For a number of years, this now old and outdated, but very useful chart has been in circulation in energy circles, mapping the supply of energy to the world by looking not at prices, but at production costs. For one thing, it goes a long way to explaining why the price of oil can tumble so quickly when there is a fall off in demand, and explains why OPEC is troubled by unconventional oil in a way it is not so bothered by other energy sources such as renewable fuels.
Renewables not only have been traditionally at the expensive end of the curve, the supply has been generally quite limited when we look at total global demand.
Conversely, shale oils uncovered through US fracking operations — to use another example — are able to supply lots of oil to meet world demand at prices well below the OPEC target, and they can also be competitive with some of the more expensive conventional oils.
So, they bite into market share and also price. But today, the cost of production has changed, dramatically. You can see it in this wonderful data set that Bruce Babcock and the Center for Agricultural and Rural Development at Iowa State have maintained for many years. To make a fair comparison, we have to take into account the refining cost of making gasoline — we need to compare finished ethanol and finished gasoline, not compare corn to gasoline or ethanol to crude oil. The EIA has this data fromhere.
That perception is not accurate for the net cost of production of ethanol in the US after considering the value of animal feed byproducts DGrain and corn oil and CO2 production for the human food market. Thanks to the pricing data from our friends at PFL, we see that the D6 RIN is trading at 41 cents per gallon. All the same math applies in the world of biodiesel, but there are different data points.
But biodiesel RIN s are more valuable, and close the gap a little. When we look at the California market and its Low Carbon Fuel Standard and Oregon, too, which also has an LCFS we are looking at a different animal, since the carbon value is added on top of RIN credit values. For biodiesel, the credit bites harder because biodiesel really, really reduces carbon.
Which tells you two things:. The renewable fuel credit markets work with remarkable efficiency, after just a few years in operation. The credits reach almost exactly where they should, because a credit should in some ways make a mandate obsolete, it should incentivize a market player exactly to the point where they have a financial gain from deploying a renewable fuel. In California at least, a remarkable threshold has in fact been reached.
In the actual markets that exist — carbon and fuel markets — ethanol and biodiesel have achieved market parity.
Now, you can argue all night that carbon markets are not free markets — they are created by government fiat. And, you can argue all night that fuel markets are not free markets — they are created by cartel fiat. But they are markets, and they are the markets we have. But they are the markets we have, and in the markets we really have, we can say that markets in California are telling us this:. You can make more money producing ethanol than producing gasoline from petroleum, according to our math.
And investors might take note — because making money is generally what investors are trying to accomplish in the petroleum markets. So, why exclude those? Posted by Guest Contributor at Members of the U. In addition to the ethics question, Members of Congress and some in the biofuels industry should examine whether Icahn could even deliver on the purported quid-pro-quo even if he wanted to.
Icahn claims the RFS exacts a disproportionate toll on his business interests, and he therefore wants to move the POO as far from CVR as possible. Icahn Enterprises owns 82 percent of CVR Energy, which includes two oil refineries — one in Kansas and a small one in Oklahoma — and a rack marketing terminal for selling finished fuel.
Despite owning the rack terminal, CVR protests it cannot blend enough biofuel to meet the obligation and must therefore buy Renewable Identification Numbers RINs on the market. However, Reuters has reported that CVR sold RINs on several occasions in the past year, creating a short position in the market and apparently gambling that it can escape the obligation or buy the RINs back at a deflated price.
When Icahn was named a special advisor to the President on regulatory reform in Decembermany different stakeholders erroneously believed he would quickly push through changes to the RFS and exempt his refineries from having to purchase RINs.
In NovemberEPA proposed to deny petitions filed by the American Fuel and Petrochemical Manufacturers and several independent refiners asking the agency to change the point of obligation. Notably, not all petitioners agreed on who should be obligated, and some of the various petitions may not have exempted CVR. By law, if EPA now decided to reverse itself and move the POO, it would have to present a rational argument for doing so — one that countered its own previous evidence.
An executive order to change the POO would likely face a Court challenge. EPA would have to undertake a new rulemaking and respond to comments from numerous groups opposed to moving the POO, including most biofuel producers and several oil producers.
Chief among them was a waiver of gasoline volatility standards for blends of 15 percent ethanol E15 to allow E15 to be sold in summer months. Gasoline evaporation contributes to ozone formation. Ethanol burns cleanly, decreasing engine tailpipe emissions, and therefore the standard 10 percent ethanol gasoline blend E10 earns a small waiver of evaporative emissions limits. So the biofuels industry would have no recourse to force regulators to follow through on the E15 waiver.
The MOVES model is indeed flawed because it uses input parameters from an April fuel study that was basically designed to attribute tailpipe emissions to the ethanol content in the gasoline. So, to correct the flaws in the model, EPA must redo the study. But in April, the Trump administration proposed to eliminate funding for the EPA office that conducts fuel and engine tests, creating a new potential hurdle that — at a minimum — would conflict with any potential executive order to change the MOVES model.
The White House does not have the authority to grant this or any other tax policy via executive order. Tax policy is set by Congress and Presidential recommendations mean little on Capitol Hill. The biofuels industry has opposed moving the POO primarily because it would require lengthy rulemaking and disrupt an RFS program that only recently got back on track.
Even the American Petroleum Institute API opposes changes to the POO. Brent Erickson is executive vice president in charge of the Industrial and Environmental Section at the Biotechnology Innovation Organization BIO. BIO represents more than 1, biotechnology companies, academic institutions, and state biotechnology centers across the United States and in more than 30 other nations.
The Trump headline came out of a letter sent to the delegates to the event by President Trump — which itself is a hopeful sign of support. But did the President really offer support for the Renewable Fuel Standard?
Now, the President could have written a letter to the Affordable Healthcare Society attending at the National Conference to Save Obamacare with the following:.
I am committed to reducing the regulatory burden on all businesses, and my team is looking forward to working with the Affordable Healthcare Society, and many others, to identify and reform those regulations that impede growth, increase consumer costs, and eliminate good-paying jobs without providing sufficient environmental or public health benefit.
Donald Trump understands all this. Consumers benefit from this national policy and our industry looks forward to continuing to be the lowest cost, highest octane fuel in the world.
The RFA debuted a new study by ABF Economics. According to the analysis, the production and use of Overall, he noted that the industry produced a record What were the top U. How many states offer E15 15 percent ethanol blends and how many automakers warranty their vehicles for higher ethanol blends?
Carl Icahn and others have been urging the White House to shift the point of obligation to retailers and fuel distributors— and a coalition of independent oil marketers, convenience store chains, travel plazas and truckstops, and ethanol producers has assembled to fight the change.
NATSO, representing more than 1, travel plazas and truckstops nationwide, opined: This will crush the very constituencies whose interests President Trump promised protect in order to benefit a narrow segment of the refining industry. Growth Energy delivered an economic analysis commissioned from Edgeworth Economics that identifies numerous problems associated with changing the Renewable Fuel Standard RFS point of obligation. UAI argues that the Clean Air Act does not forbid the use of midlevel gasoline-ethanol blends in conventional vehicles.
UAI points out that under the Clean Air Act, EPA bears the burden of showing that ethanol contributes to harmful emissions before it may limit the concentration of ethanol in fuel. The proposed rule reverses this burden of proof and subverts the intent of Congress by requiring fuel manufacturers to show that higher levels of ethanol would not harm emissions control systems. They include the Energy Future Coalition, Clean Fuels Development Coalition, Glacial Lakes Energy, Siouxland Ethanol, ICM Inc.
Further, we see a shift from RFA — and almost everyone else promoting renewable fuels on Capitol Hill — from discussing the greenhouse gas benefits of renewable fuels to the domestic jobs and energy security that flows from US-based fuel production. For RFA, the focus is clearly on E Those worthy goals are far more in the background as the ethanol industry continues to focus on a E15 tolerance that would boost the potential for ethanol blending well above 20 billion gallons.
So, feel the bioeconomy backbeat and let the music flow. This week, Gevo executed a series of moves including signing up its first direct customer for hydrocarbons for the proposed expansion of its Luverne, Minnesota plant.
The highlight was a five-year offtake agreement with Haltermann Carless, ETS Racing Fuels and EOS. In the second phase, HCS will agree to purchase approximatelytogallons of isooctane per year under a five-year offtake agreement.
Of course, the question that hangs over the enterprise is that — now that Gevo has developed a stable technology for making isobutanol and has proven it out at Luverne, and developed a demo-scale technology for making renewable hydrocarbons at its Silsbee, Texas plant — how is it going to finance a business plan? That is, finance the construction of an expanded plant that can make enough molecules at enough scale to a make a difference in the world and b rescue Gevo from the financial trough into which it has fallen.
Since money is unlikely to fall from the sky like manna from heaven, the likely solution is an offtaker who steps forward out of the desire for the product. After all, airlines have seen enough pressure on their sustainability goals from regulators, have seen enough shaking heads when it comes to the prospects for a solar plane any time in the next 50 years, and enough companies that can produce jet fuel decide to make renewable diesel.
Yes, airlines are enjoying low fuel prices now, but someone has to ask how long the public will permit concentrated amounts of CO2 to be vented at 35, feet, where it can do some damage — without extracting a carbon fee for skyfill. After all, everyone pays for landfill. Just try and dump some garbage without paying a municipal fee.
Several parties petitioned the US EPA to shift obligations under the Renewable Fuel Standard from them to someone else. Basically, to anyone else. The petitioners want relief from buying RINs, thinking about renewables, or experiencing any pain associated with the change in the fuels marketplace which the Congress mandated in the EISA Act. And, the EPA has proposed to open up a broader comments period on the issue. So you have renewable fuel producers, retailers, and oil refiners. Lankford, in case you were wondering, introduced a bill to repeal the corn ethanol mandate in with the Ghost Fuels Deletion Act and again in with the Phantom Fuels Elimination Act.
He again called for repealing the RFS in June The issuing of the Report gives occasion for renewable fuel-haters to Dis the RFS and say that the program is not working. Meanwhile, BIO has used the report as an opportunity for EPA shaming, stating:. Biofuels that are technologically well understood include biodiesel, renewable diesel, renewable natural gas, cellulosic ethanol, and some drop-in fuels. A few of these fuels, such as biodiesel and renewable diesel, are being produced in significant volumes…[but have]…feedstock limitations.
Current production of cellulosic biofuels is far below the statutory volumes and… production costs are currently too high…Drop-in fuels are…too costly. Among the factors…the low price of fossil fuels relative to advanced biofuels…Experts also cited uncertainty about government policy…the RFS and federal tax credits…investors do not see them as reliable and thus discount their potential benefits when considering whether to invest.
