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    South Korea plans to invest 20 billion won (€14.8/$21.8 million) by 2010 on securing technologies to develop synthetic fuels from biomass, coal and natural gas, as well as biobutanol. 29 private companies, research institutes and universities will join this first stage of the "next-generation clean energy development project" led by South Korea's Ministry of Commerce, Industry and Energy. Korea Times - November 19, 2007.

    OPEC leaders began a summit today with Venezuelan President Hugo Chavez issuing a chilling warning that crude prices could double to US$200 from their already-record level if the United States attacked Iran or Venezuela. He urged assembled leaders from the OPEC, meeting for only the third time in the cartel's 47-year history, to club together for geopolitical reasons. But the cartel is split between an 'anti-US' block including Venezuela, Iran, and soon to return ex-member Ecuador, and a 'neutral' group comprising most Gulf States. France24 - November 17, 2007.

    The article "Biofuels: What a Biopact between North and South could achieve" published in the scientific journal Energy Policy (Volume 35, Issue 7, 1 July 2007, Pages 3550-3570) ranks number 1 in the 'Top 25 hottest articles'. The article was written by professor John A. Mathews, Macquarie University (Sydney, Autralia), and presents a case for a win-win bioenergy relationship between the industrialised and the developing world. Mathews holds the Chair of Strategic Management at the university, and is a leading expert in the analysis of the evolution and emergence of disruptive technologies and their global strategic management. ScienceDirect - November 16, 2007.

    Timber products company China Grand Forestry Resources Group announced that it would acquire Yunnan Shenyu New Energy, a biofuels research group, for €560/$822 million. Yunnan Shenyu New Energy has developed an entire industrial biofuel production chain, from a fully active energy crop seedling nursery to a biorefinery. Cleantech - November 16, 2007.

    Northern European countries launch the Nordic Bioenergy Project - "Opportunities and consequences of an expanding bio energy market in the Nordic countries" - with the aim to help coordinate bioenergy activities in the Nordic countries and improve the visibility of existing and future Nordic solutions in the complex field of bioenergy, energy security, competing uses of resources and land, regional development and environmental impacts. A wealth of data, analyses and cases will be presented on a new website - Nordic Energy - along with announcements of workshops during the duration of project. Nordic Energy - November 14, 2007.

    Global Partners has announced that it is planning to increase its refined products and biofuels storage capacity in Providence, Rhode Island by 474,000 barrels. The partnership has entered into agreements with New England Petroleum Terminal, at a deepwater marine terminal located at the Port of Providence. PRInside - November 14, 2007.

    The Intergovernmental Panel on Climate Change (IPCC) kicks off the meeting in Valencia, Spain, which will result in the production of the Synthesis Report on climate change. The report will summarize the core findings of the three volumes published earlier by the separate working groups. IPCC - November 12, 2007.

    Biopact's Laurens Rademakers is interviewed by Mongabay on the risks of large-scale bioenergy with carbon storage (BECS) proposals. Even though Biopact remains positive about BECS, because it offers one of the few safe systems to mitigate climate change in a drastic way, care must be take to avoid negative impacts on tropical forests. Mongabay - November 10, 2007.

    According to the latest annual ranking produced by The Scientist, Belgium is the world's best country for academic research, followed by the U.S. and Canada. Belgium's top position is especially relevant for plant, biology, biotechnology and bioenergy research, as these are amongst the science fields on which it scores best. The Scientist - November 8, 2007.

    Mascoma Corporation, a cellulosic ethanol company, today announced the acquisition of Celsys BioFuels, Inc. Celsys BioFuels was formed in 2006 to commercialize cellulosic ethanol production technology developed in the Laboratory of Renewable Resources Engineering at Purdue University. The Celsys technology is based on proprietary pretreatment processes for multiple biomass feedstocks, including corn fiber and distiller grains. The technology was developed by Dr. Michael Ladisch, an internationally known leader in the field of renewable fuels and cellulosic biofuels. He will be taking a two-year leave of absence from Purdue University to join Mascoma as the company’s Chief Technology Officer. Business Wire - November 7, 2007.

    Bemis Company, Inc. announced today that it will partner with Plantic Technologies Limited, an Australian company specializing in starch-based biopolymers, to develop and sell renewably resourced flexible films using patented Plantic technology. Bemis - November 7, 2007.

    Hungary's Kalocsa Hõerõmû Kft is to build a HUF 40 billion (€158.2 million) straw-fired biomass power plant with a maximum capacity of 49.9 megawatts near Kalocsa in southern Hungary. Portfolio Hungary - November 7, 2007.

    Canada's Gemini Corporation has received approval to proceed into the detailed engineering, fabrication and construction phases of a biogas cogeneration facility located in the Lethbridge, Alberta area, the first of its kind whereby biogas production is enhanced through the use of Thermal Hydrolysis technology, a high temperature, high pressure process for the safe destruction of SRM material from the beef industry. The technology enables a facility to redirect waste material, previously shipped to landfills, into a valuable feedstock for the generation of electricity and thermal energy. This eliminates the release of methane into the environment and the resultant solids are approved for use as a land amendment rather than re-entering the waste stream. In addition, it enhances the biogas production process by more than 25%. Market Wire - November 7, 2007.

