The Big Guy - note bold under machines off-site
Post# of 43064
Posted On: 09/08/2014 9:55:17 AM
The Big Guy - note bold under machines off-site
The AGM transcript with a complete history of JBI's progress to date.
I can only think of one reason you might say "nice try," and it is a fallacious reason at best.
Here is an excerpt from the AGM just last December, in case anyone has not paid attention to the progress of this company:
Mr. Bordynuik:
For those on the call new to our company, we are a technology company who has developed a process for converting waste plastic into in spec
fuels. We do this in our patent-pending processors, which crack the long hydrocarbon chains found in plastics into smaller length chains
resulting in diesel and gasoline molecules.
The process is primarily powered by converting some of the waste plastic into a gas. I would like to focus this update on the individual processors and provide updates on production, operations and the capability of the processors.
Processor 1
Processor 1 was our original machine to “master” making in-spec fuels. As it is only a single kiln unit, it is now being used for research and
development and limited fuel production. After operating Processor One for a year and a few months, we were able to determine that the
Plastic2Oil process would work more efficiently with two separate kilns to house the different reactions occurring (the melting of plastic in one
and the cracking of the hydrocarbons in the other).
In addition, Processor 1 originally had a residue removal system on it. However, we were unable to consistently remove residue from it
because on occasion, partially melted plastic would make it to the end of the kiln and exit through the residue removal system. It was believed
that implementing the new “two-kiln system” would eliminate this residue issue, and hence, Processor 2 was designed.
Processor 1 did enable us to solve a number of prior unsolvable issues in other technologies by making a continuously fed waste plastic to fuel
machine:
We had a number of successes with this first machine and contribute much of the evolution of the processor since 2009 to Processor 1.
1. We developed a method to feed cold waste plastic into a hot kiln with a very low power requirement. This is the same in feed system that we use on Processor 3 today. Normally, a device called an extruder is used with extremely high power requirements and low feed.
2. We perfected rotary seals at high temperatures while containing hydrogen and other gases.
3. We were able to model the system and extract data every minute to scale the process.
4. We were able to design a novel back end of the process that changed our product output from a “diesel-like fuel” to pure in-spec
diesel and naphtha.
5. We were able to produce a #6 fuel specifically for US Steel.
6. We solved a common problem encountered in waste plastic to fuel technologies: pet coke. This problem was solved in the first
processor and kept the walls from being coked up, thereby preventing heat transfer.
Processor 2
Our second processor was assembled in early 2012. It was our first modular machine, with the kilns and towers being standardized. After
running Processor 2 for some time, and 160,000 lbs runs, the 1-3% residue was becoming a large number in volume, that is, twenty barrels of residue would half-fill the reactor over a few days and that residue would have to be removed.
We then tried to remove the residue from the processor while it was running. From time to time we could, and from time to time we could not.
Processor 2 also had a new burner design which enabled us to put far more heat into the kilns and therefore process more plastic and waste
oil. We have run several million pounds through Processor 2. It has been a work horse and produced most of the fuel we made in 2012 and a
significant amount in 2013.
The successes of Processor 2
1. We were able to scale our small feeder from Processor 1 to a large feeder of similar design on Processor 2 to allow up to 2,000
pounds per hour (Please note, at that time, our permit only allowed us to ever operate at a maximum of 2,000 pounds per hour).
2. The melting of plastic and the cracking of long hydrocarbon chains were separated in this processor. This allowed us to run far more
product through the processor on average and as disclosed prior, we can run approximately 160,000 pounds of plastic through this
processor, or up to 20,000 gallons of heat transfer fluid, all depending on inert fillers in the plastic.
3. In-spec fuels were consistently produced.
4. A new proprietary gas compression system was perfected and is still used today.
5. Transferring molten plastic to the reactor was a challenge when tested in R&D. However, in Processor 2, we developed an
interconnecting transfer system that could easily move molten plastic from one kiln to another with vapor and residue.
6. Metals were retained in the premelt for recycling purposes.
Challenges with Processor 2:
1. Residue removal . We were inconsistently able to remove residue due to plastic in various states in the reactor. Therefore, the
temperature would have to be brought down in order to remove residue from the kilns. This would generally occur after 160,000
pounds of plastic were fed. This, in turn, led to solving the residue issue with Processor 3.
Processor 2 Status NOW:
Processor 2 is an ideal candidate for residue removal system as installed on our third processor. This would allow for lengthy runtimes, less cycling, and no residue buildup.
Processor 3:
Processor 3 is best described as: a totally modular, highly standardized machine with individual units for melting of plastic, cracking the
hydrocarbons, and conditioning and removing residue.
Processor 3 is our flagship machine. It is able to accept heat transfer fluid and plastic simultaneously and continuously. In addition, Processor 3 has not exhibited any of the challenges that were remaining to be solved on Processors 1 & 2.
To walk you through Processor 3:
Plastic is melted in the first kiln. The second kiln and the first tower work to crack the hydrocarbons primarily to the length we select. The residue removal system that was implemented in the design of this processor, accepts any residue, fuel, or remaining plastic from the reactor. It cracks any remaining plastic, boils out any fuel, and conditions the residue.
