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By Samuel R. Avro on Sep 28, 2011 with 81 responses

This Week in Energy: U.S. Military to Spend Big on Alternative Energy

This Week in Energy is a weekly round-up of news making headlines in the world of energy. Most of these stories are posted throughout the week to our Energy Ticker page.

The purpose is to stimulate discussion on energy issues, and community members should feel free to turn these into open thread energy discussions. Suggestions and news tips are welcome. I (Sam) can be reached at editor [at] consumerenergyreport [dot] com .

Military and DoE Studies

The Riverine Command Boat (Experimental) is powered by a 50/50 algae-based and NATO F-76 fuels blend to support the Navy's efforts to reduce total energy consumption on naval ships. (U.S. Navy photo)

Commodity Speculation, Rapier Interview, Peak Oil, Oil Prices to Blame for Poverty

Oil expenditures as a share of after-tax income by income quintile 2007-2009

Oil expenditures as a share of after-tax income by income quintile 2007-2009.

Fukushima, 94 MPG Hybrid, Solyndra, Solar Cost Parity With Fossil Fuels

  1. By Walt on September 28, 2011 at 8:37 am

    Samuel R. Avro said:


     

    This is true.  I can produce liquid fuels right now in a remote gas field below $1.50 a gallon and when you submit a request to the DOE or DOD seeking support they respond they are doing research on this currently with various biomass/algae based technologies.

     

    Jet Fuel and Diesel is of course the rage, and ethanol is right behind, but methanol is the evil step mother not to be discussed and like Robert is facing with his comments being censored on some websites, there is inside the government a lot more sensoring on things that work.

     

    Follow the VC money and watch the “smartest” guys in the world build a government funded, IPO exit model for our fuels.

    “Like every greentech IPO
    that’s priced in recent history, Mascoma has low revenues, large losses,
    and, in Mascoma’s case, an unhealthy amount of revenue from government
    grants. The company has raised about $135 million in venture capital and
    debt.”

    http://www.greentechmedia.com/…..-and-More/

    They all raise $100 to $250 million to build pilot and demonstration plants
    and later cash out VC investors before commercial projects prove to be uneconomic or fail altogether due to lack of government back funding!

    [link]      
  2. By perry1961 on September 28, 2011 at 12:27 pm

    It’s a shame the Air Force “shifted the focus” from coal to liquids to biofuels. CTL is known technology that could work today, at prices a lot closer to what is paid for diesel and jet fuel today. Better yet, the US has more coal than any other country. The military could enjoy true energy independence, at a fraction of the cost of biofuels. It’s all politics, pure and simple.

    [link]      
  3. By Walt on September 28, 2011 at 2:33 pm

    perry1961 said:

    It’s a shame the Air Force “shifted the focus” from coal to liquids to biofuels. CTL is known technology that could work today, at prices a lot closer to what is paid for diesel and jet fuel today. Better yet, the US has more coal than any other country. The military could enjoy true energy independence, at a fraction of the cost of biofuels. It’s all politics, pure and simple.


     

    The Sept. 19-25 issue of ICIS Chemical Business says:

     

    “Natural Gas Ideal For Synthetic Gasoline; The abundance of low cost of natural gas in the US makes it the ideal feedstock for the production of synthetic gasoline, the CEO of US-based synthetic fuel producer Accelergy said.  Other feedstocks are cost-prohibitive or in short supply, said Tim Vail.  For biomass to account for just 10% of the country’s energy needs, all the arable land in the US will have to be converted to fuel production, Vail said.  Natural gas, on the other hand, is abundant and cheap.”

    http://www.accelergy.com/co_mngmnt.html

    ————————

    These guys are doing a project in North Dakota as well with biomass as I recall.  They have a grant application there which is really a must read for anyone serious about the sector.  They have no press releases on their website, but I have always believed these guys are the real deal, and if anyone has the muscle behind them it is that group.

    In the United States, Accelergy is working on demonstration
    facilities in Pennsylvania, Montana, and North Dakota. Accelergy’s
    process can be tuned to utilize a wide range of feedstocks, and the
    company is currently exploring the use of both coal and natural gas in
    the U.S, along with biomass.

    The company is also targeting its efforts in China since the country
    already has a small number of synthetic fuels plants where coal is
    converted to a liquid, he said. China is also the world’s largest
    producer and consumer of coal.

    Accelergy has received $40 million in Series A and Series B funding since 2007 from

    Advent International, Goldman Sachs, Lux Capital, Mobius Venture Capital, Nth Power, Sequoia Capital and Technology Partners.

    http://www.americanfuelscoalit…..-advances/

    ———————–

    Accelergy
    Corporation, a global leader in high-grade domestically sourced liquid
    fuels, today announced that it has begun production of their highly
    efficient fuel from coal and biomass, to be evaluated by the United
    States Air Force (USAF) as the industry benchmark for 100 percent
    synthetic jet fuel. To date, synthetic fuels have required blending with
    petroleum feedstocks on a 50% basis to be suitable in aviation
    applications.

    http://advancedbiofuelsusa.inf…..r-jet-fuel

    ———————-

     

    They are the players to watch with some major deals in my opinion.  They move quietly, are well funded and have technology.  As soon as I get funded I’m closing my website!!!  Oh, I can only hope October will be that month with some major brand names.  18 months of due diligence is exhausting by these big companies, but I hope next month will allow me to go stealth like Accelergy.

    [link]      
  4. By Walt on September 28, 2011 at 4:14 pm

    I was just thinking that Accelergy Management have of course massive credibility….this there is no doubt.  Clearly leaders in the synthetic fuels sector, but wait….what did this Houston group say?  They are making methanol first in GTL, and then fuels.  What?  methanol, don’t they understand that you can listen to Silicon Valley VC’s and methanol is the worst possible product in the world.  It kills people, it makes people blind and it is so dangerous that even NASCAR switched to ethanol for racing.

    In fact, when I first saw their website many months ago I wondered if they had a typo and did not mean “ethanol” rather than “methanol”.  How could they raise any money to make methanol and then synthetic fuels?

     

    —————————

    About Gas-to-Liquids

    Accelergy deploys industry leading gas-to-liquid technologies
    coupled with our proprietary TerraSync® carbon capture and recycle
    technologies to produce economical low carbon gasoline, diesel and
    jet fuel. First we convert natural gas to a simple alcohol,
    methanol, which can then be converted into synthetic gasoline or
    sold as a chemical plant feedstock. Having two relatively
    independent markets provides the flexibility to maximize the
    profitability of our projects based on market conditions. Both the
    methanol and gasoline produced from our process meet all of the
    industry standards and are truly a drop-in replacement. No
    complicated and costly upgrading or expensive distribution
    infrastructure is required.

    http://www.accelergy.com/techn….._cbtl.html

    ————————–

     

    Well, let’s see how many deals these guys put together in China and USA.  It sounds like with all the government contacts they have, as well as the grants they are getting in state-by-state they know the system.  Don’t mention methanol…only mention “synthetic fuels” except in a paragraph on the website.  Nice to have the Exxon technology and credibility backing up these guys.

     

    In Sept. 19-25, ICIS Chemical Business it also says:

    —————

    “The deal is expected to be a 10-year exclusive supply agreement with Gevo, and will help LANXESS meet a goal of reducing the carbon footprint of its butyl rubber business by 25% by 2025 based on 2002 levels.

    ‘Gevo is targeting bio-isobutanol production volumes of about 10m gal/year in 2012 and 60m gal/year in 2013, ramping up to 200m gal/year in 2015, chief financial officer Mark Smith said.’  The target of 350m gal by 2015 involves retrofitting nine ethanol plants, he added.  Gevo currently uses corn starch and sugar-cane feedstock for bio-isobutanol production.  In the future, it also plans to make use of agricultural residue and wood for feedstock, CEO Patrick Gruber said.  Gevo estimates theoretical cash costs to produce bio-isobutanol were at an average of $1.60/gal, or $1.00/gal lower than petroleum-based isobutanol from 2006-2011.  LANXESS has invested $27m in Gevo and holds 8.5% equity stake in the company, according to Gevo’s latest quarterly earnings filed with the US Securities and Exchange Commission on August 3.

    ————–

     

    My question on this model is this…if they are going to reduce carbon footprint by 25% does this include calculations for making the sugar cane, shipping it from Brazil to USA and processing it here, or is this carbon calculation for bio-isobutanol from Gevo ignoring their feedstock?

     

    I tend to side with the guys at Accelergy that coal (in China) and gas (in North America) will be the most sensible…if they have this carbon recycle issue worked out as they say.  It is a carbon economy, and everyone is not going IPO who should be watched carefully.

    [link]      
  5. By Wendell Mercantile on September 28, 2011 at 6:11 pm

    It’s a shame the Air Force “shifted the focus” from coal to liquids to biofuels. CTL is known technology that could work today, at prices a lot closer to what is paid for diesel and jet fuel today. Better yet, the US has more coal than any other country.

    I agree Perry. The Air Force even had a pilot CTL plant started near Malmstrom Air Force Base in Montana. When they abandoned the project in 2009 they only said it was not “viable,” without giving specifics other than that a CTL plant at Malmstrom would have interfered with the mission of the base’s missile wing.

    It’s great they are looking at bio-mass sources, but as you say, we have an almost unlimited supply of coal, and they should not have abandoned CTL research so quickly. That coal is our “strategic reserve” with respect to energy, and we need contingency plans to be able to use it quickly if/when the need arises.

    [link]      
  6. By Kit P on September 28, 2011 at 8:17 pm

    Sam writes,

     

    “Bloomberg took an in-depth look at Fukushima, six months after the tsunami and nuclear meltdown. The article tells the tale of a devastated $3.2 billion-a-year farm industry, the desolate 12 mile no-go zone where 160,000 inhabitants have been evacuated …”

     

    One has to wonder if the article has any perspective.

     

    “The March earthquake and tsunami that caused the nuclear crisis and left almost 20,000 people dead or missing may cost 17 trillion yen ($223 billion), hindering recovery of the world’s third-largest economy from two decades of stagnation. ”

     

    The sad thing here is that a lot of people would be alive if the had an irrational fear water and ke[t running after they were told they were safe.

     

    ““There are no simple solutions,” Timothy Mousseau, a professor of biological sciences at the University of South Carolina, said. Deciding whether life should go on in radiation tainted areas is a “question of acceptable risks and trade offs.” ”

     

    When are they going to evacuate the LA. Air pollution is ‘killing’ thousands annually, I read it in peer reviewed reports.

     

    Evacuation is warranted when there is a wildfire approaching, a train is burning, or a nuke plant has lost cooling. The degree of risk is not known.

     

    “An examination of more than 77,000 first-generation children in Hiroshima and Nagasaki after the bombings found no evidence of mutations, he said. ”

     

    We know the risk, few things have been studied more than radiation. Radiation detectors are cheap and teaching people how to protect themselves would take 4 hours.

     

    “increases the risk of cancer. ”

     

    Notice that the risk is never quantified by the media. Fear mongering is very good business. The risk is very low.

    [link]      
  7. By Kit P on September 28, 2011 at 8:34 pm

    “The abundance of low cost of natural gas in the US ”

     

    When you have abundant low cost NG you either make a ammonia or build a pipeline

     

    [link]      
  8. By paul-n on September 28, 2011 at 11:08 pm

    When you have abundant low cost NG you either make a ammonia or build a pipeline

    Or make methanol.

    [link]      
  9. By rrapier on September 29, 2011 at 1:16 am

    Kit P said:

    Sam writes,

     

    “Bloomberg took an in-depth look at Fukushima, six months after the tsunami and nuclear meltdown. The article tells the tale of a devastated $3.2 billion-a-year farm industry, the desolate 12 mile no-go zone where 160,000 inhabitants have been evacuated …”

     

    One has to wonder if the article has any perspective.

     


     

    I think we have all wondered for a long time whether you do.

    RR

    [link]      
  10. By perry1961 on September 29, 2011 at 2:44 am

    Walt, Sasol is doing a feasability study for a $10B 96,000 bpd GTL plant in Lake Charles, La. They would convert Haynesville shale gas to diesel and possibly jet fuel. Sasol demonstrated their CTL jet fuel in a commercial airliner last year. The flight used 100% synthetic fuel. The fuel meets the strictest commercial standards.

    Not only are CTL and GTL viable, but Sasol is making money hand over fist. South Africa is even considering windfall profit taxes on them.

    [link]      
  11. By Walt on September 29, 2011 at 8:19 am

    Perry, that makes sense to me.  What does not make sense is giving another $5 million dollars to Gevo!  These guys get everything handed to them.  When do these companies who raised millions and who’s core investors/owners “make millions” stop taking money from the government?

     

    ——————————-

    • Grant will focus on developing sustainable, cost-effective biojet fuel from woody biomass

    ENGLEWOOD, Colo. - Gevo, a leading renewable chemicals and advanced
    biofuels company, received a $5 million grant from the United States
    Department of Agriculture (USDA) for the development of biojet fuel from
    woody biomass and forest product residues. The award is a portion of a
    $40 million grant presented to the Northwest Advanced Renewables
    Alliance (NARA), a consortium led by Washington State University (WSU).

    “This is an opportunity to create thousands of new jobs and drive
    economic development in rural communities across America by building the
    framework for a competitively-priced, American-made biofuels industry,”
    said U.S. Department of Agriculture Secretary Tom Vilsack.
    “Public-private partnerships like these will drive our nation to develop
    a national biofuels economy that continues to help us grow and
    out-compete the rest of the world while moving our nation toward a clean
    energy economy.”

