Range Fuels’ Number One Critic
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That title appears to be reserved for me, even though I did not set out to earn it. It all started with the first story I wrote on Range Fuels in which I pointed out that their progress does not remotely align with their early promises. Since that initial story was published I have been frequently contacted to provide a skeptical side of the Range story. Below I report on another story on Range that has just come out that reiterates my skepticism – not on the nature of the technology but on the disconnect between the intial claims and actual progress to date.
One person recently e-mailed me and said “I bet (Range backer) Vinod Khosla and (Range CEO) David Aldous don’t like you very much.” Well, that may be (although I have had quite a lot of cordial correspondence with Khosla). I have also said before that I believe Vinod’s heart is in the right place. But this is not personal. I am far more worried about the future and the impact false promises may have on that future than whether I win popularity contests.
What Harm is Done?
Of course some ask “What harm is done? So someone fell short of expectations. Big deal.” In this case I think it is a very big deal. Here’s an analogy to illustrate why. Assume for a second that your house is on fire. Some people show up, dressed as firemen, and start to go through the motions of putting out the fire. To your untrained eye, they appear to be firemen, but you can’t help but notice that the fire continues to burn. After a while, it becomes obvious that these are not really firemen, and don’t know how to put out a fire. Meanwhile, the house burns to the ground. The real firemen never showed up, though, because they had gotten the message that firemen were already on the scene and had the situation under control.
I view our energy crisis as a house on fire, and biofuel hypesters as the faux firemen who lull the public into a false sense of security. They also pose a threat to the real fireman out competing for the same sources of funding. So I want some accountability from biofuel hypesters who go out and make outrageous claims and then fail to deliver on them.
Vinod Khosla on Skepticism
I believe the issues I have raised are fair, especially for Khosla. He made some bold statements about what they would do, and took taxpayer money to do it. The flip-side of that is you have to be prepared to accept responsibility when things don’t go as planned. I have yet to hear anyone from Range or within the government say “Yes, we screwed up a bit.” But all you have to do is read the February EPA report on what Range told them about their progress and contrast that with earlier claims that were made to see that things have not gone according to plan.
And while some have criticized me as the skeptic, note that Vinod has never been shy about expressing his skepticism about certain biofuel technologies. Indeed, Mr. Khosla warned investors to steer clear of clean tech IPO’s that rely too heavily on government funding and lack a clear technological advantage. “There will be Googles in this business, but before there is a dot-com rush, investors should ask questions,” Khosla told Bloomberg in an interview. “My objective is that good companies get funding and that, with the bad ones, people know what questions to ask.”
In response to my criticisms, Range apologists invariably say something like “That guy doesn’t know the big picture.” Actually I know a whole lot more than what I have written. For example, Range laid off a number of employees last year, including employees who were trying to develop a catalyst that could efficiently produce ethanol from synthesis gas. That is pretty key to Range’s claims, and my inference from these lay-offs is that Range couldn’t see any light at the end of that tunnel. That’s not all I know (e.g., a direct quote from a Range insider “There is nothing special about Bud’s (Klepper) gasifier“), and based on what I know, I stand behind my charge that Range has failed to deliver what they promised.
On the other hand, I want to make it clear again that my issue is not with the risk that they may fail. Of course new ventures are risky. Of course there will be unexpected problems. That is exactly why you don’t go out and make a lot of boasts about what you will do and how cheaply you can do it. But if you think I am just trying to belittle someone who took a risk that didn’t pan out, you have it completely wrong. Had they not gone out and made the claims they did – claims that at the time I thought were highly irresponsible and naïve – while chasing tax dollars, this wouldn’t be the same issue.
The Latest Range Story
Back to the new Range story I mentioned in the opening paragraph:
Range Fuels Fights Criticism, Technological Challenges
Let me address some specific bits from the article:
OMAHA (DTN) — Between 2006 and 2009, more than 100 news stories and press releases touted a cellulosic-ethanol-technology developer as a leader in a promising industry.
