Northwest Advanced Bio-Fuels, LLC (NWABF) draws ever closer to achieving its primary objective – building a world-class SAF refinery on the banks of the US’ Columbia River
With the International Renewable Energy Association predicting demand for sustainable aviation fuel (SAF) exceeding 3.5 billion gallons by 2030, but current production capacity for renewable jet fuel standing at less than 30 million gallons per year, we are facing a problem.
Governments around the world have acknowledged the need to increase the use of SAF (a drop-in fuel which can replace conventional petroleum-based jet fuel) and are creating mandates designed to encourage airlines to move over to this option (and penalize them if they don’t). Clearly, there is a huge need for more facilities to produce this fuel. In fact, according to a report from ICAO in 2020, ‘If the alternative fuels market were to supply Sustainable Aviation Fuel (SAF) blended with 50 percent petroleum fuel, the market will need at least 85 facilities a year for the next 30 years.’
Recognizing this opportunity, nearly seven years ago Dave Smoot and his highly experienced team of Subject Matter Experts (SME’s) at Northwest Advanced Bio-Fuels, LLC (NWABF) began formulating a project to build a second generation, commercial scale, cellulosic renewable bio-fuel refinery. Designed to produce up to 60 million gallons of renewable jet fuel on an annual basis, it will convert woody biomass to SAF using biomass-to-fuels gasification technology that is already proven, and currently deployed in the US and around the world.
Significant feedstock
Following intensive research, the right location for the bio-refinery has been identified in the Pacific Northwest (PNW) Columbia River Corridor. In fact, an offer is in to purchase the land. With an existing dock for feedstock and fuel transport by barge, it has access to rail, truck and utilities, making it ideal for receiving the large amounts of woody biomass required to generate the required fuel volume at the most economical price.
This brings up the topic of feedstock – one of the teams’ most significant decisions was choosing woody biomass for this purpose, as it is plentiful, cost controllable and available locally. NWABF, led by Project Manager Chris Whitworth, has already executed more than eight Letters of Intent with financially successful feedstock suppliers in the PNW to fulfil over 300 percent of its needs for woody biomass, allowing for a redundancy of supply. These agreements get turned into definitive agreements during the next phase of the project development. Feedstock prices, negotiated under mutually agreeable supply terms, will protect the project with feedstock deliveries for a minimum ten-year term, enabling the company to control long-term supply chain costs, and giving feedstock providers the opportunity to book long-term contracts for the first time ever.
As NWABF emphasizes, woody biomass is a natural source of fuel (having similar traits to coal with very high BTU and carbon content) and it is working with supply partners who develop long-term plans to keep the environmental and ecological health of the forests as their top priority. Former 20-year Navy Seal Team VI Member Steven Brown, working with Whitworth, will be responsible for the intensely complex logistical issues of sourcing, tracking, retrieving and receiving the huge quantities of wood chips the project requires. Using no live trees, the wood supplied comes from slash piles, pre-commercial and commercial thinning, mill waste and forest residuals from the ground, which for over a century have been left in the forest (emitting GHG), control burned, land filled or been fuel for forest fires. NWABF’s strategy includes adhering to stringent guidelines for RIN credits and meeting RFS standards compliance in feedstock eligibility, as well as forming partnerships and collaborations with each segment of the supply chain; trucking, chipping and grinding, barge deliveries, and rail deliveries from multiple locations in the Northwest. The business also uses a life cycle analysis company, Life Cycle Associates, for measuring carbon footprints, qualifying for LCFS Credits, tracking and verifying feedstock resources, and tracking and documenting the energy required in every aspect of the project from cradle to grave.
World-class partners
With NWABF releasing progress announcements almost daily, EOG talked to Dave Smoot, CEO of NWABF, to get the latest details. Dave’s background in business includes 40 years in computer software and software leasing, five years in the development of large wastewater and water projects for new greenfield housing developments and a couple years setting up 1000+ acre wind and solar projects in California. In 2014, Dave began to focus on the new concept of renewable energy and fuel made from wood. Learning a lot from his first projects, which struggled to develop because of technology issues, over the next few years Dave formed new relationships with top tier technology companies and various airlines as he continued working to get a SAF refinery project off the ground. This hard work culminated in a call in 2019 with Delta Air Lines. “That turned into what is one of the longest, most valuable, and largest SAF contracts written to date,” he begins. “Delta executed a ten-year Fuel Purchase Agreement. The magnitude of the Agreement and the incredible terms we negotiated are a credit to our CFO, Bernie Asher, our lawyers at Kilpatrick and to the team at Delta Air Lines, who knew what they wanted and how to go about getting it. Delta is the only airline that owns a Refinery, Monroe Energy in PA, and they are great to work with.”
As a buyer for the SAF has been confirmed, adequate amounts of feedstock located and the perfect location identified, Dave and the NWABF team continued to assemble a hugely impressive group of world-class partner companies to provide the technology to convert the woody biomass to SAF, oversee the construction and startup, provide operations and maintenance, and provide industry-leading legal counsel. Sr. V.P. and Director of Project Development, Nausher Khan, a former Business Development expert with 20 years in power generation and O&M services in the O&G industry, led NWABF’s Team to attract and partner with industry prominent companies for the project, which now includes renowned names such as Fluor, Worley, North American Energy Service (NAES), HDR Engineering, Chevron, ThermoChem Recovery International, Topsoe AS, Xylem, and ARVOS/Linde. “Recently, another world-class company agreed to participate. Siemens has agreed to provide technology and engineering expertise as it relates to its technology,” Dave reveals. “When you include all these companies together, you have close to $400 billion of annual revenues in NWABF’s list of partners. This is an incredible feat for a new developer/project company and attests to our abilities to attract every element required to execute on our plan.”
