Louisiana attracts second net-zero renewable fuels, CCS complex
Industry’s increased efforts to meet rising demand for low-carbon transportation fuels in a manner aligning with long-range targets to achieve net-zero greenhouse gas (GHG) emissions by 2050 is continuing to spur investment by US operators in grassroots projects involving both renewable fuels production and carbon capture and sequestration (CCS).
While singular projects recently have been announced for Oklahoma, South Dakota, and North Dakota, Louisiana—the only US Gulf Coast state with a climate action plan to reduce GHG emissions across the entire state economy—has attracted two major combined renewable fuels production-CCS projects currently under development.
Alongside Grön Fuels LLC’s proposed $9.2-billion carbon negative renewable fuel complex to be built at the Port of Greater Baton Rouge, near Port Allen, La., Louisiana is supporting ongoing development of Strategic Biofuels LLC subsidiary Louisiana Green Fuels LLC’s (LGF) biorefinery and adjacent bioenergy with CCS (BECCS) power plant now under way in northeast Louisiana (OGJ, Feb. 6, 2023, p. 34; OGJ Online, Jan. 20, 2022).
Designed to convert renewable feedstock from the agroforestry sector into renewable fuels, LGF’s proposed complex will be powered by onsite-generated renewable energy and use CCS technology to capture and sequester carbon dioxide (CO2) from both the biorefinery and the onsite power plant for carbon-negative production of liquid renewable fuels.
In addition to presenting an overview of Strategic Biofuels’ LGF project, this article discusses the latest contract awards for the complex, as well as outlines current technologies selected for the site.
Project details
First announced for development in early 2021, LGF’s proposed complex is scheduled for construction across a 171-acre tract of land on a roughly 327-acre site at the Port of Columbia, in Caldwell Parish, La., about 25 miles south of Monroe (Fig. 1).
Selected for its location to ensure long-term, cost-friendly feedstock supplies, the complex would use established refinery processes to produce up to 32 million gal/year (about 2,300 b/sd) combined of renewable fuels—including renewable diesel and renewable naphtha—from a feedstock of timber byproducts in the form of wood chips supplied by privately owned and sustainably managed plantation forests located within a 75-mile radius of the project site, according to Strategic Biofuels and LGF’s June 2022 minor-source air permit application to the Louisiana Department of Environmental Quality (LDEQ).
To supply green, renewable electricity for operation of the biorefinery, the complex will use an onsite 85.5-Mw power plant consisting of a biomass-fired boiler fueled by forest-derived biomass such as slash—including thinnings, along with branches, pine needles, and treetops—and sawmill materials otherwise considered to have little economic value.
The essential feature driving the complex’s overall carbon negativity will be its onsite CCS system, which will capture more than 90% combined of CO2 from the biorefinery and electric power plant. Captured CO2 will be compressed into a supercritical, or near-liquid state, and via several onsite US Environmental Protection Agency Class VI-permitted wells, injected and stored permanently underground in a mile-deep CO2 sequestration reservoir.
Biorefinery technology, process
In early 2023, Strategic Biofuels let a contract to Johnson Matthey (JM) and bp PLC to license their jointly developed Fischer Tropsch (FT) CANS technology for LGF’s biorefinery, which will use the technology to convert synthesis gas (syngas) generated from its 1 million tonnes/year (tpy) of biomass feedstock into an initial 31.8 million gal/year of biofuels at rates of about 87% renewable diesel and 13% renewable naphtha.
LGF will also be able to use the FT CANS process to increase its proposed future production to more than 165 million gal/year of renewable diesel and sustainable aviation fuels (SAF) during the next 10-12 years, JM said.
Based on its current design, LGF’s biorefinery will process cellulosic biomass with a combined hydrogen and carbon content of 57% (on a dry basis), gasified to produce a raw syngas and ash. The syngas will be cooled and cleaned of particulates within the primary gas clean-up process, after which it will be compressed and sent to the secondary syngas clean-up process for trace contaminant treatment.
While the site will include an associated water gas shift (WGS) unit to adjust the hydrogen-to-carbon monoxide (H2:CO) ratio of the syngas, downstream of the WGS unit, acid gas species will need to be removed to reduce CO2 buildup and sulfur to meet optimum composition before routing to the FT CANS synthesis unit.