Many of those 100+ stories were hyped up puff pieces that the company encouraged. This hype created a buzz around the company that had them winning accolades long before they delivered. Shouldn’t they now be accountable for wasted tax dollars, and lost opportunities for companies that were denied funding that went to Range? Shouldn’t some of the writers of these puff pieces be taking a second look now? One thing is crystal clear. Range has not lived up to the expectations they created. No amount of dissembling can change that. They have taken in well over $300 million. That’s a lot of money. What do they have to show for that?
Construction on Range Fuels’ Soperton, Ga., cellulosic ethanol plant has stopped while the company continues work to improve its gasification technology. (Caption below a picture of the construction site).
Range Fuels claimed in 2007 it would produce commercial cellulosic ethanol using wood and other biomass at a 20-million-gallon plant in Soperton, Ga. — by 2008. However, the plant remains in development. Now, Range Fuels CEO and former Royal Dutch Shell executive David Aldous said his company has been honing its gasification/catalyst technology and plans to restart construction on the Soperton commercial plant in 2011.
“We have to do an equity raise before we get into the construction phase of that,” he said.
Note that the above implies that construction has stopped, but another story that came out a few days later quotes Range CEO David Aldous as saying the plant will start up producing methanol within the next couple of weeks – and ethanol at some future date (assuming they get more money).
“They were never going to be a cellulosic ethanol producer,” he (Rapier) said. “Can they do this in a cost-effective manner? No, not in my opinion.
Let me provide two additional pieces of information to put that in clear context. First was the fact that historically “cellulosic ethanol” has referred to the process by which cellulose is hydrolyzed to sugars, and then the sugars are fermented to ethanol. With the influx of the venture capitalists into the sector in the past few years, “cellulosic ethanol” suddenly became a catch-all definition for all sorts of processes involving biomass and some type of fuel product. For someone who is familiar with the long history of cellulosic ethanol in this country, this is very annoying. It would be as if we suddenly decided that calling bicycles “cars” is OK, when in fact that would confuse a great number of people.
So the first reason I said they would never be a cellulosic ethanol producer is that their process isn’t cellulosic ethanol except by the colloquial definition. But the second reason is that their process is gasification, and when you produce alcohols in this way you produce methanol or mixed alcohols. So I saw a process that was gasification to mixed alcohols, not a cellulosic ethanol process. Hence, my comment that they were never going to be a cellulosic ethanol producer (not that they could never be successful with their approach) – their process was only going to be gasification to mixed alcohols (including ethanol).
Unfair Criticism?
The criticism leveled at Range Fuels is “unfair,” Aden said, and the company likely will be commercially successful at some point. Several things make Range Fuels’ technology “fairly unique,” he said.
The Range gasification technology is a two-step process that includes volatilization. Volatilization is a chemical process that rapidly converts nonvolatile solids and liquids (biomass in Range Fuel’s case) into volatile compounds by thermal decomposition. The company then follows that with steam reforming, Aden said.
I don’t know what Aden means when he says the criticism is unfair. What I have done to this point is contrast what Range is now saying they will deliver with their earlier public statements. If you say you are going to build a plant for $120 million and start it up in 2008 producing ethanol, I think by 2010 you have some explaining to do when you have taken over 3 times that much cash, substantially reduced the capacity, still don’t have a completed plant, and are now saying you need more money to continue. Public statements have been made about deliverables. No amount of spin will make them vanish, and I have a right as a taxpayer to question how my money is being spent. So what is unfair about asking for some accountability for how our tax dollars are being spent?
One of the issues could be that the people within the government who are supposed to be looking after our tax dollars are a little too close to Range to remain objective. After all, Range has a fair share of cheerleaders within the government agencies doing the funding, but those cheerleaders need to take a step back and apply some objectivity with respect to what taxpayers are getting for the money they have been forced to spend.
