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To: Glenn Petersen who wrote (13888)	11/14/2012 9:47:52 AM
From: TheSlowLane	Respond to of 16955

Looks to me like some of these technologies are getting to or are at the tipping point. The Q3 report from Alter NRG points to the fact that Air Products is building two plants for $400MM each in the UK that are a strong demonstration of their commitment to the technology. Message 28546744

To: Glenn Petersen who wrote (13888)	11/14/2012 1:05:54 PM
From: Dennis Roth	Read Replies (1) \| Respond to of 16955

Credit Suisse note on KiOR (KIOR) Successful Plant Startup Significantly Derisks Stock; Reiterate Outperform 6 pages, Download link at sendspace.com Bottom Line: This morning, KiOR announced the successful startup of its first large scale commercial plant in Columbus that converts non-food wood biomass to hydrocarbon fuels using a proprietary thermochemical technology. The technology has been successfully scaled 50x from the demo unit and is producing oil that meets specifications, which significantly derisks the equity story in our view, with the attention now shifting to execution as the optimization process aims to increases the plant throughput and yield. We reiterate our Outperform rating and $25/share Target Price. Successful startup at Columbus: KiOR announced that its first plant has started producing on-spec oils and is on track to produce 500,000 to 1 million gallons in 4Q2012. Additionally, management provided color on the near-term pricing discounts of $0.50-$1.00 (vs. prior comments of $1.25- $1.50), which are expected to be reduced to be on par with traditional fuels. Yield & throughput improvements enhance value: (i) KiOR announced their new catalyst platform can reduce coke production, which increases throughput by 25% without additional capex; this improvement exceeds the prior target of 20% improvement and equates to increased returns commensurate with a 15 gallon/ton yield improvement. (ii) Additionally, yields are now expected to be 72 gallons/ton at Natchez, compared to prior 67 gallon/ton levels, with continued improvement expected as R&D efforts steadily progress towards the target of 92 gallons/ton (~116 is the theoretical max). (iii) The second plant in Natchez remains on track for construction to commence early in 2013 following a capital raise, with production expected by late 2014. Estimates: We maintain our EPS estimates as the story remains firmly on track. Our $25 Price Target is based on a scenario-based DCF analysis.

To: Glenn Petersen who wrote (13888)	5/23/2013 3:09:42 PM
From: Dennis Roth	Respond to of 16955

Who Loses from Rising Natural Gas Prices? energytrendsinsider.com Tags: advanced biofuels, ethanol, ExxonMobil, KiOR, natural gas prices inShare Chemicals and Fertilizer Industries In last week’s post Who Wins from Rising Natural Gas Prices?, I discussed the sectors that would benefit from rising natural gas prices. This week, let’s talk about the potential losers. Natural gas is an important feedstock for the chemicals and fertilizer industries, so higher prices could pressure those sectors. Oil companies with significant chemical operations could also see this business segment take a hit, but based on ExxonMobil’s (NYSE: XOM) advocacy of liquified natural gas (LNG) exports, it clearly believes the net effect of rising natural gas prices on the company would be positive. Dow Chemical (NYSE: DOW), on the other hand, has come out strongly against LNG exports because of the potential cost to its own business and that of other heavy users of natural gas. Ironically, last week the Department of Energy granted a permit to a facility called Freeport LNG — in which Dow owns a 15% stake. Dow’s answer to that is that they invested in the facility when it was supposed to be an LNG import facility. Biofuels Sector But the risks to the chemicals and fertilizer industries are well-known. What isn’t as well-known is the risk from higher natural gas prices to the biofuels sector. This may be counterintuitive, since renewables like wind and solar power become more competitive as natural gas prices increase. The difference (unappreciated by many biofuels investors) is that many biofuel technologies rely heavily on natural gas. Corn ethanol production, for instance, is dependent on process steam that is mainly produced from natural gas. And since natural gas is also a key component in fertilizer, higher natural gas prices tend to drive up fertilizer prices and eventually corn prices, subjecting ethanol producers to a double whammy. But the advanced biofuel industry may be at an even greater risk, since it hasn’t yet become economically competitive. Take KiOR (Nasdaq: KIOR), for instance. KiOR’s technology starts with a fast pyrolysis process that heats up biomass rapidly to break it down. KiOR uses a common oil refining process called Fluid Catalytic Cracking (FCC) technology for the pyrolysis step in a process they call Biomass Fluid Catalytic Cracking (BFCC). The end product is partially upgraded pyrolysis oil (still very different from crude oil), which is further upgraded to gasoline and diesel blendstocks via another common oil refining process called hydrotreating. The entire process is heavily dependent on hydrogen from natural gas. Based on my calculations from KiOR’s published statements on wood feedstock inputs (500 bone dry tons) and gasoline, diesel, and fuel oil outputs (13 million gallons per year), as much as half of the energy content of the produced fuel has to be derived from natural gas. Natural Gas Laundering As an aside, even though half of the BTUs are derived from natural gas, the fuel that is produced qualifies as 100% renewable fuel, and therefore receives tax credits as 100% renewable fuel. One might think of this as natural gas laundering, where the natural gas “becomes” renewable by being combined with biomass. And because this natural gas is being provided by companies like ExxonMobil, and is still relatively cheap due to the new supplies brought about by the fracking revolution, many advanced biofuel producers are ironically dependent upon both ExxonMobil and the fracking revolution. Thus, KiOR — and certain other advanced biofuel producers — have a very high sensitivity to natural gas prices. This is another reason to shy away from investing in KiOR, which I have been advising investors to do since 2011. This has proven to be good advice, as the company’s share price has fallen 70 percent since mid-2011. Meanwhile, KiOR recently announced a net loss of $31.3 million for the first quarter of this year. Several analysts surprisingly (to me) reiterated ratings of “Overweight” or “Outperform” on the company in response to the results, seemingly oblivious to the company’s sensitivity to higher natural gas prices. Even more surprising is that one analyst — Pavel Molchanov from Raymond James – reiterated the “Outperform” rating that he first made on August 15, 2011. How well has KiOR “outperformed” since he made this initial recommendation? The share price has fallen over 60%, and yet he reiterated his “Outperform” rating. In my opinion many of the analysts covering these advanced biofuel companies don’t have a firm enough grasp on the technology or the risk factors involved. As a result, their clients end up with steep losses. Conclusions Thus, if you believe that natural gas prices will retain strength in the coming months, the companies at most risk are chemical companies (including fertilizer manufacturers) and biofuel companies — particularly advanced biofuel companies engaged in hydrotreating. Link to Original Article: Who Loses from Rising Natural Gas Prices? By Robert Rapier

