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By Robert Rapier on Feb 21, 2011 with 24 responses

Due Diligence: How to Evaluate a Renewable Energy Technology

Doing Due Diligence

To people who follow the energy industry closely, it’s a common occurrence to come across announcements from companies proclaiming to have developed the key to the ‘next big thing’ — for solving the world’s energy crisis. Maybe they say they can take any sort of waste biomass and turn it into fuel — ethanol, diesel, pyrolysis oil, mixed alcohols — at very low cost. Or they say they can produce renewable electricity at a price competitive with coal.

The layperson reads the news release and is curious: “Is this real?”

When I am asked to comment on a press release, I try to be cautious with my opinions until I have peeled the onion a bit. There are technologies with real potential, and just because a company hypes their technology doesn’t mean it won’t work. So my opinion on technologies that I haven’t particularly studied will tend to be general and conservative.

But let’s say you are interested in becoming a stakeholder in the process. You could be a private investor, a government entity, or you could be someone from the media who is interested in sorting out hype from reality in order to protect potential stakeholders (such as taxpayers). That requires quite a different level of investigation than rendering an opinion based on a press release, and many people don’t know where to start.

In my own experience, perhaps 90% of the stories you see promoting various technologies are at least exaggerated. So how do you separate fact from fiction and wishful thinking from reality?

Understand the Levels of Scale and the Hurdles that Come With Each Step

It is a huge challenge to take results that were achieved in a laboratory and scale those up through a pilot facility to a demonstration facility to a commercial facility. Each of those steps is a gate, and each of those gates will stop most technologies from advancing to the next gate. Skipping steps — for instance jumping from the lab to a demonstration size facility — greatly lowers the probability of success while putting much more money at risk.

There are no hard and fast rules on the borders between these particular facilities; one person’s pilot facility may be another person’s demonstration facility. In general, I think of lab experiments as consisting of one aspect of a technology at scales of ounces or milliliters. Piloting moves up into scales of pounds or liters per day, and will incorporate more pieces of the puzzle into the experiments. Demonstration facilities reach the realm of barrels per day (1 barrel = 42 gallons), and are typically integrated facilities designed to demonstrate that all aspects of the technology work — in conjunction with each other — at that particular scale.

A facility producing 10 barrels a day (150,000 gallons per year) is demonstration size; one that produces 1,000 barrels a day is on the low end of commercial size. To put those numbers into perspective, the average size of a corn ethanol plant is just over 4,000 barrels per day and the average size of an oil refinery in the U.S. is 125,000 barrels per day.

Data Omitted From the Press Release: How and Who to Get it From

Before you even get to ask questions, you may be asked to sign a secrecy agreement. This is a legitimate and necessary step for companies who wish to protect against someone running off with their technology and starting a competing company, or leaking proprietary information to competitors. A secrecy agreement will give you access to information you might never obtain otherwise, and you will often find out very quickly that what companies tell you privately is different from their press releases. On the other hand many companies that are out promoting their technology and trying to get funds will answer many questions before asking for a secrecy agreement — and ideally you want to learn as much as you can before signing an agreement.

Of course if you are a reporter doing an investigative story, you will never sign a secrecy agreement. You are just going to have to dig a little harder to find answers to your questions. In my case, I fall into both categories. I sign secrecy agreements with companies whose technology we may be interested in developing. I do not write about those companies. The technologies I do write on are based on information I have been able to glean through some of the methods I detail below.

As you dig for information, generally the first people you will encounter are those promoting the technology. They will probably be careful and very optimistic with the information they provide. What you really want to do is ultimately talk to an operator or technician who is involved in the day-to-day operation of the process. They will be the ones to tell you about potentially significant issues.