Second, “fairly unique” is a bit generic, isn’t it? All of these processes are “fairly unique.” They have some subtleties that differentiate them from other processes, but not too many of them are “very unique” – which is how Range sold their process. In fact, Aden describes a two-step process in which the 1st stage process is a pyrolysis step. That part certainly isn’t unique, as I know a company that has been doing that sort of two-stage process for 10 years.
That’s what I mean when I say what Range is doing isn’t unique. (I think they aspired to do something relatively unique, but those aspirations were derailed by technical challenges they underestimated). There are numerous off the shelf technologies that can take a gasifier and couple it to a catalyst for producing methanol or mixed alcohols. People just don’t do it because it isn’t economical to do it. But the technology has existed – for decades – to do it (as I explained to a Range contractor who couldn’t understand why I was criticizing this revolutionary technology).
Why Range’s Initial Plans Derailed
I think two things happened with Range on the way from the lab to a demonstration scale. First, I think they had trouble scaling up their gasifier (in fact I have heard this from numerous sources). These can be notoriously difficult to scale because all kinds of temperature issues can give trouble at larger scale. The inability to scale their gasifier will make it very difficult for them to make their economics work; simply stacking up smaller gasifiers is much more expensive than just building one large one.
Second, I think they thought they could develop a catalyst that could produce ethanol for them in high yields. As Aldous admitted above, they get equal amounts of methanol and ethanol – which is what some of us were suggesting all along would happen. Methanol is cheaply produced from natural gas, so the only way they can compete with that is to get very generous subsidies and then sell to biodiesel producers – who will then presumably collect their own subsidies. So for Range to be successful here is going to take a dual biofuel subsidy and involve methanol which we can already cheaply produce in abundance.
The process itself is not necessarily a bad process: Gasify biomass and produce methanol and ethanol. The problem was that they had a number of bad assumptions to start with, and they have had to spend a lot of money getting to the point they are at. If I started out to design a process for producing mixed alcohols from biomass, I could do it for a fraction of Range’s capital expenditure.
A Skeptic and a Cynic
It’s easy to be skeptical or cynical, Aldous said. The question he would ask of those who are skeptical or cynical is, what are they doing to take on the challenges of achieving energy independence?
OK, I am skeptical and cynical, but I can answer the question. I am doing plenty, but we don’t issue press releases about what we are working on. Don’t confuse making lots of press releases about your plans and goals – very typical of many biofuel companies – with concrete actions. But it is possible – as illustrated in the fireman analogy – to actually do more harm than good even though you are trying to take on the challenge. If in the process you sour the public on the biofuel sector, then I would argue that it would have been better to remain on the sidelines.
I will say again that my criticism has never been directed at Range CEO David Aldous. I think the original management recognized a train wreck in progress (of their own making) and decided to get someone who really knew the energy business. (I think their original view was that they were smarter than all of those dinosaurs in the energy business, but finally concluded that maybe they better get someone who knew the business). Thus, they tapped former Shell executive Aldous. I think he has come in and reeled in most of the irresponsible statements. I can’t think of much he has said that I would have much of a problem with, and I realize as the CEO he has to attempt to defend his company against some of the things I am saying.
Conclusion
To conclude, I am not suggesting that Range can’t succeed technically at what they are attempting. I am only saying that what they are now doing is quite different (and has been far costlier) than what they initially claimed, and it will be very difficult for them to produce economical alcohols via this process. Ultimately, this is a cautionary tale about applying a bit more skepticism and a bit less cheerleading for some of these biofuel companies who promise the solution to all of our energy problems. Sort of like the kind of skepticism Vinod Khosla applies toward prospective algal biofuel producers.
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Anthony, their process does indeed make methanol, or more accurately a methanol dominant mixed alcohol. Rather than go through the pain of upgrading that to ethanol, I think they are better off to stop there and refine their methanol, which is, after all, a widely used chemical. But the mixed alcohol product can be blended with gasoline and used in Flax Fuel vehicles – they are designed for it. Given that there are many flex fuels out there already, why go to the expense of further upgrading, when they have a useable fuel?
