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    Taiwan's Feng Chia University has succeeded in boosting the production of hydrogen from biomass to 15 liters per hour, one of the world's highest biohydrogen production rates, a researcher at the university said Friday. The research team managed to produce hydrogen and carbon dioxide (which can be captured and stored) from the fermentation of different strains of anaerobes in a sugar cane-based liquefied mixture. The highest yield was obtained by the Clostridium bacterium. Taiwan News - November 14, 2008.


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Sunday, January 27, 2008

Rentech on track to produce synthetic (bio)fuels this spring


Rentech, Inc. recently announced that its Product Demonstration Unit (“PDU”) at its Rentech Energy Technology Center (“RETC”) in Commerce City, Colorado remains on track for fuel production in spring 2008. Rentech’s PDU is designed to produce synthetic ultra-clean diesel and aviation fuels from natural gas and various coals and types of biomass on a demonstration scale.

The Rentech Fischer-Tropsch (FT) gas-to-liquids (GTL), biomass-to liquids (BTL), and coal-to-liquids (CTL) technology is a three-step process, also known as 'indirect liquefaction', whereby:
  1. Carbon-bearing resources such as natural gas or coal are converted into synthesis gas, a combination of hydrogen and carbon monoxide.
  2. The synthesis gas is then sent through a FT reactor containing a catalyst where it is converted back to an ultra-clean liquid hydrocarbon.
  3. This initial product is upgraded into diesel fuel and jet fuel.
Rentech utilizes a patented and proprietary iron-based catalyst in its Fischer-Tropsch reactors. The Rentech catalyst was chosen to be used over cobalt catalyst for two very specific reasons: (1) The qualities of iron catalyst make it the most flexible catalyst, able to convert synthesis gas made from the widest range of hydrocarbon feedstocks with excellent economic efficiency; (2) specific to CTL, iron catalyst can tolerate low levels of sulfur contamination and ammonia compounds that may get into the synthesis gas and still maintain economic levels of conversion. Cobalt catalysts on the contrary have little or no resistance to poisons that may be contained in the synthesis gas produced from coal and once contaminated must be replaced.

According to Rentech, significant progress has been achieved as the PDU nears completion. All major equipment has now been installed at the site. In addition, over four thousand pounds of the Rentech catalyst have been manufactured, tested and are onsite and ready to be loaded into the reactor immediately prior to start-up of the process. Catalyst has also been loaded into the steam methane reformer, enabling the activation of the equipment and the production of synthesis gas for the process:
:: :: :: :: :: :: :: :: :: :: ::

In addition, successful testing of Rentech’s proprietary wax catalyst separation system has been conducted at RETC.

Over the next few weeks, as more systems are completed and turned over to the operations group, the Company will be completing pressure tests on the piping systems and will continue instrument loop checks. The finalization of the testing will enable Rentech to launch production of ultra-clean synthetic fuels at the PDU this spring.

D. Hunt Ramsbottom, President and CEO of Rentech, said the PDU will provide significant value to the company by enabling it to demonstrate its process and provide ultra-clean synthetic fuels to potential customers, including the Air Force, this year for testing purposes.

As part of a collaboration effort with the Southern Research Institute of Birmingham, Pall Corporation, and Thermochem Recovery International, Rentech was recently selected by the U.S. Department of Energy as one of four biomass-to-liquids projects receiving a combined $7.7 million in research funding (previous post).

Rentech, Inc. aims to transforms under-utilized domestic energy resources into valuable and clean alternative fuels and chemicals. These energy resources include coal, petroleum coke, biomass and municipal solid waste.

References:

Rentech: Rentech’s Product Demonstration Unit Remains on Track for Fuel Production in Spring 2008 - January 17, 2008.

Biopact: US DOE to invest $7.7 million for four biomass-to-liquids projects; more than $1 billion for biofuels this year - December 05, 2007

1 Comments:

Anonymous Anonymous said...

