Goodbye Lumber

Diane Francis column Wednesday April 27

Vince Mifsud is only 38 years old, but is busy working on his third successful start-up, Genesis Building Innovations.

"I've been able to take two software companies public, Rand Technology which went from C$30 million in sales to C$300 million in five years and Pivotal Technologies," he said. "Both had sales outside Canada equivalent to 90% of the total."

Genesis is revolutionary software and manufacturing company which has developed light-weight galvanized steel framing for buildings that are hurricane-proof, wind-proof and termite-proof.

The steel is not only durable than wood, but, more importantly, can be shipped to a site and assembled like a lego set whether it's a house, hotel, hospital or apartment building.

Software and technology innovations have allowed Genesis to produce materials which match the cost of lumber.
"The cost is the same as wood if you include labor, even at today's high steel prices," he said in a recent interview.

The company designs buildings then makes the components for shipment around the world. The plan is to manufacture but also to license its technology and provide turnkey, automated factories to large contractors or developers.

For instance, Genesis was approached by drywall giant United States Gypsum Corporation in the U.S. and demonstrated its technology in February in housing-starved New Orleans. An event, attended by President George Bush, included the erection by Genesis of a 2,100 square foot, hurricane-proof home in just eight hours.

The federal and state governments are looking at this technology as part of the reconstruction of the region in the wake of Hurricane Katrina. Genesis structures have been tested and can withstand 160 mile per hour wind conditions.
Gypsum hopes to build a factory in Louisiana and build 5,000 houses per year.

"We are also negotiating with a firm in Northern California," he said. "We can engineer our buildings to withstand any kind of weather and build them on fault lines."

The steel meets all building codes worldwide, is environmentally friendly because it is 80% recycled steel and also provides health and conservation benefits.

"The Asthma Society of Canada has deemed steel allergy free and because steel frames don't move there is no insulation leakage which save energy," he said.

Genesis has several factories and produced then shipped one million square feet of buildings last year.

Genesis technology is finding great acceptance in places where termites are a chronic issue in wood houses or in areas with strict building codes due to weather risks.

Another benefit that Genesis boasts is that its easy-to-assemble structural kits work around the increasing shortage, and expense, of skilled framers and other construction workers.

"There are 10 people needed to assemble our houses and 40 people on a wood site," he said. "Windows fit perfectly, there is no warping or settling issues and insurance costs 50% less."

Sales abroad are slowly growing, but word has spread among developers about the benefits of using Genesis steel kits.
"We have just shipped 12 houses to Spain and are doing two huge projects in South Carolina," he said.

In Toronto, Genesis is building 600 stacked townhouses downtown, several hotels, McDonald's and East Side Mario's Restaurants and a golf course club house.

"We can engineer a building six or seven storeys high," he said.

The company has fine-tuned its technology and after a venture capital round raising C$16 million last year is expanding manufacturing as well as marketing its technology to potential licencees or customers around the world.

A number of home builders have adopted Genesis structures such as Remington, Baywood Homes, Aspen Ridge, Grey Rock, IBI Group, Urbancorp, Daniels Corporation and Chamberlin Contractors to name a few.

"We feel really good about our company and its ability to replace wood and concrete construction in many parts of the world," he said.

Vince grew up in the steel industry because his father worked until retirement for Samuel Manutech, a highly successful Ontario company.

Eventually, he and his investors would hope to take the company public but that's down the road.

One of the interesting developments, however, that may spirit the company on its growth path is the fact that J.D. Power is going to rank house builders as it does auto manufacturers.

This will help consumers who often buy shoddy homes, but it promises to help catapult steel-framed housing to the top of lists around North America.

"When it comes to quality we cannot be beaten by wood," he said.

Oil's Holy Grail

Diane Francis Financial Post column Friday April 28:


NEW YORK CITY - Two Canadian chemical engineers working in the forestry sector have invented what may become the oil industry's "holy grail".

At least that is what the TSE's Ivanhoe Energy Inc. is betting on, as are the world's three biggest oil corporations.

The inventors are Dr. Robert Graham and Barry Freel, two Ottawa-based chemical engineers, who founded Ensyn Group Inc. of Ottawa. They have devised a process that converts wood into fuels and chemical feedstocks which is now being applied to upgrading heavy oil into valuable light crude at a reduced cost of US$12 to US$20-a-barrel. Ivanhoe paid $100 million to buy its technology for use in the oil business worldwide.

The first commercial plant to demonstrate this technology began operation in January. The facility can convert up to 1,000 barrels a day of heavy into light crude and is located in a large California oil field owned by a partnership between ExxonMobil Corp. and Royal Dutch Shell.