If they simply optimised this process, there is quite a market for wood to methanol, as there is lots of waste wood around. Even if not used for automobile use, the methanol can be used to co-fuel diesel engines, or upgrraded to DiMethyl Ether, probably a much better pathway than ethanol.
It’s a good example of how the governments focus on ethanol leads to capital being shifted from other, promising fuels, into ethanol, just because that’s where the (free) money is. And Range has used a lot of it.
Rather than go through the pain of upgrading that to ethanol, I think they are better off to stop there and refine their methanol, which is, after all, a widely used chemical. But the mixed alcohol product can be blended with gasoline and used in Flax Fuel vehicles – they are designed for it.
Very insightful Paul. Although I doubt the corn ethanol lobby would go for flex-fuel cars that use an alcohol blend of ethanol/methanol. For some reason the corn ethanol people seem to have too much invested emotionally and financially in corn and corn ethanol and that gives them a jaundiced eye evaluating the potential of methanol and its derivative di-methyl ether as transportation fuels.
Even if not used for automobile use, the methanol can be used to co-fuel diesel engines, or upgraded to Di-Methyl Ether, probably a much better pathway than ethanol.
Yes. If DME was made from corn, the Corn Belt politicians would have been behind it 30 years ago.
Walt said:
No gasification system gives you a H2 to CO exactly right for mixed alcohol - or Fischer-Tropsch synthesis. The mixed alcohol synthesis catalysts are (most likely) molybdenum-based and they operate at around 300-350 deg C. At that temperature the watergas shift reaction is at equilibrium and will therefore consume CO and water to produce H2 as required by the system. Of course CO2 is also produced. If you do low temperature FT you can do the WGS in the reactor by utilizing an iron based catalyst. If you’re wanting to use cobalt, you’ll need to shift outside the reactor to obtain the appropriate H2 to CO ratio.
What I find amazing about the “syngas to ethanol” brigade is that they are peddling their technology as being new and unique. In the mean time, what they’re using is basically work that was patented by Dow, Union Carbide and others in the 70’s and 80’s. Then it was already shown that methanol is a major product, with diminishing selectivities to higher alcohols. To my mind, the approach followed by Enerkem in Canada (syngas to methanol followed by methanol homologation to produce ethanol and other oxygenates) is a better way to go, depending of course on how efficient their methanol homologation step is.
Peanuts,
Enerkems approach is good, but once again, why bother to change methanol to ethanol? (or anything else) If it was worth doing that, Methanex would be doing that with some of the methanol they produce today. In fact, they did do that for while in New Zealand in the 80’s and 90’s, but the upgradingwas not economical.
The biggest hurdle is turning wood/cellulose/MSW into a useable liquid fuel. Once you have done that (methanol), I think it is better to find uses for it. And as a motor fuel, it is similar, but slightly superior to ethanol, so why bother upgrading to ethanol, just mix it in and go.
The product they get from their reaction is a mixed alcohol, which has a slightly higher energy content than pure methanol. As you point out, the work to develop this process was done back in the 70’s, and also back then it (methanol) had ben carefully studies as a fuel, and found to be eminently suitable (paper here).
This paper also found that;
So everything both Range and Enerkem are working on has been know for some time, even the ability to use MSW as the feedstock (the Purox process).
But why then increase the cost and complexity, and reduce the net energy yield, by going to ethanol? The only reason is becasue that is where government money is. If the said money was to be paid on the basis of liquid btu produced, they would stop at mixed alcohol, and we would probably all be using it today.
We’ll see how Enerkem goes – they are going to a lot of effort to answer a question (how to convert mixed alcohol to ethanol) that shouldn’t be being asked.
