|May 10, 2012|
Renewable Diesel Roundup
|In Louisiana, Emerald Biofuels announced that it will build an 85 million gallon renewable-diesel refineries at a Dow Chemical (DOW)site in Plaquemine, Louisiana. The company will use Honeywell's (HON) UOP/Eni EcoFining process technology for the production of Honeywell Green Diesel Fuel.|
Emerald and Dow are finalizing a site lease and a site services agreement for Dow to provide a number of services and utilities to support Emerald's operation. The site has ship, barge, rail and truck access, and Emerald will be capable of both receiving and shipping by all four modes of transportation. The UOP Ecofining process, developed in conjunction with Italian refiner Eni SpA, uses catalytic hydroprocessing technology to convert natural oils and animal fats to Honeywell Green Diesel Fuel.
The product is chemically indistinguishable from traditional diesel fuel, features a high cetane value, excellent cold-flow performance and reduced emissions over both biodiesel and petroleum-based diesel. Green diesel can be run without blending and offers value as an upgrading stock for petroleum refiners seeking to enhance their existing diesel fuels while also expanding their diesel pool.
Emerald has retained Fieldstone Private Capital Group, Inc. to assist in completing the financing of the Plaquemine refinery and expects to have the financing closed later this year. Final engineering and the construction cycle are to begin immediately upon financial closing.
What is it with Louisiana? It seems like at-scale renewable diesel projects have never found a a better home. There's the Dynamic Fuels project -- 75 million gallons in Geismar; the 137 million gallon Diamond Green Diesel project under construction in Norco, as a JV between Valero and Darling, and now this one, clocking in at 85 million gallons.
If and when all three are completed, that's 297 million gallons of capacity in the one state.
Ah, well its that mother of inland transport, the lower Mississippi, that really is the story here. All three plants find themselves in the heavy shipping corridor between Baton Rouge and New Orleans.
One side note. Emerald Biofuels, Diamond Green Diesel, Sapphire Energy. I think we're done with the precious stones now, though ruby's still out there. Cubic Zirconia is available.
Renewable diesel -- 3 reasons it really, really matters.
1)It's a drop-in biofuel, requiring no infrastructure change -- and there are generally no limits on its distribution except those imposed by cost and geography, and the size of the global diesel pool itself, which could absorb capacity from hundreds of advanced biofuels projects.
2)It's renewable, here now, made at home, and at-scale today. No need to wait for the promise of algal biofuels, or other hot technologies still in the process of commercializing at scale. More than 600 million gallons of capacity already exists -- Dynamic Fuels plant in Louisiana, and three from Neste Oil in Rotterdam, Singapore and Finland.
3)In the case of Dynamic Fuels, Diamond Green and Emerald Biofuels, all three projects can utilize animal waste residues -- a classic case of turning low-value, noxious feedstocks into high-value molecules.
Around the Horn: Let's look at the latest from around the world in renewable diesel.
In Texas, Darling International (DAR) announced that Diamond Green Diesel LLC, its previously announced joint venture project with Valero Energy Corporation, has secured financing for the planned construction of its renewable diesel facility in Norco, Louisiana. Financing will be provided internally by a subsidiary of Valero Energy Corporation.
According to the project's sponsors, the facility will be capable of producing over 9,300 barrels per day or 137 million gallons per year of renewable diesel on a site adjacent to Valero's St. Charles refinery near Norco, Louisiana. The facility will convert grease, primarily animal fats and used cooking oil supplied by Darling, and potentially other feedstocks that become economically and commercially viable, into renewable diesel. Completion of the facility is anticipated just as 2013 gets underway.
KiOR (KIOR) began construction of its first commercial scale facility, located in Columbus, Mississippi, in the first quarter of 2011. The approximately $190 million facility is expected to create several hundred direct, indirect, and induced jobs during operation, and over 500 jobs on site during peak construction. Production is scheduled to commence in the second half of 2012. KiOR's process produces refinery intermediates for the production of renewable diesel.