Based on our current operating data, 1-4 barrels of residue are removed from this unit every 12 hour shift. The number of barrels removed is dependent of the amount of inert filler in the plastics or dirt in the heat transfer fluid. The residue removal system has worked successfully without any modification from its initial installation.
Processor 3 is fed heat transfer fluid and plastic every hour continuously. Residue is removed every hour continuously into drums as per our permit. We believe the residue has value as it has a BTU content of approximately 12,000 BTU’s per pound and we are going through testing by a few potential buyers of this product.
Maintenance & System Revisions To Processor 3:
To date, we have only changed flue gas piping, and removed and/or added a couple of pipes. No other repairs or extended maintenance have
been done to Processor 3 since its start-up. This is primarily due to the fact that the processor does not have to be heat cycled every few days
and the continuous nature of the entire process at steady state.
The hardware requires normal maintenance like greasing seals, bearings, and other normal daily or weekly maintenance items. The seals and sleeves have held up well. The infeed system is by far the most robust machine we have built to date and it has functioned as expected.
We have encountered challenges in feed stock, fuel capacity, and new training issues around running this processor that I will discuss at length.
Most of it is attributed to a much higher fuel production than in the Company’s prior history.
Feed Stock Issues:
Plastic: Since our new CEO Rick Heddle took over in August, the Company had significant volumes of unacceptable feedstock that was
procured at higher prices. With the transition, that practice ceased and the Company went back to procuring waste plastics that were not
intentionally contaminated with inert materials like wood, large metal bolts, and other heavy objects that would assist the seller of the plastic
loads much more money.
Since discarding this plastic, and closing the Recycling Center in Thorold, we have not had any plastic & water, plastic & snow, or plastic and large inert objects getting into the processor and causing problems.
We did however, attempt to correct the high feedstock cost of goods of the past by seeking very inexpensive heat transfer liquids.
Heat Transfer Fluid:
In all fairness, in Q4 2012, the NYSDEC required us to use expensive in-spec, highly controlled, highly screened heat transfer fluid for testing. We were not permitted to accept waste oils from any other source because we did not have the equipment required internally to test for NY State regulations of heat transfer fluid. The HTF was acquired during that quarter for approximately $1.90-$2 per gallon.
We wanted to introduce HTF because we knew that waste oils could be acquired much cheaper than that if we had our own testing in-house
and it would allow us to quickly melt very large blocks of solid plastic.
The expensive waste oil was being purchased when we received
our HTF permit in June 2013. Since our new CEO Rick Heddle took over in August, cheaper sources of HTF were sought.
As with any waste in the recycling world, there are good suppliers of material, and there are poor suppliers. Poor suppliers tend to try to blend other wastes in the streams to get rid of them. At this time we had to quickly assemble and operate a fully capable HTF testing lab, which included testing for PCB’s, halides, hazardous metals, and other requirements by the NYSDEC. We were able to procure HTF for $1.00 per gallon.
Some of those suppliers provided great HTF, but others supplied HTF mixed with some other products that did not appear in the material or in the screening and passed NYS testing. These other products added to the waste oil, while they were not hazardous, they were clearly not desirable and not compatible with our process.
When we determined what these contaminants were, we then developed a very quick screening method to determine the quality of HTF specific to our process. While this is not required for permitting, it is required for what is compatible with our process. The kinds of foreign compounds blended into the HTF have included: liquefied farm waste, vegetable oil, and animal fat oil.
These products caused downtime due to the fact that in some cases, we had to refuse the truckload and therefore run out of HTF, and slowed our
process down due to quickly creating a second tier of quality control testing beyond the NYSDEC’s testing criteria.
We have done something similar to this with waste plastic. We could not afford to let our waste oil quarantine tank become contaminated in any way with this inferior product.
We have learned over the past 3 years what some undesirable suppliers try to melt into their plastic or add to their loads, to attempt to get rid of waste that would otherwise be expensive for them to dispose of. We have active counter measures in place to keep that material from getting to the hopper of the machine.
We had to learn this process with HTF fairly quickly. We were able to develop tests to determine unknowns, and more importantly, was the HTF in question what was being sold.
Fuel Output Issues:
With Processor 3 coming online and fuel production increasing to all-time highs for the Company, we encountered growing pains in our
logistics department, loading/unloading, and customer demand issues.
On more than one occasion in Q3 and Q4, we had to idle Processor 3
because our fuel tanks were filled quickly. When processor 2 and 3 run at our plant simultaneously, our tanks fill very quickly.
On some occasions we could not book trucks on short notice and sometimes we’ve had to send fuel to our blending site for temporary storage. The reason for this is that our customers have a very specific amount of fuel they consume every week. They schedule their fuel purchases weeks, and in some cases months, in advance.
Our large customers will off-set fuel from other sources if given enough notice in advance. At the same time, we would have to be absolutely certain we would have the fuel in stock to service them as (if they are displacing fuel from other sources).
