Friday, November 8, 2013

Kior Eats Catalyst



Kior announced their quarterly results.   They had bigger losses and lower revenues than expected.   The stock analysts asked their questions during the earnings call.  Then they found “green” linings in the BS that was spoken.


I simply picked up that Kior is still struggling to keep the plant running and has not done any run at full throughput of the pine chips.   They operated for 41% of the available time in the quarter and at 50% to 60% of capacity.   This is a little less uptime than last quarter that was 43%.  The 55% capacity is above the 40% of the previous quarter.

At 100% capacity Kior will feed 500 tons a day of wood chips.   In the quarter they fed 10,373 tons of wood chips.   In the previous quarter they fed 7,826 tons of wood chips using the above capacity and uptime figures.   Therefore they fed an extra 2,547 tons of pine chips quarter to quarter.    Pine chips cost about $73 a ton so the added feedstock cost was approximately $185,000.  

The CFO stated the following in the earnings call:

“While baseline fixed cost at Columbus remained relatively constant for Q3, with the increase of production in Q3, we saw a $2.3 million net increase in cost of goods sold relating primarily to feedstock and catalyst costs, along, to a lesser extent, with utilities, maintenance and other costs related to the ramp-up.”

We know the added feedstock  was only $185,000 and the utilities, maintenance and other costs were a lesser extent in the added $2.3 million.   Therefore the big added cost is catalysts.   Based on the above the added catalyst cost probably $1.5 to $2.0 million.

This is very disheartening as catalysts should be able to reused over and over but it looks like Kior goes through catalysts in a rapid fashion.   The definition of a catalyst is that it is an ingredient that is not consumed in a reaction.


 Kior did not provide the data on the actual increase in raw bio-oil out of their FCC unit but this probably was in the range of 75,000 additional gallons quarter on quarter (30 gallons per ton times 2,500 tons).   This implies that catalyst costs alone are $20 to $25 per gallon of raw bio-oil.   This is a fundamental question the analysts should ask.   If the process after a year of lining out still needs $20 to $25 per gallon of catalysts to produce a gallon of bio-oil, then the process itself is flawed.

4 comments:

  1. Green Explored was never even a bit friendly or enthousiastic about Kior ?
    I wonder with only critisisme all the time your titel "Green ......." If this is justified ?
    You schould encorage people that are trying to find a way to make the world a bit Greener ........ not always breaking them. I sometimes wonder who are your sponsors ?

    ReplyDelete
  2. Hi Paul No sponsors As You can see the site has never taken one ad from any company or institution. Exploring is about finding the truth. The truth is some are green and most are gangrene. I was involved in a large PV project (100 megawatts) in the Atacama Desert of Chile. That was green and replaced diesel for electric power generation. I have worked on advanced yet very simple bio fuels that hold some promise for small villages. But when an former Secretary of State (Ms. Condi Rice) is on the board of directors of Kior and they talk utter nonsense about making 92 gallons of diesel from a bone dry ton of pine, I have to explore this and see if it is going to be the next case of missing weapons of mass combustion. Paul if you live in Belgium eat some good chocolate

    ReplyDelete
  3. You are scary Lindsay. I wouldn't like to be your adversary. Your ability to crystallise problems in complex systems in a way that allows us mere mortals to grasp the salient issues is more than impressive. My biggest concern for our planet is that you are not in a position to influence the big decision makers as to their appropriate interventions in fancy, allegedly green energy technology, most of which you have exposed as bogus. As a matter of great concern is the fact that that I cannot recall your endorsement of any such technology. My impression of your philosophy is that this fragile rock of ours needs nothing more than simple measures like exchanging our Hummers for 1500cc Fords (et al) but you know as well as I do, that is not likely to happen, particularly in the energy guzzling countries like mine and yours. What about a blog looking at some other viable options and I sincerely hope it ain't going to be a one-liner.
    Well done and keep it rolling.

    ReplyDelete
  4. Max Thanks for the kinds words. There are several green that make sense. Replacing light bulbs with LED lights makes absolute sense. Traffic lights were replaced with LEDs about ten years ago and in the next two decades LEDs will become 99% of lighting. The Prius type hybrid is a great green technology. Not plug in but simple hybrid is the best. Electric bikes are a great idea. I know you like to pedal but many are simply too lazy to pedal. Using natural gas instead of coal in electric power generation and using PV where it is extremely sunny like the Atacama Desert of Chile is real good idea. Placing PV cells in Northern Germany or Delaware is dumb as the yearly output will only be 40% of Atacama for the same PV module. Using home water heaters (geysers) to store heat from intermittent wind energy is a good idea if the homes do not have natural gas. Solar hot water heaters in sunny areas like Australia makes some good sense. But the thing that makes the most sense is to tell people there are too many people and cars on the planet and we should not let the population of cars and people grow like crazy. A car that uses 8 liters of gasoline a day is like 35 extra mouths to feed on the planet. With 1 billion vehicles it is like we added 35 billion more people to the planet. Our problem is mainly sociological and lifestyle not the fuel.

    ReplyDelete