AETE Announces One Dollar Ethanol
ENERGY TECH
AETE Announces One Dollar Ethanol
by Staff Writers
Houston TX (SPX) Mar 18, 2008
Source: Energy-daily.com
The Alternative Energy Technology Center ahs announced its plans to produce ethanol for the U.S. market at less than $1 per gallon. AETE will refine biomass into fuel products using its exclusive technology. Most new automobiles built in the U.S. by General Motors and other manufacturers are equipped to run on 85% ethanol.
To fuel these cars ethanol production must be expand significantly. With corn at over $5 per bushel, current plants spend nearly $2 to produce a gallon of ethanol that sells for $2.60. AETE’s process using common cellulosic biomass will produce ethanol for less than $1 per gallon.
“One dollar ethanol will allow us to operate profitably without government subsidies or incentives,” noted Brown Marks, AETE’s President. “We expect to produce over 100 gallons of fuel per ton of cellulosic biomass which costs about $65 in today’s market,” he stated. “We have designed our technology to use low cost feed stocks that are widely available at low cost. We use a low energy input design to increase efficiency and we can place our plants wherever there is abundant biomass available,” he concluded.
Cellulosic Ethanol Event in Southern California
The Solution To High Gas Prices Is Revealed By Top Purdue Scientist
The importance of biofuel has never been more important to the security and economic future of the United States than now. The Compound Annual Growth Rate of cellulosic industry from 2008 to 2022 estimates to reach 435.63% while Energy Independence and Security act mandates the supply of cellulosic ethanol must reach 16 billions gallon in 2022. To help farmers and company to produce cellulosic ethanol more efficiently, an award winning Purdue Scientist will be revealing the latest breakthrough in Cellulosic Ethanol Production, an alternative to conventional corn based ethanol.
Dr. Nancy W.Y. Ho, a molecular biologist and group leader from Purdue University will be illuminating the latest research she and her team have been working on, named “Ho-Purdue Yeast.” According to Dr. Ho, “It’s about weaning America from its self-destructive oil habit by tapping the energy in everything else that grows–and rots–all around us.”
Dr. Ho has spent the better part of a career at Purdue University figuring out how to convert the DNA of a simple form of brewer’s yeast by cloning a gene nobody else had thought to clone. Now, if you stir her creation into a beaker filled with the sugars derived from throwaway organic materials like wheat straw, switch grass, orange peels, or any agricultural waste, it will gradually convert most of them into high-octane auto fuel.
The U.S. Department of Energy has already successfully deployed Dr. Ho’s “yeast” research and has sponsored the creation of an ethanol demonstration plant. For those who are interested in participating in the growing cellulosic industry and intend to increase the revenue of their own farms, it is the seminar you should not miss.
Next Generation of Ethanol Production- An Introduction to the Ho-Purdue Yeast
Venue: Imperial County Farm Bureau
1000 Broadway El Centro, CA 92243
Date: March 20, 2008
Time: 2 to 5 p.m.
Speaker: Nancy W. Y. Ho
RSVP: Please register if you want to join the event FREE of charge.
Curriculum Vitae
Nancy W. Y. Ho
Research Molecular Biologist/Group Leader
Laboratory of Renewable Resources Engineering
Purdue University
Potter Engineering Center
500 Central Drive
West Lafayette, Indiana 47907-2022
Phone: 765-494-7046; Fax: 765-494-7046
nwyho@purdue.edu
EDUCATION
• Ph. D. Molecular Biology, Purdue University, 1968
• M. A Organic Chemistry, Temple University, 1960
• B. S. Chemical Engineering, National Taiwan University, 1957
RESEARCH AND/OR PROFESSIONAL EXPERIENCE
• Senior Research Scientist and Group Leader of Molecular Genetics Group, LORRE, July 1, 1980 to present.