With Processors 2 & 3 running, we produced 45,000 gallons of fuel very quickly. However, many of our fuel buying customers are on their own set production schedules.
As a company, we also want to avoid driving up additional cost of goods by shipping our fuel to the blending site for storage. We have worked to resolve this problem by going through acceptance procedures with bulk fuel distributors who can handle surges or excess fuel production. This process becomes less and less problematic as we produce large volumes of fuel more consistently.
Our end customers appreciate and reward consistent, on time delivers, of the specific fuels they require. We have come a long way
by contracting multiple trucking companies and more customers.
Staffing Issues:
As discussed last spring, I consulted with Islechem and other local chemical factories management personnel for the ideal operating team staff structure for chemical processes. (Islechem is an independent lab that we have been fortunate to work with for the past four years. Their core businesses include: Chemical Manufacturing; contract Research and Development (R&D); Analytical Services; Environmental Services; and Technical and Support Services.)
They have been through years of experience in this area and identified what we needed to run our processors. The ideal operating team is a chemical engineer (in the $60,000 salary range), a chemical operator (in the $50,000 range), and a material handler.
We are still amassing these shift teams so that the machines have full coverage of all three required people to operate the processors without challenges. As of today, we have a molecular chemist, an analytical chemist, and a chemical engineer on staff.
We have 3 chemical operators and a full slate of material handlers. We are short chemical operators to cover vacations, sickness, and emergencies. New training on the process requires about 3-6 months of time with an experienced P2O operator to become very comfortable and familiar with the entire plant and operate it independently.
When a new staff member has a challenge or missed something occurring in the process, it has enabled us to automate that challenge out of the system so that we don’t encounter downtime. In this Q, on one occasion, a new chemical engineer allowed water to be pumped into the system, causing a two day shutdown.
Like many of the technical hurdles we have overcome, we will perfect our approach to training our staff so that processor deployment with be efficient and collaborative with our future customers. We are interviewing, hiring and training new staff for our future customers of machines. As with any company, amassing the right team and great
people takes time and turnover.
Processor 3 Status NOW:
We are not modifying or changing the processor. I am stepping up the feed rates on shifts with experienced staff and running at lower feedrates
on new staff, until everyone is trained the same way on this machine. I have run the Processor at 2,700 lbs/hr on shifts that I am operating it or
training others.
Seasoned staff is quickly getting there, between 1500 and 2000 lbs/hr with our staff depending on what their experience is. I am
working with new staff on their shifts to teach them everything I know and to determine what additional information they need to help diagnose
issues.
As we evolve a team of 3 for operating shifts I suspect most issues will go away. Our processor requests more plastic some hours, and less others, with an average in the middle where we want to operate.
Unfortunately, permitting does not work that way. Permits establish an
absolute maximum limit and we are not allowed to make up for lost time or hours that a maximum was reached. Originally we were granted a
permit to operate at 2000 lbs/hr. This proved to be a severe limiting factor when dealing with a machine that needed a 1000 lbs/hr one hour, and 3000 the next.
With our 4000 lbs/hr permit, my goal is to achieve 3000 lbs/hr or 36T/day on average on system 3. Prospective customers are
requesting this performance data so I am mindful of the need to accomplish this as soon as possible.
For those new to the Company, plastic and heat transfer fluid converts into diesel and gasoline fuel with off-gas and a small amount of
residue. The exact conversion is dependent on the amount of hydrocarbons in the feedstock as well as inert filler in the feedstock thereby displacing potential fuel production. Through the various tests by independent engineering firms and our own internal Mass & Energy
Balance, 2,200 pounds of waste feedstock comprised of plastic and HTF, makes on average 75% liquid fuel product or 1,320 pounds or 184
gallons of diesel and 330 pounds or 52 gallons of naphtha.
Residue could be up to 220 pounds and off-gas or gas to run the system would be approximately 330 pounds. The ratios of naphtha and diesel can also vary depending on how the processor is run by the operator or
programmed to run. For ideal feedstock, we generally get an 86.7% liquid conversion.
The example I have given you is 75%, which is representative of a lot of industrial plastic and HTF waste streams. These numbers can vary based on water content, inert fillers and other nonhydrocarbon substances in the waste stream. I am always working to increase the diesel production and reduce naphtha production, as diesel
has more value.
The gas compression system, chiller system and hot oil skids have all worked flawlessly. We have had no downtime with these even though
this was our biggest downtime factor in Processors 1 and 2.
Machines Off-Site:
Internally, we have fully documented processor 3, which is our flagship machine for joint ventures and sales. We have a full set of engineering
prints, and installation prints (engineering drawings). We have completed process flows, and troubleshooting manuals. We have also had to
produce operating manuals and at this time, we are preparing maintenance documentation for third parties. We are supplying due diligence information to prospective buyers and we are gathering and tracking weekly reporting on processor 3 for buyers.
Our team and technology:
We are a technology company, not an operator. There are plenty of companies with decades of experience in wastes, fuels, and operating
equipment and plants. That is why many companies who design and develop processes don’t build and internally operate them. I am very
confident in system 3 and a seasoned 3 rd party would be able to operate our system well.
