FAQ about FASFormTM and the Novo BioPower Joint Venture

What is the FASFormTM process?

FASFormTM uses a coal conversion process called partial pyrolysis developed in the early to mid-1900s. The pyrolytic process processes biomass, coal, lignite, oil sands and other carbon resources in an oxygen-starved environment to recover volatile liquid hydrocarbons such as LPG, gasoline, jet fuel and diesel precursors and isolate the Sulfur and Mercury in an inert form. Unlike the early technology, the FASFormTM process operates continuously and operates similar to the fractionation process to recover the volatile hydrocarbons from raw crude oil.  The resource is not destroyed as with gasification or liquefaction. The solid residue after removal of the liquid fuels, is a clean, high energy value fuel that can replace raw coal and lignite in existing power plants with emissions compliant to new regulations.

The Chinese scientific community recently published research into coal to fuels pyrolytic process. The theory of coal pyrolsis goes back decades, however, the process of removing contaminates, given the strict newer environmental laws in the US and the European Union, while recovering the fuels, is a relatively recent development. Similar processes are shown below:

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If this pyrolysis process is not new, why is FASFormTM worthy of a patent?

In past efforts to process coal into fuels products, the process was to put the raw coal or other carbon source as a discrete batch into the reactor, remove the volatile hydrocarbons as a synthetic crude oil and limited value solid residue, and repeat the process.     FASFormTM is a continuous process that recovers the liquid fuels as segregated products and the solid residue as a clean combustion fuel.    FASFormTM also recovers treated process water from the raw resource reducing the solid residue’s transport weight, and increasing its efficiency as a generation fuel.    FASFormTM is a moderate temperature and low pressure process so capital and operating costs are much lower than gasification and liquefaction.  The energy intensive batch process on the left compared to FASFormTM on the right is shown below:

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Can you remove pollutants such as Sulfur and Mercury from the carbon fuel process?

Frontier Applied ScienceYes, the science community has confirmed this process with a body  of knowledge in the Argonne National Labs research library. In addition, the Japanese have constructed several pilot plants and tested the process using different types of coal resources, with the objective on complete conversion from solid carbon coal inputs to clean liquid fuel outputs.    In other pilot projects, the process became analogous to liquefaction and completely destroyed the coal eliminating the clean solid fuel production. See Japanese pilot plant in photo.

Are there any negatives to this process?

Only from the perspective that fossil fuels are still being utilized as feed stocks. FAS believes coal and lignite is necessary for the global growth for the foreseeable future. It just needs to be used in an environmentally acceptable way.   The FASFormTM reactor is a closed vessel operating in a reducing atmosphere (no oxygen or combustion).     The process can be designed for zero emissions.    Products are liquid fuels suitable for nominal additional refining to remove Sulfur to produce clean, finished marketable fuels, a clean solid fuel that meets new regulatory requirements for NOx, SOx and Mercury, and treated process water.  Most importantly, though, is that substantial revenue can be generated from the liquid fuels.   FASFormTM is not just an additional environmental cost. This is a sustainable solution to energy generation that will bridge the gap until most energy generated can be from renewable or other cleaner sources like fusion.

Is this just like the coal to liquids processes found in China and elsewhere?

Liquefaction processes are not the same as FASFormTM.   Liquefaction completely destroys the coal and is roughly 5-8 times the capital cost and 3-5 times the delivered energy cost of FASFormTM. However, there are likely situations where liquefaction and gasification are viable options. South Africa’s reliance on liquefaction in the past was driven by energy security.   FASFormTM can be a profitable feed stock pretreatment for full liquefaction or gasification. Research has indicated that pyrolysis of coal prior to gasification can substantially increase the quality of the gas output in a gasification system in a dual fueled system.

Can FASFormTM be used in conversion of pine biomass resources into marketable biofuels?

Frontier Applied ScienceYes, a lot of scientific efforts have gone into the conversion of woody biomass and other lower carbon based waste products into usable fuels. The University of Utah has done extensive research on the biomass conversion process and the methods best suited for energy generation and carbon fuel byproducts. A variety of fuel products can be generated from the FASFormTM prototype near Snow Flake, Arizona.  This system is a compliment to the “Healthy Forest” efforts in Northern Arizona. One of the main challenges with direct biomass to liquid fuel conversion is the low fixed carbon and volatile hydrocarbon content of woody biomass.  Most efforts have been directed at gasification of the biomass and then conversion of the syngas to liquids. This is much more costly than FASFormTM. The optimal economic model is likely co-feed of woody biomass and coal which is our plan at the Snow Flake prototype.    NREL has conducted extensive research into biomass conversion systems because of the political focus on non-coal fuels and renewables.

How will the drop in oil prices affect your market for liquid fuels?

Frontier Applied ScienceTransportation fuels track crude prices so revenues will vary depending on crude oil prices. However, FASFormTM can produce products that convert to marketable liquid fuels for $0.60-0.70/gallon.   It is perhaps even lower if FAS is able to get an environmental premium on its clean, solid fuel.   Crude oil would have to fall below $30.00/barrel (42 gallons) to put pressure on FAS’s financial projections. Crude oil spot prices were $49-52/barrel on February 2, 2015.   Internal rates of return on net income after tax at $40/barrel crude oil are still in the high 20s.

Crude Oil; WTI (NYMEX) Price

Read more: http://www.nasdaq.com/markets/crude-oil.aspx#ixzz3PxUpG7lV

How will the markets and regulators react given the current “war on coal?”

There will always be naysayers when fossil fuels are involved. However, FASFormTM represents a way to make current coal-fired power generation sustainably compliant. Even the liquid fuels produced displace higher polluting sources. The economic implications of immediately shutting down all coal plants or rendering them uneconomic by adding unnecessary emission controls are huge. Jobs will be lost, energy and water costs will skyrocket, and utilities will go out of business. They key is to clean the coal plant up and make money in the process.

Will the Heber plant be compliant from an environmental standpoint?

The plant will be a zero-discharge (no emissions) system. It will be on an existing industrial site using as much of the existing infrastructure as possible, with very little, if no, additional water requirements. Transportation of products will use existing rail and truck infrastructure and will be done in a safe and clean manner.

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