Week of June 7

The next biofuel boom…Neste Oil…the world's first commercial fuel cell car….

The Race is to the Swift

Swift Enterprises, located in Purdue University's technology incubator, has been publicizing itself rather assiduously of late, gaining many prior mentions in the mainstream press. Unfortunately, as is often the case, with lay reporters, the technology has been thoroughly misrepresented in most of the blurbs I've seen. Still, the articles piqued my curiosity, sufficiently so that I decided to interview Todd Burrough, the head of Business Development for the seven year old firm. My conclusion is that the earlier coverage was warranted even if some of the key facts never made it into print.

Burrough disclosed enough information for me to understand the basic type of process his company is using without vouchsafing anything proprietary or unique. And perhaps there is nothing unique apart from marketing, but in this business, as in any other, marketing is half the battle.

"The key to success in alternative fuel manufacturing is to stay out of commodity markets," opines Burroughs. I happen to think he's right, and unfortunately not many of his competitors appear to have arrived at that basic insight yet.

So what's so important about avoiding commodity markets? Aren't fuels by their very nature commodities?

They certainly tend toward that status, but commoditization isn't inevitable. Standard Oil kerosene wasn't a commodity product when it first appeared in the eighteen seventies. It was the best kerosene in the world, the standard by which all others were measured, hence the name. It only became a commodity after John D. Rockefeller had driven damned everyone else out of business. Even today various brands of gasoline strive to escape from the commodity cage with varying degrees of success. As do lubricants with perhaps a greater degree of success.

So what has Swift got, and why ain't it a commodity?

If Swift's claims are correct, they have the world's only bio-based avgas with 130 octave rating and without lead.

Aviation gasoline is itself a small niche market and one that is scarcely a commodity. Quality is all important because you don't want a fuel induced engine stall. It might kill you.

Several years ago I identified avgas as a key niche market that alternative fuel manufacturers should target, but almost no one has. Standard Alcohol of Colorado claims to have a product made of mixed alcohols that provides similarly high octane, and if the claim is true, it would constitute a serious rival to Swift Enterprises. No one else to my knowledge has attempted to make aviation gasoline from biomass, though a number of companies have produced experimental bio-based jet fuels.

According to Burrough, SwiftFuel, the name of the company's product, is produced from synthesis gas, a substance consisting of hydrogen and carbon monoxide which can be generated by gasifying biomass or coal. The scientific literature indicates many ways of converting syngas into light hydrocarbons, and the basic approach is certainly not new. In the past, the economics have not been favorable, but Burrough asserts that Swift's production methods will permit the manufacturing of a finished refined fuel product for a cost of about $1.80. In the avgas market where pump prices run in the seven and eight dollar range that's very acceptable.

Burrough further indicates that commercial production will follow closely upon ASTM certification, and that the fuel should be available about a year from now.

Neste Oil's NExBTL

Another company with firm plans to introduce a biofuel that closely approximates a refined petroleum product is Neste Oil, a Finnish petroleum firm. Finland is a center of biofuels research, no doubt because of the abundance of resources in the form of peat and forest waste, and due to the lack of fossil fuel resources, and Neste has been very active in this area.

Neste's product, known as NExBTL, is made from plant or animal fats, as is biodiesel, but according to Neste Oil's literature, is generally similar in chemical composition and burn characteristics to synthetic diesel made from natural gas, and is properly a hydrocarbon, just as is petroleum diesel, and not a methyl or ethyl ester as is conventional biodiesel. Neste further claims that the cetane of the fuel, that is its propensity to self detonation—a desirable characteristic in a diesel analog, is anywhere from 84 to 94. Ordinary petroleum diesel is generally less than 50. Neste also claims that CO2 emissions are significantly lower than for ordinary petroleum diesel, and that there are no cold weather gelling problems as is the case with ordinary biodiesel.

Neste has been operating a pilot for about year, and last week announced that a small commercial plant processing 800,000 tons per annum will be built in Rotterdam, currently the site of a number of oil refineries. The facility is expected to commence operations in 2011. This represents a fairly accelerated technology development, and, in my opinion, a clear admission that business as usual is not likely to obtain in the liquid fuels industry for many more years.

Earlier we reported on a technology developed by UOP in the United States that could also be used to convert plant or animal fats into middle distillate hydrocarbons. I have been unable to determine the degree of relationship between the two processes.

Honda's First "Commercial" Fuel Cell Vehicle

Honda recently announced the introduction of the FCX Clarity fuel cell powered sedan. Supposedly this is a commercial offering, the first ever, but a glance at the fine print seems to indicate otherwise. Yes, you can obtain a vehicle, if Honda wants you to have one and if you're in the entertainment industry where your possession of the Clarity will help to publicize it, but it ain't exactly for sale, only for lease. The terms of the lease are for three years at $600 per month, and you have to have proximity to a hydrogen fueling station.

The Clarity is incrementally better than previous Honda fuel cell cars which were strictly experimental. Horsepower is roughly 130 and weight is about 3,500lbs. Torque is close to 200 foot pounds. The Clarity contains a 148lb. fuel cell stack and a bank of lithium batteries of undisclosed mass. All that energy storage undoubtedly accounts for a sizable fraction of the too high curb weight.

The car runs on compressed hydrogen. Honda indicates a driving range of 280 miles which is much better than was the case for earlier iterations.

So what's it all mean? I remain skeptical that hydrogen fuel cells are close to commercialization. My guess is that the Clarity will maintain Honda's vaunted reputation for reliability, and that it probably does represent a significant improvement in the operating lifespan of the power plant, always a problem with hydrogen PEM fuel cells. But the fact that they're not selling it tells me that they can't manufacture it at any reasonable cost.