    NARA includes a broad consortium of scientists from universities,
    government laboratories and private industry. The WSU-led grant aims to
    address the urgent national need for a domestic biofuel alternative for
    U.S. commercial and military air fleets. The NARA project envisions
    developing a new, viable, aviation fuel industry using wood and wood
    waste in the Pacific Northwest, where forests cover almost half of the
    region. The project also will focus on increasing the profitability of
    wood-based fuels through development of high-value, biobased co-products
    to replace petrochemicals that are used in products such as plastics.

    http://www.globalenergywatch.c…..techno.com

    [link]      
  12. By Walt on September 29, 2011 at 8:22 am

     

    Now this just adds insult to injury in my world…

     

    —————————–

    • Air Force Purchase is for Jet Engine Testing and Feasibility Flight Demonstration

    ENGLEWOOD,
    Colo. - Gevo, a leading renewable chemicals and advanced biofuels
    company, has been awarded a contract by the Defense Logistics Agency
    (DLA) to supply jet fuel to the U.S. Air Force (USAF). DLA sources and
    provides nearly 100 percent of the consumable items America’s military
    needs to operate. The contract, worth a possible total of $600,000,
    provides that Gevo will supply the USAF with up to 11,000 gallons of
    ‘alcohol-to-jet’ (ATJ) based jet fuel, which will be used to support
    engine testing and a feasibility flight demonstration using an A-10
    aircraft.

    “The USAF is committed to positioning itself to integrate cost
    competitive alternative aviation fuels for up to half of its domestic
    needs by 2016,” commented Christopher Ryan, Ph.D., president and COO of
    Gevo. “Once the USAF certifies our ATJ fuel, we believe we will have an
    excellent opportunity to become a supplier of homegrown and renewable
    jet fuel to our armed services.”

    This is the first ATJ fuel contract awarded by the DLA. The contract
    stipulates that Gevo will supply the USAF with 7,000 gallons of ATJ
    fuel. The fuel will be shipped to Wright-Patterson Air Force Base, where
    the Air Force will finish lab testing and begin engine testing. DLA has
    the option to order up to an additional 4,000 gallons at the end of the
    contract.

    The ATJ fuel is scheduled to be produced from isobutanol at Gevo’s
    hydrocarbon processing demonstration plant in Silsbee, Texas, in
    partnership with South Hampton Resources. The company plans to begin
    shipping product to the USAF in the first quarter of 2012.

    Source : Gevo, Inc.

    http://www.globalenergywatch.c…..techno.com

    [link]      
  13. By Walt on September 29, 2011 at 8:26 am

    I had a posting last night where I listed the companies planning to make ethanol, jet, diesel and gasoline from methanol as an intermediate.  It did not show up in the posting this morning…maybe it got lost?  It did not seem like it went through, but I know I typed it and hit send.

    [link]      
  14. By rrapier on September 29, 2011 at 12:49 pm

    Walt said:

    I had a posting last night where I listed the companies planning to make ethanol, jet, diesel and gasoline from methanol as an intermediate.  It did not show up in the posting this morning…maybe it got lost?  It did not seem like it went through, but I know I typed it and hit send.


     

    I will look in a bit and see if it got flagged as spam. That happens sometimes, especially with posts that have a lot of links and if you posted as a guest. Be a little bit before I can get to it though; headed to work shortly and then have an immediate conference call.

    RR

    [link]      
  15. By Walt on September 29, 2011 at 12:58 pm

    Robert Rapier said:

    Walt said:

    I had a posting last night where I listed the companies planning to make ethanol, jet, diesel and gasoline from methanol as an intermediate.  It did not show up in the posting this morning…maybe it got lost?  It did not seem like it went through, but I know I typed it and hit send.


     

    I will look in a bit and see if it got flagged as spam. That happens sometimes, especially with posts that have a lot of links and if you posted as a guest. Be a little bit before I can get to it though; headed to work shortly and then have an immediate conference call.

    RR


     

    Thanks.  If it is not there, I can retype it.  I did not use links on this one if I recall, but pasted the names of the companies using methanol as the intermediate in response to Paul’s comment above, but all the words were in blue rather than in black letters.  I cut some of it from my own weekly newsletter to my email list, and did highly it in blue.  It was odd when I sent it here it took me back to the top of the article.  Maybe pasting from my newsletter tried to find the hidden links and could not find…just guessing.

    [link]      
  16. By rrapier on September 29, 2011 at 2:03 pm

    Walt said:

     

    Thanks.  If it is not there, I can retype it. 


     

    Walt, I dug through 7 pages of spam, which went back to yesterday morning. I didn’t see it. If it didn’t show up right away, then that means it either went into spam or something malfunctioned. That’s why I generally do a control-a, control-c before I post anything. That way at least it is on the clipboard if something goes wrong.

    RR

    [link]      
  17. By perry1961 on September 29, 2011 at 3:19 pm

    “The contract, worth a possible total of $600,000,
    provides that Gevo will supply the USAF with up to 11,000 gallons of
    ‘alcohol-to-jet’ (ATJ) based jet fuel”

    Hey, that’s only $55 a gallon. That’s like 50% off algae-based biofuels. Maybe the Air Force has toned it down since news of the $1000 toilet seats made headlines.

    If the Northwest wants some real jobs, they’ll use those forest products for renewable biomass energy. I’m pretty sure biomass still provides more actual energy than wind and solar combined. Not nameplate capacity, but what actually gets produced and used at the end of the day.

    [link]      
  18. By Walt on September 29, 2011 at 6:53 pm

    Robert, thanks for checking.  I typed it offline this time to save it just in case.

     

    Paul mentioned in response to Kit that you can make methanol from natural gas and not only ammonia.  In response I thought that is true, but that is highly political in America and methanol is commonly attacked as the evil step mother of ethanol.  While the federal government does everything in its power to remove “methanol” from all the government grant applications, and often refuses to allow the word “alcohol” to be used (I know as I have tried to apply for grants since 2006 and often excluded because they had to be ethanol or butanol, or be derived via syngas route or biological route).  Whoever writes these grant applications to get federal funding obviously is not looking to support any funding for methanol.

     

    In fact, when Robert writes that his emails on blogs sometimes do not get posted unless they support the bloggers or authors agenda, I can say with 100% certainty that I’ve faced this with methanol for years.  My posts almost never get allowed on article dismissing methanol or bad mouthing methanol, and one of the few bloggers I’ve been able to post is on this site.  This is a fact.  I’ve never had my posts on this site…but can say just recently I posted several responses in support of methanol on articles promoting the Open Fuel Standards Act and they were rejected.  That is a different issue in my view as some of the promoters have a heavy bias toward a few supporters who want no competition in methanol, but generally if I am just pro ethanol/alcohols my posts will get through.  Another good example is when Robert did a pro-methanol article way back in the early days and it drew immediate and sharp negative response from Biofuels Digest.  My posts and emails to them were removed a long time ago…and that was when I was still nieve going back to post the same thing two-three times just thinking it was the computer the problem.  Only later did I start to see the bias against anything methanol.

     

    So the question is this.  Are people that make or use methanol all just foolish, ignorant and misled companies?  Those who make methanol as an intermediate to make gasoline, jet fuel, diesel, ethanol, chemicals, etc. cannot be all stupid engineers.  Watch the blogs….and man we kill people, destroy the environment, people run fast away from methanol and use ethanol.  In fact, if NASCAR replaced methanol with ethanol it must be bad.  Well, here is a list of companies that make methanol to make fuels and chemicals.  Study these companies…they are not filled with Silicon Valley VC investors, nor do they all reside in ethanol lobby, nor will they make the Biofuels Digest (except maybe a few).  Think about it…

    Enerkem – waste-to-ethanol (via methanol intermediate)

    Celanese – coal/natural gas-to-ethanol (via methanol)

    Chesapeake Natural Gas Ventures/Sundrop Fuels – biomass/natural gas-to-gasoline (via methanol)

    Accelergy – coal/natural gas/biomass-to-synthetic fuels like gasoline, jet fuel (via methanol)

    Exxon Mobil – coal/natural gas-to-gasoline, diesel and jet fuel (via methanol)

    Total Petrochemicals/UOP – coal/natural gas-to-olefins (via methanol)

    Lurgi – coal/natural gas-to-olefins and fuels (via methanol)

    Linde – coal/natural gas-to-fuels (via methanol)

    Davy Process Technology – coal/natural gas-to-olefins and fuels (via methanol)

    Haldor Topsoe – coal/natural gas-to-gasoline, DME (via methanol)

    Dow Methane Challenge (research to directly convert methane-to-methanol)

    University of Virginia (research to directly convert methane-to-methanol)

    GasTechno (field demonstrated direct conversion of low-BTU to high-BTU
    natural gas to oxygenates & aldehydes (e.g., methanol, ethanol and
    aldehyde)

     

    Finally, study the market of China.  The methanol market is growing MASSIVE in scale and it is being blended with gasoline.  The Chinese are adopting methanol while DC is blocking methanol (unless you don’t mention it like the companies above) as an intermediate to fuels & chemicals.  You CANNOT do the same thing with ethanol or butanol….but WHO GETS ALL THE GRANT MONEY.  Gevo and VC funded butanol/ethanol techs!

    [link]      
  19. By Walt on September 29, 2011 at 7:09 pm

    One more point…the fact is that the press release on U.Va. to lead the $11 million research converting methane to methanol is difficult to find on the internet.  I used to search for it and always had to get just the right words in order to find it.  But, it is pretty impressive to see this group of universities working very quietly to convert methane-to-methanol.  This is no lacky group of universities…obviously.

    ———————–

    “We envision methanol as a linchpin for many useful applications, but
    the missing link, currently, is the broad-scale conversion of natural
    gas to methanol or other liquid fuels,” Gunnoe said.

    “Sustainable
    sources of energy are a major challenge facing society, and
    universities are the place where grand challenges can be solved,” said
    Thomas C. Skalak, U.Va. vice president for research. “New methods of
    catalysis are at the heart of tomorrow’s energy economy, and Dr.
    Gunnoe’s research team at U.Va. will lead the development of those
    critical new technologies.”

    Partners in the U.Va.-led center
    include scientists with a variety of areas of expertise at the
    California Institute of Technology, Princeton University, the University
    of California-Berkeley, the University of Maryland, Iowa State
    University, the University of North Carolina, North Texas University,
    Yale University, and Scripps Research Institute “Florida.

    http://www.newswise.com/articl…..sible-fuel

    ———————-

     

    Now of course I’m actually operating in the field making product (in batches) as I can afford to run the plant and building the next commercial plant in my shop so that does not count as being credible.  What is credible is GEVO announcing millions of dollars to research “jet fuel” from butanol and getting a contract to supply the USAF “alcohol” based jet fuel at $55.00 per gallon.

     

    If someone could please get Roberts incentive plan passed in Washington and give us $2.00 per gallon for every gallon we deliver, I bet I can find a dozen new employees who are smart enough to ignore the media about methanol, and go to work faster than ever to produce barrels.  Sure, it would be great to convert alcohols to jet fuel and get $55.00 per gallon.  I’m fighting to produce methanol at $1.50 per gallon and make profit without grants, subsidies and reduce the Carbon footprint by 40% using natural gas over power generation.  Bloom Energy got $550 million because they can reduce the carbon footprint over traditional natural gas co-gen plants by 20%.  So 20% lower carbon footprint gets Bloom Energy $550 milion to make electricity.  Great!  What if you make liquids with a 40% lower carbon footprint due to combustion efficiency?  What did you say, FANTASTIC…what is the liquids?  Methanol…opps, sorry…that kills people.  Bye!

     

    Get the picture.  No, I’m not moving to China.  One of the first presentations I did here in Michigan at NextEnergy the lead CTO told me to take the technology to Japan or China where they are interested in methanol.  Here they wanted only hydrogen or ethanol.  Sad.  I know, poor me.

    [link]      
  20. By Benny BND Cole on September 29, 2011 at 10:08 pm

    Walt-
    I have long thought methanol is a great fuel choice for the USA. I think a methanol PHEV just about destroys OPEC and generates wealth and jobs in the USA, while being a cleaner alternative.

    We can have a cleaner, more prosperous future. At times, it seems we really have to bungle it to stay dependent on unreliable foreign suppliers of crude oil, that burns dirty and costs a lot.

    That said, aside from simple government incentives–taxes on dirty imported fuel, for example–the feds and states should butt out and let the market work.

    [link]      
  21. By paul-n on September 29, 2011 at 11:52 pm

    Walt, that is quite an impressive list of companies that are trying to make X from methanol.

     

    If methanol had the same mandate + tax credit as ethanol, I’ll bet none of them would even bother going past methanol.

    As great an engine fuel as methanol is, I think what will be needed for M to make the big time as a fuel is a breakthrough with the Direct Methanol Fuel Cell.

    Why – because then it presents itself as a credible, and cheaper, alternative to EV’s.   

    Just have a look at this list of search results for “methanol” at Fuel Cell Today – there are a LOT of companies quietly working on DMFC’s, and a few, including the US military, using them.

    There is hope yet…

     

    [link]      
  22. By Walt on September 30, 2011 at 7:05 am

    Benny BND Cole said:

    Walt-

    I have long thought methanol is a great fuel choice for the USA. I think a methanol PHEV just about destroys OPEC and generates wealth and jobs in the USA, while being a cleaner alternative.

    We can have a cleaner, more prosperous future. At times, it seems we really have to bungle it to stay dependent on unreliable foreign suppliers of crude oil, that burns dirty and costs a lot.

    That said, aside from simple government incentives–taxes on dirty imported fuel, for example–the feds and states should butt out and let the market work.


     

    Benny, it does struggle as a fuel blend, but Lotus has over come this by designing a blend that looks/acts just like E85 to comply with the ethanol lobby, but it uses methanol/ethanol/gasoline as the final product.  I’ve signed NDA’s with Lotus Engineering in Ann Arbor and learned some really fascinating benefits about how well this blend could be used in America.  The problem is that it requires a lot more than 3% methanol in the blend to make it “look like” E85, but the US government/EPA refuses to allow its use due to political pressure from POET and others.  The Open Fuel Standard Act would change this, but those behind at are in the intelligence business and have already got their favorite projects/technologies selected for millions of grants/subsidies.  They do let me post on the OFSA site, but not to discuss my technology.  That is a Methanol Institute and Methanex funded lobby along with a few former intelligence folks who are not about to let any new technology involved.  They are promoting up to 10 plants in America now, and last week things are surfacing several new methanol plants will be announced.  Beyond those “obvious” methanol plants being announced, the list I’ve posted “quietly” use methanol for fuels and chemicals.

    [link]      
  23. By Walt on September 30, 2011 at 7:38 am

    Paul N said:

    Walt, that is quite an impressive list of companies that are trying to make X from methanol.

