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Zardiw

12/10/10 1:09 PM

#81284 RE: Zardiw #81231

TerryEls, Experienced (18 years) Refinery Expert visits JBII: UPDATED.......

I visited the plastic to oil factory and viewed the input (charge), the process, process control, and resulting petroleum product. I examined the machine closely and followed pipes throughout the plant to better understand flow and the syngas loop. I reviewed the stack emission test report, residue and syngas analysis reports. I spoke to operators, staff, but spent most of my time with Mr. Bordynuik. I briefly met Rick Heddle at the factory.

The charge capacity of the plastic to oil process is likely greater than 20 metric tons per day. In my opinion this is a regulatory limit, not operable capacity. Barrels per day are likely higher than 100 when operated at the charge capacity. The product slate is gasoline, ultra-low sulphur diesel and/or fuel oil. The final petroleum product did not solidify when left to cool. I was able to take fuel with me for testing. Islechem confirmed the chemistry and process scaled nicely from a 1 gallon lab unit to a several thousand gallon machine. Scaling successfully rarely happens in chemistry and processes. They have a handle on the mechanical scaling and the challenges of charging different bulk densities into the process. I see no reason why the process wouldn’t benefit from economies of scale if they were to build a 50 metric ton per day charge capacity machine.

In my opinion, the machine is well designed and assembled. They have their own machine shop and were manufacturing their own parts. They have skilled machinists, engineers, and welders. They have some significant IP. It may appear like a simple process but there is a lot of technology and know-how working. I am quite impressed with the simplicity of the machine. They did not over-engineer it as cost was clearly a driving factor. It’s often difficult to keep plants simple when employing engineers in various specialties. I believe the operable rate of the machine will be in excess of 90% due to its simplicity, serviceability, and overall robust deign.

I spoke to John for over an hour. He is very knowledgeable and could answer tough questions. There is no doubt in my mind he and his team are able to refine various plastics into a marketable final petroleum product. They are processing less than 5 barrels per hour and have plenty of technology managing it. They do not require emission monitoring and reporting systems and scrubbers so the overall machine cost is low. They could further reduce emissions by installing a low NOx burner on the furnace.

The quality of the petroleum product was exceptional when compared to other plastic conversion processes I have reviewed.

Over the years refineries have had to upgrade to refine heavier crudes. JBI built a machine to refine the “heaviest crude” so to speak so they will not face the upgrade cycles as our refineries do.

Hindsight being 20/20, I do not believe it was a good decision to permit the first machine in NY. It is a difficult state to do business in and it is just too cold. I am back for a meeting in Buffalo and am looking forward to returning home.

Followup Response from Terryels:

I asked him many questions about hydrogen production, coking, the scission, heat balance, emissions. He knew the machine well and its capabilities. He knows various data points that most CEO's wouldn't understand. He had good general knowledge of how they calculated heat and material balance. He knew the math and understood how to apply it. When I asked him about the various levels of hydrogen production he was able to explain why and where it was being affected.

The process control system he developed with his team demonstrated he had an understanding of what stable state was and how to deal with conditions outside it. I asked him about potential problems and he had immediate answers without pause.

Questions and Answers:


What more were you able to find out about throughput?

I verified it in the time I was there. It's simple pounds in/pounds out. I watched the gas compression system and the burner to tell me how much heat was being driven into the system. The charge is monitored by a scale and the final petroleum product was quantifiable by the level of the fuel in the tank. What is important here is the ratio of charge to final product. They scale the the machine to whatever size they want. So to me 20T was not the important question. The material balance is what is important. They have excess heat so the primary production factor in this machine is how much heat can they drive into it.

The ratios provided by JBI jibe with the material and heat balances I was able to complete.

What type of regulatory limit?

They have no emission monitoring or controls so the only way to ensure they do not exceed Title V emissions is to limit the lbs in. They have a long way to go to reach a Title V so I believe a simple per amendment for a 100T or more a day machine would not be difficult to get.

I know many people who had reservations on the integrity of JBI due to that decision.

The integrity and credibility is proven by starting in NY. The NYSDEC will not allow anyone to commission a project without significant technical information. If they had started in another state some of the environmental information would be suspect. By starting in NY they are able to go to any other state. It was a good decision to start there based on the location of their team, Islechem, and the funds they had to work with. A pilot plant can't be built in one state and reside in another.

Hindsight being 20/20 and if the company had more funds they could have started in NY and then build plants in other states to move fast. That all takes money. I am suprised what they have been able to build with the funds they had.

I am very suprised your reference of integrity in relation to NY.

Did you find it odd that they were making machine parts and maintaining a machine shop?

No. I would find it odd if they weren't.

Were they making the attempt to find the items commercially before going to this expense?

Many of the parts are off the shelf type items. They built their own proprietary feed system and catalyst system.

Even if they needed custom parts, I would think that they would spec them and have them built externally

So they can educate others?

What are your impressions on their readiness to build more P2O units rapidly? Are they ready with a Construction Package and detailed design documentation? Or is this a one-off?

CRA is doing that work. Working with a large engineering firm like that makes building more machines easy.


Thank you for your report Terry.........z