    A new Agency to manage Britain's commitment to biofuels was established today by Transport Secretary Ruth Kelly. The Renewable Fuels Agency will be responsible for the day to day running of the Renewable Transport Fuels Obligation, coming into force in April next year. By 2010, the Obligation will mean that 5% of all the fuels sold in the UK should come from biofuels, which could save 2.6m to 3m tonnes of carbon dioxide a year. eGov Monitor - November 5, 2007.

    Prices for prompt loading South African coal cargoes reached a new record last week with a trade at $85.00 a tonne free-on-board (FOB) for a February cargo. Strong Indian demand and tight supply has pushed South African prices up to record levels from around $47.00 at the beginning of the year. European DES/CIF ARA coal prices have remained fairly stable over the past few days, having traded up to a record $130.00 a tonne DES ARA late last week. Fair value is probably just below $130.00 a tonne, traders said. At this price, some forms of biomass become directly competitive with coal. Reuters Africa - November 4, 2007.

    The government of India's Harayana state has decided to promote biomass power projects based on gasification in a move to help rural communities replace costly diesel and furnace oil. The news was announced during a meeting of the Haryana Renewable Energy Development Agency (HAREDA). Six pilot plants have demonstrated the efficiency and practicability of small-scale biomass gasification. Capital subsidies will now be made available to similar projects at the rate of Rs 2.5 lakh (€4400) per 100 KW for electrical applications and Rs 2 lakh (€3500) per 300 KW for thermal applications. New Kerala - November 1, 2007.

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Monday, November 19, 2007

Syntroleum receives $12 million in committed equity financing, announces site for $135 million synthetic biofuels plant

Synthetic biofuels developer Syntroleum Corporation today announced that it has entered into an agreement with an affiliate of Fletcher Asset Management which requires Fletcher to purchase $12 million of Syntroleum common shares over the next 24 months pursuant to its existing shelf registration statement. The issuance of the securities is subject to certain closing conditions.

In a related development, Syntroleum also reports that Louisiana Governor Kathleen Babineaux Blanco and Dynamic Fuels, LLC have announced Geismar, Louisiana, as the site for Dynamic Fuels' new plant to produce next-generation renewable, ultra-clean diesel and jet fuel from vegetable oils and fats. The $135 million facility will have a capacity of 5,000 barrels per day and is scheduled for completion in 2010. Dynamic Fuels is a 50/50 venture between Syntroleum and Tyson Foods, Inc. to construct and operate multiple renewable synthetic fuel facilities (earlier post).

The agreement with Fletcher will make the investor put up an initial $3 million within the next six months at the market price of Syntroleum common stock plus $0.60 per share. If that market price equals the November 16, 2007 closing price of $1.49 per share, shares would be sold at a premium of 40 percent.

Fletcher will make later investments of $9 million in months 7 through 24 of the agreement at the prevailing price minus $0.20 per share. Warrants will be issued for 50 percent of the shares purchased in the later investments, with an exercise price equal to the price of the first later investment plus $0.40 per share. Wm Smith & Co., based in Denver, Colorado, acted as sole placement agent.
We are very excited about Syntroleum's Dynamic Fuels venture with Tyson Foods to construct renewable synthetic fuels plants. We've invested in Louisiana and the dynamic new field of renewable energy for years and look forward to sharing our insights with Syntroleum as they review alternatives to raise the balance of the capital they require to construct Dynamic's first plant. - Alphonse Fletcher, Chairman of Fletcher Asset Management.
Dynamic Fuels, the joint venture between Syntroleum and Tyson Foods, selected Lion Copolymer's Geismar plant as the site for their first facility. The Geismar plant will have a capacity of 75 million gallons per year and will utilize Syntroleum's Biofining technology and feedstock supplied by Tyson Foods.

The Biofining process [*.pdf] is a 'flexible feed, flexible synthetic fuels' technology capable of processing a wide range of renewable feedstocks including vegetable oils, fats and greases into a broad slate of synthetic ultra-clean fuels, including summer to arctic grade diesel fuel and jet fuel. This dual flexibility is unique in the renewable fuels industry. Biofining processes triglycerides and/or fatty acids from fats and vegetable oils with heat, hydrogen and proprietary catalysts to make renewable synthetic diesel or jet fuel (in this sense it is similar to other hydrogenation based renewable diesel production processes, such as UOP's 'green diesel', Galp Energia's 'H-biodiesel' or Petrobras' 'H-Bio') . The resulting fuel products are extremely stable, exceed all the standards of conventional petroleum based fuels, and are usable across a very wide band of operating temperatures as both diesel and jet fuel.

