Transcript: A Paradigm Shift - From Waste to Fuel

MITZI WERTHEIM:  I think we’re getting ready to start, so if we can lower the volume.  For those of you who don’t know me, I’m Mitzi Wertheim.  I’m one of the large team that makes this event happen, because we have lots of people that we wouldn’t succeed without them.  And the folks from CNA who are so terrific are Kathy Lewis; Alison Basey (sp); Vivian Luter; Brenda Mitchell (sp), who’s been outside; Lee Woodard, who does our artwork and created our wonderful poster and buttons, and we now have magnets; and Dave Perkins, who takes care of our audio-visual stuff.

I’m here tonight because Steve Wehrenberg, who normally does this, he’s with the Coast Guard – this is an interagency endeavor.  It’s a horizontal endeavor both in terms of where people come from and the knowledge we need to collect.  And our theme is “listen, learn, connect, share and collaborate.”

Tonight our introducer is going to be Al Shafer (sp).  He’s the director at DDR&E for plans and budgets.  I have to read this, actually – sorry.  He said I had to make it short and he has a really very impressive résumé because it is so diverse.  He’s been into intelligence, he’s been into budgeting, he’s been into weather.  I realized why he was interested in energy:  If you’re interested in the weather, you have to be interested in energy, and also, I guess, planning. 

The one thing I am going to tell you about him because I loved it when I discovered it, he was the Air Weather Service Junior Officer of the year one year.  I thought that was pretty terrific.  (Laughter.) 

AL SHAFER (sp):  A very long time ago.

MS. WERTHEIM:  Yes. 

We are ready to launch our beta website, and there is a piece of paper, I think, at every place.  This is a website that’s been developed out at the Naval Postgraduate School.  The initial funding came from the Office of Forest Transformation.  And the idea is to make it as user-friendly as possible, and we need all of you to help us do that.  So it’s designed – can I tell you, there are lots of glitches in it.  You know whenever you create software there are always sort of glitches.  But there is a mechanism by which you can send us feedback, and we are open to all suggestions.  We want to make it work both vertically and horizontally so that you can see what’s going on, and we want to connect to other websites.  There are some that are already there, but you ought to suggest to us what else ought to be added.  But we’re trying to make this – for those who are certainly in government doing energy work, it’s sort of a one-stop shop.

So I think I’m going to step down and let Al do the introduction, because we have a very interesting evening ahead of us.  Thank you.

MR. SHAFER:  Thank you, Mitzi.  It is my very great pleasure to introduce tonight’s speaker.  It’s Mr. Brian Appel, the president and chairman and CEO of Changing World Technologies.  Changing World Technologies was founded in ’97, but the fascinating thing to me is from the first nine years of its existence, it has already been cited in Scientific American as one of the 50 – Scientific America’s 50 Innovative Young Companies.  Brian has been the founding father of this company.  He has led it through the growth, and he’s here to talk to us about, as you can see, a paradigm shift – waste to fuel.  He shares the concerns of just about everybody in the room at how do you get more energy out of everyday things?  I’ve seen his talk before; it is really quite spectacular.  I hope you will enjoy it. 

Brian has a B.A. from Hofstra University, has moved in to working in oil, and predominantly thermal conversion to energy.  So, rather than spend an awful lot of time for me talking, Brian, I’m going to turn it over to you and let you take it away.

BRIAN APPEL:  Thank you.  (Applause.)  I think I do better walking around.  Can that get a little clearer?  Is that clear on that – (cross talk).  Is it okay?  So it’s my eyes.  It doesn’t look clear to me.

Well, I am here to talk about something that’s –

MR.    :  Put your mike higher – higher up your tie.

MR. APPEL:  Is that better? 

MS.    :  Yes.

Much better?

MR.    :  No.

MR. APPEL:  Okay.  I am here to talk about one issue that nobody likes talking about, which is waste, and then we’re all interested today talking about energy; we’re all interested in minimizing effects of global warming, whatever the debate is.  We know that man’ activities are certainly doing some things to change around what we are doing.  And if we get rid of waste, reduce renewable energy, and we do it smartly, we can certainly improve the quality of life.  And it’s going to take a big effort from everybody – every industry. 

As an example, we’re going to be looking at power technologies, we’re going to be looking at different fuel technologies, and someone who has only been in this energy business for about nine years, I think we need all these technologies.  And even coming from the environmental side, there are benefits to coal technologies; we’ve just got to make them clean coal technologies, so the coal-to-liquid and technologies like that, these are really important.

When we look at fuel, we look at renewable diesel, which is our fuel; we look at ethanol; we look at biodiesel; we look at coal-to-liquid and gas-to-liquid.  So each one of these is going to have a place, and each one is going to be important to different parts of the military.

We’re going to be important because we’re going to tap into this organic waste, and the waste is available where the people are.  It’s proportionally distributed where everybody is.  That’s where we produce the waste.  But using a technology we call the thermal conversion process – sometimes thermal depolymerization process.  Using just water, temperature, and pressure, out comes liquid fuels, gasses, and carbon or solids.  There’s going to be some inorganics that we’re going to have to deal with.  And we do that safely, and even all the bad actors, they’re converted to things that are safe. 

If we look at turning waste into fuel, this is an immediate platform for a ready nation.  We have a commercial plant – and I’m going to get into exactly what Carthage, Missouri is doing and some of the exciting things they’re doing with the car companies – but this renewable diesel exists from an indigenous source, something that’s a natural source in the area.  There is existing technology to upgrade this to all sorts of different transportation and other power fuel.  It’s a direct substitution for CO2.  Less fossil fuel needs to be dug up from beneath the ground, so that makes sense.  You’ll b able to control future fuel costs because you can have hedging mechanisms against your waste.  I mean, that’s really important.  If you look at what you hedge out in the future and we look at some things, whether it’s drought or other things; if there’s a war, interruptions in supply line, you can clearly come up with a hedging mechanism for your future fuel costs because you could fix it to the waste.

Power and distribution from locally produced fuels.  It limits your vulnerability.  Clearly you’re going to be grid-independent because we’re over 80 percent energy efficient.  That means you’re going to be a net energy producer, so you’re going to have lots of oil to store. 

The infrastructure: the communications, your heat and power.  If you think of what happened in Katrina, how important some of the things we take for granted when the lights go off – you know, how important it would be just to have electricity so you could run your generator sets, so that you can perform all of your emergency services. 

And clearly for the military it has a strong strategic implication because we can reduce the logistical tail burden, streamline waste handling procedures.  I’m always amazed when I look at how many different systems are on board a ship.  I mean, you guys crush plastic containers and they go here, and you’ve got lubricants over here, solvents over here.  And each one has their own independent system to deal with this waste, so we can handle all that waste in one system and produce a safe diesel fuel that we can use somewhere else.

Then you’d have additional storage for critical assets, for your food and weapons, and this is a ready-to-use fuel.  This is not a JP8 or JP5, and I know we’re focused on that because it is a big number, but this is like a clean number two diesel fuel, so it has a use.

The footprint in our process is relatively small.  The people from the military who have been out there, and some Homeland Security people, can’t believe that 250 tons a day of material, and producing 500 barrels fits on less than a three-acre footprint.  It’s a relatively small footprint.  So that means we could make these mobile. 

Who is Changing World Technologies?  We started the company in 1997.  Our headquarters is in New York.  We have our research and development facility in Pennsylvania and Philadelphia Navy yard, and a demonstration facility in Carthage, Missouri.  We put over $100 million of private equity in developing this technology.  Some of the common shareholders include ConAgra Foods, things like Armour, Swift-Eckrich, Hebrew National, Butterball, Healthy Choice, Wesson Oil – basically your refrigerator, unless you’re a vegetarian.  (Laughter.)  And that company is the company we selected to develop the thermal conversion process.

So what is the TCP?  The TCP is a process – it’s a thermal process that uses just heat, pressure and water to break down these complicated compounds into simple components we wind up calling diesel and other co-products.

Waste.  This is really incredible because nobody wants to talk about this.  The numbers are staggering, and we can argue all day long on the numbers and just accept a few of the numbers.  The reason why nobody wants to talk about waste is if you do start talking about waste, you wind up creating a record – you create a record of how much waste you have and now you create a target and a mechanism for the EPA to fine you.  Now, one thing is for sure:  You know exactly how much food that you put on your plate; you have no idea how much gets thrown out every week other than that can is heavy when you take it curbside.  So we’re very cognizant of certain things, but we’re not very cognizant on characterizing waste.

Agriculture waste: 6 billion tons a year.  These are EPA numbers.  If you only took 10 percent – just 10 percent of that because we don’t want to get into whether it’s a carbon basis or whether it’s wet waste, dry waste, but just a conservative estimate is you could make 4 billion barrels of fuel a year out of there.  And I keep hearing that what about transportation?  Waste is proportionally distributed where the people are.  If you talked to anyone from the municipalities, the first thing they tell you is, can you reduce my freight costs because I’m shipping this waste everywhere?  So it’s a misnomer, this complication about having this material to have your mass to make fuel.  You talk to any municipality or any industrial company and they can’t wait for you to stop shipping this material very far. 

Industrial waste – 768 million tons a year.  Obviously you’re going to convert more of that material because we’re just discounting that heavily. 

Municipal waste and utilities.  You see from – this is about more oil than you’d make from the others because that’s mainly lubricants, PCB oils, and transformer oils and things like that. 

This bottom category, this is animal waste: poultry, cattle, hogs.  This is just from those three categories, and we don’t even call this waste in this country; we call it animal feed.  So this is another number – you can make 30 million barrels a day from something that we call animal feed that’s been prohibited everywhere else in the country (sic) from feeding animals back to animals. 

