Resource logo with tagline

Renewable fuels outfit puts RNG equipment into service in California

Aemetis, Inc is expanding a California biogas digester network and pipeline system to convert dairy waste gas into renewable natural gas.

Aemetis, Inc., a renewable fuels company based in California, announced today that after completing construction, testing, and commissioning, the company has accepted into service 36 miles of additional biogas pipeline; two biogas digesters, the Biogas-to-Renewable Natural Gas upgrading facility, and the utility gas pipeline interconnection unit.

Two additional dairy digesters will be commissioned and operating in February, with another dairy digester fully operational in March, according to a news release.

Four dairy digesters, approximately 40 miles of biogas pipeline, the central biogas-to-RNG facility and the utility pipeline injection unit are now completed and fully operational, with three more dairy digesters beginning production in February and March. Aemetis RNG is being sold into the PG&E utility gas pipeline and will be stored underground until Aemetis Biogas receives approval from the California Air Resources Board (CARB) for the issuance of credits under the Low Carbon Fuel Standard (LCFS).

The RNG production data collection required for CARB’s Pathway approval process has been completed, and applications will be submitted in February for CARB review and approval.

Founded in 2006, Aemetis has completed Phase I and Phase II and is expanding a California biogas digester network and pipeline system to convert dairy waste gas into Renewable Natural Gas. Aemetis owns and operates a 65 million gallon per year ethanol production facility in California’s Central Valley near Modesto that supplies about 80 dairies with animal feed.

Aemetis is developing sustainable aviation fuel (SAF) and renewable diesel fuel biorefineries in California to utilize distillers corn oil and other renewable oils to produce low carbon intensity renewable jet and diesel fuel using cellulosic hydrogen from waste orchard and forest wood, while pre-extracting cellulosic sugars from the waste wood to be processed into high value cellulosic ethanol at the Keyes Ethanol plant.

“Over the last several years, Aemetis has announced milestones for the significant growth of our Carbon-Negative Renewable Natural Gas operations. These milestones have included the phased construction of pipelines, biogas digesters at dairy farms and the upgrade unit that transforms the dairy biogas into RNG. Today, these central systems are now operational and in-service, transporting and converting the biogas from four operating dairy digesters with three more dairy digesters coming online soon,” said Andy Foster, president of Aemetis Biogas, Inc.

“California, and especially Merced and Stanislaus Counties, recognize that the adoption of dairy biogas as a negative carbon intensity fuel to replace diesel in heavy trucks and buses is essential. Aemetis is taking action to reduce carbon pollution and improve local air quality in the most impacted Central Valley communities while creating jobs in an expanding green economy for future generations. Aemetis continues to rapidly deploy the infrastructure necessary to connect our network of dairy digesters and increase the production of carbon negative dairy renewable natural gas,” Foster continued.

The Aemetis pressurized pipeline conveys conditioned, pressurized biogas from dairy digesters to the company’s centralized gas cleanup facility and the Pacific Gas & Electric (PG&E) interconnection unit to inject RNG into the gas utility pipeline. The RNG is used as a negative carbon intensity transportation fuel primarily to replace diesel in trucks and buses. The initial four-mile Phase 1 pipeline project was completed and commissioned in the third quarter of 2020 in conjunction with the completion of the Company’s first two dairy digesters.

The pipeline project and the $12m biogas cleanup facility are funded in part by a $4.2m grant from the California Energy Commission and a $5m grant from the CPUC RNG Pipeline Interconnection Incentive Program. Aemetis recently announced the closing of $25m of 20-year financing with Greater Commercial Lending (GCL) which provides loans to businesses and organizations in under-served and rural communities. This long-term project financing was guaranteed by the U.S. Department of Agriculture (USDA) through the Rural Energy for America Program (REAP) and carries approximately a 6% fixed interest rate for the first five years.

“Government guaranteed loans, such as USDA REAP, can be crucial to encourage development of new and innovative projects such as the Aemetis Biogas dairy digester and pipeline project. With GCL’s support, we continue to expand the number of digesters which capture methane emissions from dairy farms and convert the methane into a negative carbon intensity renewable fuel,” said Eric McAfee, CEO and founder of Aemetis, Inc.

About 25% of the methane emissions in California are emitted from dairy waste lagoons. When fully built, the Aemetis biogas project plans to connect dairy digesters spanning approximately 60 dairy farms, capturing more than 1.65 MMBtu of dairy methane each year. The project is designed to reduce greenhouse gas emissions equivalent to an estimated 6.8 million metric tonnes of carbon dioxide over ten years.