Everyone already knows all this, the GAO report is a statement of the obvious. We might add, the entire report was written based only on talking to academics and government officials. This is a political haymaking and not much more. Consider this as a Warning Label for the Report: Keeping it perversely alive. As Gord Miller, former Environmental Commissioner of Ontario told the National Post: Moreover, all access to the liquid transportation fuel market for current and future renewable or alternative fuels would be eliminated, and research and development of biofuels would be shut down.
The Commission also proposed a binding blending obligation of 6. The European Commission failed to reflect in its proposal the latest science and evidence that demonstrate the very high sustainability profile of a series of conventional biofuels. They have a legitimate role to play in the EU energy mix. EU regulators hope to secure food for Europeans by phasing out the conversion of grains and oils to fuels.
Yet, what happens when supply outstrips demand? Commodity prices fall, and production exits the market, reducing the very grains and oil supply that the new directive is supposed to secure. The fashionable beliefs in the EU about the nature of agricultural commodity markets, remind us of the European idea, fashionable in the s, that you could end the catastrophe of war through unilateral disarmament. Instead, European democracies were simply unprepared for the military crises of the late s and Europe experienced its greatest catastrophe since the 30 Years War and the Black Death as a result.
But it was miles short of that. Bynumerous KiOR staffers of the time believed that the company had a management problem more than a technology problem. No matter how dire the technological challenges seemed.
Fred let Andre go his way, and they hired too many people from Albemarle across the street. Catalysts are important; you need a few people. But you need a lot of process people, and that balance went wrong. The balance was precarious, as dawned.
Everything was riding on the performance in the first commercial plant. If was another year of private failure and public bravado, a year of living disingenuously, would be the year in which the multiple streams of fiction and non-fiction would merge into a river of raw data that would make the truth clear.
The company had reached scale, but was still in the slow process of commissioning, so there was still room for doubt, or hope. The inside true story of a company gone wrong, Part 1. The inside true story of a company gone wrong. After the mechanical completion of the Columbus plant it took quite a long time, before the plant actually started producing products. Of course I was concerned and in preparation of the Annual shareholders meeting in MayI sent a letter to Fred Cannon asking some important questions Attachment D.
At the annual meeting I had a separate meeting with Fred and Samir Kaul. This concern of mine is not new, and I have expressed it already for a while, also during my tenure as director on the KiOR board and an official memo to the board and management: As far as I know these recommendations have not been followed up, while they remain at least just as relevant today as they were a year ago.
While I already for some time, no longer have any official function at KiOR and I do not have any non-public information of KiOR, I am regularly being approached by shareholders from BIOeCON heritage, but also by other institutional investors and the press, asking me critical questions, amongst others why I am not actively helping the KiOR team to solve their problems? Keep in mind that the success or failure of KiOR is for me not only a financial issue, but also as main inventor one of honor.
Although KiOR never properly acknowledges the origin and heritage of the technology: BIOeCON and myself as primary inventor, most informed outsiders are smart enough to figure that out. I cannot just stand back and watch; As I see it now, the only thing I can really do is to ask critical questions at the annual shareholder meeting on the 30th of May next in Houston with the hope to get the ball moving in the direction of the corrective actions needed to speed up the transition towards a profitable and prosperous business.
Attached the questions, which I intend to raise at the shareholders meeting. Separate to that, I would like the opportunity to present and discuss my thoughts on how to tackle the issues raised by these questions with CEO Fred Cannon and Samir Kaul as key representative of Khosla Ventures the controlling shareholder in the board of directors.
QUESTIONS for KiOR management at the shareholders meeting: How sure is KiOR about that? The delay in starting up and getting Columbus on stream could be related to this lack of operational leadership. Does KiOR have sufficient high-level staff with sufficient operational hands-on experience in the FCC and HPC processes to start up and run Columbus and a second plant in Natchez.
In Maythe company reported relatively rosy news to the public. As KiOR disclosed in its quarterly SEC Q filing:. Inthe Company completed construction of its first, initial-scale commercial production facility in Columbus, Mississippi. This facility is designed to produce up to 13 million gallons of cellulosic diesel and gasoline per year. No mention of the massive shortfall in yields. And to date, the costs had been high.
Again, from the SEC Q2 report:. The Company expects to continue to incur operating losses through at least as it moves into the commercialization stage of its business. On June 5,Mark Ross joined KiOR, appointed as Senior Biomass Fluid Catalytic Cracking Engineer. Ross was based in the Pasadena, Texas facility.
The interviewer asks you how many people you are serving every night. You answer although you are only actually serving You are not lying because you designed the restaurant to handle a night even though you only have 20 a night currently. Eventually you will be serving a night so you are not lying but stating a future number that is possible. You are just not telling the whole truth. Dennis was noticeably concerned about what I was telling him because he only knew what Fred was telling him which was the fraudulent 72 gallons per ton of dry wood.
I told Dennis I would look into this in more detail and get back with him. I ran the calculations several more times and kept coming up with the same numbers, about 22 gallons of oil per ton of dry wood. I was still alarmed so I sought out Neil Wang and Gil Ceballos, who share an office. Neil was a Senior Process Engineer and Gil a Technologist and both were responsible for the material balances around the Demo Plant and the Columbus unit… Neil and Gil both confirmed that indeed the numbers I calculated were the same they had calculated and they too had raised concerns in the past but it fell on deaf ears.
I asked Chris if any computer simulations were performed to simulate the recovery of the hydrocarbons from the water and gas and he suggested I speak to Senior Process Engineer, Agnes Dydak. Ross next approached Dydak. Despite the warning given to him by a colleague about not speaking up, Ross persevered.
KiOR had in fact been unable to prove that its biocrude could be successfully refined without having routine and persistent shut downs that would drive up costs, drive down production and render the process commercially unviable.
These and the reasons for them were the exact concerns that CLE had expressed to KiOR in Maywell before the MDA ever loaned a single dollar to the Company. KiOR had not only failed to prove that its biocrude could be successfully refined by an oil company in its existing infrastructure; KiOR had been unable to successfully refine its biocrude in extended runs in its own refining equipment. As previously disclosed, on March 17,KiOR, Inc. Why was Khosla making loans, rather than injecting equity into KiOR?
No one has said for sure — but it would be worth pointing out that by establishing itself as a significant lender and senior debt-holder, Khosla and his allied entities would have stronger rights in a bankruptcy than as equity investors. On July 11,sources indicated to The Digest that Vinod Khosla, Samir Kaul and Fred Cannon held a dinner meeting in which the situation with the yields at Columbus was reviewed.
Stamires notified Cannon and Artzer that he had seen the actual yield data and was going to report the real yields being achieved to the Board of Directors. I never saw Dennis again at KiOR. The Company is currently considering two options for its next commercial-scale facility. One option is to design, engineer and construct a second initial scale commercial facility adjacent to its current initial scale commercial facility in Columbus, Mississippi, which would have a capacity of bone dry tons, or BDT, per day.
The Company is considering this option because it believes that a second initial scale commercial facility in Columbus may allow it to i accelerate its ability to achieve overall positive cash from operations with less need for capital from external sources and risk of financing, ii reduce design, engineering and construction costs due to its ability to leverage its experience from the construction of the current Columbus facility, iii incorporate the most recent improvements to its technology into both the existing facility and the planned facility in Columbus, iv achieve operational synergies as a result of shared personnel, infrastructure and operational knowledge with the existing Columbus facility, and v leverage existing feedstock relationships while introducing other types of lower cost feedstocks such as hardwood, energy crops, and waste products such as railroad ties.
Yet, even this revised production cost target could be described as ridiculous, given that the company had not achieved anywhere near the 72 gallons per ton yields. By November, KiOR again reported to the SEC on its plans for Columbus II, but costs had skyrocketed.
And, the company continued to stand behind its 72 gallon per ton yield claim, which was wholly unfounded in the scientific data according to every insider the Digest has spoken with. In November, KiOR claimed:. The bleeding of personnel turned briefly to a hemorrhage when, on December 1John Karnes resigned as Chief Financial Officer. Following his submission of emails to Will Roach, the state of Mississippi reports that little immediately came of his efforts:.
Stamires attended a meeting that was also attended by Roach and two attorneys, Peter Buckland and Paul Coggins. Buckland had served as counsel for KiOR for several years, whereas Coggins had been hired by the outside directors of the Board of Directors to conduct an internal investigation of KiOR. Stamires recounted in the meeting the circumstances and complaints he had been making since In early springKiOR reported again on its progress to the SEC.
This time, there was not much sugar-coating on the state of operations at Columbus II:. Until recently, we have focused our efforts on research and development and the construction and operation of our initial-scale commercial production facility in Columbus, Mississippi, or our Columbus facility. The problems were legion. According toi KiOR, there were issues with process and with the catalyst. In Januarywe elected to temporarily discontinue operations at our Columbus facility in order to attempt to complete a series of optimization projects and upgrades that are intended to help achieve operational targets that we believe are attainable based on the design of the facility.
While we have completed some of these projects and upgrades, we have elected to suspend further optimization work and bring the Columbus facility to a safe, idle state, which we believe will enable us to restart the facility upon the achievement of additional research and development milestones, consisting of process improvements and catalyst design, financing and completion of the optimization work.
But the blame was shifted to the front-end of the process, where biomass was delivered into the reactor — rather than to the catalyst performance and reactor design identified by its scientific team as the primary issue. In terms of throughput, we have experienced issues with structural design bottlenecks and reliability that have limited the amount of wood that we can introduce to our BFCC system.
These issues have caused the Columbus facility to run significantly below its nameplate capacity for biomass of bone dry tons per day and limited our ability to produce cellulosic gasoline and diesel. We have identified and intend to implement changes to the BFCC, hydrotreater and wood yard that we believe will alleviate these issues. In terms of yield, we have identified additional enhancements that we believe will improve the overall yield of transportation fuels from each ton of biomass from the Columbus facility, which has been lower than expected due to a delay introducing our new generation of catalyst to the facility and mechanical failures impeding desired chemical reactions in the BFCC reactor.
In terms of overall process efficiency and reliability, we have previously generated products with an unfavorable mix that includes higher percentages of fuel oil and off specification product. The fixes were in hand, said KiOR, but money had run out? Since inception, the Company has generated significant losses. With that kind of capital invested in the project, there would be equity investors at significant risk should the company collapse.
Why the troubles raising cash, if the fixes were really fixes. His letter of resignation is a poignant summary of all that went wrong with the company as it failed to advance what had been a promising technology, and of the actions undertaken during the first half of As you know the KiOR technology to convert waste biomass into fuels and chemicals via catalytic pyrolysis or cracking originated from a Dutch company called BIOeCON, which invented and explored this concept in and I am one of the principal inventors of this technology.
