BIKE: First the bad news then the good news

[Roger Baker]

<http://english.aljazeera.net/NR/exeres/08B97BCF-7BE6-4F1D-A846 
-7ACB9B0F8894.htm>

When the world's biggest oil field, Gharwar, is in decline, then the  
whole world is in terminal decline, according to experts like Matthew  
Simmons.

Bad news for Texas toll roads.

The Saudis claim they can pump more oil -- but it is heavy sour crude  
and the appropriate world refining capacity does not exist, leading to  
current heavy discounting of heavy sour prices (plus it takes hydrogen  
made from natural gas to get the sulphur out, assuming you have the  
refineries, but unfortunately there is a natural gas shortage too).  
Aljazeera reporter Adam Porter is first class in the key area of  
interpretation and analysis of Saudi misinformation.

                           
***************************************************

But the good news is that you can make oil out of turkey guts. So here  
is the good news:


http://www.kansascity.com/mld/kansascity/news/11370598.htm


Innovative turkey-to-oil plant eats money, spits out fowl odor

By KAREN DILLON The Kansas City Star


CARTHAGE, Mo. — The eyes of the world have been on this Missouri town
for several years to see if a New York businessman can really turn
turkey leftovers into oil.

The answer: A resounding yes. In fact, a revolutionary plant is
turning 270 tons of poultry waste into 300 barrels of crude oil every
day.

That would be cause for wild celebration in many circles if not for
two not-so-minor problems.

First, the plant is losing buckets of money, and second, some
residents of the town that once welcomed it now pretty much hate it.

It turns out that process of cooking turkey guts, feathers, feces and
other waste gives off a horrible stench.

"It's rotten," said Beth Longstaff, a resident who was shopping at
Wal-Mart recently. "You can't get away from it. It's like something
out of a horror movie."

Residents have responded with hundreds of complaints to company,
city, state and federal officials.

The stink has sparked the concern of government officials, including
members of Missouri's congressional delegation who helped the plant
get federal grants to try the new technology.

Without the first $5 million grant, the plant probably never would
have opened, but now it's burning through money so fast that the
future is in doubt.

"My obstacles are enormous," said Brian Appel, the man behind the
plant.

The turkey oil is much more expensive to produce than projected — the
cost of a barrel is double what it sells for.

Appel told The Kansas City Star recently that he doubts the process
can be financially successful in the United States for several years.
His company, Changing World Technology, has put on hold plans to
build more plants in Colorado, Alabama and Nevada.

Instead, he is considering a deal to build a plant in Ireland, where
costs would be considerably less, and where a recent news article
predicted a plant should be operating by next year. Appel also is
negotiating with officials in Italy and Germany.

He doesn't know what the future of the Carthage plant holds, but he
wants to make it work.

"I owe it to the people who have been really supportive of what we
plan to do, to do everything in my power to turn that around," Appel
said. But, he said, "I don't know how long I can keep funding this."

Several federal and state officials said they were unaware of Appel's
negotiations overseas but haven't lost enthusiasm for the project.

"The congressman believes in the technology," said Dan Wadlington,
spokesman for U.S. Rep. Roy Blunt of Missouri.

"Two hundred tons of turkey guts and feathers, and you come up with
100 barrels of refineable oil — it's a heck of a deal."

Antiques and poultry

In 2000, Carthage officials celebrated when they learned their town
would be home to the world's first commercial demonstration plant to
turn turkey waste into oil.

Scientists had been tinkering with the technology for 30 years and it
now seemed set to become a reality.

The southwest Missouri town had been better known for art and tourism
than for pioneering industry.

The Precious Moments Chapel south of town has been a major attraction
for years, and the town square, with one of the oldest courthouses in
the state, is going through a rejuvenation of sorts. Trendy cafes
have opened, and so have collectible and antique shops. Paintings,
statues and sculptures decorate many spots around the square.

Just four blocks off the town square is the industrial district where
Appel located the plant. It seemed logical because ConAgra's turkey
Butterball plant was already there and would supply the offal to the
plant.

Appel's company remains protective of the plant's technology.

After promising a 30-minute tour, a plant official on a recent rainy
day would only show a reporter the outside of the facilities.

