|
Thursday, September 9, 2010
|
|
BREAKING NEWS
Do Alternative Fuels Have A Fossil-Based Future?
October 20, 2009
This summer Los Angeles-based Rentech – which stands for Renewable
Energy Technologies – made a huge news splash when it announced a
program to convert municipal green waste-literally twigs and
branches-into both electricity and bio-diesel that will be used by
ground vehicles at Los Angeles International Airport.
The initial deal to purchase up to 1.5 millions gallons per year of
synthetic diesel involves seven airlines-Alaska, American, Continental,
Delta, Southwest, United, US Airways and UPS.
But both sides note the agreement could eventually be expanded beyond
diesel to also include synthetic jet fuel as Rentech looks to position
itself as a major provider of new fuels to the commercial aviation
industry.
The biofuels will be produced at Rentech’s new Rialto Renewable Energy
Center in Southern California and uses what the company calls the
Rentech Process that can use syngas produced from biomass, agricultural
waste, forestry waste, algae and energy crops such as Jatropha, to
produce pure synthetic low sulfur fuel while also co-producing clean
power.
With the Rialto Project, Rentech CEO and President D. Hunt Ramsbottom
noted “We could do 1,000 barrels a day, but we instead elected to do
600 barrels a day plus 35 megawatts because we get a nice premium for
green power.”
Ramsbottom stressed this is more than just a PR stunt for the
carriers-it also makes good financial sense. “At Rialto we didn’t give
them any price concessions and when we start selling jet fuel we will
be able to sell that fuel to the carriers basically at spot,” he
stressed. “That’s why I continue to beat the drum that we can be
economically competitive.”
But Ramsbottom is also realistic about how quickly biomass and energy
crops will be able to scale to meet both short- and long-term demand.
“Everybody wants green fuels but the question is finding a scalable
solution,” he said. “Because with the airlines, for instance, selling
it to them by the thimbleful is not going to have an impact.”
In an effort to come up with truly scalable solutions, Rentech has
begun projects in other parts of the country and using feedstocks that
may not endear them to the environmental community, but that they
argue can be clean, scalable and sourced domestically.
In Commerce City, Colorado, Rentech has built a Product Demonstration
Unit (PDU) that is the only operating synthetic jet and diesel fuels
facility in the US, producing thousands of gallons of ultra-clean
synthetic fuels including military jet fuel, commercial Jet A and Jet
A-1 and ultra low sulfur diesel.
Rentech is also working with Mingo County, West Virginia to use
underutilized local resources such as waste coal, waste wood and
stranded natural gas to make synthetic diesel and other fuels.
But Rentech’s most ambitious effort to find a non-biomass fuel solution
will soon be rising on the banks of the Mississippi River near Natchez,
MS.
There Rentech is drawing up plans to build a synthetic fuels, chemicals
and power facility that could take approximately 13,500 daily tons of
coal and petroleum coke to be gasified to produce up to 30,000 barrels
of ultra-clean synthetic fuels and 560 megawatts of clean power per
day.
“To get to the really big scales I still believe you need to use
feedstocks such as natural gas – if it is economical – or you can use
petroleum coke or coal,” Ramsbottom explained. “It is a fossil
feedstock, but our process captures about 80%-84% of the CO2 – In fact
we’ve already sold that CO2 in advance to Danbury Resources who will
pump it below the surface as part of their oil recovery efforts.”
Ramsbottom is well aware that the use of coke or natural gas will not
make some environmentalists happy. But he argued, “This is a process
that is very clean and our point-and many people at the major airlines
agree with us – is that as long as this is domestic technology and we
are cleaner than the imported oil that we are replacing, we need to go
forward as part of a overall strategy focused on securing a domestic
supply.”
Right now, airlines are publicly taking a wait and see attitude toward
alternative fuels that leverage fossil feedstocks. John Heimlich, vice
president and chief economist for the Air Transport Association (ATA),
would not comment specifically on Rentech or its efforts to use coal,
coke and natural gas as feedstocks for jet fuel.
But Heimlich did stress that US airlines are willing to be flexible
when it come to alternative fuels as long as they meet four criteria:
1. The fuels are safe and meet high quality specifications. 2. There is
a clear environmental benefit. 3. There is a reliable supply. 4. The
fuels are economically feasible.
“We’re agnostic in respect to feedstock, but we are not agnostic when
it comes to performance,” Heimlich said in an interview. “So were not
going to rule anything out and if they do provide that needed level of
energy security, then we would want to do everything we can do to help
them meet our environmental criteria as well.”
Heimlich added most people in the aviation already realize it’s
probably going to take a combination of feedstocks to fill their new
fuel needs going forward, noting. “We don’t want to let the perfect be
the enemy of the good. But we would need confidence that there is
either sufficient carbon capture or blending with biomass in order to
meet the environmental criteria.”
But privately one fuel executive for a US airline, suggested fossil
feedstocks such as natural gas, coke or coal are currently at the
bottom of the totem pole when it comes to potential alternative fuel
solutions, adding, “One of the main reasons we’re looking at
alternative fuels is for the (carbon) credits.”
Ramsbottom stressed that Rentech’s technology is also feedstock
neutral, noting that a some point it may be for the Natchez facility
to produce 30,000 barrels of fuel daily using a combination of fossil
and bio feedstocks.
“We can even do 30,000 barrels a day using biomass,” he added. “But I
would need some help with both growing the crops and transporting it to
our facility in an economical way.”
Because it is literally on the banks of the Mississippi, one solution
that’s being considered would be to transport biomass up and down the
river via boat or barge, though right now that cost is prohibitively
expensive. “If the government wants to encourage a massive project like
that, they’re really going to have to write some checks,” Ramsbottom
said. “It may take something like a Manhattan Project type effort to
really come up with a bio energy crop to get things moving.”
Until those massing public-private efforts take root, Rentech plans on
continuing to move forward developing is RenJet fuel specifically for
the aviation industry. “The airlines have already seen what $140 crude
looks like and they’ve seen airplanes get grounded because of it,”
Ramsbottom said. “Morgan Stanley just came out with an estimate for
2012 of $105 crude and that’s before you add another $15 on for
processed jet fuel and get to $120. Then you have to consider there’s
going to be some cap and trade effort that has the potential to cost
the overall airline industry another $5 billion a year.”
The fact that airlines will need to come up with answers to these
issues sooner rather than later, will hopefully leave Rentech well
positioned to be one of the first steady suppliers of alternative jet
fuel.
“What we can offer airlines is a floor and ceiling on price,”
Ramsbottom stressed. “With us they’ll be able to buy maybe 10 or maybe
even 15 years out. with the stability in pricing that they’ve never
been able to have before. That will make so much easier for airlines
and other industries to plan their business because they know what the
floor and ceiling is on fuel price.”
And even as it builds out plants in the US, Rentech is also looking to
extend its technological reach outside the US. “We’ve had licensing
discussions going on for projects in the EU to Russia, Australia and
all corners of the globe,” Ramsbottom said. “And that’s because one of
the beauties of our technology is that we can play with so many
different feedstocks.”
|
|
|
|
Forgot Your Password?