• Graduate Faculty, Department of Foods & Nutrition, Purdue University, Sept.1, 1982 to present
HONORS, RECOGNITIONS, AND OTHER AWARDS
2004 Since April 2004 , Iogen, a Canadian company, has used the engineered yeast developed by Dr. Ho at Purdue University to produce ethanol from wheat straw in the world‘s first production plant of its kind. Purdue University issued a news release on June 28, 2004 entitled, Purdue yeast makes ethanol from agricultural waste more effectively, to mark this special event. Many newspapers and magazines have also reported upon this exciting development.
1999 The genetically engineered Saccharomyces yeasts developed by Dr. Ho were also honored by Discover Magazine as one of 27 of the most important technological innovations of 1999 selected from more than 4000 technological innovations worldwide. Dr. Ho was honored by Discover Magazine as one of the 27 finalists of the Discover Award for that year.
1998 R&D 100 Award from R&D Magazine for her successful development of the genetically engineered Saccharomyces yeast that can effectively co-ferment both glucose and xylose from cellulosic biomass, which has made biomass-to-ethanol technology closer to commercialization. The Chicago Tribune has called this award “The Oscar of Invention.” Others have referred to the award as “the Nobel Prize of Applied Research.”
Range Fuels gets $100 million to build ethanol plant
Range Fuels, which says it can produce cellulosic ethanol out of wood scraps, has raised $100 million to build a 100-million-gallon-a-year plant in Georgia, according to VentureWire, which posted the news first. Investors in the round include Khosla Ventures (a previous investor) and an unnamed energy company.
Earlier, the company received grants from the U.S. Department of Energy worth up to $76 million, as well as other venture funds.
CEO Mitch Mandich, a former Apple guy, told us last year that the plant would cost around $150 million. Unlike Web 2.0 start-ups, energy companies require a lot of capital to get off the ground. The company is trying to get the plant running this year to the point where it can produce 20 million gallons a year.
Range Fuels uses thermochemical processes to convert forestry wastes into ethanol. The alcohol can be mixed into gas, or be turned into E85, which is 85 percent ethanol. There are only a few cars on the road that can run on E85 and only about 1,400 stations in the U.S. that sell it, but both numbers are expected to climb.
The process devised by the company is similar to the Fischer-Tropsch process for converting coal to liquids. First, the solid is turned into a synthetic gas, which then gets combined with other gases and converted to a liquid. Fischer-Tropsch, invented in 1920, can be somewhat expensive. Countries invested in coal-to-liquids when they couldn’t get fuel otherwise. The Third Reich was a fan, and so was the Apartheid regime of South Africa. (You can also call it the Hans and Franz process after Franz Fischer and Hans Tropsch.)
But with oil prices climbing, synthetic liquid fuels are becoming more attractive. Many cellulosic companies say they can make fuel and sell it for $1 to $1.50 a gallon once it’s in mass production. Efficiency, however, is paramount in this market, and companies are racing to see who can get the most fuel out of a ton of scraps. ZeaChem, a rival, says it can get 160 gallons per ton. Others have claimed more than 100 gallons.
While most of the cellulosic companies are start-ups, an influx of cash and interest is coming in from traditional fuel vendors. Chevron and Weyerhauser, for instance, have created a biofuel company. Although big companies can threaten start-ups, partnerships are inevitable: building large-scale refineries takes more time, capital, and distribution heft than most start-ups can muster.
Range Fuels isn’t the only outfit getting money these days. Coskata, which wants to make cellulosic ethanol out of garbage, got $19.5 million. And in the solar world, rumors swirl that Nanosolar and Solyndra are trying to raise money for factories and telling investors they are worth $2 billion and $1 billion respectively. Neither company is in mass production.
Iogen, Canada evaluate cellulosic ethanol proposal
Source: Reuters.com
Corrects 10th and 11th paragraphs to show that the timetable for the Idaho project is still to be determined, while Iogen hopes to break ground on the Saskatchewan project later in 2008 or in 2009)
By Roberta Rampton
WINNIPEG, Manitoba, March 14 (Reuters) – The Canadian government said on Friday it is performing due diligence on a proposal to help fund a commercial-scale cellulosic ethanol plant planned by Iogen Corp for the province of Saskatchewan.
