50 Hottest Companies in Bioenergy for 2009-10: #14, Range Fuels

Range Fuels

Based in: Colorado
2009-10 rank: #14

Technology: Range Fuels is focused on commercially producing low-carbon biofuels, including cellulosic ethanol, and clean renewable power using renewable and sustainable supplies of biomass that cannot be used for food.  The company uses an innovative, two-step thermo-chemical process to convert non-food biomass, such as wood chips, switchgrass, corn stover, sugarcane bagasse and olive pits to clean renewable power and cellulosic biofuels.

Range Fuels’ Two-step Thermo-chemical Conversion Process. In the first step of the process heat, pressure and steam are used to convert the non-food biomass to a synthesis gas or syngas.  Excess energy in this step is recovered and used to generate clean renewable power.  In the second step the cleaned syngas is passed over a proprietary catalyst and transformed into cellulosic biofuels, which can then be separated and  processed to yield a variety of low carbon biofuels, including cellulosic ethanol and methanol.  These products can be used to displace gasoline or diesel transportation fuels, generate clean renewable energy or be used as low carbon chemical building blocks.

Range Fuels is employing its proprietary two-step thermo-chemical conversion process in its first commercial cellulosic biofuels plant currently under construction and scheduled to begin production in the second quarter of 2010.

Fuel type: Range Fuels’ thermo-chemical conversion process can generate a suite of low carbon biofuels from non-food biomass that can reduce the country’s dependence on foreign oil, create immediate jobs, and dramatically reduce GHG emissions.  Major products potentially yielded include cellulosic ethanol, methanol, dimethyl ether, diesel fuel, green gasoline and clean renewable power.  Potential customers for Range Fuels’ low carbon biofuels and clean renewable power include consumers, refined petroleum product suppliers, utilities and industrials, chemical companies, vehicle fleet operators and biodiesel producers.

Major investors: Range Fuels and the Soperton Plant are supported by over $250 million in support from public and private sources, including a $76 million grant from the U.S. Department of Energy, an $80 million loan guarantee from the U.S. Department of Agriculture, and over $100 million from an oversubscribed Series B financing round completed in the spring 2008.  The Company has also secured state and local incentives to support development of the Soperton Plant.

Range Fuels was founded by Khosla Ventures LLC, a venture capital firm focused on the creation of renewable, environmentally-friendly energy sources.  Range Fuels closed its Series B financing round, in which it raised over $100 million, in the spring of 2008. Investors in this round included Passport Capital, BlueMountain, Leaf Clean Energy Company (advised by EEA Fund Management Ltd. and Shaw Capital), Morgan Stanley, and PCG Clean Energy & Technology Fund (with participation by California Public Employees’ Retirement System).  Range Fuels also received a $76 million grant from the U.S. Department of Energy, an $80 million loan guarantee through the U.S. Department of Agriculture and a grant of $6.25 million from the State of Georgia for the Soperton Plant project.

Past milestones (08-09):

In the spring of 2008 Range Fuels, Inc. closed its Series B financing round, raising over $100 million to help finance construction of its commercial cellulosic biofuels plant near the town of Soperton, Georgia.

In November 2008 David C. Aldous joined the company as Chief Executive Officer, bringing 28 years of petrochemical experience to apply to the successful construction and operation of Range Fuels’ first commercial cellulosic biofuels plant.  Immediately prior to joining Range Fuels, Aldous was Executive Vice President Strategy and Portfolio for Royal Dutch Shell in London, where he had responsibility for strategy, mergers, acquisitions, divestments, consulting, global systems, health, safety, security, environmental, and technology for Shell’s downstream business with revenues of more than $300 billion.

In January 2009 the U.S. Department of Agriculture awarded Range Fuels a conditional
commitment for an $80 million loan guarantee to assist construction of its commercial cellulosic biofuels plant near Soperton, Georgia.  The loan guarantee falls under the Section 9003 Biorefinery Assistance Program authorized by the 2008 Farm Bill, which provides loan guarantees for commercial-scale biorefineries and grants for demonstration-scale biorefineries that produce advanced biofuels or any fuel that is not corn- based. The Biorefinery Assistance program is intended to assist in developing new and emerging technologies that produce advanced biofuels to increase the nation’s energy independence; promote resource conservation, public health, and the environment; diversify markets for agricultural products and waste material and spur rural economic development.

In spring 2009 the Company intensified construction efforts on Phase 1 of the Soperton Plant, Reaching over 200 contractors and employees on site managing construction activities by the fall with major process systems delivered and installed at the site.

3 major milestone goals (2010-11)

To begin production of cellulosic biofuels from Range Fuels’ Soperton Plant in the second quarter 2010 and be first to market with commercially produced cellulosic biofuels in the U.S.

To advance build-out of the next phase of the Soperton Plant.

