26 November 2007 00:00 [Source: ICB]
Clay Boswell/New York
Being the world's most efficient processors of biomass, struggling US pulp and paper makers are well positioned to become thriving producers of crude oil
Deep in the heart of a Wisconsin forest, in a small town called Park Falls, a pulp and paper mill that was on its last legs a fewyears ago is now at the cutting edge of US energy independence.
The transformation is no coincidence.
The US pulp and paper industry has been struggling for a decade. With the rise in energy costs, an increase in offshore competition, and the stagnation of demand, the industry has consolidated and hundreds of mills have shut down.
One of those was the Smart Papers mill in Park Falls. But when a new owner, William "Butch" Johnson, arrived in 2006, he had a broader conception for the business.
"Over the past decade, the market for our kind of printing and writing papers has shrunk about 3%/year in price," observes Bob Byrne, president of the mill, now called Flambeau River Papers. "Everyone in the world knows what the cost of energy has done in the past decade. So which business would you rather be in - the paper business or the energy business?"
In fact, Flambeau River is now in both. A second company of which Byrne is also the president, Flambeau River Biofuels, now shares the same site. In April, it will begin construction on an $84m (€57m) 15%-scale demonstration facility for the conversion of biomass to Fischer-Tropsch (F-T) liquids - a kind of crude oil that can be refined, like petroleum, to a range of hydrocarbon fuels with properties equal or superior to gasoline, diesel fuel and the other petroleum derivatives that are staples in transportation.
In the longer term, Flambeau Rivers Biofuels will build a full-scale facility,probably on the same site, for $200m-220m.
The pulp and paper industry is on the verge of a fundamental shift, suggests Alexander Koukoulas, senior technology consultant, ANL Consultants, and adviser to Flambeau River.
"If you're a pulp and paper producer, you have an infrastructure in place for processing biomass, a readily available wood resource - forests in the US are healthy - but perhaps you don't have the right product mix," he says. "You might think about expanding your product base to include liquid fuels or bioenergy to complement or even displace your existing product offering."
Most mills have not yet recognized the opportunity, he continues. "They look at pulp and paper as they reason why they are in business, whereas if you step back and say, 'I am a biomass processor,' then you have a much different paradigm."
Two technologies that make this transformation viable are gasification and the F-T process. Gasification, which converts carbonaceous materials into carbon monoxide and hydrogen, or syngas, is almost 200 years old. The F-T catalytic process converts syngas to liquid hydrocarbons, and was developed during the 1920s.
Bioethanol has always attracted greater attention than biomass-to-liquids (BTL). However, F-T liquids have numerous advantages, one being the ease of distribution.
"A huge infrastructure goes into making gasoline readily available," explains Koukoulas. "You can't take ethanol and put it into an oil or fuel pipeline because it contaminates and corrodes the lines. So you're forced to distribute by unit rail and blend it locally. That's proving to be a challenge. In comparison, F-T liquids are expected to be fully fungible and easily integrated within the petrochemical infrastructure.
There is also the flexibility of the process.
"You can put an awful lot of carbonaceous feedstocks [into the gasifier] with no penalty," says Chris Doherty, vice president, contracts, at TRI, a biomass-to-energy company focused on gasification. "And when you get your syngas, you can do anything you want with it. Our end product is an energy-rich, hydrogen-rich synthesis gas. Folks who make ethanol, they make one product - ethanol."
Syngas can be used to produce a wide range of chemical products, including ethanol, or it can simply be burned as fuel.
Baltimore-based TRI's specialty is a type of gasification called steam reforming. Its key features - low temperature and low pressure - are responsible for its particular flexibility. TRI is supplying its technology for Flambeau River Biofuels.
"Steam reforming has a lot of very strong attributes, one being that there is no incineration, so emissions are ultra-low," says Doherty. Conditions in the large fluidized bed of the steam reformer change very slowly, as well. "It's really like a thermal flywheel," he says. "You can change feedstocks on an hour-to-hour basis - no retrofitting necessary. Wheat straw, bark, sawdust - throw it into the maw," he says.
"We think that the flexible-in/flexible-out is a real paradigm buster in terms of why you'd want to do gasification, versus enzymatic fermentation," he adds. Enzymatic processes are generally optimized for a narrow range of feedstocks.
Other companies working on biomass gasification include Chemrec and Choren. Based in Sweden, Chemrec has focused on the gasification of black liquor, a byproduct of kraft paper manufacturing. US paper manufacturer NewPage is considering the installation of a Chemrec gasifier at its mill in Escanaba, Michigan, that would consume one-third of the facility's black liquor. F-T fuels are being considered as well.
Choren, a German firm, has developed the entire BTL process from start to finish using F-T technology provided by Shell. Choren intends to begin marketing an F-T diesel product, SunDiesel, in 2008. Carmakers Daimler and VW are Choren shareholders.
TRI has developed its gasification technology for both black liquor and solid biomass. A gasification facility installed by TRI at Norampac, a containerboard manufacturer in Ontario, Canada, has been producing syngas from black liquor continuously since 2003, a total of over 22,000 hours of operation. The syngas is burned for power.
The Flambeau River facility installation will be the first pairing of TRI's technology with an F-T reactor, which will use technology from Syntroleum. Based in Tulsa, Oklahoma, Syntroleum already has a high profile on the BTL scene, having partnered with Tyson Foods and ConocoPhillips to produce F-T jet fuel from animal fat,which has been certified for use by the US Air Force.
THIS YEAR'S MODEL
Key to Flambeau River's business plan is integration of Flambeau River Biofuels with the pulp and paper mill. The full-scale facility is expected to satisfy the mill's energy needs.
"That should take us 100% off natural gas and coal," says Bill Johnson, president of FutureWood, a sister company that supplies the mill. "We'll be virtually fossil-free."
The biofuels plant produces more than "biocrude." It also generates a great amount of heat, as well as a significant quantity of unreacted syngas, which is essentially a natural gas equivalent. Both can be used to make steam, which the pulp mill needs.
"Biomass gasification is extremely efficient when it's in an integrated facility - that is, when all of the waste energy is being reused for that specifically configured host facility," Doherty notes. "It makes the most sense to have a host. You're wasting nothing. It brings down the perceived minimum scale for a biorefinery, or for a refinery for that matter."
Flambeau River Papers is itself vertically integrated into the forestry and timber operations FutureWood, Northshore Forest Products and Johnson Timber, which will also supply Flambeau River Biofuels.
The BTL facility will run entirely on woody biomass that would otherwise go unused - treetops, bark, branches and similar material recovered from the forest floor during harvesting operations, which might typically have been left behind.
"So for the cost of chipping and transportation, we will be able to support this mill with woody biomass without cutting down a single additional tree," Byrne notes. Construction and demolition debris are also options, although the project does not depend on them.
Construction of the 15%-scale biofuels demonstration facility is expected to take two years. It will consume 580-600 tons/day (526-544 tonnes/day) of bone-dry biomass, and produce about 5.8m gal/year (21.9m liters/year) of biocrude. The full-scale facility will begin construction as soon as the demo facility is proven. It will consume about 1,900 tons/day of bone-dry biomass, and produce 39m-40m gal/year of biocrude, which will be sold to local refineries.
Byrne does not expect Flambeau River Biofuels to be unique forever. "The nth model is not going to look like the first," he says, "but someone has to be first."
For more on biofuels, visit Simon Robinson's Big Biofuels Blog at www.icis.com/blogs/biofuels/
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