Velocys Share Discussion Threads

[thebigshortfella] 17/10/2017 12:01

gac141 - I hope that you are well. I am sorry to be a pain but I was wondering if I could ask you a favour please?

I would be very grateful if you could please provide in just a few simple points the potential upside (with the caveat of DYOR as always!) from here for VLS. I have read the posts between your good self and Visionon and they are over my head!

It would be extremely useful for me (and I suspect others) to have a distilled version of the forthcoming potential.

Many thanks!!

[gac141] 16/10/2017 10:13

Thank you visionon for this...Very useful and good research- helpful to
all old and new.

Still hoping for very positive news on ENVIA any day.

[visionon] 15/10/2017 14:36

GAC I don't know if you have recently looked at the the Coryton reincarnation, Thames Enterprise Park. To remind you, it is majority owned by Greenergy (Shell an others) who are the UKs biggest fuel distributor and have been investing heavily in the adjacent Oilport.

At the bottom of the page of the link you will see an interesting paragraph. Perhaps the old green sky plant designs are being dusted off. This is where it was originally going to go and whilst it's sat on the back burner due to lack of GOV support progress has been made by TEP with chimney demolition, decontamination and master planning (which takes an age).

Something for you to cogitate on while you wait for VLS news from ENVIA. Maybe the RTFO changes ie gov support will see this BA project reborn with VLS, Norma and Suez. Any useful heat or low carbon electricity generated as a WTL byproduct could also serve the adjoining industrial units or the oil port. And Greenergy will need to be sourcing increasing amounts of RTFO compliant biofuels. Where easier than on their doorstep ?

According to the Thurrock Echo a TEP master plan application ( a general application for the zoning of the whole site plus roads etc) is expected soon. So I would add 2-3yrs for planning and infrastructure. Which could fit with an FID in 2019 for a MSW to fuels plant ie. built by say 2021.

All speculation and musings of course so DYOR !




hxxps://www.thames-enterprise-park-consultation.co.uk/plans

[visionon] 15/10/2017 13:53

hxxps://www.transportenvironment.org/press/countries-reject-plan-aviation-biofuels-targets

Here's an update on the ICAO conference. It should be good news for VLS in theory because nations have rejected indiscriminate biofuel adoption (which would have accelerated deforestation to support palm oil - cheapest path) and insisted the new technologies aimed at more sustainable fuels should be encouraged ie waste derived fuels where indirect land use change is not a detrimental factor.

I can't see the revised declaration yet (so caveat accordingly!) as ICAO haven't published it on their web that I can see. But I would imagine there are some red faces at ICAO. The assumptions underlying their 2050 vision have been questioned and seemingly found wanting.

What would be helpful now is some news from VLS saying that ENVIA is delivering and telling us more about the sustainability credentials of the fuel being produced. Oh and that they are generating some revenue...just a small point !

October is fast disappearing.

[gac141] 13/10/2017 12:43

Been a bit quiet on the trading front this week. I wonder if this will change next week.

[visionon] 12/10/2017 09:54

hxxps://www.transportenvironment.org/newsroom/blog/navigating-our-way-out-biofuels-quagmire

This is a more considered view, see penultimate paragraph. The UK RTFO intends to encourage advanced fuels and reduce crop fuels. Other countries need to follow suit, but the new technologies also need to work. VLS still needs to prove it's technology at commercial scale with gasified waste, albeit the cleaning up of landfill gas and conversion has been an encouraging sign. Worth listening again to the BRR interview that the VLS technical director did a few months back re quality of syngas etc.

Also today the UK Clean Growth Strategy tome appears on the BEIS website. Some refs to the RTFO and lots of emphasis on the need to reduce transport emissions and that those of heavy goods plus airlines will need cleaner fuels. Big fluffy document but the intentions are a positive pull for the likes of VLS, in theory.

EJ your list of polluting vehicles has vanished from my screen...?! have you sold them all overnight ?

Tree Hugger

[visionon] 11/10/2017 19:55

I suggest you read biofuelswatch report (ref 4 in that link), which names VLS and is generally dismissive about VLS, Fulcrum etc. The NGOs reference this report so presumably they embrace it, no ?