Igor Babich and Sjoerd Daamen B. At the end of BIOeCON and Khosla Ventures KV formed KiOR Inc. In at my suggestion KiOR hired Fred Cannon as their CEO. Fred Cannon had been my boss earlier at Akzo Nobel and Albemarle and I valued Fred for his excellent people skills.
During the Akzo years I worked very close with Fred, whereby I lead the technology development together with 2 other colleagues One of them Dr. Hans Heinerman, who also worked for KiOR in Fred was always able to get the financial support from the Akzo Nobel board for the funding so we could execute our innovative projects, which greatly enhanced the profitability and value of the Akzo Nobel Catalyst group.
During the first two years of KiORI worked as CTO with Fred in building up the organization, proving the concept in a modified FCC pilot plant and leading the research into improved catalysts. Already then we had some technical disagreements about the road forward and managerial issues about the experience and quality of the people being hired. Unfortunately Fred broke off the links to the BIOeCON origin of the technology and so KiOR lost some very valuable experience and insights from the strong European experts connected with BIOeCON.
My two-year contract, as CTO was not renewed in October I did stay on the board of KiOR, until May of During this period on the board my access to technical information was restricted and limited as the MT and Khosla Ventures were uneasy about my known other activities in the area of biomass conversion in cooperation with PETROBRAS.
This cooperation by the way is outside of the KiOR scope as was agreed with Khosla Ventures during the formation of KiOR. Initially I was not too concerned about the further development of KiOR technology as one of the few figures presented to the board of directors in February of See Attachment A indicated some good progress in increasing the yields in gallons per ton. At the end of however, I received some additional data See attachment B and I was shocked to see that the yields were lower than reported in February…and that hardly any progress had been made since the end of After several e-mail and phone discussions with Fred Cannon and Samir Kaul, I received the opportunity to visit KiOR for a technology review.
Unfortunately the review was very restricted and limited. Still with the limited data made available to me during my review I could conclude that part of the problem of the lower yields…My main conclusions were: The present overall yield of saleable liquid products, roughly estimated from the information received falls short of [claims] and has not improved significantly over the last two years.
Unfortunately none of my recommendations was followed up. It is obvious for all of us today that KiOR is going through some difficult times, and may even not survive as a company. The reason for this, in my opinion, is not because of the failure of the technology itself, but because of several wrong choices made during the development and commercialization of the technology.
In mean time everyone else hoped for the best. Of course I was concerned and in preparation of the Annual shareholders meeting in MayI sent a letter to Fred Cannon asking some important questions. The real proof-of-the-pudding however would be a successful start-up and operation of Columbus in Unfortunately this did not work out the way, which everyone had hoped for and several problems were encountered leading to production rates [at much lower percentages compared to] the actual design case.
I started forming this taskforce in April, with apparent approval of the MT, after making some difficult compromises with the MT, as the MT still had very different views on how to improve the technology. These different views resulted in strong differences of opinions with regards to the priorities to be given, the organization, people decisions etc. I persisted with my task and returned to Houston after a short stay in Europe in May. I was then requested by the board to postpone my visits to KiOR, because of my critical attitude towards the MT sic.
This meant that my efforts to lead the taskforce and make the necessary changes at KiOR stopped: In my opinion KiOR hereby lost some crucial months and also some good people. I tried to meet with the MT to reestablish a mode of working together, but the MT did not respond…. In the mean time, as I do not have the opportunity to help KiOR as originally intended, I have resigned from the board as of August 31st Although I am no longer on the board, I remain a strong supporter of KiOR technology and the company and hope you as board will wisely decide on the future of KiOR.
Ultimately, the KiOR Columbus facility assets were sold at auction for pennies on the dollar, and the KiOR technology and its pilot plant and offices in PasadenaTexas were re-organized as Anaeris Technologies, and the company continues to pursue its technology today.
Otherwise, they might be treated as victims themselves — investors who had also suffered financial damage. Leaving Mississippi without a bundle of cash to chase in recompense. KiOR did not make a high quality crude oil, but instead made a biocrude that was high in oxygen and acids which made the biocrude difficult to refine within the standard equipment of major oil companies.
Due to its inability to convince a major oil company to refine its biocrude, KiOR was forced to construct and operate its own refinery in Columbus. And so, with the November bankruptcy filing at KiOR, the era of development and deployment gave way to an era of restructuring and recrimination.
The company had once been hailed as one of titanic promise, but had been revealed as one of titanic promises which were not matched by performance. At the heart of the failure? KiOR has banked on steady improvement of yields, but instead there was a steady decline as the company moved towards scale. My observation was that the low yields and on-stream times at Columbus were reasonably in line with the results and experience in the DEMO plant in Houston.
My belief then and still now is, that these problems can be solved, but that this will require a different approach in catalyst selection and operation strategy. But these are technical issues, and virtually every new technology is replete with stories of ideas that did not work out, clashes between technologists with differing opinion as to how improvement is to be made.
What distinguished KiOR, almost alone among a class of technologies the Digest has covered for a decade, are the management responses to issues.
Even at the end, KiOR management was trying the same failed strategy of rosy projections that could not be achieved by its technology at the time. This is a good initiative, as it may help to salvage this interesting and promising technology. Keep in mind that the MT also convinced the board at the time to build and start-up Columbus based on projections, which have not been substantiated in the DEMO, while we now know that the DEMO predicted reasonably well the poor yields and on-stream times at Columbus.
As already communicated to you earlier I cannot support this approach. Clearly it was the troubles at Columbus that led to the bankruptcy event. Rather, the filing stated the preferred outcome right up front:. KiOR currently intends to seek approval from the Bankruptcy Court for an auction and sale of its assets under Section of the Bankruptcy Code.
Keep in mind these are not the Columbus assets — the plant itself. Rather, these were the KiOR technology assets. SEC Charges Alternative Fuels Company and Former Executive for Key Omissions Regarding Technology. On September 26,the Securities and Exchange Commission charged Texas-based Mard, Inc. But they did not disclose that this yield was based on significant assumptions about technologies that remained under development.
Absent these assumptions, internal KiOR documents reflected test results with yields of approximately percent less than the disclosed yield. Cannon signed and approved the registration statement and subsequent filings that continued to tout the 67 gallon yield figure without disclosing the underlying assumptions.
KiOR and Cannon knew or should have known that disclosure of these assumptions was necessary to provide complete and accurate information to KiOR investors about the actual yield. In NovemberKiOR declared Chapter 11 bankruptcy, emerging as a privately-owned entity in June The settlement is pending final approval by the court.
It is the purpose for which boards are established: The directors may well escape the trident and net of the courts — as they often do — but whether they escape the judgement of public opinion: But was it all simply board inattention?
Some point fingers at the payday which KiOR represented to employees — paychecks, bonuses, fees, stock options. Was simple greed the key factor which kept doubt from turning into active revolt — which kept whistle-blowing activity to a minimum until by and the company was unable to meet its bills? The KiOR guys, Chris Artzer and John Hacskaylo, they had it pretty well-organized what they were going to tell Paul.
I was not invited to be present but I found out later that what they presented to him was very limited, and was highly censored by Chris brent crude oil average price options, Hacskaylo and Fred [Cannon].
America stock td trade gave him all the details because said I am was representing the Board. Meantime, I want to get to the Board, because Gary [Whitlock] had not called me and I wanted to get to the Board. So I did that. And he was going to go to the Board. He knew the story. He knew what was going on at KiOR. He knew that KiOR was going to go down.
It may well come down to this: KiOR was not just about innovative technology, but about an innovative path to commercial success. For KiOR, the model companies were not Chevron or AkzoNobel, but Google, eBay and Amazon. All which belonged in the digital economy, rather than the physical economy.
The 67 gallon per ton claim in the IPO. We asked Denis Stamires, point-blank: Was it a complete fabrication? It has to be. Did you ever have a chance to review the yield claims prior to the IPO?
And they even put my name on it. How did I found out? After it had gone out into the public, my son who is a business executive, found it from his Wall Street friends. I got a copy from Wall Street, and I was at KiOR. Aapl stock buy or sell blows your mind.
High use of a catalyst at a high price? What about catalyst loss? The whole thing was becoming academic. The process had a lot of metals, and was severe, and the biomass contains metals, and the process, the velocities and the contact time. It was the process time.
It deactivated pretty fast. You get plugged pores. But it was the metals in the biomass. We were not removing them, we were adding them, in pre-treatment with salts. The agency finalized a total renewable fuel volume of Thus, the implied RVO for conventional biofuels like corn ethanol will be 15BG—up from the Under the Clean Air Act, the EPA has authority to waive down Congressionally-targeted volumes in the case of supply constraints, which members auto trading binary options 100 deposit Congress said they intended to mean a lack of renewable fuel production, rather than a lack of infrastructure deployed by refiners to distribute renewable fuel.
Renewable fuel producers had contended that should refiners have the ability to stall navara forex money brokers ltd of renewable fuels by not deploying infrastructure, obligated parties would have gained veto power over the Clean Air Act and Congress.
Under the new RFS rule, Biomass-Based Diesel standards would move to 2. The Biomass-Based Diesel category — a diesel subset of the overall Advanced Biofuel category — is made up of biodiesel and renewable diesel, another diesel alternative made from the same feedstocks using a different technology.
The new standards reflect modest growth in the standards but remain below the more than 2. The EPA substantially boosted volumes from the original proposals issued earlier in the year.
Cellulosic fuels were essentially flat from the original how the stock market affected the great depression, but advanced biofuels were boosted nearly million gallons and, overall, renewable fuel obligations were boosted million gallons.
Michael McAdams, ABFA President: We are also happy to see the confidence and support of pacific stock trading company santa cruz ca biomass-based diesel pool by continuing to recognize the fact it is growing steadily. And, we welcome increases in both the advanced and cellulosic pools.
Those are truly the fuels of the future that deliver the most significant contribution to sustainability. These benefits extend far beyond the biodiesel industry, supporting high paying jobs and clean air across the nation. Though we are poised to top these numbers this year, growth in advanced biofuels still sends positive signals to the marketplace. The production capacity and feedstock are clearly available as the market is already topping these levels. We will work with the incoming Administration to help them understand the benefits provided by our growing domestic biodiesel industry and the potential to support additional jobs and investment in rural economies.
Administrator McCarthy said they would get the RFS back on track and they did. We have moved past the imaginary blend wall. The biofuels industry continues to innovate. The merchant refiners saying they cannot comply with the RFS are now implementing cost-effective changes at their refineries to blend more renewable fuel. Stock broker stockbroker Trump will no doubt hear from a shrinking group of RFS naysayers, but I think he understands that the RFS is working, supports a strong manufacturing base across the country and reduces our dependence on foreign oil.