“It’s a huge step in the commercialization process,” said Jeff Passmore, an Iogen official, in an interview.
By 2011, the C$500 million ($505 million) plant would produce about 90 million liters (23.78 million U.S. gallons) of ethanol a year, along with enzymes and other byproducts, using straw left over from the wheat harvest in Canada’s breadbasket,
Canada has said it will spend C$500 million to help commercialize “next-generation biofuels” with repayable loans for up to 40 percent of project costs.
“They need to know that this is a sound investment,” Passmore said, adding that government officials began meeting with Iogen engineers and other company officers last month to study the project, with the due diligence process set to wrap up next month.
Traditionally made from corn and other food crops, ethanol is a fuel additive hailed as a way to extend the longevity of limited global oil supplies and reduce the climate-changing greenhouse gas emissions of vehicles.
But rising concerns about food inflation have pushed governments to invest in cellulosic ethanol, which currently costs about twice as much to produce as corn-based fuel, and is not yet produced on a commercial scale.
The United States will consume about 9 billion gallons of ethanol this year, but the recent U.S. energy bill calls for 36 billion gallons of renewable fuel by 2022, including 16 billion gallons from nonfood stocks.
Privately held Iogen, backed by Royal Dutch Shell (RDSa.L: Quote, Profile, Research) and Goldman Sachs Group Inc (GS.N: Quote, Profile, Research), is working a similar-size project in Idaho selected for U.S. federal funding last year.
“We’re proceeding with due diligence there as well,” Passmore said.
The timetable for the Idaho project is still to be determined, Passmore said. Iogen hopes to have financing in place to start building the Saskatchewan plant later in 2008 or early in 2009.
Iogen has run a demonstration plant in Ottawa for four years that can produce about 2.5 million liters of ethanol per year from straw.
“I’m not sure what stage our competitors are at, but we’re the only ones who have had four years of operating experience at a demo plant, and that’s taught us a lot about what works and what doesn’t,” Passmore said.
Iogen eventually hopes to build plants producing 200 million-250 million liters of ethanol to attain better economies of scale, he said.
($1=$0.99 Canadian) (Reporting by Roberta Rampton; Editing by Peter Galloway)
Early Move On Ethanol Pays Off For Distributor Of Farm Produce
March 12, 2008: 03:44 PM EST
Investor’s Business Daily delivered by Newstex
When the ethanol boom started two years ago, ethanol startups began sprouting almost as fast as dot-coms in the ’90s. But in the end, the old-timers seem to be winning.
One venerable player is 61-year-old The Andersons ANDE. The company was long established in storing and merchandising grain and had diversified into several other farm-related industries. Ethanol, then, seemed like a natural add-on.
Andersons opened its first plant in Albion, Mich., in August 2006. It opened another in Clymers, Ind., in April last year and a third in Maumee, Ohio, in February. Andersons built and owns the plants in partnership with Marathon Oil (NYSE:MRO) MRO, which needs ethanol to fulfill the new renewable-fuel laws.
Grain And Ethanol
All this helped the firm’s Grain & Ethanol Group — which includes both ethanol and grain storage — nearly double its revenue in 2007 and more than double its operating income. The group accounts for about 60% of Andersons’ business.
Analysts say the diversity of its business helps Andersons avoid the pitfalls of other ethanol producers. Pure-play producers have gotten killed by rising corn prices, which hit a record $5.615 a bushel at the beginning of March. But Andersons plays it both ways.
“Its grain storage business and fertilizer business benefit from higher corn prices,” said analyst Heather Jones of BB&T (NYSE:BBT) Capital. “The higher (prices) are, the more likely farmers are to plant acreage.”
It also helps that the firm has negotiated contracts covering 70% of its ethanol plants’ corn demands for this year, meaning corn is locked in at a lower price. And, adds analyst Charlie Rentschler of Wall Street Access, “If anybody knows how to hedge, it’s The Andersons.”
Jones says that Andersons’ joint-venture approach is shrewd. The company won’t take a position in an ethanol plant unless it also gets a contract to provide related services. That’s a high-margin business that generated $15 million in fees last year, Jones says.
