|A new wood-to-crude oil conversion facility opening this week in Mississippi. Source: Kior|
Kior Inc. opened its first commercial-scale plant in Columbus, Mississippi last November to take in 500 tons of biomass a day and transform it into 40,000 gallons a day of gasoline and diesel. The company’s technology uses catalysts to vaporize biomass, removing the oxygen and condensing the remainder to oil that can be refined into cellulosic gasoline, diesel and jet fuel. Silicon Valley powerhouse Khosla Ventures owns more than half of the five-year-old company, which is based in Pasadena, Texas.
If you think about the way nature makes crude oil, Kior just accelerates that natural process. Nature does it thermally; Kior does it catalytically. They start with the same material nature started with, compress that process from a million years, or a very long period of time, into literally seconds. They take solid biomass through a single-step conversion to renewable crude oil. And then they upgrade that crude oil to cellulosic gasoline and diesel.
Kior's next plant is planned for Natchez, Mississippi. International Paper Company shut down a paper mill there about 7 years ago. As the pulp and paper industry has continued to go down, Kior would imagine building these conversion units to convert their unused biomass. It's the tops of the trees, the limbs and the small trees from thinning the forest that have little or no market today, and Kior convert that to oil.
Kior sold out their plant in Columbus, Mississippi, before they ever broke ground. Their customers are Catchlight Energy LLC, which is a joint venture between Chevron Corp. and Weyerhaeuser Co., Hunt Refining Co. and FedEx Corp. They see it as the most effective and least disruptive avenue for them to achieve their internal strategic renewable energy objectives as well as their near term Renewable Fuel Standard volumetric obligations [RFS2]. What the companies like about Kior is it's a thermo-chemical process. It's not a biological process. They like the fact that Kior produces fundamentally indistinguishable gasoline and diesel from what they do from petroleum.
Their significant customers will be both integrated oil companies as well as independents that are striving to satisfy their growing renewable fuel obligations under RFS2. In addition to that, there is a tremendous market of energy-conscious businesses, like FedEx, that are looking for cost-effective, non-disruptive, low-carbon, environmentally-friendly fuels solutions to continue to grow their business in a truly sustainable manner. (Bloomberg, 11/8/2013)