So this definition of waste and getting a characterization of waste, the lines are often blurred.  We call sewage sludge biosolids.  We call manure a nutrient in balance.  So we have to really be careful when we categorize waste of how much is really out there. 

The animal waste markets in total – I just gave you the three animal groups, but if you think about further processing, it’s about 23 million tons a year of what we admit to.  So that’s all animal and food waste.  Two-thirds of the integrated and a third of these small independents, basically four companies control that food group – you know, ConAgra, Cargill, Tyson, Smithfield – but that would be 63 separate thousand-ton-a-day facilities.  The capacity of Carthage, Missouri is 250 tons a day.  So about 72,000 barrels per day of fuel and a significant amount of renewable diesel from stuff that we don’t even call waste in this country. 

That market penetration results in a real market for soybean and corn and rendered products.  Look at how much we’re exporting.  So if we eliminated feeding animals back to animals, we could turn that into a fuel.  We could also help the farmers sell more soybean and corn, and that’s a good thing.  And then there is dramatic growth in biodiesel and ethanol, and they each produce a lot of waste. 

Feedstocks are widely traded, so it can withstand this penetration.  And, as I said before, there is a way to hedge the future costs.

Simple overview how the process works:  We take the material – so in the case of fats, bones and feathers and sludges, it goes into a machine that grinds up the material.  We then pressurize the material and heat it in just pumps, and then this number three here, this is our depolymerization unit.  That’s the bulk separation of the organics from the inorganics.  So all the calcium and the phosphates and all the solids are separated from the proteins, carbohydrates and the fat. 

In the case of shredder residue, we don’t even actually grind a tire; we go through a depolymerization step; we go through this dissolving – this depolymerization step.  So up to there it’s basically similar.  We’ve taken out the metals and the clips and things like that from shredder residue.

And then this fourth step is really important.  This is the hydrolysis step, and that’s where the water gets into the inner stycises (ph) of these molecules and further splits apart the bad actors.  Typically the bad actors, we call them chlorine and bromine and things like that.  Chlorine loves water, so it goes with the water and it’s tied up as a salt.  So even chlorinated compounds, very high chlorinated compounds like PCBs and PVCs we handle very well in this process.  And actually, we like them because it helps break down the material faster in the process.

So if we go through that depolymerization hydrolysis step, I want to just illustrate, you have oil options.  This is really important to have oil options.  You can have a commercial industrial customer that uses that fuel.  You can further fractionate it in the oleo chemical business.  You can further refine that.  We have three different refinery groups confirm that you can upgrade this and put it in their mild hydrotreater, and there you’d make your jet fuel.  And if you look at what ConocoPhillips, Nestea, and Total (sp) are doing right now, they’re upgrading these lipids into jet fuel. 

So it is renewable diesel so you can burn it right away.  So you have a storable – I'm sorry – you have a storable liquid.  So you want a storable liquid.  You want to be able to have that liquid when you need it.  A lot of these other technologies, they go to destroy the carbon and you only have thermal heat, so it means you’ve got to use that heat right away.

How big are the markets that we’re going after?  Fixed energy is our main target right now.  It’s about a third against the transportation number, about 20 million barrels a day, and I think it’s over 80 million barrels worldwide.  This is a little bit distorted in the U.S. because we really don’t have very good CAFE standards.  You know, we’re at 24 miles to the gallon; the rest of the world is at 42.  I love – Amory Lovins always talks about the biggest oil well sits under Detroit – just raising the CAFE standards you save 3 million gallons a day – 3 million barrels a day. 

 But the reason why we’re so focused here, it’s so identifiable to us.  We’re filling up – you know, going to work every week.  It’s certainly really important for aviation fuel.  But this is a market where the fuel is the fuel, and on new fuels, you could learn how to use these fuels, and by taking the pressure off of this side, we can get smarter if we decide to expand into the transportation sector.

Now, we’re looking for new capacity, so all these ethanol and these biodiesel plants and these renewable diesel plants going up, there’s going to be concerns with having the guard dog, the refineries, taken out of the process.  Well, it’s more forgiving, these stationary engines.  So you use a lot, you’re going to wind up blending, and then we could learn fuel delivery systems, whether they’re erosive and corrosive, and all the things that we wind up getting carried away with ourselves and trying to put a little bit of fuel in all these trucks and cars.  So there is a big market here.  And I understand that a lot of people in this room want JP8 and JP5, and then after they get that they want JP-6½ , which is a compromise, I think.

The two concurrent paths that we’re talking about is use of the renewable diesel at fixed installations.  That means every fixed installation should have one of these so that we can take this fuel and do the laundry boilers, the hospitals.  I mean, there’s just a lot of energy needs at fixed installations, all from waste, and you don’t have to worry about being on the hub.

And then develop what we call a rapid diesel deployment platform.  And when we look at the waste at these base camps, there’s an awful lot of waste – I would say 60 to 65 percent we’re very confident that we can take and make a storable, renewable diesel for the soldiers and sailors to use when they need it and not have to worry about doing a run to take the garbage out, or waiting for another oil container to come up and supply the soldiers and the sailors.

It’s going to take some work, but we’re really confident that we have two groups that we have developed this technology with.  One is CanAgra Foods in the food business, and the other is with the car companies, and I’m going to get into the car company stuff in a second.

You all know these programs, but we’ve been under a microscope.  When I look at a couple of different reports – I put these up here – this hidden cost of imported oil doesn’t reference our technology, but it references something that’s even more important that we have to understand:  According to this report, that was just updated, we’re subsidizing traditional fuel about $5.50 over the pump price – $5.50 cents a gallon over the pump price.  And you can discount whatever you’d like, but at the end of the day there will be a significant amount of subsidies that we give to traditional fossil fuel.  And we’ve heard a number of people talk about we’re funding both sides of the war.  Well, we’re also funding the barriers to entry by not paying attention of the inequities in these markets. 

Boyden Gray wrote a paper to the Texas Law Review I think in February, and he’s the ambassador to the EU and he’s certainly a Bush confidante, and he pointed out just the depreciation allowance alone that we give the oil companies is $4 billion a year.  And if you add up all the ethanol and all the biodiesel and everyone crying foul, that’s less than $2 billion.  If you go to the end of the tailpipe, according to Boyden Gray’s paper that he put into the Texas Law Review – and then we heard the president say that we’re addicted to oil – $250 billion is what he claims is what we’re subsidizing traditional fossil fuels at. 

So this is really important.  If you haven’t seen it, it’s a great report – “Wining the Oil Endgame.”  It’s this transitional study that is very well done and talks about all the technologies, even to get us to the hydrogen economy and lightweight vehicles; “Ending the Energy Stalemate,” which is another study.  So all the policies are there.  Our company – as I said, we’re the new kid on the block so we’re the new source review to pick on them.  Two life-cycle analyses, one done by MIT and the other one done by U.S. Car, Ford, GM, and Daimler under the Vehicle Recycling Partnership.  We have that Stage Gate review from the DOE.  That’s to make sure you have a commercial opportunity at the end of all these funding – if you got any funding.

We had fuel testing done by the Defense Energy Support Center, I think it was down in the Southwest, to make sure these fuels will burn.  And we just finished – someone this year from Brookhaven – we just did a whole study with KeySpan and Brookhaven National Lab because KeySpan, a big power company in New York, the one that’s being taken over by National Grid, maybe, a big British company – there’s a plant called Ravenswood – it’s in New York City – and 25 percent of New York City’s electricity is produced from Ravenswood, and they wanted to take and blend up to 5 percent of our fuels, including from Missouri.  So you can imagine the scrutiny of testing fuels, whether it has to do with erosion or corrosion or microbial – you know, bugs grow in, apparently, some of these biofuels.  So we went through a long test and that was just completed, and the fuel burns.

Military waste to consider:  wet waste.  So food scraps, sludges, grease, any organically rich stream.  So your mixed plastics, PET, PBC, medical waste – bandages, sharps – spent fuels, maintenance oils, rubber and tire. 

So if you look at typical waste streams, we’re not going to put the wood pallets in there.  That would be silly.  Let’s do the things that are burdensome liability and things that make sense as you learn how to use this technology. 

What are the alternatives and the practicalities?  We all know if we need fossil fuel, so coal and shale and tar sands, they’re going to be the big piece in this puzzle.  It still takes time to develop those.  You have your stationary resources.  Those are logistical challenges.  You know, we have our coal – it’s where the coal is.  The convergence of jet fuel, it’s about 24 pounds of coal to one gallon of fuel.  Convergence – a typical crude to jet fuel is about 8 percent.  Ours is about 19 percent of one ton of the waste that we put in.  Why is it higher?  Well, what animals you’re staring out with – C-16s and C-18s, so that’s not magic.  And all the mixed plastics and tires, those are short hydrocarbons, so that’s not magic, so of course it makes sense.

When you’re dealing with whatever you’re dealing with with coal or methane hydrates or whatever – you know, you have a certain chain length and you’re going to either have to add them together like in the case of methane, or you’re going to have to break them apart, in the case of coal.

Methane hydrates probably are going to have a future – a lot of those.  Electric vehicles, plug-in hybrids – I bring this up because we’d like to take this waste, turn it into fuel, run the generator sets and go plug in those electric hybrids so they can go out and do their tactical missions.  And we save all the JP8 and JP5 for the sortie ones. 

There’s going to be fuel concerns.  I take my hat off to those people at Sasol and the Air Force for getting through this – I think it was seven, 10 years and probably lots of money to find out that of course these fuels are going to burn, but the codes say they’re feedstock-specific.  So it takes a long time to use these – learn how to use these fuels and get them approved.  We know that there’s all sorts of characteristics with – you know, these are really important fuels.  You don’t want to be up in the sky and have something foul your fuel injectors, so we believe this is not our place to be making jet fuel.  We think the guard dogs, or refineries, have to be in place to make sure the quality stays the quality that you need and you deserve.

