The Road to Lumberton

For many years I knew that when we saw the first signs for Lumberton, when traveling north on Interstate 95, having passed into North Carolina, that it was time to seek the weatern turn onto Highway 74 and make the pilgrimage to Pinehurst, where the pine-scented air and the puzzles of a Donald Ross golf course would clear out all mental cobwebs and restore sanity each springtime, no matter the discontents of the winter that had passed. 

Some of the first industrial products of the primeval bioeconomy came from these parts. Longleaf pines were cut in this area for many years, logs floated down the Lumber River until it joined the Pee Dee, and down into Georgetown on the coast, where entrepreneurs supplied the Navy with turpentine made via wood distillation. Worth adding that DuPont used made methanol and nitrocellulose from these wood products as the components of powerful explosives, right down by Georgetown.

But that is downstream, this is upstream, where the slow, dark Lumber River winds north and west with tannins releasing out of the tupelo and the bald cypress, staining the water a darkish color, like sweet tea. The Lumber becomes smaller to the northwest, smaller still, until it becomes once again Drowning Creek, its original name, and retreats into the western Sandhills, where the sandy soils of central Carolina discourage the plants and encourage the longleaf pine.

Whenever I smell the fragrance of pine residues, I am transported in my mind to the exit at the south end of Lumberton, and the promise that at Pinehurst #2’s second hole, I would finally hit it safely to the left side of the green, leaving 10 feet for birdie, an “attaboy!” or two ringing in my ears as I stride up the endless fairway. On the road to our dreams all things are perfect, anyone can make birdie no matter how humble their resume of achievement, no shot is ever too short or long, nothing rolls down into the swales of disappointment and into hollows from which we cannot make par, in sport as in industrial biotechnology.

So, I am especially delighted to share news from Lumberton today. TerraStar Energy and Emerging Fuels Technology have signed a Memorandum of Understanding to license EFT’s Fischer-Tropsch  and Maxx Jet/Maxx Diesel proprietary technology to build a fleet of FLEX plants; small-scale, modular renewable diesel facilities.

Small ball

Recently the Due Diligence Wolfpack has been high on the subject of smaller-scale projects — I believe it was Wolf Michele Rubino who coined the phrase “scaled to feedstock” — not because they are cheaper to operate on a per-unit basis, but because our ideas about units and costs are, in the carbon era, as outdated as the economic concepts of the Egyptian pharaohs and the business model of pyramid-building.  In the carbon era, we look to gain income through the reduction of carbon intensity, and the Law of Carbon in Motion states that “when carbon cost from economies of transport rises faster than the unit price of production falls from economies of scale, go local.”

Is small beautiful? If you are focused on carbon intensity now matter what, yes, it is. The company that has the lowest carbon intensity for a comparable molecule will always be the successful competitor for feedstock, will make more money, and over time it will aggregate capacity through acquisition of sites using higher CI processes. A competitor, to survive with a higher carbon intensity, would have to product switch in search of higher value and go chase vitamins instead of fuels. A good little company might emerge from that, but not the saving of the world from it’s carbon dilemma.

Is small F-T technology beautiful? If it works, surely it is. For a world that has some considerable solids-to-liquids conversion challenges, Herr Fischer and Herr Tropsch found a reliable means of solving the problem — over thew years, the challenge has been scale. Companies such as EFT and Velocys have taken up the challenge of scaling down F-T to bioeconomy feedstock sizes, chasing the small ball, applying more and more technology to get a bioeconomy development to land just right, like a softly faded five iron into the left side of Pinehurst #2’s second hole, a faint cry of “attaboy!” from a partner and the knowledge that in something small and dynamic, there is beauty, whether it is the arc of the golf ball or the tumble of the molecule over a catalyst as it opens and re-combines and what was a solid has become a liquid, and gives the hope of world beyond petroleum.

In this development, each plant will produce six to ten million gallons of renewable diesel per year. A typical plant converts 300 tons per day of biomass into 20,000 gallons of zero-sulfur, ASTM-grade D975 “drop-in” diesel which can go directly into a fuel tank.

TerraStar Energy

If you’ve never heard of TerraStar Energy, don’t fret, you can learn more here. The company has focused on turn-key waste to energy power plants in the 100KW to 100MW range for just over a decade, with the founders originating in the construction business. Our impression is that the company is fairly new to the fuels sector — but there’s no reason for a project development company cannot succeed based on mastering the economics, the permitting process, and the communicating the benefits to feedstock owners who, one presumes, are the ultimate customers of this development. 