     

    If methanol had the same mandate + tax credit as ethanol, I’ll bet none of them would even bother going past methanol.

    As great an engine fuel as methanol is, I think what will be needed for M to make the big time as a fuel is a breakthrough with the Direct Methanol Fuel Cell.

    Why – because then it presents itself as a credible, and cheaper, alternative to EV’s.   

    Just have a look at this list of search results for “methanol” at Fuel Cell Today – there are a LOT of companies quietly working on DMFC’s, and a few, including the US military, using them.

    There is hope yet…

     


     

    agreed…I have had discussions with one company specifically that has made a whole array of methanol based products, including heaters for the military at a very low cost.  Methanol is cheap source of fuel for many of these new technologies, including laptop batteries.  The problem I see coming is the ethanol lobby is going to push this market for subsidies to use ethanol for laptops, heaters and anything they can get funding for research and development.  Why pay $1.50 a gallon for methanol that works when the government will mandate ethanol use in these devices for the benefit of the ethanol community to promote biomass that can be sold at $3.00 a gallon rack prices.  Now, I know all the ethanol companies are claiming they will make ethanol for less than $2.00 per gallon, and Gevo says they can make butanol for less than $2.00 per gallon from sugar cane and other woody biomass, but if this Butanol is suppose to be so cheap why is the government paying $55 per gallon as alcohol Jet Fuel?

     

    The funding Butanol is getting is a drop in the bucket to what Ethanol is getting…certainly, but natural gas/biomass to jet fuel, diesel and gasoline via methanol is ready to commercialize by some of the companies listed above.  Patience is the key for us, and we must learn to shift as the lobbies and Silicon Valley dictate legislation and pick the winnners.  Methanol is black listed right now, but watch those behind the Open Fuel Standard Act and you will see who is in the background ready to change the landscape.  It will mainly benefit Methanex of course, but after their settlement at the State Department with ADM there is not much know about what Methanex and ADM agreed to behind the scenes.  We just have to wait…I suspect if methanol is approved for more fuel blending it will come from only specific sources of feedstock, or be only allowed if produced by gasifiication or syngas routes.  This will guarantee a safeguard to those building massive jumbo size plants.  I just signed an NDA yesterday with a company that has plans for a 7,500 ton a day plant…that is massive…the only plants that size is one in Saudi as I recall.  Those methanol prices at that scale are less than $1.00 per gallon…but it is an exceptionally large project and could only be natural gas.  Coal would not be permitted in the USA in my view.

     

    I like Roberts idea as with that subsidy allowed for fuels I could get an off-take agreement signed immediately with customers, and run to the bank showing the potential to “get started” without arguing with investors only about methanol.  Seldom do you find engineers who are investors that understand the value of methanol, but rather typically those who control the risk money are VC’s and a few phone calls to friends will silence the idea of methanol technologies.  The key I think is don’t mention anything about methanol.  Use the strategy by Chesapeake, Accelergy, Celanese and only use words like “synthetic gasoline”, “jet fuel”, “diesel fuel”, “ethanol” and the like.  As I have said MANY TIMES here on this site, the technology is not the issue with these companies.  It is branding, marketing, IPO exits and government money.  The technology does not have to work, nor does it have to be proven to go public, but it has to meet a certain test.  Government money and loans, government support via R&D, access to political and military establishment for massive awards coming, the fastest IPO possible before the technology is proven not to be commercially viable and a major media and marketing program to access trade journals, lobby backing and as high valuations as possible to justify the even higher valuation of IPO and quiet exit of the VC and silicon valley establishment.  If they can keep the machine and public and governmet convinced they will make $1.50 butanol or $1.00 ethanol it will be years before these plants are built, and really it will be $55.00 butanol pig made up to look like a $1.60 jet fuel from sugar cane sourced out of Brazil.

     

    It takes time to understand the system of legislative structures in place, and who are the winners selected, but I guarantee you it has NOTHING to do with the technology.  Look at the Bloom Box…a multi-billion dollar valuation, $550 million invested and annual losses still.  When they go IPO with all the flare and glamour, ribbon cutting opening, 60 minutes follow-up the people will buy it like it is some sort of ‘holy grail’ to make electricity and save the planet.  AT&T just signed up for several, and their list of clients will guarantee billions in IPO exit profits.  It will not be the technology.

     

    The end of the year large number of IPOs for fuels and clean tech (everyone needs out of these deals quickly who has money in) will be a major race.  Watch the market as more are about to get dumped on the public so their brokers can fleece them…it has moved from boiler rooms back in the 1950 and 1960s to the mainstreet.  Fast money, fast bonues, large loans repaid to management and key VC groups, etc.  I think most of them will be done this year….you will not find any CAPEX or OPEX costs in these documents…that is forbidden by lawyers now.

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  24. By paul-n on September 30, 2011 at 11:55 am

    it does struggle as a fuel blend, but Lotus has over come this by designing a blend that looks/acts just like E85 to comply with the ethanol lobby, but it uses methanol/ethanol/gasoline as the final product.

    Isn’t that starting to get close to Mark’s Higher Mixed Alcohol blend?  Just throw in some butanol and you are probably pretty close.

     

    Now, I know all the ethanol companies are claiming they will make ethanol for less than $2.00 per gallon, and Gevo says they can make butanol for less than $2.00 per gallon from sugar cane and other woody biomass, but if this Butanol is suppose to be so cheap why is the government paying $55 per gallon as alcohol Jet Fuel?

    All this business of making X for Y$/gallon could be stopped immediately, by the DoE and DoD saying that, for any company they fund, that makes any statements like that, they will ONLY buy at that price for the next five years.  And if the company can’t deliver after that time – they get defunded.

     

    Interesting behind the scenes stuff about methanol.  Personally, I think if someone came up with a coal to methanol proposal, that included an end use for the methanol, as fuel, they might well get approval, especially if they are doing it in Montana/Wyoming/Illinois.

    Using local coal to displace imported oil sounds like a good deal to me.

    As for when these companies go IPO, I hope that when they do, the market turns their back on them – let the shares go down by 90% – then these companies will probably be fairly valued.  

    [link]      
  25. By Walt on September 30, 2011 at 1:50 pm

    Paul N said:

    it does struggle as a fuel blend, but Lotus has over come this by designing a blend that looks/acts just like E85 to comply with the ethanol lobby, but it uses methanol/ethanol/gasoline as the final product.

    Isn’t that starting to get close to Mark’s Higher Mixed Alcohol blend?  Just throw in some butanol and you are probably pretty close.  


     

    The blend is just methanol, ethanol and gasoline.  The objective is to make E85 cheaper so more people will buy it, and the only way (currently they believe that is possible) is to add cheap methanol.  Watch closely what happens in California and their LCFS developments as they told me currently they would allow the methanol/ethanol blend at their pumps, and even allow M85 at their pumps, but the EPA will likely sue them immediately.  The EPA only allows 3% methanol by law in gasoline.

     

    Everyone is counting on the cellulous ethanol volumes to double capacity with the plants registering in California.  However, there are lots of corn and sugar cane ethanol plants registering.  The recent report updated by LCFS staff says:

     

    —————————

    U.S. EPA set the cellulosic ethanol volume standard for the first time in 2010 at 6.5
    million gallons, a reduction from 100 million gallons identified in RFS2. The 2011
    standard was set at 6.6 million gallons, a reduction from 250 million gallons identified in
    RFS2; and the 2012 cellulosic ethanol volume standard has been proposed to be
    reduced from 500 million gallons to a volume within the range of 3.55 million gallons to
    15.7 million gallons. The 15.7 million gallon cellulosic ethanol estimate includes 8.0
    million gallons of cellulosic ethanol and 7.7 million gallons of non-ethanol cellulosic
    liquids that can substitute for gasoline. U.S. EPA listed nine facilities in the United
    States that are projected to have the potential to make cellulosic ethanol available for
    transportation use in 2012. Their list consists of facilities that are either in the pilot
    stage as of July 2011 or are expected to commence cellulosic ethanol production by the
    end of 2011. U.S. EPA has identified five facilities that may begin production of
    cellulosic ethanol on a commercial scale by 2013: Coskata, Enerkem, Poet, Abengoa,
    and Mascoma.

    http://www.arb.ca.gov/fuels/lc…..ter_v7.pdf

    —————————

    The EPA in the big boss.  They control the blend wall, and 3% methanol is max allowed.  I could make M85 today and easily put it into a flex fuel vehicle and the EPA would come down on my company (after ethanol producers get together and file a wave of complaints against me) to close down my business.  However, the ethanol companies (I hope they get caught) are looking at secretly blending more methanol into their E85 to make more profits…but that is something very difficult to tell in the blend as I understand as the testing is not that tight, and the gas stations will never know the difference.  The Flex Fuel vehicle also may not know either as I did not ask Lotus at what volume does the senser kick on the warning light in the car when it senses more methanol than ethanol.  I really think the sensor WILL NOT know until it reaches the level that Lotus has in their patent, but I am not certain.  It is an interesting question.

     

    However, with a 3% limit and the ethanol lobby watching methanol like the evil step mother, I am not interested in the games the “untouchables” are playing with the sector.  I’m following the law to the letter, and anyone wanting to play games over more profits it is up to them.

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  26. By Wendell Mercantile on September 30, 2011 at 3:32 pm

    However, the ethanol companies (I hope they get caught) are looking at secretly blending more methanol into their E85 to make more profits…

    Wow, that is interesting Walt. The problem of course is that methanol doesn’t have the advantage of coming from 21 farm states (with 42 farm state senators) that the ethanol cartel has.

    Methanol does have a high potential as a transportation fuel to augment or displace gasoline, but it lacks the political support of ethanol, and the “gee whiz” factor of hydrogen-burning fuel cells.

    I was reading earlier today about the huge amount of coal in Alaska, but that would be very difficult to transport south because of the cold weather (lack of open year-round ports) and permafrost prohibiting rail lines.

    The obvious solution would seem to be to turn that coal into methanol in situ, and then send the methanol south through a pipeline.

    [link]      
  27. By Walt on September 30, 2011 at 4:20 pm

    Wendell Mercantile said:

    However, the ethanol companies (I hope they get caught) are looking at secretly blending more methanol into their E85 to make more profits…

    Wow, that is interesting Walt. The problem of course is that methanol doesn’t have the advantage of coming from 21 farm states (with 42 farm state senators) that the ethanol cartel has.

    Methanol does have a high potential as a transportation fuel to augment or displace gasoline, but it lacks the political support of ethanol, and the “gee whiz” factor of hydrogen-burning fuel cells.

    I was reading earlier today about the huge amount of coal in Alaska, but that would be very difficult to transport south because of the cold weather (lack of open year-round ports) and permafrost prohibiting rail lines.

    The obvious solution would seem to be to turn that coal into methanol in situ, and then send the methanol south through a pipeline.


     

    Take for a minute the potential of just flared or wasted methanol sources.  50% of the time my phone rings by mom/pop companies trying to figure out what to do with wasted or flared sources of natural gas or methane.  Until recently I have not pursued this mini-market due to the high CAPEX we have over power generation.  However, once I started running my trailer unit with parts off of e-bay and $100,000 in controls (I did not waste money on where money is best spent), I could see ways to reduce costs and eliminate waste.  When I built my first home at 18 years old, I was taught how to do the plumbing, heating, electrical, rough/finish work, etc.  By the time I built my fourth house myself I figured out ways to save money and have it first class.  The first tailer was a lot of trial and error, of course, but without outside money to throw at expensive experience we applied a lot of just good old fashion common sense.  This next commercial scale I’m building now is even smarter and will be a money maker at 100-300,000 scfd.  These units will produce over 35 gallons/day of methanol and other valuable chemicals.  I’m going to try to build this in 90 days…it is unlikely, but I have to learn oribital welding first which they will train me on hopefully sometime next week.

     

    The point is that while MASSIVE scale plants are the dream for every engineer, and corporate executive, there is money made without politics needed in this country.  I have worked hard the “typical” model to fund clean tech in this country, and it is riddled with obstacles…none of which have anything to do with technology risk.  That is a game to scalp you as most of these guys don’t read anything about the technology, they just toss out a bunch of smoke screens.  You can prove it to them right in their face it works, and they will still figure out an argument why it must be funded by government, who are the VC’s involved, how many millions or hundreds of millions have been invested, and how can they take all the controlling stock or control the board guaranteeing you are pushed out for the Harvard MBA executive to help take it public (or into the public).  I would not count out small business in this country, nor the innovation that does not make the headlines or the Silicon Valley/DC litmus test.  Coal is great, but it is expensive to process and permit.

     

    Think small, agile and relatively modest efficiency to make money.  There is a hot spot that anyone with an interest to make money in fuels and chemicals can get involved without the Valley boys or DC lobbiest.  Pick up a welding torch, pipe and follow the prints.  Let the rest complain about how much government money they need to make ethanol or jet fuel for the military.  Small business still drives this economy, and 90% of them are not lining up like the Silicon Valley investors looking for Washington to guarantee them revenues (through grants) and loans.

     

    I’m not giving up…not yet.

    [link]      
  28. By Benny BND Cole on September 30, 2011 at 5:45 pm

    According to the Methanex website, they are willing to sell methanol for $1.38 a gallon. Today, no subsidies, no blah-blah about the future etc. Now, and today, methanol for $1.38 a gallon.

    You can make methanol from natural gas, and we have centuries of that.

    Sheesh, a pure methanol, PHEV would completely eliminate the need for crude oil. With a high-compression motor, we are talking a lot of miles per tank for range extension.

    [link]      
  29. By Walt on October 1, 2011 at 3:21 pm

    perry1961 said:

    As for the perfect fuel, it’s hard to beat synthetic diesel. It’s so clean, you can drink it. One gallon will take you 2 1/2 times further than a gallon of methanol. It can also be used where methanol can’t, like in heavy machinery, big rigs, ships, and tanks.


     

    I’ve sat in West Africa in one of the best hotels tossing and turning all night because of the smell of diesel fuel generators running all night long, and the massive pollution of diesel fuel cars in the cities.  I’m familiar with the specs of Pearl and Oryx GTL diesel and am not familiar with anyone being able to drink it.  Can you send me your source on that?  I’ve held the position that people should not be drinking any fuel product, but I will reverse my position on GTL diesel if you can source the safety label for me.

