|New Biomass Process Is Still In The Experimental Stage But Is Far Enough Along To Attract Investors With Clout|
|Monday, May 28, 2012 13:05|
New technologies in transforming natural gas and wood chips into gasoline may hold the keys for developing a green form of gasoline. Some may not take such a venture seriously but investors including Kleiner Perkins and Oak Investments think there’s enough value there to take a stake in the development of the process.
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Chesapeake Energy is another investor. Yet by-standers are wondering why larger oil companies are not exploring this type of process, too. It’s an unusual process and runs counter to the 80-year old process used by big oil companies in countries like Qatar to transform natural gas into oil. The new process costs less and also streamlines the transformation.
The big companies already have a lot invested—twice the original estimates—in the plants they’ve developed in the Middle East. Sometimes it’s the smaller player who has the vision and the drive to simplify the process and contain costs. The utilization of wood chips also qualifies under the new Renewable Fuels Standard. The low costs mean producers can make a higher margin on the end product—gasoline.
Critics say it makes better sense to use pulverized coal or solely natural gas. Using so-called biomass ingredients like wood chips doesn’t seem to make sense to them since, again, larger companies also would be wanting to get in on the higher margins. The biomass process is still largely experimental and is viewed as very high risk. But it might be a development worth watching.