Tuesday, April 27, 2010

Big Whopper

A little known private joint venture is the biggest winner in the Department of Energy’s renewable fuel grant bonanza. INEOS New Planet BioEnergy, LLC was awarded a $50 million grant to produce ethanol and electricity from wood and vegetative residue and demolition materials through a combination of biomass gasification and fermentation processes. The plan is to produce as much as 8 million gallons of ethanol and 2 megawatts of electricity per year beginning in 2012. INEOS must match the grant with their own $50 million.

INEOS plans to begin construction on a commercial-scale plant in Indian River County in Florida beginning this summer and finish it in time to be operation by late 2011. The joint venture promised 120 construction jobs over the next two years and between 40 and 50 full-time jobs once the plant is in operation.

Besides job creation, INEOS management claims its plant will reduce waste going to landfills, relies on non-food feedstock for its ethanol output, and proves agriculture and municipal waste - two sustainable, consistent feedstock sources - are also economically viable energy sources.

An anaerobic fermentation step is central to the INEOS Bio process, which will be used in the plant. The bacteria will convert gases from a variety of biomass, including forestry, agriculture, construction and municipal waste. INEOS believes its process gives waste owners flexibility to locate a plant anyway a feedstock is available.

INEOS has patented its bacteria - bacteria smart enough to convert carbon monoxide and hydrogen gases to ethanol. The company maintains its bacteria approach is advantageous over other chemical catalysts that require high temperatures and pressures that add to production costs.

The INEOS process produces the gases through a controlled, partially oxygenated environment, which converts the feedstock to carbon monoxide. It is this step that enables the use of a variety of feedstock, any one of which can be converted to carbon monoxide.

New Planet Energy, LLC is bringing the business know-how to the joint venture. The company does not appear to have any other projects underway. Perhaps this project will be New Planet’s first Big Whopper.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

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