Syntec offers technology license
Company President and Chairman Michael Jackson said the license is valued at $200,000. The decision to give it away was made when ethanol producers in the Midwest began struggling with high corn prices as a result of an unusually wet spring. "My thinking was, if we could help them in some way-a license is a small part-or if it could give them the idea to put up a thermochemical facility in conjunction with corn ethanol, it would increase their revenue and decrease the cost," he said.
At press time, Jackson said Syntec would offer the free license until the price of corn drops below $6 per bushel. The license being offered is for use at a 12 MMgy facility. He estimated the cost of such a facility would be approximately $50 million and said the producer could generate $28 million annually. "Our business model is based on building smaller plants on the premise that there are many small saw mills, sugar and corn ethanol plants, [and municipal solid waste] stations that would have approximately 300 tons per
day of waste material that we could gasify," he said, adding that at that size, the return on investment is "very compelling."
Although a free license could aid a corn-based ethanol producer looking to transition into cellulose, Jackson admitted the offer isn't completely selfless. It serves as advertising for the company and entices companies to install Syntec's technology, after which they would be obliged to pay royalty fees. A royalty license of 7.5 cents per gallon means Syntec would earn $900,000 from a 12 MMgy facility operating at full capacity.
According to Jackson, Syntec currently has nondisclosure agreements with "three major chemical companies in Japan, a large government petroleum company in China, two companies in Hawaii, one company in Brazil, and approximately eight large and small companies in the United States."
Syntec has been working since 2001 to develop advanced catalysts that can be used in a thermochemical gasification process to produce ethanol from a variety of biomass feedstocks, including corn stover. "There are only two companies in North America that are at the level we are, and that is (Colorado- based) Range Fuels and us," Jackson said, adding that he believes Syntec is the first company to begin licensing. The company is also working toward construction of a 10 MMgy biomass-based methanol facility in Oregon, which he expects to be operational in 2010. The plant will eventually convert feedstocks such as wood and municipal solid waste to cellulosic ethanol once development of the catalysts is complete.