Paul
I agree with you. My point was that if you’re hell-bent on making ethanol you’re not going to do it with so-called “ethanol catalysts” and perhaps the methanol homologation route is superior (but time will tell, Enerkem is somewhat cagey about making public process performance which usually indicates somewhat below par performance…). Regarding methanol as a fuel, does it not suffer from a few drawbacks (hygroscopic, attacks seals in the engine fuel supply system etc)? I also believe that mixed alcohols would be a better bet as a fuel additive but the ethanol lobby would be dead against that, wouldn’t they?
As an aside, I see there is another crowd barking up this tree: http://cleantech.com/news/4934…..validation Can’t find any information on their technology though…
The truly amazing thing is that I have discussed this with many of them who are entirely ignorant of the history. It is just like all the people claiming to be the first to produce commercial cellulosic ethanol. That was done prior to 1900. Many believe that what they are doing has never been done. In fairness, some of the approaches are using microbes, and that doesn’t have the history of some of these other approaches. But none of this has been invented in the past decade.
RR
And they appear to have fooled the government (and other investors) into thinking that their “new and unique” stuff is worth a lot of gov funding.
Peanuts, methanol as a fuel behaves very similarly to ethanol, most seals that can handle ethanol, can handle methanol. The fact that it absorbs water is a positive, as you don’t have to worry about condensation in the tank. In fact, if you are running the vehicle on pure alcohol fuel (either pure E or M or any mix) you can leave water in the fuel, for no performance penalty, and in high load/hot weather, and actual improvement. This means the expensive molecular seive dehydration step to get ethanol from 5% water to 0%, can be omitted entirely.
The ethanol lobby would probably be against that, but really, if you had 100% replacement of gasoline by mixed alcohol, with ethanol being, say, half of that, then that is 50% displacement by ethanol. Today they are at 10%, so there is plenty of room to grow – i think the two alcohol fuels united (mixed) are a better, stronger, and more profitable proposition than ethanol alone. But, the ethanol lobby will never admit that…
I think methanol to gasoline (MTG) and DME as being pushed by China is the way to go with cheap methanol processing. These are relatively low cost processing steps compared to the cost of making methanol or ethanol via syngas. Here is Exxon’s process, but there are others as well.
http://www.exxonmobil.com/apps…..n_mtg.html
Although most companies desire to scale it with coal to jumbo scale process technologies, I had a very interesting discussions with one of the largest automobile companies in Europe who said the methanol based gasoline is their preferred quality if it could be produced globally. They were not at all interested in ethanol or methanol blended gasoline…but would not give me the reason. They wanted DME and methanol based gasoline.
Perhaps it is the European way to make a silent statement against the US Corn Lobby…but we shall never know. Their number one target market is China where methanol, DME and MTG is being developed aggressively.
There is a rumor in Soperton, GA, that the Range Fuels plant produced a small quantity of ethanol for the first time yesterday (08/09/2010).
Also in Soperton, local agribusiness native Phillip Jennings is doing some merging or name-changing with his intentions to produce ethanol from the tall Japanese grass plants. Jennings has a knickname, “The Sodfather” for his production of grass for famous golf courses and landscapes.
Bill
Ethanol or methanol? They were planning on starting up on a methanol catalyst, and weren’t expecting to make any ethanol this year.
RR
You are correct. Soperton HAS produced. Unfortunate this column continues to pummel Range Fuels or any other company trying to get Americans off of their dependency of imported oil. Obviously this columnist has no reputable background in bio fuels, methanol, ethanol and simply bases his facts on speculation. You have no clue what Range Fuels has actually done nor where they are in their process or for that matter what type of fuel they are working with, you purely speculate. Range Fuels has made progress and you can’t stand to live with that Mr Rapier.
How many billions upon billions of dollars have been spent in medical researches for causes in cancers etc. We continually here in the news there are breakthroughs yet nothing has really happend, they’re all false starts. Wasn’t it 10 years ago there was an aides cure? If so, where is it? And at least 15 year ago there was a cancer cure, again, where is it? Why don’t you pummel those companies for a while.