Competitive Advantage:
Since day one, we were very aware of the problems plaguing other waste plastic into fuel technologies and the fatal barriers they still have to
this day. Our greatest strengths against current competitive technology is:
Challenges Solved in Last Five Months:
1. For example, we have no waste water in our process. Other technologies (where the fuel contacts the water) have waste water
disposal bills of $100,000 or more per month.
2. Another significant problem that other technologies have is residue that cannot pass TCLP testing and therefore is considered
hazardous waste. The competitors are still plagued with that problem today. Our catalyst and process ensures the residue is inert
and safe for the environment.
3. Fuel output quality is also a significant problem. Halides like chlorine and bromine in fuels render the syn-crude or random
hydrocarbon mash fuel nearly worthless. Halides can be as high as 800 ppm in competitive technologies without catalysts. Our
fuels were tested for halides and no halides were found. We do not sell to small refineries, we sell to large customers with significant
fuel quality requirements, layers of government regulations, and the need for halide free, high flash point, in spec fuels.
1. Residue comes out 1-4 barrels every 12 hours consistently every shift, depending again on the fillers in the feedstock. The product is
uniform, much better than before, and we knocked it out of the park from a solutions standpoint. To date, we have removed
367 barrels of residue from Processor 3.
2. We have amassed significant data from Processor 3 that allowed us to adjust the heating distribution across the machine, the cooling
demands and flows into a steady state.
3. New catalyst into Processor 3 and it is functioning well and a liquefied version will be complete soon. The new catalyst was
discussed in detail in my ASME published paper “Viable Production of Diesel from Non-Recyclable Waste Plastics.” I recommend
those listening today who are new to the Company today to read that paper to better understand the technology and the evolution of
this Company.
4. The support equipment for the system has worked flawlessly.
5. The high cost feedstock and those practices have been eliminated from the Company.
Challenges Remaining & How We are Mitigating Those Risks:
6. Fabrication Team When Rick Heddle came onboard, he set up our fabrication in a manner that he has experience with from his
prior business ventures. The team has executed very difficult tasks, very quickly, without error. Their work has been significantly better than this site has ever seen. The new policies, methods and structure implemented have improved the quality of work as a whole by the fabrication department.
7. Material handlers and feed stock quality Our material handlers have been trained. They are very good at spotting any material
that is not right. We built testing procedures on site for them to be able to test and reject any plastic loads.
For example, the old feedstock we received before the transition in August, was 50% rejected at the hopper. We are now at 95% acceptance. Going through these challenges have built a very robust frontline team who know what to look for, how to test the plastic and waste oil, and how to stop any problematic feedstock before it gets near the hopper.
1. Inexpensive HTF We are being very careful what vendors/suppliers we take HTF from. We believe we have covered most
possible inert fillers, however, we are in the infancy of this and therefore, despite the fact that we tried to correct high cost of goods
caused from extremely expensive feedstock from Q1 and Q2 of 2013, we will not be risking the uptime any further to acquire ultracheap
HTF. Instead, we will focus on reasonable HTF at a much lower price around $1.00-$1.30 per gallon and not risk new sources
until we have infrastructure in place to flag possible unknowns.
2. Staffing We are seeking and hiring experienced engineers and chemical operators. We currently have half the staff we had
before, doing double the amount of work. We are putting together training materials and hiring the appropriate people to run our
processors. We need trained JBI employees to be able to train staff and startup processors in remote locations in the future. They
need to be fully trained here in Niagara Falls, NY to be able to do so in the future. We need more staff for this purpose.
3. Winter The plant environment is different from the very hot summer to the cold winter. While we have things in place to stop
pipe freezing and cold areas, in cases, cold related issues can rear its ugly head when least expected. It is a challenge when dealing
with low temperatures and high wind lake effects. We are being vigilant to correct any issues that arise.
4. Recycling Recycling is a dirty business! Suppliers, brokers, MRF’s, are all looking at a way to maximize their recyclables and
get rid of their waste.. free. Because we are interested in the non-recyclables, our challenge is always being on the defensive trying
to stop a large bolt, a skid piece of wood, a large spoon, a baseball bat, or some other large object of that kind from getting into the
processor. We are continuing to work with new large feedstock sources and be continue to be vigilant even with the most trusted
sources.
SUMMARY:
Fortunately, we have relationships with large engineering firms that have had the advantage of reviewing other competitive systems and have
in turn validated ours. We learned a lot from these firms and were reassured at various stages in our evolution that simply “you don’t know
what you don’t know.” What I mean by this is when you have a new technology that hasn’t been done before, you don’t know always what
issues are left until you’ve removed any in your way. This is a new technology that has been put through a very fast evolution from a 1 gallon desktop reactor to a massive, high volume, waste plastic to fuel production plant. With our current permit of 4,000 lbs/hr, my goal is to achieve 3,000 lbs/hr or 36T/day on average on System 3. We have overcome growing pains in all areas of the business and become a stronger, more adaptable company because of it. We believe this experience will be very beneficial to our future partners. We worked through these challenges and we will continue to work towards our goals.
