A Biofuel of a Similar Line

Alright, bio-oil may not actually share a family tree with biodiesel, but it is an environmentally sound product derived from biomass. This dark, viscous renewable fuel is produced through the thermal cracking of molecules, a process known as pyrolysis. An ambitious anadian firm is on a mission make this stuff work commercially-and it's something biodiesel stakeholders should keep an eye on.
By W.R Stephens | March 01, 2006
It was 1997, and Andrew Kingston was about to break a promise. He had sworn to his wife that he was done with energy ventures, but he was now faced with an opportunity that was simply too good-and too challenging-to pass up. The former oil company executive was then heading his own consulting firm, and the temptation now luring him was a promising British Columbia-based biofuels start-up called DynaMotive. To cut to the chase: Kingston doesn't just get involved with the company; he becomes president and CEO. Just like that, he's back in energy.

From its conception, DynaMotive's mission was to exploit its principal asset, a patented process for making "bio-oil," a clean-burning, bio-friendly alternative to hydrocarbon oil, and a fuel that is perhaps in the same family tree-although definitively different than-biodiesel. What proved irresistible to Kingston was the once-in-a-lifetime chance to market a brand new commodity. Kingston envisioned DynaMotive's future as a vertically integrated company, not unlike the corporate giants of the petrochemical world. That meant the company would be involved in every aspect of the bio-oil business from research and development to sales and marketing.

The actual product isn't impressive to look at. As opposed to the clean appearance of biodiesel, bio-oil is a dark brown viscous liquid that looks like used motor oil. Although it's sometimes called "liquid smoke" or even "biodiesel's ugly lookin' cousin," Professor Franco Berruti of the University of Western Ontario points out there isn't much of a family resemblance. "Bio-oil and biodiesel are very different things," Berruti says. "Biodiesel is produced by transesterification of fats and oils. Bio-oil is produced through the thermal cracking of molecules that contain carbon, hydrogen and minor quantities of other elements."

The closest ties between the fuels may be that they are both made from biomass and considered environmentally friendly. Burning bio-oil produces virtually no sulfur dioxides and very little nitrogen oxides. Plus, because bio-oil is made from biomass, experts say the raw materials grown for its production absorb more carbon dioxide than is emitted when it is burned. It's a fuel that can be burned with an open flame to heat a boiler, or combusted in a turbine or a slow- or medium-speed diesel engine. It's also very cost-competitive with hydrocarbon oil.

Kingston points out that bio-oil doesn't have the high upstream costs of the traditional oil business. "You need to prospect, find, extract, transport, refine and market [petroleum fuels]," he says. "If you can find a technology that can take aboveground biomass and convert it into a fuel that can be used in similar [ways]-and you can do it economically-it's quite compelling." But in the late 1990s, not even Kingston, a seasoned oilman, could have predicted today's skyrocketing oil prices. "Our business model took a look at being competitive at about $25 per barrel at the wellhead," he says, pointing out that with today's world oil prices hovering near the $60 mark, DynaMotive's pricing has a lot of wiggle room.

Bio-oil is produced by a process called pyrolysis, which simply means heating biomass in an oxygen-free environment. DynaMotive uses temperatures of 450-500 degrees Celsius in its process. If oxygen were present at those temperatures, the material would burst into flame. But with no oxygen to feed the flame, the biomass breaks down into bio-oil, char and non-compressible gasses. Professor Robert C. Brown of Iowa State University explains , "It is technically a 'pyrolytic liquid' (PL), consisting of highly oxygenated organic compounds." Other scientists like David Chiaramonti of the University of Florence use the term "pyrolysis oil" (PO).

Experts point out that burning biomass alone produces energy, but by first converting that biomass to bio-oil, the energy yield is multiplied by 12 to 15 times. It's also easier to move that energy to where you need it. In liquidity, it closely resembles light fuel oil, which means you can run it through a pipe, pump it aboard a tanker truck, or funnel it into containers.

It's also very cheap to produce. Principal feedstocks are agricultural and forestry residues, which not only turn waste materials into useable fuel but solves major waste disposal problems for those respective industries. There's also plenty of biomass available. The forestry industries of British Columbia and Alberta alone generate close to 12.3 million tons of it annually in the form of forest residue-enough to produce approximately 20 MMgy of bio-oil.

The prospect is equally attractive for processing large quantities of agricultural waste. For example, disposing of bagasse, the remains of sugarcane after the sugar has been extracted, is a major problem for sugar producers. Brazilian sugar-producing giant Cosan Bom Jesus has signed an agreement with DynaMotive to explore the possibility of building a bio-oil plant that could very well turn a waste disposal problem into a profit stream.

There's scarcely a source of low-cost biomass that DynaMotive hasn't explored. The company has also signed contracts with Classic Power and Megacity Recycling to develop a plant that will make bio-oil from construction and demolition waste wood.