First Questions

The first question to ask is “At what scale has this process been demonstrated?” But that’s just a start, because you will get misleading answers and people will withhold information. They may not tell you that they only simulated some parts of the process. For instance, a biomass gasifier produces synthesis gas (syngas), but there can be problems with the gas quality because of tar formation. If a simulated syngas is used in lab or piloting experiments (e.g., bottled hydrogen and carbon monoxide were mixed together to produce the syngas), that tar issue can be conveniently ignored in the lab and yet be a show-stopper for a commercial plant.

So you have to dig into the details. You want to know the scale of the process that has been demonstrated, but then you also want to know how many consecutive hours it has been run, and you want to know the source of the raw materials and the composition of the final product. Ask about the nature of byproducts and waste products as well. Product quality and waste disposal are both issues that have bankrupted companies attempting to commercialize a process.

Know the Limits of Computer Modeling

Next you have to ask about the assumptions that they are using to model a commercial plant. What is the scale-up factor between what they actually demonstrated and what a commercial plant will be? What are the production volumes in each case? How were the costs estimated for construction of a commercial plant? Have they attempted to skip steps in the scale-up process (e.g., going from lab or small pilot to small commercial scale)? If they are running at lab or small pilot scale and projecting their production costs for a commercial plant, I generally never take those numbers seriously. There are just too many hurdles between the lab and commercial scale. Small lab scale problems often become much bigger problems at demonstration scale.

You want to clearly distinguish between how much of the process has actually been proven and how much has been simulated with computer models. I saw a recent question posed by a renewable energy developer: Isn’t it true that you can prove a technology through modeling? The answer to that question is ABSOLUTELY NOT! In fact, the reverse is true: You prove a model by actually demonstrating that the process gives results consistent with the model. But some people will present model results as if they represent reality. Models are merely guides; a model won’t tell you whether a process will work or not. It will give you some guidance, but ultimately you have to take the results from the model and actually run the process. That is how you prove a technology (and validate a computer model).

Biomass Feedstock, Economic Assumptions, and Energy Requirements

You need to ask about the presumed source and cost of the biomass that will be used. As I identified in Bad Assumptions, I believe the assumption of a long-term supply of cheap, free, or even negatively-priced biomass is one of the most unrealistic assumptions companies make, and yet the assumption that commonly results in those claims of $1 or $2/gallon biofuel.

So I want to know what the economics look like if the biomass costs are similar to the cost of hay. I want them to tell me about their costs if the biomass is $100 per ton (and I expect elusive or misleading answers). It is true that there is a lot of wood in the U.S. that has been killed by the pine bark beetle, but it still costs money to process those trees and move them to a facility for conversion into fuel.

The energy requirement for the process is a very important issue, but one that is not generally easy to dissect. But you want to know the types of energy used in the process, as well as the energy balance for the process (the energy of the fuel out over the energy it took to produce it). People will omit all sorts of energy inputs when stating an energy balance. The will assume that they will burn waste biomass in the commercial plant and thus assume low external energy inputs. They won’t count the energy that it takes to grow and transport biomass, and they won’t count the energy inputs to move the fuel to the customer. When you see someone claim an energy return of five or ten to one for a renewable process, those are often the kinds of assumptions they are making. (While it is true that the economics of using coal as a primary energy input for making fuels may be attractive even if the energy balance is poor, such a process can’t rightly be labeled renewable).

Competitors and Former Employees Can Be a Source of Valuable Info

I also want to know about predecessors and competitors. Very little is invented from scratch; almost everyone builds off of previous work. So who came before and did similar work? Who is doing similar work now? How is their work better than that of others? Then you ask the same questions of competitors. This is a very effective tool for sniffing out problems. Competitors are always happy to tell you what is wrong with the other company’s process. On the other hand, many will insist that they are so unique they have no competitors. Don’t fall for that.

Talk to former employees. If there are skeletons in the closet, they may tell you where to look (especially if they are disgruntled). The difficulty here is that they may not be willing to go on the record, but they can provide leads. For instance, an employee will likely be bound by a confidentiality agreement, but that doesn’t prevent them from pointing you to a specific bit of information in a patent that doesn’t mesh with the company’s public claims.

