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Debra Fiakas, CFA
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Ms. Fiakas is a seasoned, credentialed investment professional with a diversified and successful track record as a research analyst and as an investment banker. Her career includes experience in all aspects of the equity capital markets with particular emphasis on emerging growth companies... More
My company:
Crystal Equity Research
My blog:
Small Cap Strategist
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  • Mighty Microbes

    The Department of Energy waved its wand over Solazyme a few months back, offering the private developer of renewable oil and bioproducts a $21.8 million grant to validate a commercial scale biorefinery.  Solazyme must match the grant with $3.9 million from its own company pocket.


    Solazyme claims to be “the only microbial biofuel company to produce an oil-based fuel.”  Not a difficult claim to make considering the number of “microbial” biofuel companies can be counted on one hand.   Technically  - as one of our readers pointed out  -  all manner of bacteria and green algae are considered microbes, suggesting that any number of alternative energy developers fall into the “microbe” category.  That said, it appears that only Solazyme wants to be known as a “microber” with the rest of the pack choosing more consumer friendly imagery.


    Solazyme has branded their particular brew as Soladiesel and two of the products have met ASTM International (formerly the American Society for Testing and Materials) standards for motor oil.  The two fuels are compatible with existing distribution infrastructure and can be used with no modification in standard diesel engines.


    Microalgae are put to work in Solazyme’s technology to convert biomass directly to oil through photosynthesis and standard fermentation processes.  Solazyme adds sugar to its algae pond, which streamlines the oil extraction process.  As we have noted in previous posts algae are among the most efficient in capturing energy from the sun in real time.  This is after all what renewable fuel is all about  -  capturing the suns energy efficiently enough to replace the energy captured and compressed over the millennia in coal and oil.


    In September 2009, the Department of Defense order 20,000 gallons of Solazyme’s fuel to replace shipboard fuels used by the Navy.  Solazyme is delivering the fuel this year.  The Navy will be testing the fuel along side fuels from other vendors.


    A bet on algae-based fuel is tough to make since the technolgy is still largely at developmental stage and owned by privately held companies.  Other algae-based fuel names to watch include UOP, LLC (subsidiary of Honeywell, HON:  NSYE), Algenol Biofuels, Sapphire Energy, OriginOil (OOIL:  OTC/BB) , Synthetic Genomics, Solix and Aurora Biofuels.  Both Sapphire and Algenol have been profiled in previous posts in this renewable fuel series.



    Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. 

    $HON $OOIL

    Disclosure: None
    Tags: HON, Energy
    Aug 03 11:05 PM | Link | Comment!
  • A Non-profit's Bonfire

    The series continues on the companies and organizations that were awarded grants from the Department of Energy to pursue renewable energy sources.  Private investors are left out in the cold on the award given to Renewable Energy Institute International (REII), a non-profit organization.  Eventually some of the institute’s technology will find their way into commercial projects  -  at least that is the idea  -  and within reach of investors.


    REII is receiving just under $20 million to produce green diesel from agriculture and forest residues using advanced pyrolysis and steam reforming technologies.  They are to establish a pilot plant that can process up to 25 tons of feedstock per day. 


    I have been somewhat critical of the DOE for awarding large grants for development of technologies that appear to be well established and already in commercial stage.  We have already seen several green diesel concepts and plenty who are targeting ag and wood waste.  However, this project does not involve the usual cellulosic ethanol processes and proprietary enzymes.


    Pyrolysis  -  combustion in the absence of oxygen  -  is worth exploring further.  There are yet unanswered questions about pyrolysis.  What is the energy requirement to kick-start the process?  What is the real output in terms of finished product and waste or pollution streams?  What scale is needed to make a pyrolysis operation breakeven?  Then where can a pyrolysis plant be located to ensure both access to adequate raw material supply and distribution?


    Investors may not be able to invest in REII, but it is worthwhile to watch the outcome of this project as it will provide valuable insight into the economic viability of pyrolysis technology as a viable energy resource.


    Notably Waste Management, Inc. (WM:  NYSE) and InEnTec have a joint venture, called S4 Energy Solutions, that aims to produce renewable fuel and power using plasma gasification.  InEnTec calls it their PEM or Plasma Enhanced Melter.  In this process biomass is superheated in a closed chamber to temperatures of up to 20,000 degrees Fahrenheit, yielding a synthetic gas.  The “syngas” is then reformulated using into ethanol, green diesel, hydrogen and methane.  Since WMI brings feedstock material to the equation, we are inclined to expect more at an earlier date from the S4 Energy venture.




    Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein. 



    Disclosure: None
    Jul 20 2:46 PM | Link | Comment!
  • Chicken Project is all Pork

    Elevance Renewable Sciences (private) is launching a pilot project to turn it and plant oils into jet fuel.  Elevance is getting $2.5 million from the Department of Energy’s stimulus funds to complete a preliminary engineering design for a renewable fuel facility in Newton, Iowa.  The company is putting up $625,000 of its own money for the design.


    Elevance claims to be the first company to “successfully bridge the renewables and chemicals industries.”  The company says it is trying to turn natural renewable plant-based oils like soybean, canola, corn and sunflower into specialty chemical products.  Elevance claims to have Nobel Prize-winning catalysts and other proprietary technology at its disposal to synthesize natural oils with greater efficiency.


    Alright, for $2.5 million I guess we can see if Elevance really has built a better mouse trap.  However, I am skeptical that the company can come up with anything significantly different than the processes used by any number of other players which have already been using chicken fat for jet fuel. 


    For example, Tyson Foods, Inc. (TSN:  NYSE) teamed up with Syntroleum Corp. (SYNM:  Nasdaq) to build a facility that is expected to produce 75 million gallons of renewable diesel and jet fuel from Tyson’s chicken fats and other oils in Syntroleum’s patented Biofining process.  Syntroleum uses a version of the well-known Fischer Tropsch process.  Syntroleum already tested 100,000 galls of synthetic jet fuel with the U.S. Air Force in 2006.  The joint venture is already started construction on a refining facility in Geismar, Louisiana.  It is expected to begin production in 2010 and turn out about 75 million gallons of fuel a year.


    Darling International, Inc. (DAR:  NYSE) has also formed an alliance with Valero Energy Corp. (VLO:  NSYE) to produce renewable diesel from used cooking grease and other animal by-products collected by Darling.  Darling and Valero have applied for a DOE loan guarantee but no new science and no seed money for engineering designs are needed to bring this project to commercial stage.


    Furthermore, chicken fat is not the only contender in the feedstock race.  Sapphire Energy in California successfully tested algae-produced renewable jet fuel on a Continental flight.  Bill Gates put $100 million into Sapphire, probably because he and his advisors can see that algae-based renewable diesel shows great promise.  Given that algae can produce a finished product in two weeks means that one acre of algae can deliver more fuel than one acre of just about any plant and could far surpass chicken and other animal by-products in terms of volume.  The National Algae Association estimates current algae technology could produce up to 3,000 gallons of biocrude per acre per year and that the cost of algae-crude could drop to $10.00.


    My hat is off to the Corn Belt congressional delegation.  They seem to get what they want when it comes to their “pork” and chicken projects.



    Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.  Crystal Equity Research has a Buy rating on DAR shares.


    Disclosure: None
    May 18 7:11 PM | Link | Comment!
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