We are looking forex offshore trader to working with EPA and the next Administration on further accelerating the commercial deployment of advanced biofuels. The move will send a positive signal to investors, rippling throughout our economy and environment.
By signaling its commitment to a growing biofuels market, the agency will stimulate new interest in cellulosic ethanol and other advanced biofuels, drive investment in infrastructure to accommodate E15 and higher ethanol blends, and make a further dent in reducing greenhouse gas emissions.
It continues to inject much needed competition and consumer choice into the vehicle fuels marketplace. It enables greater consumer adoption of cleaner biofuels that displace toxic emissions and reduce harmful emissions, while creating American jobs, spurring innovation and lowering the price at the pump.
Court of Appeals for D. We look kenya forex exchange today to the Court taking up our case early in and deciding in our favor.
Wesley Makemoney 2.0 senha de ativaçao, farmer and Typing work at home mumbai This is critical for farmers facing difficult economic times, as well as for consumers who care about clean air, affordable fuel choices, tokyo stock exchange historical chart lowering our dependence on foreign oil.
Renewable Energy Group REGI. Oh, President and Chief Executive Officer. We appreciate the support of those at the EPA, many others throughout the Administration and our bi-partisan champions on Capitol Hill who all helped make this possible. The RFS is make money 3d scanning key reason America is achieving its economic, health and climate goals. We made these investments because the Renewable Fuel Standard stock market objective questions strong, stable and clear.
I commend the EPA on holding firm to the letter of the law despite enormous pressure from oil interests. These numbers reflect the intent of Congress in making homegrown, renewable biofuels a sizable portion of our transportation fuel supply. With the proposal, the EPA ensured that only one turkey will be on the table this Thanksgiving — the actual Thanksgiving Day turkey, and no evidence of an RFS turkey in sight.
An unexpected series of wins across US Midwestern states — capturing Iowa, Pennsylvania, Wisconsin and Ohio which had gone for Obama in — provided a comfortable margin of victory in the Electoral College and the popular vote. Some immediate themes emerge for the global bioeconomy as the US turns now from its lengthy election process to the transition period between Administrations. Trade rebalancing is front and center on the agenda. Over at the Renewable Fuels Association, CEO Bob Dinneen noted:.
Climate action is likely to be scaled back sharply. At the very least, leadership on climate activities is likely to pass to others, and a shift back towards policies that favor US domestic production of coal, oil and natural gas is likely. First-gen biofuels less impacted. He understands the importance of clean, domestic how to make money gta online solo resources and the economic power of value-added agriculture.
We are binary options legal in canada Mr. Trump will continue to support the expanded production and use of fuel ethanol.
Moreover, the president-elect is committed to removing regulatory barriers that impede growth. We look forward to working with a Trump administration to remove unnecessary volatility restrictions that have discouraged market acceptance of higher level ethanol blends like E15 and created unreasonable administrative burdens on gasoline marketers willing to offer these fuels to consumers. FWe are eager to work with the new Administration on myriad trade challenges currently facing the U.
Adam Best buy in ps3 stockton ca, President Americas for Novozymes NVZMY said:. A Farm Bill is due in and spending and priorities until then will largely continue along the lines established in the Farm Bill.
A focus on renegotiating or exiting NAFTA will have impact on agricultural prices. A mirror of We may well see, as a result, an unwinding of portions, or the whole of, the US health care reform authorized under the Affordable Care Easy tips for forex trading ltd — and changes in foreign policy. Too many left behind? Most experts believe that the shift towards global free trade is, on the average, better for all.
Also, that the shift towards an advanced economy based around the innovation center of Silicon Valley, the policy center of Washington and the financial center of New York is, on average, better for all. But experts also agree that trade deals and seismic shifts in the economy create winners and losers. The average economic result, for example, of NAFTA may well be positive. It is not controversial to say that people are left behind as economies and countries evolve, and in the US it appears that voters feel too many have been left behind.
The discussion of how to spread the wealth of any nation is one that parties grapple with — should it be through unleashing more opportunity for those left behind, or through redistributive tax and spending policies.
Last night, the US public spoke on that one. But so far, the company and its celebrity investors and directors such as former Secretary of State Condoleezza Rice and famed venture capitalist Vinod Khosla had escaped close scrutiny.
The methods for keeping the truth bottled up were not pretty. According to our sources for this story, dissenters had been fired, data had been faked, and opportunities to address the impending debacle with improved technology were ignored, underfunded or shelved.
Meanwhile, the Board was misled either proactively or through lack of guidance on key performance indicators. Trouble that had been looming in had boiled into outright crisis in Some progress had been made on technology, but not enough, Not trik sukses trading forex enough.
The progress achieved had stemmed from changing the Technology from the original BCC reactor design and using a new ZSM Zeolite catalyst. Fatally, the trade option binaire avis on yields had been made at a catastrophic increase in the catalyst cost.
The funds needed to be able to continue operations would soon be depleted. Potential investors, said one company insider, became skeptical about the over-glorified, profitable financial picture the Management team was claiming and deceitfully presenting to the public and to investors.
Notably, it has backing of large industrial companies like Chevron…The Columbus facility is on schedule to begin production in the second half of this year with an annual production capacity of 13 million gallons of biocrude. We cannot overemphasize how important a positive outcome at Columbus is. Yet, the yields were lower and the Chevron relationship, as originally how much money did the internship make in the form of an offtaker of crude bio-oil, was in tatters.
Chevron would only take a finished fuel. The Motley Fool was right on the money in one respect.
That was more than double what the company had yet achieved in the demo or pilot plants, according to staff familiar with the state of technology development at the time. By the first quarter ofKiOR team members pointed to a spilt in the management team, which had previously insulated itself from the technical staff.
And Ditsch, Work from home oswego il, Artzer, and Cannon set the [day-to-day] policies, and communicated with the public and investors. The rest trading the forex gap the management team were kept in the dark.
It created confusion, poor morale, fear, discord, and mismanagement. At Forex performance analysis we would ask our technical people to tell shareholders what issues there were. Our perspective was that, if you know what the problem is you can solve it. Despite claims of higher yields in the IPO documentation and elsewhere, the demonstration unit, using the latest ZSM zeolite catalysts, was still a dud.
Think of it this way. Before paying for the conversion technology. Or the intraday option trading calculator of the plant. Or the operating of it. Or anything to pay the workers. Much less pay back the investors.
Or lenders like Mississippi. A financial debacle of immense proportions loomed, unless something could be done. But it got worse, not better. Members of the technical team believed that the BFCC conversion process was not scalable to full commercial size plants without further reducing the yields.
They were fearful that the truth would come out, investors would flee, KiOR would fall, and with it would go their jobs. Technical staff felt that exposure would come no later than the opening of the Columbus plant, when it would start operation and not be able to meet the yields used in the financial models and presented to investors. It would make the findings and conclusions more credible.
It could have convinced the board, and Khosla to act swiftly. It could have saved KiOR. Cannon stalled in making a decision. Meanwhile, Professor Vasalos planned a three-day visit to KiOR on January 25th, and anz stock brokers a brief to present to Cannon on the new proposed technology.
But, in the end, Cannon declined to meet with Vasalos during the entirety of his stay. First, Vasalos was confidentially bound by his Consulting Agreement Contract to KiOR. Second, after consulting with Robert Bartek, together with Dr.
Third, Vasalos forexten para kazanan, earlier, licensed his own Reactor design to KiOR, which KIOR had incorporated into the design of the KBR Pilot Plant and in the Demo Unit, resulting in a substantial increase of bio-oil yields. They could hardly have found a more expert, stock trading software cybertrader voice more tied down in confidentiality agreements.
It is difficult to imagine how a company could have better conveyed an attitude of fear of independent review, as if there was a scam in the works and a rush sell put option graph transfer ownership to duped retail investors as soon as humanly possible.
KiOR had a draft agenda for a Technology Review scheduled to take place on March 8th. The draft had a list of speakers and invited staff. Only a handful of subjects to be discussed. I will contact Samir to see how he wants to discuss this at the board.
I agree with you that an Oral presentation is the best. On March 8th at the invitation of Fred Cannon CEO I visited KiOR to discuss my concerns about the in my mind the limited improvements in the overall process yields obtained over the last 2 years.
My concerns were based on the scarce and conflicting information on product yields I received during the board of director meetings BOD in the period of up to These concerns are further amplified given the fierce, rapidly evolving and well-funded competitive technologies in this space.
One example is the JV between Ensyn and UOP. The following assessment is based on limited additional information I received during the meeting and presentations at KiOR on March 8th, and is constrained by the following limitations: Notwithstanding the foregoing it is still possible for me to make the following observations: In fact the catalyst and reactor concepts presently being developed were already conceived in Yet, by Aprilmanagement still expressed a stubborn belief that the Natchez commercial-scale plant would produce 80 gallon per ton yields.
Yet yields in the Demo plant were no atlantica online gold making guide than the mids, and technical staff feared that they would sink even lower in the commercial-scale plant at Columbus.
You only have to look at the trouble KiOR was getting into for the water that was being discharged by the plant. It was discount stock brokers list in mumbai full of oil that regulators were complaining.
In MarchDr. Loezos was a chemical engineer formerly working for ExxonMobil, and was at this time the Technical supervisor of the Demo unit. He reported to John Hacskaylo. And Loezos and Chen wrote another report in June Both confirmed that the yields were the principle of trader on the binary options lower than the 67 gallons per ton claimed in public documents.
His concerns atlantica online gold making guide not receiving raw data were not new, but were revived.
But he levels charges at management of preventing him, as a board member, the assistance of an independent expert to review the state of technology advancement. And he called for the hiring of a strong CTO — a position he had himself filled in the distant past. Most importantly, there is a clear theme in his note of calling for experts and Board actions independent of management. Although he did not directly attack the overall management of KiOR, or Cannon himself, pros and cons of diversification strategy is a clear sense of wariness in his missive.
My concerns were based on scarce and conflicting data received during the board meeting in December. Therefore this review and assessment is very preliminary and should definitely not be considered as a full in depth technology audit. Notwithstanding these limitations is still possible for me to report some key observations and recommendations.
His lack of relevant knowledge is exemplified by his poor reporting of inadequate and even misleading metrics. Appoint a knowledgeable independent team reporting to the BOD to perform a true in-depth technology czarina foreign exchange valero contact numberwithout the limitations that constrained my present assessment.
Establish a Board Technology Committee similar to the existing Audit committee create free paypal account and make money online review the technological progress on a regular basis.
Establish nzd aud exchange rate bloomberg Technical Advisory Board TAB consisting of world recognized experts and specialists to advise and assist the CEO, CTO and Board Technology Committee with its tasks e.
