Hot Sauce! 5 Lessons Louisiana Can Teach Us about Advanced Bayoufuels
by Jim Lane (Biofuels Digest) Louisiana — hot as cayenne pepper in biofuels capacity development, but some cautionary tales there in the sauce.
When it comes to the first generation of ethanol and biodiesel-based biofuels, Louisiana didn’t figure much into the calculations — to date, there’s just the 5 million gallon (per year) Oswalt Bioenergy biodiesel plant in Lake Providence, which opened last year.
But since drop-in renewable fuels arrived, Louisiana hasn’t just been in the race, or near the front of the pack — it has become the Secretariat of project development — out in front by a mile. In all, more than 500 million gallons in advanced biofuels and chemicals project capacity announced — a 100-fold jump in the past five years.
…76 million gallons of that proposed capacity is currently completed (another 142 million expected to come online this year, and 50 million more in 2014, the rest we don’t have firm dates on as we await financing news). From that capacity, today, there’s not currently any commercial production — as Dynamic Fuels awaits better RIN price conditions (and the 1.5 mgy BP Biofuels plant in Jennings is a pilot plant used in research and development). …
1. Smoke ‘em if you got ‘em
Louisiana has many blessings above and beyond Bourbon Street and cajun spices. Among them are an abundance of gases for sale — from hydrogen to natural gas; fats and greases from animal rendering, and a forestry sector that has fallen on tough times with the decline of newsprint. …
2. In grease, color matters
White grease bad, yellow grease better, brown grease best.
Generally speaking, traditional biodiesel plants utilize choice white grease if they can utilize grease at all. ….
Yellow greases — the economics used to be wonderful — now, not so much. Projects like Dynamic Fuels were based on those feedstocks — but these days, the price of the feedstock has made renewable diesel a tough economic proposition unless the RIN prices for renewable fuel credits, and other incentives like blenders credits, are available. …
But the future may well be in brown grease – the really tough to use material – sludgy and klugy. That’s said to be the strategy for D2 Renewable, developing a 70 acre energy park, located in Convent, Louisiana. The energy park will ultimately consist of five 30 million gallon refineries producing ASTM D 975 Renewable Ultra-Low Sulfur Diesel fuel. …
3. RFS2 matters, RINs matter
As mentioned above, yellow grease is a tough business without good RIN prices and a strong RFS2 mandate to drive RIN values. …
4. Creative financing matters
Two of the most creative financing efforts in recent years are behind two of the next projects to come online in Louisiana.
… Myriant is the first bio-based chemicals company to receive funding from USDA’s B&I Rural Development Loan Guarantee program — and a bond issue sold in by Stern Brothers.
…Bonds are also expected to provide financing magic for Sundrop’s 50 million gallons renewable gasoline plant. …
5. Long-term — diversify feedstocks
You’d think that with all that natgas, rendering grease and hydrogen that the state would rest on its laurels. Not so. In fact, the state has seen enough in the potential of renewables to double down on support for developing dedicated energy crops.
In January, the LSU AgCenter officially opened its pilot plant. The plant focuses on sweet sorghum, energy cane and other grasses to produce convertible sugars, fiber and bioproducts and can be scaled up to any capacity. … READ MORE