Problems and delays with biofuel project

Producing biofuel is proving to be much more difficult for Z Energy to produce than they had thought when announcing a project in 2014. They still haven’t produced anything saleable three years after their projected completion date but are still trying.

Newsroom: Why Z Energy is persisting with its biofuel plant

Four years ago, Z Energy announced a cunning plan: to build a plant to turn tallow into biodiesel. The plant would be operational in 2015 and would help Z and some of its commercial customers (companies like Fonterra, Fulton Hogan and NZ Post) take a bit of fossil fuels off their carbon balance sheet and meet their greenhouse gas reduction commitments.

Voilà. Easy.

Four years on and a new government with ambitious carbon reduction targets has put biofuels more firmly on the radar. Cars will go electric, but for the time being there aren’t many “green” alternatives to fossil fuels for heavy trucks, ships and planes.

But over in Manukau, more than two years after it was meant to go into production, Z is struggling to get biodiesel out of its plant. The company has yet to produce a single litre of saleable biofuel. Z still thinks biofuels are a good idea, and it has customers keen to buy it – even prepared to pay a couple of cents a litre extra for it.

Z’s sometimes tortuous experience trying to get its plant up and running has a key lesson for industry and government as we look at ramping up New Zealand’s nascent biofuels industry.

It’s not as easy as you think.

I hope the Green and Labour parties learn something from this. Biofuel may end up being a viable alternative for some energy needs, but it hasn’t been a quick fix so far.

What’s good about biofuels?

In the simplest biofuel scenario, you grow a plant, which absorbs CO₂. Then when you turn that plant into ethanol (the most common biofuel) and burn it in a vehicle engine, a little green sleight-of-hand allows you to write off the CO₂ it produces. Just like that: carbon neutral. Well, almost.

It’s a bit more complicated with biodiesel made from waste products (rubbish or tallow, for example), as you don’t have that handy CO₂ in-and-out exchange. But what’s not to like about making fuel from waste, especially when burning biofuels produces slightly less CO₂ than burning fossil fuels?

And what’s not so good?

Biofuels also have some significant downsides:

– As Z has found, the technology can be complex. The company knows that choosing to use an untried New Zealand technology rather buying a more expensive off-the-shelf product from overseas has added to the technical challenges. Even so, according to the Productivity Commission’s report: “advanced biofuels are much less technologically mature and therefore come with significant technical risk”. For example, five years ago, there was much excitement about a new biofuel made from algae. Algae would produce high yields and wouldn’t use up productive land. But the euphoria soon died down. Oil giant Exxon pulled out of a US$600 million joint venture, claiming viability is likely to be 25 years away.

– The easiest way to make biofuels is from plants – anything from sugar beet to corn to that spiky plant in Australia no one can find another use for. But the idea of using productive land to grow fuel (rather than food) has some serious ethical and environmental downsides, which have stymied projects overseas – and put many people offside. In 2009, US President Al Gore told a green energy conference he regretted his support for the US ethanol industry because of its role in driving up the price of corn, and therefore food.

– Most biofuels have to be mixed with carbon-emitting fossil fuels at very low ratios (5-10 percent biofuel with 90-95 percent ordinary petrol or diesel) just so they don’t mess up our engines. Sometimes it hardly seems worth it. (Interestingly, the mixing thing is more to do with engine technology than the properties of biofuels. In fact Henry Ford designed his first cars to run on biofuel, not petrol.)

Zero nett carbon emissions by 2050 are still reliant on significant advances in technology and cost of production.

54 Comments

  1. chrism56

     /  May 6, 2018

    It is just like the wood pelletising plant in Taupo that helped Solid Energy go bust. Things that can work in a test tube, or even in a lab sized pilot plant don’t necessarily translate to working in a full sized industrial complex. They always cost a lot more to build than budget, and commissioning with all the ensuing production delays takes years, not weeks.
    Zero net carbon emissions is just a tee shirt slogan. It isn’t feasible unless there are drastic reductions in everyone’s lifestyles. Not quite back to horse and cart, but not far from it. Listen to this interview with the Minister of Energy. https://youtu.be/PiwagHGrAw4 She is great on chanting slogans with all the cliches present, but has no idea of what it actually entails or even how to get there. The work hasn’t been done and what has been, is reliant on technology that doesn’t exist.