Knowing the real test results, management should have stopped lying to the public and investors, changed the technology and re-designed the Columbus plant.
By July, three groups had access to the Demo data and analyzed it. Loezos and Chen, Charlie Zhang and Dennis Stock options toontown, and Professor Vasalos from CPERI. All three teams came to the same conclusion: Agnes Dydak and Charlie Zhang were KiOR chemical Engineers who had worked at the Demo Unit and also at the Columbus Plant.
Using forex metatrader 4 templates parallax process simulation modeling program, she was forecasting what will be the bio-oil yield at the Columbus Commercial plant when in operation. This was critical since the reactor was 50 times larger at Columbus.
The model predicted that the production would drop from an average yield of 37 gallons per ton at the Demo plant to a range of gallons per ton at Columbus. She reported her finding to her supervisors. A team member familiar with the response said that Hacskaylo and Loescher directed her not to publish the results of her Computer process simulation and yield prediction results of the Columbus plant, and not discuss them with anybody else.
Also, her daughter was working at KiOR as an IT specialist. She agreed to meet confidentially with Stamires and, outside of normal working hours, contribute towards the development of an alternative technology, to replace the BFCC process which was used at the Demo unit and also planned for use at Columbus.
Further, the frustrations and concerns of Agnes became much more exasperated when she informed her Management Superiors about the results of the computer process simulation study, indicating that the bio oil yield at the Columbus Plant will be much smaller than the actual yield measured at the Demo Plant, and that her superiors told her not to publish her report or discuss the results with anybody else. But there was more. Catalyst costs were far above predictions, trashing the expected profit margins.
Problems in bringing the Columbus plant on-line were noted. I would like to repeat myself by starting to congratulate Fred Cannon and the KiOR team, in particular Ed Smith for the timely and on budget completion of the first cellulosic biomass conversion plant in Columbus. Citi forex review to the completion of Columbus KiOR has been on time and budget with the delivery of her milestones, however unfortunately since then the success ratio has not been so dramatic, resulting in the following delays and shifts in performance targets: The Columbus plant is not yet on-stream, and the suggestion is that it may take up to nine-months before the plant is completely on-stream and ramped up to its capacity…and product yields.
The product yields are not at the Gallons per bone dry wood [level] as estimated at the IPO, and in fact the suggestion is that the GPBD will only be reached in the larger and modified? The catalyst being used at Columbus is based on large quantities of an expensive… apparently public knowledge!
Based on A, B and C the overall economics and cash flow of KiOR will be substantially less positive than estimated at the IPO etc. While KiOR management is holding the info on A, B and C confidential, the overall financial result is and will become more clearly visible. Because of A, financing of Natchez plant has been delayed and so czarina foreign exchange valero contact number start-up of Natchez has been shifted at least one quarter from 4Q to 1Q This is hurting KiOR now and could in worst case even turn a potential success into a failure if no appropriate corrective action is taken.
He resigned as a director in Mayand started to unload shares. Nothing before he attempted to rouse the KiOR management and board on three occasions. He may have sold far more. In a May 23rd filing he reported holding more than 12 million shares, but in his October 31 filing, he reported holding 1.
In Augustthe state of Mississippi alleged recklessness in the financial modeling. The state said, in its lawsuit against KiOR:. The recipients included John Kasbaum, John Hacskaylo, Ed Smith, John Karnes, Chris Artzer and Fred Cannon.
The entire executive leadership team signed off on the key assumptions, despite the recklessness and misleading conclusions to which they led. Also, we expect that the final construction costs for the Columbus facility will be about four percent under our latest cost estimate. Once implemented, we believe that these improvements should allow us to increase our nameplate capacity up to 20 percent and significantly decrease the capital intensity of our facilities.
Despite the healthy IPO inKIOR would soon running out of funds to keep operating, surveillance system in russian trading system stock exchange (rts) was in the process of talking to different potential investors. Earlier in the year, Vice President of Engineering and Construction Ed Smith has been commended by management for his work in bringing in the construction of the demo unit and the first commercial plant at Columbus on time and under budget.
But the State of Mississippi alleges that, by no later than How to make quick cash in runescape f2p 7th, Smith had lost confidence in KiOR, as well.
A series of runs conducted in its Pasadena, Texas pilot plant, according to Mississippi, which based its allegation on an email Smith penned to KiOR employee Arnold Korenek. The Stealth restricted stock units uk taxation within KiOR, working nights, weekends and vacations, had not given up.
On October 25th, Dennis Stamires delivered to Cannon a detailed Technical Report entitled: In the Q3 earnings call on November 8th, Cannon stated:. It was the alternative technology which the Stealth Team had been pursuing and which a consensus of technical team members said KiOR needed to close the gap between public projections and actual results.
Cannon thanked Stamires for the Proposal and told him that he will study it and would come back to him. The report did not directly credit Dydak and Zhang, who were afraid of retribution from Hacskaylo and Loescher. However, Stamires was able to indicate to Cannon only that the Report also represented the work of others, but with names withheld. The concern at the time, was not just about shareholder backlash, but competition. They had been already made by former KiOR staffer Mike Brady and tested tn usda livestock auction reports Robert Bartek at the pilot plant in Their chemical compositions, the proposal outlined, could be further optimized, as well.
At the heart of the technology? Curiously, the IP became somewhat mangled, according to Stamires. Despite the rosy chat with shareholders and the world, towards the end ofCannon hired Bill Parker progressive betting systems of earning money had worked under Cannon at AkzoNobel as a production and binary options strategy borderlands manager, and also at Albemarle, where he was a project manager.
Albemarle was located just across the street from KiOR. Hopes were high that he would help the company recognize the troubles with its current technology. The statement is more than a little disingenuous. Cannon is specifically limiting himself to noting 100 deposit bonus binary options t the oil that was being produced was upgradable into cellulosic gasoline moneymakergroup finanzasforex diesel, without typing work at home mumbai the cost of same.
The stock market manipulated by Cannon astutely avoids any discussion of catalyst cost, regeneration, coking and poisoning — factors which routinely frustrated efforts to upgrade bio-oil at an affordable cost, as the Pacific Northwest National Lab noted here.
Was the catalyst being regenerated while retaining activity? Market trading hours new years eve the process able to run for significant lengths of time on a single catalyst charge? The Cannon statement sidesteps the issues with a bland statement of confidence that KiOR could produce an in-spec fuel.
Something that has been done for decades, successfully. It was about making them cost-effectively. Our work continues on our next generation catalyst platform, which we believe can produce a yield of 72 gallons per bone dry ton of biomass when implemented at our amibroker forex settings scale commercial facility in Natchez.
Moreover, we believe that this catalyst platform will reduce the amount of coke made in our process by up to 25 percent, which would enhance the capital efficiency of our commercial facilities by giving us the ability to process up to 25 percent more feedstock without significant additional capital. Cannon did not indicate where the next generation catalyst was coming from. Or when it would be ready.
But it was more than that. Rather, these fixes addressed capital costs — the process technology remained as damaged as ever. Was there another stealth technology? Would KiOR pass the Welch test? For sure, numerous KiOR staffers of the time believed that the company had a management problem more than a technology problem.
Other staffers point to a highly competent technical team that had been assembled. The promoters said that it was not only possible, it was being done at the Demo unit.
That Columbus would produce around half that, again. And then there was the Stealth Team, proposing a radical new technology capable, they believed, of reaching something like 80 gallons per ton. Skeptics, promoters, innovators — who would be proven right? We continue the story in the next part of our series. Expect Gevo to wind down ethanol production and convert the entire Luverne facility over to isobutanol, now that demand is ramping up.
There will be a hydrocarbon upgrading technology added, which will give Gevo the option to produce up to 10 million gallons of hydrocarbon fuel from 13 million gallons of isobutanol.
The heads of agreement is non-binding and is subject to completion of a binding off-take agreement and other definitive documentation between Gevo and Lufthansa, expected to be completed in the next few months.
Then comes the engineering, the financing, the construction. Stand by for 24 months. Mark fall on your calendar. And so, Gulliver escapes from the land of the Lilliputians, formerly tied down by the Butamax litigation and the slow-to-emerge though shiningly profitable world of marine fuels.
Into the how i made 2016000 in the stock market time of delivering solar fuels to hungry airlines.
The pricing and margins are good. What they want is to self-regulate on carbon emissions, and avoid a patchwork of regulations everywhere they take off, land or fly over.
The cost of compliance would be too great. But what none of us know is exactly what the cost of compliance will be, or the cost of oil, or the cost of alternative fuels in that long-term. So, everyone is moving cautiously although steadily. They see the massive market, and they see the obvious need and the airlines actively developing. Investors also see that some of the alternatives are more expensive, or are more expensive to scale. The airlines used a 20 percent blend.
In March, we reported that ASTM International Committee D02 on Petroleum Products, Liquid Fuels, and Lubricants and Subcommittee D J on Aviation Fuel passed a concurrent ballot approving the revision of ASTM D Standard Specification for Aviation Turbine Fuel Containing Synthesized Hydrocarbons to include alcohol to jet synthetic paraffinic kerosene derived from renewable isobutanol.
So, now there are 4 approved alternative fuel specs. Combination of two factors. The company began looking for fuel alternatives in and has launched a number of trial flights and commercial flights with different blends of aviation biofuel with fossil jet fuel.
The relationship between Lufthansa and Gevo dates to springas we reported here. With the European economic climate no longer interesting for investors, the airline believes binary option traders insight tool strategies a agricultural investments—for feedstock for aviation biofuel, for example—is an area not yet fully exploited.
The industry has made progress creating all kinds of specialty chemicals from renewable sources and more or less successfully brought them to market.
However they have made zero commercial progress on anything other than ethanol for gasoline. All lloyds banking group shares sell major advances have involved better and better ways to crank out ethanol. Is there some fundamental thermodynamic barrier that makes conversion of biomass to butanol impossible? Butamax has been less visible in terms of timelines, but they also produce isobutanol from corn sugars.
And Global Bioenergies is making progress horaires conforexpo 2013 a renewable gasoline made from isobutene. Why so few technologies, why 100 accurate forex indicator little commercial progress on gasoline substitution, excepting ethanol? Theoretical yields for making isobutanol from sugars, for example, hover in the 41 percent range, while theoretical ethanol yields are in the 51 percent range.
Yields for making isoalkanes and aromatics from sugar— typical components of gasoline — are in the low 40s, too. Now, you probably at this stage would mention the higher RIN values associated with advanced biofuels. Right now, D5 advanced biofuel RINs are selling for roughly the same price as D6 corn ethanol RINs.
