Tuesday, July 15, 2014

Primus Wants to Green Up Fossil Fuel

“Incremental commercialization” are the words Primus Green Energy uses to describe its use of natural gas as a feed stock for transportation fuel.  The company promises to convert to biomass such as wood pellets or Miscanthus as soon as its gasification technology is perfected.  I realize it is popular to characterize natural gas as a green energy source, but I am reluctant to take that leap.  Natural gas is after all a fossil fuel derived from the same dead plant matter that is providing us with coal and crude oil.

From a business standpoint, the natural gas strategy seems quite clever for privately-held Primus.  So many renewable energy companies have had to close their doors because of inadequate capital to support development and commercialization of their technologies.  Primus could benefit greatly from early stage sales of fuels it derives from natural gas.

Primus is perfecting a process to turn synthetic gas into liquid gases that are ready to distribute in conventional pipelines and transport vehicles.  Syngas generation is nothing new, but Primus claims its syngas has a higher ratio of hydrogen to carbon monoxide.  Primus calls its process “syngas-to-gas” plus because potential end products include jet fuel and aromatic chemicals as well as gas. 

Management of Primus has promised a commercial stage plant this year.  Confirmation that ground has been broken has been slow in coming.  At least a pilot plant in New Jersey has proven the merits of the company’s biomass gasification and its natural gas reforming technologies.  However, production capacity at the pilot plant has been sufficient only for testing purposes.

In the meantime, Primus is keeping busy with a small-scale version of its natgas reforming process.  At the beginning of June 2014, Primus announced the availability of its STG+ technology for use on stranded gas flared at oilfields.  The gas would otherwise go to waste, but through the Primus process can be turned into liquid gas usable at the oilfield.  It has to present a very economical solution to an otherwise wasteful and environmentally damaging practice of simply burning stranded gas.

Primus did not go into business to become an oilfield services company, but certainly this creative way to use its STG+ technology could put the company right in the middle of it.  Primus may not have yet produced any renewable energy itself, but it may end up putting a little ‘green’ on fossil fuel.

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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