    • Strong For Life

       /  May 6, 2018

      Yes. I have asked Mr Shaw what are these new green innovations and industries we hear about. Where will they be situated, how many jobs will they create? To date, no answer to my emails from Mr Shaw. Perhaps I should email the same questions to Miss Woods?

    • Griff

       /  May 6, 2018

      Binary Thinking
      Phrase. Denotes a system of thought that predominantly considers things in an “either, or”, “right, wrong”, “black, white” way, ignoring any subtleties or consideration of third or more alternatives.

      In philosophy, this is know as a “bifurcation fallacy”.

      People who habitually think in this way are usually fairly unintelligent and unimaginative.
      chrism56: “You’re either burning fossil fuels or your back in the days of horse and cart.
      Griff “Wow, chrism56 can only seem to understand the world through binary thinking…”
      https://www.urbandictionary.com/define.php?term=Binary%20Thinking

      Let me introduce you to two ways of thinking:

      1. Binary thinking – right/wrong, yes/no, good/bad, start/finish.

      2. Directional thinking – moving forward, a step closer, lighter grey/darker grey, an experiment, an opportunity to learn, smart-ish, safer, right-ish, wrong-ish, finished-ish.

      Binary thinking feels safe. It creates a world where things are black or white. They are happening or not happening. Something is good or it’s bad. A person performs well or isn’t performing. A deal is in writing or it’s not a deal.

      In the binary world there are start dates and finish dates. Things happen sequentially in a linear, orderly fashion.

      The largest and most powerful part of your brain loves the idea that this is how the world works. It craves the clarity of a world that unfolds in a straight line. It’s happy if there’s a plan and it takes comfort that if we stick to it, everything will be ok.

      Sadly this isn’t how the world works and it’s not how entrepreneurial success happens either. Success is always in a mess, it unfolds from a world of grey decisions that are ‘directionally correct’.

      Success is a network effect from dozens of simultaneous side projects coming together over time. The decisions are never easy at the level of high performance – they involve trade-offs and risks.

      The way success looks from a distance is as if it was a plan that came to fruition. The way it is behind the scenes is a mess that was moving in vaguely the right direction most of the time.

      When you look closely at successful people, few of their decisions were black and white and obviously safe. Safe decisions don’t provide a payoff. Safe and clear decisions are actually dangerous for a person who’s seeking the rewards of entrepreneurship. If the decisions don’t feel risky and incomplete then the opportunity is too obvious and therefore too contested.

      Directional thinking is suitable in the domain of uncertainty. It’s the thinking required to keep the many moving parts of a business moving ‘roughly’ towards a desirable outcome – more often than not.

      Directional thinking doesn’t resolve any tension. It doesn’t feel safe or complete. Therefore it requires emotional intelligence.

      In a fast changing world, anyone who thinks they have clear cut answers about the future is shutting down their ability to see what’s actually happening and respond accordingly. Likewise, anyone who hesitates while they look for a well defined path will get left behind.

      http://www.keypersonofinfluence.com/binary-thinking-vs-directional-thinking/

      • David

         /  May 6, 2018

        Griff, how about you pop down to ZBioD and help them out, as your not a binary thinker I’m sure you’ll have it sorted before lunch.

    • Blazer

       /  May 6, 2018

      Solid Energy was run by overpaid, incompetents trying to increase their bonus…plan.

      • David

         /  May 6, 2018

        Blazer, if you ran Solid Energy, what would the company look like today? What would it’s future be exactly?

        • Blazer

           /  May 6, 2018

          my modesty and humble disposition prevents me from giving you a fulsome..answer.

          • Trevors_Elbow

             /  May 6, 2018

            hahaahhahaha… so nothing as always…..

          • Gezza

             /  May 6, 2018

            Bullet points would suffice.

      • chrism56

         /  May 6, 2018

        Yes – that was why they had all those Labour appointees on the board when the decisions were made which got them into financial difficulties.

        • Kitty Catkin

           /  May 6, 2018

          Fulsome means cloying,smarmy, overdone, sychophantic and insincere, not ‘full’.