Unlock this article

The content you are trying to view is exclusive to our subscribers.
To unlock this article:

You might also like...

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.

Read More »

Nikola invests $50m for stake in Indiana hydrogen project

The cash and stock deal is for a 20% equity interest in a clean hydrogen project being developed in West Terre Haute, Indiana.

Nikola Corporation is investing $50 million in cash and stock in exchange for a 20% equity interest in the clean hydrogen project being developed in West Terre Haute, Ind.

The project, developed by Wabash Valley Resources, plans to use solid waste byproducts such as petroleum coke combined with biomass to produce clean, sustainable hydrogen for transportation fuel and base-load electricity generation while capturing CO2 emissions for permanent underground sequestration, according to a press release.

Once completed, the project is expected to be one of the largest carbon capture and clean hydrogen production projects in the United States. The focus is to produce zero-carbon intensity hydrogen with the potential to develop negative carbon intensity hydrogen in the future.

Working together, Nikola and WVR expect to lead in the transition to clean transportation fuels for trucking operations within the Midwest, one of the most intensive commercial transportation corridors in the United States.

This investment is anticipated to give Nikola a significant hydrogen hub with the ability to offtake approximately 50 tons a day to supply its future dispensing stations within an approximate 300-mile radius, covering a significant portion of the Midwest. Exercising its offtake right will likely require significant additional investment by Nikola to build liquefaction, storage, and transportation services.

“We intend this project to produce clean, low cost hydrogen in a critical geography for commercial transportation.” said Pablo Koziner, president, energy and commercial, Nikola. “The Wabash solution can generate electricity as well as hydrogen transportation fuel, which should provide the flexibility to support future truck sales and hydrogen station rollout in the region.  The expected efficiency of WVR’s clean hydrogen production should allow Nikola’s bundled truck lease, including fuel, service, and maintenance, to compete favorably with diesel.”

As part of this investment in the hydrogen economy in the Midwest, Nikola intends to build stations across Indiana and the broader Midwest to serve the region.

“WVR is developing a multi-product facility, where the hydrogen can be combusted in a turbine to produce clean baseload power. The recent spate of power outages serves as a reminder that the market has a pressing need for a non-intermittent source of clean energy.  We also look forward to working with Nikola to bring zero-emission transportation solutions to the Midwest,” said Simon Greenshields, chairman of the board for Wabash Valley Resources.

The completed facility should have the capability to produce up to 336 tons per day of hydrogen, enough to generate approximately 285 megawatts of clean electricity.  The project is expected to require 125 full-time employees and may support 750 construction jobs.  Groundbreaking is expected in early 2022 and take approximately two years to complete.

Read More »

NEXT Renewables acquires Oregon biofuels assets

Lakeview RNG plans to redevelop a failed biofuels project into a facility producing RNG and clean hydrogen from waste wood.

Lakeview RNG, a wholly owned subsidiary of NEXT Renewable Fuels, has acquired assets associated with the Red Rock Biofuels development in Lake County, OR, according to a news release.

The company is commencing a redevelopment plan focused on completing construction of certain aspects of the site while replacing or enhancing others. When complete, the Lakeview RNG facility is expected to be capable of converting forest waste into renewable natural gas and clean hydrogen.

NEXT Renewable Fuels reached a deal to go public via a SPAC transaction with listed Industrial Tech Acquisitions II. A merger agreement for the deal, which was set to close on April 14, has been extended to December 14, according to SEC filings.

“Acquiring the Lake County clean fuels infrastructure is another advancement in our mission to decarbonize the transportation industry and produce low carbon fuels at scale,” said Christopher Efird, CEO and Chairperson of NEXT. “This acquisition represents a major step toward our clean fuel production capabilities and pathways to meet growing demand for clean fuels along the west coast of the United States while helping to address the critical concern of forest health.”

Using wood waste, or “slash,” as the feedstock, Lakeview RNG will process that wood waste and turn it into a low-carbon gaseous fuel, benefitting environmental and community health in southern Oregon and beyond.

