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Biofuel refinery developer selects SLB for carbon sequestration

Strategic Biofuels is developing a biofuel refinery that will be powered by an adjacent bioenergy with carbon capture and sequestration power plant for its project in Columbia, Louisiana.

Strategic Biofuels has entered into an agreement with SLB, a global technology company, to provide carbon sequestration services for Strategic Biofuels’ Louisiana Green Fuels (LGF) Project, supporting the production of deeply carbon-negative fuels.

In the past 20 years, SLB has been involved in over 100 carbon sequestration projects around the world in various industry sectors.

Strategic Biofuels said Wednesday it is developing a biofuel refinery that will be powered by an adjacent bioenergy with carbon capture and sequestration (BECCS) power plant for its LGF project in Columbia, Louisiana. The project focuses on converting forestry wood waste from established and sustainable pine plantations into renewable fuels and electric power, then permanently storing the resulting CO2 emissions from both the refinery and the power plant in porous rock formations thousands of feet below ground. Strategic Biofuels made an application to the U.S. Environmental Protection Agency for a Class VI permit for CCS and has been notified by the agency that it is administratively complete and that technical review has begun.

The unique combination of biomass as feedstock and green power for the refinery plus CCS for both will enable the project to produce liquid renewable fuels with an industry-leading carbon intensity of minus 294. When the biofuel refinery and BECCS plant comes online, LGF will have the capacity to offset up to 1.36 million tons of CO2 emissions annually, the equivalent impact of 274,000 cars per year.

“The collaboration of Strategic Biofuels and SLB is a major enhancement of the Louisiana Green Fuels Project,” said Bob Meredith, COO of Strategic Biofuels. “Carbon-negative renewable fuels will play an important role in the energy transition. We are excited to work with SLB on our Louisiana Green Fuels Project, given the company’s decades of carbon sequestration expertise and knowledge of both state and federal CO2 storage requirements. Together, we will ensure that our CCS complex will be among the best developed and managed in the world.”

SLB will provide site de-risking and front-end engineering and design (FEED) services for the CCS complex that will be located on and around the biofuel refinery and BECCS plant. The agreement includes provisions for future services, including injection operations and long-term CO2 monitoring.

“SLB is committed to supporting projects that contribute to a lower carbon energy mix,” said Frederik Majkut, SVP of Carbon Solutions, SLB. “As demand for cleaner burning fuels rise, we see tremendous opportunity for carbon capture and sequestration to support the growth of the biofuel industry. We look forward to working with Strategic Biofuels to advance its Louisiana Green Fuels Project by ensuring the sequestration site is de-risked and ready for further development.”

Completion of the biofuel refinery and BECCS plant are expected in 2027. When these facilities come online, they will be capable of producing nearly 32 million gallons of renewable synthetic fuels per year and generating more than 85 megawatts of electric power.

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Air Products expands California SAF project by $500m

The Pennsylvania-based company has modified the design of the project to include more sustainable aviation fuel thanks to incentives in the Inflation Reduction Act.

Air Products will commit an additional $500m to a sustainable aviation fuel (SAF) project in California thanks to the Inflation Reduction Act, bringing the company’s investment in the facility to $2.5bn.

Pennsylvania-based Air Products teamed with World Energy earlier this year to build an expansion project at World Energy’s SAF production and distribution hub in Paramount, California.

The change in the design of the SAF facility results from the passage of the Inflation Reduction Act in the US, Air Products executives said on its fiscal 4Q22 earnings call today. The IRA includes a new $1.25 per gallon SAF credit where the fuel reduces greenhouse gas emissions by at least 50% compared to petroleum-based jet fuel.

While the total capacity at the plant remains the same at 340 million gallons per year, the portion of the output dedicated to SAF will increase, adding additional costs, company CEO Seifi Ghasemi said.

The long-term, take-or-pay agreement with World Energy includes Air Products’ construction and ownership of a new hydrogen plant to be operated by Air Products and renewable fuels manufacturing facilities to be operated by World Energy, the company said in an April news release. The project is scheduled to be onstream in 2025.

Air Products is also building a $4.5bn blue hydrogen complex in Louisiana, where plans to capture 5 million tons per year of CO2 will result in an annual benefit of roughly $425m after tax from incentives in the IRA, Ghasemi said on the call. The legislation provides a tax credit of $85 per metric ton of captured CO2.

“The numbers are very clear with regard to CO2sequestration,” Ghasemi said.

The company is conducting further evaluations of the expected impact of the IRA’s tax benefits for the Louisiana facility that could result in an expansion of the project’s scope, he added.

