Being Solid and Liquid: The Screwy, Upside-Down World of Renewable Fuels Financing

BioRefineries/Renewable Fuel Production, Biorefinery/Fuel Production Infrastructure, Business News/Analysis, European Union (EU), Feedstocks, Forestry/Wood/Residues/Waste, Infrastructure, Marketing/Market Forces and Sales, Mississippi, Process, R & D Focus

October 30, 2013

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by Jim Lane (Biofuels Digest) …“Cowcookies”, the lost Marx Brothers script
Scene, an office on Wall Street. Enter a lender, Harold P. Cheesebreath — and his prospective borrower, Al Cohol.
Cohol: (confidently) See here, it’s a no-brainer. Mandated fuel, pilot-proven technology, no food crops, carbon-friendly.
Cheesebreath: I don’t care about carbon.
Cohol: (brightly) OK, here’s a mandated fuel, demonstrated technology, and no food crops.
Cheesebreath: I don’t care for mandated markets.
Cohol: (chastened, but unbowed) OK, here’s a demonstrated technology, and no food crops.
Cheesebreath: Why can’t you use crops with a track record?
Cohol: (sighing) Because those would be food crops.
Cheesebreath: Food vs fuel? Well, I won’t finance that.
Cohol: (sadly) OK, here’s a demonstrated technology.
Cheesebreath: I don’t do first commercial projects. I’ll do your next one.
Cohol (brightening): You mean you’ll finance my second plant?
Cheesebreath: No, your next one. If you’re planning your second, I’m only interested in your third. If you’re ready for your third, I’m only interested in your fourth.
Cohol: (distressed) But that will take at least five years, to get to a fourth.
Cheesebreath. And that’s another thing, your sector is always five years away.
Cohol glumly leaves the building.
Of course, most project owners give up at this stage. Which appears to be the point of the process.
…
“While the rumors, hopes and comments about our death have swirled about,” (BlueFire) CEO Arnold Klann reflected with a sigh, “we have been trying to figure out how to finance a first of its kind commercial project without any corporate, venture, cash flow or other financial support.
“I can say with great confidence, we know at least 50 ways on how not to finance a project. I am thinking about writing a song about it to the tune of “50 ways to leave your lover” by Paul Simon. The other thought is to write a book,” Fifty shades of no financing”.
…
But here’s the exception to the rule, Klann says. Blended with lignin from BlueFire’s process, the wood pellets create a market advantage under the international mandates for renewable energy, especially for power in the European Union.” READ MORE

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