The capacity of the three plants together is about 275 million gallons. It’s still pretty small compared with industry leader Archer Daniels Midland (NYSE:ADM) ADM, which cranks out about 1.1 billion gallons. But Rentschler says Andersons doesn’t go head-to-head with ADM because its plants are located farther east, away from the thickly populated Iowa market.
The increased demand for corn, thanks to ethanol and other factors, has also driven up Andersons’ Plant Nutrient Group. Sales in that segment jumped 75% last year to $466 million, while operating income multiplied eight times over to $27 million. This came about thanks to a 43% increase in volume and a 24% increase in price. Not only was there a rise in acreage last year, but corn requires more fertilizer than other crops, so farmers needed more nutrients per acre as they converted their land to corn fields.
Andersons’ three smaller segments didn’t have such a great year. The Retail Group runs six stores in Ohio with a Home Depot-like (NYSE:HD) format, and last year it opened a specialty food store called The Andersons Market, taking advantage of the burgeoning organic-food craze. Nonetheless, both same-store sales and margins shrank in 2007. The Turf & Specialty Group, which offers fertilizers for lawns and golf courses, also declined. Read more, please go to Ivestor’s Business Daily. Invest Smarter! Get 2 Bonus Weeks of Investor’s Business Daily!
Corn based Ethanol production fuels environmental problem, experts fear
Margaret Munro , CanWest News Service
Published: Monday, March 10, 2008
Ramping up corn production to make ethanol will make the “dead zone” in the Gulf of Mexico even more lethal, according to a Canada-U.S. study that links biofuels to an environmental problem.
Run-off from corn fields is all but sure to increase the zone of oxygen-deprivation water in the Gulf that is toxic to fish, says geographer Simon Donner, of the University of British Columbia, and lead author of the report published Monday in Proceedings of the National Academy of Sciences.
“It is going make what was already a difficult problem pretty much impossible to solve,” says Donner, who has a long interest in agriculture’s impact on the environment.
The dead zone in the Gulf of Mexico, which grows to cover close to 20,000 square kilometers in summer, is one of the more dramatic. Nutrients and fertilizers wash off Midwest farmland, down the Mississippi River and into the gulf, where it fuels a depletion of oxygen. The result is one the largest and most infamous of the 200 dead zones now found in coastal zones around the globe.
Donner and his colleague Christopher Kuckarik at the University of Wisconsin predict that if the U.S. meets its proposed ethanol goal, the amount of nitrogen from fertilizer flowing into the gulf will increase by as much as 19 per cent in coming years.
A U.S. task force has concluded nitrogen flowing into the gulf must be cut 30 per cent to bring the Gulf of Mexico dead zone back to life. Other studies have called for a 55 per cent reduction.
Donner says the downstream impacts on the gulf “doesn’t appear to have been on the agenda” of the U.S policy-makers who recently endorsed a plan to produce 36 billion gallons annually of ethanol by the year 2022, as much as 15 billion gallons of it from corn starch.
“The energy policy pretty clearly is going to contradict the Gulf of Mexico dead zone reduction effects,” says Donner, whose study assessed the amount of estimated land and fertilizer required to meet the ethanol goals. It concludes the dead zone will grow if there are not “radical shifts” in food and land management.
While the study focused on the gulf, Donner said in an interview he expects similar problems to crop up around the world as more and more land moves into biofuel production.
“There is only so much productive agricultural land on the planet and we’re already using most of it,” he said, stressing the importance of assessing the trade-offs and consequences in advance.
He says one way to reduce the problems is to use less land to grow corn for cattle, and reduce the global appetite for beef.
“If we didn’t eat beef we’d easily have enough land to feed the planet,” he says.
Several recent studies have raised questions about the environmental costs of biofuels, particularly ethanol made from corn, which requires a lot of energy and fertilizer to grow. “It (corn ethanol) doesn’t come out well on balance for the environment or the atmosphere,” says Donner, noting that some biofuels are better than others.