Bring up the company in casual conversation and see where it leads. I did this on a recent trip, where a manager relayed to me that many years ago he had worked for a company that was claiming a breakthrough in turning natural gas to gasoline. I mentioned this process, and he said “Yes, it works but the gasoline has a very high aromatic content.” That was the first time I heard that particular revelation, and yet many countries have very low aromatic allowances for their gasoline. Hence, this was a potential show-stopper, or in any case a good bit of information to have as I continued to investigate the company.

Read Between the Lines and Use Common Sense

Claims like “Ideally suited for landfill waste” sometimes mean “Our economics only work if we are getting paid to take the biomass.” A statement like “Perfect for co-locating with a power plant” can mean “We need cheap steam.”

Are there patents or patents pending? If so what are the patent or patent application numbers? Find out if “patent pending” means “Some day we hope to get around to filing for a patent.”

There will often be specific technical claims that may be outside of your particular area of expertise. For instance, someone claims to be able to run a car on water. You may not have the technical foundation to understand why this isn’t what it claims to be, but you can find lots of information on the Internet that breaks the technical issues down. You can also consult with someone who knows the area. Sometimes you can locate a free opinion. You may see a quote from a professor who is skeptical of the process. Contact them for further information.

Beyond the technical questions, there are the obvious signs. Do the company’s claims appear to be grandiose? If yes, this is a warning sign. Most companies making grandiose claims do not deliver. Do they issue press releases for fairly trivial developments? For instance, I saw a recent press release from a company claiming that a university had validated their (seemingly inflated) claims. Yet there was no actual detailing of which claims were being validated, nor exactly what the results of the university study were. It was a press release designed to draw attention without actually conveying any useful information.

Summary

To break this down into a short “cheat sheet”, here is a summary of some important questions that you want to ask. Try to corroborate answers by talking to employees or competitors.

  1. At what scale has the process been actually demonstrated, and is the process currently running?
  2. What is the source of raw materials for the process?
  3. What is being done with the product?
  4. What are the primary energy inputs into the process, and what is the energy balance?
  5. Will there be intermediate scale-up steps before a commercial facility is built?
  6. What are the key assumptions for a commercial facility (e.g., size, cost of production, location)?
  7. What is the presumed source and cost of biomass for a commercial facility?
  8. Has the process been proven on that specific biomass?
  9. What are the patent or patent application numbers relevant to the process?
  10. What prior work is most similar to yours, and who are your perceived competitors?

If you manage to get honest answers to those questions, you will be well on your way to burrowing through the hype to understand the true potential of a process.

* Robert Rapier writes the R-Squared Energy Blog.

  1. By Jana Chicoine on February 21, 2011 at 7:21 am

    I suggest adding two more questions: “Are there regulatory uncertainties or roadblocks?” and, “Is this commercially viable without fickle subsidies?”

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  2. By Wendell Mercantile on February 21, 2011 at 10:29 am

    Thanks Robert. You have done those who will read a great service.

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  3. By Dave Runyon on February 21, 2011 at 1:18 pm

    Great article! I sent to my wife who is taking an investing class

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  4. By Eddie Devere on February 21, 2011 at 2:28 pm

    Thanks for the informative article. I’ve been a fan for a while.
    I’ve been burned before by a certain unnamed cellulosic ethanol company by not doing an exergy balance before starting to work on the “demonstration-scale” project.
    I find that the second law of thermodynamics is absolutely crucial for calculating the net useful work out of a process, and so I’ve had to teach myself exergy analysis. (I may have learned it in college, but that was a long time ago.) The other thing I’ve had to teach myself is how not trust companies that say “our levelized cost of electricity is X $/MWh” or “our levelized cost of ethanol is Y $/gallon”. I have a major problem with using levelized cost estimates, and it’s due to the fact that if current gasoline or electricity prices reached the “cost” of the alternative technology, then the “cost estimate” would be invalid because now you have to redo the capital/fuel/labor cost estimates. I prefer to calculate average rate of returns on investment. I blog about this at:
    http://eddiesblogonenergyandph…..gspot.com/

