How would Strategic Biofuels achieve a NEGATIVE -294 Carbon Intensity score in a road fuel?
One gallon's production and combustion would remove a net 2X more carbon from the atmosphere in the process than diesel typically contributes.
Every fuel emits carbon, right? Not if you count the whole supply chain.
Strategic Biofuels, currently under development, has a recipe for highly negative CI through a combination of using abandoned forestry waste (nature's carbon-capture system), creating their own electricity from sawmill waste, and sequestering CO2 deep underground using oilfield technology.
Here's CEO Paul Schubert explaining their project in Louisiana:
The carbon intensity (CI) of fuels is California's primary metric for judging the environmental damage or benefit of a transportation fuel. Its units are "grams of carbon dioxide equivalent per megajoule," or gCO2e/MJ. The smaller (more negative) a CI score, the more potential for earning valuable LCFS credits when sold in California.
How good would that CI score be? As calculated by California's Air Resources Board, traditional ultra-low-sulfur diesel has a CI of about 100. Using an otherwise waste product like used cooking oil (UCO) is considered a highly beneficial feedstock for making renewable diesel and has a CI of about 20. Using fresh soybean oil? About CI 55, higher because farming and land use are involved. Beef tallow is also well regarded at around CI 33.
Forestry trimmings are not something everyone sees in their daily life. But, far from cities, in rural industry, these waste products are ready to be collected for carbon-abatement purposes. Paul explains:
So-called "injection wells," which are deep wells often used to dispose of used or "produced" water in oil- and gas-field operations, are also how carbon is sequestered in the Strategic Biofuels project.
And it has been shown that these injection wells can sometimes contribute to the likelihood of earthquakes. However, seismic activity has never been a concern in this corner of Louisiana.
It isn't just injection wells that this new-energy project has in common with oil and gas development. The local and state governments are recognizing how oilfield workers and technology are being redeployed to benefit the community and environment.
Much like in gas development, pore rights – who owns the economic benefit of the rock formations and how they're used – are crucial in this development.
When the owner of the pore rights is unknown, developers are stalled. But Louisiana passed a law allowing eminent domain process to secure those rights.
Did the vote barely pass in Louisiana, a major oil-and-gas state? Paul explains his surprise at the unanimous vote.
A site diagram shows how the fuel plant, power plant, and river port would be arranged.
A $15 million grant is being used to enhance the highway and rail facilities to serve the plant. The groundbreaking happened in December.
But why do this?
Yes, forestry waste, if unused, would be a missed opportunity to use the trees' natural carbon sequestration and may even contribute to biomethane released into the atmosphere.
But economics is what drives development. Paul talks about forestry waste's competitive advantage against traditional renewable-fuel feedstocks.
Soybean oil can contribute $5-$6/gallon to the finished fuel cost. Plus, there are other environmental and operational costs.
Forestry waste cuts that cost by 75%.
The U.S. Forest Service has an interest in controlling this forestry waste. But, as part of the federal government, they also want to ensure the fuel being produced complies with renewable-fuel standards and doesn't expand forest-harvesting land use.
Strategic Biofuels partnered with the Forest Service to establish standards to create these policies. Weaver and Tidwell and U.S. EPA were also at the table.
What benefits to the community might this project bring?
This project is extremely rural, in north-central Louisiana, about 25 miles south of the city of Monroe and on the Ouachita river. The average household income is around $35,000 per year.
Paul and Strategic Biofuels have experienced remarkable events in developing this renewable-fuels project. As a result, he and the team have extraordinary insight for investors looking to participate in this space of the new-energy economy.
The project is in its early stages, and the story is not yet complete. Nevertheless, we at AEGIS are excited to see both it and the renewable-fuel market develop.
If you need guidance on how to access the various credits and premiums associated with renewable fuel and feedstock development, AEGIS can not only advise you on the market for those credits but also execute a trading plan to monetize the credits. This may include RFS, LCFS, RINs, and other pathways.