We’ve got huge warranty issues if you change the fuel.  This is a big liquid fuel concern and we’re out there doing all sorts of studies.  You have the Defense Science Board, DDR&E, Department of Energy.  Everybody is looking.  Companies are looking for ways to minimize their energy costs.  When we look at the military, clearly it’s a liquid fuel concern – your jet fuel, your ground, your marine.  We have to look at feedstock vulnerability costs.  We saw what happens to gas to liquids.  You know, with natural gas going up it makes it really difficult.  You have to look at the commodities.  There’s a lot of technologies out there that there’s a lot of people accusing the American companies of a food fight.  The world’s starving and here we are making fuel out of crops. 

And then of course we’ve got logistical issues.  I remember when coal went up a few years ago, we had train tracks washed out and we had issues.  So we’ve got to be very clever what happens when we make these decisions.

These decentralized facilities could provide an alternative fuel, and as I said before, proportionally distributed with the population.  The waste exists wherever you are.  Just look at your leftovers on the plates or where food is made.  These are tremendous amounts of waste.

Existing equipment is going to run on liquids for many, many years.  I think the car companies told us Friday – we had Daimler, Ford, and GM, who have been funding us, the big executives in on Friday for a presentation – that the drive trains are out 14 years right now.  I mean, they’re out 14 years.  That means that these cars are going to be running on liquid for a long time, so we’re going to have to come up with liquid fuels.

I look at, you know, the single-fuel concept, and to me it drives me nuts that you take JP8 and JP5 – and I know there’s probably other things that I’m not considering, like logistics and everything – you know exactly the cost.  But when I watched JP8 and JP5 going into an electric generator set when a lot of these technologies are much more flexible – because when you went into a port you never knew what you were going to get.  So we have all these oilers floating around and we’re very specific, but equipment manufacturers, they can make engines and equipment that run on a wide range of fuels.  And I think we have to be careful when – or you all have to be careful when you’re making that decision to go to the single fuel concept and make sure you don’t get too tight on the specifications.  The old generator sets did fine with heavier oils.

We’ve got big competition from the airline industry – lots of planes going up there, so we’re not the only ones flying.  I think efficiency is going to change around things.  Alternative sources are going to play a role.  And the next big thing is going to happen.  You know, whatever you call your dilithium crystals, whatever is coming out there.  I’m sure they’re going to happen, and that will be a good thing.  We still have to get rid of the waste.  So even if we come up with the next big thing, we have to get rid of this burdensome liability of the waste.

Major difference in us and almost all the other things you hear about – everyone things that, you know, there is a lot of technologies that are doing thermal depolymerization.  Big difference is we do not terminate the carbon as CO2 or carbon char.  We’re preserving that carbon because we want to store that. 

We have a medical infectious waste permit in New York, so clearly all the pathogens – and at these temperatures and pressures it’s known to even destroy BSE – you know, the mad cow, the prions, which are a really tough protein to destroy, just because of the peculiarity. 

So, again, the thermal conversion process – fats, bones, feathers, spent hens – it doesn’t matter what animal – you know, cattle, pigs, poultry.  So all the fats and greases from rendering, restaurant grease.  When you hear about the fats – can you make biodiesel out of that? – no, it’s old; no, it’s rancid.  Our machine doesn’t care.  We’re not making a meth-less (ph) or an alcohol fuel. 

Wet distillage, dry grain from ethanol production – there is a lot of that.  We’ve tried that.  It’s mainly fat and protein at the end of the day. 

Soap stocks from soybean oil crushing.  Energy efficiency at Carthage is 86 percent.  These are high-value products – high diesel content, organic-rich nitrogen fertilizer, phosphates.  When we process this material over traditional rendering, because of using high temperature and pressure, the water, we get a 34-percent increase in yields.  So if you took a traditional rendering plant over what we’re doing, 34 percent increase over liquid yields.  That’s substantial.  That’ a lot more liquid than just the fats that you’re crushing off of a fat plant.

It’s not a combustion system, so there’s no significant environmental footprint.  That’s really important.  It displaces CO2.  I think that’s going to be important for the future.  And we were granted this parity with biodiesel and ethanol.  There’s actually – it says biodiesel and renwable diesel is a fuel that has received production credit from the government.

Where does the waste come from?  Well, we take for granted where our food comes from.  We think it comes from Wal-Mart in the refrigerator section.  Well, it’s still coming from those animals.  They’re just out somewhere else.  So the animals go to a slaughterhouse and it goes to a renderer, and the renderer used to turn this material back into feed and it was a vicious cycle, bioaccumulation of dioxins and fats and all the bad things you hear about the food chain.  Well, now we take this material and we can make a renewable diesel and a fertilizer.  And the numbers I showed you are quite substantial just for the food chain. 

Carthage.  Our first commercial plant, what happened at Carthage, we commissioned Carthage, a 250-ton a day facility.  We’re running about five days a week now.  Butterball only runs about five days a week.  They kill 35,000 36-pound turkeys every day.  And then we supplement that with other material.  Situated on only about three acres – a small footprint, actually less than that – it originally was a 50-50 joint venture with CanAgra.  We now operate the facility because CanAgra sold all of their food processing businesses.  They’re out of killing animals; they’re just in the refrigerator.

So all the major process equipment and operation issues are resolved.  We’re selling the fuel, steam boilers, rendereres, greenhouses, a dairy product plant, and Carthage Water and Electric, and we’ve actually made electricity live on a grid – this is not in a test; this is on a live grid, you know, lighting up homes.  And we’re penetrating now the fertilizer market.  This is our first out (?) plant, so hopefully with all the changes we made in increasing the cap ex, we’ll break even in 2007.  This is also our training facility.  We never had planned this plant actually to make money.  We pay $97 a ton, believe it or not, for this waste material in Carthage, on average.  Now, most other countries will get paid $100 a ton, so – because we haven’t been feeding animals back to animals, but when that day comes, the idea was this plant would be ideally situated also to make money. 

We utilize existing infrastructure so it’s transparent from the place we get the waste, so these are the same old trucks.  We just dump them in.  When people come, they look and say, where is your boiler?  This is a small footprint.  This is a small energy footprint.  We only use 12 million MMBTU now for this whole facility.  Probably the boiler in this office building is bigger. 

Why?  Because we utilize water under pressure.  It does not take a lot of energy to heat water up to the boiling point of water.  All the energy is lost when you cross that threshold to the vapor phase.  So we hold it under pressure.  We don’t have an energy penalty by vaporizing all this water.  Now, we do hold this up to 250 degrees C and 6 (hundred), 700 pounds of pressure.  And when it comes time to release the pressure, we release it twice.  We release it once to 300 pounds – and those of you who have industrial processing experience, that means we get all the 300-pound steam we need in the plant.  That’s the high-value steam.  And then we do it again and we drop it to 100 pounds, and that means we get all the 50-pound steam, which is your low-value steam.  So we only have one boiler for the entire facility, so we just use sophisticated countercurrent heat recovery technology that’s been around for five decades in paper pulping plants.

Why fats?  Well, nature figured out a way to store a lot of energy the most efficient way, and they do it in lipids, which you hear canola, you hear soybean oil, but also what doesn’t get much attention these days is animal fats.  They can’t be used directly; there’s all sorts of issues with burning them.  And you would think you could take this oil and burn it directly in your boiler, but it fouls up, it soots up.  It’s because of the glycerin.  And it’s really a bear if you’ve got to clean your boiler out every three days.  So it needs a pre-processing or a step.

Animals also have a lot of fat.  And actually the offal has more fat because we eat the protein in the refrigerator.  The fats wind up going back to the food chain.  So if you look at the back of a label – this is a Butterball plant; they kill 35,000 turkeys everyday – you have fats, carbohydrates and proteins, and you say, how could these people turn that into oil?  Well, just look at what they’re made out of. 

First our target fuel is hydrocarbons.  So methane, CH4; octane, you’ve heard that.  That’s the gasoline rating.  And then you’ve certainly heard cetane with all of this diesel talk.  That’s basically the middle range of diesel, cetane – that’s the cetane number.  Well, if you take a look at the fats that are split from the triglyceride, next to a cetane it looks identical except it has a COOH group on the end.  So that burns.  That’s like an oxygenated fuel. 

Then if I look at proteins, there are strings of these amino acids, so you have your hydrogen and carbon.  And then you look at carbohydrates and you have six carbon – they’re just not showing – you know, C6H1206.  So it makes sense you can turn that all into fuel, and that’s what we do.

Fluid catalytic cracking.  You want to make jet fuel?  Well, this is old cracking techniques.  You can use mild hydrotreaters, mild hydrocracking.  A little bit about our company:  Our two executives are from the oil patch.  The president of our company ran Yukos, was the head of petrochemicals and refining until they threw Khodorkovsky in jail.  They let him back because he was a ConocoPhillips executive and was a COO of Premcor, called Valero today.  And our CFO was the president of Texaco Refining.  So we have a lot of refining experience, so we know exactly what it takes to crack and further crack hydrocarbons.  It’s what we do.  But this is mild hydrotreating, mild hydrocracking.  You could make whatever size fuel you’d like to make. 

Our renewable diesel burns compatible with number two fuel oil.  It’s about 88 percent of residual fuel oil.  It’s about 140,000 BTUs for fuel oil.  Low sulfur.  Minor delivery systems, you know, for the boiler.   You do have to heat this.  We could further crack and make gasoline diesel, which we do, but since we have customers that can burn it just like this, there’s no reason for us to do any further work because it’s a great fuel already.