I don't call that being supportive. Being supportive would be to be pressing for more support to bring these technologies to the fore so that palm oil is not the default. And to make the effort to highlight ENVIA, for example.

As I said, question marks over VLS and their PR advisors. Let's hope they do a good job if and when ENVIA reaches full capacity and is actually generating concrete revenue as opposed to 'saleable quality goods'. Whenever that might be. A big splash on ENVIA and successful fund raise to back it up would constitute a good correction to that reports rather economical findings.

Good to get confirmation from you re the outstanding need for RINs accreditation. Another example of VLS opaqueness it would seem.

[gac141] 11/10/2017 19:28

The next news will be the milestone on the full capacity on ENVIA and then the process for RIN accreditation on what we are producing.

visionon we have support from the NGO's with what we are doing. Our publicity strategy is something I will want to discuss with VLS as I have some questions. Not sure when that will be tho...

All that said... I am mega excited and burning a hole through my rose tinted spec ;)

[arf dysg] 11/10/2017 11:10

gac141 (722) "Looking forward to seeing key milestones being hit."

I hope that they will not hit, impact upon, collide with or crash into the milestones, but will whizz past them at high speed, continuing their progress.

[visionon] 11/10/2017 07:54

hxxp://www.cidse.org/newsroom/almost-100-organisations-worldwide-condemn-un-aviation-agency-s-biofuel-plans.html

Here you go GAC, this is the info. Perhaps you could pass it to your contacts at VLS as it claims that biofuel from waste is not technically and economically viable at large scale. See ref 4.

I think we know it's not economically viable - that's the whole point of government support ! which NGOs should welcome, no ? PV and wind wasn't viable either, now look at it.

As to it being technically viable - one for the VLS publicity machine (does it exist?) to comment on me thinks.

Do let us know how you get on.

[gac141] 10/10/2017 14:54

I assume I am right on this???

DEFINITION OF NGOs

A non-governmental organization (NGO) is any non-profit, voluntary citizens' group which is organized on a local, national or international level. Task-oriented and driven by people with a common interest, NGOs perform a variety of service and humanitarian functions, bring citizen concerns to Governments, advocate and monitor policies and encourage political particpation through provision of information. Some are organized around specific issues, such as human rights, environment or health. They provide analysis and expertise, serve as early warning mechanisms and help monitor and implement international agreements. Their relationship with offices and agencies of the United Nations system differs depending on their goals, their venue and the mandate of a particular institution

[visionon] 10/10/2017 11:31

This is worth keeping an eye on. NGOS have today written protesting about ICAO ambition for growth in biofuels for aviation. But the protest seems to mainly highlight deforestation issues associated with palm oil, something I also am concerned about. But advanced biofuels from waste residue is another matter. Forest maintenance helps prevent fires and provides feedstock for biofuels. MSW is a growing problem with landfills filling up and new consents being resisted. VLS and partners offer covers both of these areas ie in helping reduce aviation emissions it also tackles other existing environmental issues e.g. waste and forest maintenance (which many authorities have no resources for).

Someone recently posted the ENVIA pathways letter. That indicated 75%+ GHG reductions, which looks very marketable.

One doubt I have is whether Camarco are the right PR agency to be making the most of all this. VLS seem to be calling themselves a renewable fuels company, yet Camarco seems to do a lot with O+G. Does that create a conflict ? Or is it now considered the new O+G ? I don't know the answer as I don't invest in O+G as a rule. But perhaps other posters here with more experience of such things would have a view ?



hxxps://www.icao.int/Meetings/CAAF2/Pages/default.aspx

[gac141] 09/10/2017 18:02

Useful article for those unsure of what Cellulosic fuels are.

