Agee assembled a team and formed GTG Inc., which later became Syntroleum Corp. To date, the Tulsa, Okla.-based company has amassed nearly 160 patents on its work. “In the early days, we tested 1,000 different catalyst combinations,” Agee says. In the past decade, the company has come close to seeing its technologies commercialized, particularly when oil prices were high enough to make the capital-intensive F-T process cost effective. The U.S. DOE helped fund a demonstration plant to scale up the Syntroleum process and produce 400,000 gallons of synfuels for testing in military jets and diesel applications. Syntroleum supplied 100,000 gallons of the synthetic JP8 jet fuel it produced from natural gas in the Cartoosa demonstration facility to the U. S. Air Force. It passed the tests and is now certified for use in a 50 percent blend with petroleum-based jet fuel in B52 bombers. The Air Force intends to certify all of its aircraft to fly on the blend by 2011.
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With that project complete, Syntroleum was in the process of mothballing the demonstration plant when management challenged its team of chemists and chemical engineers to come up with other uses for their technology. In one of those “ah-ha” moments, the group realized the chemical structure of triglycerides is similar to the F-T waxes refined in the company’s patented and trademarked Synfining process. Lab testing confirmed that fats and oils could be refined into high-quality synthetic fuels, and identified the needed adaptations to create what the company has trademarked as Biofining.
In making the fat connection, Syntroleum has identified an application for the simplest and cheapest part of its process—the refining step that follows the Fischer-Tropsch reaction. “We couldn’t do a $1 billion project,” says Agee, referring to the estimated cost to complete an F-T Synfining facility. “We can do a $150 million project.” The company’s business development group created a short list of potential partners and this summer closed a deal with Tyson Foods Inc. The joint venture promises to bring two decades of research and development to commercialization, giving Syntroleum a positive cash flow for the first time. “It’s been the most wonderful shot in the arm for the employees and investors to be not just a technical success, but a financial success,” CEO Jack Holmes says.
In June, Syntroleum and Tyson announced a joint venture to create Dynamic Fuels LLC. The deal involves building multiple, stand-alone facilities producing “ultra-clean, high-quality, next generation renewable synthetic fuels using Syntroleum’s patented Biofining process, a ‘flexible feed/flexible synthetic fuels’ technology,” according to Tyson. The first facility expected to be built somewhere in the mid-South will produce about 75 MMgy of fuel from low-grade animal fats, greases and vegetable oils supplied by Tyson. The $150 million project is targeted to be on line by 2010. The price tag includes a contingency for unanticipated expenses in building the first facility. Then the work will begin to add biomass gasification capabilities to the front end of the Biofining plant. A third-party will be recruited to supply the gasification technology and Syntroleum’s technology will be added to convert the biogas into F-T products that can be refined in the same Biofining plant as the fats.
In the Spotlight
Syntroleum has been riding a wave of publicity created when it inked the deal with Tyson, telling its story on television, making a presention on Wall Street and providing tours of its Tulsa facilities as the company begins the work of raising its share of funding for the joint venture. Standing beside the structure of pipes and tanks, Sid Schmoker, manager of facilities maintenance, explains how the company’s F-T technology works as he guides a tour of Syntroleum’s demonstration plant for Biomass Magazine. The $60 million plant demonstrated the company’s technology using natural gas as the feedstock to manufacture synfuels. Biomass-to-liquid or coal-to-liquid will require adding a gasifier and syngas clean-up to the front end of the Syntroleum process.
Jim Engman, manager of catalyst testing, continues the tour at the Syntroleum F-T laboratory in another part of Tulsa, where a bank of small reactors and a room full of monitors permit multiple test runs, while the researchers tweak process conditions to see how well they can control the outcome. Across town, at Syntroleum headquarters, researchers in another set of laboratories are running tests on dozens of fat samples from Tyson.
F-T is not a new process. The Germans used the technology to produce fuel from coal during World War II to power its military. Sasol Ltd., based in South Africa, became the world leaders in F-T technology when an international embargo during the country’s apartheid regime stopped oil imports. In the rest of the world, cheap oil has discouraged the development of F-T technology, which requires oil prices above $50 per barrel to make it economical. Syntroleum targeted its F-T innovations to stranded gas reserves—the natural gas that gets flared off oil wells in areas where there’s no access to natural gas infrastructure. As the price of oil has climbed, the economics of recovering stranded gas has improved.
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