To accomplish CO2 and hydrogen sulfide (H2S) removal, the plant will include a Rectisol unit that will remove more than 99% of the CO2 within the process stream and reduce H2S levels. The purified syngas, with an optimized H2:CO ratio, will then be routed to the FT CANS synthesis unit, where wax and light hydrocarbons are produced. These wax and light hydrocarbon products from the FT synthesis loop will be directed to the upgrading unit, in which the raw synthetic hydrocarbon products are hydrocracked and fractionated into saleable renewable diesel and renewable naphtha, according to project documents.
In its LDEQ permit application, LGF said prefeasibility design of the project concluded that the biorefinery will be bound by the delivery of 3,000 US short tons/day of woody biomass feedstock, resulting in a nominal combined renewable diesel-naphtha production rate of 2,354 b/sd.
With the use of the FT CANS technology, LGF’s overall project will feature a carbon intensity score of -294 g CO2e/MJ to become one of the most deeply carbon-negative liquid renewable fuels production sites globally.
Additional project partners
In late June 2023, Strategic Biofuels revealed SLB will provide site derisking and front-end engineering and design (FEED) services for LGF’s CCS complex, to be built on and around the biofuel refinery and adjacent BECCS power plant. SLB’s scope of work also covers provisions for future services, including injection operations and long-term CO2 monitoring.
The mid-2023 contract follows LGF’s April 2022 agreement with Koch Engineered Solutions subsidiary Koch Project Solutions for construction of the renewable fuels plant on a lump-sum turnkey basis with parent-company backed guarantees, including liquidated damages for any performance and schedule delays. As part of the contract, KPS will deliver engineering, procurement, construction, commissioning, and startup services for the biorefinery.
Strategic Biofuels previously selected Hatch Ltd. to deliver engineering for the LGF project.
Funding, status
Strategic Biofuels, which initially received a $200-million tax-free bond allocation from the state of Louisiana to help advance the estimated $700-million development, has received ongoing financial and legislative support from the state to advance it as part of Louisiana’s broader commitment to reach state-wide net-zero emissions by 2050.
In February 2022, Louisiana Governor John Bel Edwards awarded the LGF project a $250-million bond allocation designed to form an integral part of debt financing for construction costs. For the 2021 private-activity bond allocation year, LGF received $250 million of the $393 million that was available from the state. The allocation provided the right to issue tax-free bonds to finance the project, which is qualified to receive them because it is a waste-to-fuels project.
As a result of positive financial impacts stemming from the US Inflation Reduction Act with respect to tax credits for sequestration projects, the Louisiana Community Development Authority’s (LCDA) executive committee in September 2022 voted unanimously to adopt a resolution granting final approval for up to $1.1 billion of tax-exempt revenue bonds to finance a portion of the LGF project.
A statewide conduit issuer of revenue bonds, the LCDA is authorized to issue bonds to finance economic development, industrial, and manufacturing projects on behalf of local governmental entities throughout Louisiana. In addition to bond allocations to date, Strategic Biofuels said it expects to receive substantial additional allocations during the next 2 years.
Louisiana also enacted Caldwell Parish-specific legislation on Aug. 1, 2022, that extended the eminent domain acquisition of pore rights for underground CO2 storage, prohibiting third-party drilling through Strategic Biofuels’ storage reservoir. The drilling ban in the law aligns the LGF project with the carbon sequestration requirements of the California Air Resources Board’s Low Carbon Fuel Standard (LCFS) and enables qualification for credits for fuel delivered to that state. These credits, together with the credits under the federal Renewable Fuel Standard and federal sequestration tax credits, aim to further contribute to the project’s future revenues.
Strategic Biofuels—which has already completed drilling and testing of LGF’s stratigraphic test well—also confirmed it has made an application to the US Environmental Protection Agency for a Class VI permit for CCS and has been notified by the agency that the application is administratively complete, with a technical review now under way.
Near to reaching final investment decision, Strategic Biofuels said in July 2023 that it expects to reach mechanical completion of LGF’s biorefinery and BECCS plant—for which several infrastructure improvement projects at the Port of Columbia began in December 2022—in 2027.
The overall LGF project will have capacity to offset up to 1.36 million tpy of CO2 emissions.
Robert Brelsford | Downstream Editor
Robert Brelsford joined Oil & Gas Journal in October 2013 as downstream technology editor after 8 years as a crude oil price and news reporter on spot crude transactions at the US Gulf Coast, West Coast, Canadian, and Latin American markets. He holds a BA (2000) in English from Rice University and an MS (2003) in education and social policy from Northwestern University.
