Red Rock Biofuels: The Digest’s 2015 5-Minute Guide

Red Rock takes waste biomass from forests and sawmills, and using a proprietary process, transforms it into domestically produced jet, diesel and naphtha fuels. The company’s process begins with the gasification of woody biomass to produce syngas, which is then cleaned and sent to a Fischer-Tropsch unit where it is converted to a high grade, renewable syncrude. Finally, standard upgrading refines the syncrude to yield renewable jet, diesel and naphtha fuels which provide a lower carbon, cost competitive alternative to crude oil-based fuels.

Each Red Rock refinery will utilize up to 175,000 dry tons of woody biomass feedstock to produce up to 16 million gallons per year of finished products.

The Situation

The Red Rock refinery, slated to begin construction in late 2015, will convert approximately 175,000 dry tons of woody biomass into at least 15 million gallons per year of renewable, liquid transportation fuels.

Red Rock last year received a $70 million DPA Title III award from the U.S. Departments of Agriculture, Energy and Navy to help build its $182 million refinery, as part of an effort under the Defense Production Act aimed at building 100 million gallons of const-competitive renewable jet fuel capacity.

In March, Red Rock Biofuels unveiled a strategic partnership with Flagship Ventures that sets the stage for the construction of its first commercial scale refinery in Lakeview, Oregon.

Flagship will provide financial and strategic expertise as Red Rock moves toward construction of a commercial-scale refinery and secures additional partnerships, funding and customers. Flagship partner Brian Baynes, Ph.D., led the investment and will join Red Rock’s board of directors. Flagship Ventures manages over $900 million in capital and has internally founded 27 ventures while investing in another 45, and is best known in the sector for its investment in Joule Unlimited and Midori, and a former investment in LS9 (since acquired by Renewable Energy Group). The firm is active in three principal business sectors: therapeutics, health technologies and sustainability.

More about project #1

The processing technology. Red Rock has partnered with Velocys, and will build one of the first full-scale versions of that company’s micro-channel Fischer-Tropsch reactors. Velocys developed its Fischer Tropsch microchannel reactor technologies for the efficient and economic small scale distributed production of biofuels via BTL and liquid fuels from natural gas via GTL — using a wide range of waste feedstocks including agricultural, municipal and construction waste, forestry waste; plus, stranded and associated gas from oil wells which would otherwise be reinjected, vented or flared.

The gasifier. Red Rock has partnered with TCG Global, whose technology is capable of converting any carbon-containing feedstock such as biomass, coal, petroleum coke, or municipal solid waste into synthesis gas (Syngas), consisting primarily of hydrogen and carbon monoxide. The Syngas produced by this gasification process is a clean, dry, flexible fuel which can be burned to create heat and electricity, passed through any of several different catalysts to produce fluids such as alcohols and transportation fuels, including clean burning diesel, or used to supply pure hydrogen gas for multiple applications. The initial demonstration plant was constructed and tested in Denver, Colorado for Red Lion Bio-Energy.

Red Rock CEO Terry Kulesa commented “We like the fact that the gasifier operates like a coal-to-liquids gasifier — if it can clean up coal, it can clean up the syngas. Plus the capex is not crazy stupid and the beauty of it is that we can have any hydrogen ratio we want, because it’s non-catalytic. In our case, we want a 40% moisture content with our wood because it helps with our reaction.

Timelines. “We’d like to close the whole deal this summer,” Kulesa told The Digest, “and have the project complete end of 2016 — that’s completed, commissioned and making fuel. Most of the time is used up in the time frames for equipment orders. Out of the entire $182 million project, $110 million is equipment; it’s not that big a construction project, but the lead times are 12-14 months on some of the pieces.”

Upgrading intermediates to fuels. “We’re working with Haldor Topsoe,” Kulesa said. “We could have used the UOP [hydroprocessing] technology, too, but we found Haldor Topsoe more willing to work with a smaller company. This project is like falling off a log for them.”

Tested together? “Not every piece of equipment is tested together yet,” Kulesa confirmed. “They’ve been tested, but never been hooked together. We believe they are commercially viable, though, and we worked with Fluor to give us the blessing.

Feedstock flexibility. Kulesa confirmed that the plant will be able to work with wood — and also with natural gas, should wood supply be interrupted. “With wood cointracts,” Kulesa told the Digest, “we are locked in for 8 years at a “fixed floating” rate, so that part of what we pay is tied to diesel fuel price. For example, with diesel at $3.00 we pay $50 per ton for wood, but we can pay between $46-$54 depending on diesel prices.

Technology overview

RRB’s technology platform converts woody biomass to jet, diesel, and naphtha fuels — based on the TRI gasifier technology and the Velocys micro-channel FT reactors.

The process begins with the gasification of woody biomass to produce synthesis gas. This synthesis gas is cleaned and sent to a Fischer-Tropsch unit where it is converted to liquid hydrocarbons. Hydroprocessing refines the liquid hydrocarbons to produce jet, diesel, and naptha fuels.

Top past milestones

In 2014, Red Rock received a $70 million DPA Title III award from the U.S. Departments of Agriculture, Energy and Navy to help build its $182 million refinery, as part of an effort under the Defense Production Act aimed at building 100 million gallons of const-competitive renewable jet fuel capacity.

In September 2014 , Southwest Airlines agreed to purchase approximately 3 million gallons per year of Red Rock’s low carbon, renewable jet fuel,

In July FedEx signed up for another 3 million.

Top future milestones

1. Ground breaking and equipment ordering for first commercial plant by Q4 2015.

2. First commercial plant in operation in 2017.

Business model

Owner-operator.

Competitive advantage

RRB’s key difference is a small economic footprint with flexible feedstock design. In addition, Large commercial facilities currently use Fischer-Tropsch technology, and Fischer-Tropsch fuels are approved for use today (ASTM spec D7566).