The Energy Independence & Security Act of 2007 contained a number of mandates with respect to renewable fuels. One of these mandates called for the production of 16 billion gallons of cellulosic or biomass-based fuel by the year 2022. This simply means producing ethanol from nonstarch sources such as corn stover and cobs, wheat straw, switchgrass, wood, sugarcane bagasse, agricultural residues, municipal solid waste, garden and lawn clippings, and rice hulls. In 2009, a total of 10.75 billion gallons of corn (starch) ethanol were produced from 170 production facilities operating in 21 states. According to EISA, corn-based ethanol is to be capped at 15 billion gallons. In order to produce the additional 16 billion gallons of cellulosic ethanol, new facilities will have to be built that are scaled to produce sufficiently large quantities in order to sustain profitable enterprises. Going hand-in-hand with the production of ethanol will be the need for more flexible-fuel vehicles (FFVs) that can burn ethanol up to a level of 85 percent.

The Energy & Environmental Research Center has worked with all facets of the ethanol industry: from siting corn ethanol plants, to developing new fermentation schemes, to inventing new thermochemical processes that require absolutely no fermentation. So here's an answer to a question we get asked at least weekly-what is the status of this ethanol revolution? Indeed, it will take a revolution.

With respect to FFVs the automakers seem willing to produce more E85 FFVs, but in most states gas stations that carry E85 lag way behind and there is still a severe lack of public acceptance and incentive to get consumers interested in FFVs. Of the 7 million or so E85 vehicles on the road, GM has made half of them and has plans for 50 percent of its production to be FFVs by 2012.

With respect to the fuel production side, the U.S. DOE is trying to stimulate technology development for cellulosic ethanol plants. Within the past two years, DOE has provided awards to 20 organizations working to develop such technologies. Currently, 19 of the original 20 organizations are actively working toward their goals; one organization has dropped out; and three are producing cellulosic ethanol-albeit at small scales. The array of technologies being developed is diverse, in part due to the wide variety of cellulosic biomass feedstocks being utilized.

Most ethanol plants today are located in the Corn Belt of the U.S., but most of the 19 organizations with DOE awards for cellulosic ethanol are developing their technology outside of the Corn Belt. This represents the diversification of feedstocks being developed. States that currently do not possess starch-ethanol production facilities and are hosting a DOE-funded project include Maine, Vermont, Florida, Montana and Louisiana.

The technologies used to convert cellulose to fermentable sugars include biological methods that utilize concentrated acid hydrolysis and enzymatic hydrolysis, coupled with fermentation. Other technologies will utilize thermochemical means such as gasification to convert the biomass to gas and then reform that gas using chemical catalysis or biological fermentation to produce ethanol. When compared head-to-head, these various technologies offer an almost endless combination of possibilities for conversion of cellulose to ethanol.

[gac141] 08/10/2017 14:44

I think Lipski figures out of date but will try and get clarity...although recent conversations in the last year lead me feel positive on my numbers. The % to Velocys is to be established.. but I think Roy's figures may be out of date particularly with changes in the design and interest level. If I can help I will...

[gac141] 08/10/2017 12:39

So based on approximate figures assuming $70 for Biodiesel and RIN's value currently $207.6 and LCFS from California of $30/barrel Less production costs of $140/barrel that gives us a 1400 bpd plant a profit of $85,367,660 for each year...

That is very serious bucks!!!

[dogwalker] 08/10/2017 11:26

'visionon or visionoff' this morning ?!

[visionon] 08/10/2017 09:47

Exiting ? No, I'm not exiting. At least not yet ! ;)

thanks for that. hopefully VLS might explain all this a bit better when they next update. we should be getting these trends from them, don't you think...?!

[gac141] 07/10/2017 18:16

Hi visionon.. this is good news... Just heard back from my friend.

The multiplier is 1.7 - based on the Energy content of the fuel with 1 being considered a gallon of ethanol.

So based on the math.. RIN value/b $207.06

Very exciting agreed????? !!!

[visionon] 07/10/2017 13:33

gac thanks for this. can you remind me what factor is applied to D3 and D7 under current RFS. is it 1.5 or 1.7 ? i.e. 2.9USD x 1.5 x 42 gal = $182/bbl etc. perhaps your contact would confirm as this can be confusing.

[gac141] 07/10/2017 12:32

Hi visionon- Yes I saw the letter but wanted to speak to my US Govt friend first to get her test on this.

