Advanced Refining Concepts on track to $100 million year

Peter Gunnerman looks up from a salad, his weekday lunch at Guy's Place, a barbecue spot just down the road from the Peru Heights refinery operated by his Advanced Refining Concepts.

"Write this down, and hold us to it," he tells a visitor. "We'll do $100 million in sales this year."

It's a heady prediction from Gunnerman.

It's been only a year, after all, since Advanced Refining Concepts began selling the refinery's production, a liquid fuel known as "GDiesel" that's created from a combination of natural gas and a petroleum base.

And it was only in November that the refinery's monthly production topped 1 million gallons for the first time a figure that was more than doubled in February.

The privately held company has invested $24 million mostly family money since 2008 in development of the technology and construction of the first refinery.

As founders and co-directors of the Sparks-based company, Gunnerman and his father, Rudolf, made a calculated decision that they wouldn't make any claims about the performance of the product, which has been designated as an alternative fuel by the Nevada Division of Environmental Protection.

Users have said, however, it reduces smoke, odor and soot deposits in diesel engines while improving cold-weather operations.

A big endorsement came late last year, when Clark County contracted to buy approximately 1 millions of GDiesel during the next year.

"Use of this new fuel allows us to lower emissions and still save on fuel costs," said David Johnson, manager of Clark County's automotive division, operator of the third-largest vehicle fleet in Nevada.

Advanced Refining Concepts is building a refinery in Clark County this year to meet that contract even as it's adding a second phase to the Peru Heights facility at Tahoe Reno Industrial Center east of Sparks.

The additional refining units will double production of the Storey County facility to 200,000 gallons a day.

"We see this as an incredibly quick acceptance of a new product," says Peter Gunnerman.

As Advanced Refining Concepts markets the production of its refineries, Gunnerman says the company looks to the east, the south and the north anywhere, in fact, except for California.

"There are so many complications in California that we look not to be there," he says. "Sometimes, your best markets are ones in which you feel most comfortable."

Advanced Refining Concepts' marketing is low-key. It doesn't set up any mileage or performance claims that users can knock down.

"Try it, and you tell me," Gunnerman tells them. Northern Nevada distributors who have signed on include Golden Gate Petroleum, Casazza Oil Petroleum Distributors, Nevada Petroleum, Inc. and Allied Washoe Petroleum, and GDiesel is available at about 10 cardlock and retail locations in the region.

The company's strategy calls for development of a series of smallish refineries something on the lines of the Peru Heights facility as new markets are opened.

Just as the electric generation business looks at a distributed generation model many small generating units spread across a wide area so does Advanced Refining Concepts look to a distributed refining model.

The closed-loop catalytic refineries developed by the company don't generate any wastes. There are no giant crackling towers or flares. They're quiet enough that operators speak in a normal voice even while they're standing next to the catalytic units.

While the initial installations create liquid fuel from natural gas, the Gunnermans say the company's technology can use other feedstock such as methane from landfills or waste-treatment facilities.

The highly automated refineries are overseen by two workers per shift.

The company employs more than 30 people in northern Nevada between the refinery, the corporate office, and an assembly plant in Sparks where refinery units come together.

The company outsources most of its manufacturing, keeping in-house only the robot-built creation of the catalytic plates that are at the heart of its refining process. The units are assembled on skids at the Sparks facility for trucking to refining sites.

Northern Nevada suppliers such as Merit Electric and L.A. Perks handle installation.

While development and commercialization of a clean fuels technology has been satisfying, Gunnerman says the creation of jobs has been equally rewarding.

"We know we've made a difference in the state," he says.