Lakeview RNG has evaluated the potential feedstock supply in Oregon and determined that all of its wood waste needs could come from within 150 miles of the facility. Wood waste used at the facility will be certified and compliant with applicable regulations for RNG production. Converting forest waste to renewable fuel products helps reduce forest fire fuel loads and provide an additional revenue source to timber communities. The local distribution network in Lake County is anchored by the Ruby pipeline and can deliver renewable fuels to transportation markets in Oregon and along the west coast.

The purchase price of the facility has not been disclosed.

Read More »
exclusive

Green hydrogen developer in active discussions for California FID this year

A green hydrogen developer is in active discussions with counterparties as it pursues a final investment decision for its first project.

Houston-based green hydrogen developer Element Resources is in active discussions to reach FID this year on its first green hydrogen project slated for Lancaster, California.

The company had engaged Houlihan Lokey in recent months to lead a capital raise for the project, according to two sources familiar with the matter. The Houlihan mandate had involved raising non-dilutive debt, a process that is believed to have been shelved, said one of the sources.

“We are steadily working our way to an FID this year and are pulling together all parts of the project,” Element CFO Avery Barnebey said via email in response to inquiries. He declined to comment further.

A Houlihan representative did not respond to an email seeking comment.

The Lancaster facility, which is targeted to begin commercial operations in early 2025, will be built on 1,165 acres and consist of 135 MW of solar-powered electrolysis capacity, according to the company’s website. At full capacity, the 18,750 mt per annum of hydrogen produced by the facility will serve the growing demand for clean mobility fuels as well as clean energy for manufacturing.

Element is led by founder and CEO Steve Meheen, an oil & gas industry veteran. Barnebey is a former director of corporate development at California Resources Corporation.

Read More »

Exclusive: Verde Clean Fuels seeking project finance for gas refineries

Publicly listed Verde Clean Fuels plans to seek equity and debt investors for low-carbon gasoline refineries it expects to deploy across the US. We spoke to CEO Ernest Miller about the strategy.

Verde Clean Fuels, a publicly listed developer of clean fuels technology and projects, is planning to seek project debt and equity investors to finance a series of low-carbon gasoline refineries it expects to deploy across the US.

Houston-based Verde, which employs syngas-to-gasoline refining technology, recently announced an agreement with Diamondback Energy to construct a facility in the Permian Basin that will utilize stranded natural gas to produce 3,000 barrels per day of gasoline.

The company is also pursuing a carbon-negative gasoline project on the premises of California Resources’ Net Zero Industrial Park in Bakersfield, California. The California project will produce approximately 500 barrels of RBOB renewable gasoline per day from agricultural waste, while capturing and sequestering around 125,000 tons of CO2 per year.

Verde is capitalized following a private investment in public equity (PIPE) injection of $54m as part of a reverse merger last year, allowing the company to take the Bakersfield and West Texas projects through the FEED phase, CEO Ernest Miller said in an interview.

Underpinning Verde’s business model is the view that gasoline will persist as a transportation fuel for many years to come, and that very few parties are working to decarbonize the gasoline supply chain.

“Between renewable diesel, renewable natural gas, and sustainable aviation fuel, there is very little awareness that renewable gasoline is even a thing,” Miller said. “The addressable market is enormous, and the impact that can be made by taking even a sliver of that market is enormous.”

Miller says that many market participants believe that electric vehicles will solve the emissions problem from road transport.

“The fact is that gasoline has a very, very long runway ahead of it,” he said. “Regardless of the assumptions you want to make about EV penetration, the volume of gasoline that we continue to use for the foreseeable future is huge.”

Verde Clean Fuels demo plant.

Verde’s projects are sized in the 500 – 3,000 barrels per day range, making them a unique player at the smaller end of the production range. The only other companies with similar methanol-to-gas technology are ExxonMobil and Danish-based Topsoe, which operate at a much larger scale, according to Miller.

Miller recognizes that low-carbon, or negative-carbon, gasoline operates within a complex ecosystem, with the California project potentially playing in that state’s LCFS and D3 RIN markets, in addition to the market for gasoline.

“What I would like to see us do is have an offtaker that plays in all three of those products – so if I can go to Shell Trading, or bp, or Vitol, and get one of them to say, ‘here’s a price,’ and they take all of that exposure and optionality,” Miller said, “that allows me to finance the project without having to manage a whole bunch of different commodity exposures and risk.”

Bakersfield 

The Bakersfield project, estimated to cost $235m to build, will utilize 450 tons per day of agricultural waste to produce gasoline, and sequester CO2 via California Resources’ carbon management company, Carbon TerraVault, a joint venture with Brookfield Renewable.