    I’d love to see you write an article about your thoughts on the advantages and disadvantages of levelized costs versus average rate of return on investment.
    Thanks,
    Eddie

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  5. By J. van Dorp on February 21, 2011 at 3:51 pm

    Great breakdown Mr. Rapier. Been following your essays for years. On those free opinions, I recommend remembering to pay the people later, who ended up giving you the most valuable opinions.

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  6. By Wendell Mercantile on February 21, 2011 at 5:06 pm

    * Scale
    * Logistics.

    The two things that will doom those who go into (or invest in) an energy project without their eyes fully open.

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  7. By Walt on February 21, 2011 at 9:58 pm

    Robert Rapier said:

    In my own experience, perhaps 90% of the stories you see promoting various technologies are at least exaggerated. So how do you separate fact from fiction and wishful thinking from reality?

    Understand the Levels of Scale and the Hurdles that Come With Each Step

    It is a huge challenge to take results that were achieved in a laboratory and scale those up through a pilot facility to a demonstration facility to a commercial facility. Each of those steps is a gate, and each of those gates will stop most technologies from advancing to the gate. Skipping steps — for instance jumping from the lab to a demonstration size facility — greatly lowers the probability of success while putting much more money at risk.


     

    I’m not sure if my comments will remain, but I would like to address this point above.  The more I have been reading this blog, and understand the author, the more I recognize the point he makes, “In my own experience, perhaps 90% of the stories you see promoting various technologies are at least exaggerated.”  This is a very valid point, and therefore the odds are highly suspect that any new technology should be taken serious.

    I agree a dose of skeptism is critical in scaling a technology, as there are many problems at each gate, and between each gate.  However, I would argue that it is not entirely unreasonable to skip some steps in the scale up process if the technology would warrant less risk and less economies of scale to commercialize the unit with a modest profit.  There are few companies in the world like Shell who can finance an $11+ billion dollar project, including all upstream, midstream and downstream, and recover their investment in less that 24 months at $80/bbl oil prices.  I would argue that both Oryx and Pearl have pushed the limits at how they define “commercial scale” and I’m not sure how many more we will see of those plants without Chinese or Russian funding/resources in the future.  Once people see the returns on Pearl some believe GTL will surge…I’m not so sure.

    On the most tiny scale, with limited credibility that one could move to a commercial scale next, I wanted to show how we skipped the scale steps that is referenced in the article, and still would consider it moving toward small scale commercial. http://www.youtube.com/watch?v…..wUNWzmD8  Beyond this scale, I believe it is possible, but no guarantees as the next gate is not convincing to many engineers.

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  8. By rrapier on February 21, 2011 at 10:18 pm

    Jana Chicoine said:

    I suggest adding two more questions: “Are there regulatory uncertainties or roadblocks?” and, “Is this commercially viable without fickle subsidies?”


     

    I meant to put a note in there that this was definitely not an all-inclusive list. There are other very important questions that need to be asked.

    One that I thought about when this article was in my head but that I forgot to list was the intellectual property position. Do they have patents? Patents pending? If so, what are the patent or patent application numbers?

    RR

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  9. By holoman on February 21, 2011 at 11:46 pm

    Isn’t it true that you can prove a technology through modeling? The answer to that question is ABSOLUTELY NOT! In fact, the reverse is true: You prove a model by actually demonstrating that the process gives results consistent with the model. But some people will present model results as if they represent reality. Models are merely guides; a model won’t tell you whether a process will work or not. It will give you some guidance, but ultimately you have to take the results from the model and actually run the process. That is how you prove a technology (and validate a computer model).

