Dynamic Fuels Hosts Investor Plant Tour

by Joanne Ivancic (Advanced Biofuels USA) From time to time, you hear people complain that you can’t make money off of recycling. Dynamic Fuels gives the lie to that statement. Not only has it already saved tens of MILLIONS of dollars by recycling a closed Uniroyal plant, and giving new life to storage tanks from closed chemical operations, operators and investors believe it will take in many multiples of those millions in the not-so-distant future from recycling food processing waste into ultra clean synthetic diesel.

Currently experiencing the pains of being “first to be first,” with commercial operations delayed until fall 2010, this Geismar, Louisiana, 50/50 joint venture between Syntroleum Corporation and Tysons’s Foods, Inc., is taking advantage of not only of land and materials available at bargain prices due to the economic downturn, but also taking advantage of the resources built over the years in this chemical/industrial corridor in the Mississippi River Valley.

Jeff Bigger, Senior Vice President for Business Development explains that although hailing from Oklahoma and Arkansas, respectively, the companies decided to locate in Louisiana due to the abundant existing infrastructure. It is clear that not only were they spared permitting delays and difficulties often associated with putting new chemical/industrial developments in areas unfamiliar with them, they were also able to use a number of existing buildings, $7 Million worth of existing steel structures, and can “plug into” under-capacity utilities (water treatment, steam, natural gas, electricity, etc.) and a hydrogen (from natural gas processing) pipeline that passes through the property providing one of the essential elements of the Dynamic Fuels process.

Reuse, Recycle, Renovate, Restore,... Certainly Dynamic Fuels shows that recycling is good for its bottom line, in addition, it minimized its construction carbon footprint.

With the area barely recovered from Hurricanes Katrina, Gustav, Ike, et al., the British Petroleum/Deepwater Horizon oil spill is certainly an unwelcome development. Louisiana is currently staring at severe losses in its Gulf of Mexico fishing, seafood and tourist industries. With this disaster looming, restoring professional jobs in the chemical industry benefits the local economy more than Dynamic Fuels could have imagined. Forty-two of the 44 Dynamic Fuels employees are experienced locals, supplemented by two specialists from Oklahoma and Minnesota.

This was the aspect of Dynamic Fuels’ operations that attracted perhaps the youngest Syntoleum investor who took a tour of the plant in mid-May before it went online. Brittany Cain is an undergraduate student of criminal justice in northern Louisiana, planning to go on to law school. She thought it would be good to begin to learn about the stock market. Cain chose to put $1000 into Syntoleum because Dynamic Fuels “is a good opportunity for the Louisiana economy.” She pointed out that as the recession has hit Louisiana; this company has hired local people and is supplied by local businesses. She believes this is an example of the future of Louisiana’s economy. In addition, she wanted to support this company because it recycles waste as a feedstock for renewable transportation fuels rather than using crops that can also be used as food.

On the other end of the age and experience spectrum at the plant tour was Peter F. Sommers, known as “Shareholder #1.” Sommers has supported this project since 1984 when Ken Agee, his buddy working across from him at TransOK, a natural gas pipeline company, mused about making liquid fuels from natural gas. He and Erna Sommers, his wife of 55 years, helped with initial funding and call this project their “baby.” The Sommers’ watched as Agee developed his idea, built a bench scale prototype in his backyard and made 3 barrels a day, drop by drop.

Unfortunately, Sommers’ observations about their lengthy struggles finding funding reflect the experiences of many entrepreneurs a quarter century later. “If it’s not developed in their own labs, “big industry” won’t accept it,” he remarked.

At the Dynamic Fuels plant tour, Sommers wears a gimme cap commemorating the 2004 construction of the pilot plant in Catoosa, Oklahoma, thanks to the eventual investment by Marathon Oil and the U.S. Department of Energy, and management by Integrated Concepts and Research Corporation.

Peter Sommers’ emotions on the day of the tour of the soon-to-be-operational facility? “Disappointed, that it’s taken so long,” he said slowly. The Sommers’ watch anxiously and proudly as the professional operation inches forward; hoping the pipes and steel, acres of tanks and towering reactors prove the success of the renewable energy version of that long-ago idea at commercial scale “before we disappear,” while they can still enjoy seeing the fruits of their labor and support.

The investors gathered for the plant tour are the old-fashioned kind of investors, really putting money into a business in order to enable it to thrive; not just trading stock from afar by looking at numbers and investment advisors’ opinions.

Peri Bradford’s story provides one perspective on this. She’s been a shareholder since January 2008, having never purchased stock on her own before in her life. She read a short blurb in a newspaper about this stock—an article about it being a real “dog” that smart investors should avoid. To this day, Bradford doesn’t know why the article stuck in her mind. But it seemed inconceivable to her that a company with the plans described could be a bad investment, especially when it was selling for only $.50/share and intended to provide renewable fuel to a military market. So she headed to a notable investment firm to find out how to put some money into it.

Her investment advisor was incredulous; after a review of her current investments, Bradford refused to take funds out of a very conservative fund to put them into one with more moderate risk; yet insisted on putting $5000 into this “dog” of a stock. When Bradford doubled her investment in days, her advisor could only remark, “Well, that doesn’t happen very often.”

And, indeed, there are ups and downs. But Bradford, her family and friends are content that their funds are supporting needed change for a better future.

Bob and Shirley Fortune of Bossier City, Louisiana, near Barksdale Air Force Base, were convinced to purchase this stock when they saw that Tysons Foods became a 50/50 partner rather than serving only as a feedstock supplier. They also had faith in the potential military market. “Every time I see a B-52 flying over our house,” said Bob Fortune, “I think that it could be using our fuel.”

Investor, Dr. Eric Bernz, makes his living as a dentist in Las Vegas. His interest in supporting Dynamic Fuels is to help establish an industry that will “keep US resources here.” “We don’t need to finance people working against us,” he adds. Bernz pointed out that America was built on great ideas; recently, “cars, the phonograph, light bulbs, etc.,” and that the next great idea is home grown alternative fuels. “Necessity is the mother of Invention,” he notes; and he and the other investors see that now and in the future, we are experiencing the necessity of finding replacements for petroleum-based products.

Another investor, on the opposite end of the spectrum from Peri Bradford, who chose to remain nameless, also remarked on this necessity. For this company, he explained, he has the same feeling he had about Google in 2003. He noted, people questioned how Google’s product would be used; questioned its value. Some took a chance to support something that had never been done before, just as they are taking chances on this “never-been-done-before” technology.

As Don Duga, Dynamic Fuels Plant Manager says, “This is the first plant of its kind in this part of the world.” Those who support it now, old or young, experienced investors and neophytes, see the future and it looks like a lot of steel and pipes and storage tanks on the high ground along the Mississippi River in Louisiana. And, they all look forward to seeing that future in other places as well. READ MORE and MORE (Biofuels Digest update)