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Pasadena-based KiOR plans to have renewable crude oil at the pumps next year (Condi Rice on board)
Your BayArea News ^ | August 2, 2011 | JIM MOLONY

Posted on 08/25/2011 8:53:23 AM PDT by StolarStorm

Imagine a cheaper gasoline that can be produced domestically and is environmentally friendly.

A pipe dream?

Maybe not if a Pasadena-based company’s business plan pans out.

KiOR, (pronounced KEY-ORE) has spent the last three years perfecting a technology that enables the company to convert low cost biomass like wood chips or algae into hydrocarbon-based renewable crude oil that is then refined into gasoline or diesel.

“Kior was built on the vision that we can reduce our dependence on petroleum by harnessing alternative sources of fuel without having to rebuild the nation’s fuel infrastructure,” Fred Cannon, KiOR’s President and CEO says in a statement on the firm’s website. “At Kior we are commercializing a technology that can create an environmentally friendly crude oil substitute from a wide variety of biomass, everything from agriculture waste and residue such as sugar cane bagasse to wood chips.”

According to the company the process has been tested successfully at KiOR’s labs and Pilot Plant, located on Bay Park Road in Pasadena. The plant is a hive of activity underneath a pair of huge concrete silos that can be seen from nearby La Porte, but considerably smaller than a refinery.

“Pasadena has been KiOR’s headquarters since shortly after its founding in 2007. At the demonstration scale facility, which has been running in Pasadena since the first quarter of 2010, the company is producing 15 barrels of its renewable crude per day. KiOR also has a pilot plant at its headquarters, which has operated successfully for over 9,000 hours,” a company spokesman said in an email to The Citizen. “At its first commercial scale facility in Columbus, Miss., KiOR plans to produce 11 million gallons of renewable fuel per year. The company is also planning to begin construction on another commercial scale facility – three times larger than the Columbus plant – in the second half of 2012.”

FOUR STEP PROCESS

The process is very detailed but essentially can be broken down into four steps: Biomass processing. biomass fluid catalyic cracking and product recovery.

The biomass od dried and conditioning using equipment similar to what is typically used for pulp and paper processing. The biomass options are numerous and readily available without the need for exploration or drilling.

“While KiOR plans for Southern Yellow Pine woodchips to be the primary feedstock at its first commercial scale facilities, its feedstock flexible technology allows for the conversion of a wide variety of non-food biomass into renewable fuels,” the spokesman said. “ Potential feedstock options include agricultural resides such as corn stover and sugarcane bagasse, energy crops like switchgrass, and algae. The advantage of this feedstock flexibility is primarily geographic, allowing the company to pursue expansion opportunities virtually anywhere in the world where biomass feedstock is abundantly available.”

The biomass fluid catalytic cracking step involves taking the treated biomass and feeding it into a reactor where it interacts with the catalyst in a process based on fluid cataylic cracking.

This process has been used for decades in conventional crude oil refining, but KiOR has integrated proprietary catalysts in its process. KiOR officials say the company has pending patent applications containing thousands of patent claims covering different aspects of the technology.

Within seconds of insertion the reaction produces renewable crude oil as a primary product as well as light gases, water and coke as byproducts. The renewable crude oil, byproducts and catalysts then enter a separator where the catalyst is separated from the products. The crude oil and byproducts proceed to product recovery where they are cooled and separated.

The catalyst moves to a re-generator where coke created during the reaction is burned off. The re-generated catalyst is then cycled back into the reactor where it will repeat the process.

In product recovery the renewable crude oil condenses into liquid while the light gases are transferred to the co-generation unit. In the final phase the liquid undergoes hydro-treating where reacts with hydrogen to remove the oxygen and is then separated into gasoline and diesel blend stocks.

According to the company KiOR’s blended fuel stocks can be used in vehicles currently on the road or combined with conventional fossil fuels.

“Currently KiOR is planning for its renewable gasoline and diesel blendstocks to be combined with their fossil fuel-based counterparts, to offer more environmentally friendly fuel options to consumers at the pump,” the company spokesman said. “KiOR plans to bring the fuel from its first commercial scale facility in Columbus online in the second half of 2012.”

KiOR employs 107 full-time employees and most are based in Pasadena. That number will be growing soon, as KiOR’s recent initial public stock offering raised approximately $100 million from sale of stock.