    I wholeheartedly agree that as GTL diesel gets more coverage, and people see how fast Pearl is paid off in cash flows, people are going to be pushing GTL diesel far more than is going on today.  The key is to find the 300 mmscfd+ gas volumes and 25 years reserves to make them cash machines like the super majors and banks want to see to take the risks.  Unfortunately, you can count those available gas reserves on one hand worldwide, and few “single governments” own those reserves.  Using that GTL model in the USA when dozens of operators often own the gas in the fields, and getting everyone to agree to sell natural gas at $1.00 per mmbtu like Nigeria did with Escravos and Qatar did with Pearl/Oryx projects (after taking 49% of the capital costs and provding the port/infrastructure) is not easy.

    To scale down GTL diesel projects below 100 mmscfd is not likely to make it competitive in the United States from what most are saying.  You need larger jumbo projects, or integrated projects with very large controlled reserves.  Besides, there is a lot of additional waxes, naptha, motor oils, etc. that come with each of these plants that require extensive and deep networks to distribute.  There is a lot of talk about the Sasol GTL projects being investigated in Louisana and Canada, and those studies will tell the story when completed.  If they move on them, it would be a big win for GTL diesel in North America for Sasol and its partners.

     

    My point.  I’m not against synthetic diesel whatsoever.  My only issue is that people say it requires large or jumbo scale to make it work, and the projects will need to be $2.0 to $10 billion in size.  Oryx as I understand had 43 syndicating banks for the Sasol/Chevron project, and its costs were $2.5 billion by some estimates.  Technip took a $1 billion loss on the project as they had a fixed priced contract…which is an estimate by some analysts.  Escravos I think is now over $4.5 billion and a couple billion over budget.  Pearl is I think close to $12-14 billion but they have not yet (as I understand) released final costs until it goes into full operation.  Few companies are like Shell who can fund these on balance sheet.

    [link]      
  30. By perry1961 on October 1, 2011 at 3:37 pm

    Here’s the claim on page 2 Walt. I’ve read where stranded gas in Alaska could produce 1M bpd of synthetic diesel.

    http://www.angtl.com/pdfs/GTL%…..merica.pdf

    [link]      
  31. By Walt on October 1, 2011 at 5:52 pm

    perry1961 said:

    Here’s the claim on page 2 Walt. I’ve read where stranded gas in Alaska could produce 1M bpd of synthetic diesel.

    http://www.angtl.com/pdfs/GTL%…..merica.pdf


     

    Thanks.  I tend to think this is more of a marketing piece rather than a scientific fact, but when he drank it in the video and claims he has been for 20 years that is pretty convincing. 

     

    So that is a picture of the CHOREN plant.  That is a larger facility than I imagined.

     

    I did not know Mossgas was a GTL plant.  What I was told in several conferences is that Bintulu was the only functioning GTL plant in the world back in 2009 and 3 more were in development (eg., Pearl, Oryx and Escravos) back then.

     

    BP has their demo plant in Alaska and is trying to announce a new project somewhere in the world.  There are only a few with the technologies so it will be intersting who announces a plant in Alaska.  I’m not familiar with ANGTL company.  I’ve sat in conferences where people announce a GTL plant coming to Alaska or the lower 48 and people almost always ask where these companies are going to get the F-T reactor as they are controlled by a half-dozen super majors, syntroleum, rentec and inevitably the response is “confidential”.  My feeling is that unless you partner with a super major on GTL it is not going to be easy to battle their lawyers, and get it financed.

    [link]      
  32. By Walt on September 30, 2011 at 8:04 pm

    Benny BND Cole said:

    According to the Methanex website, they are willing to sell methanol for $1.38 a gallon. Today, no subsidies, no blah-blah about the future etc. Now, and today, methanol for $1.38 a gallon.

    You can make methanol from natural gas, and we have centuries of that.

    Sheesh, a pure methanol, PHEV would completely eliminate the need for crude oil. With a high-compression motor, we are talking a lot of miles per tank for range extension.


     

    That is the non-discounted price.  It is even cheaper on contract and can also be hedged making it attractive to traders who want no risk of large price swings (which methanol has a problem with since supply is “relatively speaking” controlled by a couple companies in North America).  The processor I’m tolling with sells their methanol after fractionation at $1.20 per gallon ex. plant.  It is tough to compete with those prices, but the 10% ethanol I make at $3.00 rack prices Michigan save my tail.

    [link]      
  33. By Wendell Mercantile on September 30, 2011 at 11:29 pm

    Think small, agile and relatively modest efficiency to make money. There is a hot spot that anyone with an interest to make money in fuels and chemicals can get involved without the Valley boys or DC lobbiest. Pick up a welding torch, pipe and follow the prints.

    Where’s Rufus? Why isn’t he lobbying to build one of these in every county instead of a small cellulosic ethanol plant?

    [link]      
  34. By perry1961 on October 1, 2011 at 5:17 am

    “According to the Methanex website, they are willing to sell methanol for $1.38 a gallon. Today, no subsidies, no blah-blah about the future etc. Now, and today, methanol for $1.38 a gallon.”

    That’s $2.76 gasoline equivalent Benny. Methanol has a 50% mileage penalty. Unleaded regular closed at $2.56/gallon today. Would you blend methanol into your gasoline if it were more expensive than the gasoline itself? Are you willing to retrofit your vehicle to do so?

    “You can make methanol from natural gas, and we have centuries of that. ”

    There’s the dilemna. Anything made from natural gas will cost more than NG itself. NG retails at the pump for $2/gal. equivalent. Sure, it can be converted to methanol, or any type of fuel you choose. The better the fuel, the higher the cost. Sasol makes diesel and jet fuel from NG. That makes more sense to me. Tanks and aircraft can’t be run on electricity, or natural gas for that matter.

    I’m not against methanol. I just think the feedstocks for it are better bargains as they are. Natural gas for CNG’s. Trees and other biomass are better when used in CHP plants. Sure, they can be converted to ethanol, but why spend 5X as much for something that’s half as efficient?

    [link]      
  35. By Walt on October 1, 2011 at 6:40 am

    perry1961 said:

    “According to the Methanex website, they are willing to sell methanol for $1.38 a gallon. Today, no subsidies, no blah-blah about the future etc. Now, and today, methanol for $1.38 a gallon.”

    That’s $2.76 gasoline equivalent Benny. Methanol has a 50% mileage penalty. Unleaded regular closed at $2.56/gallon today. Would you blend methanol into your gasoline if it were more expensive than the gasoline itself? Are you willing to retrofit your vehicle to do so?

    “You can make methanol from natural gas, and we have centuries of that. ”

    There’s the dilemna. Anything made from natural gas will cost more than NG itself. NG retails at the pump for $2/gal. equivalent. Sure, it can be converted to methanol, or any type of fuel you choose. The better the fuel, the higher the cost. Sasol makes diesel and jet fuel from NG. That makes more sense to me. Tanks and aircraft can’t be run on electricity, or natural gas for that matter.

    I’m not against methanol. I just think the feedstocks for it are better bargains as they are. Natural gas for CNG’s. Trees and other biomass are better when used in CHP plants. Sure, they can be converted to ethanol, but why spend 5X as much for something that’s half as efficient?


     

    Perry,

    I think the idea of using methanol as a feedstock for fuel is for several reasons.

    1) Flaring gas is preferred over making electricity and CNG by industry if there is no access to a pipeline.  Gas is not easily transported contrary to the Pikens Plan without a large volume and pipeline acess.  There are options to convert the flared gas to liquid fuels and chemicals that are economic with the right regulations to stop flaring or limit production on wells, but producers want the oil not the gas so they flare it.

    2) It is not wise to judge methanol, ethanol or biodiesel prices compared to low gasoline or diesel prices today.  Methanol, gasoline and diesel are pegged to crude oil prices, and as long as crude prices remain around $80/bbl it is possible fuels and chemicals will remain lower cost.  Methanol prices are “relatively speaking” controlled by one company in North America as a benchmark, and not stable. Natural gas is much more stable in North America due to perceived proven reserves and market forces.  With more methanol production in North America, prices would stablise out of the hands of one company generally speaking and give consumers more options on liquid fuel and chemical feedstocks.  It might even separate from crude and switch to natural gas as the hedge mechanicism.

    3) CNG and the Pikens Plan is a good idea, but installation of those pumps nationwide is not easy or inexpensive for most gas stations.   A liquid fuel alternative that is lower cost is good for America and especially good for the rest of the world.  The Lotus study gets into why this is important since cars often sit idle most of the day, and retroffiting cars to CNG and gas stations to offer the option is expensive for most people.  Methanol and ethanol blends are more viable if lower cost.  The study here by Lotus gives some data:

    http://www.ecolo.org/documents…..tus_09.pdf

    4) What Lotus suggests is to get people to start thinking in not just miles per gallon, but rather in $ per mile.  If people were able to see on average what each car costs in $ per mile using gasoline, methanol, ethanol, methanol-ethanol blends, CNG, electricity, etc. they would be better informed, and add in “well-to-wheel” calculations and it would give them more information still.  Information is key to choice, but there are some (as Robert points out on this blog) that want to limit information only to support their agenda.  CNG is not the answer for the entire world, or for most of America due to lack of access for many people…especially the poor and middle class.  A cheaper fuel based upon $ per mile would allow people to drive and do what they need, and keep more money out of the hands of crude refiners who have a lock on the fuel markets here via EPA and lobbies.  If you study the history of methanol, you will see it was jointly attacked in California (who had major testing of alcohols) by ADM and Chevron to discredit it and they did it fiercly.  It started with MTBE and Gray Davis legislation to then methanol as a killer…and stuck nationwide.

    My suggestion is to look at methanol as a good intermediate chemical and a liquid fuel that can be easily transported, blended and will reduce costs when calculating $ per mile over time.  It is not the perfect fuel by any calculation, as that is gasoline and diesel if abundant and cheap.  It is however much cheaper worldwide than building CNG terminals and entire CNG trucking fleets to transport CNG all over the country.  China has by far the cheapest CNG and LNG trucking system worldwide.  They produce natural gas in remote areas, truck it hundreds and hundreds of miles to domestic markets in cities to use it for fuel and feedstock, but not everyone can do this economically.  Natural gas prices there are much higher than ours right now, and in Vietnam where CNG is growing their natural gas sales price delivered to factories is $12/mcf while here ours is probabaly $6/mcf on commercial rates.  I know some gas wells selling directly to industry that are paying less than $4/mcf currently.  Natural gas in America got as high as $16-18/mcf in the boom days, and it bankrupted thousands of small chemical companies and those who relied on natural gas for feedstocks.   A major play is ongoing to export billions of cubic feet of natural gas overseas, and some licenses have been approved by the administration.  America is going to export gas to the highest paying markets until the global “shale gas” markets catch-up, but as Halliburton and Schlumberger have recently stated there is no equipment to handle this global push for shale gas…as it is all mostly in America.  It has to be built or moved out of America overseas.  That will happen in time as China and others are paying top dollar for this equipment, and like alot of our factories, methanol plants, etc. that were here will be bought and moved to China and Asia where gas demand is growing and large shale gas reserves exist.  CNG should not be America’s primary answer for fuels as Pikens argues, nor should electricity or hydrogen as the auto companies are pushing aggressively. 

    Think methanol as a preferred fuel and transition fuel for those around the world who cannot afford high CNG prices or expensive electric cars.  It should not be blocked in America by ADM and Chevron…along with their lobbies.

    [link]      
  36. By Walt on October 1, 2011 at 9:17 am

    CleanTech China!

    The rise of Chinese corporate capital

    Venture capital aside, in the two years since I last visited
    mainland China, another dramatic change seemed the level of interest
    from state-owned and other businesses in clean technologies. It’s
    indicative of China’s new green order: the country’s latest five year plan
    places a strategic emphasis on clean and green technologies as a
    cornerstone of China’s economic growth and improvement in standard of
    living. And what its five year plan articulates, the country implements.
    Fast.

    http://www.cleantechblog.com/2…..ch+Blog%29

    [link]      
  37. By Wendell Mercantile on October 1, 2011 at 10:59 am

    What Lotus suggests is to get people to start thinking in not just miles per gallon, but rather in $ per mile.

    We should instead think in terms of Btu and kWh per mile, and fuel and energy companies should sell fuel by their energy content, and not by volume — whether cubic feet or gallons.

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  38. By Walt on October 1, 2011 at 11:08 am

    Wendell Mercantile said:

    What Lotus suggests is to get people to start thinking in not just miles per gallon, but rather in $ per mile.

    We should instead think in terms of Btu and kWh per mile, and fuel and energy companies should sell fuel by their energy content, and not by volume — whether cubic feet or gallons.


     

    Do you want to see higher Btu or kWh per mile or lower?  Does it matter what the cost is using the preferred method in Btu or KWh?

     

    For example, the BTU of flared gas at one site I’m working at is ~1,600 before separation.  It is very high and valuable, but not without expensive separation into a “pipeline quality” acceptable to the pipeline company.  This is 1050 btu.  To go from 1600 to 1050 btu is not necessarily cheap or easy as it depends on what makes up the flared gas.  It could be high ethane which is difficult to remove, for example.

     

    There is a cost to make every fuel to spec, and so I would be interested to know if you want the lowest BTU per mile, and if so, does it matter the cost to get there? I’m in favor of whatever gives the consumer the most choice in cost vs. performance vs. stability over the long-term.

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  39. By paul-n on October 1, 2011 at 12:33 pm

    It is not the perfect fuel by any calculation, as that is gasoline and diesel if abundant and cheap.

    Actually, I think methanol is pretty damn close to the perfect fuel.  

     

    consider this ;

    -it can be made from any carbonaceous feedstock

    -in a fire, it can be put out with water

    -it is completely biodegradable, and is actually beneficial to soil microfauna

    -it has higher octane than any hydrocarbon fuel, and can be used in high compression diesel engines

    - it does NOT need to be anhydrous to work in engines

    -it can be used in any kind of ICE, gas turbine etc.

