If the long-term is green, and the present is based on carbon-intense “black” technologies – the near term is going to be shades of olive, and technologies that combine green and black may be the big winners.
Today, 5 strategies at the nexus of green and black, exemplars of the Olive Economy
A couple of years ago, Sir Richard Branson said , “by 2030, all businesses, that are still businesses, will be green businesses.” Though ZeaChem’s Jim Imbler puts it a little differently, they have a common point of view.
“There are lots of ways to be green,” Imbler said, reflecting on the commercial progress at ZeaChem’s integrated biorefinery in Boardman, Oregon, after Itochu announced an investment in his company.
Over the years, it’s been Imbler who has reminded the Digest that integrated biorefineries not only have their novel technologies, but have a tremendous amount of traditional, off-the-shelf technologies inside them.
Off-the-shelf, he has told me, is a powerful way to make sure a green project is affordable. “If you can make some green,” he says, “you can really be green. You make a difference by selling product. You open a plant, show a margin, that’s what brings project finance and expansion. Green is not completely new and different. Every business, for all time, has needed to find ways to be more efficient, and find better ways to use the resources at hand.”
At the same time, green technologies – whether they are bolt-ons producing new forms of energy, or new systems at old plants that reduce energy intensity (and thereby green the economy through energy efficiency) are not necessarily the exclusive province of biorefineries and other clean energy technologies – you might well find that what we call green technologies have about 10 percent novel energy-altering technology, and what we call the old-line black technologies will ultimately have about 10 percent novel, energy-altering technologies in them too.
So, what we are actually fighting over, when this political battle wages across the globe between proponents of “drill, baby, drill” and the proponents of the “clean economy”?
Here are five types of technologies that straddle the political divide between green and black.
Re-using industrial waste gases
Here are three companies aiming at capturing CO2 and either directly converting to fuels, or using it as a means of mitigating the impact of a high-carb fuel.
BioProcess is based in Portsmouth, RI and is currently running a demonstration facility at the Green Plains Renewable Energy ethanol plant in Shenandoah, Iowa. The company’s technology features low-cost autotrophic production of algae biomass using its proprietary Grower Harvester photobioreactors. Algae is grown out of solution in thin, controlled biofilms to increase productivity and lower dewatering costs, gas transfer costs, pumping costs and mixing costs.
Grower Harvester bioreactors have been tied directly into the plant’s CO2 exhaust gas since October 2009. Initial co-location strategy has focused on bridging First Generation biofuels to Next Generation biofuels and bioproducts.
Early-stage company, just coming out of stealth, using an genetically modified organism to ferment CO2 into renewable fuels. Its microbial bioreactor system can capture CO2 from waste industrial gases and convert this carbon source into chemicals used in biodegradable polymers, cosmetics, food additives, industrial lubricants, plastics, other specialty chemicals and fuels.
Where does the hydrogen come from, for the OakBio process? Either commercially shipped hydrogen, or produced on-site via conventional steam reformation of, say, low-cost natural gas.
The LanzaTech process increases industrial energy efficiency by capturing waste gases (CO, CO2) and converting them to valuable fuels and chemicals through its microbial gas fermentation technology. The LanzaTech process is feedstock agnostic and is not dependent on any one resource for gases. The LanzaTech process has already been proven utilizing steel mill off gases as well as synthesis gas derived from biomass. This means that all synthesis gas is a suitable feedstock including gases derived from coal, petroleum coke, natural gas, municipal solid waste etc.
LanzaTech can use hydrogen-free gases for the production of ethanol. This is because its proprietary microbe can produce hydrogen from carbon and water as required.
Green technologies as components in an overall industrial symbiosis converting waste streams to material streams
Inbicon opened its pilot-scale 1.4 Mgy cellulosic ethanol plant in Kalundborg, Denmark in December 2009, and is expected to develop future projects in North America and China, amongst other locations. What makes Kalundborg so remarkable? In the Kalundborg Symbiosis, public and private enterprises buy and sell waste products from industrial production in a closed cycle. The residual products traded can include steam, dust, gases, heat, slurry or any other waste product that can be physically transported from one enterprise to another. In the case of Inbicon, the cellulosic ethanol producer obtains process heat and steam from the Symbiosis, and supplies lignin that can be burned in place of coal at the Kalundborg DONG Energy power plant.