Every once in a while I get a comment that is so clueless it defies belief. Yours is just such a post. If you want to come here as an anonymous coward and bash me, at least have the decency to properly reflect my position. I will do so for you now since you are apparently too lazy to spend time grasping it.
You are right that someone in this exchange has no clue, but it isn’t me. I have plenty of idea what Range has done and are in the process of doing. In fact, after I wrote this column several Range/ex-Range employees contacted me to say that my analysis was spot on. You don’t appear to understand the analysis, so let me break it down for you. Nobody doubted they could produce methanol. I don’t doubt that they can produce ethanol. What I have criticized is their long history of overblown promises and blown taxpayer money. We could produce methanol from biomass in 1923. The reason we haven’t been doing it all these years is that it isn’t cost-competitive with methanol from natural gas. But I am all in favor of the idea of methanol from biomass, and if that was Range’s story all along we wouldn’t have this problem.
Range came along and said “We can produce X million gallons of cellulosic ethanol for X dollars by 2008.” Two and a half years later, the story is 1/10th X million gallons of methanol for 3X dollars in 2010. The original backers of Range had no idea what they were doing, so they made promises they couldn’t keep.
You come in here all puffed up as if delivery of something lets them off the hook. Here is an analogy for you. I hear Walmart claim that they are selling Dell computers for $100. I go down there and find nothing of the sort. I let people know that Walmart has made false representations. You come along and say “You have no idea what Walmart is doing or can do. I just went down and bought a VCR for $300.” You see, I made a specific claim. You attempted to bash me but did not address my specific claims. You think because you bought expensive old technology that they aren’t accountable for the $100 Dell claim.
Are you really this clueless? Actually, I wish them success. But people need to be accountable for broken promises. They made representations and took taxpayer money. Whether they can deliver “something” is not the issue. They can’t deliver on what they promised, and some of the money they took could have been better deployed elsewhere.
You really are mixed up, aren’t you? First off, this isn’t a cancer blog. If it was, I would spend time exposing those who made claims like “You and your loved ones should fear cancer no more. My company will have a cure in 3 years. We just need taxpayer money.” Those claims are dangerous for multiple reasons. Then if said company runs off and does research that has been known for years, they would be rightfully held accountable for diverting funds from more promising areas. One shouldn’t promise cancer cures in the first place if you can’t deliver, but if you take taxpayer money and promise a cure you should certainly be held accountable.
Sorry you don’t feel they should be held accountable, since after all they did produce something at some inflated price.
RR
Smiles…. checkmate. You have definately proven how dense you are in the bio field and certainly have no idea how government monies are applied to new theories. You are the best comedian on the net Mr. Rapier. Keep up the good work.
Checkmate? Guy, you are playing checkers here. Rolls eyes…. Touchdown!
Boy, if only everyone was as smart as you. Then I would have more spare time and wouldn’t have to deal with conference invitations, writing book chapters, and all that other stuff that comes from people thinking you know what you are talking about. Would really simplify my life. Heck, maybe my boss would stop paying me to work in the bio field and I could find a job as an anonymous troll on the Internet.
LOL! New theories? What on earth are you babbling about? What new theory is involved here? Do you even know what a theory is? Perhaps you don’t know – since you are clearly out of your element here – but what they have done has been known technology for decades. I can tell you with 100% certainty that I could build what they have built for 1/4th of the money they have spent. The reason they couldn’t is that they started out trying to do something else that didn’t work out (even though they had been promising that it would). So they had to spend a lot more money due to initial incompentence within the organization.
You don’t seem to understand, but Range wasn’t given money to do basic research. They were given money to do something they claimed they could do. For $150 million. By 2008.
But by all means, keep living in your delusional fantasy world where Range has invented something new and novel and lived up to the hype.
If you want to have a serious discussion, let me know. Otherwise, stop trolling.
RR
Wasn’t me!