    -it can be used DIRECTLY in a fuel cell with  no reformer.

    - in an optimised engine, it uses less btu/mile , and will cost less $/mile, than any other fuel.

     

    And, for now, it can be blended with gasoline and ethanol to get it into use.

     

    There is no other fuel that has all these attributes.

     

    The 3% rule is ineteresting.  Assuming that M did replace 3% of the 165bn gal of gasoline used every year in US+Canada, that would be 4bn gal of M annually – 1/3 of current ethanol production.  That is not a bad start for a methanol fuel industry, and then get it into E85, or start selling M85, and away you go.

     

    When looking at the rack price of methanol, consider this – when methanol is produced, the raw product also has small amounts of higher alcohols and water present.  The methanol is post-processed to create a pure product for the chemical industry.

    BUT if it is being made for fuel, then you can leave the higher alcohols (mostly ethanol) in there, saving cost and upping the btu yield.  If the vehicles were running 100% alcohol, like they do in Brazil, then you can even leave the water in there – which actually improves engine performance.

    So, if methanol is being produced for fuel, it can be produced more cheaply than current methods.  Walt’s method allows M to be produced from sour gas, something that is not done for conventional methanol.  It may be possible to produce conventional methanol from sour gas, in which case you take the plant to the gas field(s) and save another cost of cleanup to pipeline grade.  

    If we look at producing methanol specifically for fuel, and not as a pure chemical, there are many advantages to be had.  Could probably get the cost below $1/gal.   And once we do that, we then take the methanol plants up to the Arctic, where almost every hole drilled for oil, comes up with gas instead.

    Methanol is the only liquid fuel (other than perhaps LNG) that can deliver oil-import independence for the US.  

    If all the $bns that had been wasted on cellulosic ethanol, algae, etc had been spent on methanol, we’d be way ahead of the game by now.

     

    A classic case of the answer “hiding in plain sight”…

     

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  40. By Walt on October 1, 2011 at 1:25 pm

    Paul N said:

    It is not the perfect fuel by any calculation, as that is gasoline and diesel if abundant and cheap.

    Actually, I think methanol is pretty damn close to the perfect fuel.  

     

    consider this ;

    -it can be made from any carbonaceous feedstock

    -in a fire, it can be put out with water

    -it is completely biodegradable, and is actually beneficial to soil microfauna

    -it has higher octane than any hydrocarbon fuel, and can be used in high compression diesel engines

    - it does NOT need to be anhydrous to work in engines

    -it can be used in any kind of ICE, gas turbine etc.

    -it can be used DIRECTLY in a fuel cell with  no reformer.

    - in an optimised engine, it uses less btu/mile , and will cost less $/mile, than any other fuel.

     

    And, for now, it can be blended with gasoline and ethanol to get it into use.

     

    There is no other fuel that has all these attributes.

     

    A classic case of the answer “hiding in plain sight”…

     


     

    Paul, that is a very interesting list of benefits that I had not seen before.  I’m always trying to focus on the “methanol kills people” argument which is the standard argument used by the ethanol lobby going back to ADM when they linked it to MTBE.  Thank you for the positive list on methanol.

    We should really find a group of engineers and start our own methanol lobby or methanol advocacy.  I have the technology that I would be willing to let others investigate and even send all the leads I get in my inbox that I cannot respond to day-by-day.  Most are outside the USA, where methanol has a lot more appeal, but the next 3 months I’m going to be buried in the garage building this commercial plant.

     

    There is so much business out there it just takes people with a reasonable and fair understanding of methanol and its value to overcome the negative comments.  We will never get into Biofuels Digest or other “clean tech” groups as it is too much of a threat to their readership and their financial backers, but there is a lot of potential working on flared gas, biogas or landfill gas projects that do not impact Silicon Valley funded technologies.  Further, it might be even better to ignore the methanol word entirely.  I am thinking of taking down my website on methanol, and just redoing it focused on “gas-to-gasoline”, “gas-to-diesel”, “gas-to-jet fuel”, etc.  We have alot of that design work completed, and there are several companies that will package their own methano-to-gasoline technologies at larger scales.  I’m getting worn out on arguing the benefits of methanol over CNG, power, ethanol, syngas, etc.  I want to leave it to some sort of methanol lobby that supports new technologies that compete with their controlling board members…we are not going to get that with the current lobby.  We won’t even make the newsletter, and you see from all their press releases they link to on their website NONE of our methanol press releases ever get put up on their site.  They remove them with the web crawler pulls them into their news page I assume.  These lobbies have to protect their main contributors and I understand that so no reason (without money to pay them) to cause any friction.  Start our own club I suggest!  :)

    [link]      
  41. By Walt on October 1, 2011 at 1:34 pm

    Paul N said:

    So, if methanol is being produced for fuel, it can be produced more cheaply than current methods.  Walt’s method allows M to be produced from sour gas, something that is not done for conventional methanol.  It may be possible to produce conventional methanol from sour gas, in which case you take the plant to the gas field(s) and save another cost of cleanup to pipeline grade.  


     

    Sour gas by definition here in Michigan is gas with H2S.  Removal of H2S is required with our process, but that is done using our proprietary system to remove it.  The real amazing thing was the lack of pre-treatment of the gas as in required in traditional syngas plants to get the right ratios for FT or syncrude.  Now of course most engineers will discount our claims, and that is fine, but they cannot discount the operational testing we have done in the field on high and low BTU gas coming off the compressor (before and after the JT separator…methanol plants call it the flash drum to drop out the liquid gases first).

     

    The Chinese were so impressed they fly to meet me, I picked them up at the airport and took them to the plant.  They took lots of pictures and went back to Beijing to share the news with their friends and never heard anymore from them.  It does make sense for people to see the onsight demonstration and operation, but you also have to be careful since people love free data and information…especially the Chinese oil & gas sector.

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  42. By perry1961 on October 1, 2011 at 2:10 pm

    “If all the $bns that had been wasted on cellulosic ethanol, algae, etc had been spent on methanol, we’d be way ahead of the game by now.”

    Paul, methanol from biomass received a .60/gal. subsidy for at least a decade. Wood alcohol was being made from trees long before talk of cellulosic ethanol came along. Still, nobody took advantage of the .60 subsidy, because methanol from natgas was so much cheaper. Congress isn’t going to subsidise hydrocarbons, or the conversion of hydrocarbons. Methanol from NatGas isn’t being blended into gasoline, because it’s more expensive than gasoline on an energy content basis. Yes, there is a 3% blend wall, but refiners aren’t even doing that.

    As for the perfect fuel, it’s hard to beat synthetic diesel. It’s so clean, you can drink it. One gallon will take you 2 1/2 times further than a gallon of methanol. It can also be used where methanol can’t, like in heavy machinery, big rigs, ships, and tanks.

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  43. By Rufus on October 2, 2011 at 12:58 am

    I can’t get that $13.00/kcu ft that we were paying for Nat Gas a few years ago out of my mind. What does that do for the nat gas/methanol argument?

    1) Nat Gas is a fossil fuel of declining availability, and

    2) We import the “marginal” volume.

    I think I’ll wait, and see how Poet, and Abengoa (as well as Dupont) do with their Cellulosic ethanol from ag waste ventures.

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  44. By perry1961 on October 2, 2011 at 2:36 am

    You’ve got it backwards Rufus. Proved and probable reserves of US NG increased 35% in ’09, from 1500 to about 2000 TCF. We use about 23 TCF per year.

    World “proved” reserves tripled in the last 25 years, to about 6000 TCF. The world consumes about 75 TCF annually. Unlike other fossil fuels, we can make more NG. Landfills are a growing fuel source.

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  45. By mac on October 2, 2011 at 3:12 am

    This alternative fuel discussion is very interesting. I’m wondering if any one has ever thought to stop and ask Paris Hilton what she actually thinks about all this.

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  46. By carbonbridge on October 2, 2011 at 5:13 am

    perry1961 said:

    You’ve got it backwards Rufus. Proved and probable reserves of US NG increased 35% in ’09, from 1500 to about 2000 TCF. We use about 23 TCF per year.

    World “proved” reserves tripled in the last 25 years, to about 6000 TCF. The world consumes about 75 TCF annually. Unlike other fossil fuels, we can make more NG. Landfills are a growing fuel source.


     

    I find this particular discussion to be rather interesting and agree with Perry that Rufus has got it all bass-ackwards. 

    This discussion is going places where we have not previously discussed C1 Methanol on this blog.  I’d like to remind people that A) Methanol has been purposefully kept out of the automobile’s gas tank for 95 years (except for Indy 500 races for 37 years) and B) Methanol is the largest chemical by volume marketed on this planet.  Methanol is a base ‘chemical’ used to produce plastics, paints, varnishes, thinners, solvents and more plastics as I’ve previously mentioned.  It is also a ‘water grabber’ and is used to absorb condensate water which contaminates gasoline, jet fuel and diesel which causes far more combustion problems in below zero winter weather.

    People are learning that Methanol is easy synthesize by century-old GTL processes.  The net reaction of this gas-to-iiquids (GTL) process is simply to add a missing Oxygen atom (derived from H2O water) to CH4 Methane NatGas which then falls out as a liquid CH3OH Methanol alcohol which is very stable at ambient temps and pressures.  This is the utter fallacy of compressed NatGas or liquified NatGas being dangerously used for any transportation fuel.

    Methanol contains 1/2 of the BTU’s per gallon as does gasoline so typically in conventional ‘gasoline’ engines without benefit of any FFV chip (not high compression/adjusted race car engines) about twice as much methanol volume is combusted to gain equivalent gasoline mileage and the exhaust emission is biodegradable. 

    Methanol can be ‘added to itself’ catalytically to produce a blend of C1-C10 higher mixed alcohols which is 20% stronger BTU than Ethanol or 60% stronger BTU than Methanol is – or it can also be ‘added’ to itself to produce a C5-C10 synthetic gasoline where the magic Oxygen atom is tossed. 

    Oxygen in liquid fuel contributes zero BTU’s – but what Oxygen does do beyond changing the magnetic polarity of the molecule is ‘to fan the flames’ getting all or nearly all of the hydrocarbons it is blended into to fully combust netting out in more engine power plus a highly reduced emissions profile…  [I'm repeating many things herein which I've posted on this blog over the past couple of years.]

    Remember too that float-on-water hydrocarbons only contain hydrogen and carbon atoms where oxycarbon alcohols keep that additional Oxygen atom integral to the finished molecule.  Oxygen is what changes the polarity of the hydrocarbon molecule allowing it to become water soluble as an oxycarbon and thus easily biodegradable – plus alcohols are also magnetically attracted back to hydrocarbon oils and ground coal.

    The difference between C1 Methanol and C2 Ethanol is only one Carbon atom plus two more hydrogen ions.  Yet the chemistry sets which produce these two lower alcohols are as different as night and day. 

    The simpler C1 Methanol molecule is produced 24×7 continously via thermal steam and catalysis which typically employs carbon and hydrogen feedstocks being either methane or coal.  Whereas the C2 Ethanol molecule is produced in much more limited quantities via 4-day batch fermentation of corn kernels or sugar cane using acid enzymes and biobug yeasts as the active process drivers.

    The costs per unit gallon to produce these C1 and C2 alcohols are also as different as night and day. 

    I don’t agree at all with discussion herein in these threads indicating that Methanol costs as much to produce as is being alluded to.  Try wrapping your heads around Methanol being produced for less than 25¢ per gallon in world-scale GTL facilities where methane NatGas is the traditional feedstock.

    -Mark

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  47. By Kit P on October 2, 2011 at 9:21 am

    “I can’t get that $13.00/kcu ft that we were paying for Nat Gas a few years ago out of my mind. ”

     

    Hold on to that thought Rufus. There has never been a shortage of NG reserves in the US. There was a time in the ’90s when there was no shortage of $2/MMBTU on the west coast thanks to NG discovered in Canada while looking for oil. What happened to that NG. The built a pipeline to Chicago where they would pay $4/MMBTU.

     

    Supply and demand controls the price of NG.

     

    Energy Markets Report – September 19-23, 2011

    http://www.nei.org/resourcesan…..ketsreport

     

    On page 3 there is a curve ‘Natural Gas Trends’. To be blunt, the electricity generating industry knows that the Natural Gas will gouge Americans when it can. The profits the electricity generating industry makes are carefully regulated but fuel costs are passed right along.

     

    PaulN posted a curve show cost of electricity compared to coal however more telling is the cost of electricity compared to NG.

     

    So it take about a rig count of about a 1000 to keep up with demand in weak economy and hold NG at $4/MMBTU. There is not glut of cheap NG but there is a reasonable supply of affordable NG.

     

    The curve ‘Electricity Day Ahead Trends’ shows what happens when electricity is not produced with base load coal, nukes, or CCGT. The curve ‘Fuel Cost to Electric Utilities’ shows fossil fuel costs. The stable line at $2/MMBTU. Rufus is remembering the part of the curve for 2007 and 2008.

     

     

     

    “remind people that A) Methanol has been purposefully kept out of the automobile’s gas tank for 95 years ”

     

    This old guy remembers that both CNG and methanol have been promoted by the DOE ofr 30 years but customers have rejected those transportation fuel. Customers may complain about oil companies but changing the flavor of the product is not the issue.

     

    I love statements like this,

     

    “These lobbies have to protect their main contributors and I understand that so no reason (without money to pay them) to cause any friction. ”

     

    Written just after a long lobbying statement why some who costly regulations that favor their process without significant environmental or social benefit.

     

     

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  48. By Rufus on October 2, 2011 at 10:51 am

    I’m pretty sure we Imported a higher percentage of our nat gas in the last 12 months than we did in the twelve months, prior. And, that was before we started trying to run some large percentage of 240 MILLION Cars, and trucks on the stuff.

    Make of it what you will, but it’s a Depleting, Imported Fossil Fuel. I’m skeptical.

    [link]      
  49. By russ-finley on October 2, 2011 at 6:17 pm

    Bloomberg took an in-depth look at Fukushima, six months after the tsunami and nuclear meltdown. The article tells the tale of a devastated $3.2 billion-a-year farm industry, the desolate 12 mile no-go zone where 160,000 inhabitants have been evacuated and tourists that used to hike the mountains and surfed off the beaches are nowhere to be seen. Regardless of whether you fall into the pro- or anti-nuclear camp, the article is worth a read if you’re interested in seeing how that area has been affected.