Alternative Green Energy is the Future. Rentech (RTK) Significant Announcement on the Horizon

Company: Rentech

Ticker: RTK

Company Snapshot: Rentech is composed of two business segments each focusing on a major global issue, alternative green energy and fertilizer production. Rentech’s alternative energy segment is one of the world's leading synthetic fuels technology and development companies. Over the last twenty-five years, Rentech has developed and patented the Rentech Process, an advanced version of the well-established Fischer-Tropsch process. The Rentech Process can convert a wide array of carbon-bearing materials, including green resources such as biomass and municipal solid waste, into ultra clean fuels and chemicals ranging from jet fuel to diesel gasoline. Rentech’s objective is to help the world reduce its dependency on oil and lower emissions, including greenhouse gases. Rentech’s second business segment is their fertilizer plant Rentech Energy Midwest Corp. -REMC-, located in East Dubuque, IL. REMC is one of the country’s largest nitrogen manufacturers producing nitrogen-based fertilizer products and industrial nitrogen products.

Recommendation: Buy

Recommendation Date: Friday, November 21, 2008 at .50 cents per share

Recommendation Results:
** 11/21/2008: UP 8.00%
** 11/24/2008: UP 12.96%
** 11/25/2008: DOWN -1.72%
** 11/26/2008: UP 3.42%
*** Since Date of Recommendation: UP 24.00%

________________________________________________________________________________
On Friday, November 21, 2008 we recommended Rentech (Ticker: RTK) with a buy rating at .50 cents a shares. Since then a few positive and significant developments have taken place.

* November 22, 2008 Indiana and Illinois announce they are pursuing major clean coal power projects. Illinois Attorney General Lisa Madigan has announced a measure that will create 2 clean coal projects including a $2.5-billion plant near Taylorville, Illinois. That plant comes in the wake of another $2 billion coal gasification project in southern Indiana.
http://www.wthitv.com/dpp/news/news_wthi_Indiana_and_Illinois_Clean_Coal_200811212155

* November 22, 2008 Baard Energy has received its final air permits from the Ohio EPA which in turn allows them to build a coal to liquid plant in Wellsville along the Ohio River. One of the first of its kind. The permit is the third and final state environmental permit necessary for Baard Energy to proceed into final design and construction of the 53,000 barrel-per-day coal/biomass to liquids plant at the Columbiana County Port Authority site in Wellsville. Baard has yet to release who will supply their Fischer-Tropsch technology.
http://www.reviewonline.com/page/content.detail/id/507886.html?nav=5008

* November 22, 2008 President-elect Barack Obama reaffirmed his support for alternative energy. This includes Rentech’s Fischer-Tropsch technology that converts biomass, natural gas, and coal into liquid fuels ranging from jet fuel to diesel gasoline.
http://news.yahoo.com/s/ap/20081122/ap_on_bi_ge/obama_economy_12;_ylt=Anucx2RdHWzyzTRuGeA1tl0Gw_IE

* November 24, 2008 The US Air Force concluded analysis of the effects of using a natural gas-based synthetic fuel with its Lockheed Martin F-22, as work to trial the technology accelerates through its trainer, transport and fighter fleets. The office of the assistant secretary of the air force for installations, environment and logistics is expected to select a private partner during December to develop a Fischer-Tropsch production facility at Malmstrom AFB, Montana.
http://www.flightglobal.com/articles/2008/11/24/319113/us-air-force-completes-f-22-synthetic-fuel-trials.html

________________________________________________________________________________
As of Friday, November 21, 2008 for an Aggressive short-term trade we like Rentech at these current levels. Rentech will release fiscal year 2008 financial statements December 16, 2008. Rumor has it these numbers will be very positive.

Rentech’s stock price has been down significantly along with everyone else:
15 days down –43%
45 days down –62%
65 days down –79%

The last time Rentech hit .46 cents a share was October 27, 2008 and the stock proceeded to rally .43 cents to .87 cents a share. An 89 percent increase in 7 days. Since March of this year a 40 to 80 percent fluctuation in price has been common and we look for this level of volatility to continue. Rentech could easily exceed a $1.20 per share before year-end based on a number of reasons.