Also during the quarter, Air Products announced a long-term supply agreement for Imperial Oil’s proposed Strathcona renewable diesel complex, with Air Products supplying about half the low-carbon hydrogen output from its net-zero hydrogen energy complex in Edmonton, Alberta, Canada.

In addition, the company said it would invest approximately $500m to build, own and operate a 35 metric-ton-per-day facility to produce green liquid hydrogen at a greenfield site in Massena, New York, as well as liquid hydrogen distribution and dispensing operations for industrial decarbonization and mobility.

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Energy Impact Partners closes decarbonization fund at USD 485m

The fund has already invested in 12 companies, including: Form Energy, Nitricity, Carbon America, Sublime Systems, Electric Hydrogen and Rondo Energy.

Energy Impact Partners has closed the EIP Deep Decarbonization Frontier Fund I LP, oversubscribed with global investor support, at $485m, according to a press release.

The fund will invest in climate technologies, focusing on companies that have achieved early technical validation but have not yet reached maturity at scale. It has already invested in 12 companies, including: Form Energy, Nitricity, Carbon America, Sublime Systems, Electric Hydrogen and Rondo Energy.

The investment in Electric Hydrogen was joined by Breakthrough Energy Ventures, Capricorn Technology Impact Fund, and Prelude Ventures.

Founded in 2015, EIP has enabled more than 350 contracts, more than $1bn in bookings and business to a portfolio of 100+ companies.

Including this fund, EIP has raised more than $3bn and saw the majority of existing strategic investors commit to the Frontier Fund, adding to a diverse LP base comprised of corporates, banks, sovereign wealth funds, family offices, high net worth individuals and foundations from North America, Asia and Europe.

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Regulatory: Construction permit issued for largest planned ammonia plant

A permit to construct a clean ammonia facility much larger than any in the world has been issued by West Virginia regulators.

The State of West Virginia has issued a permit to construct the world’s largest planned ammonia facility.

The Adams Fork Energy project in Mingo County, jointly developed by TransGas and the Flandreau Santee Sioux Tribe, is slated to reach COD in 2027. When fully built out, the six ammonia production plants would pump out 6,000 mtpd for domestic and international use.

ReSource previously reported on the issuance of the draft permit to construct, released by the West Virginia Department of Environmental Protection.

Offtakers in agriculture, shipping, and energy generation are all being explored for the project, according to a source familiar with the situation. Onsite electricity production for off-grid data centers is another possibility stakeholders are taking seriously.

Hydrogen produced by Adams Fork could produce up to 5,000 MW of electricity, the source said. Six Sigma could power co-located data centers without requiring a grid interconnection.

Coal mine waste methane is planned as a fuel source for the plant, which has access to the largest fresh water mine pool in the eastern US adjacent to the site.

The site is near Gilbert Creek, West Virginia, on a reclaimed coal mine.

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Hydrogen firm launches equity raise

A US hydrogen infrastructure and project development outfit has mandated a banker to conduct a raise for equity and project capital.

Lifte H2, the Boston-based hydrogen infrastructure and project developer, has mandated a banker to conduct a Series A capital raise, according to two sources familiar with the matter.

Energy & Industrial Advisory Partners is running the process, which launched recently, the sources said. Lifte H2 is seeking equity in the topco and development capital for its first project.

Talks with strategic and financial investors are being conducted now.

Lifte H2, which also has offices in Berlin, is led by Co-founder and CEO Matthew Blieske, who served as global hydrogen product manager for Shell before starting Lifte H2 in 2021. The founding team also includes Jeremy Manaus, Angela Akroyd, Richard Zhang, Paul Karzel, and Richard Wiens, all of whom previously worked at Shell.

In January, the company launched two hydrogen transport and dispensing products, the MACH₂ Mobile Refueler, which is a combination dispenser and high-capacity trailer; and the MACH2 High-Capacity Hydrogen Trailer, which has a capacity of 1,330 kg at approximately 550 bar and, according to the company, enables the lowest cost per kilogram for over-the-road transport.

The company signed an MOU last year with Swiss compressor manufacturer Burckhardt Compression to develop a joint offering of hydrogen solutions.

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Exclusive: Waste-to-fuels developer preparing capital raise

A waste-to-fuels developer has lined up an advisor and is planning a capital raise for a project in West Texas, in what is expected to be the first of up to 20 similar fundraising efforts totaling $500m in external capital needs.

Recover, Inc., a Calgary-based waste-to-fuels project developer, is preparing to launch a capital raise for its first US-based projects in West Texas.

The company has lined up CIBC to assist with the capital raise while a large Canadian Crown Corporation is expected to sign on as a lending partner for the debt portion of the cap stack, CFO Shane Kozak said in an interview.