  2. chrism56

     /  May 6, 2018

    Enough of your sociological waffle Griff – it is always a sign that you are yet again out of your depth. How about talking hard facts? According to MBIE, In 2016 which is their last year of data, NZ’s energy’s supply was 908PJ. Of that 50 were coal, 272 oil, 174 natural gas and 201 Geothermal. Now how are you going to replace the first three and what will is cost? There is only 32 years and you can’t use magical thinking or technology that doesn’t exist in a usable form yet.

    • David

       /  May 6, 2018

      Griff is a cargo-cult thinker. As long as you keep building temples to renewable energy, it will arrive…one day..one day.

    • Griff

       /  May 6, 2018

      I think “binary thinking” nailed you to a tee .

      PJ
      oh dear wrong method of measurement.
      How much of that energy gets wasted as heat?
      50% or more .
      How much is wasted just physically moving all the coal gas and oil around?
      Another 20%.
      Most of that energy is used in transport.
      If energy from renewable generation is used in an electric car it results in about 80% of the energy actually driving your forward motion..
      For a fossil fueled car less than 20% of the energy drives you forward the rest is lost in refining, , distributing the fuel and as waste heat .

      you can’t use magical thinking or technology that doesn’t exist in a usable form yet.

      Do fuck off Chris.
      Never heard of a wind turbine or solar power?how about electric motors and batteries?
      No one said every detail was totally resolved today thats your binary thinking at work.
      They are saying it is going to happen .
      https://electrek.co/2016/12/05/john-deere-electric-tractor-prototype/
      https://www.siemens.com/innovation/en/home/pictures-of-the-future/mobility-and-motors/electromobility-electric-ferries.html

      As I have pointed out .
      The cost of not reducing reliance on fossil fuels is far greater than the cost of the transition away from them
      Until you get that into your head your world view is not reality based.

      • David

         /  May 6, 2018

        “The cost of not reducing reliance on fossil fuels is far greater than the cost of the transition away from them”

        Given you have no idea what the cost of the first is, nor of the cost of the second, how do you make a judgement that one if far greater than the other?

        The world appears to be on the A1T track, so I would dispute your entire alarmist mindset.

        • Griff

           /  May 6, 2018

          https://www.stuff.co.nz/environment/102781174/early-action-on-climate-change-would-save-new-zealand-30b-report-finds
          Climate change is “a serious long term threat” to New Zealand’s economy and delaying action to address it could lose the country billions, a banking leader says.

          Moving to a low carbon economy sooner rather than later would allow New Zealand to reap up to $30 billion in economic benefits, a report commissioned and publicly released by Westpac found.

          The bank commissioned the report so it would know the financial risks climate change posed to both the country and its business. The modelling was undertaken by EY and Vivid Economics.

          The report modelled two different paths to meeting New Zealand’s obligations under the Paris agreement: A proactive ‘central scenario’, in which the transition to a low-carbon economy was quick and smooth; And a reactive ‘shock scenario’, in which the transition was slow at first with a dramatic cut in emissions from 2030.

          The economic benefits of a fast transition were significant, it found. While short-term growth would be stronger under the ‘shock scenario’, the economy would take a hit once sharp carbon reductions were required later on, potentially as a result of trade tariffs or other sanctions.

          Based on the projected economic growth rates of both scenarios, an early transition would have a cumulative economic benefit of about $30b by 2050. Agriculture, in particular, would take a financial hit if the transition to a low-carbon economy was delayed, and everyday household costs would likely go up.

          • David

             /  May 6, 2018

            Some rather epic assumptions there Griff.

            The summary of that document is quite simple; we are all going to get rich by spending all our money on solar panels and windmills. You do realise that is the underlying assumption of that report don’t you? The economy grows because of all the investment into renewables.

            You, being the clever chap you are, see the other side of that don’t you?

      • David

         /  May 6, 2018

        Just too add;

        “If energy from renewable generation is used in an electric car it results in about 80% of the energy actually driving your forward motion..
        For a fossil fueled car less than 20% of the energy drives you forward the rest is lost in refining, , distributing the fuel and as waste heat .”