“Biofuels aren’t inherently a bad idea,” says Donner. “But they have to be done well, or the atmosphere and the waterways are going to be net loser.”
Bacterium Gets Wheels Turning on Ethanol Fuel
By Susan Kinzie and David A. Fahrenthold
Washington Post Staff Writers
Monday, March 10, 2008; Page B04
Source: Washingtonpost.com
A strain of bacteria accidentally found in the Chesapeake Bay more than 20 years ago — a bug that decomposes everything from algae to newspapers to crab shells — could help produce cheaper fuel, according to scientists at the University of Maryland.
Gov. Martin O’Malley (D) will tout the work of professors Steven Hutcheson and Ronald Weiner on campus today in announcing that Zymetis, a U-Md. spinoff company, will use the organism to generate ethanol.
The hope is that the bacterium can be used to produce ethanol more efficiently and inexpensively and in effect recycle junk into energy. The bacterium, which is very difficult to find in nature but easily reproduced in the lab, has turned bench scientists into entrepreneurs.
It’s a remarkable bug, Hutcheson said. “There’s nothing out there that compares to it.”
With environmental, economic and geopolitical reasons to find alternatives to gasoline, there’s a sense of urgency behind scientists’ drive to make cheap fuels out of such plants as grasses and wood. Other scientists said that the U-Md. research might mark a significant step in that struggle but that it was difficult to judge the discovery in detail without more information.
Ethanol is, essentially, fermented plant matter: Parts of the plants are broken down into sugar, which is converted into a kind of alcohol that is usable as fuel. For now, most U.S. ethanol is made from corn, but scientists want a source that isn’t also sought after for food.
They are now seeking to make fuel out of such things as wood chips, cornstalks and a prairie plant called switch grass. But the fuel in these plants is locked up chemically in such substances as cellulose, which nature has engineered not to break down, unlike the starches in grains.
“That’s the reason why you eat bread but you build houses out of wood,” said Philip Pienkos of the U.S. Department of Energy’s National Renewable Energy Laboratory.
That’s where this bug comes in. The bacterium Saccarophagus degradans, or sugar eater, can create a mix of enzymes that degrades plant matter. It has the largest known concentration of enzymes that eat carbohydrates, Hutcheson said.
“It basically is the ultimate bottom feeder,” said Jonathan Dinman, an associate professor of cell biology and molecular genetics at U-Md. “It eats what nobody else will eat — cornstalks, leftover chaff from hay or whatever — and can turn that into ethanol.”
Some researchers now use a pretreatment that softens the plants, then another treatment to turn cellulose into sugar, then a fermentation that turns the sugar into alcohol. Several scientists said that if the U-Md. research could make this process faster and more efficient, it could produce serious savings.
“If this guy’s got the answer to it, heck, yeah,” it would be the product of the year, said Mark E. Downing, of the Department of Energy’s Oak Ridge National Laboratory in Oak Ridge, Tenn.
But Bruce E. Dale, a professor of chemical engineering at Michigan State University, said he wondered how much difference one bacterium could make. “There’s never been, to my knowledge, a microorganism that, without help [from scientists] . . . can break down cell walls completely and rapidly,” Dale said.
If such an organism existed, he said, plants would probably have found a way to defend themselves. “If there’s organisms out in the world doing that,” they would be “turning all the trees into puddles.”
The bacterium isn’t a parasite or a plant pathogen, Weiner said, adding that research has shown it attacks only dead organic matter. It was found in the mid-1980s by scientists at George Mason University looking for the organism killing wild grass.
In the lab, most people just call it 240 — not for the Maryland area code, but because it was the 40th sample isolated on a researcher’s second day in the salt marsh.
The bug interested a scientist at George Mason, and at a conference in the late 1980s, Weiner, who happened to sit next to him, was invited to collaborate.
The other scientist soon moved on, but Weiner was hooked. “It was unique. It was the first marine bacterium shown to degrade woody material. . . . How does CO2. . . go from a complex carbohydrate in the ocean to atmospheric CO2? . . . It was a whole missing link. This organism was absolutely the first and remains the paradigm for how that occurs.”
