Fracking Biomass: Steeper Energy and the Pursuit of Renewable Hydrocarbons

by Jim Lane (Biofuels Digest) ... And it (the history of fracking) reminds us that one of the great tipping points for world civilization is when technology liberates a value great enough that the fear of the risk fades for investors too greedy for the returns, and allows for the accumulation of capital.

The problems of extraction of value from woody biomass have been a huge stumbling block. Nature designed a tighter protection around wood than grains and oilseeds. And the problem is not entirely unlike the problem that Mitchell faced with the Eagle Ford.

The energy is there, but a new technology must come along to extract it. And in the technology business as with the Parable of the Banquet as related in the Gospel of Matthew, “many are called, but few are chosen”.

Two years ago, we reported that Steeper Energy had received a $3m grant from Sustainable Development Technology Canada towards development of a $30M 100 barrel per day demonstration project for the company’s hydrofaction biomass-to-liquids technology platform.

Supercritical water is an amazing solvent — Renmatix uses it to separate C6 sugars from lignin in seconds, compared to the hours or days associated with enzymatic systems. And Licella uses a proprietary Super Critical Water reactor to attack organic polymers, cutting them directly into highly desirable energy products.

Hydrofaction economically converts a variety of forestry residues or agricultural (non-food) waste to a petroleum equivalent renewable fuel oil. Based on a high pressure/temperature process or supercritical water chemistry, the produced oil is suitable as liquid fuel for large compression engines for electricity generation as well as rail or marine propulsion, or can be upgraded using hydrogenation into renewable diesel and jet fuel. The technology is a net water producer (no water consumed) and achieves a feedstock-to-oil energy recovery efficiency of more than 80 percent, making it highly sustainable and economical.

Steeper Energy’s CEO Perry Toms recalled, ... “And we were using commodity pulp prices for the cost of biomass, and we believed then and now that we can beat that and deliver a barrel of biocrude for less then $70, that could be upgraded to renewable fuels, lubricants or biochemicals for well under $90 a barrel.

“Now today, you can sell renewable diesel, when you count in the RINs and everything else, for around $140/barrel, so the business opportunity makes some sense now, and if you think back a few years to when West Texas Intermediate was $107, in the fullness of time we will be a truly competitive blendstock, especially if some amount of the externalities of petroleum are attributed in the oil price.”

What is compelling about Steeper’s claim is that their biocrude has 8-10% oxygen content. That’s within the maximum tolerance of hydrotreating technology that is found within conventional oil refineries ...

Can you really sell renewable diesel for $140 a barrel? Well, yes, there’s evidence for that. That translates to $3.33 per gallon, or roughly $1.63 in carbon credits north of diesel’s current wholesale price of $1.70 per gallon. LCFS credits are trading around $1.00 and we don’t have data for D7 RINs but D3 RINs are trading at $2.55 each. You could make a scenario of up to $3.00 per gallon in carbon credits in the market right now without being taken to the insane asylum — or $4.70 per gallon for cellulosic fuels.

Now, let’s mark down a caveat. We have a new Administration in the United States with an untested level of support for renewable fuels and the RFS, and D6 corn ethanol RIN prices have been crushed since December. Two months ago, they were trading at $1.08. Today, they are down to $0.45.

It’s that kind of RIN volatility that was unanticipated by the designers of the RFS and is the single most important, though not the only, reason for the low availability of cellulosic biofuels. READ MORE