DOE will pay capital costs for six cellulosic projects

Michael Burnham, Greenwire reporter

Six companies planning to build the nation's first commercial-scale cellulosic ethanol plants will receive up to $385 million in federal funding for capital costs, Energy Secretary Samuel Bodman said today.

The biorefineries, slated for completion during the next four years, are expected to produce more than 130 million gallons annually of cellulosic ethanol from corn stover, cereal straws, wood chips and other carbonaceous biomass.

DOE will pay about 60 percent of the projects' capital costs.

The grants will go to:

Abengoa Bioenergy Corp. will receive up to $76 million to build a Colwich, Kan., refinery to produce 11.4 million gallons of cellulosic ethanol a year from corn stover, wheat straw, and other feedstocks.

Alico Inc., up to $33 million for a LaBelle, Fla., refinery to produce 13.9 million gallons from wood, vegetative wastes and other feedstocks.

BlueFire Ethanol Inc., up to $40 million to build a Corona, Calif., refinery to produce up to 19 million gallons from landfill waste.

Broin Cos., up to $80 million to expand its corn ethanol refinery in Emmetsburg, Iowa, to produce about 31 million gallons of cellulosic ethanol from corn cobs and stalks.

Iogen Corp., up to $80 million to build an Idaho Falls, Idaho, refinery to produce up to 18 million gallons annually from agricultural residue.

Range Fuels Inc., up to $76 million to build a Treutlen County, Ga., refinery to produce about 40 million gallons of cellulosic ethanol and 9 million gallons of methanol annually from wood residue from local timber activity.

U.S. corn ethanol production has more than tripled in recent years -- from 1.6 billion gallons in 2000 to a projected 4.9 billion gallons this year, said Matt Hartwig, a spokesman for the Renewable Fuels Association, the ethanol industry's main trade group. But cellulosic ethanol has been resigned to a handful of demonstration projects because companies must first convert hearty plant material into the sugar that is ultimately fermented and distilled into fuel.

"As Mother Nature intended, it's a difficult material to break down," Hartwig added.

Dollar-a-gallon goal

The six companies selected for DOE funding will use a variety of means to break down the raw biomass, including enzymes, gasification and acid hydrolysis.

Alico, for example, will use gasification fermentation to convert the carbon-based material into fuel, said John Alexander, the company's chairman and CEO.

"I believe cellulosic ethanol is not five or six years away," he added. "It's almost today."

Bodman said the DOE funding should go a long way toward meeting President Bush's goal of increasing renewable fuels in the transportation sector to the equivalent of 35 billion gallons of ethanol a year by 2017. What's more, he said, the funding will help the nascent cellulosic ethanol industry drive down the cost of the fuel consistent with corn-based ethanol, which costs roughly $1 a gallon to make.

"If we're able to get the cost of these [cellulosic] operations down to the dollar-a-gallon level ... it would put us in a very strong position to have these technologies compete with any fuel in the world," Bodman said.

"This is huge," he added. "This could potentially change the way we run our entire transportation sector in America."