It was obvious, too, that it had tremendous ability to degrade all kinds of complex carbohydrates. “I started off fascinated with it,” Weiner said, “and the more we studied it, the more fascinated we got.”
In about 2000, Hutcheson joined the department and began working on 240. He drove to the salt marsh, a stretch of ecological preserve in Mathews County, Va., to try to isolate more samples of the bacterium.
In more than a dozen tries, the researchers haven’t been able to.
With the help of the Energy Department, they got its genome sequenced. Weiner worked almost straight through a few nights because he was so excited when the data came back. “That was a breakthrough,” said Larry Taylor, then a doctoral student in the lab and now at the National Renewable Energy Laboratory.
A few years ago, Weiner decided to step away from the theoretical and try an informal experiment: He snipped branches off a bunch of his wife’s houseplants and put the clusters of leaves into glass flasks with 240. In other flasks, he combined 240 with newspaper or magazine pages. Then he had a group of 10 control flasks with just the bacteria.
He came back to the lab after the holidays — a week, maybe 10 days later, and burst out, “Who the devil took our flasks?”
He looked again and counted. There were 20 there, but they all looked empty. “The plant matter had all disappeared,” he said. “I never anticipated the organism would be that efficient. That’s when we knew the organism not only did things in microculture but had the potential to be useful on a grander scale.”
They had always known the research could one day be helpful for making ethanol, but the more they found out, Hutcheson said, the more possible — and compelling — the practical applications began to seem. And when he watched President Bush talk about alternative fuels in the State of the Union speech a couple of years ago, he almost fell out of his seat, he recalled. He began to put together the company through the Technology Advancement Program at U-Md.
About a year ago, Dinman joined them to help bump up the fuel yields they get from sugars using genetically engineered yeast. “Yeast has been used to make ethanol since the first caveman got a buzz off of fermenting berries,” he said.
There are still a lot of hurdles, Dinman said. There is plenty of competition, too. Weiner said the big question is whether it can be cost-competitive; Hutcheson said they reduced production costs 20-fold in less than a year.
Hutcheson hopes to have the pilot plant running this summer. And when he gets a chance, he’ll go back to the marsh. He’s still looking for 240.
Enzymes Study: Elapsed Time
Editor’s Note: This video contains no audio
Right beaker, Zymetis’ enzymes breaking down newspaper into ethanol-ready sugars over a 36-hour time period; left beaker, a salt water control sample, also with newspaper. Zymetis’ commercial enzymes will break down cellulosic material at a significantly more rapid pace.
Firms face big challenges to meet biofuels mandate
By PHILIP BRASHER • Register Washington Bureau • March 8, 2008
Source: DesMoinesRegister.com
Washington, D.C. – Whether it’s garbage, corn stubble or waste trees, some company claims to have come up with a way to turn the stuff into motor fuel.
Projects like these are considered critical to meeting the new biofuels mandate included in the energy bill that Congress enacted in December. But the companies face a number of hurdles. The costs far exceed those of conventional ethanol plants, and investors are in short supply.
Range Fuels, a project funded by investor Vinod Khosla, has cleared land in Georgia to build a plant to make ethanol out of wood waste from nearby pine forests. The facility will use heat, pressure and steam to turn the wood into a synthetic gas that can then be converted to ethanol.
In Iowa, Poet LLC plans to expand an existing corn ethanol plant at Emmetsburg to make 25 million gallons of the fuel per year from corn cobs. Poet uses enzymes to convert the cobs into sugars that can then be fermented into ethanol.
BlueFire Ethanol, which plans to convert municipal waste into ethanol, plans to have its first small plant in operation in early 2009 next to a landfill in California. BlueFire uses acid to turn garbage into fuel.
“This is a whole industry being built on waste,” said BlueFire’s chief executive, Arnold Klann, speaking at a renewable energy conference in Washington this week.
The energy law requires the nation to use 36 billion gallons of biofuels by 2022. Only 15 billion gallons of that fuel can be traditional corn-based ethanol. The rest will have to be made from other feedstocks, such as the plant fiber, or cellulose, that makes up everything from trees to corn cobs, wheat straw and yard waste.