        This has been true since the very first motor car. Electric cars are not a new idea, nor are they new technology. The problems that existed then still exist now. You can argue that they have been solved, but you still have 150 years of infrastructure to replace in a single generation for very little net improvement. That is simply not going to happen that quickly.

      • chrism56

         /  May 6, 2018

        Wind is in the data – 8PJ and solar 0.55PJ. As I have said before, when you are stumped by inconvenient facts you resort to name calling – your stock in trade.

        • Griff

           /  May 6, 2018

          Chris
          I did not call you names I pointed out the deficit in your thinking .
          When you complain about my tone rather than address my statements you are resorting to tone trolling resulting in my opinion of your ability to think critically becoming even lower.

          Still with the Pj use.
          It is not a direct compassion between the energy in fossil fuels to electrical energy generated by renewable sources as so much of the chemical energy of fossil fuels is wasted in the transition to useful work.

          One joule of energy from a renewable electricity source is able to do more useful work than one joule of energy contained in a lump of coal.

          Binary thinking.
          You are still trapped into thinking we can not move towards a goal in steps instead insist as we can not transition instantaneously we can not change at all.

          • David

             /  May 6, 2018

            “One joule of energy from a renewable electricity source is able to do more useful work than one joule of energy contained in a lump of coal.”

            In the real work this is very marginal. Coal has a huge advantage, you have a choice when you burn it. Solar power runs at about 10% of nameplate capacity for this reason. Capacity factors for coal, gas and nuclear are many times that for renewable’s. Efficiency arguments are very silly unless you are looking at a total system.

          • chrism56

             /  May 6, 2018

            Because the uses rates differ, MBIE converted everything back to PJ – they could have used barrels of oil equivalent does the same thing. That is the only way you can compare the energy used on the road with electricity generation. Most coal is used for thermal uses outside of electricity generation, it is about 80% there. For Huntly, it is about 25%. for electricity, NG is between 40 and 50% conversion efficiency. The big advantage is they are dispatchable and storage is cheap. Same with liquid fuels. The same cannot be said for the wind and solar.

            • Griff

               /  May 6, 2018

              According to MBIE, In 2016 which is their last year of data, NZ’s energy’s supply was 908PJ. Of that 50 were coal, 272 oil, 174 natural gas and 201 Geothermal. Now how are you going to replace the first three and what will is cost?

              Again.
              Most of the barrels of oil we use are for transport.
              A barrel of oil is about 5,861,520,000 J of energy.
              https://www.unitjuggler.com/convert-energy-from-boe-to-J.html
              Sweet smeg all of that energy gets used to drive mass forward.
              By the time you have used energy to crack the oil into usable products freighted it to an end users burnt it to provide chemical energy then converted that to forward motion you have lost more than 90% of the energy in a barrel of oil.
              Plug your transport directly into a renewable source and about 80% of the energy you draw drives you forward.
              The two are not comparable unless you account for the relative effectiveness of the differing processes involved.
              hence.
              To make up for the loss of oil use we don’t need to produce 272Pj of energy.

            • chrism56

               /  May 6, 2018

              No Griff you are wrong again (as usual). You can’t even get your processes correct. Go away and read the MBIE report. After you have digested the numbers and thought about it, come back and make sensible comments

            • Griff

               /  May 6, 2018

              ROFL
              Hand waving .
              quelle surprise.
              I did read it. I down loaded the fuckin MBIE spread sheet on oil use and have it right in front of me right now .
              Go out to your car drain the radiator go for a drive and see how far you get…. You are arguing with the physics of converting chemical energy contained in oil into the forward motion in an Internal combustion engine driven mode of transport not me.

            • chrism56

               /  May 6, 2018

              OK Griff – we will take my Corolla as a simple example. I get just over 45mpg. We will call that 15km per litre of petrol. A litre of fuel contains just over 34MJ. Electric cars of the same size get around 5km per kWh in general driving. For 15km, that is 10.8MJ. But the round trip from the grid to a car battery output is only about 82% efficient ,so the car would use 13.1MJ of grid power to travel the 15km. So if cars are only 10% efficient like you say, it makes electric cars only 26%. not the 80% you claim.
              That is why you have no credibility.