All of the EPA – we don’t live in a world without the EPA, so all the EPA 42 rules we have to comply with.  And anywhere in the state of Missouri where there is a boiler permit, a two or four or six, we’re allowed to use this fuel. 

Environmental considerations, there’s not a lot on the site because it’s a non-combustion process.  A lot of these new resource issues and all these permitting come when you burn, you gasify, you incinerate, you have lots of volumes of air you have to deal with.  There is really no uncontrollable emissions.  Minimal process water use; that’s really important.  We recycle the water – not a big draw on water.  There’s water coming in with the material that we get. 

Minimal waste disposal.  We discharge water, 40,000 gallons a day, into the sewage treatment plant because a lot of water coming in these animals.  And that’s really important.  We don’t need a lot of water because it’s coming in the feedstock. 

The best way to look at this is there’s hot water coming in the material and it’s hot water going out.  It’s not going out as stacked because we’re using all that energy when we heat it up.  All the products meet a commercial specification.  That’s really important.  We are not going to make our own boutique fuel because we find that that’s something that nobody really wants.  You have to make a commercial specification fuel, so we shoot for D975 and D396, and that’s an important ASTM specification because there’s equipment manufacturers guaranteeing the performance of that equipment based on that fuel characterization.

Global warming considerations.  This is a direct fossil fuel offset, and a shift would allow carbon deposits to remain in the ground.  We know we still need them, but this will be a good carbon sink.  You know, the argument will be, well, look, we need fossil fuels, we need coal, we need all these, but, oh, look at what else we’re doing; we’re shifting some of this waste so that we wind up balancing, you know, some of these environmental concerns, and they’re out there.

We’ve been through two environmental assessments, received two FONSIs – that’s the National Environmental Policy Act, and the FONSI is the Finding of No Significant Impact.  Those are just fun things that they put you through.

Let’s talk about plastics for a second.  Plastics, there’s a couple kinds of plastics.  There’s carbon-carbon bonds, and those break during depolymerization, so your polypropylenes and your polystyrenes.  And then we don’t mind PVC.  We don’t know anybody who likes PVC.  We like PVC because we think it helps in breaking the material down faster.  And as I said, chlorine likes water, so we use water, so it’s not a problem for our process.  But that breaks in the hydrolysis step.

Mixed plastics – 27 million tons a year.  That’s 74,000-ton-a-day plants we could put strategically located and make 232,000 barrels a day of renewable diesel from shredder residue.  The vehicle recycling partnership was in response to end-of-life recycling laws and to find a use for this material, so it’s the Department of Energy, General Motors, Ford, Daimler focusing on shredder residue.  And we completed a pilot study; all the bench stuff is over.  We’re now finishing a study to do a commercial design like we did at Carthage, Missouri with the car companies. 

About 50 to 75 percent recovery of liquid hydrocarbon fuel.  Again, the separation of the inorganic from the oil phase; that’s really important.  Significant international opportunities.  This is probably going overseas because the end-of-life recycling laws exist in Europe; they don’t exist here.  That’s another burden that we have with developing technologies, that a lot of them are going to exit to Europe because there’s just tighter rules and laws.  I don’t like putting that up here when I wear my patriotic colors, but it’s the fact of life.

So when the car companies look at this, they want to go zero landfill, so they’re looking at recovering glass and iron and steel.  They don’t recover rubber of plastics, and they’re recovering the aluminum and the zinc.  So this is the material that we’ll take.  And that’s nasty material.  This is a shredder; this is shredder residue.  So mixed plastics, foam, fibers, metal, rubber, that’s the stuff that we get. 

If we look at examples – you’re basically looking at hydrocarbon polymers, and as I said, there’s always PVC, and sometimes we’ll run heavy tires and no tires, but this is typical mix that you get. 

And out comes a hydrolyzed oil, and this doesn’t have an organic chlorides, or less than five parts per million.  We came from the refinery side.  Refineries don’t want to hear about organic chlorides if it’s more than five PPM – parts per million.  So we focus on making sure that that stays out of the oil.

So you could burn that right away, or you could fractionate it and there is your jet fuel.  This is – and someone asked me to pull the numbers.  Of the light fuel, we get about 12 percent.  This is 38 percent, which is the jet range; 32 percent, 15 percent – and that’s like a still a light number two fuel oil, and 3 percent is gas.  And the gas is – it’s methane, propane, butane and that kind of stuff.  So if you look at the total input, it’s about 19 percent to make a jet fuel. 

We have two thermal process steps – no different than what I showed you before: the depolymerization and the medium-temperature hydrothermal process.  This is not the super critical conditions where you’re up to super critical 3,000 PSI where nature dissolves surrounding rock with those temperatures and pressures, which makes it hard to build reactors and let-down values.  We’re way below that.  We’re 600, 700 pounds of pressure, 250 degrees C.  These are not extreme.  Because of the separation, chlorine and metals are separated from the oils.  PCBs are reformed and destroyed.  You can take this oil and you can upgrade it in any refinery.

The big picture for shredder residue – and you can look at this as the big shredders on ships or wherever else you’re looking at – is in the case of shredder residue, it’s not just the cars and the trucks; it’s white goods – your refrigerators and your washers, dryers – e-waste, lubricants, oils.  You recover the organic material clearly as an oil and a gas, other, which is a lot of carbon – you know, they use carbon to fill tires and things – and plastics.  The inorganic material can go to a smelter or a landfill if you have to and water disposal.  This has a value to a smelter because that’s why they built the shredder plant to begin with.  They’re recovering the metal and the glass. 

So you can take, of one ton only – this is about an average – it’s been this way for many years.  These shredders apparently, according to the car companies, hasn’t changed in 20 years, and it’s not going to change, I don’t think, for another 20 years.  You get 600 pounds, so at about seven pounds a gallon – you know, 80 gallons.  Fixed carbon, so that clearly – just look at the clean coal value.  Scrap metals and fines.  Inorganics, some more metals, and water.  And if you start adding all the oils that they drain out, the numbers go up tremendously.  For every ton of mixed plastics, you get about five barrels of oil, and the numbers go down depending on what else you put in there. 

So how to achieve military objectives and change?  Supporting commercial-ready technologies through cost-sharing or preconstruction agreements.  You know, it is important for the capital market to be attracted.  I think we really want to limit our vulnerability and build smaller, independent facilities.  You know, this vulnerability with the Henry Hub and the Alaskan pipeline, and the vulnerability of waiting for that next disaster, it’s frightening.  We want to limit our supplies from places that are not seen as friendly to us.  You know, I live in New York and there was some comment about that guy who smelled like sulfur the day before; the other guy came in from Latin America.  I mean, those are terrible – you think about 3 million barrels coming from the company that owns more of the gas stations than any other, and we’re relying on that.  I’d like to see us move away from those kind of places we get our fuel. 

We need to develop these appropriate construction models with an eye on mission support.  I think that the driving force has to be the military – what are all of the visions of the future?  What are the forces going to look like?  Are they going to be mobile?  Because we don’t want to build these clunkers and have them sitting on the side.  We want something that’s going to fit in with the future of the military.  So I don’t think that anybody should say this is what we want to do.  We should try and listen to what we want as a force and see if we can gear the technology to fit the needs of the force.

We’re already storing these synthetic fuels, so we’ve just got to expand those services.  We have to bridge the gap.  These refineries are the guard dogs.  We could take our material right into the refinery.  There is not a shortage.  And this was confirmed with the people at the DESC with meetings with oil companies that I have had with them.  There is not a shortage of light fuel to go into the fluid catalytic crackers or the hydrotreaters.  There is a shortage of the light-condensable crudes.  The bottleneck is the desalters and the type of crudes.  There’s plenty of capacity downstream.  So there is no reason for someone like Changing World Technologies to build a delayed coker, like we did in Carthage, Missouri.  So there we were making gasoline, diesel fuel, fuel oil, gas and fixed carbon.  That infrastructure is already in place.

So we can build these boiler fuels until we get the capacity enough where a refinery becomes interested because they only want ships and they want pipelines.  These biofuels are not going to be delivering by ships and pipelines, so we all have to get real on that notion.  You know, we’re talking about having a pipeline from Iowa to California for ethanol.  That’s ridiculous.  I mean, I’d like to see one in a way, but we’ll never fill it.  And believe me, I’m a fan of all these fuels, but the reality is we don’t need to have this infrastructure if it’s not sensible. 

We think you could fast track some of these programs under your existing programs.  I’m excited that the leverage between the Department of Energy and the Department of Defense, because of the urgency that’s here with the Department of Defense and the vulnerability – I think you’ve got to initiate meaningful alternative fuel preference programs, not just buying green tags.  You know, the easy way out: go buy a green tag.  Well, that’s ridiculous.  I mean, we should be looking at – if we could put this in a boiler – you know, the numbers today is, if you look at installations, if they can buy a green tag they’ve satisfied EPAC.  Instead of someone saying, well, we could put in a boiler for you, we can make our own.  We can start actually limiting the vulnerability and we’re still going to get credit for reducing our petroleum use to comply with EPAC, but the easy way out is buying green tags.  We’ve got to get away from that.

If we set a minimum, you’ll share in the upside.  We have to get clever with the contracts.  Because we’re not making JP8/ JP5, I just hate to see the single fuel concept – I don’t know what the Navy and the Air Force are going to do with the JP5 and JP8 and how you settle that debate, but maybe it will be two fuels.  But if you have this waste, you might as well make a fuel – you’re not going to have a refinery floating on some strategic platform, so you might as well use that fuel as something that will fire your gensets, and if your gensets are wrong to charge these electrical vehicles or to provide base lights and heat and power, that’s also a good thing.

