Nearly two years ago, an LA-based company called Rentech Inc. announced plans to build a biofuels plant four hours north of Sault St. Marie, Ontario. It would use forest waste and “unmerchantable” tree species for making renewable jet fuel and naphtha, a chemical feedstock used to make all sorts of products. That plant was supposed to be operational in 2015. It was supposed to employ up to 1,000 people during peak construction, and keep 83 people directly employed full time in a region of the province that could really use those jobs.

Ain’t gonna happen, it seems.

The company put out a press release last night announcing that it is ceasing operations, reducing staff, and eliminating all R&D related to new technology development. And yes folks, I’m told that would includes its Ontario “Olympiad” project, which was to use a Fischer-Tropsch process to turn biomass into 85 million litres of green fuel annually. It means the deal Rentech signed with the Ontario government that gave it access to up to 1.1 million cubic metres of Crown timber is effectively dead wood. The question is whether those access rights will be transferred to one of the competing projects from local companies that bid against Rentech and lost.

It’s funny (or not so funny) how many grand announcements from government never actually come to fruition. This, in my view, could have been a good project. It’s a shame for the people living in that region. They could have used the economic boost.

I already posted on L.A.-based Rentech’s plans to build a $500-million jet fuel biorefinery four hours north of Sault St. Marie, Ontario, using residual crown timber. My latest Clean Break column looks at that project in more detail and against the backdrop of a coming European Union aviation “carbon” tax that will hit all airlines flying into the EU on Jan. 1, 2012.

Also, I had a chance to attend a panel at the BIO World Congress conference in Toronto this week on the challenges of producing renewable jet fuel. The panellists all agreed that producing low-carbon jet fuel from algae, jatropha, camelina and wood was not only technically doable but could be done economically. The potential problem, as one panellist pointed out, is that producers may opt first to make higher value products, such as green chemicals and nutriceuticals, which can fetch a much higher price per litre and, by association, a higher profit. In other words, we can make the green jet fuel, but will we use it as jet fuel?

So far, that’s Rentech’s intention — but will it change its mind? Either way, from a climate perspective, the end product will still presumably displace petroleum-based feedstocks, so it would seem all good in the end.

A Los Angeles-based company called Rentech Inc. announced today that it is building a biofuels plant four hours north of Sault St. Marie, Ontario, that will be dedicated to turning forest waste and “unmerchantable” tree species into renewable jet fuel and naphtha, which is a chemical feedstock for making all sorts of products. This is big news for an Ontario steel and forestry area that was hit hard by the economic downturn. The plant, called the Olympiad Project, is expected to be operational in 2015 and will employ up to 1,000 people during peak construction. There will be about 83 direct full-time jobs once the plant is operational and over 300 indirect and “induced” positions — whatever that means.

Rentech’s approach is to gasify the biomass, condition the resulting synthesis gas (syngas), then convert it into jet fuel and naphtha using a Fischer-Tropsch process. The plant, called the Olympiad Project, is being designed to produce approximately 85 million litres (23
million gallons) annually of renewable and certified low-carbon jet fuel. Rentech will get its biomass from Ontario crown land through a deal with the province. In total, Rentech will have access to up to 1.1 million cubic metres (1.3 million U.S. tons) of Crown timber per year. The company has applied to receive up to $200 million in funding from Sustainable Development Technology Canada’s NextGen Biofuels Fund. That amount is expected to be paid back over time from project cash flow.

The ultimate impact of this fuel on the environment, according to Rentech, will be a reduction of 600,000 metric tonnes per year of CO2-equivalent emissions. “This equates to removing more than 100,000 passenger cars from the road,” the company says. The green jet fuel is “virtually” free of sulfur and aromatics. It has lower particulate matter, NOX and  SOX compared to conventional jet fuel (kerosene). The fuel is certified and was tested in 2010, though as a mix that contained 40 per cent conventional Jet-A fuel.

Anyone who has read this blog knows that I’m a big supporter of developing biofuels specifically for aviation purposes and adopting an electrification strategy for light-duty vehicles. We can’t electrify commercial airliners or military jets, so greening up those fleets will require some sort of biofuel solution. The bonus is that distributing this green jet fuel to airports is much easier than delivering to the thousands and thousands of gas stations across North America. Rentech, for instance, could do a deal with CN rail, which delivers jet fuel directly to Pearson International Airport in Toronto.

I plan to chat with Rentech’s CEO this afternoon to get more detail about where the company plans to sell its green jet fuel and related products. Also, next Tuesday, there will be a panel on bio-jet fuel innovation at BIO World Congress in Toronto. I plan to attend and will report back.