KiOR: The Inside True Story of a Company Gone Wrong. Part 4, the Year of Living Disingenuously

KiOR hires a fixer

Despite the rosy chat with shareholders and the world, towards the end of 2012, Cannon hired Bill Parker who had worked under Cannon at AkzoNobel as a production and start-up manager, and also at Albemarle, where he was a project manager. Albemarle was located just across the street from KiOR. He came to KiOR having earned a reputation as “a decent, very professional guy, and a person with high integrity,” according to one KiOR staffer. Hopes were high that he would help the company recognize the troubles with its current technology.

A Mystery Next-Gen Catalyst

In a press release released November 8th, concurrently with the earnings call, Cannon went into further detail regarding the state of KiOR’s technology.

“I am pleased to announce that we have commenced operations at the Columbus facility and have produced a high quality oil that is in line with our specifications for upgrading into cellulosic gasoline and diesel. More importantly, we believe the high quality of the oil from the Columbus facility validates KiOR’s proprietary biomass fluid catalytic cracking, or BFCC, technology at commercial scale. The facility’s performance to date not only meets our expectations based on our experience at our pilot and demonstration scale facilities, but also gives me confidence that we remain on track to upgrade our oil in order to ship America’s first truly sustainable cellulosic gasoline and diesel for American vehicles.”

The statement is more than a little disingenuous. Cannon is specifically limiting himself to noting that the oil that was being produced was upgradable into cellulosic gasoline and diesel, without referencing the cost of same.

To be perfectly frank, so long as oil is being produced with less than 15% oxygen content, virtually any pyrolysis oil can be upgraded successfully to cellulosic gasoline and diesel, so long as an appropriate technology is used, so long as cost is not a consideration. The statement by Cannon astutely avoids any discussion of catalyst cost, regeneration, coking and poisoning — factors which routinely frustrated efforts to upgrade bio-oil at an affordable cost, as the Pacific Northwest National Lab noted here.

Was the catalyst being regenerated while retaining activity? Was the process able to run for significant lengths of time on a single catalyst charge? Was the water/oil problem solved so that significant amounts of oil were not leaving the plant via the effluent stream? The Cannon statement sidesteps the issues with a bland statement of confidence that KiOR could produce an in-spec fuel. Something that has been done for decades, successfully. KiOR’s technology wasn’t about making cellulosic fuels. It was about making them cost-effectively.