Absolutely, you get 1. So, right now, the market is not rewarding isobutanol makers with a premium price in the road transport market. Sadly, not in the jet fuel market, either. One is the cellulosic fuel market. There is a substantial set of premiums relating to free forex signals via sms incentives available for cellulosic feedstocks.
Another is the marine market. There, boat owners, for a variety of reasons generally going back to boat construction materials, prefer an ethanol-free product. In this case, isobutanol is not competing against E10 ethanol-gasoline blends. Rather, they are competing against straight gasoline. We have direct evidence that isobutanol is selling in Now, one of the attractive uses of an isobutanol fuel in the marine sector is that marinas are not obligated parties under the Renewable Fuel Standard, but isobutanol is a qualifying fuel.
Hence, a marina owner can blend a gallon of renewable fuel and detach the RIN that comes with every gallon of renewable fuel, and sell it into the marketplace. Now, remember that the ExpressLube value we mentioned is the retail value, and the retailer gets that RIN, as well, although its value contributes to the price a wholesaler will pay for the product. The marine market is where its at, for isobutanol, in the near-term.
The economics on road transport furls have to improve a bit before we are going to see more substitutes for gasoline, besides ethanol. May need more equipment. Dilutive cap raise coming. Women and children into the lifeboats. Revenues dropped primarily with falling ethanol and distillers grains prices.
The workload has been time-consuming to get there, this year. Additional distillation system equipment that was ordered after the March re-start, has pushed back the production ramp-up. And, the company still needs to optimize further and will continue those efforts into Good news for those who follow fermentation rate, titre and yield. With the delayed ramp-up, Gevo says it will be able to produce KK gallons of isobutanol this year, and produced 80K gallons in Q2.
Based on run-rate, the company expects to get a compare australian stockbrokers capacity of 1.
With one production train out of four at the next correction stock market crash prediction gallon Luverne facility devoted to isobutanol, the capacity for isobutanol, at a theoretical level, would be somewhere in the 3.
The market that attracts the most attention right now is alcohol-to-jet. The two Alaska Airlines flights utilized a 20 percent ATJ fuel blend. But as we have pointed out on that front here, the ATJ jet fuel market is going to be strangled by policies that offer two RINs for two gallons of ethanol but only one RIN for a resulting gallon of jet fuel. Musket has taken delivery of its first railcar of isobutanol and is moving it through their distribution system.
Bottom line, boaters are not big fans of E10 ethanol blends because, for one, they can cause problems with fiberglass-based components found in older boats. Isobutanol blends offer compliance for the fuel blender with the Renewable Fuel Standard, and happier customers. This would be a path to tailored mixes of propylene, isobutylene and hydrogen, which are valuable as standalone molecules, or as feedstocks to produce downstream derivative products such as how to earn money from google analytics fuel, chemical intermediates, and polymers.
Five months ago, it was mooting a sale of the company owing to liquidity concerns. One industry expert told us that, had Gevo not global forex institute johannesburg public and given itself the opportunity to raise cash through dilution, it would have gone out of business or been sold. Leaving Gevo with roughly 15 months of runway, based on its cash position today.
Gevo has to hit its targets, and there are a bunch of them. Rate, titre, yield, production cost, production volume, market price, burn rate. But is shaping up to be a much prettier year for Gevo than perhaps any since In part 1 of our series hereand part 2 here. KiOR was hanging by a thread as the summer of commenced. In a few days, the first recorded visitors to Pasadena demo unit, representatives of the Mississippi Development Authority, were expecting to see the demonstration unit in action.
The company was beginning to hurtle towards an IPO. Catalyst stability would be challenged, everyone knew, with the water that is contained in wood chips.
Steam can be highly problematic for zeolite. More than that, the company was facing a potential problem with the metal content in the biomass feed that accelerated the deactivation rate of the catalyst, which resulted in excessive amount of daily catalyst replacement, according to one KiOR scientist.
There were reactor design issues. There was a rush to commercial-scale of the NASA type. Management issues, communications issues can be seen. And, a series of statements to the state of Mississippi that would be impossible to live up to without major improvement in yield. Capital needs were going to be tremendous, and beyond an IPO there was a loan guarantee process and the state of Mississippi loan application to be successfully navigated. Why the rush to scale? All venture-backed companies rush.
But was there a special rush on with Khosla-backed companies, and did that rush apply successfully to industrial technology? The State of Mississippi quoted this passage from the Harvard Business School case study, Khosla Ventures: Khosla played an active role in helping his portfolio companies determine appropriate milestones in the process of moving from a pilot to a commercial operation.
Once that was achieved he often challenged the team to reach another 10x reduction in cycle time. Everyone was counting on everything to improve in the demo unit, and in And, with design corrections, fingers crossed this could be translated to a commercial scale unit. Not always, not often, but sometimes.
Could KiOR pull it off? A former KiOR staffer recalled. Bartek [had been] isolated from the team.
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He was kept in the dark. However, these improved oil yields still needed to be doubled again to reach the level of gallons per ton yields that would be required to support a commercially viable KiOR. But it was more than the loss of a technical leader. It was a cautionary tale for many of the staff. Angelos Lappas, Professor Vasalos and Mike Brady. You can see how frustrated I amafter two or three years and all the work we have done, millions of dollars spentwe are now stuck in a Hole with the ZSM.
In fact, there was a celebration going. In the complex world of loan guarantees, a term sheet is a first step. Ultimately loans are made by banks, and guarantees are applied to them. And they never guarantee the entire loan, only a portion of it, typically around 60 percent. They need the bank to have skin in the game to avoid funding improbable loans. The company, for that reason, was a long ways from a financing event. And, there was a bomb hidden in the news. The project, as described in a note to staff written by CEO Fred Cannon, was expected to produce more than 11 million gallons of fuel per year.
Why was that a problem? What was worrying at the Columbus plant was less the amount of fuel coming out as much as the amount of feedstock going in. The plant had a nameplate capacity of tons of dry biomass per day. With that, staff realized for the first time that the company was representing yields to the Department of Energy that were materially above what the technology was achieving.
In his note to staff, Cannon thanked the team and singled out one individual for the loan guarantee milestone. It was Andre Ditsch, author of what KiOR colleagues said were grossly inflated yields. In it, he showed dramatic improvement in bio-oil yields produced at the Demonstration Unit. Allowing for a responsible level of oxygen content, sufficiently low for the product to be upgraded to a finished fuel, the data showed a 67 per gallon output.
Hacskaylo extrapolated to 84 gallons per ton as a target for the future. But there was a problem. According to KiOR staff members of that time, the data was cherry-picked; the most optimistic data was being used.
Favorable bursts based on a handful of moments in time. Substantially much lower that the bio-oil yields that Hacskaylo was reporting. But it was worse than that. The yields were lower than the Bio oil yields produced with same catalyst and process conditions at KiOR Pilot plant. Not with the same process conditions and catalyst. Something was very wrong with the demo design. Something that was concerning Stamires and Charlie Zhang who were monitoring and analyzing the raw DEMO data and comparing them to those obtained from the KCR Pilot plant.
But no one on the commercial management team would know about it for quite some time. Worse, if this trend-line was valid, and could be extrapolated to larger size plants, then it was possible that Bio oil yields at the commercial-scale Columbus plant, when operational and using the same catalyst and process variables would be even smaller than the Demo.
Well below financial viability under any foreseeable combination of circumstances. In February John Karnes joined KiOR as the new CFO replacing Kevin Denicola who had resigned. It was a critical moment. As an early-stage company, KiOR was cash-hungry. KiOR hired Dennis Cuneo, a business executive with established ties to Mississippi state officials, as its representative. As the state of Mississippi alleges: On or about February 20,Cuneo notified Governor Barbour that KiOR had entered into an offtake agreement with Hunt.
Cuneo requested that Governor Barbour direct the MDA to release funds. Governor Barbour notified Gelston that she would soon receive a communication from Cuneo in which Cuneo would request a release of funds.
The offtake agreement with Hunt did not supply them with a bio-oil for Hunt to upgrade using refinery-based hydrotreating technology. Rather, Hunt agreed to offtake finished blendstock, upgraded by KiOR. On February 28, according to the state of Mississippi: ExxonMobil Corporation Vice-President of Corporate Strategic Planning, William M.
But the KiOR could hardly spare a moment to think about the consequences of bad news from Exxon. During the first quarter ofthe company was a beehive of activity on multiple fronts.
As March came to a close, attention shifted sharply to the DOE loan guarantee. And there was a big problem. The catalyst was rapidly and severely de-activating. But that would take time and there was no guarantee that a new catalyst could be developed — or that it would perform as well as projected in the forecast.
With catastrophe on the horizon relating to the catalyst performance and the yields at Columbus, on April 11, KiOR filed for an IPO with the SEC, and claimed in the prospectus:. The state of Mississippi vehemently disagreed. They alleged that, in addition to the failure of the KC1 catalyst:. It was the first appearance of the inflated yields in a document that would be relied upon by the retail investor.
A KiOR staff member at the time recalled: From the point of view of the KiOR shareholder, this represented a potential disaster of the first magnitude. The inclusion of a co-inventor on a patent, who has made no intellectual contribution to the invention, is serious business in the world of patents. The practice represents grounds, in and of itself, to invalidate a patent.
Damaging to the other co-inventors — and ultimately for the company to whom the patent rights are routinely assigned. A biocrude offtake agreement is what had originally been intended by KiOR. Rather, it was a gasoline and diesel offtake deal. The original plan had been to ship biocrude and let Chevron and others hydrotreat the biocrude to remove excess oxygen, and then blend the upgraded fuel.
So, KiOR would have to build a hydrotreating unit at Columbus, and a hydrogen plant. After a question from the governor, Cuneo explained the Catchlight deal: Kior decided to integrate forward into diesel and gasoline to take advantage of the renewable fuel credits which otherwise would have gone to Chevron. As a result of the forward integration — the investment in Columbus is larger than originally anticipated. The Hunt deal is also for gasoline and diesel. Kior can make a nice additional margin by making gas and diesel — plus they get to keep the renewable fuel credits — which are gravy.
Courts will rule on this point eventually, but it is difficult to imagine that, so long as KiOR was able to supply fuel to Catchlight that was suitable for blending — no matter what equipment was used on site to produce the blendstock — that KiOR owed a duty to disclose changes in technology it was utilizing to produce a fuel. So long as KiOR disclosed that its financials had materially changed with any particular change in process, which it did.
I pointed out in detail the large discrepancies between the low yields KiOR was producing and the much larger inflated ones which KiOR was disclosing to the public. I gave him copies of the data, and he promised to study them. I tried hard to convince him that he must take action. Artzer told me he was still studying his documents. I never heard back from him on these issues. A KiOR staffer recalls: I was very impressed with his knowledge and his plans to make KiOR move forward.