Like you, I am a major shareholder in this company and have a significant vested interest in making this company a success.
The AGM transcript with a complete history of JBI's progress to date.
I can only think of one reason you might say "nice try," and it is a fallacious reason at best.
Here is an excerpt from the AGM just last December, in case anyone has not paid attention to the progress of this company:
Mr. Bordynuik:
For those on the call new to our company, we are a technology company who has developed a process for converting waste plastic into in spec
fuels. We do this in our patent-pending processors, which crack the long hydrocarbon chains found in plastics into smaller length chains
resulting in diesel and gasoline molecules.
The process is primarily powered by converting some of the waste plastic into a gas. I would like to focus this update on the individual processors and provide updates on production, operations and the capability of the processors.
Processor 1
Processor 1 was our original machine to “master” making in-spec fuels. As it is only a single kiln unit, it is now being used for research and
development and limited fuel production. After operating Processor One for a year and a few months, we were able to determine that the
Plastic2Oil process would work more efficiently with two separate kilns to house the different reactions occurring (the melting of plastic in one
and the cracking of the hydrocarbons in the other).
In addition, Processor 1 originally had a residue removal system on it. However, we were unable to consistently remove residue from it
because on occasion, partially melted plastic would make it to the end of the kiln and exit through the residue removal system. It was believed
that implementing the new “two-kiln system” would eliminate this residue issue, and hence, Processor 2 was designed.
Processor 1 did enable us to solve a number of prior unsolvable issues in other technologies by making a continuously fed waste plastic to fuel
machine:
We had a number of successes with this first machine and contribute much of the evolution of the processor since 2009 to Processor 1.
1. We developed a method to feed cold waste plastic into a hot kiln with a very low power requirement. This is the same in feed system that we use on Processor 3 today. Normally, a device called an extruder is used with extremely high power requirements and low feed.
2. We perfected rotary seals at high temperatures while containing hydrogen and other gases.
3. We were able to model the system and extract data every minute to scale the process.
4. We were able to design a novel back end of the process that changed our product output from a “diesel-like fuel” to pure in-spec
diesel and naphtha.
5. We were able to produce a #6 fuel specifically for US Steel.
6. We solved a common problem encountered in waste plastic to fuel technologies: pet coke. This problem was solved in the first
processor and kept the walls from being coked up, thereby preventing heat transfer.
Processor 2
Our second processor was assembled in early 2012. It was our first modular machine, with the kilns and towers being standardized. After
running Processor 2 for some time, and 160,000 lbs runs, the 1-3% residue was becoming a large number in volume, that is, twenty barrels of residue would half-fill the reactor over a few days and that residue would have to be removed.
We then tried to remove the residue from the processor while it was running. From time to time we could, and from time to time we could not.
Processor 2 also had a new burner design which enabled us to put far more heat into the kilns and therefore process more plastic and waste
oil. We have run several million pounds through Processor 2. It has been a work horse and produced most of the fuel we made in 2012 and a
significant amount in 2013.
The successes of Processor 2
1. We were able to scale our small feeder from Processor 1 to a large feeder of similar design on Processor 2 to allow up to 2,000
pounds per hour (Please note, at that time, our permit only allowed us to ever operate at a maximum of 2,000 pounds per hour).
2. The melting of plastic and the cracking of long hydrocarbon chains were separated in this processor. This allowed us to run far more
product through the processor on average and as disclosed prior, we can run approximately 160,000 pounds of plastic through this
processor, or up to 20,000 gallons of heat transfer fluid, all depending on inert fillers in the plastic.
3. In-spec fuels were consistently produced.
4. A new proprietary gas compression system was perfected and is still used today.
5. Transferring molten plastic to the reactor was a challenge when tested in R&D. However, in Processor 2, we developed an
interconnecting transfer system that could easily move molten plastic from one kiln to another with vapor and residue.
6. Metals were retained in the premelt for recycling purposes.
Challenges with Processor 2:
1. Residue removal . We were inconsistently able to remove residue due to plastic in various states in the reactor. Therefore, the
temperature would have to be brought down in order to remove residue from the kilns. This would generally occur after 160,000
pounds of plastic were fed. This, in turn, led to solving the residue issue with Processor 3.
Processor 2 Status NOW:
Processor 2 is an ideal candidate for residue removal system as installed on our third processor. This would allow for lengthy runtimes, less cycling, and no residue buildup.
Processor 3:
Processor 3 is best described as: a totally modular, highly standardized machine with individual units for melting of plastic, cracking the
hydrocarbons, and conditioning and removing residue.
Processor 3 is our flagship machine. It is able to accept heat transfer fluid and plastic simultaneously and continuously. In addition, Processor 3 has not exhibited any of the challenges that were remaining to be solved on Processors 1 & 2.
To walk you through Processor 3:
Plastic is melted in the first kiln. The second kiln and the first tower work to crack the hydrocarbons primarily to the length we select. The residue removal system that was implemented in the design of this processor, accepts any residue, fuel, or remaining plastic from the reactor. It cracks any remaining plastic, boils out any fuel, and conditions the residue.