"I came across the Ensyn technology while running a UK investment bank specializing in environmental technology," said Ian Barnett, Vice President Corporate Development for Ivanhoe Energy in a recent interview. "They had found the only commercial way to convert woods to fuel. We bought it in 1996 and in April 2005 Ivanhoe bought the rights for the oil application."

Ensyn's technology will be the industry's "holy grail" because it promises to eliminate the need for natural gas as a fuel and the high cost of carbon waste disposal, thus reducing oil sands and heavy oil upgrading costs by US$12 to US$20 a barrel.

In other words, if Ensyn's technology works on a commercial scale, it will change the economics of oil production around the world.

"Applied to the oil industry it means upgrading without using natural gas, creating waste products or emissions," said Mr. Barnett. "The heavy oil is vaporized by a blast of hot sand and separates carbon and hydrogen molecules. There are too many carbons in heavy oil."

The excess carbon is transferred to a re-heater where it is burned off, the heat recaptured and used as a fuel source.

"We turn a low value byproduct into high value energy," he said. "We produce two products - light crude liquids and onsite energy that replaces natural gas as a fuel. And it's a self perpetuating process."

"Current methods involve big upgraders, solvents, gasifying, emissions, burial of waste," said Mr. Barnett. "We are using the bottom of the barrel as fuel."

That's why Ivanhoe has gotten the attention of the world's biggest oil companies. Besides ExxonMobil and Shell, Conoco-Phillips has licensed from Ivanhoe rights to the process in Canada until 2010.

What's also important to oil producers is that the Ivanhoe-Ensyn process can upgrade oil on-site, or in the field. "We have mini upgraders at or near the wellhead," he said. "These are turnkey and transferable to other locations."

This portability and localization eliminates the transportation costs incurred by oil producers now who must bring raw materials and fuels to their upgrader sites at great expense. Likewise, today's upgraders also must transport and dispose of bulky waste products. The California site can produce 1,000 barrels daily.

Another huge potential advantage derived from this process (trademarked "RTP" for "Rapid Thermal Processing") is that production continues 24-7. By contrast, traditional upgrading is in batches, requiring that equipment be shut down, carbon waste be removed from the upgraders and huge amounts of energy be deployed to re-start then use the process.

The California project is the first commercialized application of the Ivanhoe-Ensyn technology. The first pilot plant, producing only 1,000 barrels per day, was built in Ottawa in 1998 by Gulf Canada Resources and Ensyn Group.
While definitive results from the commercial plant may be two years away, the technology is exciting the industry worldwide.

If it proves to be effective, the process will liberate billions of barrels of oil for production around the world.

"This will allow companies to book stranded assets that are too expensive to upgrade," said Mr. Barnett.
Even more fascinating is Ivanhoe's business plan. It will only license the process to oil producers in return for a piece of the action. This makes it the world's first "technological farm-in".

Oil's Holy Grail

Diane Francis Financial Post column Friday April 28:


NEW YORK CITY - Two Canadian chemical engineers working in the forestry sector have invented what may become the oil industry's "holy grail".

At least that is what the TSE's Ivanhoe Energy Inc. is betting on, as are the world's three biggest oil corporations.

The inventors are Dr. Robert Graham and Barry Freel, two Ottawa-based chemical engineers, who founded Ensyn Group Inc. of Ottawa. They have devised a process that converts wood into fuels and chemical feedstocks which is now being applied to upgrading heavy oil into valuable light crude at a reduced cost of US$12 to US$20-a-barrel. Ivanhoe paid $100 million to buy its technology for use in the oil business worldwide.

The first commercial plant to demonstrate this technology began operation in January. The facility can convert up to 1,000 barrels a day of heavy into light crude and is located in a large California oil field owned by a partnership between ExxonMobil Corp. and Royal Dutch Shell.

"I came across the Ensyn technology while running a UK investment bank specializing in environmental technology," said Ian Barnett, Vice President Corporate Development for Ivanhoe Energy in a recent interview. "They had found the only commercial way to convert woods to fuel. We bought it in 1996 and in April 2005 Ivanhoe bought the rights for the oil application."

Ensyn's technology will be the industry's "holy grail" because it promises to eliminate the need for natural gas as a fuel and the high cost of carbon waste disposal, thus reducing oil sands and heavy oil upgrading costs by US$12 to US$20 a barrel.

In other words, if Ensyn's technology works on a commercial scale, it will change the economics of oil production around the world.

"Applied to the oil industry it means upgrading without using natural gas, creating waste products or emissions," said Mr. Barnett. "The heavy oil is vaporized by a blast of hot sand and separates carbon and hydrogen molecules. There are too many carbons in heavy oil."

The excess carbon is transferred to a re-heater where it is burned off, the heat recaptured and used as a fuel source.

