Great Plains, Accelergy partner to produce renewable jet fuel from coal, biomass
By Biofuels Digest special correspondent Chet Geschickter
In Ohio, Great Plains Oil & Exploration announced a partnership with Accelergy to team up on the production of biojet fuel using a process that converts coal and biomass to drop-in aviation fuel using a gasification process. The next day, in a separate announcement, Accelergy revealed that it has begun producing fuel from coal and biomass for evaluation by the US Air Force, which has a stated goal of sourcing 50 percent of its JP-8 aviation fuel from cleaner and domestic sources. For its part, Great Plains is focusing on establishing and expanding camelina production. Two different business models, one common aim: large scale production of synthetic jet fuel. Three different considerations are important for evaluating the significance of these announcements: 1. Sustainable large scale production, 2. Environmental benefits and 3. Economics. Here, we’ll look at each in a little more detail (drumroll please).
Sustainable Large Scale Production
Accelergy gets two thumbs up here. The dual feedstock strategy provides a pragmatic path to large quantities of synthetic jet fuel from alternative sources. Coal is plentiful, camelina, meanwhile, is nascent. It’s likely to take several years before camelina acreage can scale to the point where it can supply a large-scale synthetic jet fuel refinery. Coal provides both a “bridge” conventional petroleum feedstock, and a reliable, albeit ugly, feedstock source. And, in the case of camelina, this could prove extremely important.
We are very early in camelina’s commercialization and agricultural adoption. Camelina has the potential to reach very large scale production, but it’s too early to give it thumbs up. A non-food oilseed, camelina holds promise as a rotation crop to replace summer fallow on northern wheat farms and potential as a winter rotation crop for soy and corn. In the U.S., corn, soy and wheat account for 201 million acres of total acreage, at 86 million, 64 million and 50 million acres respectively. Expanses of wheat in Saskatchewan, Manitoba and Alberta add to the total. In our recently published Camelina Market Opportunity report [http://biomassadvisors.com/blog/thinking/reports/] we estimate that, depending on the interplay of about one dozen complex factors, one billion gallons of camelina oil can be produced by 2025 in wheat country alone, with potential upside from corn and soy country. But whether camelina reaches its long-term potential as a billion gallon crop depends on a multitude of factors, including the pace of farmer adoption, their success in growing the crop, a strong market for it, and a number of agricultural details like approved herbicides – to name a few.
Environmental Benefits
Should a GHG emissions regime take hold (i.e. cap and trade or direct tax) camelina holds high value since it’s a crop that can slip onto existing cropland without bumping food production. However, these same environmental merits don’t necessarily apply to coal. According to a recent MIT-Rand report on the Near-Term Feasibility of Alternative Jet Fuels, life-cycle GHG emissions for jet fuels from coal to liquid (CTL) pathways without carbon sequestration are estimated at 2 to 2.4 times greater than conventional petroleum.
The same study, gives oilseed crops that don’t bump food production or cause land-use change like camelina two thumbs up. They are spared the brutal land-use charge applied to palm oil or even soy. After researching and writing our report on Camelina market outlook, I concur. Camelina holds great potential for dramatically reducing well-to-wake (or farm-to-fuel), GHG lifecycle emissions, especially since fertilizer requirements are relatively modest (making fertilizer emits significant greenhouse gas).
Economics
Ah, making money. The holy grail of biofuels. First off, the cost of building a processing facility that uses advanced technology like Agragen’s is quite significant. What a pity it would be to leave it idle, if or when, feedstock and variable production costs swing above petroleum parity. Coal is cheap and abundant. It provides a low-cost “baseline” feedstock that can protect the facility from swings in biomass costs. There is no commodity market for camelina right now – we could expect one to emerge when the crop gets into the mainstream. Right now, the primary market makers for camelina are companies like Great Plains and Sustainable Oil that guarantee a price per pound to farmers. We can consider this a form of vertical feedstock integration, if you will. This conveniently “locks-in” feedstock economics – for the time being. However, should camelina become a traded commodity like soy, canola or sunflower, fasten your seatbelt. Commodity markets are apt to take producers on a wild price ride.
Good thing Agragen has coal to fall back on. Two thumbs up for economics.
Before moving on, it’s worth noting that Agragen plans to locate production in North Dakota – smack dab in the middle of northern wheat country, considering the Canadian Plains as part of the mix. This should help on all three considerations when it comes to camelina, which can be grown en masse locally: money (low shipping costs), large-scale production (Wyoming for coal, northern plains for camelina or canola oil) and GHG (less messy shipping by truck or rail).
While it may be upsetting to biofuel purists who accept nothing other than pure biomass feedstocks, Agragen appears to be onto something with its combined coal and biomass approach.
There’s one catch though. Assuming a price and value is placed on GHG – then it will require careful monitoring of production and feedstock inputs to calculate GHG emissions and environmental credits. Enough perhaps, to give people aiming to make a living through carbon accounting two thumbs up and a smiley face, but regulators, and even end-users may wind up with a complex moving formula.
Chet Geschickter is co-author of “Camelina Aviation Biofuels Market Opportunity and Renewable Energy Strategy Report,” available from Biofuels Digest research affilaite Biomass Advisors.
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