Colorado small businesses are less likely to change health insurers for the upcoming year, even as they anticipate continued price increases, according to the second-annual Delta Dental of Colorado Small Business Survey.
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“You have to have hydrogen to mass produce renewable biofuels. Natural gas is cost effective and it’s plentiful,” said Steven Silvers, spokesman for Sundrop Fuels Inc. “Every gallon of domestically made biofuel is a gallon of gas that we don’t have to import from foreign sources.”
Natural gas, extremely important in the company’s long-term plans to create a gasoline from cellulosic materials, also is the principal driver of the company’s short-term goals of creating a revenue stream from converting natural gas to gasoline and a principal source of its funding.
Sundrop Fuels, Inc., a privately-held advanced biofuels company, has engaged design consultants for its inaugural facility near Alexandria, Louisiana, and is expected to break ground on this facility before the end of the year. Consultants now are creating a design, Silvers said, and then funding for the facility would also need to be completed.
Designed as a combined commercial and demonstration plant, this first plant’s primary mission will be to produce about 60 million gallons of finished gasoline from natural gas while providing a platform for Sundrop Fuels to prove its proprietary gasification technology for making renewable “green gasoline” from woody biomass.
“This first plant will create a revenue stream (based on existing technologies), while we work out our proprietary technology,” Silvers said. However, the production facility also will create much of the front- and back-end processes needed for an add-on plant that will create bio-gasoline, largely from the wood waste created by the forest-products industry in the southeastern United States.
“This is gasoline that on a molecular level is identical to gasoline created from oil,” Silvers said. “You can’t tell the two apart. It works the same. It transports the same. Everything is identical.”
The success of Sundrop Fuels’ integrated commercial and demonstration plant will put in motion the company’s plan to build a series of renewable gasoline “megaplants,” each producing more than 200 million gallons of cellulosic biofuel annually. Sundrop Fuels expects eventually to have four such facilities in operation, representing a combined production capacity of more than one billion gallons – a significant percentage of the total cellulosic advanced biofuels goal set by the nation’s Renewable Fuels Standard.
Sundrop’s proprietary technology differs greatly from other biofuels, especially those converting woody biomass to biofuels. Essentially, the goal in creating transportation fuels, such as gasoline, is to reach a 2-to-1 ratio of hydrogen to carbon, and Sundrop does that by adding hydrogen-rich methane.
“Most of the other technologies get there by actually reducing the carbon in the biomass,” Silvers said. Sundrop, on the other hand, can approach utilizing 100 percent of the carbon in the biomass, meaning it may sequester more carbon than the other processes.
So when it comes to examining the life-cycle analysis of the process and its effect on greenhouse emissions, Sundrop may have a leg up on the competition.
The process allowed the fuel to qualify for the renewable classification as determined by the Environmental Protection Agency, in which the production pathway has to represent a 60 percent decrease as compared with petroleum, Silvers said. That’s an important designation for the future of this company, for even as company officials envision being able to produce gasoline for roughly $2 a gallon – or about the same as gasoline produced from oil – the vision is the corner a significant portion of the market for fuels created from biomass.
Plans are for Sundrop Fuels to achieve a combined production capacity of more than 1 billion gallons by 2020 – a significant percentage of the cellulosic advanced biofuels goal set by the Renewable Fuels Standard. So even if domestic production drives down the cost of gasoline – a big “if” – the plentiful supply of natural gas from many of the same sources could be helping drive eventual profits for Sundrop.
Significant backing for Sundrop Fuels comes from Chesapeake Energy Corp., the largest producer of natural gas in northern Louisiana’s Haynesville Shale Field and second-largest producer in the nation. Chesapeake invested $155 million in Sundrop Fuels in mid-2011.
The company’s investors also include two of the world’s premier venture capital firms, Oak Investment Partners and Kleiner Perkins Caulfield & Byers.