Friday, August 24, 2007
Crystal Fuels makes first Texas sale of portable biodiesel plant.
http://www.bizjournals.com/houston/s...

Thanks to a Houston company, domestic biodiesel producers facing a difficult regulatory environment and a high capital cost threshold now have another option.

Crystal Fuels Inc. imported its first portable biodiesel refinery from Brazil last month and sold it to Positive Feed Ltd., a Sealy livestock feed manufacturer.

The idea is to offer biodiesel manufacturing to smaller, decentralized locations. The size -- 22 feet long, 8 feet wide and 9 feet tall -- and the $120,000 price tag make the unit attractive to small-scale producers.

"All you have to do is hook up the pipes," says Crystal Fuels President Don Looper, who is also an attorney with Looper Reed & McGraw PC, Crystal Fuels' legal counsel.

Crystal Fuels is not the only biodiesel refinery producer eyeing the Texas market. On a larger scale, Xenerga Inc., an Orlando, Fla.-based licensing company that imports prefab biodiesel plants from Germany, recently signed letters of intent with investors in Sugar Land, Dallas and San Antonio, and has seen serious interest from a Houston group hoping to bring several of its half-acre, $1.95 million plants to the city.

Those plants, however, lack the portability of the Crystal Fuels refinery -- called the BioCom 4000 -- which can operate closer to a feedstock source, meaning farmers can crush seeds directly rather than buy seed oil at what have been increasingly volatile prices.

"If it's operated on a farm, they can crush the seeds, make biodiesel and feed the (seed) crush to their animals," Looper says.

Made from commercial-grade steel, the units weigh 6 tons and can be transported on standard containers that fit on flatbed train cars and 18-wheelers. They are designed and manufactured by BioCom SA, a Crystal Fuels subsidiary in Brazil, where biodiesel has enjoyed a healthier market thanks to a much more supportive government.

Capable of building 10 mini-refineries -- or "processing plants," as BioCom President Lou Crowder calls them -- at one time, BioCom has five on the factory floor now, destined for a farming

co-op in Brazil. Crowder says the company is also about to close on a deal to sell 100 to a Latin American government entity for distribution to small producers.

American companies have shown interest, but only for deployment in South America. One American company plans to use one BioCom 4000 in Ecuador while another U.S. company wants to put one in Paraguay, Looper says. But he would like to see more coming to American soil.

"The United States is a different market," Crowder says. "The biodiesel industry is still not well-defined. Most of the biodiesel facilities in Texas are either bankrupt or up for sale. Many have been caught off-guard with the rise in prices of vegetable oils, particularly soy oils."

In Brazil, where prices largely mirror the U.S., Looper says, soybean oil has risen from $2.60 a gallon to $3.89 a gallon in the past seven months.

"The same equipment a year ago could have been making a client $60,000 a month in profit," Looper says. "Now, it's probably $20,000 a month in profit. It's a tight market right now."

Says Crowder, "The bottleneck of producing biodiesel is the oil, the feedstock. You have to solve that problem before you can be profitable."

Another trick is that, in the United States, Congress awards credits of $1.10 per gallon to blenders of biodiesel but not producers, another "quirk in the way oil companies got Congress to adopt the law," Looper says.

Efficient production
While infrastructure, supply and U.S. government support are a long way off, Crystal Fuels is pushing its machine's efficiency as a major selling point.

At the Aug. 3 demonstration in Sealy, the biodiesel produced was 98 percent to 99 percent efficient -- essentially perfect. The biodiesel manufactured at most large plants in Brazil generally comes out between 60 percent and 65 percent efficient, Crowder says, and that's after two run-throughs, meaning twice the time and energy expended to make it.

One guest of the trial run, a big oil company out of Fort Worth, didn't believe it was possible to make 99 percent efficiency biodiesel with one pass, Looper says, but now interest in the machine has been piqued.

