ZeaChem meets two key financial milestones in biorefinery construction
07 December 2010
ZeaChem Inc., a developer of biorefineries for the conversion of renewable biomass into sustainable fuels and chemicals, has hit two key financial milestones in the construction of its 250,000 gallon-per-year biorefinery in Boardman, Ore.
First, the company has obtained a guaranteed maximum price (GMP), under the Engineering, Procurement and Construction (EPC) agreements with engineering firm Burns & McDonnell, for construction of the core facility. The core facility will convert sugars into acetic acid and then ethyl acetate, the chemical precursors, under ZeaChem’s process, to the production of ethanol.
Second, ZeaChem has secured full construction funding for the core facility. The $25 million grant from the US Department of Energy will be used to fund the independent front and back-end cellulosic process components, enabling ZeaChem to produce fuel grade ethanol as well as intermediate chemicals from non-food related biomass.
With forest waste, farm waste and crops like switchgrass, we should be able to run at least half the cars on domestically made non petroleum fuels. This will eliminate OPEC oil imports to the U.S. completely and take some of the supply/pricing power from OPEC in the world markets.
Posted by: SJC | 07 December 2010 at 01:39 PM
SJC: It would also lower oil prices below break-even for some of our potential enemies -- Iran for one, and perhaps Russia. It would certainly transform the military industrial congressional complex. Maybe that is why we have not done it earlier.
Posted by: JMartin | 07 December 2010 at 07:42 PM
Use renewable energy where you can and conserve fossil fuels. One of the best use of fossil fuels is to build renewable energy resources.
Posted by: SJC | 07 December 2010 at 11:52 PM
I doubt there is such a thing as "prices below break-even" for existing major fields in OPEC. The natural decline rate of existing fields is in the neighborhood of 5%/year, and it takes continuous re-work to keep production rates up. Discontinuing rework would both save a great deal of money and quickly remove any surplus of supply. Revenue would go down, but profits would not decline nearly as much; the major damage would be to oil-field servicers like Halliburton.
This is the problem with using liquid fuels: if the system remains compatible with petroleum, it remains a market for petroleum no matter what else it can use. Electric vehicles eliminate that market.
Posted by: Engineer-Poet | 08 December 2010 at 05:09 AM
EP: "below break-even" may have been a poor choice of words on my part. It is estimated that both Iran and Russia need oil to sell for more than $80 (don't remember the exact numbers) to sustain their economies.
Some production will still be profitable at lower prices, but as you note, investment in new production and re-work will likely tail off. That means less money available to those governments.
Posted by: JMartin | 08 December 2010 at 08:00 AM
With as few as 82292 similar plants, USA could stop importing oil, if demand stops going up. Another 1606 new plants would have to be built every year to keep up with a low 2%/year rise in consumption.
The country may need 1000 new ships to collect enough feed stocks from 100+ different countries (excluding Haiti) around the world.
Yes Sir, this is the solution.
Posted by: HarveyD | 08 December 2010 at 04:30 PM