U.K. oil major BP made a big splash in 2000 when it changed its name to “Beyond Petroleum” (originally British Petroleum) and changed its logo to a sunburst design that was supposed to represent the company’s greater renewable energy focus. BP has since scaled back some of those efforts, but other firms are pushing ahead with commercial businesses designed to produce liquid transport fuels made from non-petroleum-based feedstock.
One such firm may not have the type of name that immediately comes to mind when thinking about this business model, but Honeywell UOP is working on several commercial ventures that manufacture diesel and other fuels from sources other than crude oil.
“We are a developer of technology for fuel development,” said Jim Rekoske, VP & General Manager, Renewable Energy & Chemicals at Honeywell UOP. Founded in 1914, the company was originally called Universal Oil Products (now just UOP) and is responsible for 31 of 34 major refining advancements from the late 20th century to present day, he added.
Honeywell UOP started making drop-in fuels from alternative sources in the mid-2000s, said Rekoske, and currently works with some major refiners like Valero.
The Diamond Green Diesel plant -- a project half-owned by Valero and Darling International -- is in startup phase and will be creating diesel from animal fat that it will sell directly into the U.S. market. The plant uses Honeywell UOP technology.
“The private sector is likely to bring the next breakthrough. The military blazed the trail when the industry needed support,” Rekoske said. “Commerce is ready to take over where DOD left off; they [DOD] are surprised by the negative reaction they received for being leaders in the area.” Many have criticized the Defense Department for investing relatively large sums into developing non-petroleum-based fuels, particularly jet fuel.
At a basic level, Honeywell UOP applies technology it developed to hydrogenate oils from animal fat, used cooking oil, inedible corn oil and similar sources. “All these things are great feedstocks for making transport fuels,” said Rekoske.
RIN Market Impacts
Renewable Identification Numbers are assigned to each gallon of biofuel to track and ensure compliance with the EPA’s Renewable Fuel Standard (RFS) that mandates blending requirements for refiners producing traditional petroleum-based fuels. However, a RIN shortage has developed as blending mandates increase while gasoline consumption decreases. Refiners complain there are not enough RINs available to meet the government’s blending requirements. Advanced biofuel technology for fuels made from non-food sources has not progressed as quickly as many originally envisioned, adding to the RIN shortage.
“We make biomass-based diesel, which qualifies as advanced biofuel and is RIN-eligible,” said Rekoske. “The Diamond Green plant will produce about 12 million gallons per month and the diesel has 1.7 times the energy content of ethanol, which gives producers 1.7 times more RINs.”
“Diamond Green will be largest renewable diesel refinery in the U.S., producing 10,000 barrels per day. We think it’s the first step toward growing the advanced biofuel industry,” he said.
While it may be a great first step, many more plants will be needed to satisfy RFS blending requirements that stretch into the tens of billions of gallons for 2013 and are set to further increase next year.