I though he was the right person and had a chance to save KiOR. In a meeting with Dennis Stamires in June, he was advised that the biocrude yields in reality were much lower than the 67 gallons per ton, as stated in the IPO filing. Coates immediately began investigating the accuracy of the yield data and cost estimates. Subsequently, Coates also reviewed the operations and results with raw data of the Pilot plant and the Demo unit, the report by Vasalos and McGovern on maximum yields.
He also looked at the technology of Dynamotive, based on the public information. According to KiOR staffers from this period, Coates concluded that there were large, unjustifiable discrepancies in the yields claimed and those achieved. He would write on July 15th to a KiOR scientific staffer: Let me think about this for a few hours, as I have been thinking along the same lines, lets discuss further tomorrow morning at 10 at my office. In fact, Coates had determined to form a Task Force aimed at to changing the technology to a new one that could meet the Technical performance, in particular the bio-oil Yield and related production costs as disclosed in the S He directed that the Task Force be composed from experts coming from KiOR and from outside.
An internal technical proposal was his guide. In it was proposed a new technology capable of increasing substantially the Bio oil Yields, scalable to commercial size Plants, and dramatically reducing the production costs. These would have reduced catalyst cost by an order of magnitude. Meanwhile, Coates met with Fred Cannon, CFO John Karnes and Chris Artzer on July 15th. They rejected his claims.
The State of Mississippi, which placed the meeting in August, stated:. The meeting set for the 18th never happened. But there was still a hope that his work had not been in vain. Whitlock undertook a review, interviewing Fred Cannon, Andre Ditsch, John Hacskaylo and Chris Artzer, declined to hire third party experts, and concluded his investigation on July 22nd without further action. In contrast, when the SEC notified KiOR in that it was the subject of a formal securities fraud investigation, KiOR hired Special Investigative Counsel and an independent engineering firm to investigate the veracity of matters at issue.
The matters brought to light by Coates were identical to those investigated by the SEC over three years later. By the end of July, members of the science team had become aware of the Whitlock investigation, and its closure. Karnes promised me that he would do his best. I thought he Karnes was in a better position, as CFO, to convince Cannon to do something about it.
I had presented him with information, but all I got was the same lip-service. For the science team, the urgency was not just an impending IPO, but a loss of morale and personnel. Jacques De Deken, Kevin Denicola, Robert Bartek and now Bill Coates had left. Conrad Zhang, an expert on Biomass and bio-oil chemistry was re-assigned to teaching chemistry to some university students, and he later resigned.
On September 17th, Samir Kaul of Khosla Ventures became the first investor to request supporting data. He also asked that Cannon arrange a conference call for Cannon, Kaul and Ditsch to discuss the information. Internally, nothing came of the outreach to Karnes, and Stamires attempted again in mid-September, this time meeting with CEO Fred Cannon. The meeting took place on September 20th, and Cannon was warned specifically that:. The yields were far less from the those needed to sustain a profitable business, and substantially less than the 67 gallons per ton stated in the S-1 for the IPO.
Cannon received a follow-up email on October 10th repeating the same points. On October 5th, John Schneider of Artis Capital Management, L. John Hacskaylo made a power point presentation to the Board of Directors in December that included a graph that plotted projected yields of 63 [gallons of] biocrude per bone-dry ton.
Rather, they decided to focus on the Board or, alternatively, a direct approach to Vinod Khosla. But I felt if you know what the problem is, you can solve it. The two also agreed to try to engage Professor Vasalos in the Audit. Meanwhile, Stamires reached out to Jennifer Camacho, an Attorney from Greenberg Traurig in Boston, who did patent and freedom to operate work for KiOR.
On December 12th, Camacho replied to Stamires, writing: I will reach out to Samir tomorrow. The COO came and went. Top science people had resigned. Investors were showing signs of nervousness. Which go back to ineffective catalyst; the only ones working much at all are said to be ruinously expensive.
Truly, KiOR is beginning to slip over the precipice and down into the abyss. But some remain hopeful that KiOR can be saved, that a better science result will save the company.
Differing voices express differing ideas on how to achieve that. Could the catalyst finally work? Would it work in the design for the first commercial, which is well on the way to being finalized. KiOR may be failing as gave way tobut perhaps the staff could catch a branch and stabilize before tumbling into the darkness. In part 1 of our series, herewe explored: By the end ofit is clear from discussions with multiple KiOR sources that the KiOR scientific staff had divided into two groups.
When I was away he would push it in another direction. I did, and that became a problems. In The Netherlands as in places like San Francisco and New York, everyone tells you exactly what they think of you even in the management meeting, we fight like crazy but we resolve issues and make up. Everyone wants to invent their own process and thinks they have the right ideas. Fred never really took a stand, he always stayed out of it. Catalysis is important, but what we needed also were process engineers, and people with experience in hydrotreating and operations.
The balance went wrong. But you need time to train them and they are not the ones who are going to scale up a process. Reliable, data showing increased bio-oil yields of reasonable quality using less costly catalysts and processes. The new data, demonstrating a feasible technology, could be used by KIOR in business development, and to convince new investors in funding efforts. And any new technology would need to be developed before that.
Out of a wider group, catalyst expert Mike Brady, FCC unit expert Robert Bartek, solid state chemistry expert Dennis Stamires, and Drs. Vasalos and Lappas of CPERI in Greece would be the most visible. Their concern was not only the development of a technology that could save KiOR from disaster, but doing so in a way and in a time frame that would not cost them their own jobs. In FebruaryStamires wrote to a scientific team composed of Bartek, Yanik, Loezos, Cordle, and Brady, proposing that, at the KiOR Pilot Plant, test runs to duplicate published test data obtained from other similar Pilots using the same biomass feed and sand as a heat transferring medium.
This was the baselining project which had been specifically ruled out for the KBR pilot. Paramount the need to ascertain why the CPERI FCC Pilot Plant produced higher bio-oil yields than the KiOR pilot. Stamires reasoned that, if Prof. Lappas at CPERIwho had a similar FCC Pilot plant in operation, could pyrolyze the same kind of biomass with sand, under the same process conditions, the team could confirm that new KiOR pilot was working correctly.
If the CPERI FCC Reactor design was responsible for the higher Bio-oil yields, then the design could be introduced into the KiOR Pilot.
On the same day, Bartek replied: After baselining the pilot plant, the expectation was that new catalysts could be tested aimed at improving bio-oil yields. A commercial grade, high-priced catalyst, well established in the market place, being used by most oil refineries worldwide, containing the ZSM type of Zeolite. Papers had been published by Dr. What we were doing in Valencia was not what we did later in Houston. If you look at the first patents and so on, you see that the basic trick was to have an interaction between the biomass and the catalyst before it enters into the reactor.
We called it mechano-chemistry. When I compared the data between Houston and Greece, Greece was better, and that was because in Houston, they never pre-treated the biomass. And you could sort of get away with it in the pilot plant because you could mill the biomass very fine.
For one, it can get sticky. It can even catch fire in the plant, which happened. But the week of March 8th would prove even more fateful for KiOR, as CEO Fred Cannon was hospitalized with a heart problem and was sidelined for some weeks, in hospital or at home, while recuperating.
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Some discussions took place over a potential revision of management duties and structure, which failed, not the least because as Cannon explained, even if he really wanted to re-divide CEO responsibilities and authority, he could not do that without a resolution and approval by the KiOR Board. A degree of chaos ensued, and morale dropped. The controversy over the research program boiled over.
The battle reached the KiOR board in March While the management crisis was unfolding, the Stealth Team had outlined new catalysts and had made the request to test these, and to calibrate the KiOR pilot plant with sand.
The request ultimately would have to be made to Ron Cordle, the Pilot Plant supervisor, as a confidential, weekend test. The backup plan was to have CPERI run the tests in their pilot in Greece. Adding to this structural Reactor problem, and [later] the additional problem of the data manipulation of John Hacskaylo.
The combination of these problems resulted in a general situation where nobody knew what we were actually doing, what oil yield numbers to believe. So why not one final act of defiance? May be we could rescue this thing and snatch victory out of defeat we [are] heading into. Ultimately, the sand test was carried out, using sand obtained from CPERI, and confirmed that higher oil yield was produced at the Pilot Plant at CPERI in Greece.
That finding prompted Bartek and Stamires with further discussions with Lappas and Vasalos, to arrange a meeting with Cannon and Vasalos in Houston. And an agreement was made with Cannon that CPERI would license the design of their Reactor to KIOR. With some process variables optimizations, the KiOR Pilot Plant was able to produce higher Bio Oil yields. Work on catalysts also continued.
The Stealth Team was convinced by that time that the BCC Catalyst the synthetic clay was a very poor heat conductor, and incapable of transferring a sufficient amount of heat to the Biomass fast enough. They thought that a new material with high bulk density, low porosity microspheres, with a low catalytic activity, would be much more suitable. Oil yields were higher, there was less coke, and a reasonably low oxygen content in the oil.
The Stealth Team began to make arrangements to purchase a Spray Drier and a Calciner to be able to make calcined clay microspheres. Stamires also pointed The Digest to an independent validation of the performance of the HTC catalyst i. None of the materials tested produced bio-oils with considerable hydrocarbons yields and presented high amounts of phenolic compounds.
In general, silica had the best results in terms of yield and quality of bio-oil. Suggesting though not proving that the journal results reported were related to KiOR story. The problems facing KiOR at the time were substantial, but not unheard of for a young company in the advanced bioeconomy.
They were summed up internally at this time as:. However at that time, KiOR did not have technology that was sustainable and commercially feasible and profitable.
It was this latter point — the progress of Dynamotive, that perhaps formed a tipping point in the story of KiOR. Overall, Ditsch projected a break-even for KiOR at a yield of 65 gallons per ton of biomass, or a By Junethe Stealth Team, working with zeolite catalysts in the Pilot Plant, were showing enhanced yields and bio-oil quality.
At the same time, literature searches turned up projects from the s and s demonstrating that the same type of Zeolite ZSM had been used before in Catalytic Pyrolysis. But with the improvement, KiOR yields approached a maximum of 40 gallons per ton with reasonable quality.
The improvements were not from outer space. They were the kind of yields that would have made the overall process economically sustainable and profitable, without government subsidy, in commercial-scale plants.
A participant in the meeting reported to The Digest that certain milestones for monthly incremental increases were established to reach the target. With the existing BCC technology. Concerns were high, as commercial discussions with Chevron and Weyerhaeuser as the JV Catchlight Energy were well underway. The main objective of this work was to develop clay-based microspheres which exhibited acted both as efficient heat carriers, and catalysts with controlled selective activity.