So I think a single fuel in a non-wartime scenario sounds great, but in a wartime scenario, as I said, there’s a lot of people getting killed performing duties of taking out garbage and waiting for some fuel to show up.  So maybe we can get rid of a rung or two from that logistical tail that we carry.

And then of course assign a team.  If Changing World Technologies goes to these generator companies – they’ve heard these stories for 30 years about making biodiesel and ethanol run on their generator sets.  The military goes, you can make a smaller footprint and make a more forgiving speck because the military is buying equipment, so if the military steps up and pushes the General Electrics and the Pratt & Whitneys and even Rolls Royce, there will probably be some forgiveness because the old engines took a wider range of fuels, so let’s push back and make sure that there is some forgiveness in the fuels that we burn.

There is lots of incentives out there.  I want to leave everyone with this image.  This is nothing new.  When we want to stimulate change we were good at that.  So there is a lot of different programs out there to be able to stimulate alternative energies, but the playing field must be leveled for alternative or renewable energy fuels.  If we were given $5.50 a gallon subsidy like they get fuel oil, I could sell the Department of Defense fuel oil at minus $3 a gallon.  That would be a good price.  Our price that we offered on a contract, when we offered the price to a military base two hours from our plant, they thought something was wrong with the fuel because we offered them a price of, I think it was, $1.60 a gallon for fuel oil – today’s price.  That number goes down if we get paid for fuel.  So very competitive.

This really is a paradigm shift if we start to think about the possibilities.  We’re only beginning to pay attention to this waste because of all the deaths that are happening as we take waste out of Camp Anaconda.  Look at the waste as a source of renewable energy.  Look at this as a way to have a carbon offset.  And we can improve the quality of life for all the soldiers and sailors and all the people in this great country. 

That last slide doesn’t want to go, but that’s it.  Thank you.  (Applause.)  Now the question time.

MS. WERTHEIM:  Right.

Q:  You mention a couple of feedstocks –

MR.    :  Stand up.

Q:  Okay, sorry.

MS. WERTHEIM:  Stand up and state your name and your organization.

Q:  Tom Wynn (ph), CNA.  You mentioned that you can start from different feedstocks and wastes or you can also start from polymers.  So what I’m wondering is that in order to break it down, instead of going all the way down to methane or carbon monoxide, you stop around the middle instead of going all the way back up again.  So I’m wondering what kind of catalyst that you have to use for different feedstocks.

MR. APPEL:  We don’t use any catalysts or chemicals.  To us, it comes in the material.  You know, we say we don’t add any chemicals or catalysts, but if you look at that feedstock material, that’s nasty stuff because you’re getting all sorts of different reactions that are going on because you have a mixed waste stream.  We have not looked at straight, pure polymers because if I had one of those I’d probably be selling at a very high price. 

So we look at only the mixed waste stream and we don’t go all the way to terminate the carbon and CO2, okay, so we’re what you’ve got.  But we have not looked at any kind of chemical or catalyst in order to help make these reactions happen. 

Q:  (Off mike) – catalyst to do that.  I mean, in order to evolve into whether diesel or JP, they have to use hydrocracking to get the produce that they want.  So that’s one of the questions, because I think you mentioned earlier that your product is not exactly JP5 or JP8.  It’s oil that can be burned but it’s not exactly that.  I think there is some issue with either the length of the hydrocarbon chain, but that’s why I’m not criticizing the product; I’m just saying that maybe I’m thinking along the line of some catalyst, either in the second process, hydrocracking, to make it to the product that – more diverse product.

MR. APPEL:  Let me try it a different way.  The stuff they’re making into JP8 and JP5, they call it crude because it is.  It’s really nasty stuff.  Coal – I mean, if you just look at the consistency of coal, there is only a little bit of JP8, JP5.  I have a huge advantage over that.  First of all, nature gave me, for plants and animals mainly – and I’m not talking about the sugar economy, the C6H1206, the carbohydrate short-chain sugar world because that’s for ethanol and for something else. 

I’m talking lipids and I’m talking – they’re mainly C16s and C18s, so the advantage that we have is enormous over someone who’s got crude or coal or tar sands.  So I don’t need those because nature already gave me a very short window to use.  Then when I deal with this post-consumer plastics world, whether it’s e-waste or your cars, those were short-chain polymers that someone figured out how to link together.  The longest ones are a heavy fuel oil, say like a Sundex (sp) 960 from making tires, which are not a real heavy fuel oil but, you know, something reasonably heavy.

So I’m starting out with something that’s a whole lot better than crude.  So they’re looking at these chemicals and catalysts.  They’re making it very it very specific; they’re trying to get their yields up and everything else.  Our whole focus is to take this material that nature has already given me – you know, that short window with the lipids – and then the post-consumer plastic waste and all these lubricants and solvents.  They’re giving me stuff that’s already in that range.  So now I’m just fractionating it.  I know it’s hard to believe, but –

Q:  Okay, thermal depolymerization is about as old as syngas Fischer-Tropsch chemistry.  It’s been around forever.  The only reason it has not come up to this level until today is the fact that the cost of electricity has been really, really cheap.  And, you know, this is strictly pyrolysis with a second step that is not gasification.

The question I have is that normal pyrolysis is about 50 percent efficient, but you have to consider when you start getting into the 80 percent efficiencies – you have to consider that this is – what are you defining as efficiencies?  Is your efficiency defined as the amount of gas that you get out plus – you know, the BTU content of the gas that you get out plus the BTU content of the heat that you get out, plus the BTU content of the oil that you get out?  Or is it strictly the BTU content of the oil that you get out that is 80 percent efficient, and did you account for the fact that you said you use 12 million BTUs per day to – as a plug in to run the plant?  Did you subtract that number out?

MR.    :  (Off mike.)

Q:  Oh, hi, I’m Rosemarie Szostak; I’m with LMI, and I’ve been doing this kind of technology for a while.

MR. APPEL:  Well, energy can be calculated in a number of ways.  We’ve taken the more conservative approach.  We take the BTUs that are in the incoming material over the BTUs that are available in the products that we store, whether –

Q:  Products, plural?

MR. APPEL:  Products.  That includes –

Q:  That’s gas plus –

MR. APPEL:  Oil, plus any fixed carbon like we would get from the –

Q:  Okay, so what’s the chance that that big product is oil?

MR. APPEL:  Well, it depends on –

Q:  (Off mike.)

MR. APPEL:  It depends on what goes in, but the majority of the material, in the case of the animal parts, it’s about 50 percent. 

Q:  So 50 percent – so your efficiency is not really 80 percent when you’re converting it to oil, but it’s only 50 percent – (off mike) – you’ve got other products you have to concern yourself with.

MR. APPEL:  Well, I’m giving a general speech.  If I take mixed plastics, okay, then my energy efficiency is 91 percent straight to oil if I take PET, HDPE, PVC.  So I’m dealing with this other nasty material, so I’m dealing with water, I’m dealing with metals, you know, inorganic material.  So I’m taking a very conservative calculation.  So when we take the energy required to heat the material, the electric for the pumps and the motors, all the electric needs inside the boundaries of that facility, we have an energy efficiency of about 86 percent at that plant.

Q:  So you are subtracting out the energy required for input energy?

MR. APPEL:  About 15 percent at that plant.  I’m subtracting it out.  I need 15 percent inside the fence to make that process work.

He’s got the mike, so –

By the way, the DOE, MIT, Ford, GM, Daimler, they’ve all done their independent – there are so many ways you can calculate energy efficiency.  This is the most conservative approach. 

Q:  I think that the concern was you’re making a whole range of products and it’s not specifically taking garbage and converting it to – what?  That’s one of a number of products that you’re getting – (off mike).

MR. APPEL:  That’s right.

Q:  It just sounds like it’s a – (off mike).

MR. APPEL:  Well, you know, I can’t turn that into oil.  So I’m dealing with mixed waste.  So I have to deal with the inorganics.  I’m getting inorganics, even when it comes with the animals.  I’ve got calcium and like P205 (ph).  So it’s a big part of what I do.

Q:  Robert Eberth, Sanderling Research.  This last exchange really got to the – made a great example for my question.  It becomes very important whenever we’re doing these type of economic analyses of alternative technologies how you draw the boundaries on the system that you’re looking at as one alternative.  This lady had one boundary she was proposing, I think; you mentioned another one, which was sort of inside the fence.  There is also energy costs of getting things inside the fence.  Has anyone – this is a question I’ll direct at you but it’s sort of open to everyone – have we tried to come up with a standard way of defining those boundaries so that we can be really making equitable comparisons across these alternatives? 

In your discussion you mention several things outside the boundaries of that fence where you saw benefits – economic benefits – coming back to the society.  There’s also additional ways of drawing the boundaries on the input side, which would include everything needed to get the material inside your fence, including the vehicles and the construction thereof to move them in.  Has anybody tried to define those boundaries so when we do these comparisons, we really can have equitable comparisons? 

MR. APPEL:  The answer is yes, we’ve done those – I haven’t done those analyses, but MIT and the Wallenberg (sp) Institute did the analysis for this process.  They did a lifecycle analysis.  And then Ford, GM and Daimler extrapolated to absurdity a lifecycle analysis, looking at all of the different details, because they go to different layers in their life cycle analysis because if they change a component, say to go from a PVC to some ABS or some other kind of component, they want to take it all the way through to see if it affects manufacturing or if it affects disposal.

So all of these, according to MIT and the Wallenberg Institute, they have never seen a life cycle analysis that’s been so positive, looking at all the distribution of bringing waste material in and the energy from that truck, and coming from X miles.  And then the car companies have never seen on that has been so good.  And that’s been published at SAE and all these other conferences, and I know that I’ve passed these on.  They’ve been as good as anyone has ever seen from life cycle analysis. 

