Primus Green Energy Primes Its Pumps to Make High Octane Bio-Gasoline
Weaning the country off its addiction to petroleum is a lofty dream many renewable fuel companies undertake. Last Friday, the folks at Hillsborough, NJ-based Primus Green Energy revealed their plans to ease our reliance on traditional gasoline, as it opened the doors to its demo plant. The eleven-year-old company developed technology that coverts biomass, such as specially prepared wood waste pellets, and natural gas into high octane gasoline and jet fuel.
Primus’ technology converts material such as wood waste and miscanthus grasses and turns it into a mixture that can be used in unmodified, standard engines. The biomaterial is superheated and gasified to unlock its hydrogen and carbon monoxide, mixed with natural gas, scrubbed of impurities, and then processed into liquid fuel. The company says its bio-gasoline does not suffer some of the constraints of corn-based ethanol, which can require more land to grow crops for fuel compared with miscanthus grasses.
Primus says its technology can produce 93-octane gasoline and can also be used to create specialty chemicals such as toluene and xylene. The company raised $12 million in March from its backer, IC Green Energy, which has so far put a total of $40 million into Primus. IC Green Energy is a unit of Israel Corp., one of the largest holding companies in that country.
Robert Johnsen, CEO of Primus, says the company expects to complete the demonstration plant in Hillsborough by the fourth quarter of this year, and plans to start construction in 2013 on a commercial plant, which will cost at least $150 million. Johnsen believes he can commercialize Primus’ fuel at prices competitive with petroleum—$65 per barrel for its bio-gasoline versus $83 per barrel of crude oil.
Johnsen sees the airline industry as a source of potential partners who may want lower cost sources of fuel for jets. He says his company has also shown its technology to at least one American automaker, which tested Primus’s gasoline for compatibility with its engines.
In spite of enthusiasm for the technology, Johnsen says raising funds for commercialization may require some creativity on his part. “There was a window in which bio-fuel companies over the past two years were able to go public even without having a commercial scale plant,” he says. “That window is closed.”
Johnsen, who joined Primus in March, worked for such investment banks as Dain Rauscher Wessels early in his career, and he says he is tapping that Wall Street experience to get Primus the backing it needs. That may include contracts with the bio-gasoline’s end-users such as airlines. “They get the benefit of a much cheaper fuel source with a more stable price point than what they have currently,” Johnsen says. Prior to joining Primus Green Energy, he served as CEO of ethanol technology companies Mascoma in Lebanon, New Hampshire and Cambridge-based Verenium Biofuels, which sold its cellulosic ethanol business to BP Biofuels North America.
Last Friday, during Primus’ tour of its demonstration plant in Hillsborough, Johnsen took a test drive in a car that ran on his company’s gasoline. Yom-Tov Samia, president of Israel’s IC Green Energy, said during the presentation his firm plans to participate in future funding for Primus but he wants to see more U.S. private and government sector partners step up to back the company first. “We’ve been the only investor in [Primus] for the past five years,” Samia said. “We applied for some [U.S.] government support but so far we’ve gotten zero.” In spite of this cold shoulder treatment from federal authorities, Samia said Primus’s technology could play a role in reducing the United States’ reliance on oil from complicated overseas regions. “Energy independence is one of the legs of national security,” he said.
Building commercial plants is only part of Johnsen’s plans for growing Primus Green Energy. Other business opportunities, he says, include fitting its technology into smaller plants about the size of a shipping container. These modular plants could be located near natural gas sources that are not possible for pipelines to reach or at military facilities at the end of supply lines. For now, getting the commercial plant built is Johnsen’s biggest priority. “The strategy is to build a couple of plants, have robust R&D, and then consider those alternatives once we’re in control of our destiny,” he says.
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