upset because of my request for data. A picture isn’t data. I was looking for somewhere that they logged this, which you finally provided with the EIA data (but only after becoming clearly annoyed and taking potshots at me). Further, you have just proven my point that I was making multiple requests for data, when you have characterized that as denial of the issue.


     

    Let me please be clear.  You cannot find operator data on gas flares, but have to request the databases from the states.  I explained this clearly.  You specifically were clear when you said:

    “What I am looking for (and there may be an example within all of those links) is an ***example of an onshore operator flaring*** anything other than baseline amounts of natural gas (to keep the flare lit) during normal operating conditions.”

    That is not available in the EIA data I sent to you, nor what you asked for, but the links are to the people who have the databases, and can be obtained for a fee (or for free in Michigan) for those who request the operator data.

    I was trying to give you access to operator flaring data, but picture, or by database.  There is no published link to the data I am aware of, and most certainly not at the EPA to the best of my knowledge and research.

    I wish you the very best with Choren and its endeavors. These were the last points I wanted to make.

    [link]      
  61. By Steve Frazer on February 17, 2011 at 3:03 pm

    Mr. Khosla has the right approach in that the price per gallon of petroleum sourced fuel will justify multiple solutions in the near future. While we believe there will be a few synthetic “gasoline” flavors, the primary migration will be to advanced diesel with ever increasing percentages of biodiesel blends.

    We find it amazing that while the rest of the world migrated to diesel almost a decade ago, the US continues to try to support the “gasoline” (E-something) powered engines.

    http://etcgreen.com Article: Are you driving your last gasoline powered car?

    [link]      
  62. By Julia on April 15, 2011 at 8:27 am

    I am bemused at the charlatans who keep duping the government into funding them, like range fuels. I, and a team of chemical engineering students, spent three months in the lab producing an alternative fuel by fermentation and them modeled the scaled up industrial production system and economic pay back for such a system. The months of double time work and we determined it was not feasible with the current technology. These companies know their system is going to run into technical difficulties, but they wait till after the 300 million has cleared the bank. What we need is investment in intensive modeling and economic planning. Or maybe I should just start lobbying to build an alternative energy company :)

    [link]      
  63. By Walt on April 15, 2011 at 12:16 pm

    Julia said:

    I am bemused at the charlatans who keep duping the government into funding them, like range fuels. I, and a team of chemical engineering students, spent three months in the lab producing an alternative fuel by fermentation and them modeled the scaled up industrial production system and economic pay back for such a system. The months of double time work and we determined it was not feasible with the current technology. These companies know their system is going to run into technical difficulties, but they wait till after the 300 million has cleared the bank. What we need is investment in intensive modeling and economic planning. Or maybe I should just start lobbying to build an alternative energy company :)


     

    Julia,

     

    Here is an interesting statistic that will be interesting to see how some of these VC funded companies will compare.  ExxonMobil Chemical spends a lot of money in R&D and so this calculation of “return on average capital employed” will be a target for most of us who strive to deliver value.

     

    “ExxonMobil Chemical Company continues to lead competitors in return on
    average capital employed at 26.3 percent in 2010. Over a 10-year period,
    the company has generated returns more than two and a half times
    greater than the competitor average.”

    http://www.rigzone.com/news/ar….._id=104966

     

    I think that is the number to try to beat in the industry.  Arguing that one can produce ethanol at less than $1.00 per gallon in several press releases I’ve seen does not tell us enough about their feedstock costs, their scale, their costs of money, any subsidies, etc.  The valley funded deals raise and spend hundreds of millions on these new technologies and so let’s look at their “return on average capital employed” in the future.

    [link]      
  64. By rrapier on April 15, 2011 at 1:18 pm

    Julia said:

    I am bemused at the charlatans who keep duping the government into funding them, like range fuels. I, and a team of chemical engineering students, spent three months in the lab producing an alternative fuel by fermentation and them modeled the scaled up industrial production system and economic pay back for such a system. The months of double time work and we determined it was not feasible with the current technology. These companies know their system is going to run into technical difficulties, but they wait till after the 300 million has cleared the bank. What we need is investment in intensive modeling and economic planning. Or maybe I should just start lobbying to build an alternative energy company :)


     

    Hi Julia,

    I think you are correct; these companies do know they have technical problems yet plow ahead. Or at least people within the organization know it, even if they aren’t completely honest with the rest of the organization. The mistake they make is in assuming those technical difficulties will be solved when they scale up. I think too many are driven by “Moore’s Law” thinking, when in fact they are dealing with something very different from computer chips, and something that has already been around for over 100 years.

    RR

    [link]      
  65. By sameer-kulkarni on April 16, 2011 at 2:25 pm

    Robert Rapier said:

    The mistake they make is in assuming those technical difficulties will be solved when they scale up. I think too many are driven by “Moore’s Law” thinking, when in fact they are dealing with something very different from computer chips, and something that has already been around for over 100 years.

    RR


     

    The analogy of Moore’s Law could be applied in production of chemicals for e.g Microreactors employed for Process Intensification. However scaling-up to a commercial biomass-refinery to produce a cheap commodity chemical is far more challenging than mass producing a compacted electonic gizmo that yields a lucrative consumer merchandise. 

    [link]      
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