    Should of told us years ago after we built all our prototypes from modeling.

    Also need to tell Northrop-Grumman, Boeing, GE, and Westinghouse and others they are wrong in modeling.

    Of course you will need to add hundreds of universities.

    The author of this article definitely talks the talk but doesn’t walk the walk.

    Nothing worst than putting out bad information !!

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  10. By rrapier on February 22, 2011 at 1:31 am

    holoman said:

    Should of told us years ago after we built all our prototypes from modeling.

    Also need to tell Northrop-Grumman, Boeing, GE, and Westinghouse and others they are wrong in modeling.

    Of course you will need to add hundreds of universities.

    The author of this article definitely talks the talk but doesn’t walk the walk.


     

    Wow, talk about complete failure to comprehend a point. Of course you build prototypes from modeling. I have developed numerous process models, and we change processes and design units based on modeling all the time. The criticism is not about modeling as a tool; if you were actually experienced at building and using models you would have grasped that. The point is that the model doesn’t prove the process; the process proves the model. You don’t know if you have a realistic model until actually testing that model out — which is why you build a prototype and don’t start a production line based on the model!

    Nothing worst than putting out bad information !!

    I actually think it is quite a bit worse to grossly misunderstand a point, respond arrogantly as a result of your misunderstanding, and then conclude that you got bad information because of your own lack of comprehension.

    RR

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  11. By Kit P on February 22, 2011 at 6:14 am

    Add to the list, do you have a large enough contingency funds to fight court challenges? Many who build renewable energy projects thing they are immune from interveners but there often are groups that advocate renewable energy in general but are against projects in particular.

    “The point is that the model doesn’t prove the process; the process proves the model.”

    Since energy project take a long time to pay off, does the project meet or exceed the expected capacity factor year in and year out. We like to brag about production. Lot of solar projects brag about going commercial then you never hear about production. Five years later they are not expanding the project.

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  12. By Eddie Devere on February 22, 2011 at 9:49 am

    Great quote Vinod Kholsa today in the Wall Street Journal about the demise of Range Fuels: {I’m being sarcastic}
    “We should applaud the continued progress, and that entrepreneurs iterate as superior technology becomes available. This is how innovation happens, but the [Wall Street] Journal does not really understand innovation.”
    &
    “The bigotry of ‘government’ shouldn’t do anything.’”

    So, Vinod Kholsa is starting to sound like those Middle East dictators.
    Defending the regime up until the very end. Calling people ‘bigots’ who don’t want the government to support wasteful spending. Whoah! This is a new low for a CEO. Calling people bigots who don’t want him to get rich!

    I hope that the Republican’s in Congress start looking into Waste, Fraud & Abuse within the companies supported by the DOE/NREL to see if Vinod ended up making money at the expense of tax payers.
    Perhaps, Vinod may well end up in jail like the Enron executives who used political clout to steal millions in dollars.

    And here’s the (ironically) best quote from the Range Fuels CEO, David Aldous.
    “When gasoline hits $4.50 per gallon, let’s chat again.”

    This is what I was saying in my previous comment. When gasoline hits $4.50 a gallon, cellulosic ethanol will still not be competitive with gasoline. (Because their capital/fuel/labor costs will all be higher now that all energy is more expensive if gasoline reaches $4.50.) What we need to do is to calculate a total average rate of return on investment.
    I wish that there was an easier why to tell hype, from from people like Vinod Kholsa and David Aldous, from truth in the energy business.
    RR’s article (and entire blog) shows that it’s not going to easy to tell hype from fact. I hope that we all learn how to “Curb your Enthusiasm” and do the hard work that is “Due Diligence.”

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  13. By rrapier on February 22, 2011 at 11:25 am

    Eddie Devere said:

    Great quote Vinod Kholsa today in the Wall Street Journal about the demise of Range Fuels: {I’m being sarcastic}

    “We should applaud the continued progress, and that entrepreneurs iterate as superior technology becomes available. This is how innovation happens, but the [Wall Street] Journal does not really understand innovation.”