"We turn a low value byproduct into high value energy," he said. "We produce two products - light crude liquids and onsite energy that replaces natural gas as a fuel. And it's a self perpetuating process."

"Current methods involve big upgraders, solvents, gasifying, emissions, burial of waste," said Mr. Barnett. "We are using the bottom of the barrel as fuel."

That's why Ivanhoe has gotten the attention of the world's biggest oil companies. Besides ExxonMobil and Shell, Conoco-Phillips has licensed from Ivanhoe rights to the process in Canada until 2010.

What's also important to oil producers is that the Ivanhoe-Ensyn process can upgrade oil on-site, or in the field. "We have mini upgraders at or near the wellhead," he said. "These are turnkey and transferable to other locations."

This portability and localization eliminates the transportation costs incurred by oil producers now who must bring raw materials and fuels to their upgrader sites at great expense. Likewise, today's upgraders also must transport and dispose of bulky waste products. The California site can produce 1,000 barrels daily.

Another huge potential advantage derived from this process (trademarked "RTP" for "Rapid Thermal Processing") is that production continues 24-7. By contrast, traditional upgrading is in batches, requiring that equipment be shut down, carbon waste be removed from the upgraders and huge amounts of energy be deployed to re-start then use the process.

The California project is the first commercialized application of the Ivanhoe-Ensyn technology. The first pilot plant, producing only 1,000 barrels per day, was built in Ottawa in 1998 by Gulf Canada Resources and Ensyn Group.
While definitive results from the commercial plant may be two years away, the technology is exciting the industry worldwide.

If it proves to be effective, the process will liberate billions of barrels of oil for production around the world.

"This will allow companies to book stranded assets that are too expensive to upgrade," said Mr. Barnett.
Even more fascinating is Ivanhoe's business plan. It will only license the process to oil producers in return for a piece of the action. This makes it the world's first "technological farm-in".

Oil's Holy Grail

Diane Francis Financial Post column Friday April 28:


NEW YORK CITY - Two Canadian chemical engineers working in the forestry sector have invented what may become the oil industry's "holy grail".

At least that is what the TSE's Ivanhoe Energy Inc. is betting on, as are the world's three biggest oil corporations.

The inventors are Dr. Robert Graham and Barry Freel, two Ottawa-based chemical engineers, who founded Ensyn Group Inc. of Ottawa. They have devised a process that converts wood into fuels and chemical feedstocks which is now being applied to upgrading heavy oil into valuable light crude at a reduced cost of US$12 to US$20-a-barrel. Ivanhoe paid $100 million to buy its technology for use in the oil business worldwide.

The first commercial plant to demonstrate this technology began operation in January. The facility can convert up to 1,000 barrels a day of heavy into light crude and is located in a large California oil field owned by a partnership between ExxonMobil Corp. and Royal Dutch Shell.

"I came across the Ensyn technology while running a UK investment bank specializing in environmental technology," said Ian Barnett, Vice President Corporate Development for Ivanhoe Energy in a recent interview. "They had found the only commercial way to convert woods to fuel. We bought it in 1996 and in April 2005 Ivanhoe bought the rights for the oil application."

Ensyn's technology will be the industry's "holy grail" because it promises to eliminate the need for natural gas as a fuel and the high cost of carbon waste disposal, thus reducing oil sands and heavy oil upgrading costs by US$12 to US$20 a barrel.

In other words, if Ensyn's technology works on a commercial scale, it will change the economics of oil production around the world.

"Applied to the oil industry it means upgrading without using natural gas, creating waste products or emissions," said Mr. Barnett. "The heavy oil is vaporized by a blast of hot sand and separates carbon and hydrogen molecules. There are too many carbons in heavy oil."

The excess carbon is transferred to a re-heater where it is burned off, the heat recaptured and used as a fuel source.

"We turn a low value byproduct into high value energy," he said. "We produce two products - light crude liquids and onsite energy that replaces natural gas as a fuel. And it's a self perpetuating process."

"Current methods involve big upgraders, solvents, gasifying, emissions, burial of waste," said Mr. Barnett. "We are using the bottom of the barrel as fuel."

That's why Ivanhoe has gotten the attention of the world's biggest oil companies. Besides ExxonMobil and Shell, Conoco-Phillips has licensed from Ivanhoe rights to the process in Canada until 2010.

What's also important to oil producers is that the Ivanhoe-Ensyn process can upgrade oil on-site, or in the field. "We have mini upgraders at or near the wellhead," he said. "These are turnkey and transferable to other locations."

This portability and localization eliminates the transportation costs incurred by oil producers now who must bring raw materials and fuels to their upgrader sites at great expense. Likewise, today's upgraders also must transport and dispose of bulky waste products. The California site can produce 1,000 barrels daily.