A government forecaster told the Senate energy committee this week that the country likely will fall short of the targets for those advanced biofuels, as they are known in the law.
Annual targets for advanced biofuels likely will have to be waived, so total biofuel production will likely reach just 32.5 billion gallons in 2022, said Guy Caruso, chief of the Energy Information Administration.
“If there are significant breakthroughs in technology, these numbers would change, definitely,” he said.
Robert Brown, a biofuels expert at Iowa State University, said it isn’t clear yet what are the best methods for making the next generation of biofuels. He also said the capital costs need to be reduced.
“Every audience I talk to now, I tell them we better get to work. It is a very ambitious target,” he said of the biofuels mandate.
With current technology, a cellulosic biorefinery would cost about five times as much to build as a conventional ethanol plant, Brown said. A 100 million-gallon-a-year cellulosic project could cost as much as $1 billion, although the price could be reduced with further research, he said.
“The biggest challenge we face is that people are going to balk at the capital costs to do this,” he said.
Industry officials say that it is hard to find investors willing to put money into the projects and that the government must take a lot of the risk.
“The big trick is how do you get that first one financed,” Klann said.
The Energy Department a year ago announced grants for six demonstration plants, including the Poet, Range Fuels and BlueFire projects, but many companies are seeking federal loan guarantees and the department has yet to approve one. Meanwhile, farm-state lawmakers are pushing to have the Agriculture Department run the guarantee program.
The Energy Department is required by law to operate the guarantee program without having to set aside taxpayer money to back the loans. So far, it has been unable to do that, said Matt Carr, who follows biofuels policy for the Biotechnology Industry Organization.
Also in limbo is a proposed new tax credit to subsidize the production of cellulosic ethanol. That incentive, which would be $1.25 per gallon under a Senate plan, is caught in a battle between the Bush administration and congressional leaders over how to pay for renewable energy subsidies.
Poet is still working on the financing for its $200 million Emmetsburg project, but hopes to start construction on the facility by 2009 and begin operation in 2011, said Jeff Broin, the company’s president and chief executive. Poet was awarded an Energy Department grant that could reach $80 million and also has applied for one of the department’s loan guarantees.
Poet is testing the best methods of harvesting and storing the cobs. The company harvested 4,000 acres of grain and cobs last fall in South Dakota and plans to harvest cobs in the Emmetsburg area this year.
Broin said he believes the biofuels mandate can be met with cellulosic ethanol and thinks the competition among companies is healthy.
“We’re hopeful that more than one method to convert cellulose is created. It would be a fantastic thing for our country and our planet,” he said.
Reporter Philip Brasher can be reached at (202) 906-8138 or pbrasher@dmreg.com
Texas poised to become regional hub for ethanol
Panhandle alone will have four big plants soon
March 7, 2008, 11:27PM
By BRETT CLANTON
Copyright 2008 Houston Chronicle
Source: Chron.com
HEREFORD — Texas may be a latecomer to the ethanol business, but it is about to announce its arrival in a big way.At a ceremony today in this small town near Amarillo, where cattle far outnumber residents and the brown, flat land extends forever in all directions, a Dallas company will formally open the state’s first large-scale ethanol plant. It is one of the nation’s biggest.
Yet it won’t have bragging rights long. Three more major plants are to open this year in the Panhandle, and other projects are in the works.
With the new plants, Texas is poised to emerge as a key regional hub for ethanol production — now centered in the corn-rich Midwest — as U.S. demand rises for the renewable fuel.
But even the companies behind the projects acknowledge this isn’t the best time to be opening new corn ethanol plants.
Not only are grain prices cutting into profits and investors fleeing the market, but more questions are being raised about the environmental impact and negative economic ripple effects of making the fuel from corn.
“We’d love to have opened a year ago,” said Kevin Kuykendall, CEO of White Energy, the Dallas firm celebrating the grand opening of its 100 million-gallon-per-year ethanol plant in Hereford.
