Kior Presents Nothing New

UPDATE   after the close of the market today KIOR updated on fuel production at their site in Columbus Miss.

http://finance.yahoo.com/news/kior-provides-operational-columbus-facility-200500166.html

In July and August they shipped almost 100,000 gallons of fuel (99,175 gallons).  Through the end of August they have shipped 199,071 gallons.  They have produced 357,532 gallons through August 31, 2013.  This means as of August 31 they had 158,461 gallons in inventory.  Thy may ship 100,000 gallons in September for total shipments of 200,000 gallons for the quarter.

Wow Condi and Vinod must be scrambling to raise money that they will need in 10 days given their cash burn of approximately $10 million a month.  New investors would value the company at about 25 cents on the dollars and the plant in Columbus should be values at $50 million not $200 million as it is on the books.  So the question is how much goodwill will a new investor pay for the hope that the technology can really yield 72 gallons of fuel per bone dry ton of wood when all it has achieved to date is between 15 and 20 gallons per bone dry ton.

This will be exciting to watch.

 

I took a look at the presentation that Kior gave at the Credit Suisse conference a couple of days ago.  Nothing new is in the deck.

http://files.shareholder.com/downloads/ABEA-6B1XEW/2507428405x0x691253/a299709c-8f86-4600-9e2f-e8457c215cfe/KiOR_Company_Overview_September_2013_FINAL.PDF

I do not know what the CFO stated but the stock has remained about where it was on Friday the 13^th before the presentation.  So I have to imagine those present at the presentation were not moved by CFO story.

This presentation was a smokescreen for the real work the CFO and his bosses Condi and Vinod are doing to find funds to keep the company going. 

The one pearl of wisdom I got from the slide deck is that the cost of pine expressed as cost per 5.8 million BTUs is $24 today.  The cost of pine has not risen much since 2000 when the cost was $21 expressed on the same basis.  Tells me owning pine forests is a crappy business and could well be because the pulp and paper industry is in the doldrums. 

The $24 figure works out to be $4.14 per million BTUs.  Natural gas is trading at $3.75 per million BTUs and natural gas is a far better feedstock to make chemicals than wood.  That besides the fact that what Kior is attempting to do is almost impossible has made the stock drop to 10% of its IPO price two years ago.  

News on Fisker the Al Jazeera Gore car company is that the DOE will auction off the debt that Dr. Chu and Mr. Obama supported them with.  The amount we will recover will likely be less than 10 cents on the dollar.  This will allow Fisker to move on so to speak and find a buyer without “government interference”. 

http://online.wsj.com/article/SB10001424127887323981304579081551462409332.html

Looks like the Musketeer at Teslacle is the only success story in the “green” space.  I have to hand it to Elon he went upscale, charged a bunch for his Model S, took as much subsidy from tax payers, and built a quality car that has limited range and really gets 22 MPG.  Meanwhile my 14 year old C 280 is partying like it is 1999. I can say I have a 20^th Century car and I am the Prince of Thermo.  Billy Preston sang "nothing from nothing leaves nothing".  Billy was the Prince of Soul.

China Gives “Green” Light To EVs

Hydrocarbon Processing reported today that China unveiled subsidies for fuel efficient vehicles.  “The program is to “speed development of the new-energy automobile industry, reduce emissions and help control pollution,” the ministry said in a statement published on its website.

http://www.hydrocarbonprocessing.com/Article.aspx?ArticleId=3255917

I think without doubt China will speed the development of the new-energy automobile industry and will produce and possibly export tens of millions of vehicles in the coming years.  But the statement that China will reduce emissions and help control pollution is really questionable.

If China does move to have more pure electric plug in vehicles they are simply shifting the emissions and pollution from the road to their coal fired power plants.  For argument sake let’s assume they produce an electric vehicle with 30 kwh of batteries that has a 100 mile range and has a life of ten years and is capable of travelling approximately 120,000 miles before the batteries are kaput.