"This is a first-of-a-kind plant in the world," said Paul
Halberstadt, a plant vice president.

Halberstadt explained visitors would have to dress in special
clothing and heavy boots and take a safety course to get inside.

In general, though, he explained that turkey waste is pressure-cooked
under extreme heat to produce oil.

The plant was expected to cost $15 million to build, a third of it
supplied by a federal grant that U.S. Sen. Kit Bond and Blunt helped
obtain.

But problems with the technology caused design problems early on. The
plant had to be rebuilt at a cost closer to $40 million, with money
coming from investors and ConAgra.

The repairs delayed operation until last year.

"Shame on us," Appel said. "We made mistakes. But we made the
commitment to stick in with more monies."

Those weren't the only projections that were way off.

Initially, the company predicted the cost to make the oil would be a
bargain — cheap in fact.

But today, a barrel of the grade 2 to 6 diesel oil costs almost $80
to make, Appel said, while the company buying the experimental oil is
paying only about $40 a barrel under its contract.

Appel and his colleagues had assumed turkey waste would cost nothing
because they expected the federal government to put a ban on feeding
animal waste to animals. They estimated that processing plants would
pay them $24 a ton to take away the offal.

But that didn't happen, and Appel now is paying $52 a ton for animal
waste, he said.

Appel also had high hopes that he would get a $1-a-gallon biofuel tax
credit for production costs, or about $42 per barrel. Congress did
pass the tax credit, but the definition of biofuel excluded Appel's
technology.

In Ireland, Appel said, the losses would be reversed because
processing plants would pay him to take the waste and the government
has a tax credit.

Meanwhile, Appel has three proposed plants in the United States on
hold, along with more than $8 million in federal grants.

A tax credit and a ban on feeding animal waste to livestock are
needed for the plant to become profitable, Appel said

The Blunt spokesman said there was still a chance that the plant
would get a tax credit.

"We are exploring that because the energy bill is still a work in
progress," Wadlington said.

"The congressman would like to find a solution."

Creeping odors

Even if the finances turn around, Appel has to figure out how to get
rid of the overwhelming smell.

He's spent a $12 million federal grant he received last year in part
trying to fix the problem.

He promised before the plant was built that it would be an odor-free
operation, and the Carthage mayor and townsfolk haven't forgotten.

For more than a year, the smell would creep up the hill from the
plant to the town square and then envelope the town.

Then, in October, it became decidedly worse.

One day recently, Halberstadt acknowledged that the smell was really
rank, but said the company was doing everything it could to fix it.
He showed off the new scrubbers that had been put in place to reduce
odors.

Residents have complained that the smell makes them retch.

One said he was even afraid to let the dog go outside.

Ann Carter, who owns Epicurean Delights, a wine, cheese and gourmet
food store, said the first time she smelled the odor, she went
outside and checked in the alley to see if something was there.

"It was worse than a farm smell," Carter said. "I figured something
had died."

Mayor Kenneth Johnson worries that the town is getting a bad
reputation.

"This type of publicity isn't going to help tourism," Johnson said.

And on March 18, Blunt, Bond and Sen. Jim Talent wrote a letter to
Doyle Childers, the director of Missouri Department of Natural
Resources, asking that his agency find the source of the odor.

"The plant … has great promise, with the hope of reducing our
dependency on foreign oil," they wrote. "We do not want this
technology to fail."

The Department of Natural Resources has cited the plant in recent
weeks with two violations for odors and pollution — two truck
trailers were found spilling blood and water or meat byproducts onto
a roadway.

Childers, who visited the plant two weeks ago, said he also spoke
with Gov. Matt Blunt.

Childers said odor agents are installing new monitoring devices to
collect data and try to determine where the smell is coming from.

The process should take about 45 days.

"The governor said he wants this done," Childers said.

"We don't want to jeopardize a technology that could eventually be
very important to really our whole country. Everybody said they want
to work together."

Appel blamed a handful of vocal critics in town for most of the
complaints, and said that some of the smell could be coming from
other plants.

But Appel said he didn't want to make excuses for the plant's
problems.

"We never built one of these plants and we didn't know what to expect
when we pressed the gas pedal all the way to the floorboard," he said.

To reach Karen Dillon, call

(816) 234-4430 or send e-mail to kdillon.