“Crown support, First Nations, town and provincial support, all coming together. They’ve shown everyone how you get this done.” says Rentech CEO Hunt Ramsbottom, noting contrast between US, Canadian organization on biofuels commercialization. Can the US catch up?
In Canada, Ontario has selected Rentech’s Olympiad Project in the Township of White River for proposed supply of up to 1.1 million cubic metres/year of forest waste and unmerchantable wood fibre (1.3 million US tons) to produce renewable RenJet low-carbon jet fuel at the proposed 23 million gallon Olympiad Project. The Rentech project will also produce 43 million litres (13 million gallons) annually of renewable naphtha, a chemical feedstock.
In addition, Rentech has recently submitted an application for funding to the federal government’s NextGen Biofuels Fund, for up to 40 per cent to a maximum of C$200 million of eligible project development and construction costs, which would be repaid from a percentage of the project’s cash flows. The Government of Canada’s Sustainable Development Technology Canada (SDTC) has up to C$500 million in funds.
The Olympiad Project
The Olympiad Project, scheduled to be in service in 2015, will be designed as a state-of-the-art renewable energy facility that will employ the Company’s Rentech-ClearFuels biomass gasification system and the Rentech Process to produce the only type of alternative jet fuel certified for use in commercial aviation today. These leading-edge technologies will enable Rentech to turn primarily unmerchantable and underutilized timber into clean, renewable jet fuel, and create up to 400 jobs,
US technology at Canadian speed
In a Digest interview, Rentech CEO Hunt Ramsbottom said that the speed with which the program attracted integrated support from policymakers, should send a message to the US. “Look at this – you have Crown support, First Nations and provincial support, all coming together. We’ve worked far longer in the US to bring projects forward; the Canadians have provided vision, organization and results in far less time. They’ve shown everyone how you get this done.”
Rentech’s CEO added, “Having our project selected in the Provincial Wood Supply Competitive Process for a proposed large, sustainable feedstock supply from the Ontario government is a significant achievement and step forward for our renewable energy project. We will be working closely with SDTC, First Nations, and other partners to secure project financing. SDTC’s funding opportunity played a key role in Rentech’s decision to pursue a large-scale renewable energy facility in Northern Ontario. We’re encouraged by the Government of Canada’s commitment to commercializing renewable energy projects.”
Working with the Province of Ontario and White River, Rentech has forged a significant partnership with the Pic River First Nation for up to an 18 per cent equity interest in the project. The Pic River partnership is expected to create significant opportunities for the Aboriginal community through job creation and advanced skills training. Other Aboriginal communities, such as the Pic Mobert First Nation, will benefit from regional opportunities as well.
Ramsbottom also confirmed that the Olympiad project, and the desire for an end-to-end solution utilizing Rentech’s Fischer-Tropsch process and the ClearFuels biomass gasifier, was one of the primary motivators for Rentech to recently exercise an option to obtain a majority stake in ClearFuels.
“Rentech’s renewable fuels project proposal is an example of how the SDTC NextGen Biofuels Fund can provide real support to the commercialization of new and advanced biofuel technologies,” said Vicky Sharpe, President and CEO of Sustainable Development Technology Canada. “We look forward to working closely with Rentech as its application advances to the next stage of consideration.”
The announcement was made at a joint press conference in Sault Ste. Marie, Ontario attended by Michael Gravelle, Ontario Minister of Northern Development, Mines and Forestry; MPP Mike Brown; MPP David Orazietti; D. Hunt Ramsbottom, President and CEO of Rentech; Chief Roy Michano of Pic River First Nation; Chief Johanna Desmoulin of Pic Mobert First Nation; and White River Mayor Angelo Bazzoni.
The proposed wood allocation to Rentech’s project is the largest ever awarded in the Provincial Wood Supply Competitive Process administered by the Ontario Ministry of Northern Development, Mines and Forestry.
The project would bring much needed employment to a region that has suffered significant job losses in recent years and revitalize a struggling forestry sector. The project would leverage local sustainable forestry expertise, employ an estimated 83 full-time employees and create over 300 indirect and induced positions. During peak construction, Rentech expects the project to employ up to 1,000 workers. Chief Roy Michano of Pic River First Nation commented, “Communities such as Pic River and White River that have withstood the industry shift from traditional pulp, paper and sawmills to new uses for Ontario’s forests now have a renewed sense of hope.”
Rentech operates a demonstration facility in Commerce City, Colorado, deploying its synthetic fuels technology that has produced over 150,000 litres (40,000 gallons) of certified synthetic fuels. In 2010, a commercial flight flew on a blend of Rentech’s synthetic jet fuel and conventional Jet-A with no difference in performance when compared to conventional jet fuel.
The Digest’s Take
Kudos to Rentech and Canada. The US is getting a reputation amongst biofuels developers as a great place for R&D, too slow and disorganized on commercialization. Given that the oil industry’s lessons convince us that the biggest valuations go to upstream resource owners and developers, not the technology companies, the US may well end up with the biggest spend for the smallest return in the biofuels space.