Advanced BioFuels USA

by Joanne Ivancic* (Advanced Biofuels USA)  Golden Leaf Energy’s Troy A. Clark grew up in Louisiana. Studying chemical engineering at Tulane University brought him into contact with the oil industry. And yet, as his career progressed, he was drawn to renewables. Initially working as a dispatcher of ethanol for fuel, he forged relationships with companies from New Orleans to Detroit, then explored building a cellulosic ethanol biorefinery using sugar cane bagasse.  Eventually, coming full circle, his company transitioned from using restaurant brown trap grease to manufacture biodiesel along the West Bank’s Harvey Canal to producing high tech bio-based lubricants for the oil industry from the same “funky mess,” as Clark describes it.
His journey embodies a dynamic evident throughout the advanced biofuels industry.

Sadly for those who would like to see a speedy transition away from use of fossil fuels for transportation purposes, Clark’s story from oil industry to renewables and back to the oil industry reflects a not uncommon theme in the renewable fuels sector.  California’s Origin Oil followed a similar path with its algae-based lubricants marketed to the gas and oil fracking market.  And New Zealand’s Lanza Tech has taken a biogas fermentation-to-ethanol technology to China where smokestacks at steel mills feed the gas to the biological process.   Jim Lane of Biofuels Digest calls this merger of “green” bio-based feedstocks or technologies with “black” fossil fuel enterprises, the Olive Economy.
Clark is not giving up entirely on hope for bio-based fuels and materials to someday displace petroleum; but, he says, “The transportation fuel system that we have works; it’s hard to get people off it. It really is.”
He understands that from not only personal observation, but from participating in the markets as a consumer, dispatcher and entrepreneur.
From Dispatcher to Producer; Not without Set-Backs
Clark started as distributor of ethanol in the mid-west.  He matched product from smaller ethanol producers such as DART Disposal and Recycling Technologies, Inc. who fermented waste soda, beer, wine, pharmaceuticals, candy, mouthwash and such into ethanol; with buyers in the transportation fuels business.
But Clark wanted to do more.  He wanted to make something.  With partner Dr. Calvin Mackie and the Louisiana State University’s Audubon Sugar Institute, they explored making cellulosic ethanol from sugar cane bagasse.  At the time, they got stymied by the same biomass recalcitrance that has plagued other efforts and directed their attention to developing biodiesel refineries instead because they were relatively easy to build.
“We had a novel concept of a small facility that was modular and could take in any kind of feedstock,” Clark explains. They built a prototype facility in Harvey, Louisiana, using proprietary innovations that they developed to use brown grease, what Clark calls, “the bottom of the barrel” for biodiesel feedstock. Because their process could efficiently convert high levels (up to 90%) of free fatty acids (FFAs), what Clark calls “the enemy” of efficient biodiesel production, Golden Leaf Energy was able to hold down feedstock costs.
“We love FFAs because we know the more FFAs there are, the cheaper the product/feedstock is going to be. And because our facility is designed to take in up to 90% FFAs, we have no problem with that,” says Clark.  FFAs have to go through a couple of chemical processes to convert it for use in the biodiesel process.
Again, typically for many innovations in the biofuels industry, key processes and “secret sauce” recipes are held close to the vest.  “There’s some technology there; in our case it is cutting edge technology.  For us, we don’t talk about it.  It’s just a black box; it’s just magic.  We process it and take it all the way through after that,” is all Clark will say about Golden Leaf Energy’s proprietary conversion of the FFAs.
Eventually, however, also typical of many in this business, even that processing innovation wasn’t enough to overcome the low margins and policy uncertainty of the biodiesel industry particularly the on-again, off-again federal biodiesel production tax incentive and the threat to the value of Renewable Fuel Standard RINs posed by the Environmental Protection Agency’s proposed downward adjustment to renewable volume obligations for the US transportation fuel market.  Clark notes that most biodiesel  is consumed as blendstock for diesel by the oil industry to comply with federal regulations, and to reap the RINs financial incentive.  “They play largely a RIN game; so their consumption of biodiesel is almost entirely because of the RIN issue, because they are obligated to use it.”
Considering these uncertainties, Clark says, “We found it (producing biodiesel) to be a bit of a challenge because the margins are low and it is almost completely dependent on whether or not the tax credit is in place. The companies that supply the raw materials have a lot of control over margins and have a lot of control over the marketplace in general.”
To limit feedstock expense, Golden Leaf Energy developed its own collection system with about 100 restaurants.  It wasn’t enough product for their entire production, but enough to reduce the overall cost of feedstock while they were making biodiesel for the transportation market.
“I’m lucky,” Clark says.  “I get to use brown grease, the bottom of the barrel.  Most people can’t use brown grease because their facility is not set up to manage it.  Brown grease is almost completely FFA.  You are talking 75-80% FFA.  Most facilities don’t have the pretreatment capabilities to manage it.  We wanted to use brown grease from the beginning, so we developed pretreatment capabilities that allow us to use it.”
Clark insists that there is a lot of opportunity to sell biodiesel in the region from New Orleans to Houston.  “You have about 43 % of the country’s refining capacity,” he explains.   He believes that when the economics are right, there’s a vast market.
From Biofuels to Bioproducts
For now, Golden Leaf Energy is taking a different tack.
“That market (transportation fuels) is not as attractive to us.  We had a small facility and because we were engineers and scientists, we felt we could do some more interesting things so we began to look for opportunities to use methyl ester in other chemistries.  We rarely even call it biodiesel.  We call it methyl ester because for us it is a chemical.
