As the price of oil has become increasingly volatile in today's market, Americans are pursuing alternatives from electric cars to natural gas powered vehicles and biofuels. A laughing matter to the likes of some politicians like Newt Gingrich, biofuels have typically struggled to make serious headlines in commercial markets for many years. But the tides are changing. A second generation biofuel is on the rise.
Under the widely adopted Fischer-Tropsch process, many have sought to create commercially viable alternative fuels for over 50 years. The gas to liquids technology originally used to produce synthetic fuels in oil-poor Germany during WWII has undergone many upgrades since, yet its byproducts have remained hampered by high capital costs, high operational and maintenance costs, volatile prices of crude oil and low costs of natural gas. However, one company has been able to significantly improve the process enough to create a competitive renewable gasoline.
Through the conversion of biomass into high-octane gasoline, Primus Green Energy Ltd. can create drop-in gasoline that is virtually indistinguishable from gasoline produced from fossil fuels. It can be used directly in engines and does not require costly engine modifications, overhauls of the fuel delivery infrastructure or changes in consumer behavior. With the prices of crude oil well over $100 per barrel today, Primus estimates that its gasoline would only cost around $60 a barrel.
Using non-food crops such as herbaceous, woody biomass pellets or even miscanthus, Primus' process has a conversion efficiency of 25 percent—twice that of its closest competitor. Using one ton of biomass feedstock, or even natural gas, 90 gallons of renewable gasoline can be produced, making the process remarkably economical.
The 93 octane gasoline byproduct sells at 20 percent premium unleaded, meaning it can be used as a blendable component that refineries currently use. Ethanol, comparatively, runs into a 10 percent blend law. As for other alternative fuels, gasoline is generally a small portion of the product stream the same as it would be from crude oil at a refinery. That's what makes Primus so convenient.
“We only produce one thing,” says Dr. George Boyajian, VP Business Development at Primus. “A stream of pure gasoline.”
In terms of physical characteristics, Primus biofuels parallel that of a high quality gasoline. After being tested and analyzed in independent labs, the resulting product proved to be very stable with the lowest rates of conversion and corrosion of commercial gasoline.
In order for the process to be economical, the biomass would have to be sourced within a 50 mile radius of each plant and provide about a half million tons of feedstock annually. That's where miscanthus comes in. The EPA approved biomass crop can yield 10 to 20 tons of biomass per acre, while wood supplies about 1 to 2 tons per acre annually.
“Essentially, you could have dozens of these plants throughout the country that would be growing and supplying gasoline locally,” says Boyajian.
Attaining the right feedstock was a task Primus put a lot of time and research into, having tested some 20 other types of biomass over the years. Due to low ash and sulfur content, wood pellets and miscanthus have proven to be most ideal. Furthermore, should there ever be an interruption in feedstock supply, inexpensive natural gas can be used as a supplement.
In 2013, the company will begin breaking ground on its first commercial plant, which is expected to come online in 2015 and produce about 4.5 million gallons of gasoline annually. The cost of building the plant is crucial—an area where many others in the industry commonly fail. But because Primus plans on first scaling down from a commercial plant to a demo plant, the cost and engineering of a full-scale commercial plant will be much more predictable.
In terms of technology and business strategy, Primus owes much of its success to the failure of those in the industry before it.
“We believe it will be the most economic next generation biofuel on the market,” says Boyajian. “Ethanol was a good first step—if it weren't for ethanol, there wouldn't be a second generation biofuel. We've tried to learn lessons from others and further advance historic technologies. As with most science and technology, you're standing on the shoulders of someone else, and making improvements.”
Many of the “seasoned” developers at Primus also have decades worth of experience in the oil and refining industries.
“So, having seen a lot of the failures in the market before, we all came in with our eyes wide open,” says Boyajian. “And we're confident we have a winner.”