Rentech’s management is currently in a pickle. The stock has dropped significantly and the officers of the company need results ASAP if they want to be able to justify their year-end bonuses. In addition, all stock options are underwater including those belonging to the board of directors. As we have seen in the past, Rentech actively manages their stock price by issuing press reports before releasing their latest financial numbers. Only to be followed with additional press releases over the coming weeks in an attempt to influence the stock price. One news release could easily move Rentech’s stock price .50 to .60 cents like it has done so many times in the past. Two or more press releases could be very significant.

Press releases for Rentech's alternative energy segment could focus on:
* Technology licensing partnerships = Revenue increase
* Revenue and cost sharing relationships = Revenue increase and cost decrease
* New business strategies and directions = Shareholder assurance
* New product sales revenue generated by their Product Demonstration Unit -PDU- leading the way to future business opportunities as companies discover value in Rentech’s numerous gas to liquid products = Revenue increase and shareholder assurance
* Continued process improvements at their Product Demonstration Unit -PDU- facility in Commerce City, CO = Shareholder assurance

Rentech’s fertilizer plant, Rentech Energy Midwest Corporation -REMC- located in Dubuque IL, is an extremely valuable asset that generates a tremendous amount of cash. The value of this plant alone creates a support at current levels helping to reduce downside risk. Rentech currently has 166 million shares outstanding and their fertilizer plant alone is valued between 120-210 million. A quick back of the envelope calculation, 122/166 and 210/166, suggests a stock price between .73 to $1.27.

Rentech recently reaffirmed EBITDA guidance for their fertilizer plant and there’s a good chance Rentech will post a net income, something they haven’t done in years. Moving from a net loss to a net income would be a significant event and I think the street HAS NOT priced this into the stock. Last quarter Rentech successfully completed their Product Demonstration Unit -PDU- that converts natural gas into various petroleum based products like jet fuel and diesel gasoline. The completion of the PDU means a reduction in expenses. Combine reduced expenses with record fertilizer sales revenue, coming from greater demand for corn that is used in the production of ethanol based fuels, could translate to a positive earnings per share. Management needs a homerun if they want to justify year-end bonuses; there’s an incentive for them to be aggressive. Shareholders are less likely to be pissed off when they hear about seven figure total compensation packages when the stock is trading at $3.15 versus .50 cents a share. Again, management has a strong incentive to move this stock and all stock options are currently underwater.

Press releases for Rentech's fertilizer segment could focus on:
* Record fertilizer sales revenue growth for fiscal year 2008
* Very favorable EBITDA guidance for 2009
* Favorable asset valuation discussion of their fertilizer plant

As reported at Mutual Fund Facts About Individual Stocks -MFFAIS- the overall number of institutional owners has recently increased 20 percent from 81 to its current level of 97. This is very positive.
Institutions adding to an already existing position include:
Goldman Sachs added 825,221 shares
Vanguard Group added 5,662,885 shares
Barclays Global Investors added 1,918,971 shares
Credit Suisse added shares
Putnam added shares
Oppenheimer added shares
Northern Trust added shares
Bank of New York Mellon added shares
Bank of America added shares
Wells Fargo added shares

There’s a large short position, I believe 8-9 million shares and it’s probably a safe assumption that these sellers are in the money since Rentech is currently near 52-week lows. If Rentech’s stock price does move quickly, press releases and an overall market rally, we could see short sellers add to the buying as they lock in profits. This 1-2 combo could move Rentech’s stock price in excess of .40 cents a share.

Because of a crisis in confidence the major indices, DJIA and S&P 500, have seen a record setting retreat in the last 30 days, especially in the last 7, and the market is due for a 1,200-point rally. This alone could move Rentech’s stock price .30 cents a share.

8:31 AM  

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