    &

    “The bigotry of ‘government’ shouldn’t do anything.’”


     

    I saw the Khosla/Aldous replies. Khosla especially is the master of spin. I could do a story deconstructing this, but will leave it alone. But for the record:

    He may not have invested in E3, but he certainly promoted them. And here is Greentech Media on the Cello story:

    Cello Energy isn’t listed on Khosla Ventures’ list of biofuel companies. But the well-known green VC firm has put $12.5 million into the Alabama-based startup, which the EPA expects to be producing 70 million gallons of ethanol from trash and biomass by next year.

    Beyond the initial $12.5 million, Khosla agreed to additional funding for a second and third plant in the contract, Woodburn said.

    Those plants, along with a fourth new one, are meant to eventually reach 50 million gallons per year production, but Cello’s shorter-term goal is to be producing 70 million gallons per year by next year, he said.

    He is trying to distance himself now since they were convicted of fraud. He wants to downplay the nature of the investment, but the very fact that he invested is fair game considering he is out there trying to get at public funds. His track record in the energy business should be closely scrutinized.

    And he has made hundreds of millions in profits in renewable energy? Certainly not selling energy. Maybe by hyping companies and selling them. We are all still waiting to see one of his companies actually produce energy at a competitive price. It is funny to hear him talk about a 50-60% success rate when none of his projects to date has proven anything.

    Finally, probably the ultimate irony is the fact that he is defending the Range technology in his response, when he recently went on record saying that gasification wasn’t the future and that Range would have to change to fermentation. He is talking out of both sides of his mouth.

    RR

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  14. By biocrude on February 22, 2011 at 12:00 pm

    Speaking of over-hyping something…

    http://www.greencarcongress.co……html#more

    Sorry Rufus, it seems the all new Flex Fuel Buick Regal still realizes a 20% loss of mpg when running on E85 compared to gasoline. Better than 30%, but still not the over-hyped 5% mpg loss on E85 people were claiming.

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  15. By Wendell Mercantile on February 22, 2011 at 3:36 pm

    Sorry Rufus, it seems the all new Flex Fuel Buick Regal still realizes a 20% loss of mpg when running on E85 compared to gasoline.

    The good news is that Rufus never ordered one.

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  16. By Benny BND Cole on February 22, 2011 at 3:38 pm

    Excellent work, RR.

    I would add this: Try to determine if the people raising money are in the business of raising money–in other words, the “business model” is to get funding, not to actually make something someday. A guy who raises $50 million can usually carve off a few mil for himself–not bad work, if you can get it.

    Check out the backgrounds of the people involved. If they have been at a lot of other start-ups that fizzled, that might be a clue.

    And if they dodge, or take umbrage at questions, that is almost always a bad sign.

    BTW, RR has become the best investigative reporter in the energy sector.

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  17. By Benny BND Cole on February 23, 2011 at 12:43 pm

    RR may want to do a piece on Libya. Over the years, the idea that we are vulnerable to thug states who control oil has been raised many times in this forum. I suppose that is why the USA spends trillions of dollars in the Mideast, although you can’t pump oil with an aircraft carrier. We see now just how feeble our military might is to compel oil production.

    What are some options?

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  18. By Dima on February 23, 2011 at 8:33 pm

    Speaking of companies with big claims, has anyone heard or seen anything that would help me conduct due diligence on Blue Fire Ethanol? If you haven’t heard of it, they’re another one of the six that received part of the DOE’s $385 million. The CEO has been interviewed on CNN, and the company has pictures of construction beginning (see the bottom of the company’s homepage, http://bluefireethanol.com/). Plus, they claim to have sound technology (http://bluefireethanol.com/technology/).

    But, it seems that they’re skipping the scaling process and they love attracting hype, so I’m looking for avenues to investigate their claims further. Any help (a web link, recounting a conversation with a former BlueFire employee, etc.) would be greatly appreciated.