With over a hundred successful production feedstocks tested, it's not finding raw materials that is DynaMotive's main problem, it's finding markets. From his earliest days at the helm, Kingston recognized that his company faced a multi-tiered problem. First, the company had to develop its production process to the point where it could replicate the quality of its product. Secondly, DynaMotive needed to be able to produce enough bio-oil to enable it to be tested by the large-scale industrial users that Kingston saw as his primary target market. Finally, the young company had to sell the benefits of using its product, especially its environmental advantages.

Despite pressure to rush the product onto the market, Kingston stuck to a cautious approach: research and development, independent testing and modest scale-ups. It took four scale-ups before the company built its first commercial-scale plant, the 100 metric-ton-per-day CAN$20 million plant in West Lorne, Ontario. It's a long way from British Columbia to southwestern Ontario, but what made the site attractive to DynaMotive was the chance to partner with Erie Flooring and Wood Products, a well-established company that had been a fixture of the tiny community since 1927. Not only did Erie Flooring produce bio-oil feedstock in the form of about 70 metric tons of wood waste a day, but there was also enough space on the property to accommodate an adjacent bio-oil plant. Waste could be ground into sawdust and piped right into a DynaMotive processor.

"We were looking for a host that would provide waste on a continuous basis, that had good operational capabilities and seemed to be a good fit," Kingston recalls. "The project came to life once we developed a consortium with Magellan Aerospace, Sustainable Development Technology Canada (SDTC), UMA Engineering and Ontario Power Generation. How things came together was almost serendipity."

DynaMotive's trademarked BioTherm fast-pyrolysis process in use at the West Lorne plant does not extract bio-oil from sawdust, but rather converts sawdust into bio-oil. Sawdust is blasted into a reactor containing an anaerobic atmosphere above a bed of fluidized sand. The reactor temperature is about 450 degrees Celsius. The reaction takes place in less than two seconds, producing bio-oil, char and non-condensable gases. The bio-oil and char are vacuumed off, cooled and separated. The non-condensable gases are used in two ways. Some gas is recycled into the reactor to fluidize the bed of sand, and some is consumed in the burner that heats the reactor. Everything produced is either sold or used in the process. Nothing goes to waste.

But that's only part of the story. The plant also generates steam, about 12,000 tons per hour, which is piped off to Erie Flooring and used to heat the lumber kilns. On top of that, some of the bio-oil is used to power an Orenda OGT2500 gas turbine hooked up to a generator that produces 2.5 megawatts of electricity, enough electricity to provide power for the DynaMotive plant, Erie Flooring and 2,500 residential homes besides. That also makes West Lorne the world's first bio-oil-powered cogeneration facility.

Frank Button, vice president and general manager of Orenda, which is a division of Magellan Aerospace, says that his company has long been excited by the prospect of burning biofuels in its turbines. The problem was getting enough high quality bio-oil, before DynaMotive came along. Still, adapting the OTG2500 to burn bio-oil took some clever engineering. The fuel naturally contains a substantial amount of water, is moderately corrosive and has a tendency to gum up nozzles.

A bit of tinkering is still going on, but the commissioning procedure is all but wrapped up. The plant's ability to produce bio-oil in commercial quantities has certainly been proven, and Kingston confidently expects the plant to produce a profit. At least one independent financial analyst has speculated that if operated at capacity, the plant could produce close to $2 million in profits annually. The plant can produce enough bio-oil to fill existing contracts plus some new ones, with enough left over for product testing by other potential high-volume users. Char, too, has commercial value. It's in demand for processing into briquettes or fuel pellets.

Still, the plant's real value is as a "proof of concept" facility. It has attracted visitors from around the world, and announcements of new DynaMotive projects have followed rapidly, including a plant being developed in partnership with Megacity Recycling and another facility in Nova Scotia. Kingston, however, sees most of DynaMotive's future revenue coming not from operating plants but from license fees, royalties and long-term service contracts. "There was a determined decision to build a platform, rather than a company, that would build and own two or three plants," Kingston explains. "There's nothing wrong with that strategy, but our objective was to develop a commodity in the form of pyrolysis oil." This strategy meant focusing on partnerships that would give DynaMotive the strength and ability to service multiple markets.

Indeed, DynaMotive's ability to forge alliances seems to be one of the company's key strengths. The list includes Magellan Aerospace, UMA Engineering, Bruks-Klockner, Ramsay Group, RTI Resource Transforms International Ltd. and Mitsubishi. An alliance that has served DynaMotive especially well is with South American engineering firm TECNA, which has resulted in a modular design for future plants to be put together quickly and scaled to almost any size.

Despite the focus on construction, DynaMotive continues a substantial research and development program. A particularly tantalizing prospect is the hope of finding commercial applications for some of the hundreds of chemicals that make up bio-oil. A lot of research and development effort is directed toward finding ways to blend the product with other fuels. "There's a lot of room for cooperation and symbiotic [relationships]," Kingston says. "We've seen that with the sugar industry and ethanol producers. I believe we can do the same thing with biodiesel producers. With the market and geopolitical conditions we have today, it's very worthwhile to explore."
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