            • Griff

               /  May 6, 2018

              Official figures not your guess.
              EPA Leaf 112 mpg e
              https://www.fueleconomy.gov/feg/noframes/38428.shtml
              EPA corolla automatic 31mpg
              https://www.fueleconomy.gov/feg/bymodel/2018_Toyota_Corolla.shtml

              The miles per gallon gasoline equivalent is based on the energy content of gasoline. The energy obtainable from burning one US gallon of gasoline is 115,000 BTU, 33.70 kWh, or 121.3 MJ.

              3.78541 L to US gallon.

              You are also using energy at the fuel tank and ignoring the energy used to get from the barrel of oil at the NZ border to petrol in your cars tank .
              Estimates put the energy used for refining at about 1.5kw / liter of petrol plus add energy used to get fuel to your tank.

            • chrism56

               /  May 6, 2018

              No Griff you are changing the goalposts when proven wrong. And you can’t fault my maths. The EPA figures are realistic driving. That was the basis behind VW fiddling the chips to pick when it was in EPA type mode.
              If you want to claim moving petrol from the border to the car, for which you have no data, you also need to have all the grid losses from the generator to the household wiring

            • Griff

               /  May 6, 2018

              hand waving
              I did not change the goal posts mate .
              ‘The original argument was over your idea that we need to replace all the energy in fossil fuel. You quoted the PJ In oil coal and gas as the energy we needed to replace.

              I said we only need to replace a fraction of that as the energy in fossil fuels is not directly comparable to the energy from renewable electricity generation.

              Most of our fossil fuel use is for transportation.
              We can now agree.
              An electric car uses around 1/3 the energy of a petrol one using official EPA figures.
              Without going into loses from refining and the need to physically freight fuel or grid and energy conversion loses .

              Therefore we need about 1/3 the energy to make up for the loss of oil in transport .

              The same happens in electricity generation.
              A Pj of oil, gas or coal used at a power station is not the same as a Pj of energy from renewable energy entering the grid.

              We do not need to replace all the energy in fossil fuel with the same amount of renewable electrical energy as you first claimed.

              How much will it cost ?
              Less than what not shifting away from oil will cost according to reputable sources .

              Can we do it with out damaging to our economy?
              The cost is declining and the technology is expanding as more effort to m limit climate change is spent around the world.
              I think over the next decade or two we could get close to carbon neutral here in NZ at a net zero cost to our economy.
              As long as we ignore Luddites.

            • David

               /  May 6, 2018

              “I think over the next decade or two we could get close to carbon neutral here in NZ at a net zero cost to our economy.”

              That is impossible without renewable infrastructure and equipment being an order of magnitude or more cheaper than the alternatives.

              If that was the case climate change is simply not a problem in any significant way. All those people working on it can safely be fired.

            • chrism56

               /  May 6, 2018

              So Griff you are conceding you are wrong “1/3 the energy of a petrol one” is pretty close to my calculated anecdote of 2.6 times – a lot closer than your 8 to one advantage.
              And you still are wrong, as well as misquoting me. Petrol is less than half the liquid fuel used. What about all the diesel for which there is no substitute? And what is the cost of the transformation – real numbers, not your wishy washy statement?

              It isn’t being a Luddite. It is just being able to know the science and do the maths. That is the real world stuff – why I’m still working and you are an embittered pensioner. People like you are the magical dreamers, though the coarser NZ term is more appropriate.

            • Griff

               /  May 6, 2018

              ROFLMAO

              On off binary if it can not be done today it can be never be done

              Diesel is a fossil fuel.
              It can and will be replaced with electric power.
              https://www.daimler.com/innovation/case/electric/efuso-2.html
              https://www.trucks.com/2017/09/25/navistar-electric-truck-coming-north-america/

              I have pointed out many times that the cost of renewable energy is almost as cheap as the cheapest fossil fuel alternatives already and still falling.


