Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Maybe irrelevant to you, YBD, but not to the technologists who will do the due diligence. The process starts by sorting MSW, preparing it to feed to the gasifier, feed it to the gasifier, clean up the gas stream, adjust the H/C ratio before the FT process.
YBD, before you lecture the posters, you should get your facts straight.
The Red Rock plant is still under construction, ergo no proof (https://www.redrockbio.com/lakeview-site.html).
The ENVIA plant ran on landfill gas and natural gas, no MSW. So, the process - MSW to jet fuel - is not proven.
The Velocys FT technology was partly proven. Partly, because on their way to full capacity, one of the reactors developed a leak. The ENVIA reactors never reached nameplate capacity.
DM: very doable!?! Velocys is looking for over two years for investors for the Bayou Fuels plant which requires a similar investment. Maybe the investment climate in the UK has changed and it became much less risk adverse.
Expatbrat: I agree as it is understood that the FT technology comprises the reactor and the catalyst.
Also, bp invested $30M in Fulcrum which uses bp/JM technology.
Expatbrat: there are many roadways from biomass to liquids and not all of them go via FT. Here is a couple of informative studies of the subject:
- https://www.sustainableaviation.co.uk/wp-content/uploads/2020/02/SustainableAviation_FuelReport_20200231.pdf
- http://www.ieabioenergy.com/wp-content/uploads/2017/11/Technology_Roadmap_Delivering_Sustainable_Bioenergy.pdf
It looks like a quick review of the history with Red Rock Biofuels (RRB) would be useful:
- July 2013: RRB selects Velocys' FT technology for their planned biomass to liquids plant
- May 2018: VLS receives a "notice to proceed" action to commence manufacturing of FT reactors and catalyst for the RRB biorefinery.
- February 2019: The agreement with RRB is amended to reduce the initial order of 6 reactors to 4. In return, VLS received £1.4 M directly with a reduction of future payments.
Comment on Wareborn's statement: "Our reactor supply chain has now been tested and has proven our capability to deliver our technology to our global clients." But it took more than 2 years to manufacture these 4 reactors. What is the maximum capacity of this reactor supply chain?
Thanks, Sean. I am surprised that you do not know that. The Oklahoma plant operation was suspended in September 2018 and never restarted! The reason why your remark on the FT reactors caught my is that the Velocys' reactor technology is aimed at low volume operation because of its cost. As a consequence, it is well suited for distributed operations based on biomass and MSW, such as Altalto.
Sean83: a couple of comments:
The Oklahoma plant, owned by the JV ENVIA, does not exist anymore. Velocys got the FT reactors back.
Could you give us the reference of the presentation about FT reactors?
The issues regarding a waste-to-jet fuel are related to the upstream processes: sorting the MSW to get to the carbon containing materials, the gasification, the tar handling and the syngas cleanup. TRI is handling the gasification, but they do not have experience yet on the Altalto scale. The tar handling will be done by Linde’s Hot Oxygen Burner Technology and the gas cleanup by Air Products. All this was published in the February 3rd press release about Worley as the Altalto engineering partner. Air Products is good company and might be able to handle the MSW syngas. Their experience is related to syngas cleanup to produce energy, not to produce jet fuel. The cleanliness requirements for syngas to be sent over the Velocys catalyst are much stricter. Lastly, Velocys has not yet announced their partner for the MSW sorting. This is a critical step as experienced by Fulcrum. They tackled that first...it looks like Velocys will tackle that last.
Good discussion. I agree with both of you. But why is it so difficult to find investors who want to fund Velocys' projects. The 2018 Annual Report mentions "The Natchez, MS Biorefinery project completed planning, permitting and pre-FEED engineering successfully and is currently under due diligence by strategic partners...(p6)" So they have been trying for over 2 years without success. The Altalto project is not yet at this stage yet because permitting is not achieved yet, nor is the pre-FEED finished.
Static: another conspiracy theory...
Fulcrum is privately held. They filed for an IPO back in 2011, which they canceled later. They also might have a strong patent position about MSW to fuels which Velocys lacks, e.g. US Pat 10,344,233. This might become a problem for Velocys in the near future. I don't see a reason for the merger.
Lastly, it will come down to which of the FT technologies is the most economical. Since the Velocys one is based on microchannel reactors, and the JM/BP one on regular multitubular reactors, the latter might have the advantage.
Expatbrat: Fulcrum's Sierra Biofuels plant will convert MSW into a synthetic crude oil which will upgraded to jet fuel in a Marathon refinery. Velocys' Altalto plant will convert MSW into jet fuel at the site.
Converting MSW into a suitable feed for the gasification unit is well defined and in operation by Fulcrum. The Altalto approach has not been defined in any process description.
The gasification unit is the same: both Fulcrum and Velocys are using ThermoChem Recovery International's technology. Both plants convert the cleaned syngas via the Fischer-Tropsch process. Fulcrum uses the JM/BP technology tested on natural gas in Nikiski, Alaska on a 300 bpd scale, while Altalto uses Velocys' microchannel technology, tested on landfill gas in the Envia demo plant in Oklahoma City, OK, on a 200 bpd scale.
It is late but I found a gem which I should have sent to the Velocys BOD, but I am sure they follow this message board. Please read the following article from Morgan Stanley titled "Using green bonds to turn garbage into jet fuel." I give the full title so that you can easily retrieve it via Google in case LSE remove the link.
https://www.morganstanley.com/ideas/fixed-income-finances-fulcrum-bioenergy#:~:text=A%20creative%20tax%2Dexempt%20municipal,be%20powered%20by%20alternative%20fuel.%E2%80%9D
It is very interesting how Fulcrum went about to finance their waste to jet fuel plant by avoiding the traditional approach such as a project-finance loan from a commercial bank. Velocys is not yet there and maybe they can learn from the Fulcrum example using smart British investment banks...
Correction, Expatbrat: VLS has two IP protected technologies: the reactor technology and the FT catalyst. That is how they generate revenues together with engineering services.
Draft: If Altalto is one of Britains biggest projects, then Britain's economic future is in a dire state...
Regarding the cash situation. I would not go until year end. You estimate that the May cash situation is £5.8. VLS has also burned £10/12*5 or £4.2M so far or they had £1.6 cash in May. This means that they will run out of cash by the end of next month. Is that the reason why they postponed the AGM and the annual report until August?
Expatbrat: BP decided not to go into the Gas-to-Liquids business, maybe because their technology was not economical. So they did not want to take the risk Shell took. Shell had already a 15,000 bpd plant in operation in Bintulu at the time that Nikiski was up and running. So, BP was way behind and did not see how to catch up with Shell.
Davy Engineering, a Johnson Matthey subsidiary, that had developed the BP GTL technology got the go ahead to license the technology back in 2009. The first license they sold was to Fulcrum in 2018! Just to emphasize how difficult it is to bring new technology to market, even for giants such as BP and JM...Hence it is not a surprise that Velocys is struggling to get into this market. They tried to get away from the GTL market by going after other raw materials than natural gas to convert in to valuable products, but so did BP/JM when they licensed that GTL technology to Fulcrum to convert municipal waste in to jet fuel.
Friedtattie: sorry for the delayed reply but the BP GTL technology was tested way beyond the lab. BP operated a 300 bpd GTL demonstration plant in Nikiski, Alaska for 7 years until they shut it down in 2009.
IM: "Sentiment is the driver of shareholder value"...I don't think so...a better statement is "Sentiment is the drive of share price"...and "Economic performance is the driver of shareholder value."