She mentioned that the RIN prices had slipped a bit recently but have now started a recovery. Apparently RINs on Cellulosic fuels have regained back up to 2.9 USD per RIN which is much more favourable. My stock maker in the US also says this movement is most likely because 38 Senators from both sides of the house have sucessfully petitioned Pruitt to strongly support all forms of biofuel. It sounds like they are making good headway and the appetite to reduce quotas for all biofuels is waning. This is thanks to up to date information from my two sources. Hence the rise in RIN's again.... The boat is steadied.

I continue to be more than excited by the prospect of Velocys meeting its key milestone and getting the associated RIN accreditation for ENVIA. I think it is very much watch this space..............

[visionon] 06/10/2017 08:08

GAC the article below seems to suggest that there are some headwinds re RFS volumes.

I'll take a look at your numbers. Thank you.

hxxp://www.biofuelsdigest.com/bdigest/2017/10/03/a-blustery-day-in-the-bioeconomys-billion-acre-wood-the-latest-from-epa-poet-fuels-america-calyxt-eligo-bioscience-queensland-gevo-virgin-and-unilever/

[gac141] 05/10/2017 23:04

Visionon… sorry to take a bit of time here.

I do not have the values for these RIN's but have done a load more research today on what Velocys new strategy will produce and why.

Ok… So in the renewable fuels industry there is the new “Big Prize” which is D7 Cellulosic Biofuels.
Cellulosic Bio ethanol is ethanol (ethyl alcohol) produced from cellulose (the stringy fiber of a plant) rather than from the plant's seeds or fruit. It is a biofuel produced from grasses, wood, algae, or other plants.. and in our case Woody Biomass.
The D7 products Velocys make are very robust and the US Gov and congress are driving a path to support this production by us and others.

As previously mentioned in my research note “We have done everything right and I heard from a contact in California Govt that Velocys's name is known in Washington and they are also a member of ABFA and clearly on top” I have had further confirmation today that Cellulosic Fuels are being nurtured by Washington DC and apparently have a fairly hefty lobby presence. D7 is the new kid on the block and D3 less so.And in time D3 Fuels could be reduced in favour of D7 Fuels. Both will still have a presence but in time D7 will take over primary spot. The Renewable Fuels Standard have requested that by 2022 the US will be producing 36 Billion Gallons of renewable clean fuels per year. This market is massive and we only need a very small piece of the action to have a significant business and indeed market capitalisation. I can see clearly now why we have changed the business model.

Again I refer back to my research of August “Value of Bio Diesel $£70/b currently (NYMEX quoted) is I have been told a good approximation for renewable diesel.
US RIN (D7) Federal Credit (under the Renewable Fuel Standard) $200/b currently( Although a bit lower at the moment)
California Low Carbon Fuel Standard (LCFS) state credit $30/b currently
From what I can see the federal and state governments know that they want to incentivize this sector for decades to come and that’s why US laws are currently in place and will continue to be in place underpinning this market to support Velocys and others to get the investment they need to build many plants over a number of years)

For example based on August numbers
So Total revenues in round numbers $300/b offset cost of development and building/manufacturing finished product say $140/b leaves a surplus of say $160/b. Multiply that by a 1400 bpd plant x 365 days = profit per plant per year of $81,760,000- so nearly $82 Million per year!!! for just one plant.
It is interesting that we are seeing an increasing amount of states that will further support LCFS’s originally California but now I believe a further 8 states are supporting the production of the D7 /D3 fuels. I expect the number of states supporting this production to increase with pretty rapid intensity. These financial incentives work completely independently to RIN’s.

RIN values for D3 Fuels have been falling recently due some noises from the Administration but they are just noises -for now. D7 will certainly be the way forward and David Pummell and his team certainly are in tune with the market place.

I think the same may well be said for a number of major producers looking to take the lead on production of D7 Fuels. Maybe we will have more new partners to work with over the next year and into the future.

When you research information to this level, I hope you understand/ forgive, my excitement for Velocys future and indeed for my shareholding.

I look forward with great interest to the coming months…..

[visionon] 05/10/2017 14:50

Taking of RINs do you GAC have any info on what D3 and D7 are worth now. An article said they had fallen and it's not easy finding current data, and I don't wish to rely on old VLS presentations as they have a habit of being overly optimistic!!