Based on our current operating data, 1-4 barrels of residue are removed from this unit every 12 hour shift. The number of barrels removed is dependent of the amount of inert filler in the plastics or dirt in the heat transfer fluid. The residue removal system has worked successfully without any modification from its initial installation.
Processor 3 is fed heat transfer fluid and plastic every hour continuously. Residue is removed every hour continuously into drums as per our permit. We believe the residue has value as it has a BTU content of approximately 12,000 BTU’s per pound and we are going through testing by a few potential buyers of this product.
Maintenance & System Revisions To Processor 3:
To date, we have only changed flue gas piping, and removed and/or added a couple of pipes. No other repairs or extended maintenance have
been done to Processor 3 since its start-up. This is primarily due to the fact that the processor does not have to be heat cycled every few days
and the continuous nature of the entire process at steady state.
The hardware requires normal maintenance like greasing seals, bearings, and other normal daily or weekly maintenance items. The seals and sleeves have held up well. The infeed system is by far the most robust machine we have built to date and it has functioned as expected.
We have encountered challenges in feed stock, fuel capacity, and new training issues around running this processor that I will discuss at length.
Most of it is attributed to a much higher fuel production than in the Company’s prior history.
Feed Stock Issues:
Plastic: Since our new CEO Rick Heddle took over in August, the Company had significant volumes of unacceptable feedstock that was
procured at higher prices. With the transition, that practice ceased and the Company went back to procuring waste plastics that were not
intentionally contaminated with inert materials like wood, large metal bolts, and other heavy objects that would assist the seller of the plastic
loads much more money.
Since discarding this plastic, and closing the Recycling Center in Thorold, we have not had any plastic & water, plastic & snow, or plastic and large inert objects getting into the processor and causing problems.
We did however, attempt to correct the high feedstock cost of goods of the past by seeking very inexpensive heat transfer liquids.
Heat Transfer Fluid:
In all fairness, in Q4 2012, the NYSDEC required us to use expensive in-spec, highly controlled, highly screened heat transfer fluid for testing. We were not permitted to accept waste oils from any other source because we did not have the equipment required internally to test for NY State regulations of heat transfer fluid. The HTF was acquired during that quarter for approximately $1.90-$2 per gallon.
We wanted to introduce HTF because we knew that waste oils could be acquired much cheaper than that if we had our own testing in-house
and it would allow us to quickly melt very large blocks of solid plastic.
The expensive waste oil was being purchased when we received
our HTF permit in June 2013. Since our new CEO Rick Heddle took over in August, cheaper sources of HTF were sought.
As with any waste in the recycling world, there are good suppliers of material, and there are poor suppliers. Poor suppliers tend to try to blend other wastes in the streams to get rid of them. At this time we had to quickly assemble and operate a fully capable HTF testing lab, which included testing for PCB’s, halides, hazardous metals, and other requirements by the NYSDEC. We were able to procure HTF for $1.00 per gallon.
Some of those suppliers provided great HTF, but others supplied HTF mixed with some other products that did not appear in the material or in the screening and passed NYS testing. These other products added to the waste oil, while they were not hazardous, they were clearly not desirable and not compatible with our process.
When we determined what these contaminants were, we then developed a very quick screening method to determine the quality of HTF specific to our process. While this is not required for permitting, it is required for what is compatible with our process. The kinds of foreign compounds blended into the HTF have included: liquefied farm waste, vegetable oil, and animal fat oil.
These products caused downtime due to the fact that in some cases, we had to refuse the truckload and therefore run out of HTF, and slowed our
process down due to quickly creating a second tier of quality control testing beyond the NYSDEC’s testing criteria.
We have done something similar to this with waste plastic. We could not afford to let our waste oil quarantine tank become contaminated in any way with this inferior product.
We have learned over the past 3 years what some undesirable suppliers try to melt into their plastic or add to their loads, to attempt to get rid of waste that would otherwise be expensive for them to dispose of. We have active counter measures in place to keep that material from getting to the hopper of the machine.
We had to learn this process with HTF fairly quickly. We were able to develop tests to determine unknowns, and more importantly, was the HTF in question what was being sold.
Fuel Output Issues:
With Processor 3 coming online and fuel production increasing to all-time highs for the Company, we encountered growing pains in our
logistics department, loading/unloading, and customer demand issues.
On more than one occasion in Q3 and Q4, we had to idle Processor 3
because our fuel tanks were filled quickly. When processor 2 and 3 run at our plant simultaneously, our tanks fill very quickly.
On some occasions we could not book trucks on short notice and sometimes we’ve had to send fuel to our blending site for temporary storage. The reason for this is that our customers have a very specific amount of fuel they consume every week. They schedule their fuel purchases weeks, and in some cases months, in advance.
Our large customers will off-set fuel from other sources if given enough notice in advance. At the same time, we would have to be absolutely certain we would have the fuel in stock to service them as (if they are displacing fuel from other sources).
With Processors 2 & 3 running, we produced 45,000 gallons of fuel very quickly. However, many of our fuel buying customers are on their own set production schedules.