It’s a little bit different debate when you look at – for instance you’ve got this guy at Cornell; he’s got this argument that it takes more energy to make ethanol than it does of what you get out.  We’re dealing with waste.  We’re not growing a crop, we’re not worried about natural gas making anhydrous ammonia or fertilizer to grow some kind of crop; we’re dealing with stuff that has virtually no value.  That’s what we’re dealing with. 

So, on any life cycle analysis we have to get rid of that.  I’ve actually seen some analysis done by people saying the transportation to get the material to the plant, okay, costs too much money.  You’ve just got to go talk to these municipal leaders.  They’ll tell every one of these people doing these analyses that they’re mad because they pay all this transportation fuel to get this stuff shipped some faraway place.  I’m from New York so we used to run the “poo-poo choo-choo” to Texas until they got smart and they closed the front doors of the ranch saying that they’re spreading all that New York shit down in Texas so shut the door.  (Laughter.)  So that’s a big freight train. 

So, yes, I have not looked at it – you know, we have to get rid of the waste, but we’ve had a number of agencies look at that and they’re very positive, and they’re very – you can imagine General Motors, Ford and Daimler doing that.  It’s as in-depth as it comes, and you can imagine the sensitivity of MIT and the Wallenberg Institute.

Q:  I’m Scott Chubb from the Naval Research Laboratory, and I’m also from Ne York and I agree with you.  (Chuckles.)

MR. APPEL:  On the “poo-poo choo-choo”?

Q:  Yes, and also actually problems involving Shoreham Power Plant and things like that.

Now, an interesting question in my mind is the – it relates to what has just been said.  We often try to deal with sort of econometric models where we have, you know, sort of generic probabilities and value of investment.  It looks like what you’re dealing with is something very specific that could have very real value, and it’s sort of isolating the particular wastes and the costs of the wastes – what one might call the priors in a kind of Bayesian analysis.  And what I mean by that is in order to bound the topic, one might sort of restrict the constraints.  So as opposed to thinking in terms of some kind of comparison of the simpler kinds of synthetic fuel conversions, you’re dealing with much higher-grade molecules and what might happen to them.

And I just throw that out.  I mean, it’s – standard econometric models might not work very well here where sort of conditional probability arguments might actually have much greater weight.  I’m thinking in particular of the work by E.T. Jaynes.  You know, I don’t know if you’re familiar with Bayesian analysis, but they’re very interesting approaches. 

MR. APPEL:  You know, we have our walking vestibules of knowledge that have come up with all the different formulas and calculations.  And you’re right; I deal in a very real world.  I’ve got to get rid of this stuff.

Q:  That’s right.

MR. APPEL:  And we have a different equation that we use.  We don’t care about life cycle analysis.  We don’t care about any of these things.  At the end of the day, if someone says, “Can you meet a commercial spec?”  “Yeah.”  “And what’s the price?”  And we could deliver the price at BTU parity, what does a life cycle analysis mean at the end of the day?

Q:  I guess what I’m suggesting is that, yeah – I mean, you have to bound the problem, though, is what I’m suggesting.  You know, you have a particular kind of output; you have a particular kind of input, and you say, well, this really costs this amount to get rid of, and we just – this is much better.

MR. APPEL:  I appreciate that.  And life cycle analyses are important, don’t get me wrong, okay, but when you’ve got to deal with this –

Q:  Exactly.

MR. APPEL:  I pay $97 a ton for the pleasure of buying waste that shouldn’t be even fed to animals.

Q:  There you go.

MR. APPEL:  If I get paid, okay, at paying that material, my production costs on an MMBTU basis is $9 per MMBTU.  We all know natural gas, that’s like $8, $9.  If I don’t have to pay for the waste material, I’m at $2.65 per MMBTU.  How many people would buy natural gas and fix it at $2.65 an MMBTU today?  You’d be happy if you can get a long-term contract at $8.  You may get lucky and buy spot in the shoulder months, you know, when it’s a little bit warm, at $4.50, $5. 

So we look at it, we’re selling BTU parity to boiler fuels.  So in the end of the day, that’s the important thing is what can you sell this product for and make money in a plant? 

Q:  (Off mike.)

MR. APPEL:  Then we did the Bayesian analysis.  (Laughter.)

Q:   Sarah (sp)?  All right, Sarah, I’m going to take prerogative.

MS. WERTHEIM:  (Off mike) – sit down.

Q:  I’m taking prerogative of holding a mike for a moment.  Adam Siegel, Northrop Grumman Analysis Center.  Let’s take the most naïve sort of question, then.  Carthage has been around for two years now, the plant.  Why don’t we have Purdue diesel off the Eastern Shore?  Why don’t we have Fresh Kills diesel?  Why don’t we have more plants?  If you’re able to produce this at these sort of prices, why aren’t there 50 of your plants under construction around the country to be producing fuel?  What’s the barrier to entry if you’re so cost-competitive?

MR. APPEL:  Well, the big thing was – I don’t think it’s a secret.  We had some issues with the state.  You know, we were shut down for a good part – because of the odor.  And my partner kills 35,000, 36 (thousand) pounds every day – birds.  We’re next to a Schreiber Cheese plant.  They produce lots of cheese.  And we were blamed for every odor in town, and we are the ones to prove that we were worthy of being in – I’m actually in the neighborhood.  I’m a half a mile from the town square.  And the lawsuits were dismissed only in the end of June.  So even though we started the plant up in 2004, we actually didn’t.  We were under the watchful eye of the EPA and the Department of Natural Resources in the state.  So we only actually turned this thing full throttle in August of this year because we were under very tight reigns with the state government. 

The other thing is – I’ll say it one more time because it doesn’t exactly sink in – this is the only country in the world where cannibalism is acceptable.  Everywhere else, including Canada, just this past June, made a decision to ban feeding animals back to animals.  So you have to pay for the pleasure of buying this waste material that’s prohibited everywhere else.  So some of the stories you see in the paper, and, you know, we’re going – I’m over in Europe a lot and I’m in Canada a lot because we’re not going to build a plant where I have to pay that much money for a waste material that’s prohibited everywhere else. 

So Tyson feeds animals back to animals, as does Smithfield, as does ConAgra because it’s an accepted practice.  No one has figured it out why, here, but just to give you a quick number, we’re killing about 3 to 4 million less head of cattle a year since that purported mad cow outbreak three years ago – that’s a lot of animals – because nobody wants to buy our meats overseas because we continue to feed animals back to animals.  So it has a terrible effect.

Q:  This is a follow-on question.  I’m Gene Porter from the Institute for Defense Analysis.  A follow on to Adam’s question about – (unintelligible).  I mean, it sounds too good to be true.  I mean, a low-pressure pressure cooker, no magic chemicals.  You feed in essentially free feedstock and out comes highly – (off mike) – hydrocarbons.  Why aren’t you – why don’t you have 50 competitors doing this in Canada or Europe already where the feedstocks would be free?  What’s their barrier to entry?  Why are you ahead of the curve on this?

MR. APPEL:  Well, because we’re the patent developers; we’re the technology –

Q:  Ah, you have patent protection on this.  Could you describe that a little bit?

MR. APPEL:  Well, we have patent protection in trade secrets, so we’ve developed a patent and there is about, I don’t know, eight or nine of them now, that we’re the ones who figured out how to do this.

Q:  How many years left on your patent?

MR. APPEL:  Twenty.  It was 22, so 20 on the ones that were – the ones that were ’92, those were – we’ve gone so far past there, so we’re up to ones that were 2004, so it’s –

Q:  (Off mike.)

MR. APPEL:  No, no, it’s 22 now.  Seventeen is old.  They’re much longer now. 

Q:  Hi.  Lieutenant Colonel Wideman (sp) from the Air Force Civil Engineers Office.  In some of the other processes that I’ve done some reading and a little research on lately, like waste energy where you’re burning and gasifying, you know, you use a magnet perhaps to extract some of the ferrous metals, but there are some things that get through.  In your process, prior to feeding it into the process, how do you keep those other metals that are not going to be picked up – manganese or lead or zinc or something else that’s going to make it into the process – how do you deal with that inside your process so that we’re not producing or making hazardous waste we have to handle later?

MR. APPEL:  We don’t take them out until they go through the – there’s the bulk separation.  The process is such low temperatures and pressures, you’re not melting metals.  You’re at 250 degrees C.  That’s it.  So you’re not going to melt any metals at that temperature.  The only solid you melt at that temperature is the strange solid which we call proteins.  That actually starts to disassociate and melt at much lower temperatures.  You know, it’s purely from a solid. 

So when we take this material – so there’s metals in there and there’s zinc and magnesium and all sorts of stuff in that shredder residue, when we cook that all together – you know, we’ve got our catalysts and our chemicals, and there’s PBC in there, you know, 6, 8 percent, so you’ve got chlorine, so you’ve got acid activities going on.  We heat that and then all of the organics dissociate and separate from the organics.  We also make solvents that we then wash those metals so they’re clean.  That oil then is really nasty oil.  It’s this pyrolytic-type oil.  We nicknamed it “methyl-ethyl death” because that’s where all the bad stuff would be.  So all of your chlorine and your bromines and all your metals.

Now you need the hydrolysis step, and the hydrolysis step further breaks down that material and the metals and the chlorine go with the water.  And the metals all leave as oxides, so they would pass all your T clips.  So we even did metal-flocculated sludges from circuit printed board factories, you know, these (look like phones ?), and those would also pass your T clips.