XTL Technologies that use a combination of biomass and traditional coal and gas feedstocks to make affordable fuel, at scale, that performs better on carbon
Accelergy has developed out an XTL gasification system (using biomass or coal), and is currently in Tier II testing of its fuels with the US Army and Air Force. Its experimental add-on is bringing in a closed system photobioreactor to capture excess CO2, use it to grow algae, which would in current plans would be sequestered as a soil enhancement to mitigate the CO2 release of XTL fuels and bring them in to compliance for use as alternative fuels by the US military.
In Colorado, Sundrop Fuels announced that they have agreed to purchase about 1,200 acres of land near Alexandria, Louisiana to build their first plant. Using forest waste and hydrogen from natural gas, their plant will produce up to 50 MGy of renewable gasoline. The plant will cost $450 to $500 million to build and will be financed in part through the sale of tax-exempt Private Activity Bonds.
The biofuels plant will salvage wood waste from renewable forests in Central Louisiana and adjacent regions and use that biomass as a feedstock. Sundrop Fuels also will extract hydrogen from abundant supplies of Louisiana natural gas, combining the hydrogen in a proprietary reactor with carbon extracted from wood waste. The result — up to 50 million gallons of fuel a year — will represent the world’s first renewable green gasoline that’s immediately adaptable to existing pumps, pipelines, engines and transportation infrastructure.
Oil refinery upgrade
Technologies that produce pre-fuel intermediates that are upgraded at traditional refineries into renewable fuels
KiOR is probably the best-known company using pyrolysis to create a bio-oil that is upgraded at oil refineries into drop-in fuels. Last August, in reviewing the financial outlook, Rob Stone and James Medvedeff of Cowen & Co wrote: “KIOR has developed a proprietary process to convert biomass into gasoline and diesel blendstocks, compatible with existing infrastructure, using abundant, non-food feedstock. It should be cost competitive, but also benefit from biofuel mandates. Customers are in place for the first commercial plant, expected on line in H2:12. Scaling from there points to huge long-run cash flow. We see 50%+ upside relative to the market in 12 months.”
Bio-based enhanced oil recovery
Not every Olive Economy story brings bio-based production to the refinery. In the case of Glori Energy, the technology brings bio-based strategies to the wellhead.
Glori Energy’s mission is to sustainably and efficiently recover oil trapped in reservoirs using existing oil wells through the deployment of its microbe-based Activated Environment for Recovery of Oil (AERO) System. AERO enhances production from waterflooded wells by stimulating a reservoir’s naturally occurring microbes to improve water sweep and oil mobility. Waterflood technology injects water into reservoirs to release additional quantities of oil that were unrecoverable during primary recovery. Conventional waterflooding only extracts a fraction of all discovered oil, leaving the majority underground. The AERO System provides a new, viable option to recover this trapped oil with minimal new footprint or investment.
Green-Black investing, or is that olive?
Back in December we reported that Warburg Pincus will invest up to $355 million in First Green Partners, a newly formed early-stage venture capital company. First Green will, in turn, invest in early-stage companies that focus on developing methods of converting renewable carbon, such as non-food biomass and carbon dioxide to fuels and chemicals, and applications of clean or green technologies in the conventional energy or industrial process, otherwise known as green-black technologies. First Green will make initial investments of $500,000 to $10 million in each emerging technology and up to $100 million in a single business as it commercializes.
The Bottom Line
The trend towards green is clear, but the greening of the economy will take time, and involve a lot of old-style equipment in new technologies as well as energy-efficient green technologies applied at older facilities.
So, black economy, green economy – neither is for the here and now. The winners in the near-term are those that master the olive economy.