“KiOR plans to use the net proceeds it will receive from this offering to fund a portion of the capital expenditures for its planned first standard commercial production facility in Newton, Mississippi.” The spokesman said. “The company intends to use any remaining net proceeds for general corporate purposes, including the costs associated with being a public company, much of which will be focused in Pasadena.”

KiOR, Inc. went public with an initial public offering of 10,000,000 shares of Class A common stock at a price to the public of $15.00 per share on the NASDAQ on June 23. The stock was trading at around $14.42 per share on Monday (Aug. 1).

YET TO TURN A PROFIT

During the last five months KiOR has secured agreements with Catchlight Energy LLC, Hunt Refining, FedEx Corporate Services and the Department of Energy in advance of the plant opening in Mississippi.

Catchlight, a 50-50 joint venture between subsidiaries of Chevron Corporation and Weyerhaeuser Company focused on providing liquid transportation fuels from sustainable forest-based resources, signed a feedstock supply agreement with KiOR. Under the agreement, Catchlight Energy will supply forestry-based feedstocks required by KiOR’s production facility in Mississippi.

Hunt Refining Company agreed to purchase renewable gasoline and diesel blendstocks and fuel oil produced at KiOR’s first commercial facility. The two companies have agreed to collaborate on information and resources aimed at optimizing the performance of their products and services.

Under the agreement with FedEx Corporate Services, Inc., KiOR may supply renewable diesel blendstocks for purchase by affiliates of FedEx Corporate Services.

The Department of Energy’s Loan Guarantee Program provided over $1 billion in loan support for the biofuels project. KiOR’s project under the DOE loan guarantee program will consist of four biorefineries that will contribute approximately 250 million gallons of cellulosic biofuel to the Renewable Fuel Standard. The first two plants are expected to be in Mississippi, with additional sites planned in Georgia and Texas.

“We are pleased to work with the DOE on reaching this milestone and are excited about the scale and impact of the project. The project’s first facility, planned in Newton, Mississippi, is expected to be the largest cellulosic biofuels facility in the United States,” Cannon said on Feb. 3 when the agreement was announcd. “Additionally, the project will have a significant impact on rural communities through the creation of direct, indirect and induced jobs, with over 14,000 jobs created during construction and over 4,000 jobs created during operations. The project also expects to reduce greenhouse gas lifecycle emissions by over 70 pecent as compared to fossil-derived gasoline and diesel fuels. While the term sheet is an important step in the process, we recognize that more work lies ahead to finalize the loan guarantee and there is no assurance it will be issued until the loan is closed.”

The DOE agreement came six months after KiOR had reached agreement with the state of Mississippi to build five commercial-scale renewable crude oil production facilities in return for a State assistance package that includes a $75 million loan.

According to the agreement, KiOR will build three of the five facilities over the next five years. By 2015, the project will deliver more than 1,000 direct and indirect jobs and an estimated $500 million worth of investment. In addition to the loan, the State’s package includes assistance with infrastructure needs and workforce training.

In July of this year former Secretary of State Condoleezza Rice joined KiOR’s Board of Directors. Secretary Rice has also served on the board of directors for the Chevron Corporation, the Charles Schwab Corporation, the Transamerica Corporation and the International Advisory Council of J.P. Morgan. She is currently on the board of Makena Capital, a private endowment firm, and C3, an energy software company.

“Secretary Rice has achieved immense success in many roles over the years and has shown herself to be one of the great strategic minds of her time,” said Fred Cannon, President and CEO of KiOR. “Her expertise will become an asset for KiOR, and her wisdom will help guide the company as we continue to grow.”

KiOR, however, has yet to turn a profit, the spokesman confirmed.

“As with any company progressing toward commercial production, KiOR has thus far been largely focused on research and development and improving its technology, and does not yet sell its product for revenue,” the spokesman said. “The company will begin taking in revenue with the completion of the Columbus commercial facility, where KiOR already has customer offtake agreements in place for all of its fuel output.”

Once the process is commercialized and produced on a large scale the company is optimstic consumers at the pump will quickly discover the advantages of KiOR’s biofuel.

“First, the renewable nature of KiOR’s gasoline and diesel blendstocks gives it a tremendous benefit over their fossil fuel counterparts,” the spokesman said. “ In addition, KiOR believes its blendstocks can become cost competitive alternatives to petroleum without government subsidies, with the potential to offer many societal benefits including lowering dependence on foreign oil, reducing greenhouse gas emissions, and creating jobs.”

