Friday 19 October 2018

BioLargo Spotlight: BLEST Awarded Contract for Natural Gas Conversion Plant

BLEST was recently awarded a contract by one of its key accounts to prepare all environmental permits applications for a new production plant that will convert natural gas into diesel fuel and paraffin waxes. The new plant is to be built in modular stages with each stage capable of producing 200 barrel per day of liquid fuel, with an eventual goal of ten production units, with an eventual total production capacity of 2,000 barrels per day of synthesized diesel fuel and waxes.  Environmental permitting is central to the plant design process and it is imperative to develop a full understanding of the permitting issues in order to make informed design decisions.

This project is a great example of the sort of environmental permitting work that BLEST conducts for industry, and why permitting is so important in North America’s highly regulated manufacturing arena . For that reason, we’ve taken a few paragraphs to explain the process for this contract and discuss the rationale behind some of the permitting process.

An LNG Plant

The first phase of the project is to prepare a permitting strategy document that records our evaluation of which potentially applicable environmental regulations and how they may impact design and operation of the proposed facility.  The permitting approach can be categorized by media, that is: emissions to the air, emissions to the water and solid waste.  There are numerous potential regulations that may apply for each of the media, including, but certainly not limited to the broad Federal regulatory categories below:
  • Resource Conservation and Recovery Act
  • Clean Air Act Amendments Title V
  • Clean Air Act Amendments Title III
  • New Source Performance Standards, New Source Review
  • Prevention of Significant Deterioration (PSD)
  • Toxic Substances Control Act
  • National Pollutant Discharge Elimination System
  • Process Safety Management

In addition to the Federal regulations that may apply, each state and many cities and counties have regulations for specific parameters that must be considered during the design process.  In total, a new plant may be required to comply with over thirty separate environmental regulations, some of which may conflict, making compliance impossible.

Permitting is often considered an afterthought or a “sideline” issue during the plant design process.  However, incorporating the permitting strategy in the design process can save both time and money.  There are numerous thresholds built into the regulations that, if exceeded, escalate permitting fees, design and operating costs and extend the time from inception to operation by an order of magnitude.  For example, if PSD is triggered, it becomes necessary to conduct an ambient air study and collect data for a calendar year before a permit application can be considered.  The site-specific ambient air quality data establishes a baseline air quality that, under PSD, cannot be appreciably impacted by emissions from the proposed plant.  By designing the scale of the proposed plant so that PSD is not triggered, at least a year can be saved between inception and plant operation.  Conversely, if PSD is not considered in the early planning process, the plant operation can be delayed by at least a year and potentially be denied permission to construct due to local ambient air quality impacts.  This outcome requires the plant to be completely redesigned and likely reduced in scale, which could make the economics of the entire endeavor prohibitive.

Early and thorough regulatory planning is imperative to a successful project.  Under today’s regulatory setting, designing in ignorance of regulatory requirements is tantamount to project failure.

What is a BioLargo Spotlight?
It’s an exciting time at BioLargo. We’re moving fast, and it can be difficult to keep our stockholders and the investing public informed of our progress. In light of this, we will be posting a series of short articles titled “BioLargo Spotlight”, highlighting certain business activities and other important information in between our required SEC filings. Of course, these do not replace our public filings, which contain more complete information than can be delivered in this forum, and thus we urge you to carefully read and rely on those filings for definitive information, and to review our risk factors and caution regarding forward-looking statements. We are optimistic about our business as we work hard to continue to grow and ultimately generate profits for our stockholders.  

Legal Disclaimer
Our attorneys remind us that while we believe these developments are important and that these small victories could add up and lead to big victories, at this stage they do not rise to the level of an official material disclosure. As the size and magnitude of these developments become material, we will naturally report that information in an 8-K and our regular SEC filings.

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