As a company, we also want to avoid driving up additional cost of goods by shipping our fuel to the blending site for storage. We have worked to resolve this problem by going through acceptance procedures with bulk fuel distributors who can handle surges or excess fuel production. This process becomes less and less problematic as we produce large volumes of fuel more consistently.
Our end customers appreciate and reward consistent, on time delivers, of the specific fuels they require. We have come a long way
by contracting multiple trucking companies and more customers.
Staffing Issues:
As discussed last spring, I consulted with Islechem and other local chemical factories management personnel for the ideal operating team staff structure for chemical processes. (Islechem is an independent lab that we have been fortunate to work with for the past four years. Their core businesses include: Chemical Manufacturing; contract Research and Development (R&D); Analytical Services; Environmental Services; and Technical and Support Services.)
They have been through years of experience in this area and identified what we needed to run our processors. The ideal operating team is a chemical engineer (in the $60,000 salary range), a chemical operator (in the $50,000 range), and a material handler.
We are still amassing these shift teams so that the machines have full coverage of all three required people to operate the processors without challenges. As of today, we have a molecular chemist, an analytical chemist, and a chemical engineer on staff.
We have 3 chemical operators and a full slate of material handlers. We are short chemical operators to cover vacations, sickness, and emergencies. New training on the process requires about 3-6 months of time with an experienced P2O operator to become very comfortable and familiar with the entire plant and operate it independently.
When a new staff member has a challenge or missed something occurring in the process, it has enabled us to automate that challenge out of the system so that we don’t encounter downtime. In this Q, on one occasion, a new chemical engineer allowed water to be pumped into the system, causing a two day shutdown.
Like many of the technical hurdles we have overcome, we will perfect our approach to training our staff so that processor deployment with be efficient and collaborative with our future customers. We are interviewing, hiring and training new staff for our future customers of machines. As with any company, amassing the right team and great
people takes time and turnover.
Processor 3 Status NOW:
We are not modifying or changing the processor. I am stepping up the feed rates on shifts with experienced staff and running at lower feedrates
on new staff, until everyone is trained the same way on this machine. I have run the Processor at 2,700 lbs/hr on shifts that I am operating it or
training others.
Seasoned staff is quickly getting there, between 1500 and 2000 lbs/hr with our staff depending on what their experience is. I am
working with new staff on their shifts to teach them everything I know and to determine what additional information they need to help diagnose
issues.
As we evolve a team of 3 for operating shifts I suspect most issues will go away. Our processor requests more plastic some hours, and less others, with an average in the middle where we want to operate.
Unfortunately, permitting does not work that way. Permits establish an
absolute maximum limit and we are not allowed to make up for lost time or hours that a maximum was reached. Originally we were granted a
permit to operate at 2000 lbs/hr. This proved to be a severe limiting factor when dealing with a machine that needed a 1000 lbs/hr one hour, and 3000 the next.
With our 4000 lbs/hr permit, my goal is to achieve 3000 lbs/hr or 36T/day on average on system 3. Prospective customers are
requesting this performance data so I am mindful of the need to accomplish this as soon as possible.
For those new to the Company, plastic and heat transfer fluid converts into diesel and gasoline fuel with off-gas and a small amount of
residue. The exact conversion is dependent on the amount of hydrocarbons in the feedstock as well as inert filler in the feedstock thereby displacing potential fuel production. Through the various tests by independent engineering firms and our own internal Mass & Energy
Balance, 2,200 pounds of waste feedstock comprised of plastic and HTF, makes on average 75% liquid fuel product or 1,320 pounds or 184
gallons of diesel and 330 pounds or 52 gallons of naphtha.
Residue could be up to 220 pounds and off-gas or gas to run the system would be approximately 330 pounds. The ratios of naphtha and diesel can also vary depending on how the processor is run by the operator or
programmed to run. For ideal feedstock, we generally get an 86.7% liquid conversion.
The example I have given you is 75%, which is representative of a lot of industrial plastic and HTF waste streams. These numbers can vary based on water content, inert fillers and other nonhydrocarbon substances in the waste stream. I am always working to increase the diesel production and reduce naphtha production, as diesel
has more value.
The gas compression system, chiller system and hot oil skids have all worked flawlessly. We have had no downtime with these even though
this was our biggest downtime factor in Processors 1 and 2.
Machines Off-Site:
Internally, we have fully documented processor 3, which is our flagship machine for joint ventures and sales. We have a full set of engineering
prints, and installation prints (engineering drawings). We have completed process flows, and troubleshooting manuals. We have also had to
produce operating manuals and at this time, we are preparing maintenance documentation for third parties. We are supplying due diligence information to prospective buyers and we are gathering and tracking weekly reporting on processor 3 for buyers.
Our team and technology:
We are a technology company, not an operator. There are plenty of companies with decades of experience in wastes, fuels, and operating
equipment and plants. That is why many companies who design and develop processes don’t build and internally operate them. I am very
confident in system 3 and a seasoned 3 rd party would be able to operate our system well.