    I have to disagree that the Bloomberg article is worth a read. It’s a classic example of lay press sensationalism, complete with the standard practice of conflating nuclear weapons with electric power generation.

    $3.2 billion a year …hmmm.

    (3.14 x 12 x 12)/2 = 226 square miles. That would be a square 15 miles to a side. That many acres in corn at today’s prices would produce about $0.25 billion. You could drive around that area at 60 mph in one hour. And I thought WHO declared Japanese food was safe back in March. 

    Tourists are nowhere to be seen …. How many tourists are there to be seen on any of the tsunami ravaged beaches? Have they found all of the 20,000 bodies yet?

    The tsunami and quake were the real disasters. The damage done to the nuclear plant (and the rest of Japan) was the result of the natural disaster.

     

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  50. By rrapier on October 2, 2011 at 6:35 pm

    Kit P said:

    This old guy remembers that both CNG and methanol have been promoted by the DOE ofr 30 years but customers have rejected those transportation fuel.


     

    You seem to be oblivious that they also rejected ethanol, which is why we got decades of subsidies and finally the Renewable Fuel Standard. Methanol and CNG have not had the same political advantages of corn ethanol.

    RR

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  51. By perry1961 on October 2, 2011 at 8:28 pm

    IEA doubles global gas reserves estimates

    The world may have twice as much natural gas than previously thought, according to the rich nations’ think tank the International Energy Agency (IEA).

    The world may have 250 years of gas usage at current levels thanks to “unconventional gas” from shale and coal beds, Anne-Sophie Corbeau, senior gas expert at the IEA told BBC News.

    Estimates may even be revised upwards.

    http://www.bbc.co.uk/news/busi…..s-12245633

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  52. By perry1961 on October 2, 2011 at 8:32 pm

    U.S. natural gas prices have fallen 28% since December as an increase in the U.S. shale rock gas supply has reduced the need for U.S. natural gas imports. Shale rock gas is retrieved from tight rock formations and its U.S. boom led the country to extract more gas than Russia last year for the first time since 2001.

    Russia ‘s energy giant Gazprom has a five-year plan to take 10% of the U.S. natural gas market share, but U.S. shale gas exploration has put a damper on that goal.

    “The influence of shale gas raises the prospect of change on gas markets,” Russian Natural Resources Minister Yuri Trutnev told Reuters. “We have a problem with shale gas. This is not only my position, but the position of Gazprom as well.”

    As the United States becomes a less reliable consumer, gas suppliers aren ‘t having much luck replacing the lost business.

    http://moneymorning.com/2010/0…..s-imports/

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  53. By Kit P on October 2, 2011 at 9:34 pm

    U.S. natural gas prices have fallen 28% since December as an increase in the U.S.

    Hey Perry, check the date of of your link! NG prices in the US are higher in the winter and summer and lower in the spring and fall. Just because some journalist tells you something does not make it true.

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  54. By Wendell Mercantile on October 2, 2011 at 10:48 pm

    Nat Gas is a fossil fuel of declining availability, and…

    Rufus~

    Why do you say that? There are gigatons of methane (the primary component of NG) in the frozen clathrates at the bottom of the oceans.

    Difficult to get at? Yes, but it’s there, and virtually limitless.

    Every landfill in the country also produces methane. Most places let it escape into the air or burn it off. (Just trap the methane from the dumps in Tunica county, convert it to methanol, and you’d have your own local source of bio-fuel — no cellulosic enzymes needed.)

    And last but not least, each of the ~1.3 billion cattle in the world produces about 500 liters of methane daily. (Another potential source of authentic bio-fuel.)

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  55. By carbonbridge on October 3, 2011 at 1:32 am

    Rufus said:

    I’m pretty sure we Imported a higher percentage of our nat gas in the last 12 months than we did in the twelve months, prior. And, that was before we started trying to run some large percentage of 240 MILLION Cars, and trucks on the stuff.

    Make of it what you will, but it’s a Depleting, Imported Fossil Fuel. I’m skeptical.


     

    Rufus:  I’m not sure that you can interpret the simplicity of what I’m going to relate to you.  Yet tonight I’ve decided to try…

    Please interpret that I do realize that there are hundreds of thousands of people just like you who misinterpret that any ‘new biofuel’ or alternative fuel somehow naturally comes from something agricultural which you must plant, fertilize, copiously water, then weed and annually harvest.  

    Then based upon the specific agricultural product annually harvested – SOME TYPE of processing mechanism [typically not at all understood by the consumer, motorist, investor, grant giver or Congress-person] is therein utilized to convert this agri-grown substrate into either ethyl alcohol – a water soluble, biodegradable oxycarbon – OR – something else which is traditionally termed as biodiesel which is a float-on-water hydrocarbon oil.

    I didn’t sell insurance as you did… 

    Instead I reviewed and documented several hundreds of various energy-producing technologies.  A few of these technology systems were employed to convert agri-crop products into biofuels or in direct comparison, I examined how crude oils are refined and re-assembled into different flavors of petroleum products like gasoline, kerosene jet fuel, diesel, locomotive diesel, home heating oil and further down the scale to residual bunker oils used to fuel ocean-going large ships.  

    I’ve also documented and educated others as to how the BTU’s of carbon coal were converted into steam-generated electricity via combustion boilers.  Offshoots from these major energy conversion systems deeply involve the simplest hydrocarbon element on planet earth which is CH4 methane natural gas.  

    And there are also other extremes such as nuclear-generated electricity all the way across the board to the chemical conversion of hydrogen via fuel cells to Tesla-type black boxes capable of producing electricity from the ether atmosphere which surrounds us.  

    On this blog, we’ve only lightly touched upon (RIP) Stanley Meyer type technology using water to fuel automobiles…  [I'm being overly simplistic here as there are even more disruptive energy technologies out there which I'm not identifying herein...]

    Your personal passion for corn ethanol has been interpreted not only by me, but by many other readers of this RR energy blog.  And thus I come back to the primary issues which you and hundreds of thousands of others seem to miss entirely.  And first is that biofuels should biodegrade.  Most of them do not…  

    And secondly is that corn kernels annually grown and harvested ONLY CONTRIBUTE a basic carbon atom with associated hydrogen ions towards the production of ethyl alcohol.

    Most proponents and opponents of ethanol do not even realize that its primary benefit lies in its biodegradability factors…  Same people do not realize that a carbon atom from corn can be replaced with an identical carbon atom from methane, garbage, sewer sludge or ground tires.

    What you are apparently missing is that the basic hydrogen ions and carbon atom building blocks making up methanol or ethanol don’t have to come from a annually harvested corn kernel.  

    In order to access these far more abundant and far cheaper feedstocks, the elemental processing mechanism needs to change.  

    And this is easiest accomplished by thermal super-heated steam and GTL catalysts in place of acid enzymes and biobug yeasts employed in ethanol batch fermentation processes most typically heated by methane natural gas or ground coal. 

    Regular readers of this blog realize that you very much favor ethanol and we’ve learned that you’ve also purchased a Flex-Fueled automobile complete with a E-85 FFV chip.  RR has tried in vain to educate you and others about energy balances and inherent inefficiencies when batch fermenting corn ethanol and utilizing fossil methane or fossil coal to heat this porridge – batch after batch after batch…

    • Have you ever toured a commercial-sized corn ethanol plant? 

    • Have you ever smelled the associated odor of cooking corn wafting over your community? 

    • Or have you ever sat down with a ethanol plant’s chief accountant and studied the actual costs of production – then evaluated the real profitability made possible only because of taxpayer subsidies?

    I invite you to think about examining and learning more about the absolute core of the complete, finished molecule of C2H5OH ethanol.  Please consider looking from the end product backwards to alternative methods on how to better assemble this same identical, exact C2 biodegradable fuel molecule.  

    Some of these alternative GTL assembly methods will provide far greater volumes of ethanol at highly reduced costs to achieve the same end-product.  Yet corn or any other agri-derived and annually harvested feedstock is not needed whatsoever to accomplish this goal of energy independence coupled with more positive and real environmental aspects…  

    Please understand that a carbon atom is a carbon atom building block – and the same carbon atom in corn starch is the same carbon atom cleanly isolated from methane, coal or ground tires.  The deeper you go into this research, the further away you’ll begin to stray from conventional batch fermentation methods and new enzymes which you continue to espouse.  

    If you are really not a paid shill for the corn ethanol lobby, then perhaps you’ll personally begin to learn just how far away from the physical truths that you currently are focused on corn ethanol fermentation. 

    Last:  I do recognize your research capabilities and your undying enthusiasm for corn ethanol.  

    Happy trails, pleasant dreams and more profitable investing…

    -Mark

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  56. By Walt on October 3, 2011 at 9:38 am

    CarbonBridge said:

    Regular readers of this blog realize that you very much favor ethanol and we’ve learned that you’ve also purchased a Flex-Fueled automobile complete with a E-85 FFV chip.  RR has tried in vain to educate you and others about energy balances and inherent inefficiencies when batch fermenting corn ethanol and utilizing fossil methane or fossil coal to heat this porridge – batch after batch after batch…

    • Have you ever toured a commercial-sized corn ethanol plant? 

    • Have you ever smelled the associated odor of cooking corn wafting over your community? 

    • Or have you ever sat down with a ethanol plant’s chief accountant and studied the actual costs of production – then evaluated the real profitability made possible only because of taxpayer subsidies?

    I invite you to think about examining and learning more about the absolute core of the complete, finished molecule of C2H5OH ethanol.  Please consider looking from the end product backwards to alternative methods on how to better assemble this same identical, exact C2 biodegradable fuel molecule.  


    “…utilizing fossil methane or fossil coal to heat this porridge…”

     

    While some complain about how GTL fuels using methane or natural gas are not the solution, I think Mark makes a good argument for people to study the carbon and thermal efficiencies of what it takes to make batch processed ethanol vs. GTL or methanol fuels.

    I for one knows how much natural gas it takes to operate our methanol plant, and how much is left over to make liquids…both my energy to operate and the energy to make fuels come from natural gas as the feedstock.  I dare say making ethanol takes as much natural gas as my process just for power consumption, and they STILL HAVE TO grow, harvest and deliver using fossil fuels the corn to the ethanol plant.

     

    Again, well-to-wheel is the calculation if people are interested.  California has wisely looked at this calculation in their low carbon fuel standard, and the EU/UN just released a study saying, basically, “Hey, wait…what is the energy and carbon used to grow these crops like corn and deliver them to ‘sustainable’ fuels if we have to calculate the cost of land footprint, all the energy to grow and harvest and deliver the crop to the facility and then use natural gas to operate the plant, etc.?”

     

    Well-to-wheel the corn ethanol model does not look that promising…unless they can avoid using fossil fuels to run the equipment and remove natural gas from the process to make the ethanol.  Remove those pieces and beyond the argument of using food-to-fuels, they will have a great case to hammer the rest of us tax payers that are paying for their inefficient operating profits.

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  57. By Rufus on October 3, 2011 at 10:30 am

    A lot of talk there, kiddos. But, the fact remains; Nat Gas is a Depleting Fossil Fuel that we have to Import to maintain the status quo of consumption.

    If Poet’s (or Abengoa’s, or Dupont’s) cellulosic plant is successful we will be able to produce our 15 Billion Gal/yr of Corn Ethanonol, and another 5 Billion Gal/Yr of Ethanol from Corn Cobs/Stove using NO nat gas.

    I’m going to wait and see.

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  58. By Wendell Mercantile on October 3, 2011 at 10:51 am

    If Poet’s (or Abengoa’s, or Dupont’s) cellulosic plant is successful… I’m going to wait and see.

    Rufus~

    The operative word there is “if.” I’ll wait to see too, but it’s no sure thing. As in all cellulosic schemes, the long pole in the tent will be logistics.

    As General Omar Bradley said during WW II: “Amateurs talk strategy. Professionals talk logistics.”

    In this case, the daunting logistics of cellulosic will be the 24/7/365 collection, transportation, and storage of the the massive amounts of bio-mass needed to support a cellulosic operation at scale.

    I’ve mentioned this before, but there is relative small 40 megawatt power plant near here that not long ago converted to bio-mass. They need 70 semi-loads of bio-mass per day to keep the plant running, and are ranging out as far as 120 miles to collect that bio-mass.

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  59. By Walt on October 3, 2011 at 12:31 pm

    Rufus said:

    A lot of talk there, kiddos. But, the fact remains; Nat Gas is a Depleting Fossil Fuel that we have to Import to maintain the status quo of consumption.

    If Poet’s (or Abengoa’s, or Dupont’s) cellulosic plant is successful we will be able to produce our 15 Billion Gal/yr of Corn Ethanonol, and another 5 Billion Gal/Yr of Ethanol from Corn Cobs/Stove using NO nat gas.

    I’m going to wait and see.


     

    I did not know these cellulous plants did not require outside (OSBL) energy to operate.  If they don’t need natural gas or electricity to run than you are right they will be a great option for low cost fuels.  If they do require power from the grid or natural gas to operate, they will be similar to corn based ethanol plants and very expensive to operate if natural gas prices climb.

    [link]      
  60. By carbonbridge on October 3, 2011 at 12:48 pm

    Wendell Mercantile said:

    I’ve mentioned this before, but there is relative small 40 megawatt power plant near here that not long ago converted to bio-mass. They need 70 semi-loads of bio-mass per day to keep the plant running, and are ranging out as far as 120 miles to collect that bio-mass.


     

    Wendell:  You are correct.  Combusting biomass to generate steam electricity or converting biomass into some kind of biofuel is a daunting task.  It is less daunting IF your source of biomass is municipal garbage.  How about ground tires which contain 2x the carbon as coal?  Or we’ve previously discussed the option of grinding up beetle-killed pine trees into chips and using these millions of acres of dead pine material as readily available carbonaceous feedstock.  Nothing to plant, fertilize, water, weed, etc…  It still is quite an effort to go extract this dead pine, play Johnny Appleseed and cover your tracks and move semi-truck quantities of the pine chips to a rail line and then ship the wood chips to the super-heated steam-driven GTL plant for processing.