To fabricate the batteries require 472 kwh of primary electric energy for each kwh of stored capability.  30 kwh of batteries means 14,160 kwh of primary electricity is needed.  With emissions of 1.9 pound CO2 per kwh at the power generation station 26,904 pounds of CO2 are emitted for the fabrication of the batteries.  Amortizing this over 120,000 miles equals 0.224 pounds CO2 per mile.  If the car needs 0.3 kwh DC per mile, 0.33 kwh AC per mile has to be generated at the power station.  This emits 0.627 pounds CO2 per mile for powering the vehicle.  Adding the 0.224 and 0.627 the car will attain a true emission of 0.851 pounds CO2 per mile.

http://www05.abb.com/global/scot/scot316.nsf/veritydisplay/63246e62080610aec12578640050f217/$file/china.pdf

To extract and transport crude oil, refine the oil to gasoline, transport the gasoline and then combust the gasoline emits 25 pounds of CO2 per gallon of gasoline.  Dividing 0.851 into 25 we have a true MPG of 29.37 for the EV that lasts 10 years for a total distance of 120,000 miles.  29.37 MPG is about 10% less than the average estimated MPG for a 2014 Toyota Corolla.  The Corolla will also not emit as much SOx and NOx, and would not be range limited to 100 miles.

China would best be served by subsidizing Prius type vehicles to improve the fleet efficiency and their idea of transferring emissions and pollution to their power generation stations is simply them following the US and Europe with misguided policy that pretends to address lowering emissions.  In order to really lower emissions the owners of new cars should not drive alone and China should mandate that cars have at least three occupants or else they cannot be on the road.  You will see lots of casual carpooling then in China and a bit of cleaning up of the air.

A Real Green Project Not A Huffman Boondoggle

Last year the Green Machine advised CAP SA of Santiago Chile on their optimal supply chain for electric power.  CAP is the leading Chilean Iron Ore mining house as well as the leading Steel producer in Chile and they need vast amounts of electricity for their operations.

The project ended for the Green Machine in January this year when CAP entered into an electric power purchase agreement with Sun Edison of the USA for the power output from a 100 megawatt PV solar farm that is to be built in the Atacama Desert region of Chile near a town called Copiapo .  The solar incidence is so high in this desert that the yearly output of the solar farm will be 270,000 megawatt hours.  This is 270 million kilowatt hours is enough power to charge the 85 kilowatt hour Tesla Model S from empty to full  over 3 million times a year.  The World Bank will provide some of the funds to this project.

The project will save Chile the equivalent carbon emissions of taking over 30,000 cars off the roads in that country.  The project is the largest PV project ever in Latin America and one of the largest in the world.  The output per unit of PV module is probably the highest on the planet as the Atacama desert is the one place on God’s green earth where there is 500 years of recorded history of no rain ever falling.  Copiapo makes Phoenix Arizona look like a garden spot.

The economics of this solar farm are real and provide meaningful operating cost savings to CAP who otherwise would have had to generate power using diesel power sets as Chile has very limited coal and natural gas resources and has absolutely none of these resources in this northern region of the country.  The project made economic, thermodynamic, and ecologic sense.

I wish that our Congressman (Huffman) and our Assemblyman (Levine) would give me fifteen minutes of their precious time to hear about this project first hand from me and how there are good green projects that do not need to have massive government subsidy to be developed.  Both of these politicians have avoided me for the past 8 months since their swearing in to their respective offices

KIOR Has A Plan

A Press Release came from KIOR today:

“PASADENA, Texas, Sept. 12, 2013 (GLOBE NEWSWIRE) -- KiOR, Inc. (Nasdaq:KIOR) announced today that John Karnes, Chief Financial Officer, will address the 4^th Annual Credit Suisse Small & Mid Cap Conference in New York City. Mr. Karnes is scheduled to present on Tuesday, September 17, 2013, at 11:30 a.m. EDT.”

Credit Suisse is the team that ranked KIOR as the stock with the 225% upside a year ago when it was trading at $9 a share.  Credit Suisse had a target price of $25.  Maybe the CFO will announce that Credit Suisse has bought $100 million of KIOR shares at $25 a share?   You have to remember Credit Suisse invested $30 million in Bloom Energy’s recent round.

http://www.businessinsider.com/credit-suisse-the-top-27-stocks-2012-7?op=1


http://www.benzinga.com/analyst-ratings/analyst-color/11/08/1829713/credit-suisse-initiating-coverage-on-kior-kior-outperfor


 

Next Tuesday will be a very interesting day and the CFO will have to give an update on the quantity of alchemic diesel and gasoline produced from the yellow pine trees they so happily felled in old Miss.  I am no expert in this but I have to question why the CEO is not addressing the “conference” in New York City?  Could it be that Mr. Karnes is being set up as the Susan Rice of KIOR? 

Perhaps KIOR will claim that the reason they could not produce the 8 million gallons of ethanol equivalent in 2013 was that they were watching an amateur produced video of how to solve the Gibbs Free Energy of the reaction of pine to diesel.  Unfortunately the producer of the video had never studied thermodynamics or cinematography so the video that had poor image quality did not help KIOR solve the now famous Chu Chu Sell-U-Lose Dilemma. 