Competitive Advantage:
Since day one, we were very aware of the problems plaguing other waste plastic into fuel technologies and the fatal barriers they still have to
this day. Our greatest strengths against current competitive technology is:
Challenges Solved in Last Five Months:
1. For example, we have no waste water in our process. Other technologies (where the fuel contacts the water) have waste water
disposal bills of $100,000 or more per month.
2. Another significant problem that other technologies have is residue that cannot pass TCLP testing and therefore is considered
hazardous waste. The competitors are still plagued with that problem today. Our catalyst and process ensures the residue is inert
and safe for the environment.
3. Fuel output quality is also a significant problem. Halides like chlorine and bromine in fuels render the syn-crude or random
hydrocarbon mash fuel nearly worthless. Halides can be as high as 800 ppm in competitive technologies without catalysts. Our
fuels were tested for halides and no halides were found. We do not sell to small refineries, we sell to large customers with significant
fuel quality requirements, layers of government regulations, and the need for halide free, high flash point, in spec fuels.
1. Residue comes out 1-4 barrels every 12 hours consistently every shift, depending again on the fillers in the feedstock. The product is
uniform, much better than before, and we knocked it out of the park from a solutions standpoint. To date, we have removed
367 barrels of residue from Processor 3.
2. We have amassed significant data from Processor 3 that allowed us to adjust the heating distribution across the machine, the cooling
demands and flows into a steady state.
3. New catalyst into Processor 3 and it is functioning well and a liquefied version will be complete soon. The new catalyst was
discussed in detail in my ASME published paper “Viable Production of Diesel from Non-Recyclable Waste Plastics.” I recommend
those listening today who are new to the Company today to read that paper to better understand the technology and the evolution of
this Company.
4. The support equipment for the system has worked flawlessly.
5. The high cost feedstock and those practices have been eliminated from the Company.
Challenges Remaining & How We are Mitigating Those Risks:
6. Fabrication Team When Rick Heddle came onboard, he set up our fabrication in a manner that he has experience with from his
prior business ventures. The team has executed very difficult tasks, very quickly, without error. Their work has been significantly better than this site has ever seen. The new policies, methods and structure implemented have improved the quality of work as a whole by the fabrication department.
7. Material handlers and feed stock quality Our material handlers have been trained. They are very good at spotting any material
that is not right. We built testing procedures on site for them to be able to test and reject any plastic loads.
For example, the old feedstock we received before the transition in August, was 50% rejected at the hopper. We are now at 95% acceptance. Going through these challenges have built a very robust frontline team who know what to look for, how to test the plastic and waste oil, and how to stop any problematic feedstock before it gets near the hopper.
1. Inexpensive HTF We are being very careful what vendors/suppliers we take HTF from. We believe we have covered most
possible inert fillers, however, we are in the infancy of this and therefore, despite the fact that we tried to correct high cost of goods
caused from extremely expensive feedstock from Q1 and Q2 of 2013, we will not be risking the uptime any further to acquire ultracheap
HTF. Instead, we will focus on reasonable HTF at a much lower price around $1.00-$1.30 per gallon and not risk new sources
until we have infrastructure in place to flag possible unknowns.
2. Staffing We are seeking and hiring experienced engineers and chemical operators. We currently have half the staff we had
before, doing double the amount of work. We are putting together training materials and hiring the appropriate people to run our
processors. We need trained JBI employees to be able to train staff and startup processors in remote locations in the future. They
need to be fully trained here in Niagara Falls, NY to be able to do so in the future. We need more staff for this purpose.
3. Winter The plant environment is different from the very hot summer to the cold winter. While we have things in place to stop
pipe freezing and cold areas, in cases, cold related issues can rear its ugly head when least expected. It is a challenge when dealing
with low temperatures and high wind lake effects. We are being vigilant to correct any issues that arise.
4. Recycling Recycling is a dirty business! Suppliers, brokers, MRF’s, are all looking at a way to maximize their recyclables and
get rid of their waste.. free. Because we are interested in the non-recyclables, our challenge is always being on the defensive trying
to stop a large bolt, a skid piece of wood, a large spoon, a baseball bat, or some other large object of that kind from getting into the
processor. We are continuing to work with new large feedstock sources and be continue to be vigilant even with the most trusted
sources.
SUMMARY:
Fortunately, we have relationships with large engineering firms that have had the advantage of reviewing other competitive systems and have
in turn validated ours. We learned a lot from these firms and were reassured at various stages in our evolution that simply “you don’t know
what you don’t know.” What I mean by this is when you have a new technology that hasn’t been done before, you don’t know always what
issues are left until you’ve removed any in your way. This is a new technology that has been put through a very fast evolution from a 1 gallon desktop reactor to a massive, high volume, waste plastic to fuel production plant. With our current permit of 4,000 lbs/hr, my goal is to achieve 3,000 lbs/hr or 36T/day on average on System 3. We have overcome growing pains in all areas of the business and become a stronger, more adaptable company because of it. We believe this experience will be very beneficial to our future partners. We worked through these challenges and we will continue to work towards our goals.
Like you, I am a major shareholder in this company and have a significant vested interest in making this company a success.
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