“And that chemical has certain advantages.  It is an excellent solvent.  What does that mean?  What is a solvent?  It can serve as a base for a bunch of other stuff.  You can mix methyl ester with a lot of things.  It combines well which means you can direct the chemistry toward solving various problems. And we’ve been able to direct it to solve the problem of lubricating metal-to-metal surfaces.
“Our lubricant has a lot of biodiesel in it, a lot of methyl ester in it.  We aren’t the only guys on the block using biodiesel in that capacity.  There are quite a few companies out there using it, but they don’t make/manufacture biodiesel the way we do; they don’t understand the product as well as we do.  They typically buy it.  But the opportunity for methyl ester to be used in any number of applications is through the roof.  And that’s what we are most excited about.”
As is also typical in the advanced biofuels and bioproducts space these days, Golden Leaf Energy has a patent on the recipe for the lubricant; but not a patent on the process for converting feedstock with high proportions of FFAs.  That information is too valuable to share with the world in a patent application.  Like many in this game, Golden Leaf Energy keeps that close to the vest.
Innovation and More Innovation
“What’s next for us are the opportunities for using methyl ester as a base for future products, future chemicals.  We’ll probably make some hydraulic fluids, more lubricants.  We’re going to make lubricants that are used in traditional metal working environments, metal shops, maybe big industrial places.
“We think that our next product will be a slideway oil. Slideways are inside metal making machines with a lot of metal-to-metal contact–big surface areas with metal-to-metal contact.  Methyl esters are very good in that environment. For us, the sky’s the limit in terms of opportunities for using methyl ester based chemistries for varied applications.”
Do customers care about being “green?”
Clark explains, “Yes, it matters to oil companies because they have to improve their narratives.  If you can provide an improvement to the narrative combined with product performance at cost, at what they are paying, you’ll get the sale every time.
“I think ultimately, that has to be the focus of anybody in this space.  That you are dealing with an entrenched product, petroleum.  And when you start pulling back, you start to understand how far out petroleum products go, you’re seeing, one, how successful it is; but, two, you also see all these opportunities.
“What can we develop to displace those products? What can we develop to compete with those products?  And if you can come up with chemistries that perform, and you aren’t too, too much more expensive, you have a legitimate opportunity to compete.
“Think about it from this standpoint.  You are talking about some of the richest guys on the planet.  They have absolutely no motivation to change.  Because, ‘I’ve already won. I’ve got the most money.’  Not only is it not broke, it’s not broke by a mile as far as we’re concerned.
“And then they are getting better at what they do.  They are getting better at finding oil and extracting oil.”
Petroleum Industry Psychology
Growing up in Louisiana with the prominent oil/gas/chemical industry enabled Clark to understand the psychology of this sector, to get a feel for what is important to this customer base.
“Where do they make their money?” he asks, as an introduction to sharing his take on his role in the oil industry and a key to his business model.  “What they are most concerned about is pulling it out of the ground and that’s where I interact with them.  And that’s where they spend the most money. ”
From conversations with oil executives, he says, he understands their priorities, “How efficiently and how successfully are (they) pulling oil out of the ground?”  Clark’s lubricants serve this effort.  And, his experience, similar to that of OriginOil’s, indicates that if he can compete with petroleum lubricants on price and performance, he can successfully compete.
With regard to any interest in transitioning from a petroleum-based world to a bio-based one, he emphasizes, “The scientists and engineers and businessmen in the world have to say we need to develop a renewable product that competes with petroleum products on price and performance.  If you can’t do that, then there is no way, there is no incentive to do anything different.
“So our model, what we are here to do is to compete with these products on price and performance.
“And when we do that, there’s no objection:  ‘Now you are on the list with everybody else and you’re just like everybody else: hey, give me a call. Your stuff worked for me.’”
Focus on Specialty Markets Provide Opportunity for Small Business
Founded in 2008, and still a start-up like many in this space, Golden Leaf Energy employs six people with four in production.  Clark anticipates hiring as they grow, adding a weekend and a third shift.  For every additional shift they will add two people.  As they expand into other products, he expects to add capacity to their existing 2.2 MMgy facility and that will mean more hires.
They are actively developing new products.  Clark repeats the word, “innovation.”  “We have some interesting partnerships going.  We are just cranking up this partnership with Kraev (Laboratories),” he explains, introducing Dr. Kevin Roberson.  “He’s a scientist; we’re just contracting out brains, contracting out brain power,” he joked.  “We are going to continue to do that (instead of hiring scientists at this time).”
Troy Clark has met each bump in the advanced biofuels road with persistence, belief in the potential of this sector and trust in thoughtful innovation.  Despite the deviations from a direct path to renewable fuels, Clark is encouraging, “Smart people who’ve got ideas, if they want to make a home in the alternative fuels space, there’s a lot of opportunity.”
 
*Joanne Ivancic, serves as Executive Director of Advanced Biofuels USA. She also served as a lobbyist promoting advanced biofuels research and production on Capitol Hill and with executive agencies.  She has observed the development of advanced biofuels’ research and financing for more than fifteen years. From 2010 to 2013 she was voted one of the Top 100 People in Bioenergy by Biofuels Digest readers and editors.
This article is part of a series of articles looking behind the scenes at the people, places and projects that contribute pieces of the story of the development of advanced biofuels and the bio-based economy in the early 21st century.