## Departments of the Navy, Energy and Agriculture award $210M in contracts for 3 drop-in fuel biorefineries; more than 100M gallons/year ##### 20 September 2014 The US Departments of Navy, Energy, and Agriculture have awarded contracts worth a combined$210 million to three companies—Emerald Biofuels, Fulcrum BioEnergy and Red Rock Biofuels—to construct and commission biorefineries capable of producing drop-in biofuels. In total, these projects are intended to produce more than 100 million gallons of military-grade fuel beginning in 2016 and 2017 at a price competitive with their petroleum counterparts.

The awards were made through the Department of Defense’s (DOD) Defense Production Act (DPA) of 1950, which was passed at the beginning of the Korean War to empower the President, among other things, with an array of authorities to shape national defense preparedness programs and to take appropriate steps to maintain and enhance the domestic industrial base. DPA has been re-authorized multiple times since then.

Title III of the Defense Production Act (DPA) currently provides unique authorities, under which the Government may provide appropriate incentives to create, maintain, protect, expand, or restore the productive capacities of domestic sources for critical components, critical technology items, and industrial resources essential for the execution of the national security strategy of the United States.

On 27 June 2012, the Defense Production Act Title III Program published a Funding Opportunity Announcement (FOA) for an “Advanced Drop-in Biofuels Production Project.” The FOA requested proposals from domestic sources to execute the project, focused on the creation of an economically viable production capacity for advanced drop-in biofuels.

The biofuels are to be delivered to the DoD fully blended with conventional petroleum product counterparts JP-5, JP-8 and/or F-76 requiring no modifications to existing infrastructure.

The drop-in alternative fuels can be blended at a 50/50 ratio with traditional fossil fuels. This blend was successfully demonstrated during the Rim of the Pacific (RIMPAC) demonstration in 2012 for ships and planes. As these fuels become more available, the Department of the Navy will make advanced drop-in biofuel a regular part of its bulk fuel procurement.

At the time of the issuance of the FOA, the requirement was that the project would include the design, construction, validation, qualification and operation of one or more domestic commercial-scale Integrated Biofuel Production Enterprises (IBPE) that meet a target of at least 10 million gallons per year neat biofuel production capacity.

The project has two phases:

• Phase 1: Planning and Preliminary Design;
• Phase 2: Construction, Commissioning and Performance Testing

Four Phase 1 Technology Investment Agreements (TIA) were awarded in May and June 2013; these went to Emerald Biofuels; Fulcrum BioEnergy; RedRock Biofuels; and Nature Bioreserves.

The companies receiving Phase 2 investment for the construction and commissioning of biorefineries are:

• Emerald Biofuels: To build an 82-million gallon per year (gpy) refinery on the Gulf Coast using waste fats to create military grade fuel. In May 2012, Emerald Biofuels licensed Honeywell’s UOP/Eni Ecofining process technology for the hydroprocessing of non-edible natural oils and animal fats to drop-in fuels. (Earlier post.)

• Fulcrum BioEnergy: To build a 10-million gpy refinery in McCarran, Nevada. Fulcrum uses a two-stage thermochemical process involving gasification of municipal solid waste (MSW) followed by a Fischer-Tropsch process to convert the syngas to jet fuel and/or diesel fuel. (Earlier post.) On 4 September, USDA announced a $105-million Biorefinery Assistance Program loan guarantee to Fulcrum BioEnergy for the construction of this facility. • Red Rock Biofuels: To build a 12-million gallon per year refinery in Lakeview, Ore. using woody biomass, or the by-products of forest management, as its feedstock and the Fischer-Tropsch process to create a refined product. The process begins with the gasification of woody biomass to produce synthesis gas. This synthesis gas is cleaned and sent to a Fischer-Tropsch unit where it is converted to liquid hydrocarbons. Hydroprocessing refines the liquid hydrocarbons to produce jet, diesel, and naphtha fuels. While large commercial facilities currently use Fischer-Tropsch technology. RRB’s key difference is a small economic footprint with flexible feedstock design; in 2013, Red Rock Biofuels selected Oxford Catalysts Group as the Fischer-Tropsch (FT) technology provider for the design and possible construction of a commercial Biomass-to-Liquids (BTL) plant in the US. (Earlier post.) ### Comments beauty... The total capacity of these refineries is 104 million gallons per year, about 2.5 million barrels. That is less than 7000 bbl/d, a drop in the bucket. If the Navy commissioned its new ships with nuclear power instead of diesels or gas turbines, not only would demand for petroleum be slashed far more than 7000 bbl/d, but the need for tankers and refueling would be eliminated. The ability to do trans-oceanic runs at flank speed without concern about refueling or time on station at the other end would be an operational advantage that no other navy has. So of course, our government pushes biofuels instead. My right wing friend assured me Exxon was spending billions on biofuel, and yet, it's these startup's who've won a Real Contract in the Real World. Where's Exxon? Sorry, I should have used google:, it's only$100 million, and Exxon declared it a failure.
Just some penny's for greenwashing.

http://oilprice.com/Alternative-Energy/Biofuels/Exxons-100m-Algae-Investment-Falls-Flat.html

With the price of Solar in the US Southwest now down to 5 cent per kWh, Exxon should be spending 20 Billion a year in Solar, for you know, PROFIT.

100 million gallons per year is not much, but it is a start. The three cellulose ethanol plants that just started will produce 100 million gallons per year, that is 10% of California and 1% of the nation's use. That is not a lot, but a start. Drops in the bucket have a way of filling the bucket over time when more come on line.

As for Exxon and Chevron and why they are not doing this? This is not their business, oil from the ground IS their business. They might even see this as undermining their core business. I would like to see oil companies using some of their wealth to develop alternative energy, but for the most part that is not happening. The last I heard Exxon was doing some algae work in La Jolla, just a hobby project for $300 million. They should invent a new ice that use a new fuel, both are needed to work together. surplus hydrogen in the combustion chamber expand with less heat than air. After you cool the hydrogen in the exhaust and you recirculate it back in the combustiom chamber. You then need less special gasoline or methanol. If you continu to develop this idea and make millions send me a million for the idea, i'll give you my email. Oil companies had a large exodus from biofuels two years ago. Now, it's USDA, DoD, private equity, and large industrial companies that provide the capital funding for advanced biofuels. In general the DoD seems more interested in PR than in actually establishing a new industry which is too bad given the leadership's seemingly good intentions. We'll see if this announcement has any legs. Just to add to SJC's calculation... 100 MGY is 10% of California's biofuel consumption not petroleum consumption.$210 million for 100 million gallons annual production is \$2.10 per gallon of annual production. Depending on the life of the plants, let's assume 15 years, that is 14 cents per gallon of fuel produced. 14 cents in plant costs per gallon of fuel. Depending on operating costs and feedstock this seems it could viable. Or, at least not limited by the cost of the plants/facilities. It would be nice to see the estimated total cost of production.

gor, I you referring to methyl hydrate?

Sadly, the pentagon was proposed a plan to make JP-8 out of poppy seed in Afghanistan, which is more efficient we were told than cotton, the other preference of Afghan farmers. Condee Rice would have none of it.

The competitiveness of the scheme actually takes second place to the sociology. You effectively buy out or cut out the feudal overlords by guaranteeing the peasant farmers a high income for a guaranteed crop, the cash for which could be redirected to food and animal management in a free market. This replaces the plantation system in which starving farmers are forced to grow cash crops to keep alive, only to see declining prices and ever more powerful middlemen, who spend the money on guns, religion, and other measures to keep the system afloat.

The failure to deal with this dynamic is what sunk the GWOT. God forbid we should think like the Russians!

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