Because of the carbon sequestration, the project will qualify for incentives under 45Q, but since it is producing, in Miller’s words, “deeply carbon-negative gasoline,” most of the value for the project will come from California’s LCFS program.

In order to qualify for LCFS credits, the Bakersfield facility goes through the full GREET modeling process – including transport of feedstock, processing and refining, and transport away from the facility – returning a negative 125 grams equivalent per MJ carbon intensity score for the project, according to Miller.

As for investors, Verde “would like to see both California Resources and Brookfield Renewable in the project, either individually or through the Carbon TerraVault JV,” Miller said.

Verde is also in discussions with a handful of financial players, including infrastructure and pension funds that are looking for bond-like cash flow that a project finance model can provide. The company has also explored the municipal bond market in California, which would bring to bear a favorable capital structure for the project, Miller said.

Verde is not currently working with a project finance advisor, Miller said, noting that they have in-house project finance experience. In Texas, Verde is working with Vinson & Elkins as its law firm; and in California Verde is working with Orrick as counsel.

Gasoline runway

For the Diamondback facility in West Texas, which requires roughly $325m of capex, both Verde and Diamondback will take equity stakes in the project, and Verde will seek to bring in debt financing to fund the rest of the project costs in a non-recourse project finance deal, Miller said.

The Permian project seeks to provide a pathway to monetize stranded gas in the basin by taking advantage of and alleviating its lack of takeaway capacity, which causes gas prices at the Waha Hub in West Texas to trade at a significant discount to the Henry Hub price.

“Diamondback would take the position that any gas that’s getting consumed in the Permian Basin is gas that’s not getting flared in the Permian Basin,” Miller said, thus making the project a emissions-mitigating option. “There will never be enough natural gas takeaway capacity out of the Permian Basin,” he added, noting that driller profiles are only going to get gassier as time goes on.

Diamondback, for example, produces more in the Permian than it can take out via pipeline, therefore “finding a use, a different exposure, for that gas by turning it into gasoline, is of value for them,” Miller said.

“It’s the same dynamic in the Marcellus and Bakken and Uinta – all the pipeline-constrained basins,” he added, alluding to possible future expansion to those basins.

Read More »

Exclusive: Coal bed methane producer seeking capital partners

A western US company producing RNG by injecting biomass into coal seams is preparing a Series B and has a line of site to financing and contracting EPC for a series of projects in western coal fields.

Cowboy Clean Fuels, a Wyoming-based RNG producer, is preparing to launch a Series B to reach commercialization, CEO Ryan Waddington told ReSource.

CCF injects biomass feedstock like molasses into the coal seams of spent coal mines about 1,000 ft. below surface, relying on the endogenous microorganisms living in those seams to produce methane, Waddington said. Capex on projects is low, up to $6m each.

The company raised $10m in a Series A and will seek to raise that same amount for a Series B. The company has been assisted by Syren Capital Advisors.

Projects are set up as separate entities under the parent, Waddington said. Six projects, each ranging from 70 to 300 wells, are in the company’s pipeline now in the Powder River Basin of Wyoming and Montana.

“We can replicate this 1,000 times,” Waddington said of the immense number of available wells in the region, which can be acquired cheaply. Additional growth could come in the San Juan region of New Mexico, where coal capacity is being retired quickly.

The fuels could be sold as renewable diesel into markets with incentives, like California’s LCFS, Waddington said. The renewable fuel is significantly (10X) more expensive than natural gas produced as a by-product of oil production. But, CCF is not looking to participate in the LCFS program or the EPA-run RFS program.

“The voluntary market for RNG has really taken off,” he said. A contract for renewable diesel offtake is pending with a Wyoming-based oil and gas company looking to lower its CI score.

CCF’s projects are much larger than a typical RNG project, Waddington said; the first project will produce at some 700 cfpy and include 185 tons of CCS. CCF is looking for EPC providers now.

The executive team of CCF has a minority position of the company, Waddington said. The founders and the management team together have a majority position.

The company’s first 139-well project in Wyoming is awaiting final approval from the federal Bureau of Land Management.

CCF is primarily VC-backed to date. The company received approximately $7.8m through the Energy Matching Funds program of the Wyoming Energy Authority early this year.

Read More »

Welcome Back

Get Started

Sign up for a free 15-day trial and get the latest clean fuels news in your inbox.