All Roads Lead to Rome and Rice
Executives with Colusa Biomass Energy Corp., a company securing its niche in rice waste, were searching diligently for an engineering company to take their project to the next level: commercial production. No matter the paths they traversed, CBEC execs say all roads led to BBI International.
Disappointing pilot work done with rice straw in the 1990s using the general patented process on which CBEC's more refined conversion design is based, coupled with low oil prices and a discouraging economic environment, slowed the company down but didn't stop it. Despite past obstacles, CBEC gained a preliminary engineering thumbs-up from Harris Group last year and began the hunt for experts in cellulose to scale up their process in a full-size plant.
"It was a case of mutual interest and respect," says CBEC President and Chief Executive Officer Tom Bowers, referring to what led to the two companies' new working relationship. "We've been looking hard since last March for the right group to take us to the next level domestically and internationally, and I guess it was one of those cases where all roads lead to Rome-every time we followed a solid lead on somebody who had talent or someone we respected, well, they ended up being with BBI most of the time." Originally intending to focus its initial commercial plant in California where a rice-collection infrastructure exists, the company is now equally interested in an Arkansas site where rice hulls lie awaiting-pending a deal-closer. Straw, hulls or both projects concurrently, Yancey says BBI has a timeline in place to move either site forward by completing specified tasks in 2008.
Be Practical and Forward
"We have all of 2008 to demonstrate the technology and generate the data we need to do the process design," Yancey says. "Then we have all of 2009 to do detailed design work and build the plant." The plan isn't linear so several different tasks will be going on at once, but Yancey says BBI's practical approach and project development experience will make this project go. "When we first talked, we sat down with them and said we still feel there are some technology gaps [for converting most biomass feedstocks to ethanol]," Yancey explains. "We told them our approach would circumvent those gaps and eliminate the missing technology." The technology gaps Yancey refers to stem from CBEC's desire to double-pretreat its feedstock before fermentation. The "pre-pretreatment" would liberate hemicellulose so its five-carbon sugars could carry on to fermentation. But, Yancey says, "pretreatment is still very expensive and an issue for any tech provider trying to use the fermentation route. Dilute acid requires expensive alloys or glass-lined or acid brick-lined equipment, and these primary pretreatments are generally done at a higher temperature, running up operational costs." Furthermore, there are no commercially demonstrated organisms capable of proficiently fermenting five-carbon sugars, so even if the uncertainty and expense of pretreatment were endured Yancey says exactly how those sugars would be fermented is still questionable. If it becomes feasible to isolate and ferment the five-carbon sugars from rice waste in the future, then a move in that direction could be made. Until then, BBI suggested moving forward with a base pretreatment that dissolves the silica.
A Series of Concurrent Events
BBI's forward approach hooked Bowers from the start. "What you get from BBI is a sense of well-roundedness, and that their feet are on the ground," Bowers says. "After our first meeting with BBI, I told my guys as we walked onto the airplane, ‘This is it. As far as I'm concerned let's not look anyplace else so let's make the best deal we can with them.'"
The responsibilities BBI will undertake first include conducting a detailed study to define acceptable ranges of the key process variables. At press time in late December, the study had already begun. The financials of the first plant will be driven by established targets for these key process variables. For instance, the initial study may not reveal that the C6 yield will be 85 percent and, from that, "X" amount of ethanol will be refined. "What it will tell us is that we will need at least 70 percent, for example, and if we can't reach that established target then we know we can't do this," Yancey says. Essentially, the purpose of BBI's initial study is to determine what is needed to make the project competitive, and is expected to be complete by the end of February. By then, BBI plans to have already begun developing what Yancey calls a technology demonstration plan. "That's where we'll generate the data needed to design the plant," he says. Bench- and pilot-scale work managed by BBI will continue throughout most of 2008. As data streams in, BBI will take the aggressive initiative to concurrently develop the "Schedule A" basic engineering package to transfer knowledge from the pilot work to commercial process design. "By the end of the year we should be ready to negotiate an EPC contract for the design and construction of the plant," Yancey says, cautioning he couldn't reveal which contractors are already under consideration. The Colorado-based company estimates its new client will need a $2.5 million budget for the work described.
Finally, BBI will do what Yancey's division was named after: project development. "Just like we develop projects for dry-mill plants, we'll do for Colusa," Yancey says. "I doubt we'll hold small meetings in communities asking people to invest"-how conventional equity drives go typically for private projects integrating proven designs-"but instead we'll be looking for $5 million to $20 million investments. At this point, we recommend raising 100 percent equity to build this first plant, which would greatly simplify things and lower the cost." BBI estimates the first 12.5 MMgy facility will cost approximately $50 million. BBI began designing its first cellulose ethanol plant in early 2007, and the Colusa project is its second major project in the growing field. "Cellulose process design will be a big part of BBI's future," Yancey says. CBEC is a publicly-traded company and its OTC stock symbol is CLME.PK.
Two States, One Mission
California rice farmers produce nearly 20 percent of all the rice grown in the United States, and they relish the thought of turning their troublesome crop waste into money. They currently pay between $25 and $45 an acre to have the residues baled and removed from their fields, markets for which are not easy to find. Livestock producers don't want it because rice straw is high in silica, reaching 13 percent on a dry-matter basis. "Silica is one of nature's great abrasives," Bowers says. As forage, rice straw may cause excessive wear on bovine molars, but chances are the cows won't eat it anyway because it isn't palatable. Bowers says rice waste is even destructive to farm equipment, wearing out implements 40 percent faster than wheat. And simply leaving the straw on the ground for soil nutrition still requires chopping it up and re-flooding the fields with water. "All that costs money," says Rick Nannen, CBEC vice president. Since state environmental regulations disallow producers from burning their rice residues openly in the field anymore, California rice farmers welcome new and cheaper ways to dispose of the straw. CBEC would require rice straw from 35,000 acres for the annual production of 12.5 million gallons of ethanol, and 33 million pounds of sodium silicate-a high-value specialty coproduct.
While CBEC was initially focused on the California rice-straw "market," they have since expanded their options for a first commercial project site. But true to form, all roads for this unique company lead to rice. "The other option is Arkansas, where rice mills have a problem disposing of hulls. There is no ban against burning straw in Arkansas, so there is no real incentive to collect it and therefore the infrastructure is less developed there than in California. But Arkansas is home to several large rice mills where hulls accumulate rapidly, so collocating near a mill is a wise choice and virtually eliminates the grueling task of honing an efficient method of aggregation, storage and delivery. According to Nannen, ongoing discussions with Riceland Foods and Producers Co-op for feedstock arrangements are encouraging. Riceland Foods gasifies a portion of its hulls for some of the energy required in milling operations, and has for many years. "I don't know how efficient that technology is anymore," Nannen says. Bowers adds, "They use the hulls to generate the heat for their parboiling operations. That worked really well 15 to 18 years ago but not necessarily so well now because of the advances in combustion techniques with other materials that have come along, so it was a leading situation years ago but it's not the same today-and there might be a better use for those hulls from an income point of view for the rice mills, and it could certainly be the basis for transportation fuels." Rice hulls contain 20 percent silica whereas the straw contains 12 percent. "If the economics allow us on the front end, I could see us building both these plants with completion dates within six months of each other," Bowers tells Biomass Magazine.
Two states, two companies and one mission: Being the first project development team to build the first commercial ethanol and specialty-chemicals plant using difficult but globally abundant rice waste. BIO
Ron Kotrba is a Biomass Magazine senior writer. Reach him at email@example.com or (701) 738-4962.