Another huge potential advantage derived from this process (trademarked "RTP" for "Rapid Thermal Processing") is that production continues 24-7. By contrast, traditional upgrading is in batches, requiring that equipment be shut down, carbon waste be removed from the upgraders and huge amounts of energy be deployed to re-start then use the process.

The California project is the first commercialized application of the Ivanhoe-Ensyn technology. The first pilot plant, producing only 1,000 barrels per day, was built in Ottawa in 1998 by Gulf Canada Resources and Ensyn Group.
While definitive results from the commercial plant may be two years away, the technology is exciting the industry worldwide.

If it proves to be effective, the process will liberate billions of barrels of oil for production around the world.

"This will allow companies to book stranded assets that are too expensive to upgrade," said Mr. Barnett.
Even more fascinating is Ivanhoe's business plan. It will only license the process to oil producers in return for a piece of the action. This makes it the world's first "technological farm-in".

Oil's Holy Grail

Diane Francis Financial Post column Friday April 28:


NEW YORK CITY - Two Canadian chemical engineers working in the forestry sector have invented what may become the oil industry's "holy grail".

At least that is what the TSE's Ivanhoe Energy Inc. is betting on, as are the world's three biggest oil corporations.

The inventors are Dr. Robert Graham and Barry Freel, two Ottawa-based chemical engineers, who founded Ensyn Group Inc. of Ottawa. They have devised a process that converts wood into fuels and chemical feedstocks which is now being applied to upgrading heavy oil into valuable light crude at a reduced cost of US$12 to US$20-a-barrel. Ivanhoe paid $100 million to buy its technology for use in the oil business worldwide.

The first commercial plant to demonstrate this technology began operation in January. The facility can convert up to 1,000 barrels a day of heavy into light crude and is located in a large California oil field owned by a partnership between ExxonMobil Corp. and Royal Dutch Shell.

"I came across the Ensyn technology while running a UK investment bank specializing in environmental technology," said Ian Barnett, Vice President Corporate Development for Ivanhoe Energy in a recent interview. "They had found the only commercial way to convert woods to fuel. We bought it in 1996 and in April 2005 Ivanhoe bought the rights for the oil application."

Ensyn's technology will be the industry's "holy grail" because it promises to eliminate the need for natural gas as a fuel and the high cost of carbon waste disposal, thus reducing oil sands and heavy oil upgrading costs by US$12 to US$20 a barrel.

In other words, if Ensyn's technology works on a commercial scale, it will change the economics of oil production around the world.

"Applied to the oil industry it means upgrading without using natural gas, creating waste products or emissions," said Mr. Barnett. "The heavy oil is vaporized by a blast of hot sand and separates carbon and hydrogen molecules. There are too many carbons in heavy oil."

The excess carbon is transferred to a re-heater where it is burned off, the heat recaptured and used as a fuel source.

"We turn a low value byproduct into high value energy," he said. "We produce two products - light crude liquids and onsite energy that replaces natural gas as a fuel. And it's a self perpetuating process."

"Current methods involve big upgraders, solvents, gasifying, emissions, burial of waste," said Mr. Barnett. "We are using the bottom of the barrel as fuel."

That's why Ivanhoe has gotten the attention of the world's biggest oil companies. Besides ExxonMobil and Shell, Conoco-Phillips has licensed from Ivanhoe rights to the process in Canada until 2010.

What's also important to oil producers is that the Ivanhoe-Ensyn process can upgrade oil on-site, or in the field. "We have mini upgraders at or near the wellhead," he said. "These are turnkey and transferable to other locations."

This portability and localization eliminates the transportation costs incurred by oil producers now who must bring raw materials and fuels to their upgrader sites at great expense. Likewise, today's upgraders also must transport and dispose of bulky waste products. The California site can produce 1,000 barrels daily.

Another huge potential advantage derived from this process (trademarked "RTP" for "Rapid Thermal Processing") is that production continues 24-7. By contrast, traditional upgrading is in batches, requiring that equipment be shut down, carbon waste be removed from the upgraders and huge amounts of energy be deployed to re-start then use the process.

The California project is the first commercialized application of the Ivanhoe-Ensyn technology. The first pilot plant, producing only 1,000 barrels per day, was built in Ottawa in 1998 by Gulf Canada Resources and Ensyn Group.
While definitive results from the commercial plant may be two years away, the technology is exciting the industry worldwide.

If it proves to be effective, the process will liberate billions of barrels of oil for production around the world.

"This will allow companies to book stranded assets that are too expensive to upgrade," said Mr. Barnett.
Even more fascinating is Ivanhoe's business plan. It will only license the process to oil producers in return for a piece of the action. This makes it the world's first "technological farm-in".