So you’re not – when you’re talking about gasification or incineration, you’re over 1,000 degrees F; we’re at less than – we’re 450 degrees F, so you’re actually – you know, you’re melting some of this material and you’re sending it out probably some kind of flue.  Ours is inside a pressure cooker, and nothing hits an open flame so nothing is getting that hot.  So you’re not talking the same – although they’re essentially breaking down and burning that material using heat, we’re not going to temperatures that would melt any kind of metal.  And the metals that are in that oil, that first-stage oil, that pyrolytic-type oil, I understand the concerns on that.  That’s why it keeps going to the hydrolysis section, because we need to make sure that that would be a safe oil to burn, and the hydrolysis does that. 

Q:  Wesley Taylor (sp) from the University of Maryland.  Do you sell your metals, then, for scrap?

MR. APPEL:  We only have a commercial plant.  We sell as a fertilizer – we’re a registered fertilizer in Missouri and Kansas, so we sell it at pretty much close to parity for P205 – calcium P205 and sulfur.  In the case of the metals, I’m almost finished the work with the car companies.  These scrap dealers, they have put sophisticated equipment to recover more metal, like most of them are putting in eddy current recovery systems in now.

So the answer is we believe, when we look at the products that we finally make here, that these metals, they’re going to have a value.  It’s $300 a ton for scrap today.  As a matter of fact, it’s so high they’re mining landfills.  So we believe that they will take this and this because that’s a lot better than – they don’t want all this material. 

Q:  Mike Maufin (ph), U.S. Department of State.  I was confused by your presentation because I wasn’t sure what has been done and what hasn’t been done.  The demonstration plan at Carthage used animal waste.  But you also talked about municipal waste streams.  And I know from New York City that they sell their municipal waste and they – I mean, they don’t sell it; they pay people to haul it away.  And so what’s the status of using your process for things besides animal waste, like municipal waste?

MR. APPEL:  If you look at municipal waste, it’s basically the combination of the food waste we did with ConAgra, and it’s the shredder residue waste we’re doing with the car companies.  We were – New York City did a study – we worked with the city of Philadelphia before they went to privatize their biosolids division.  We are responding – the county of Los Angeles has just selected a couple of companies to build a pilot plant.  We are one of the respondees.  They spent three years studying what would be good for municipal waste.

We told them we actually weren’t interested, and we’ve told New York City that.  We’ve told all of the municipalities, because we’ve been through this dance before.  They change mayors, they change sanitation commissioners, they change – it just happens too fast.  And the reality is they’re not very good developers.  They’re really good with the contract to – not negotiate them but with a contract in saying that I will now pay $80 a ton to get this stuff somewhere else, ship it out of here.  They’re not technology developers.  Ford, GM, Daimler, Volkswagen, they have this issue with end-of-life recycling.  So they have a gun to their head right now. 

So as we develop this demonstration plant with the car companies – and we’ll be finished with that work in the next couple of months – is to build a Carthage, Missouri-type facility for shredder residue, and it’s similar in some respects to if you take the country of Los Angeles, their transfer stations – this is after they’ve separated some of the material.  So we can take some of the material that they’ve done and work our way in, and whether the county of Los Angeles selects us, I don’t know, but on the 15th, all bids have to be in.  They have flown out to our plant in Missouri, and they’ve gotten there and they’ve said, what smell? – when all the smell stuff was going on. 

So we’re happy we were selected, but it’s not a low-lying fruit for us per se because of all the changes in, typically, those local governments.  This is a low-lying fruit and it’s someone who is extremely interested because in Europe, they have to deal with this waste, and that’s why they’re paying so much money.  That’s a better scenario for us.  And in the end – in the end, that’s municipal waste, if you add them together. 

Q:  Hi.  David Talkin (sp) from Google.  I have three questions, actually.  Just to follow up on that one, are you saying, then, that if you had R&D dollars to develop a municipal waste handling facility, you’d go for it, but the typical municipality is not willing to do that?

MR. APPEL:  I would say that’s true.

Q:  Yeah.  Okay, the other question I had is what are the economies of scale?  What’s the smallest – say, if you put it in terms of megawatts output capacity, what’s the smallest plant you could build and how does the cost go down as a function of the plant size?

MR. APPEL: Well in this case, this is refinery equipment, so big is better.  So in anything, the big is better when you’re making oil and gas.

There was a place – Plum Island, which is this bio level three facility, they only have one ton a day of waste, and we actually were designing a plant – it was under Agricultural Resource Services.  It’s now part of Homeland Security.  And they do the West Nile virus and foot and mouth and a few other of those type diseases. 

So it depends on really what you want to do.  So you can go to – you know, I’m doing pressure cookers right now in small bench, so you can do small laboratory stuff and it would be efficient for getting rid of that material.  But then, you’d have four gallons of oil; that’s a pain in the neck; what do you do with that?  So in the oil business, you want to have a lot of it.  You’ve got to have a lot of oil in order to penetrate the market.  If you want to go into a pipeline, I need 100,000 barrels an hour.  If I want a barge, I need 40,000 barrels for the barge.  But we believe that 500-ton a day plant, you could even make work in the United States paying for waste.  So this plant – that’s why you saw the uplift of 450 tons.  The nice thing is these footprints are relatively small.  They’re not that complicated.  As I said, we don’t have these chemical loops and recovery systems.  There’s a lot of stuff coming in that material.  And as I said, I’m making a fuel.  I’m not making a high-quality transportation spec fuel.  We’ll leave that up to the guard dogs, the refineries.

Q: So would 500 tons translate into roughly, say, 200-300 tons of coal in terms of the fuel potential of the output, given these figures?

MR. APPEL: You know, the densest fuel out there is coal.  So I don’t know the exact number to coal, but if this is all based on BTUs, in the food waste, it’s a little over two barrels for ever ton that I put in.  So I get over a thousand barrels for a 500-ton plant.  When it comes to this mixed plastics, the more lubricants and oils and mixed plastics, the higher the conversion.  We’ve seen upwards of four barrels for every ton on the shredder residue.  Now, the car companies – that’s just a matter of a good shredder or a bad shredder company pulling out more or less of the material.  So the more effective they are pulling out glass, metals, ferrous and non ferrous, the higher the yield.  But we don’t look at – I haven’t looked at the calculation directly against coal.  Can I ask why we would look at that?

Q:  Well, I was just trying to get an idea of how –

MS. WERTHEIM: Give him the mike because we’re trying to record this.

Q:  Sorry.  I’m just trying to get a gauge on how much electricity one might be able to generate with say, 500 tons of municipal waste a day?

MR. APPEL: I can answer that question another way – the Carthage, Missouri plant, the 250 tons – that’s about 12 megawatts worth of electricity for the city of Carthage.  And those are old, low-speed diesel engines.  So I don’t think the efficiency is very good.  If you went to a gas turbine or a boiler with some kind of back pressure steam turbine and get your efficiencies at 70 percent, then you’re talking about closer to 15, 16 megawatts.  So that’s a lot of electricity.  So on a 500-ton a day a plant, depending on how sophisticated you were – you got boilers diesels or you got gas turbines – and there is different efficiencies, and then you have different uses of heat recovery there.  But you’re talking about at least 20-something megs.

MS. WERTHEIM: Incineration, by the way, is 10 percent efficient from waste energy in to electricity out.  That’s just the benchmark.

MR. APPEL:  That’s it.  There’s 10 percent.

Q:  Ted Hilgeman (sp), Northrop – oh I’m sorry.  Is someone else?  Ted Hilgeman, Northrop Grumman.  Is mercury a problem in your feedstock or do you have a way to handle it?

MR. APPEL:  I collect it and put it in my teeth.  I’m still one of those old dentists.  Believe it or not, they’ve gotten pretty clever with taking it out of the switches.  And they’ve also gotten very clever taking it out on those – you know – those Honeywell switches.  So we see very little.  I have spoken to a guy who wrote the Depot Biosphere before he passed away.  He thought we can tie up mercury in cinnabar, which is a crystalline form of mercury.  We were working with coal companies; we never got there.  But since we don’t see much of it in the shredder residue – we see small amounts – we haven’t paid much attention.  We see plenty of PCB oil and plenty of PVC.  And even some of the other metals, as I said, they leave as oxides.  Mercury and lead are mobile.  We don’t even see a whole lot of lead.  I think they’re taking out a lot of that with their other metals.  Very little.

Q:  Chris Christopher, lately of ONR, and now of Homeland Security.  You could build a unit that you would sling on the back of a truck that could accompany a mobile force and supply its fuel for mobility out of the waste products from the food and so forth being consumed by the people in the mobile unit; is that correct?

MR. APPEL:  Yes, that’s the plan.  That’s what we were looking at it with the Fort Leonard Wood Army School of Engineering.  They call it a rapid diesel deployment platform.  And we look at the food waste, and we look at a lot of what we call the organically-rich waste material, which is the lubricants, the mixed plastics, the water bottles.  The food waste has the water we need; it’s wet.  And the other material has an awful lot of organically rich material to be able to convert into hydrocarbon oil, so you have – it’s all the solvicants (ph) and lubricants.  And I’m only taking these from forward base numbers, so I don’t have all the fixed installation numbers.  We were looking actually at something small, you could put together, connect it on some trucks or drop it from one of those big planes.  Maybe we bubble wrap it so we can jump-start the machine.

Q:  My name is John Clarke (sp).  I’m a retired engineer from Caterpillar and other companies.  I’ve worked on engine performance for all my career.  And the science of engine performance is thermodynamics.  And I find it terrible that none of these processes are compared on the basis of both the first and second laws of thermodynamics.  This BTU balance stuff doesn’t tell the story.  BTUs are not equal.  Do that on a peak bump and you’d find it was a useless machine.  BTUs in; BTUs out; they’re the same.  They’re always the same if you look at the right basis.  So my appeal is not necessarily to a company that takes waste and turns it into a good product.  That’s wonderful and I applaud it.  One of the things that thermodynamics tells you is that there is no recyclable process.  Excuse me; put it the other way.  All chemistry processes can be recycled except available energy.  Every recycling process, which could be applied to any of these materials ultimately uses available energy.  And that is what we need to put our fingers on.