    Yet here is the primary difference which Rufus doesn’t yet understand…

    When GASIFICATION is used as the front-end solids conversion mechanism: then ALL of the carbon content in the biomass wood chips is converted into intermediate CO & H2 syngas which is then catalytically converted into a new fuel whether that is a synthetic oil (expensive Fischer-Tropsch) or a biodegradable blend of 138 octane, 90,400 BTU higher mixed alcohols produced at much less capital expense with no CO2 offgas load to the atmosphere.  ALL of the pine chip becomes sulfur-free liquid fuel except for a small portion of the initial wood chip volume which becomes inert slag resold as construction or road-building aggregate.  The pine chips provide about 2/3′s of the ‘renewable carbon content’ building blocks when compared to comparable volumes of Montana or Wyoming fossilized coal utilized as solid carbonaceous feedstocks.  Readily available and abundant CH4 methane NatGas can substitute for centuries as feedstock and the solids gasification process instead becomes easy STEAM REFORMATION.  Both are THERMAL conversion processes and are exceptionally clean and 24×7 continous…

    In comparison:  When biomass such as wood chips is cooked with expensive, acidic enzymes, only a PORTION of the volume of biomass feedstock becomes C5 and C6 sugars which are then subsequently fermented with yeasts in a 7-day batch fermentation process to produce less than one-half the batch volume of ethanol as 4-day corn ethanol fermentation provides.  The majority of the wood chips volume remains after cooking and fermentation and needs to be landfilled.  Corn cobs or other agri-stover contains far less carbon building block volume than is contained in wood chips.

    This is what Rufus is waiting to finally see as a result of “actual” lignocellulosic ethanol production.  Don’t hold your breath Rufus…

    And we’ve recently discussed the ‘zero commercial quantity’ of ligno-cell ethanol production after several years of generous taxpayer grants and loan guarantees.  The science and mechanism of these two different types of mechanical conversion methods is what Rufus, other citizens and many funders still fail to realize.  

    When a proper ‘demo’ is opened up for pubic inspection of this ‘methanol-type’ of catalytic GTL conversion process and is then demonstrating inherent profit economics – then it will be game over with lotsa wanna-bees saying ‘me too.’  Just like Walt, I too am busy working on this element and it is all tied to available money in this upside down global recessionary economy.

    -Mark

    [link]      
  61. By rrapier on October 3, 2011 at 1:14 pm

    Rufus said:

    A lot of talk there, kiddos.


     

    How is that any different from this?

    If Poet’s (or Abengoa’s, or Dupont’s) cellulosic plant is successful we will be able to produce our 15 Billion Gal/yr of Corn Ethanonol, and another 5 Billion Gal/Yr of Ethanol from Corn Cobs/Stove using NO nat gas.

    How long have we been hearing that talk?

    RR

    [link]      
  62. By Wendell Mercantile on October 3, 2011 at 2:54 pm

    CarbonBridge said ~ Most proponents and opponents of ethanol do not even realize that its primary benefit lies in its biodegradability factors…

    Mark,

    The primary benefit of ethanol is to increase demand in the commodity market for No. 2 yellow field corn. And that of course benefits the Corn Belt, Big Ag, and the constituents of the 42 senators from what are considered the 21 farm states. The Corn Belt

    The fact that corn ethanol can also be used as a fuel is of secondary importance.

    [link]      
  63. By Rufus on October 3, 2011 at 3:49 pm

    Another 1.5 Million Acres are Coming Out of the CRP in 2012. That’ll save the taxpayers some money. The VEETC goes away on Dec, 31. More savings for the taxpayer.

    Meanwhile, a good, young, conservative businessman, with 20 + yrs experience in the ethanol business is rolling the bones with the family fortune (yeah, there’s a loan guarantee, but that will only kick in after he and his family are bankrupted,) after studying the cellulosic technology for several years.

    But, what I was referring to with the “lot of talk” is that the points I made were never answered. They were: Nat Gas is a Depleting Fossil Fuel, and, we imported a higher percentage of our nat gas last year than the year before.

    [link]      
  64. By carbonbridge on October 3, 2011 at 3:57 pm

    Wendell Mercantile said:

    The primary benefit of ethanol is to increase demand in the commodity market for No. 2 yellow field corn. And that of course benefits the Corn Belt, Big Ag, and the constituents of the 42 senators from what are considered the 21 farm states. The Corn Belt


     

    10/4 Wendell:  Once again I agree with you.

    As a scientist/college prof educator – I see, drive and readily interpret C2 ethanol and other higher alcohols including C4 (n) butanol as wonderfully cleaner substitutes for petroleum-derived gasoline/jetfuel/diesel which creates smoggy oil spills in the sky.  And I’m also aware of the possibilities of rapid and public decentralization of new profitable equity ownership which such processes can fiscally provide to shareholders…

    I’m also painfully aware that both World War I and II were both instigated by the Germans (then the Japanese) who did not have enough crude oil to fuel their own industrial revolutions.  I view and breathe the unburned, phase-separating oily emissions of fossil coal and crude oil knowing full-well that airborne emissions of 7 billion people exacerbates the environmental consequences of global climate change – something which beverage ethanol helps to mitigate.  And IF $35 E-85 FFV chips were standard equipment on domestic and imported cars – we’d globally be breathing much cleaner air in our own smoggy big cities while diminishing the volume of imported crude oil which our country and others go to war over.

    But alas – you are correct.  It is simply monopolist marketing and big money dominance setting the rules irregardless of food vs: fuel consequences.  I’ve said here before that I’d be glad to pay a premium price for premium, organic, non-GMO vegetable and meat products.  I’m not in any way against agrarian farmers, their way of life in working the land growing plants and raising animals.  I simply think these farmers should be growing more beneficial and premium quality food products instead of an annual harvest of fertilized corn kernels, switchgrass, palm, sorghum or green algae pond scum which ONLY provide a carbon atom and hydrogen ions to alternative, cleaner, BIODEGRADABLE, alternative fuels which are produced so inefficiently.  Remarkable changes, yet ever so slow in coming – are coming anyway.

    Financial monopolists will be surprised and will readiy board the ‘me too’ train.  A former [RIP] Russian Gazprom official once told me – “that the first green is the money.”  How right he was…

    -Mark

     

    [link]      
  65. By Wendell Mercantile on October 3, 2011 at 4:04 pm

    …the points I made were never answered. They were: Nat Gas is a Depleting Fossil Fuel…

    Rufus~

    I answered that — apparently you missed it. We have more methane (the primary component of NG) than we can ever know what to do with.

    In fact, the worry is not running out of methane, but the environmental consequence of using it That’s one of the objections to using the methane locked in the froze clathrates under the oceans — some climate scientists feel that unlocking that methane and using it would accelerate anthropogenic global warming, and that could be a concern.

    But to say we will deplete our supply of fossil-sourced methane is incorrect.

    [link]      
  66. By Rufus on October 3, 2011 at 5:47 pm

    Sorry, Wendell, you’re wrong. By definition, if you use even 1/kazillionth of a finite resource you have depleted that resource.

    And, the fact is, we’re importing a larger percentage of our natural gas than we were a year ago.

    [link]      
  67. By Kit P on October 3, 2011 at 6:15 pm

    Sorry, Wendell, you’re wrong. By definition,

    Bad news Rufus, you are a depleted resource. You will die before we run out of anything. Me too!

    OMG we are all going to die! That’s right. If it make you feel any better we can make electricity until the sun burns out.

    The whole depleting this or that resources for transportation fuel is just a little silly. There may come a day when OMG our good for nothing kids will have to suffer the indignities of car pooling or living within the range of a BEV. TOTALLY

    Of course there is a billion or so without electricity or clean drinking water who may not even know how awful the world is because they had not watermelon to tell them.

    [link]      
  68. By Wendell Mercantile on October 3, 2011 at 6:19 pm

    By definition, if you use even 1/kazillionth of a finite resource you have depleted that resource.

    Except methane is not finite. It is generated every day in swaps, from the downed folliage and wood in forests, by 1.3 billion head of cattle, and at hundreds of thousands of landfills across just the U.S.– many of them right near you in Tunica County.

    [link]      
  69. By carbonbridge on October 3, 2011 at 6:40 pm

    CarbonBridge read this and decided to share…

    Biofuels losing government loan option   October 2, 2011

    By PHILIP BRASHER, | Gannett Washington Bureau

    Developers of biofuels already have been struggling to attract private investment. Now they’ll have even fewer financing options with the sunsetting of the loan guarantee program that financed failed solar-panel maker Solyndra.

    Poet LLC of Sioux Falls received final approval last month for a $105 million guaranteed loan from the same Energy Department program to build a plant at Emmetsburg designed to distill ethanol from cobs and other cornfield residue. But the program funded with money from the 2009 economic stimulus package ended Friday, and the prospects for reviving something like the program have been clouded by the scandal surrounding Solyndra.

    The California company is the target of several federal investigations looking into how the financing was acquired.

    “We’re concerned that legislators will try to paint the entire program as a failure, rather than this one loan,” said Paul Winter, a spokesman for the Biotechnology Industry Organization.

    The Obama administration is counting on next-generation biofuels to reduce the use of fossil fuels and create thousands of jobs in rural areas.

    The Agriculture Department still operates a similar guarantee program that was created by the 2008 farm bill, but that program will end next year unless Congress comes up with money to extend it. One of a handful of biofuel projects the USDA has guaranteed financing for has shut down already.

    Loan guarantees are vital to biofuel companies as they struggle to find investors for technologies that haven’t yet been proven, experts say.

    “Until the first wave of these plants are able to get steel in the ground and start producing fuel, they won’t be able to test out which of these technologies is the most marketable and effective and establish a real position in the market,” said Salo Zelermyer, an energy policy specialist with the Bracewell and Giuliani law firm.

    The next-generation biofuels would be made from feedstocks such as crop residue, trees, and perennial grasses that won’t compete with food uses as corn now does. But the technology needed to make fuel from the fibrous biomass, known as cellulose, is still being perfected and the refineries needed to do the processing cost far more than conventional corn ethanol distilleries.

    The Poet project at Emmetsburg will cost $250 million to produce just 25 million gallons of ethanol a year, one-quarter as much as a typical new corn ethanol plant could make at a fraction of the capital cost. The plant is expected to create 40 jobs not counting construction.

    A 2007 law mandated that refiners use advanced biofuels starting in 2010, but production so far has fallen far short of the annual targets.

    The law called for refiners to use 500 million gallons of cellulose-based fuel in 2012, but the government estimates that as little as 3.5 million gallons will actually be produced. By 2022, the mandate grows to 16 billion gallons.

    Federal loan guarantees were seen as a critical piece for meeting the mandates. But of the 32 alternative energy projects that had received at least conditional approval by last week, just two were for biofuel plants, including Poet’s. Solyndra was one of the largest loans at $535 million.

    Many biofuel developers complained that they couldn’t qualify for the loans because the Energy Department insisted developers have contracts that guarantee prices for their feedstocks or a market for the fuel the facilities produce.

    “Biofuels don’t work that way,” said Wes Bolsen, an executive with Coskata Inc., a cellulosic ethanol developer based in Illinois. So Coskata and some other companies opted for the USDA program even though it required them to find an outside bank willing to provide the loan and lacked a subsidy that lowered the cost of the financing. The Energy Department’s guarantee comes with a direct government loan from the U.S. Treasury.

    Coskata got a $250 million guarantee from the USDA in January for a project in Alabama that is to turn woody biomass into fuel. The USDA didn’t require companies to have purchase contracts for the fuel, relying instead on the fact that the government has required use of the biofuels.

    The mandate “is a huge underpinning for our whole industry,” said Bolsen.

    The USDA program hasn’t been without its own problems. Range Fuels, which was awarded a loan guarantee from the department in 2010, shut down its Georgia facility earlier this year. The plant was supposed to make fuel from wood.

    The department said in a statement that all of the biofuel projects it has guaranteed, including Range, are current on their loans but that “we continue to work with the lender” on the Range fuels loan. The department is expected to announce additional guarantees by the end of the year.

    Critics say the problems some of the projects are having shows why the government should stop underwriting energy projects, including nuclear power, and leave it to private investors.

    If investors won’t put money into the projects, “it tells they’ve done due diligence and they don’t see profit at the end of that economic rainbow even with government mandates,” said Jerry Taylor, who follows energy policy for the Cato Institute, a libertarian think tank.

    Not every biofuel project is relying on government financing. Chemical giant DuPont didn’t seek a government loan or guarantee for a $200 million cellulosic ethanol project planned at Nevada, Ia.

    “It’s obviously a business decision and what works best for the business and the project,” said spokeswoman Jennifer Hutchins.

    DuPont’s plan is to license its technology to other companies if the Nevada project proves successful.

    Poet also received an $80 million grant from the Energy Department in addition to the loan guarantee. The USDA has provided subsidies to offset the cost of buying the corn cobs and other crop residue from local farmers.

    A Poet spokesman did not respond to questions about the terms of the Energy Department financing.

    http://altoonaherald.desmoines…..oan-option

    [link]      
  70. By Walt on October 3, 2011 at 7:05 pm

    CarbonBridge said:

    The Obama administration is counting on next-generation biofuels to reduce the use of fossil fuels and create thousands of jobs in rural areas.

    The Agriculture Department still operates a similar guarantee program that was created by the 2008 farm bill, but that program will end next year unless Congress comes up with money to extend it. One of a handful of biofuel projects the USDA has guaranteed financing for has shut down already.

    Loan guarantees are vital to biofuel companies as they struggle to find investors for technologies that haven’t yet been proven, experts say.

    “Until the first wave of these plants are able to get steel in the ground and start producing fuel, they won’t be able to test out which of these technologies is the most marketable and effective and establish a real position in the market,” said Salo Zelermyer, an energy policy specialist with the Bracewell and Giuliani law firm.

    http://altoonaherald.desmoines…..oan-option


     

    I really don’t think they have to guarantee the loans…if they don’t know if the technology will or will not work.  It would be better to set the incentive on a per gallon or per barrel production basis, and give those who produce $2.00 per gallon credit or some fixed amount.