About Emerging Fuels Technology 

Most recently, EFT has been in the news with its partnership with Twelve. Not long ago, we published a Competitive Edge Feature on the company. Here are some highlights:

Emerging Fuels Technology (EFT) was founded in late 2007 to address the need to reduce flaring worldwide by creating small Gas to Liquids (GTL) plants in the 500 to 5,000 BPD range. They needed to be highly cost effective, modular and able to operate in remote environments with little or no supporting utilities. We soon recognized the potential for applying our expertise in Fischer Tropsch synthesis to the production of fuels and chemicals from other carbonaceous materials. In 2008 we began working on biomass to liquids projects, many funded by the DOE. We have since developed a technology platform that allows us to work with biomass, municipal solid waste (MSW), biogases and CO2 to liquids (efuels) projects.

Q: Tell us about your organization. What do you do?

EFT licenses technology for the conversion of synthesis gas (carbon monoxide and hydrogen) from any source (biomass, MSW, biogas, CO2) into transportation fuels, primarily diesel and jet, and chemicals to fit the client’s requirements. Our patented Biogas to liquid (BioGTL) and Methane Mitigation FlareBuster technologies are at the crux of what we do.

Our BioGTL plant is designed to produce Drop-In compatible transportation fuels, diesel, jet and naphtha (gasoline blend stock), from renewable biogas. The plant is designed for remote, unmanned operation at landfills, agricultural bio-digesters and wastewater treatment facilities that produce renewable biogas. The result is a significantly more cost effective, smaller, and more efficient plant.

FlareBuster is a new approach to gas to liquids targeted primarily at methane mitigation or flaring worldwide. The design is covered by several new patents that result in a significant reduction in capex per barrel of daily capacity.

Q: Competitively, what gives your technology, product or service set an edge in cost or performance, sustainability, or any other aspect, that makes it stand out from the crowd, In short, what makes it transformative?

When we license to others, our primary advantage is the ability to provide a more cost effective, proven path to the production of synthetic fuels and chemical products from various sources of syngas. We do so cost effectively at plant sizes as small as 50 BPD. We accomplish this with a combination of a highly efficient Fischer Tropsch catalyst in a highly efficient reactor design. This optimized, upgraded technology reduces the number of components needed to create fuel, subsequently lowering the cost. Our two fully integrated designs, BioGTL and FlareBuster demonstrate the impact of these elements. Our 500 BPD FlareBuster design is estimated to deliver the plant for $30 million or $60,000 per barrel of daily capacity. We believe this is the lowest capex of any GTL plant and can generate an acceptable return without government subsidies. Our BioGTL plant makes renewable fuels at a capex that is approximately half the cost per barrel of much larger renewable fuels plants.

More about the company here. Also, there’s a handy corporate summary here. And the EFT site is replete with white papers, they’ve been terrific about sharing insights into their process and the benefits thereof.

About FLEX plants

FLEX plants owe their name to their flexibility of raw materials and their scalability, both of which enable them to convert solid biomass into liquid fuels via gasification. Flex plants are capable of producing renewable diesel and jet fuel, or both simultaneously onsite. The feedstocks can include a blend of waste wood from managed forests, construction waste, paper, cardboard, and other common household and commercial waste.

Construction times

Construction times are as low as 12-18 months, greatly reducing the carrying costs of financing compared to larger plants which can take three years to complete. TerraStar hopes to shorten the turn-around times even more as they scale this technology. The Company’s long-term plan is to work with dozens and eventually hundreds of local owner / operators around North America, Africa and Central/South America where it has established relationships.

The carbon benefit

A typical FLEX plant will reduce the amount of CO2 accumulation by up to 77,000 tons per year. By-products of fuel production are carbon-rich solids that sequester carbon when used as soil amendments. In many cases, the Company’s FLEX plants will have a negative carbon footprint.

Reaction from the stakeholders

“Every diesel plant operator’s goal is to never run short of raw materials, something that immediately affects productivity and the return on investment,” said Rob Redfearn, CEO of TerraStar. “Having plants in multiple locations, especially near customers, creates local jobs and spreads the substantial investment over a wider area. Using these modules also improves redundancy and reduces capital cost, enabling TerraStar customers to achieve an attractive internal rate of return (IRR).”

“We are excited to work with a nationally recognized developer in TerraStar, and look forward to demonstrating our technology platform capabilities in a commercial environment,” said Kenneth Agee, President of Emerging Fuels Technology. “We are hopeful that this partnership can serve as a blueprint for energy producers tasked with meeting today’s high energy demand while significantly reducing their carbon emissions in the process.”

“Our business plan is to attract operating partners around the world and build as many plants as possible, as quickly as possible. The more FLEX plants we build, the more we will reduce the amount of CO2 in the atmosphere,” concluded Redfearn.