I may have to eat crow if Condi and Vinod manage to get $100 million to keep the company going.  Perhaps I can ask KIOR to roast the crow in the fluidized bed reactor and convert the crow into turkey in a few seconds.

Bio Con

On August 6, 2013 the US EPA released its Final 2013 Renewable Fuel Standard

http://yosemite.epa.gov/opa/admpress.nsf/bd4379a92ceceeac8525735900400c27/02592be566ba346685257bbf005a7db2!OpenDocument

The one number I was particularly intrigued by was the cellulose fuel standard of 6 million gallons of ethanol equivalent.   Greencarcongress analyzed the EPA release and stated the following:

“For the purposes of establishing the standard, EPA projected the bulk of the cellulosic biofuels to come from the KiOR plant in Columbus, Mississippi (5-6 million gallons of renewable gasoline and diesel), with the remainder coming from INEOS Bio’s cellulosic ethanol plant in Florida (0-1 million gallons). “

http://www.greencarcongress.com/2013/08/epa-20130806.html

The August data of 5 to 6 million gallons from the EPA was a massively reduced figure from the 13 million gallons the EPA fibbed would be produced at the beginning of the year.

In June two months before the EPA released their nonsense Bio Con set of lies, I had blogged that KIOR had produced only one truckload of fuel.   In June Ineos had yet to produce and ship a drop of fuel.  On July 31 Ineos claimed they would release their first shipment in August.  August has now come and gone but there is no news release of the actual shipment of any fuel as of yet. 

http://www.ineos.com/en/businesses/INEOS-Bio/News/INEOS-Bio-Produces-Cellulosic-Ethanol/?business=INEOS+Bio

I love the words Bio Con.  The predecessor company to KIOR was a company named Bioecon.  KIOR took the e out of Bioecon and simply became Bio Con. 

http://www.bioecon.com/index.php?option=com_content&task=view&id=241&Itemid=6

The sad truth is that the Kior con could only happen with the help of the con from the EPA and the DOE.  The EPA helped con Kior shareholders who were led to believe in early August that the EPA sill believed Kior would produce between 5 and 6 million gallons of ethanol equivalent alchemic fuel in Columbus Mississippi.   After the Kior debacle, Condi will shorten her name Condoleezza even further.  She will be known as Con from now on.  The image above from Iowa State is pretty cool for the bioeconomy institute.  Iowa State (my school) would never con.

MS Takes Longer To Bake Than BS

Back to talking about Tesla after spending weeks blogging about KIOR and Bloom the gangrene folks who wish they had one tenth the market value of Tesla.  Tesla never hired a former US Secretary of State they simply produced a very expensive electric car and gave us a BS story of the $50,000 model S with a range of 160 miles that could never be built.

A couple of interesting blogs appeared about Tesla this week.  The first from John Petersen on Seeking Alpha who blogged that Tesla could not get their format of lithium ion battery for cheap forever and that eventually Tesla will have to pay full price for their batteries.

http://seekingalpha.com/article/1677452-putting-tesla-motors-gargantuan-battery-supply-problem-into-perspective?source=yahoo

Then a prof at the Stern School of Business at NYU blogged that the value of Tesla’s stock is probably only $67.12 and not $170.

http://blogs.wsj.com/moneybeat/2013/09/06/nyu-prof-responds-to-tesla-bulls/?mod=yahoo_hs

I know Tesla is a great looking car that costs over $100,000 to build and should sell for $130,000.  No $50,000 car with 160 miles of range came from the Musketeer.

To respond to Petersen and the prof from NYU the Musketeer is taking his car on a cross country road trip.  Even though the Model S is a seven seater, I doubt the Musketeer will invite John Broder of the New York Times to join him for the 3,000 mile trip.

I know BS comes from Bulls.  MS must therefore come from Muskoxen.  MS takes longer to become fully baked and Elon is into MS rather than BS.  He is a master of S.  Elon where is the $50,000 model S you promised us that goes 160 miles?  When you show us that car in the tens of thousands as you and Dr. Chu promised I will applaud you.  Right now you sell a very expensive car to the rich with subsidy from the poor and your Model S with 85 kwh of batteries has a real MPG of only 22 not 89. 

I suggest you all read my blog from Friday January 13 2012 on Tesla.  It was pretty pithy.

http://www.greenexplored.com/2012/01/friday-13th.html

Petersen and the prof from NYU got Elon’s goat this week, I have been calling him a MSer for years.