Syntroleum’s core technologies involve three key, patented processes, which form the starting point for the Biofining process (schematic, click to enlarge):
  1. Production and cleanup of synthesis gas consisting of carbon monoxide (CO) and hydrogen (H2)
  2. a Fischer-Tropsch process used for the production of biomass-to-liquids (BTL), coal-to-liquids (CTL) and gas-to-liquids (GTL) fuels; the key innovation is a process whereby the synthesis gas is converted to wax
  3. Synfining, or product upgrading, which transforms this Fischer-Tropsch wax into diesel and jet fuel.
The Biofining process leverages Syntroleum’s Synfining technology and product upgrading experience to produce renewable synthetic fuels from a variety of renewable feedstocks. The renewable synthetic fuels produced via Biofining are ultra-clean and much higher quality than those produced via conventional processes. The Biofining process is therefore a natural extension of Syntroleum's existing technology and business model:
:: :: :: :: :: :: :: :: ::

With its roots in Fischer-Tropsch process technology, Biofining also provides an economical pathway for the company to migrate into the emerging biomass-to-liquids (BTL) industry. By incorporating a gasifier and Fischer-Tropsch reactor to an existing Biofining plant, Syntroleum will then be able to produce ultra-clean and renewable synthetic fuels from biomass. This migration strategy is significant because the amount of potential biomass feedstock in the United States (1,300 million annual tons) dwarfs the current supply of vegetable oils and fats (15 million annual tons), and presents the true long-term growth opportunity in the renewable fuels industry.

A significant advantage of the Biofining process is the flexibility of the feedstock—vegetable oils or fats and greases, of a wide variety of quality levels (both inedible and edible) and in any proportion, can be successfully used by the Biofining process to produce renewable synthetic diesel or renewable synthetic jet fuel—all of the same high quality. Syntroleum plans to use low grade fats and greases in its plants because the cost is typically cheaper than vegetable oils, and because the use of low grade fats does not impact the human food supply.

Biofining fuels have lower emissions, near zero sulfur, no aromatics, and higher cetane levels than comparable conventional fuels. Biofining fuels can be used at much lower operating temperatures, and can be fully utilized in engines without having to be blended with other fuels. They are expected to be completely compatible with existing pipelines, storage facilities and other conventional fuel infrastructures. In summary, Biofining fuels are ultra-clean, flexible in their use, produce fewer emissions and are environmentally friendly.

Louisiana's governor commented on the selection of the site for the first Biofining plant:
I want to thank Dynamic Fuels for choosing Louisiana to create high-paying technical jobs and making the capital investment necessary to employ this new proprietary technology. This decision will allow even more Louisiana agricultural by-products to be converted into premium value-added products. - Governor Blanco, State of Louisiana Economic Development office
Syntroleum and Tyson Foods spokespeople added:
The site provides excellent people, infrastructure and utilities with an outstanding safety and environmental record. We look forward to working with Lion and expect that installing our plant within the existing complex will minimize cost while keeping Dynamic Fuels on schedule for production in 2010. - Jeff Bigger, senior vice president of Syntroleum Corporation.
The state of Louisiana, including Governor Blanco, the economic development team and local officials, have been outstanding partners to work with throughout our site selection process. This marks another important milestone in the execution of our strategy of leveraging access to animal by-products, our trading skills and industry relationships to become a premier player in renewable energy. - Jeff Webster, senior vice president of Tyson Renewable Products Division
Syntroleum has developed an advanced Fischer-Tropsch (FT) conversion process that converts synthesis gas derived from biomass, coal, natural gas and other carbon-based feedstocks into liquid hydrocarbons. It also owns the Synfining Process for upgrading FT liquid hydrocarbons into middle distillate products such as synthetic diesel and jet fuels, and the Biofining technology for converting animal fat and vegetable oil feedstocks into ultra-clean middle distillate products such as diesel, jet fuel, naphtha and propane.

Together with Tyson Foods, Syntroleum is focused on siting, engineering and constructing a plant that produces clean renewable synthetic diesel and jet fuel using low grade fats and greases as feedstock. The 50/50 venture, Dynamic Fuels, was formed to construct and operate multiple renewable synthetic fuel facilities, with production on the first site beginning in 2010. The Company plans to use its portfolio of technologies to develop and participate in synthetic and renewable fuel projects.

Fletcher Asset Management pursues an investment strategy that combines traditional investment management, corporate finance, quantitative methods and social responsibility. Since 1991, the firm has invested roughly $1 billion in promising companies led by solid management teams with responsible business practices.

Syntroleum: Syntroleum Receives $12 Million in Committed Equity Financing - November 19, 2007.

Syntroleum: Syntroleum Announces Site Selection for Dynamic Fuels Joint Venture - November 15, 2007.

Syntroleum: Syntroleum Biofining - Flexible Feed / Flexible Synthetic fuel [*.pdf] - June 2007.

Biopact: Syntroleum and Tyson Foods to produce ultra-clean synthetic biofuels - June 25, 2007


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