The potential, assuming the process can be duplicated commercially on a large scale, is considerable. A process that utilizes available non-food biomass and converts it renewable crude oil that in turn yields gasoline and diesel blend stocks that can utilize the existing fuels infrastructure could be a game-changer in the energy industry.

“Our technology puts us in a unique position to scale up rapidly and sustainably over other alternative fuel technologies,” Cannon said. “Our modular fuel design will allow us to build faster and in more locations.”


TOPICS: Local News; Science
KEYWORDS: biofuel; condoleezza; energy
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To: Cletus.D.Yokel
The only drawback I can see is whether or not the “biomass” crude can be co-mingled in the current delivery system of natural crude (pipelines, etc.)

That is a good point. I'll have to find out. I believe that their product is almost identical to standard crude, except that it is purer. It burns better actually... which makes sense considering it is synthetic. But I'm not sure if co mingling would work.
21 posted on 08/25/2011 12:53:12 PM PDT by StolarStorm
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To: dangerdoc
If there were a cost effective way to convert it to fuel, I can see entire crops of trees being planted and cut for fuel assuming there is a profit to be had.

Apparently their process uses a catalyst that reduces the energy input needed to produce their version of crude. But once you add in the energy needed to grow trees and such, I'm not sure it works out. But there is indeed plenty of waste cellulose plant material around that can be used economically.
22 posted on 08/25/2011 4:12:00 PM PDT by StolarStorm
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To: StolarStorm

I wonder how different the this tech is from what is being used in the plant in Carthage MO?


23 posted on 08/26/2011 9:17:32 AM PDT by dangerdoc (see post #6)
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To: dangerdoc
I found an old article that goes into the difference. Looks like Kior's catalysts and a process breakthrough allow them to convert biomass into crude without the high temperatures that the company in Carthage uses.

Obviously that makes the Kior method much more competitive from a total energy output standpoint (and apparently a smell standpoint... lol).

I know that they have some very smart folks in the catalyst arena, as I worked with some of their folks way back in the early 90's. They made cutting edge catalysts for Akzo Nobel Chemicals.

Here is the article I found:
Bioecon - Kior

Such a method would eliminate the need for the superhigh temperatures and toxic catalysts used in other thermochemical methods for cellulosic-biofuel production. While O'Connor says that he is still improving Kior's catalyst, his first versions are different kinds of modified clays, which are both cheap and environmentally friendly. The product is high quality as well, containing less acid, oxygen, and water. These characteristics make it suitable for burning as heating oil or for use in petroleum refineries, which can use existing processes and equipment to convert it into the longer hydrocarbon chains of gasoline and diesel fuel.

And here is a snippet that answers a previous question:

Because of its ability to slide into the existing petroleum refining and delivery infrastructure, the technology has a huge cost advantage, says O'Connor. It could also be adopted much more rapidly, according to Khosla. "If you can do a solution that's compatible with the oil companies and their current refineries, it becomes much easier for them to get comfortable with it," he says. "Getting them into the game would be a big addition."
24 posted on 08/26/2011 9:49:40 AM PDT by StolarStorm
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To: Cletus.D.Yokel

I found an article that answers your question... should be in the post right above this one.


25 posted on 08/26/2011 10:09:42 AM PDT by StolarStorm
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To: StolarStorm

Thanks for the info, I’ve really liked chemistry dating back to organic chem in college, almost decided to get a major in chem after taking it. Feel free to ping me with any similar stories.


26 posted on 08/26/2011 10:10:32 AM PDT by dangerdoc (see post #6)
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Their stock is really moving. I wonder if Condi's addition to the board has made some folks notice them. Of course, a high up at CenterPoint Energy is also a director. That might mean more for investors.

I might just have to pick up some shares. Heck, I can always "check up on them" since they are just a few miles away from me.
27 posted on 08/26/2011 11:48:27 AM PDT by StolarStorm
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To: dangerdoc; MNJohnnie; ken21; Persevero; jessduntno; Manly Warrior; Red_Devil 232; mreerm; ...
Another article just came out on biofuels, and Kior was mentioned.