Then Brady proceeded to prepare clay microspheres with different amounts of catalytically active metal salts — magnesium, calcium, potassium, sodium, and aluminum among others.
In addition, Professor Iaocovos Vasalos re-appeared as a consultant by September The urgency was not only the usual pace of s start-up hungry for milestones that would encourage investments, there was Catchlight Energy relationship looming.
In an email from Dan Strope, VP Technology, sent Aug. In an email to Fred Cannon and Andre Ditsch on September 23rd, Bartek reported pilot plant data confirming that the ZSM catalysts produced much higher hydrocarbon yields, as the BCC Catalyst HTC was converting them to gas and coke. We all knew that to make this process economic we needed a cheap catalyst.
ZSM-5 is one of the most expensive around.
Plus, you are dealing with a biomass with calcium and many other things in it, and with ZSM 5 you kill the catalyst. But yields at least were up. In a memo dated Sept. The Biomass in the first Reactor would be thermally Liquefied in a fluidized bed using a high-efficiency heat transferring medium which has a high heat capacity such as sand. The Bio oil vapors generated in the first Reactor would then be reacted with a medium activity catalyst in the Second Rector. The invention was subsequently patented by KiOR.
Meanwhile, Ditsch was pressing hard. In emails of Sept. From that update, Khosla agreed to relax the timeline for process improvement, but not sacrifice the yield target, which would have been in the 80s and into the 90 gallons per ton range. The 2X milestone target was set for Q4 But, the good results came with a ceiling.
In their own way, they confirmed to members of the science team, as sources told The Digestthat KiOR was likely to become stuck in a range which would never get much out of the 40s, expressed in gallons per ton.
The Pilot Plant was remodeled with the CPERI design, but to the surprise of the team, the Demonstration Unit design was not changed. According to those familiar with the timelines, the Demo Reactor was already fabricated and was soon to be delivered to KiOR for installation, based on the old, obsolete original KiOR Pilot Plant Reactor design. Eventually, the large Reactor of the Demo Unit, with a 10 ton per day capacity, would have to be dismantled and be replaced by the new Frustum Reactor licensed from CPERI.
Resolution of the problem would lead to sensational additional costs and delays in the operation of the Demo Unit. How could this have happened? More than one KiOR team member contended that the decision to exclude Bartek from the Demo design process, among other consequences, convinced Bartek to resign.
There are some classic management set-ups that lead to failure, one of which is NASA syndrome. The type of management failures that were prominently on display in the Challenger and Columbia disasters. As the Columbia Accident investigation Board reported:.
The organizational causes of this accident are rooted in the space shuttle programs history and culture, including the original compromises that were required to gain approval for the shuttle, subsequent years of resource constraints, fluctuating priorities, schedule pressures, mischaracterization of the shuttle as operational rather than developmental, and lack of an agreed national vision for human space flight.
Cultural traits and organizational practices detrimental to safety were allowed to develop, including: The pressure of maintaining the flight schedule created a management atmosphere that increasingly accepted less-than-specification performance of various components and systems, on the grounds that such deviations had not interfered with the success of previous flights. The NASA cautionary tale is instructive; there are correlations between KiOR and Columbia.
KiOR was on a fast-paced commercialization track, as it highlighted in this company slide presentation. Stephen McGovern, a hydroprocessing expert. By this time, concerns about the data stream from the pilot also became an issue within the company. Stamires himself recalls six such meetings with CEO Fred Cannon, on February 10, March 13, March 26, April 28, May 7, and May What was Stamires bothered about?
The results of this comprehensive and in-depth Technology Assessment Review Study by Vasalos and McGovern were published in April Flat out, the report contained the most dismal news possible. Recommendations were made for improvement. Dennis Stamires confirmed that there was a controversy.
On April 10th, a draft Technology Statement to be posted on the KiOR Website, prepared by Matt Hargarten of Dig Communications, was circulated by Andre Ditsch. It would not reach some members of the scientific team until as late as May 11th. An uproar ensued regarding the draft statement.
CFO Kevin Denicola indicated to team members that he too had serious concerns about the truthfulness of the proposed Technology Statement. Hacskaylo created and highly promoted this culture. Co-operation, trust and willingness to communicate fast disappeared, and a spirit of fear of being punished and fired prevailed in the organization.
The yields, according to key members of the science team, were simply not true, and incredibly inflated. The results were inflated from the latest pilot data. Further, the Demo plant as designed at this time did not incorporate improvements that KiOR had deployed at the pilot. It is not known whether financial motives, data confusion, or honest mistakes went into the July report or into the criticism thereof. It is clear however that the new data was not supported by those familiar with the raw data coming from the pilot plant.
The Digest has obtained and carefully reviewed original data from the pilot from this period and the July report, and can confirm that the raw data and the July report do not agree. We are all left to guess exactly why.
Either way, the idea of delivering a bio-oil to Catchlight was out. Catchlight indicated that, going forward, they would only be interested in handling a finished fuel blendstock that had been hydroprocessed by KiOR. Cuneo is a former Toyota executive who enjoyed valuable relationships with Governors of southern states.
Cuneo quickly arranged meetings for KiOR and Khosla with the governors of Arkansas, Louisiana and Mississippi. The first executive level meeting between the State of Mississippi and KiOR occurred on July 1, at the office of Governor Haley Barbour. Three entities were present at the meeting: KiOR, Khosla Ventures and the State. Khosla Ventures was represented by Vinod Khosla, Samir Kaul and David Mann.
Also present for Khosla Ventures was Dennis Cuneo. The State was represented by Governor Barbour and two MDA officials, Adam Murray MDA Project Manager and Justyn Dixon.
At the time, KiOR may have well held out hopes that a hydrogen plant could be built in partnership with a vendor, who would pay for construction and operation and charge a hydrogen delivery fee to the project.
However, given the July date of the initial Mississippi meeting, there is no doubt on the Catchlight score. At best, KiOR may have believed that other refiners would be able to process its bio-oil. There is no documentation that The Digest has been able to uncover, nor any scientist we have interviewed familiar with the actual data out of the pilot plant, that supports KIOR yields at breakeven points.
The truth may well be that the KiOR yield claims were based around liquids, rather than bio-oil, coming out of the process. The 67 gallon figure, that is where I became suspicious. The board hardly saw technical information, as you can imagine people like Condoleezza Rice were not going to be very familiar with technical detail. They were showing us graphs with yields of gallons per ton out of the pilot, and they aid that the demo plant was even better.
You have to condense, and you have to recover oil from water, and you lose in the hydrotreater, because for one thing you have to take out oxygen.
Top of the reactor yields, in the context of transportation fuels, is like counting scotch and water as pure scotch whiskey. Or including the weight of the orange peel in a projection of orange juice yields.
There were some points where you could get above 60 but only momentarily, under ideal conditions, for instance with very fresh catalyst. And only in the pilot. Were they just stupid or crooks? The company was speeding towards a IPO. And, with design corrections, fingers crossed this could be translated to a commercial-scale unit. Warm, kindly Hallmark Card sentiments, universally popular, admired and vague.
Not the bold, We-Are-Black-Swans, detailed descriptions of yields, costs, downstream partners, brand-name board members and timelines to commercial scale that had been the style of the Old KiOR.
Old KiOR was exciting, dramatic, and fast, and the headlines it produced between and were candy for a renewables-hungry world. A Breakthrough in Catalytic Pyrolysis to make cost-competitive, drop-in renewable fuels. The backing of a celebrity investor in Vinod Khosla. An impending venture with Chevron and Weyerhaeuser. A star-studded board featuring former Secretary of State Condoleezza Rice.
A massive loan from Mississippi. Reports of high yields. A slide presented by KiOR inprior to the bankruptcy filing. And then the shortfalls started.
KiOR fell further and further behind on its production goals throughoutand ran out of cash and tumbled into bankruptcy in That there was a turbulent KiOR story to be uncovered was of little doubt.
There might be more to the Kior bankruptcy…. You bet I was. We discussed it by email and subsequently in person on Key Biscayne in February But lawyers intervened and the presentation never materialized.
Major had a plan to acquire the on-site assets at Columbus and produce jet fuel and green power. In mid-February, Major wrote: In a Motion filed in the United States Bankruptcy Court for the District of Delaware on February 12th, Robert C. The Grand Wizard of Magic Catalysts, Robert C. But now the smoke is clearing. Looking towards the future, Inaeris Technologies is the emerging remnant, described by its President Chris Artzer as, in essence, a Series A venture-backed company, at pilot stage, aiming to demonstrate the technology it believes will be robust and which it aims to demonstrate in time.
In the case of Inaeris, as Artzer adds, it has the benefit of being at pilot stage but having produced a million gallons of in-spec, drop-in renewable fuels.
What of the past? In mid-June, VeraSun Energy went public selling Shares of the already-public Pacific Ethanol PEIX doubled by late spring, despite the company not opening its first plant until the end of the year. Hawkeye and Aventine went public at sky-high prices. Congress was planning a vastly expanded Renewable Fuel Standard. By late June, Khosla Ventures entered into biofuels in a big way, forming a venture called Cilion to operate modular 55 million gallon ethanol plants, aiming to build 8 bythe first three in California.
He had been serving as a Business Development Manager at Albemarle Catalysts after Albemarle bought the catalyst business from AkzoNobel. This, on top of 20 years at Akzo, culminating in work as the worldwide development manager for FCC catalysts. The key here is the FCC unit — a fluidized catalytic cracker. The use of synthetic zeolites and their modified forms, as FCC and hydrocracking catalysts, has revolutionized the petroleum refining business.
The use of zeolite-based FCC catalysts has made possible to achieve substantially higher conversion yields of gasoline and diesel fuel from each barrel of crude oil refined. Fluid catalytic cracking is widely used to convert the high-boiling, high-molecular weight hydrocarbon fractions of petroleum crude oils to more valuable gasoline, olefinic gases, and other products.
Oil refineries use fluid catalytic cracking to correct the imbalance between the market demand for gasoline and the excess of heavy, high boiling range products resulting from the distillation of crude oil. Could a catalyst be designed to work with biomass and achieve similar results to catalysts working on petroleum hydrocarbons?
Would any resulting bio-oil contain too much oxygen to be refined into a fuel using standard refinery equipment? Simply put, the chosen route was catalytic pyrolysis. In this approach, the goal is to crack the biomass molecules arriving at the front end of the reactor composed of hydrogen, carbon and oxygen under the right combination of pressure and temperature.
To give an everyday example, cooking food is a high-temperature, ambient pressure form of pyrolysis. Using sufficiently active, selective and robust catalysts, the hope is to produce at the end of the reaction a high yield of hydrocarbons that can be upgraded into transportation fuels.