Business model:

Range Fuels’ will design, build, own and operate cellulosic biofuels plants in targeted development regions. Range Fuels goals are:

• To be first to market with commercially produced cellulosic biofuels by building on the
Company’s eight plus years of pilot plant operating experience and successful public and
private financial support secured via an $80 million loan guarantee from the U.S.
Department of Agriculture, an $100 million plus oversubscribed Series B round of private
financing, a $76 million grant from the U.S. Department of Energy and a $6.25 million
grant from the State of Georgia.
• To rapidly gain market share by capturing the best plant locations, i.e. those areas that
have large, available supplies of low-cost renewable biomass that cannot be used for
food, are sustainable and are near significant markets for low carbon biofuels and clean
renewable power markets.
• To become the premier cellulosic biofuels producer by building a world-class project
management team, with a focus on continuous process improvements to improve product
yields and efficiencies, while simultaneously driving operating and capital costs down to
become the low marginal cost supplier of cellulosic biofuels.

Fuel cost: Range Fuels projects its operating costs will be competitive without financial support from the government.  Specific cost information is proprietary.

Competitive edge:

Range Fuels’ proprietary two-step thermo-chemical process can convert any type of non-food biomass into cellulosic biofuels. This feedstock flexibility reduces reliance upon specialized crops and any single geographic region as a feedstock source, which differentiates the process from traditional starch-based ethanol production and 2nd generation bio-chemical conversion processes, and promotes stable biomass supply and pricing.

The process can produce a variety of low carbon biofuels that can be used to displace gasoline or diesel transportation fuels, generate clean renewable energy or be used as low carbon chemical building blocks.  This ability to produce a variety of cellulosic biofuels, as well as produce clean renewable power in the process, reduces exposure to price volatility typically associated with specific commodity markets.

Range Fuels’ technology has a zero carbon footprint and very low emissions.  Our carbon life cycle analysis using standard models and including the positive impact of our generation of clean renewable power shows our Soperton Plant project, at full capacity, will have a negative carbon footprint or in other words we will have a greater than 100% reduction in greenhouse gases compared to fossil fuel-derived gasoline.  This advantage relative to conventional starch-based ethanol production and traditional transportation fuels will become increasingly valuable as low carbon fuels standards and climate change legislation is implemented.

Additionally, Range Fuels is the only company to have raised the necessary capital to begin construction on a commercial-scale cellulosic biofuels plant.  Range Fuels has commenced construction on its first commercial cellulosic biofuels plant and plans to begin production from Phase 1 of the Soperton Plant in the second quarter 2010.

Alliances and Partnerships:

Range Fuels’ partners include:
• AMEC, providing non-process related engineering services, permitting-related services
and construction management services for the Soperton Plant;
• CH2M Hill Companies, Ltd., providing additional permitting-related services for the
Soperton Plant;
• Merrick & Company, assisting in process engineering design and design related services
for Range Fuels’ biomass and catalytic syngas converters;
• Emerson Electric Co., supplying process control and automation systems plus system
design and expertise;
• The Price Companies, Inc., providing feedstock procurement and wood chip handling
services;
• TransMontaigne Product Services Inc., providing product marketing services; and
• Ceres, Inc., supporting use of dedicated energy crops to produce cellulosic biofuels.

Development stage

Range Fuels is currently constructing Phase I of its first commercial-scale cellulosic biofuels plant near Soperton, Georgia, which will employ Range Fuels’ innovative, two-step thermo-chemical conversion process.  The plant will be the first in the U.S. to produce commercial quantities of low carbon biofuels from biomass, which includes all plant and plant-derived material, such as wood, grasses, and corn stover, and will also generate clean renewable power from energy recovered in the process of converting non-food biomass to cellulosic  biofuels.

The Soperton Plant will initially use wood from nearby timber operations and will transition to leftover wood residue over time. At full build-out capacity, the Soperton Plant is permitted to produce 100 million gallons of cellulosic biofuels each year and can use 2,625 dry tons of feedstock daily.  The design of the Soperton Plant was informed by the operation of a fully integrated and automated pilot plant in Denver, Colorado, which successfully converted Georgia pine and hardwood as well as Colorado beetle-kill pine to cellulosic biofuels since the first quarter of 2008.

The Denver-based Optimization Plant is a 4th generation pilot plant employing the two-step thermo-chemical conversion process being used by Range Fuels’ commercial cellulosic biofuels plant currently under construction near Soperton, Georgia.  Over 10,000 hours of testing were performed on the four generations of pilot plants, which over an eight-year period processed over thirty different non-food biomass feedstocks, including wood waste, grasses, municipal solid waste and hog manure.

Recent News:

The International DME Association has formed its North American Affairs Committee to promote  awareness and use of dimethyl ether as a diesel substitute in North America. DME can be used as a transportation fuel in diesel engines, gasoline engines, and gas turbines. It can be produced from a variety of abundant sources, including natural gas, coal, waste from pulp and paper mills, forest products, agricultural by-products, municipal waste and dedicated fuel crops such as switchgrass. The new committee consists of energy and fuel producers Total and Methanex; engine technology companies Caterpillar, Volvo/Mack, and Alternative Fuel Technology; process suppliers Chemrec, Lurgi and Haldor Topsoe; and renewable and biofuel producers Genifuel, LCE BioEnergy, Blue Fuel Energy and Range Fuels; along with policy experts The Methanol Institute, and academics from Penn State University and the University of Utah.

50 Hottest Companies in Bioenergy for 2009-10: #14, Range Fuels is a post from: Biofuels Digest