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  19. By Oxymaven on February 25, 2011 at 7:13 am

    Bluefire seems to perpetually be a few months away from breaking ground on construction, and are clearly prone to over-stating their ability to deliver. I’m just a scientist and have no engineering skills to evaluate the merits and viability of their technology, but my level of skepticism of their overall abilities is strongly influenced by 1) their initial plans in 2007-2009 to (apparently) simultaneously build a 4mmgy plant and then a 17mmgy facility, and 2) the immense discrepancy in their estimates of the costs for their first ‘commercial scale’ facility, originally to be built in Lancaster CA. If you look at their March 2008 SEC filing, they indicate a 3 million gallon/yr facility will cost about $30 mil. A year later, in a May 2009 SEC filing they indicate the facility will be about 3.9 mil gal, but will cost between $100-$120 mil!! I found this very curious, especially for a firm that was touting it’s long experience in the field. Plenty of details about their plans (and many other biofuel projects) at the DoE website for the required NEPA assessments – http://www.eere.energy.gov/gol…..FONSI.aspx

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  20. By Kit P on February 25, 2011 at 12:27 pm

    “I suppose that is why the USA spends trillions of dollars in the Mideast, although you can’t pump oil with an aircraft carrier. We see now just how feeble our military might is to compel oil production.”

    What is feeble Benny is your argument and the ability of Californians to control there state government.

     

    “California is one of the top producers of crude oil in the Nation, with output accounting for more than one-tenth of total U.S. production. Drilling operations are concentrated primarily in Kern County and the Los Angeles basin, although substantial production also takes place offshore in both State and Federal waters.”

    http://www.eia.gov/cfapps/stat…..cfm?sid=CA

     

    We are seeing people in the Mideast take to the streets at risk of being shot by their government. So Benny where is your activism? Organize a protest. Drive your cars to Sacramento and start parking them around the state capital. Tell your state leadership that you are not leaving until offshore drilling increases off the California coast.

     

    The reason the US is importing oil from the Mideast is people like Benny keep electing loons who thinks we can solve our energy problems by building a million solar panels on the the roofs of houses. Ban drilling, ban, coal, ban nukes while demonstrating for thirty years of failure to deliver renewable energy.

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  21. By Geo Teo Teo on February 26, 2011 at 2:34 pm

    Past time for all of us to give deep drilled geothermal the opp to solve our energy supply problems. Deep geothermal ( please look up the 2005 MIT/DOE study that details the potential) will provide all the electrical energy we need for generations and the irony is that deep drill technology developed by Big Oil will make it possible and economical everywhere not just in Yellowstone Geyser country. Spend a little time to research this incredibly easy solution using existing technology for electrical energy production – within 25 years all other electrical power generation will be obsolete. Just my opinion – but as a graduate mechanical engineer with 43 years in the power industry ( now retired) most of my experience in nuclear plant work, I’m convinced that geothermal is the place for our energy future.

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  22. By Kit P on February 26, 2011 at 9:52 pm

    “solve our energy supply problems”

    Geo I am not aware of any energy supply problem when it comes to supplying electricity. Geothermal is an established part of the mix. Here is a link:

    http://web.mit.edu/newsoffice/…..ermal.html

     

    So what does the MIT report have to say, from 1-1 for the ‘motivation’ for geothermal:

    “In addition, during that period, 40 GWe or more of nuclear capacity will be beyond even the most generous relicensing procedures and will have to be decommissioned.”

     

    College professors write reports and do not make electricity or know much about it. At the time the report was written, there was and still is not reason to think any US nukes will be closed. Many advocates of one form of energy do not take the time to learn about the other forms.

    I did find the source of this erroneous information in Appendix A:

    “Assuming the design life of a nuclear plant is 25 years, with regulatory extensions available

    to 40 years before retirement, 46 GWe of capacity can be expected to retire in the period to 2020.”