Crystal Fuels credits the efficiency to a reactor technology it licenses from a Princeton University-educated aeronautical engineer in Argentina, the unit's size -- which Looper claims is the most efficient -- and blending the methanol and feedstock oil at the same extreme temperature (90 degrees Celsius) which leads to a faster chemical reaction and less byproduct

In Sealy, Positive Feed owner Gary Inglish isn't looking to turn a profit. He's not looking for government credits either. Instead of blending and reselling his biodiesel, he plans to use it to fuel his boiler, used in the manufacture of his various lines of livestock feed, as well as forklifts and other diesel vehicles.

"In an external combustion flame like a boiler, biodiesel is a greener, cleaner, better-burning fuel than diesel," Inglish says.

Right now, Inglish is buying canola seeds and crushing them on-site for the oil feedstock. He plans to look into flax and sunflower seeds in the future.

"In the long-haul, buying and crushing your own seeds is definitely more feasible," he says.

Inglish is not stopping with the mini-refinery, though. Before buying the BioCom 4000, he'd been working on a permanent plant in Sealy capable of churning out 7,000 gallons a day that will come online at the end of the year and be used in tandem with the portable unit. Permitted to produce 1.2 million gallons a year, Positive Feed is looking into another biodiesel plant for its Louisiana facility.

Crystal Fuels seems sure it's a sign of things to come.

"Within 60 days, there will be a lot more U.S. contracts," Crowder says, adding that the Sealy plant will function as a showroom and sales model, hosting another demonstration in September.

One guest at the last showing, Harris County Judge Ed Emmett, a former transportation industry consultant who drives a hybrid car, was impressed.

"I've always had an interest in extending our energy supplies in this county," Emmett says. "What was interesting about it is that it's something that can be done in a localized manner."

Emmett plans to keep an eye on the BioCom 4000's progress and look into how his County Commissioners Court can apply its use to Houston.

For one thing, it could help clean up one of America's most consistently dirty cities.

Burning the unit's daily output capacity of 1,000 gallons, Looper says, "would remove 5,909,961 pounds of pollution out of the air for one year."

Inside the refinery: How biodiesel is made
The BioCom 4000 produces biodiesel fuel via a transesterification process -- essentially the exchanging of molecules between the seed oil feedstock and alcohol.

The feedstock, which can come from soybeans, sunflowers, cottonseed, castor beans, rape seeds or palm oil, among others, is heated to 90 degrees Celsius under pressure, which helps remove impurities like water from the seed-crushing process. Alcohol -- in this case methanol -- is also heated to 90 degrees Celsius and mixed with sodium hydroxide, which acts as a catalytic agent.

The oil is then combined with the methanol at a 5:1 ratio.

"When they are combined in the reactor, the reactions are faster because the two liquids are the same temperature," says BioCom President Lou Crowder.

The speed allows the BioCom 4000 to make 400 liters of biodiesel in an hour, or 9,600 liters in a day, although the company recommends making a maximum of 4,000 liters a day.

"The process is very efficient because of the heat and the pressure -- 98 percent to 99 percent conversion with no effluence, or discharge," Crowder says.

The next feedstock: The jatropha tree
Critics of biodiesel and renewable fuels often point to the effects of production on food crop prices like soybeans and corn, but a resilient tree grown in many tropical locations may soon provide an alternative.

"We are working with a new tree called the jatropha that's indigenous to Brazil but being planted heavily throughout India and Africa and highly touted as one of the feedstocks of the future because it's not a food," Crowder says. "You can also get carbon credits for it."

Producing an inedible fruit that has a cluster of seeds, the jatropha demands very little water and can be genetically modified for a year-round harvest. It's also much more productive, yielding an estimated four- to seven-times as much oil per acre than soy and 10 times more than corn.

The Philippines currently produces biodiesel from it, and an Indian rail line between Mumbai and Delhi lined with jatropha runs on blended biodiesel made from the trees.

The only limitation? Cold weather -- the jatropha will die in a freeze.