And from a research point of view, I find it rather disturbing that the inputs to these processes are not described in complete thermodynamic terms.  They’re described in terms of heating value, which is not the whole story – not by any means – especially with complex quantities such as the cellulose and the starch and the plastics.  There’s more to the thermodynamics of those things, and one can’t find the numbers for these thermodynamic properties of those things – at least I can’t.  And I would welcome anybody who can tell me where we can get hold of that.  Because when we can get hold of that – if the research hasn’t been done, then we could put – (off mike) – find what level of difference is obtainable before the – (off mike) – and I’d like to see those – (off mike).

MR. APPEL:  Well, I think it’s very interesting.  And if you have a suggestion on how to tell me whether car companies – what’s in that material, we would be very happy to talk with you.  That’s one of the complications.  It’s really hard to measure when you’re dealing with waste – what really are those properties, so the only thing that we can sensibly do is come up with what we call a BTU comparison on the output material.  So we had a big study done at Brookhaven – Tom left; he did the study.  And this burns just like number-two fuel oil, so that’s the only thing that we were able to sell, because we don’t know what we’re going to get in this material on the front end. 

My partner, ConAgra Foods, told me that I was going to get X.  I got A, B, C, through Q.  They said there was going to be this much water.  Well, there was that much water.  They said we were going to get this many feathers.  Well, there was that many feathers.  So I don’t know how to do the analysis of something that ebbs and flows and we can’t spend our time figuring out what the characteristics are of that material.

Now, we have some universities doing some work on that, including MIT and Hofstra University, mapping out the chemistry.  But this is a really hard front-end calculation you’re looking for, and I don’t think that –

Q:  I’m not denying there is some use in the calculations you do, and you need to do them, by all means.  And you know when you’re improving the process. That’s not quite my point.  My point is, if somebody can show me that conversion say of cellulose into ethanol fuel is actually being done on a second-law basis with an efficiency of about 10 percent now, then that will wake up our researchers.  It will wake up our academics and say, where are we?  We’re so far away from what’s physically possible that there should be room for improvement.  And until those upper-level numbers come out and are obtainable to people, I worry that the research won’t be there. 

MR.    :  I think you have to do it from an economic perspective.

MR. APPEL:  Yeah.  I think one of the comments is do it from the economic perspective.  And we’ve got to get rid of this.  And then the academic exercises will follow – I hope – because then we can keep advancing what we already know.

Q:  I’m Brad Hallmans (sp), the Virginia Institute for Defense and Homeland Security. And I was wondering if you’d be willing to share with us a little bit about what your plans are on the business side – how you plan to go forward over the long-term to commercialize the technology, and particularly how do you plan to develop it as a business?  I assume at this point you’re a relatively small business.  Do you plan to license to the Daimler-Benzs and the Fords and so on of the world?  Do you plan to grow the company yourself and develop all of the projects?  If you understand the drift of my question, how is this going to work out commercially?

MR. APPEL:  Yes, that’s a good question.  We were going to just be the technology developer, and we tried that license routine with ConAgra.  And they’re really good at hot dogs.  But at the end of the day, when something is this new and dynamic, we took the company back, and we’re now building the operating company.  It’s a little bit difficult to commit to a plant in the United States because the production tax credits run for only two years on ethanol and biodiesel.  In Europe, we get 20-year power purchase agreements; they pay for waste.  So the next step is to roll some plants out in Europe and in Canada.  And since Canada just did an animal feeding ban, it makes it attractive to go up to Canada.  Until we put parity in this system and we put long-term agreements in place, it’s going to be tough.  We’re not going to go through a proposition where we make no money and put $30, 40, million in the ground here.  But we will be the operating company.  That’s why I brought in Brad Aldrige and Steve Carlson, and a couple other people that have built plants.  And now, our model works and we’re going to roll these out.  We took in a big financial partner, Goldman Sachs, as a common stockholder to also come up and leverage those models to hopefully build lots of these.

Q:  I’m Bob Hershey.  I’m a consulting engineer.  I did the waste tire studies for DOE and EPA.  You had mentioned waste tires as one of your inputs.  And I wonder what’s happening on that.

MR. APPEL:  We did the tires separately also with the Finkelstein family.  They’re the biggest distributors of Goodyear Tires in the world.  They’re one of my partners.  They own 15-20 percent of our company.  So we did a lot of work.  Goodyear was terrific for us, spent a lot of time in Akron, learned a lot about carbon fillers.  However, at the end of the day, they’re just part of the car.  Whether it’s the hose or the bumper, thermal plastic or the tires, it’s something that separately we get it in the shredder residue.  We did do a lot of work separately.  But to us, it just comes as part of the car.  Tires work on there too.  And one of the slides, it was up to 14 percent, which would be a high number.  You know, when you look at tires, there is an after-tire market, but the tires work fine.  You’ve got a lot of carbon black, because it’s 30 percent by weight, the carbon black.  And you’re not going to be able to return that back to the tire.  That’s a five-year road test spinning around for five years on a robot.  So someone else will have to do that.  Yes?

Q:  Is this on?

MR. APPEL:  No.

Q: Thank you.  I’m Johanna Mendelsohn Forman with CSIS in Washington.  I wanted to just bring up the international applications, and not necessarily in the developed world, but in the developing world.  Have you looked at potential investment with multilateral lending institutions who are getting interested in the bio-energy field about the prospects of going to mid-level developed countries like Mexico and parts of the Caribbean where this kind of process would perhaps meet most of their needs for diesel, where there is no other source of energy?

MR. APPEL:  We haven’t looked in depth.  We’ve had about 100,000 emails literally of people interested in trying to partner and do joint ventures, and a lot of them come from developing nations, whether its fully developed like in India or more developed in Bangladesh, but kind of from Bangladesh – get them from the Kingdom of Saudi Arabia too.  So we get them from all over the place.  Our focus was after we got out of trouble with the environmental people in Missouri was to now focus and stay within ourselves.  You know, we just say no, because we don’t know how to license and charge yet, so we’re trying to run a practical business model.  And it wouldn’t be fair to the people we would license the technology to; not sure what we would guarantee.  And the really hard part is they can’t even guarantee us what’s going in the front end.  And so we learned that lesson, so we want to have a few of these plants built first.  We have taken lots of risks.  As I said, we’ve put in over a hundred million dollars, and that’s not venture capital money – there’s no VCs here.  This is straight good smart money, maybe.

Q:  Brian, what would be the premium-size plant that you would be looking for for the type of production?  What?  Paul Bollinger with the Air Force.  What size plant would you envision as being the optimum-sized plant for output of product?  And also, you said Goldman is one of your investors or stockholders.  What type of return is Goldman looking for?

MR. APPEL:  Well, they look for high return.  (Laughter.)  That’s why they’re Goldman.

Q:  Yes, they do.

MR. APPEL:  They look for high spots in the cabinet, and they look for high returns.  Goldman – Paulson took a position before he went to run Treasury to – like AIG and a number of these institutions – that we needed to be more sustainable, and we needed to get behind some technologies.  Some of their investments are quick and some of them are patient investments.  They have $12 billion in their firm’s fund, not the outside funds they manage, so they invested the firm’s money, which is probably a little more patient than the Fidelities and the AIGs.  So I would suspect part of that is because these are significant returns on investments, if you get paid and you can penetrate the market with BTU parity.  They are our financial advisors and they’re interested in this space.  I mean, Paulson was sued by some shareholders saying that he shouldn’t go into this renewable, sustainable space because he wasn’t getting the highest returns.  So he took some licks, you know, for doing that.

I think the more important question is what is this optimum-size plant?  We’re doing an exercise with one of these groups that are studying the cost of fuels and production costs and everything else.  We submit a 2,000-ton a day plant; that’s probably giving ourselves a huge disadvantage, but it’s something that we can with confidence say you can build those plants, because really, Carthage is closer to a 450-, 500-ton a day plant.  So if you just train two of those together, you get 1,000, which is the models that we’ve just designed.  And then to respond appropriately to the military request, we put in a 2,000-ton a day plant.  We think they should be five, because there is other material that you can aggregate, and then you’d get really some significant returns.  And then you wind up hedging if the markets do change.  Remember, you’re relying on this waste stream, so if there is a use for feathers because they’re going to make some pillow that you sleep better with or something – make something up – they’re going to come out of the mix.  If they figure out how to take polyurethane out of this material because it’s worth so much money, they’re going to do that.  And they’re just going to take it from you whether you like it or not. 

So 5,000-ton a day would be the really right size, but we responded only with 2,000 because we didn’t want to argue all day, well, they never built one of those at that size.  So that plant still throws out the 2,000-day plant is 5,000 barrels of oil a day.  So that’s – I mean, it’s not what you’re used to buying, but it’s meaningful for reducing vulnerability and all those other good things.

MS. WERTHEIM:  Brian, you’ve been really wonderful.  Thank you very much.  And before we applaud for him, I want to make two points.  We are going to be recycling tonight, so I want you all to put your name tags and your tent cards into your envelopes and put them in the basket outside.  We’re going to use them again.  It’s all part of the new way of being energy smart.  And please all help me thank Brian for giving us such an interesting speech.  (Applause.)

One other point I want to make is our next meeting will be on a Tuesday night.  It will be on the 12th of December with Amory Lovins.  And our meeting in January, we’re going to have the vice president from Wal-Mart coming and talking how they have cut their energy costs by 30 percent.  So thank you all for coming and have a good evening.

(END)

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