              The nz carbon price is rising and will continue to rise into the future.
              https://www.commtrade.co.nz/
              Soon gas will be uneconomic and more will be spent on building the alternatives already planed and consented.
              http://www.windenergy.org.nz/consented-wind-farms

              NZ has hydro storage we dont have the same issues with intermittency as most the world .
              Your claim the other day we use coal for off peak was idiotic so I did not even reply. the renkien units are held in reserve just in case we have a dry spell .More wind energy the less they are needed.

              As I have said multiple times.
              The cost of a transition to carbon neutral is cheaper than the impact of climate change if we do not . I linked to one study saying so today there are many many more.
              I can guess why you dont engage with this statement .
              Right wing and in denial …….

              Now give us another good big handwave about how you know every thing and them experts dont know nothing ……..

            • David

               /  May 6, 2018

              “I have pointed out many times that the cost of renewable energy is almost as cheap as the cheapest fossil fuel alternatives already and still falling.”

              So you agree we are on the A1T track and climate change isn’t much of a problem at all then?

            • chrism56

               /  May 6, 2018

              Griff when will you stop being a elderly teenager with your acronyms and learn how to spell (The Parsons units are Rankines, after the cycle)?

            • chrism56

               /  May 6, 2018

              This article, at least as far down as the nukes, is as good as any describing plant operation
              https://en.wikipedia.org/wiki/Load_following_power_plant
              It approximately matches the NZE designations that are still used.

  3. David

     /  May 6, 2018

    “In 2009, US President Al Gore told a green energy conference he regretted his support for the US ethanol industry because of its role in driving up the price of corn, and therefore food.”

    Curious, given there were plenty of voices point out to him exactly what would happen at the time. It’s a very simple calculation to see what the impact might be.

  4. Zedd

     /  May 6, 2018

    Unfortunately.. the addiction to Fossil fuels (old habits) die hard, but there are also ruthless folks who are still probably, fighting to stop other options getting into the market.. regardless of all recent rhetoric about ‘we need to move away from this dirty polluting industry’.

    “Hemp for Victory”.. & biofuels too 🙂 😀

    • Alan Wilkinson

       /  May 6, 2018

      Rubbish. Markets welcome better products at better prices. Where are they?

      • Zedd

         /  May 6, 2018

        dont talk nonsense Alan.. price gauging & fixing, rules the fossil fuel industry & donations to politicians adds to the mix too

        • Alan Wilkinson

           /  May 6, 2018

          You are talking nonsense. Market sellers always have the option to raise prices hoping for more profit or reduce them hoping for more sales. That dynamic is continuously in play. Citing an example of the former and claiming it shows the market not working is simple ignorance or deliberate misinformation. Which is yours?

          • Gezza

             /  May 6, 2018

            When the market only has a couple of players they can raise the price as high as they like to maximise their profit & returns to rapacious executives and shareholders & minimise their so-called competitiveness.

            • Alan Wilkinson

               /  May 6, 2018

              Depends on the barriers to entry. And the fuel market has more than two players.

            • Gezza

               /  May 6, 2018

              TL;DR

            • David

               /  May 6, 2018

              “Gull does not have operations, and Walker doubted Gull would expand to increase competition in those areas.”

              That’s telling you the margins are not big enough to operate.

            • Alan Wilkinson

               /  May 6, 2018

              Minority opinion. If you want to reduce prices, make it easy to build and run a petrol station. We have a huge bureaucracy and Govt dedicated to doing the opposite. Put blame where it belongs.

            • Gezza

               /  May 6, 2018

              Oh. Ok. I didn’t read it. More of an ideas man these days. I get other people to do the actual working stuff out. So thanks for that. 👍🏼

            • Blazer

               /  May 6, 2018

              Z owns Z and Caltex =over 50% mkt share.Caltex and BP are involved with AA smart card.Other players are Mobil and minions Gull,Waitomo and Gas.

            • David

               /  May 6, 2018

              “If you want to reduce prices, make it easy to build and run a petrol station. ”

              Isn’t everyone buying electric cars…..

            • Alan Wilkinson

               /  May 6, 2018

              Shhh. You’ll set Griff off again here.

  5. Kitty Catkin

     /  May 6, 2018

    When I look around at the number of cars on the road, I do wonder if electric ones will ever replace them. Making them illegal would be a disaster. Where will they go to die ? Imagine the landfill…