Sundrop Fuels, ThyssenKrupp partner for 50 million gallon Louisiana drop-in biofuels project

May 24, 2012 |

Biomass and natural gas XTL project gets more traction in Louisiana – what is XTL and why might that TLA become SOP?

In Colorado, Sundrop Fuels announced a partnership with technology and engineering supplier ThyssenKrupp Uhde for what will be the nation’s first bona fide commercial “green gasoline” production facility.

The company’s inaugural plant near Alexandria, Louisiana, will yield up to 50 million gallons of renewable gasoline annually while also serving as proving ground for Sundrop Fuels’ proprietary biomass conversion technologies that will be used for future large-scale facilities. More than 70 engineers from the two companies are now working together to complete designs for the Sundrop Fuels plant, which should begin construction late this year.

XTL – biomass and natural gas combined

In the “explaining our acronym” department, and to explain why that three-letter acronym might become standard operating procedure in advanced biofuels –  XTL refers broadly to the family of technologies – coal-to-liquid, gas-to-liquid and biomass-to-liquid – an XTL technology is one that uses these broad feedstock groups together, or interchangeably. Sundrop is one of these class of technologies – Accellergy, which is deploying in China over the next few years, is another

Sundrop Fuels will convert sustainable forest residues and thinnings as feedstock combined with natural gas into bio-based “green gasoline” by using a commercially-proven production path that integrates gasification, gas purification, methanol synthesis and a methanol-to-gasoline process.

As a key element to its first facility, Sundrop Fuels will deploy ThyssenKrupp Uhde’s High Temperature Winkler gasification process, coupled with other established technologies for gas cleanup, methanol synthesis, and the MTG conversion.

Within the plant, Sundrop Fuels will demonstrate its proprietary process for biomass conversion incorporating the company’s patented RP Reactor, an ultrahigh-temperature technology that generates the highest fuel energy yield per ton of biomass of any biofuels process available.

Next commercial facility

Sundrop Fuels plans to follow its first facility with larger-scale fuels plants producing nearly 300 million gallons annually, with a combined production capacity of more than one billion gallons by 2020 – a significant percentage of the cellulosic advanced biofuels goal set by the nation’s Renewable Fuels Standard (RFS).

The Chesapeake Connection

Significant backing for Sundrop Fuels comes from troubled Chesapeake Energy, the largest producer of natural gas in northern Louisiana’s Haynesville Shale Field and second-largest producer in the nation.  Chesapeake invested $155 million in Sundrop Fuels in mid-2011.

Back to XTL technologies – and its impact on the three Es of biofuels – emissions, energy security and economic development.

Leaders in the biofuels industry have begun to recognize that, in the United States and Canada if not, for now, elsewhere, natural gas as a feedstock poses a formidable competitor in alternative fuels, based on cost. Recently the US House of Representatives passed a bill repealing Section 526 of the Energy Independence and Security Act which required the Pentagon to pursue those alternative fuels that reduced greenhouse gas emissions, compared to the benchmark of petroleum.

The way the market shapes up, these days, is generally thus:


The new benchmark is not going to be the proposed, or hoped for, carbon market – where nations were going to make broad mandated provision for green fuels at, generally, whatever they cost. The new benchmark is petroleum – beat that price AND deliver emissions gains AND have a drop-in solution, and there will be not only support in the financial markets, but you’ll have a friend in Washington.

Of course, beat petroleum AND have a drop-in solution, and you’ll have a friend in the financial markets anyway, and that’s basically what you need in terms of reaching scale.

The idea that there is some green premium out there worth more than a few pennies on the dollar, or a large-scale, sustainable carbon market that is going to support high-priced fuels, is in the hospice if not actually DOA.

Pain at the pump? In the broad political market, a bird in the hand is generally worth about twelve in the bush, and low cost fuels for today that cause global disaster for the 22nd century will shock you with their popularity.

Energy Security.

The new benchmark is, in the US and Canada, for now, natural gas. China, coal. Elsewhere, biomass looks pretty good. Nations will continue to value energy security – though the extent to which they will be able to or want to pay for it – that’s a good question still getting worked out. Think a few pennies on the dollar.

How does that benchmark work? Make a drop-in fuel from biomass that is the same or less than a drop in fuel from petroleum or natural gas – my friend, a massive market awaiteth you. Short of that, as Bette Davis said memorably in All ABout Eve, “fasten your seat belts, it’s going to be a bumpy night.”

Now, for the US Navy, there should continue to be a lot of interest in biomass-based drop-in fuels. A Navy is global and coastal – they’ll want and need to develop fuel depots around the world and biomass fuels will offer attractive opportunities.

Economic development.

Ah, the trump card of biofuels – the economic development opportunity – that biomass-based fuels bring to the community that makes them. One of the reasons why you see so much enthusiasm for biofuels at the Department of Agriculture.

Not to mention the impact on prices of adding a second fuel source to your supply mix. The RFA is circulating a study, for example, which makes the claim that ethanol dampened US gasoline prices by $1.09 per gallon in 2011. Powerful stuff, even if selling the benefits of avoided cost is a tough job.

One of these days, someone will figure out a formula to quantify the premium that a community or region should be willing to pay for community-based fuels, that would be justified by the overall benefit in economic development and the powerful mechanism of recycling petrodollars in the community instead of mailing them to, say, Caracas.

Arguably, the impact is far more powerful than the usual economic multipliers that are generally trotted out to support the building of any kind of local industrial facility – or when a sports-team owner asks the community to foot the bill for an enhanced stadium.

Why more powerful? Because energy is something like 30 percent of everything – it’s in your food, your clothes, your car, your packaging, your house, your computer, your business, and your roads. Sourcing energy from outside the community leaks petrodollars to Caracas, with the implacable momentum of milk spilling out of an overturned glass.

Replace foreign energy with local energy – you’ve righted that glass, and interrupted that outward flow. What was leaking out – er, money – stays at home. It’s a catalyst for real economic change, of the first magnitude. Even if the mechanics are, at the end of the day, not entirely different than, in days gone by, when you persuaded Dad to pay you to wash the car instead of paying the Insty-Wash a few miles out of town, to get the job done.

The bottom line

Sundrop is on the march. As an XTL technology, mixing some biomass and some fossil fuels – they get some of the best of both worlds – a nice score on carbon, courtesy of biomass, and a nice score on cost, courtesy of natural gas. Biomass, in certain regions, can score mighty nice on cost, too.

That’s an unmistakable trend these days – finding ways to utilize the benefits of all the new sources of energy to pursue transformative cost that can make the benefits on emissions, energy security, and economic development more of a no-brainer to pursue.

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