Bumpy ride with biofuels Robin Bromby From: The Australian March 04, 2010 12:00AM Increase Text Size Decrease Text Size Print Email Share Add to Digg Add to del.icio.us Add to Facebook Add to Kwoff Add to Myspace Add to Newsvine What are these? IT'S one thing to want cleaner fuels, but it's quite another to get investors to put up the money.
Biofuel and synthetic fuel stocks have languished on the Australian stock exchange. As this was being written, Altus Renewable was struggling to get away a $12 million initial public offering.
The company's plan sounds environmentally friendly. It aims to produce biofuel at a plant to be located beside the country's largest sawmill, at Maryborough, Queensland. Using waste from the plantation timber, Altus will initially produce fuel pellets and then build a power plant.
The problem, however, is that the float was not being rushed by investors.
There is seemingly a constant flow of new ideas for renewable fuels along with ways to improve existing technologies. Not all of them are greeted with open arms, as witness the controversies over ethanol and the diversion of crop lands to producing corn for fuel rather than food.
Start of sidebar. Skip to end of sidebar. Related Coverage Crop waste to be used in clean fuel project Adelaide Now, 1 day ago $9m for more good oil Perth Now, 7 days ago Syngas eyes carbon credits revenue Adelaide Now, 3 Feb 2010 Syngas teams up with US fuel firm Adelaide Now, 25 Nov 2009 Caltex looking at LNG production The Australian, 12 Nov 2009 End of sidebar. Return to start of sidebar. The immediate problems are how to burn less coal and how to get motor vehicles to use less oil-based fuels.
In the case of the former, the US Journal of Environmental Science and Technology reports a study which shows that mixing wood pellets -- made from forests where there is sustainable management, of course -- with coal can reduce substantially the emissions from coal-fired power plants.
As coal burning accounts for one-fifth of worldwide greenhouse gas emissions, using replacing some coal with wood makes a big difference.
This particular study was done as part of Ontario's plan to phase out coal-fired power plants. And in the US state of New Hampshire, the 50 megawatt Schiller electricity generating station has been converted from using coal to wood chips.
For all the lack of interest and disappointments, the small but clearly eager players in Australia are trying for that breakthrough.
Syngas is among the companies with their shares languishing at the level of being worth just a few cents. But the company has just signed an initial agreement to work on carbon credit commercialisation of their projects.
The company is focusing on developing coal and non-food biomass-to-liquid fuel projects and establishing what it describes as "ultra-clean" diesel and jet fuel plants.
Syngas wants to use South Australian and Victorian coals, with the priority being the Clinton project, 12km north of Adelaide. This contains 558 million tonnes of coal, with drilling expected to increase that resource by another 50 million tonnes.
Syngas sees a big market. Last year, vehicles in Australia consumed 364 million barrels of oil -- or about 1 million barrels a day.
The coal-to-liquids scenario is now well-established. In fact, another listed company, Coalworks, is planning a similar production system at Oaklands in southern NSW.
A bankable feasibility study is under way at Clinton, but the company says it is working on an operating cost of $US33/barrel for producing fuel from the coal. The plant, if built, will also use biomass to supplement the coal.
Another small listed company trying to make headway against general market indifference is Jatoil, growing jatropha trees in Vietnam to provide a feedstock for biofuel.
In early February, Jatoil said it was buying existing crops in central Java, a move which would allow it to produce its first jatropha oil later this year.
This Sydney-based company puts the case that it is not competing with food supplies. It argues that most of the world's biodiesel is produced from edible oil (such as rapeseed, soybean and palm) grown on highly fertile land.
Jatropha, by comparison, is not edible and is rather a hardy plant that can be grown in areas with poor soils and low rainfall. The seeds have an oil content of up to 40 per cent.
There is considerable interest across Asia in the jatropha plant. An Indonesian government agency is investigating whether marginal land can be used to grow the trees because there is concern that too much of the production of the edible palm oil will be diverted to fuel production.
The Indian government has set a goal of planting 11 million hectares in jatropha as part of the target of having all petrol and diesel contain at least 20 per cent biofuel by 2017.
Reports show farmers on fertile plains in parts of India are switching to jatropha because they can make more money than growing food crops.
The road to cleaner energy continues to be a bumpy one.
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