Canada’s GV Energy to Produce Little-Known Biodiesel
A Canadian energy company has proposed building a biorefinery to produce dimethyl ether, or DME, the CBC reported Wednesday. In November, Calgary-based GV Energy signed a memorandum of understanding with the city of Terrance, British Columbia, under which the city would set aside a 100-hectare site for the refinery in the Skeena Industrial Development Park.
Although DME is not widely known in North America, stricter U.S. greenhouse gas emissions standards may boost its popularity. GV Energy CEO Eric Switzer told the CBC that even though DME might never completely replace fossil fuels, if the world has reached peak oil production as many believe, it could comprise a viable solution.
DME is a mixture of hydrogen and carbon monoxide that can be produced from biomass, natural gas, or coal. GV has been producing DME from black liquor, a wood-based biomass byproduct of paper manufacturing. As one might expect, DME has its pros and cons.
For starters, GV’s facility would require a long-term wood supply. The company’s plan is for its biorefinery to use up to 3,000 cubic meters of wood fiber a day in a process that would turn the fiber into a gas to make methanol, which would then be converted into DME.
GV plans to use wood fiber from the forests around Terrance. The company plans to spend the next three years conducting a study to see if it can identify an economical long-term wood supply. GV will sign an agreement with the city if it can do so, and find investors.
More DME is required to produce the same amount of energy as diesel fuel. However, Switzer feels that it could be cost-competitive with diesel when the price of crude oil is in the $75-85 per barrel range. In terms of emissions, DME could replace diesel, because it produces 95 percent fewer greenhouse gases, no soot, low levels of nitrogen oxide, and no sulphur dioxide.
GV chose the city of Terrance because of its rail connections through Vancouver and south into the California market. In December 2008, California passed a diesel emission standard that requires a 75 percent reduction in soot by 2010 and an 85 percent reduction by 2020. National nitrogen oxide emissions standards in the US will become much stricter next year.
DME is currently used as a propellant in aerosol cans, because it is non-toxic and breaks down.
The fact that substantial investment in infrastructure would be needed to make DME widely available presents another challenge, although the equipment used to dispense DME is similar to that which is already used to fill propane tanks.
DME use is gaining ground in Asia and Europe. In Asia, it is being used as a cooking fuel alternative to propane or coal and a solution to an air quality problem that, according to the World Bank, kills hundreds of thousands of people annually in China.
Switzer said that he first became interested in DME when he and two business partners considered establishing a fund to invest in sustainable energy technologies. That venture did not pan out, but the three partners were impressed by DME’s potential. Switzer said that, “It became clear to us that there was a growing interest in dimethyl ether.” Most recently, for example, South Korea’s state-run Korea Gas Corporation inked a preliminary deal with Saudi Arabia to invest $342 million to build a plant in Jubail, Saudi Arabia that can produce 300,000 tons of DME a year starting in 2013.
“Our objective is to displace just a reasonable amount of diesel, and someone else will come and displace a reasonable amount using conventional biodiesel, so over time there will be a multitude of transportation fuels that will accomplish the job,” Switzer said.