In New Mexico, Joule Unlimited announced last November it is ready to start construction on a biofuels demonstration plant in New Mexico. Joule Unlimited Inc. plans to convert sunlight and carbon dioxide waste into biofuel at the planned facility in Hobbs, which is expected to begin operations in 2012. New Mexico state officials say Joule has the potential to expand its operations to create 500 new jobs in Hobbs by producing up to 75 million gallons of renewable diesel and 125 million gallons of ethanol per year.
Last September in the Netherlands, Neste Oil (NEF.F) inaugurated Europe's largest renewable diesel facility in Rotterdam with an annual production capacity of 800,000 metric tons that was built at a cost of $913 million. The facility uses the company's NExBTL technology that allows it to use a wide variety of oils, greases and fats as feedstock.
Key distribution deals
In Finland, Neste Oil (NEF.F) reports that they sold their first batch of NExBTL renewable diesel to the US market.
"We are very pleased to see that legislation on renewable fuels and our ability to meet the import regulations for these types of fuels are progressing in various markets," said Matti Lehmus, Neste Oil's Executive Vice President. The release did not specify who they sold to, or any financial details such as volume or the amount of sales. The fuel was produced at the company's Porvoo refinery in Finland from waste fats.
In Virginia, Dynamic Fuels and Mansfield Oil Company have signed an agreement to supply renewable diesel to Norfolk Southern Corporation, one of the nation's largest transporters of coal and industrial products. Norfolk Southern has primarily been using a 100% pure Dynamic Fuels renewable diesel at its Meridian, Mississippi rail yard since early January.
In Washington, the DOE is making up to $15 million available to demonstrate biomass-based oil supplements that can be blended with petroleum. These "bio-oil" precursors for renewable transportation fuels could be integrated into the oil refining processes that make conventional gasoline, diesel and jet fuels without requiring modifications to existing fuel distribution networks or engines.
In February, Royal Dutch Shell announced that it has built a next generation biofuels pilot plant at Shell's Westhollow Technology Center in Houston, USA, to produce drop-in biofuels rather than ethanol. It uses a thermo-catalytic process technology licensed from its commercial partner Virent, which is similar to the process being used at the Virent pilot plant in Madison, Wisconsin, USA. The Westhollow plant will explore the use of a range of feedstocks, starting with sugars and with the completion of an expansion currently under way, non-food cellulosic alternatives, leading to the production of a range of products, including gasoline, diesel and jet fuel.
Among fuels, 50 percent of executives said they expect cellulosic ethanol to reach 1 billion gallons by 2020, down from 67 percent in the last survey. Other fuels that were expected to break the billion gallon barrier by 2020: renewable diesel (down sharply from 67 to 51 percent), and aviation biofuels at 48 percent.. Algal fuel was flat at 28 percent, compared to 29 percent in the previous poll.Vehicle and ship testing
In California, Volkswagen of America announced partnerships with Solazyme (SZYM) and Amyris (AMRS) to evaluate emissions reductions and demonstrate the performance of TDI Clean Diesel technology when powered by advanced biodiesel and renewable diesel fuel.
Under the respective agreements, Volkswagen will provide both companies with two products each---the new 2012 Passat TDI and 2012 Jetta TDI---in order to closely examine the effects that the fuels produced by Amyris and Solazyme will have on Volkswagen clean diesel technology and the environment.
The 12-month evaluation period will equip Volkswagen engineers with valuable data that will aid in the ongoing enhancement of TDI Clean Diesel technology and help the brand to develop more efficient, cleaner burning diesel powertrains for future products.
In California, Solayzme (SZYM) says the USS Ford, a U.S. Navy Frigate fleet ship, successfully journeyed from its home port in Everett, WA to San Diego, CA using Soladiesel HRD-76, Solazyme's 100% algal derived renewable marine diesel fuel. The voyage was fueled using 25,000 gallons of a 50/50 blend using Soladiesel and petroleum F-76 in the ship's LM 2500 diesel turbines, and marks the first demonstration of the alternative fuel blend in an operational fleet ship.
In California, Ceres (CERE) reports their sorghum hybrids were successfully processed into renewable diesel by Amyris (AMRS), under a U.S. DOE grant. The pilot-scale project evaluated both sugars and biomass from Ceres' sweet sorghum hybrids grown in Alabama, Florida, Hawaii, Louisiana and Tennessee.