     

    US nuke plants are designed for 40 years based on assumptions for reactor vessel embrittlement. Presently 62 reactors have extensions for 60 years. The nuclear industry is looking at 80 years and has not found any reasons to prevent that.

    GEO wrote

    “Spend a little time to research this incredibly easy solution using existing technology for electrical energy production – within 25 years all other electrical power generation will be obsolete. ”

     

    I did just that and it looks like Enhanced (or engineered) Geothermal Systems will be lucky to have a working prototype in 25 years. I am more than just a little skeptical of something that does not work yet making something that works fine obsolete. When considering the obstacles that must be overcome, EGS is not the least bit practical.

    From the MIT study

    “When examining the full life cycle of geothermal energy developments, their overall environmental impacts are markedly lower than conventional fossil-fired and nuclear power plants.”

     

    Drilling holes in the ground to bring arsenic saturated water to the surface does have significant environmental impact. From Chapter 8:

     

    “Gaseous emissions result from the discharge of noncondensable gases (NCGs) that are carried in the source stream to the power plant. For hydrothermal installations, the most common NCGs are carbon dioxide (CO2) and hydrogen sulfide (H2S), although species such as methane, hydrogen, sulfur dioxide, and ammonia are often encountered in low concentrations.

     

    Liquid streams from well drilling, stimulation, and production may contain a variety of dissolved minerals, especially for high-temperature reservoirs (>230°C). The amount of dissolved solids increases significantly with temperature. Some of these dissolved minerals (e.g., boron and arsenic) could poison surface or ground waters and also harm local vegetation.”

     

    After looking at the report, I find no compelling reason to think that geothermal will ever be a big part of the mix. The MIT report projects in 2050 that geothermal will be about about as large as nuclear is now. However, each energy project is not based generalities but specific to a location. Hawaii and California may be good places to build geothermal because of good resources but that is about it.

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  23. By moiety on March 1, 2011 at 3:09 am

    Robert Rapier said:

    Data Omitted From the Press Release: How and Who to Get it From

    Know the Limits of Computer Modeling


     

    Not only is data omitted , it can be misrepresented. Take for an example a hypothetical case where we have a process using 10 units of electricity and 10 units of steam. We can reduce the steam use easily by heat recovery but (all other things being equal), we need a compressor (or pump) to drive this heat recovery. The compressor requires electricity. So the situation after everything is finished is

    Steam 10 units goes to 5 units

    Electricity 10 units goes to 11 units

    I have seen studies and releases claiming that the new process is more efficient as it uses only 16 units of energy compared to 20 units used originally which is complete balderdash and is only looking for blarney (Many EROI studies are guilty of this). Ahem excuse the slang (http://en.wikipedia.org/wiki/R…..ming_slang). A rule of thumb (caution) is that steam costs 10 times less than electricity so the new process is more expensive. By taking the former statement or more efficient, we complete cut out the methods of production of the steam or electricity.

    I have also seen studies* were the steam and electricity are converted to natural gas equivalent or the like which is also balderdash. Natural gas is not used everywhere to produce electricity or steam or is even available. 

    The correct way to deal with this data is to compare both processes per energy type and then consider the consequences. Usually this involves cost (electricity costs are easy to find http://www.eia.gov/cneaf/elect…..le5_3.html, steam maybe harder without experience). However it could involve other items like the need for additional cooling devices in warmer climates or plant utility expansion.

    * http://onlinelibrary.wiley.com…..bb.108/pdf

     

    The limits of computer modelling are rarely understood and I would say that this extends especially to the engineers that are producing and using these models. However a model can be a simple calculation. One question to ask further is whether this extensive (and expensive) model was needed. This can give a very good insight to common sense and due diligence in the company.

     

     

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  24. By Dima on March 1, 2011 at 1:05 pm

    Thank you, Oxymaven.

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