On the road to Gobig: refinery intermediates offer scale for advanced biofuels

| April 6, 2012

Honeywell’s UOP and Ensyn debut RTP fuel as a refiner-side renewable feedstock

Amongst the many thought-provoking presentations at the Advanced Biofuels Leadership Conference this year in DC, a pair from Honeywell’s UOP and Ensyn stood out from the crowd, which saw 107 presentations this week under the general 2012 them of “Go Big, Stay Strong”.

Honeywell’s UOP announced two projects this week, and generally more attention was paid by ABLC delegates to its ATJ (alcohol to jet) technology release, suggesting that, in the near term, the costs for producing aviation biofuels from alcohols might prove more to be affordably scalable than making them from plant oils.

Less attention was paid to a breakthrough on the pyrolysis side – Ensyn certainly didn’t hype it up much, perhaps because they are raising capital at the moment and wish to avoid the appearance of hyping the company, perhaps because the technology is not yet fully protected through the patent process.

Whatever the reasons for the highly conservative presentations, astute observers of advanced biofuels should pay close attention.

At the heart of the Ensyn-Honeywell announcements are two claims – first, that their pyrolysis process is capable of producing RTP fuel at scale, a crude oil competitor for a price of $45 per barrel (of oil equivalent). Even more startling, the RTP fuel can be upgraded at the refinery – using a modified (but apparently standard refinery equipment – UOP and Ensyn are being cagey about the exact piece of refinery equipment, but our understanding is that is is widely used, particularly in the US).

So, why is that a shocker?

Well, to the Digest, the RTP fuel option is a game-changer on three levels.

1. Obviously, there’s the cost. $45 per barrel for a competitive product to crude oil is, ahem, just a leetle bit more affordable than the $101 per barrel price that light, sweet crude was trading for this week on the NYMEX (not to mention the $122 per barrel cost for Brent crude).

More importantly to jaded observers, who generally greet extravagant claims on low-price advanced biofuels with an enhanced degree of skepticism – the brand wrapped around this claim is Honeywell, a Fortune 100 corporation with nothing to gain from engaging in rounds of hype-and-gripe with analysts, shareholders and customers.

2. Bringing refiners into the game. This puts the refinery into the advanced biofuels game as a producer, rather than an obligated blender, of advanced biofuels. Consider this: for years, refiners have had to deal with early-gen biofuels that have cost them time, money and aggravation to handle, while cutting in to their refining volumes. Their role was limited to buy, blend and suffer.

By producing an affordable alternative to crude oil, that is upgradable using standard equipment that refineries already have (though we understand that refineries will have to modify equipment to the extent of converting some carbon steel equipment to stainless steel, to accommodate the properties of RTP fuel), you can have refiners looking at advanced biofuels in a new way.

From the refiners point of view, RTP fuel might look like another fee stock for their refining process – only, one with cost advantage and renewable attributes. Given a choice between complying with the Renewable Fuel Standard by blending someone else’s product into theirs, how much more financially attractive to refine products like RTP fuel, and satisfy the blending obligations imposed by RFS2 on a business-as-usual basis.

Here, then, is a domestic source of transport fuel that heals, farther than exacerbates, the divide between traditional energy and the renewable fuels industry.

3. Then there’s scale, too. Using existing refineries – once the refinery technology upgrade is in place – takes the volume opportunities up sharply from what are considered standard advanced biofuels capacities of, say, 10-100 million gallons per year, per project.

Oil refineries are volume monsters. Down in Texas, the Texas City or Baytown have capacities in the 500,000 barrels per day range. That’s around 7 billion gallons of capacity, per refinery. Refinery scale means billion-gallon potential per project, from the get go.

The Honeywell’s UOP team is reporting yields in the 70 gallons per ton of biomass range with indications that it can reach 90 gallons per ton over time. Good news on feedstock too- its a relatively agnostic process – back in 2010 at the time that Envergent (the UOP-Ensyn joint venture) received a $25M DOE grant to build a fast pyrolysis and upgrading unit at the Tesoro refinery in Kapolei, Hawaii, they said they would test waste agriculture products, pulp, paper, woody biomass, algae and dedicated energy crops like switchgrass and high-biomass sorghum.

4. The guessing game. We are left to guess the initial refining partner – though it is not difficult to surmise that Tesoro has been the test partner to date, and presumably would be the first to license and deploy the process, and also presumably starting off in Kapolei.

That would be excellent news for Hawaii because the Navy is sure signaling a need for affordable, renewable marine diesel and jet fuel. No more urgently than in Hawaii, which has no domestic source of crude oil, a deep fund of agricultural potential, and a huge Naval presence at Pearl.

We are left also to guess the refining unit being used. An adapted version of a fluid catalytic converter (FCC) – a signature bit of refining equipment that has been UOP’s  signature technology since the 1940s? We’ll know in time.

The bottom line

If Honeywell’s UOP and Ensyn deliver on the promise indicated in the presentations this week at ABLC – and there’s no compelling reason to suppose they will not except a pure strain of default skepticism – we might expect to see these technologies coming online at refineries in the mid-decade.

That’s just as the cellulosic biofuels mandates start to have extravagant volumes, in the billions of gallons per year. The RFS2 mandates may, in the end, have unleashed a wave of innovation that, ultimately, will make the targets achievable using approaches to the problem that were completely unimagined at the time that EISA was signed into law by President George Bush in late 2007.

Not only is there a path to large-scale volume imagined here, but the low cost that advanced renewable transport fuels so badly needs. Very promising stuff.

Biofuels Digest thanks the 107 speakers and 575 delegates who gathered in Washington DC this week for the Advanced Biofuels Leadership Conference. You are awesome!

 



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