Spokane Journal of Business

Ag Energy Solutions finds unexpected market for biochar

Waste-to-power byproduct becomes company’s focus

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-Mike McLean
David Drinkard, CEO of Ag Energy Solutions Inc., predicts the Carbon Logic product line will make the 7-year-old agricultural technology company profitable within a year.

Carbon Logic, the first product line to be produced by Ag Energy Solutions Inc., of Spokane Valley, is going to pot—yes, the green leafy stuff.

Ag Energy originally was formed in 2010 to make equipment to convert agricultural waste into energy. For now, however, the company has pivoted its mission to market the byproduct the equipment produces, says David Drinkard, Ag Energy CEO. And one of its first customers is the marijuana industry. 

“We originally started building a gasification system that can take agriculture waste and covert it to make energy,” Drinkard says.

The heart of the system is a machine called an integrated biomass platform, which “cooks” feedstock, such as wheat straw, and converts it into two products; a synthetic flammable gas and a carbon-rich solid called biochar, he says.

“We were planning on selling the equipment.” Drinkard says of Ag Energy’s original mission. “The idea was for farmers to use agricultural waste to generate synthetic gas to fuel water pumps and sprinkler systems.”

During the development process, however, Ag Energy determined the biochar that the integrated biomass platform produces has more potential value than the energy the IBP produces, he says.

The biochar looks something like a mixture of charred wood shavings and black coffee grounds.

“We realized we needed to create a market for this waste product,” Drinkard says.

While experimenting with the biochar formulations and researching potential markets, one such market found Ag Energy, says Sally McLaughlin, a spokeswoman for the company.

“We did testing on a variety of things. Cannabis came to us,” McLaughlin says.

A representative of medical marijuana producer Trichome Tech 509 LLC, of Kennewick, asked for some variations of the biochar to test whether it would improve cannabis plant growth.

“He came back to us and said one particular feed stock did tremendous things,” Drinkard says.

Further testing resulted in crop-yield improvements of up to 64 percent incorporating Carbon Logic formulations as a soil amendment.

Carbon Logic’s biochar is highly porous. “One gram, which is about the size of the end of your thumb, has as much surface area as a basketball court,” Drinkard says.

As a soil amendment, it acts like a sponge, retaining water and making it available to plants over an extended period of time. More importantly, the biochar enhances microbial activity, he says.

McLaughlin adds, “It’s like a hotel for microbes, which are the ‘bugs’ that feed nutrients to the plants.”

During the last two years, Carbon Logic developed two formulations specifically for the cannabis industry; Rapid Starter, which promotes accelerated root development for seeds and cut clones; and High Growth, which enhances growth in plants with established roots.

In its marketing materials targeting the cannabis industry, Ag Energy boasts that Carbon Logic can lead to 50 percent higher yields, with five times the return on the cost of the products.

“We’re just launching the new Carbon Logic product,” Drinkard says. “The website, carbonlogicus.com just went live (in late August).”

The company currently has $3.7 million in outstanding stock, and Drinkard says, “We plan to be profitable within a year.”

So far, Ag Energy has been funded primarily by friends, family, and angel investors, he says.

Ag Energy has 12 employees and occupies 3,000 square feet of office and warehouse space at 7921 E. Broadway, having moved there in June from smaller quarters in the Old City Hall, at 221 N. Wall, in downtown Spokane.

McLaughlin says the potential of the technology has expanded since it was conceived seven years ago.

Proprietary formulations now under research and development under the Carbon Logic brand are showing potential for a slew of applications.

“Since 2010, we’ve been looking at this technology and the capacity to manage a waste problem, to improve the productivity of food crops, to clean and filter water,” she says. “Just in the last couple of years, we’ve had to say, ‘Let’s focus in on this (Carbon Logic) product as a quick path to revenue.’”

The broader picture for Ag Energy, however, is still about equipment sales, Drinkard says.

“We’re continuing to pursue the IBP technology,” Drinkard says.

Three IBP units are operating on a wheat farm near Sprague, about 35 miles southwest of Spokane. Each unit can produce 700 pounds of biochar in a day.

“It’s 100 percent automated,” Drinkard says. “You push a button, it does a self-check and feeds the unit.”

The equipment shuts down when it exhausts the feedstock, he adds.

Ag Energy engineered and designed the IBP units and hired local manufacturers to make them, he says. Each unit is built within a 20-foot shipping container.

“The units are modular, movable, and scalable,” he says.

Drinkard says the company’s three-year projections show it will need 19 units to meet anticipated demand just for Carbon Logic products.

“We definitely need to do more,” he says.

Drinkard says IBPs have potential worldwide applications.

“Multiple people are requesting to license our technology in the Middle East, Europe, and South Africa. They’ve got a huge waste problem and acidification of soil from overfertilizing.”

He says Carbon Logic “helps neutralize acidity and brings organics back into the soil.”

Characteristics of the biochar can be adjusted by altering the feedstock flow rate and temperature within the IBP, and Drinkard says Core Logic formulations are showing the potential to enhance yields of other crops.

“Different plants react drastically different to (biochar derived from) different feedstocks,” Drinkard says. “We realized with our feedstock flexibility, we could create unique, crop-specific formulations.”

In addition to wheat straw, tested feedstocks include wood chips, olive pits, walnut shells, rice hulls, and corn.

“We’ve even tried tumbleweeds and Russian thistle,” he says, adding that WSU research is showing that biochar formulations made from Russian thistle are showing promise for improving tomato crop yields.

Drinkard says another Carbon Logic formulation that enhances seed yields for turf grass will likely hit the market soon.

The grass-seed market circles back to Ag Energy’s original mission to dispose of agricultural waste by converting it into products of value.

Grass seed farmers traditionally disposed of their crop residue through open-field burning. Current regulations, however, prohibit such burning.

When grass growers had to stop burning crop residue, the grass straw went to waste and the crop yields declined, Drinkard says.

CHS Inc., a Minnesota-based agricultural cooperative, is looking at the potential to use grass straw as feedstock for the IBPs.

In theory, synthetic gas produced from the grass-straw feedstock would fuel its seed processing plants, and the Carbon Logic product would be put back into the fields to improve crop yield, Drinkard says.

“That’s what I consider a closed-loop application,” he says.

McLaughlin says biochar also is showing some promise as a water-filtration medium.

For that purpose, it has characteristics similar to activated charcoal commonly used in water filters.

“It’s the same thing,” Drinkard asserts, comparing activated charcoal to biochar. “One is derived from coal, and one is derived from a wood base. So (biochar) would be a renewable alternative carbon structure.”

Mike McLean
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Reporter Mike McLean covers real estate and construction at the Journal of Business. A multipurpose fisherman and vintage record album aficionado, Mike has worked for the Journal since 2006.

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