Focusing on integrating only second-generation process technologies, the refinery will use advanced steam reforming thermochemical gasification of woody biomass to syngas, syngas conditioning (cleaning and cooling) to the Fischer-Tropsch (FT) specification, FT gas-to-liquid (GLT) reactors setup to catalytically convert the syngas to paraffin wax, light hydrocarbons and naphtha, and an upgrading process that hydrogenates the wax and light hydrocarbons to deliver only Sustainable Aviation Fuel (SAF) SPK-ASTM D7566.
“The above process technologies have been utilized in the chemical, oil and gas industries for decades and have consistently delivered production efficiencies sustainably and are scaleable,” explains Dave. “For the conversion of woody biomass to SAF, the steps require bespoke, phase gated front end engineering design (FEED) followed by procurement, construction, and commissioning, to achieve successful commercial operations. NWABF firmly believes that appointing a single, experienced EPC contractor with responsibility for the entire process is essential to the success of the project.” To this end, NWABF signed a technical services agreement with world-class industry leader Fluor Corporation as EPC, utilizing its experience in building gasification/Fischer-Tropsch fuel projects. Fluor will work with the project’s process technology OEMs to ensure delivery of their respective yield during start-up/commissioning that will be memorialized at the end of the FEL2 phase.
The funding conundrum 
Given NWABF’s stringent risk mitigation measures, highly respected and established team, assembly of some of the world’s most respected technology and process suppliers, a willing buyer of the fuel and a recognition in the market that demand for SAF is going to grow exponentially, the question is – what has stunted the progression of this and many other projects? Dave identifies funding as the issue. “To date there has been little to no funding support for SAF developers from the US Federal Government,” he says. “In fact, it has specifically excluded SAF developers from being eligible for an Investment Tax Credit, which it freely offers to solar and wind developers.
“At present there are no funding solutions forthcoming from the government funds, renewable funds or banks for development capital funding. So, it’s left up to us to get creative, and that is what we’ve done. Pre-construction engineering funding is commonly known as development capital or DevCap and we have engaged third party intermediaries and consultants to identify and source the required pre-construction engineering funds. These investors exclude the traditional infrastructure and renewable funds whose charters do not allow this type of investment. We focused on the use of world class and top tier partners for this project; to help mitigate all the risks and reassure investors, and numerous companies have acknowledged our efforts. We have a new investor committed to coming on board with major industry experience, introduced to us by consultant NimblX, with Securities compliance being handled by Merit Securities. Both companies are WA based. In the future, we plan to partner with a company, currently unannounced, that will soon have a fund of $2 billion-to-$3 billion just for DevCap. Once that is available, we have plans to produce at least two new projects, beginning in 2025, subject to receiving fuel purchase agreements now being negotiated.”
Despite the challenges and delays, the hard work put in by Dave and his team is paying off. At the time of writing, after three years of waiting, the final term sheet for the $15 million FEL2 funding has been delivered and is fully executed. “The investment will undergo rigid compliance reviews by all parties as our partner Delta Air Lines is a Public Company.”
Dave’s continuing enthusiasm and passion for this project is evident as our conversation progresses, and he’s keen to highlight the potential of future SAF refineries. “We know the market is there – for instance, over three billion gallons per year will soon be required, to meet the mandates of the US and world governments in this and the next decade. If you turn that into projects, we need hundreds of projects the size of ours, which is one of the largest in the country, to meet the capacity by 2030.”
Community development
However, Dave and his incredible SME team at NWABF have realistic expectations and are not focused on global domination. “We are intent on being a major provider of SAF in the PNW, not around the world,” Dave agrees. “We are satisfied that if we can build three to five successful projects, with each project costing between $2 billion and $3.5 billion, we can be a multi-billion-dollar company in around five years. We have already located multiple additional sites on the Columbia River that allow access from barge, rail and by truck. These locations, previously operated as industrial facilities, offer enough acreage and infrastructure to develop more SAF projects in the region.
“While there are opportunities nationwide for our company (we were asked to consider developing projects in the Midwest, Southeast and Northeast) we are clearly focused on one thing, becoming the leader in SAF in the PNW. We can see the potential in this project, and we intend to share our success by doing as much good as we can for the Native American tribes as well as the surrounding communities close to the project sites in the PNW.”
Working with Native American Tribes is especially important for Dave, given his own Native American heritage. “We have huge aspirations to work with the Tribes in Washington State to improve the quality of life, where needed, for the elderly and for our Native American Veterans (Dave is a Veteran, having served in the Army during Vietnam) and to enable the youth to have jobs and apprenticeships, so they can pursue long-term careers. Native Americans have served in our military branches at a rate of 5X that of other races per capita. Tribal lands and investments will eventually play a big role in our further developments, and we continue to meet with Tribal Councils to establish relationships, find potential sites, negotiate feedstock agreements and investments. Many Tribes have successful business acumen and are genuinely interested in investing in our projects. We can do a lot of good for local communities and employ thousands of people, directly and indirectly, at the same time as improving the environment where airlines fly.”
As the momentum behind the NWABF project continues to build, the board continues to grow in strength. Recently, NWABF issued an invitation to the top environmental lawyer in the PNW to join the Board of Advisors that will include two of the top engineering CEO/Presidents of the O&G industry. An industry stalwart considered to be an authority, particularly on feedstocks, is joining the company as a Consultant. The new additions continue to add strength and validation to this project, which stands as the largest project in America using wood to make SAF. “I think the quality and importance of our project is reflected by the multibillion-dollar companies that have stayed by our side while we work to get it underway,” says Dave. “Everybody associated with us knows the size and significance of our project and the industry is watching us.” Alongside the rest of the industry, Energy, Oil & Gas is excited to hear the next announcements from NWABF and looks forward to keeping readers updated as the project moves forward.