Investors and partners can make the transition simpler for research and development companies, especially if those partners bring years of experience, good reputations and industry expertise. Texas-based Terrabon LLC seems to have found the right partners to help commercialize its waste-to-biofuel technology: Waste Management Inc. and Valero Energy Corp. Both are prominent in their industries. Valero is North America’s largest petroleum refiner and marketer, with 16 refineries and seven ethanol plants. Waste Management is a leader in providing environmentally friendly waste disposal systems, including 367 collection operations, 16 waste-to-energy plants and 111 landfill gas projects, among others.
“The biggest impact is that we are now the first fully integrated biofuels company with upstream and downstream partners that have a North American footprint,” says Terrabon CEO Gary Luce. “This technology allows those two industries to link up and better use their sustainable model of converting organic waste to produce biofuels.” Waste Management acts as the upstream partner, securing waste feedstock for the system while Valero serves as the downstream partner, helping to distribute and sell the biofuel.
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The Process
Terrabon licensed its MixAlco technology from Texas A&M in 1995. “We’ve added a whole bunch of [intellectual property] to the original license over that time,” Luce says. “It wasn’t all ready to go then. They were just beginning to research.” The process converts waste material such as municipal solid waste (MSW), sewage sludge, forest product residues and energy crops into chemicals and secondary alcohols. Those elements can be further refined to renewable gasoline through the traditional petrochemical refining process.
Terrabon is also working on commercializing its other two processes: Advanced Vapor-Compression Evaporation (AdVE), which desalinates brackish and salt water to create potable water; and SoluPro, which converts protein-bearing waste material into animal feed or commercial adhesives. “These other two technologies actually birthed out of the biofuels process,” Luce says. Waste Management and Valero have invested in the entire company, meaning their dollars will go toward commercialization of those technologies, too. “MixAlco is their primary interest, but they have access to all the technologies,” Luce says.
The MixAlco process consists of a lime pretreatment followed by fermentation by microorganisms, producing a mixture of carboxylic acids, such as acetic, propionic or butyric acids. Calcium carbonate is added to neutralize the acids and form their corresponding carboxylate salts, such as calcium acetate, propionate and butyrate, according to Terrabon. The next step can produce either ketones or carboxylic acids. The salts can be dewatered, concentrated, dried and thermally converted to ketones such as acetone, which can be hydrogenated to produce secondary alcohols such as isopropanol, propanol and butanol; or the carboxylic acids can be recovered from the fermentation solution by reacting with tertiary amines to form tertiary amine carboxylates and calcium carbonate that are then cracked to regenerate the tertiary amine and produce the carboxylic acids. The tertiary amine and calcium carbonate are recycled within the process, so no chemicals are consumed, according to Terrabon. The resulting carboxylic acids such as the ketones, can be hydrogenated to form primary alcohols such as ethanol. Those primary or secondary alcohols can then be oligomerized to produce gasoline, diesel or jet fuel, according to the company.
The product is a drop-in fuel, similar to others on the market and ready to be blended for use, Luce says. “You can blend it and stick it in a pipeline and move it on down the existing infrastructure,” he says. “It doesn’t have issues that other oxygenated fuels like ethanol have where you have to splash blend it right before you go to the retail station because of water and corrosion issues.”
The Partnership
Strategic partnerships similar to this one provide a winning scenario for all involved, according to John Eustermann, a partner with law firm Stoel Rives LLP. “It’s a brilliant approach,” he says. An upstream/downstream model is a goal for most companies. “You want to bring in a strategic investor,” he says. “Not just an investor. Not only are they bringing their checkbook, but they’re bringing other intellectual capital to the table that will assist Terrabon in ramping up its model. That’s what you want to look for when you’re a young company.”
Investors need to bring something above and beyond the dollar sign to maximize the benefit to companies in which they invest, Eustermann adds. “You don’t want to be an investment vehicle where the third party is simply looking for a return,” he says. “They’ve got to bring a little something extra to the table.”
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