Biocrude still a drop in the bucket

Based on the data it has accumulated at its demonstration facility, KiOR believes that at current yields, it can produce its gasoline and diesel blendstocks at a per-unit production cost below $1.80/USG, unsubsidized, if produced in a standard commercial production facility," said a company spokesman. Standard commercial production requires processing capacity of 1,500 bone-dry tons (BDT) per day, he said.
28 posted on 08/27/2011 7:54:17 AM PDT by StolarStorm
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To: StolarStorm

bump.


29 posted on 08/27/2011 7:55:26 AM PDT by ken21 (ruling class dem + rino progressives -- destroying america for 150 years.)
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To: StolarStorm
I found another biofuels company that already has revenues coming in: Solazyme. Looks like they can make it to without government subsidies. While ramping up their fuels business they are selling their oils to pharmaceutical companies and many others. Might be better than Kior as a viable biofuels company.

Here is the latest deal they struck, along with a list of other articles: Solazyme, Dow partner for Dielectric Insulating Fluids
30 posted on 10/12/2011 12:51:28 PM PDT by StolarStorm
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To: dangerdoc

bump


31 posted on 10/12/2011 12:53:26 PM PDT by StolarStorm
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To: Manly Warrior

It all depends on how much the input BTUs cost and how much you can get for finished product BTUs

If you can start with cheap BTUs, waste stream wood, agricultural residue, etc, and process them in a cost effective manner to an expensive form of BTUs, such as gasoline, there is no reason you can’t make a buck.

I can turn something that has no inherent value, grass clippings, into something of value by letting it grow taller and processing it into convenient bales that my neighbors can use and are willing to pay for. This is not that different.

Algae has been a false promise from the beginning. Nobody ever had a strain they could keep alive and grow economically in a commercial operation. We have a current stream of cellulose, much of it waste in our current economy, if somebody can make it more valuable at a profit, they have the recipe for a business.


32 posted on 10/12/2011 1:09:59 PM PDT by dangerdoc (see post #6)
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To: dangerdoc
I'm still doing research on Solazyme... which does use algae. Many folks seem to think their tech will work... lots of contracts with the military and others. Here is a quick and dirty summary from wiki (apologies....):

en.wikipedia.org/wiki/Solazyme

33 posted on 10/12/2011 1:35:25 PM PDT by StolarStorm
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To: StolarStorm

Algae is interesting but in the end, it will require expesive infrastructure and there is only so much energy in sunshine requiring repurposing of vast tracts of land. I wish you luck but I think the money is in figuring out how to turn the 1 billion ton anual American waste stream into useful material.

I won’t hammer you about Wiki, I find it a very usefull tool for technical information.


34 posted on 10/13/2011 6:07:12 AM PDT by dangerdoc (see post #6)
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To: dangerdoc

Thanks for your views. If they can’t make fuel at a low costs, perhaps their cosmetics will work for them. Looks like their algenist brand of skin care products is taking off. Might be much higher margins there anyway.


35 posted on 10/13/2011 9:53:28 AM PDT by StolarStorm
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To: StolarStorm

It’s always better to sell by the ounce than by the barrel.


36 posted on 10/13/2011 10:12:06 AM PDT by dangerdoc (see post #6)
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To: dangerdoc

Sorry for the necro bump.

I was pinged back and thought it was a recent thread. When I started to reply to a post authored by me, I finally looked at the dates.


37 posted on 10/13/2011 10:16:27 AM PDT by dangerdoc (see post #6)
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To: dangerdoc
Very true. I bet the skin care stuff will end up being their big winner. But in the mean time, the biofuels stuff gets nice military contracts.

And the military isn't as interested in actual cost effectiveness. They want an alternative fuel source for obvious reasons.
38 posted on 10/14/2011 7:21:22 AM PDT by StolarStorm
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To: StolarStorm
Looks like the backer of Kior is investing more money in biofuels:

----

Khosla Ventures, the venture-capital firm run by longtime Silicon Valley investor Vinod Khosla, closed a $1.05 billion fund that ranks as one of the biggest new venture funds this year, from which it plans to invest a large portion in clean technology.
39 posted on 10/18/2011 8:52:03 AM PDT by StolarStorm
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To: StolarStorm

Looks like Solazyme might be getting more involved in other uses for oils than for fuel. Much better business model if you ask me.


40 posted on 10/21/2011 9:14:03 AM PDT by StolarStorm
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