     

    This whole lobby perspective that the taxpayer has to guarantee to take all the risks until the government finds out “which of these technologies is the most marketable and effective” is just silly.  These are suppose to be commercial plants.   

    [link]      
  71. By Walt on October 3, 2011 at 7:14 pm

    CarbonBridge said:

    CarbonBridge read this and decided to share…

    Many biofuel developers complained that they couldn’t qualify for the loans because the Energy Department insisted developers have contracts that guarantee prices for their feedstocks or a market for the fuel the facilities produce.

    “Biofuels don’t work that way,” said Wes Bolsen, an executive with Coskata Inc., a cellulosic ethanol developer based in Illinois. So Coskata and some other companies opted for the USDA program even though it required them to find an outside bank willing to provide the loan and lacked a subsidy that lowered the cost of the financing. The Energy Department’s guarantee comes with a direct government loan from the U.S. Treasury.

    Coskata got a $250 million guarantee from the USDA in January for a project in Alabama that is to turn woody biomass into fuel. The USDA didn’t require companies to have purchase contracts for the fuel, relying instead on the fact that the government has required use of the biofuels.

    The mandate “is a huge underpinning for our whole industry,” said Bolsen.

    http://altoonaherald.desmoines…..oan-option


     

    You know I do NOT feel sorry for Coskata because they cannot qualify like the rest of us have to for loans.  The article says, “Many biofuel developers complained that they couldn’t qualify for the
    loans because the Energy Department insisted developers have contracts
    that guarantee prices for their feedstocks or a market for the fuel the
    facilities produce.”

     

    Well, right now I’m trying to get a loan to pay for all my equipment and the bank requires I have a guarantee Off-Taker of the production, as well as a signed agreement with the gas supplier.  Standard project financing.  These are guaranteed prices from guaranteed buyers and suppliers.

     

    I’m sorry to say this IS THE WAY the market works for some of us who do not have access to $250 million dollar guarantees.

    [link]      
  72. By Wendell Mercantile on October 3, 2011 at 10:33 pm

    Thanks Mark. The two most important sentences in that story:

    1. The mandate “is a huge underpinning for our whole industry,” said Bolsen.

    2. If investors won’t put money into the projects, “it tells they’ve done due diligence and they don’t see profit at the end of that economic rainbow even with government mandates,” said Jerry Taylor…

    Nothing would happen without a mandate, and even with the mandate, it probably won’t be profitable.

    [link]      
  73. By Wendell Mercantile on October 3, 2011 at 11:45 pm

    The Poet project at Emmetsburg will cost $250 million to produce just 25 million gallons of ethanol a year…

    RR~

    That’s also a critical sentence: Only $10 per gallon. ;-)

    But that’s nothing compared to the aviation biofuels made from camelina the Air Force and Navy have been burning. That’s $30 per gallon.

    [link]      
  74. By rrapier on October 3, 2011 at 11:21 pm

    Wendell Mercantile said:

    Thanks Mark. The two most important sentences in that story:


     

    How about this bit:

    The Poet project at Emmetsburg will cost $250 million to produce just 25
    million gallons of ethanol a year, one-quarter as much as a typical new
    corn ethanol plant could make at a fraction of the capital cost.

    That’s why I think the corn guys will eventually win the argument to allow them more than 15 billion gallons of corn ethanol in the mandate. The argument will go something like this: “You want us to spend more money to make fewer gallons? Do you want to drive up fuel costs for consumers?”

    RR

    [link]      
  75. By carbonbridge on October 4, 2011 at 1:41 am

    Wendell Mercantile said:

    That’s also a critical sentence: Only $10 per gallon. ;-)   But that’s nothing compared to the aviation biofuels made from camelina the Air Force and Navy have been burning. That’s $30 per gallon.


     

    I too thought that this gov’t loan article was interesting – glad that it is being read and interpreted by others here…

    In my dreams I see carbon atom building blocks coming cheaply from all sorts of society wastes, plus abundant methane, coal, CO2 and millions of acres of beetle-killed pine trees.  The magic (and missing) simple Oxygen atom “to fan the flames” which is easily derived from H2O becomes an incredibly simple and global near-term quick fix.  It works so eloquently!!! 

    I envision legal money printing presses outputting global currency in different flavors…  Yet the host of biofuel technologies being FUNDED today with grants and loans are sooooo faaaarrrr off-base – yet they receive taxpayer millions.   

    All while other simpler, more efficient and appropriate technologies being developed and patented by startups can’t get the doors open with investors after one of them bit the dust while hyping citizens way too much.  And then post Range – a new Solyndra scandal is hurting scores of others… 

    As Walt indicates – the normal banker-loan process is all that is left for those not qualifying for millions of free taxpayer dollars.

    Maybe it is because of the disruptive nature of some overdue new mechanical trends — which are capable of rapid global decentralization among new non-traditional equity owners? 

    I tell a joke about the ghost of John D. Rockefeller turning over in his grave because he cannot contact the ghost of his financier J.P. Morgan who is buried in a different cemetery.

    Good Night ether bloggers.

    -Mark

    [link]      
  76. By Rufus on October 4, 2011 at 2:47 am

    Well, yes, the capital costs (especially, on the first couple) will be high. However, Corn Cobs ARE Cheaper than Corn, and they do produce their own energy, plus most of the energy for the adjacent 55 Million gpy Corn Ethanol Plant.

    “Food for fuel” just trips off the tongue too lightly. I don’t think there’s a chance in Hades that the corn guys will ever get more than 15 Billion gpy approved.

    [link]      
  77. By Walt on October 4, 2011 at 8:59 am

    CarbonBridge said:

    As Walt indicates – the normal banker-loan process is all that is left for those not qualifying for millions of free taxpayer dollars.

    Maybe it is because of the disruptive nature of some overdue new mechanical trends — which are capable of rapid global decentralization among new non-traditional equity owners? 


     

     
    Mark, the difference is all political.  The VC community have a model that does not require companies to make money to go public and exit their investments.  That is why you see the IPOs get funded, they pour money into R&D and lobby efforts to get grants.  The grants give them credibility and also they can post that grant money as revenues.  They have figured out how to use taxpayer money to make revenues while doing research.  It is a no-risk way to demonstrate to the markets how amazing the technology is because it makes revenues (investors outside the VC world via their brokers assume the companies are selling production of the product) and then they attach a few large customer names like Dow, Chevron, etc.  Of course, these companies only give them letters of commitment to purchase production at certain commercial prices, but the VC does not need to produce anything until they can get another $100-250 million for the commercial operations.  If they do produce something it is in small batches, but at a cost that is extremely expensive.  This is fine for R&D companies who cannot make money during development, but if you read their press releases it sounds like they make $1.00/gallon from just air without any CAPEX or OPEX (never disclosed).

     

    In all my old powerpoints I used to disclose all my CAPEX and OPEX and production volumes.  I would send it to every VC and major company that contacted me as I felt it was important.  These figures were all based upon a TWO third-party studies I had completed by the top names in methanol industry and I would talk to these people thinking it made a huge difference.  The point is that we can be economically viable at small scales compared to others that are more economic at the largest jumbo scales…all things being equal.  We had technology risk, and they had no technology risk, but since we were all discussing ways to support bio-fuel or fuels technologies I thought the technology merit was the key.  Over the years it was clear methanol is the deal killer.  They would check around and anything that produces methanol…was dead on arrival.  Range Fuels produced methanol…so let’s kill it and let the government pick up the tab.  Gevo first produced methanol according to their website and in comes Khosla who told them (according to the website) stop with methanol, go make butanol.

     

    Their is a movement now within a small group promoting Open Fuel Standards Act toward methanol.  Keep an eye on them to get support and money from the government.  Many former government officials seek some sort of lobby role either working for the government, a foreign government or industry.  When you see them all joining in support of this legislation and creating new security groups things will change toward methanol, but it will take time and they will already have selected the largest companies to work with in America.  Watch Methanex score billions and billions for new plants in America…they are desperately trying to move plants out of Chile now due to gas supply problems.

     

    Between government money for the silicon valley IPO’s and this new security group who is promoting methanol and ethanol to save America, I think whether it is corn or corn waste they know what they are doing…as their lobbies write the legislation with staffers.  It is a no brainer.  The congressman cannot go against the money promises unless they are looking for early retirement (which is not bad money for pensions and perks)!  It is not the technology stupid, and we should just keep plugging away as small business does day in and day out.

    [link]      
  78. By Walt on October 4, 2011 at 10:40 am

    We have presented the past two years at this premier conference.  I had to decline this year because of the costs were too much for me this year to make the trip, hotels and they changed their format where speakers now have to pay a reduced fee for the conference to speak on their technologies.  However, I have been selected to speak at the World Petroleum Congress in December, so I’m working to get that funded.

     

    Nevertheless, for those who are interested in GTL, this is a great conference to attend…

    ———————–

    With
    only 3 weeks until SMis 14th Annual Gas to Liquids event, make sure
    you utilise the opportunity for international networking; hear 17
    world class presentation as well as join debates and share experiences with
    leading organisations who can help guide the development of GTL to your
    business.  

    From
    the mix of case studies provided by those working closely with the GTL plants
    and presentations on the future challenges in the market you will gain an
    insight to the whole supply chain as the market leaders discuss their
    experiences. This year’s conference will cover the latest industry drivers and
    challenges, including;

    • Updates on leading GTL plants – Escravos, Pearl, Petrobras, Bintulu,
      Chinchilla and Yerostigaz
    • Fuel optimization
    • Regulatory and environmental challenges
    • Stranded gas in Australia
    • Oil and gas project finance
    • Developing premium markets and applications for GTL
    • Future drivers and challenges of GTL
    • Review of GTL technology
    • Modular GTL as an associated gas solution
    • Microchannel
    • Global energy market updates
    • Future of gas in the energy market
    • The drivers of GTL vs LNG
    • GTL as a fuel 

    >>
    Visit http://www.gas-to-liquids.co.uk for the conference
    programme                    

    [link]      
  79. By Walt on October 4, 2011 at 12:00 pm

    I saw this today.

     

    Would anyone like to make the comparison between those who get money for biofuels, but cannot demonstrate the economical viability of the technology? 

     

    ———————

    NFL Hall of Fame quarterback Fran Tarkington makes a logical comparison
    between teacher’s unions and a fictional NFL that was run by the same
    rules that teacher’s unions have enforced upon our schools. The comparison isn’t pretty:

    Imagine
    the National
    Football League in an alternate reality. Each player’s salary is based
    on how long he’s been in the league. It’s about tenure, not talent. The
    same
    scale is used for every player, no matter whether he’s an All-Pro
    quarterback or the last man on the roster. For every year a player’s
    been in this
    NFL, he gets a bump in pay. The only difference between Tom Brady and
    the worst player in the league is a few years of step increases. And if a
    player
    makes it through his third season, he can never be cut from the roster
    until he chooses to retire, except in the most extreme cases of
    misconduct.

    Let’s face the truth about this alternate reality:
    The on-field product would steadily decline. Why bother playing harder
    or better and risk
    getting hurt?

    No matter how much money was poured into the league, it wouldn’t get better. In fact, in many ways the disincentive to play
    harder or to try to stand out would be even stronger with more money.

    Of
    course, a few wild-eyed reformers might suggest the whole system
    was broken and needed revamping to reward better results, but the
    players union would refuse to budge and then demonize the reform
    advocates:
    “They hate football. They hate the players. They hate the fans.” The
    only thing that might get done would be building bigger, more expensive
    stadiums and installing more state-of-the-art technology. But that just
    wouldn’t help.

    [link]      
  80. By Walt on October 5, 2011 at 4:53 pm

    I just saw this in an article and wonder what CEO would take government guarantees to make this type of building.  Does anyone see the difference in how things are done in Silicon Valley vs. the rest of us out here working in modest conditions just to keep our business alive?

     

    ————————–

    The glass-and-metal building that
    Solyndra LLC began erecting alongside Interstate 880 in Fremont,
    California, in September 2009 was something the Silicon Valley
    area hadn’t seen in years: a new factory.

    It wasn’t just any factory. When it was completed at an
    estimated cost of $733 million, including proceeds from a $535
    million U.S. loan guarantee, it covered 300,000 square feet, the
    equivalent of five football fields. It had robots that whistled
    Disney tunes, spa-like showers with liquid-crystal displays of
    the water temperature, and glass-walled conference rooms.

    “The new building is like the Taj Mahal,” John Pierce,
    54, a San Jose resident who worked as a facilities manager at
    Solyndra, said in an interview.

    http://www.bloomberg.com/news/…..owers.html

    —————————

     

    I recognize the importance of having quality operations and very nice facilities, but if this is true…who is this CEO that lives like he is Donald Trump?

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  81. By savro on October 5, 2011 at 7:53 pm

    Russ Finley said:

    I have to disagree that the Bloomberg article is worth a read. It’s a classic example of lay press sensationalism, complete with the standard practice of conflating nuclear weapons with electric power generation.

    $3.2 billion a year …hmmm.

    (3.14 x 12 x 12)/2 = 226 square miles. That would be a square 15 miles to a side. That many acres in corn at today’s prices would produce about $0.25 billion. You could drive around that area at 60 mph in one hour. And I thought WHO declared Japanese food was safe back in March. 

    Tourists are nowhere to be seen …. How many tourists are there to be seen on any of the tsunami ravaged beaches? Have they found all of the 20,000 bodies yet?

    The tsunami and quake were the real disasters. The damage done to the nuclear plant (and the rest of Japan) was the result of the natural disaster.

    In my opinion, much of what the media reports on lacks context. Often times this is due to a lack of objectivity on the part of the author, and/or the author trying to get as much play with his article by resorting to sensationalism. So I always look at what I read as incomplete (at least in some sense) and try to add the context and meaning on my own.

    Considering the above, I feel that the Bloomberg piece provided an interesting look into the change to the Fukushima region from six months ago. Whether this should be an indictment on the nuclear industry is up to the reader (and the antis are jumping all over it), but I agree with you that the overall context and magnitude of the tsunami is missing from the coverage of Fukushima.

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