Kozak said he will need to raise $70m – $75m for the West Texas project, which will process waste from oil and gas drilling fluids and recover 800 barrels per day of low carbon intensity diesel fuel from 800 tons of waste.

Existing equity backers Azimuth Capital and BDC will participate in the capital raise, but the company is seeking additional project equity investors to take part in a 60% debt to 40% equity capital structure, Kozak said.

While the cost of the West Texas project is estimated at $55m, the company needs to raise approximately $70m to account for debt servicing and underwriting fees, he added.

Recover has mapped out a strategy to build 20 projects in oil and gas basins across the US, and estimates it will need to raise $500m in external capital over 10 years to fully develop those projects.

Project model

The company already operates a similar facility in Alberta that became operational in 2018, at a cost of CAD 20m and producing about half of what the West Texas project will produce.

“This has been commercially proven in Canada, and we’re going to a better market with a lot more drilling waste production” in the US, Kozak said.

The waste stream from oil and gas drilling contains large amounts of diesel fuel: a typical well will create 400 – 500 tons of waste, 30%-40% of which is recoverable low carbon intensity diesel, Kozak said.

In Texas, the drilling fluid waste often ends up in pits near drilling rigs or in industrial landfills, where it biodegrades over time and emits CO2 and methane into the atmosphere.

“We significantly reduce GHG emissions and create a fuel source that can be reused, and every barrel that we recover is a barrel of fuel that would otherwise have to come from a fossil fuel source,” he said.

Recent changes to Texas policy regarding oil and gas drilling waste could increase the availability of feedstock for the company. The Texas RailRoad Commission, which oversees the state’s oil and gas industry, is seeking to modernize disposal practices that would redirect waste from drilling pits to more centralized industrial landfills.

“The good thing for us is that, in the Permian Basin, about 70% – 80% of the wells use these pits, and our strategy is to build our facility directly on industrial landfills,” Kozak said.

Recover is working with a large landfill management company with operations across the US to develop its facilities, he added. The company does not pay for feedstock, given the synergistic relationship between Recover and the landfill management company.

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Developer Profile: Green hydrogen developer finds strength in numbers

Clean Energy Holdings is assembling a coalition of specialized companies as it seeks to break into the novel green hydrogen market.

Nicholas Bair draws a direct line from his childhood on an Oregon dairy farm to the coalition of specialized companies that, as the CEO of Clean Energy Holdings, he is now assembling in pursuit of key-player status in the green hydrogen industry.

“We created our own milk from our own hay,” he says, of his family’s organic dairy farm in Klamath Falls, near the California border. He adds, using an expression he often repeats: “Everything was inside the battery limits.”

This phrase – “inside the battery limits” – represents what Bair, who is forty-one and a chemist by trade, is trying to achieve with The Alliance: a broad, self-contained battery of partners with specialized competencies working in coordination on the challenges of developing and operating groundbreaking green hydrogen projects.

“We’re doing everything from soup to nuts,” he says.

CEH and The Alliance are planning to build roughly $1bn worth of projects per year over the next ten years, Bair says. As a launching point, the parties are advancing a green hydrogen facility – called Clear Fork – near Sylvester, Texas that would churn out 30,000 kg per day in phase 1 starting in 4Q24. The hydrogen would be produced using electrolyzers powered by a 325 MW solar farm, while ancillary facilities at the site would be powered by a gas turbine capable of blending up to 70% hydrogen.

As members of The Alliance, Equix Inc. is acting as the EPC for the solar and gas turbine portion of the project, while Chart Industries is providing tankers, trailers, and liquefaction to transport hydrogen from the site in northwest Texas. Meanwhile, Hartford Steam Boiler – an original contributor to standards written by the American Society of Mechanical Engineers – will provide quality assurance and control; Coast 2 Coast Logistics is responsible for trucking; and The Eastman Group provides permitting and facilities management.

‘First-of-kind’

Although a renewable project, the green hydrogen concept is similar to most refinery EPC contracts, since many of them are first-of-kind with significant liquidated damages, Bair says. Additionally, the green hydrogen projects are “married to renewables, and you need the cryogenics and the distribution in between.”

Before starting Clean Energy Holdings, Bair was the founder and CEO of Bair Energy, a program and construction manager for infrastructure and energy projects – a service that Bair Energy is providing as a member of the Alliance. A period of low natural gas prices made Bair Energy’s specialty – geothermal power – less competitive, and Bair, seeking to develop his own projects instead of managing projects for others, sought to branch out into new types of energies.

