Strategic Biofuels

Strategic Biofuels has a stratigraphic test well in Columbia, Louisiana. The test well is being used to demonstrate that geologic formations are present that can safely store carbon dioxide that would be injected underground from a proposed refinery's conversion of waste-wood products to renewable diesel, according to the company.

North Louisiana could be on track to become a multibillion-dollar hub for renewable diesel refineries if the company behind the effort can secure regulatory carbon sequestration credits and financing to make it happen.

"We're looking at three to four plants like this in the next 10 to 15 years, and the intent is that they are all in Louisiana," said Paul Schubert, chief executive officer at Strategic Biofuels. "Think of this like pure synthetic diesel just like synthetic motor oil you would put in your car."

The company would start with a proposed $700 million plant. The business expects to make a final investment decision in 2022; the refinery could be operational by 2025.

It is expected to create at least 76 full-time jobs and support 450 construction jobs, but also spur economic activity like truck driving to deliver feedstock. The average salary at the refinery would be $68,000 for a range of positions from engineers to accountants, plant managers, plant operators and laborers.

The Louisiana Green Fuels project is a master plan by Strategic Biofuels, which has headquarters in Olathe, Kansas, but Schubert hails from Arkansas and has rooted himself in Columbia in Caldwell Parish. 

Strategic Biofuels already has leased land at the Port of Columbia, a rural regional port along the Ouachita River about 25 miles south of Monroe — where the company has been testing the possibility for a carbon sequestration well in a massive salt cavern. These caverns typically have saltwater inside, which must be removed before gas or liquids are stored there. 

The company has to prove to the federal government that it can safely and securely store greenhouse gases, particularly carbon dioxide, about 1 mile underground in the salt cavern so it can get regulatory credits bartered by businesses to meet state and federal rules. The regulatory credits are not monetary, but more of a requirement to offset carbon emissions. 

The company would rely on the active thinning of forests in the area as a source of waste, such as branches, pine needles and treetops, as the feedstock for its biofuel plant. This feedstock is plentiful in the surrounding area, where pine trees are grown for commercial harvesting into lumber. Future plants could produce aviation fuel in addition to diesel.

Schubert said the diesel Strategic would make releases fewer contaminants into the air when burned; it typically would be blended with traditional diesel products for sale by another refinery.

"It's very clean burning and doesn't have a diesel odor," he said, referring to the higher cetane content of the renewable diesel fuel.

Schubert has been developing synthetic fuels for more than two decades. He holds degrees in chemistry and worked years for the traditional fossil fuel industry, including Phillips 66, but also for alternative fuels businesses. 

The executive is bullish that the project will eventually become "carbon negative" since it uses waste for fuel and will leverage carbon sequestration.

He said he has agreements for an undisclosed "large private company" customer, selling renewable diesel to the California market which has rules and environmental goals to reduce its smog. 

Strategic Biofuels has already raised initial capital, much of which comes from local investors, to move the project forward, Schubert said. It's going to take $700 million of hard capital investment to make the first renewable diesel refinery to happen, he said. For the hub of three and potentially four refineries, it could take billions over the next decade. 

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The company expects to leverage state and local tax credits and additional economic incentives to make the project a reality, with an announcement expected today. 

With its first plant, Strategic Biofuels expects to produce 32 million gallons of biofuels. That's the carbon equivalent of taking 120,000 cars off the road, but as a refinery it's a relatively small output for customers. By comparison, it's 2,087 barrels of renewable diesel 'oil barrels' each day which is a very small scale plant. An independent oil refinery in Louisiana processes 75,000 barrels of crude oil each day. 

"Everybody knows that wood absorbs carbon dioxide from the atmosphere, and if you burn it or let it rot, it decays and puts those greenhouse gases back up into the atmosphere," Schubert said. "We're here in the middle of one of the best fiber baskets in the country and it's usually burned, which is the worst thing for the environment."

From satellite views, north Louisiana forests "look like corn fields," due to decades of forestry trade, he said, all ready to harvest. The first refinery could use 1 million tons of wood waste each year.

"Think of a wood yard plus a small refinery," Schubert said.

There are no wetlands, endangered species or culturally sensitive areas that would impede development of the project, according to the company.

About 83% of the final refinery product is expected to be renewable diesel and the remaining 17% would be renewable naphtha. Akin to many other green diesel projects, the fuel can be used in engines that require traditional fossil fuels unlike more traditional biofuels, according to the company.

"We are de-risking the project," Schubert said. "The economics work well and we've got the agreement for the offtakers and feedstock supply. Now we're working through the cost of the plant," he said. "The biggest risk for the project is validating that the geology is right."


Email Kristen Mosbrucker at kmosbrucker@theadvocate.com.