To: Glenn Petersen who wrote (13888)	8/3/2013 4:49:09 PM
From: Dennis Roth	1 Recommendation Recommended By Glenn Petersen Respond to of 16955

INEOS Bio Produces Cellulosic Ethanol at Commercial Scale August 2, 2013 environmentalleader.com INEOS Bio’s Indian River BioEnergy Center in Vero Beach, Fla., is now producing cellulosic ethanol at commercial scale with the first ethanol shipments to be released this month. It is the first facility in the world using advanced bioenergy technology to convert vegetative and wood waste to renewable fuel and electricity, the company said. The production achievement stems from breakthrough gasification and fermentation technology for conversion of biomass waste, the company said. The biofuels produced in Florida will anchor the new production of cellulosic ethanol under the US Renewable Fuels Standard, according to INEOS Bio. The BioEnergy Center is a joint venture project between INEOS Bio and New Planet Energy. The facility has already converted several types of waste biomass material into bioethanol, including vegetative and yard waste, and citrus, oak, pine, and pallet wood waste. It will have an annual output of eight million gallons of cellulosic ethanol and six MW of renewable power. The center is also permitted to use municipal solid waste for bioethanol production during 2014, INEOS Bio said. Energy secretary Ernest Moniz called the project an important industry benchmark that proves the potential of early-stage investment into innovative technologies. The hybrid technology was originally developed with the support of the department, beginning in the 1990s, DOE said. The company said it is working to expand the use of the technology. The center will serve as a reference plan for companies and cities interested in licensing the technology for similar facilities. The project’s gasification-fermentation technology has its roots in a University of Arkansas research project, supported by a $5 million Energy Department investment over fifteen years. The Department’s early support helped this technology obtain a number of patents, with the core intellectual property purchased by INEOS Bio in 2008, DOE said. In 2009, the $130 million INEOS Bio-New Planet Energy joint venture was awarded a $50 million Energy Department grant to design, construct, commission and operate the Indian River BioEnergy Center, DOE said. According to the New York Times, the plant had expected to be operational by the end of last year. Among the setbacks was the transportation of methane gas from a nearby landfill to the plant’s boilers. Another problem was its reliance on the electrical grid. When thunderstorms knocked out the power grid, the plant unexpectedly shut down, and it took weeks to get it running again. Photo credit: INEOS Bio, Indian River BioEnergy Center, Vero Beach, Fla.