Bair Energy itself consists of professionals that have been cherry-picked from the industry, Bair says. Candice McGuire, a veteran of Shell and Technip, is Bair’s chairman; chief operations officer John Strawn recently joined from Technip; and wind-industry veteran Peder Hansen has joined as VP and chief engineering manager.

“Our experience on the team is taking first-of-kind, developing it, and getting it to market,” he says. With The Alliance, “We went out and found the best at what they do, put them on lump-sum order, and brought them to the table early to figure out how to make their product talk to the other person’s product, so we can have a guarantee,” he says.

What distinguishes Clean Energy Holdings from other green hydrogen developers is, in fact, the coalition it is building, says Elizabeth Sluder, a partner at Norton Rose Fulbright who is CEH’s legal advisor.

“It’s intended to be one-stop shopping in a vertically integrated structure such that as and when needed for future CEH projects or third party projects that are identified, you have all the various players you need to take it from point A to point B,” she adds.

Because the parties are on standby with a common goal, CEH and its partners can provide lump-sum turnkey services, with some element of bulk pricing potentially factored in, because savings are generated through not having to issue RFPs for partners in future projects.

“The savings in time and money is, I would expect, very valuable,” Sluder says. “And when you apply those principles to long-term strategy and equity investment-type opportunities, the lower capex spend should theoretically benefit the project at large.”

Keeping the pieces moving

Bair runs CEH alongside Co-Founder and President Cornelius Fitzgerald. The two met as children – Fitzgerald was raised on a nearby cattle farm in southern Oregon – and enjoy the uncommon chemistry of childhood friends.

In something of classic pairing, “I’m much more the trumpet, paving the path,” Bair says, while Fitzgerald “usually keeps the pieces moving.”

“Sometimes Cornelius has had the best cup of coffee and takes the lead in meetings. And sometimes I do,” he says. “It’s that ability to rely on each other that set the basis of design in my mind for what a good partner looks like.”

Fitzgerald says they approach the challenge of breaking new ground in green hydrogen with “quiet confidence and humility.” By having a big picture vision as well as “credible and tangible fundamentals for the project” – like land, resource, and water control – the project moved from an idea to a reality, he adds.

“And really we’ve been driving at how to get the best experience and expertise at the table as early as possible,” Fitzgerald says.

Equix, Inc, a civil engineering firm, joined the grouping to build the solar and gas generation portion of the facility, representing the company’s first-ever foray into a hydrogen project, says Tim LeVrier, a vice president of business development at the firm.

“There are many challenges integrating all these types of power sources and energy into creating hydrogen,” Levrier says. “From an electrical engineering standpoint it is extremely challenging to coordinate power switching from one source to another. Another consideration we are having to work through is what to do in regards to producing hydrogen at night. Will there be a battery portion to the project or do we just not produce hydrogen when it is dark? These are all things we are considering and will have to find creative solutions for.”

‘Pathological believer’

CEH recently added Chart Industries to The Alliance, which in addition to furnishing liquefaction, tanks and trailers to move hydrogen, will provide fin fans for cooling and a reverse osmosis system for cleaning water. “We don’t want to give away all our secrets,” Bair says, “but it’s a very efficient process.”

The unique perspective and expertise of partners in The Alliance makes for a fulsome ecosystem around any CEH project, says Jill Evanko, CEO of Chart Industries. With respect to CEH’s projects, Evanko says they are “very targeted, which, with focus, will continue to help evolve the hydrogen economy.”

“Chart’s hydrogen liquefaction process as well as associated hydrogen equipment including storage tanks and trailers” – which the company has been manufacturing for over 57 years – “will be sole-source provided into the project. This will allow for efficient engineering and manufacturing to the CEH Clear Fork project schedule,” she says.

In any molecule value chain, hydrogen included, Chart serves customers that are the producers of the molecule, those who store and transport it as well as those who are the end users, Evanko adds. “This allows us to connect those who are selling the molecule with those who need it.”

Looking ahead, CEH is preparing to meet with investors in the lead-up to an April, 2023 final investment decision deadline for the Texas project. And it is being advised by RockeTruck for another RFP seeking fuel cell vehicles to transport hydrogen from the site as the trucks become available – a design that will likely include hydrogen fueling stations at the production facility as well as at the Port of Corpus Christi, Bair says.

CEH also has plans to develop its own geothermal plants and explore the role that nuclear energy can play in green hydrogen. Bair Energy recently hired Eric Young as its VP of engineering and technology from NuScale, where he worked on the research team that received approvals from the U.S. Nuclear Regulatory Commission for a small modular nuclear reactor.

“We’re a technology-driven owner-operator,” Bair says. “We’re all technologists, which means we’re pathological believers in technology. We’re all looking for transformational energy.”

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