Even so, new federal energy legislation ensures corn ethanol will have a place in the nation’s energy mix in coming years. And Texas ethanol producers say their plants are designed to operate more cost-efficiently than many U.S. ethanol plants.
In addition to the Hereford facility, which got going in January, White is planning to open a second 100 million gallon-a-year plant in Plainview in April.
U.S. ethanol production has more than tripled since 2000, hitting nearly 6.5 billion gallons last year. The rapid growth has been spurred both by government subsidies and the rising costs of crude oil and gasoline.
A new energy law calls for an increase in U.S. ethanol output to 36 billion gallons by 2022, yet it shows a clear preference for moving away from corn-based ethanol. Under the 2022 target, 60 percent is supposed to come from other sources.
Seeing a need to change
Still, dozens of new corn ethanol plants are under construction around the nation. And they likely will struggle out of the gate now that corn prices are double what they were two years ago and ethanol prices are weak, said Matt Roberts, an economics professor at Ohio State University.
“These are projects that were conceived at a time when annual returns to building an ethanol plant were likely 40 to 50 percent per year,” he said. That meant projects could be paid off in two to four years.
“Now, we’re talking about returns, on a national average, to building an ethanol plant of zero to 10 percent per year,” Roberts said.
Texas ethanol producers say they recognize the need to change the basic business model for producing corn ethanol if their projects are to survive.
Take Panda Ethanol, another Dallas firm opening a 100 million gallon-per-year ethanol plant in Hereford later this year. It chose to build in Hereford partly because of the hundreds of thousands of cattle nearby — more specifically, for the mountains of manure they produce.
Rather than using natural gas, Panda will fuel its plant by gasifying 1 billion pounds of manure a year, cutting its energy costs by more than half.
“There will be a little smell here, obviously, ” said Mike Delcambre, Panda’s construction director.
The manure — up to four days’ supply in piles 40 feet high — will be stored in a huge barn-like structure adjacent to the plant. (Video clip: A spokesman for Panda Ethanol talks about how the ethanol plant will be fueled by cow manure. Video by Melissa Phillip. Mar. 8, 2008. )
Panda and White Energy also plan to create a new revenue stream by selling the chief by-product of ethanol production — wet distiller’s grain — to cattle feedlots in the area. Midwest ethanol plants have to pay to dry the gelatinous residue of the grain fermentation process before it can be shipped to buyers.
Meanwhile, Levelland/Hockley County Ethanol, which is opening a 40 million gallon-per-year ethanol plant in Levelland later this month, expects to save by using “gray water” — municipal wastewater from sinks and other household sources besides toilets — in the fuel-making process. It also plans to use cheaper grain sorghum rather than corn, said Sam Sacco, the plant’s general manager.
Biofuel incentives gone
Such ideas may help the first batch of Texas ethanol plants weather the current down cycle. But investors are wary of new projects until the market improves, in Texas or elsewhere, said Bill Pentak, a Panda Ethanol spokesman.
He noted that the company has put new corn ethanol projects in Muleshoe and Sherman County on hold while it searches for financing.
Even if the situation improves, Texas biofuel producers say they have reservations about adding ethanol plants since the state ended a program that had offered millions in incentives to large-scale biofuel companies.
Texas Agriculture Commissioner Todd Staples said he will make it a priority in the 2009 legislative session to restore funding for the biofuel incentive program, which stopped making payments last August.
“It’s not a matter of if we’re going to have renewable fuels; it’s a matter of where they’re going to be produced,” Staples said. “And I’d like to see them produced in Texas.”
brett.clanton@chron.com
ETHANOL BASICS
Ethanol has been around for decades, but in recent years it has been touted as a way to help reduce America’s 140 billion-gallon-a-year gasoline habit, curb auto emissions and aid U.S. farmers.
• How it’s made: U.S. ethanol chiefly is produced in a fermentation and distillation process that converts starch found in corn or sorghum into sugar and then to alcohol, or ethanol. It also can come from cellulosic biomass such as trees and grasses, but that technology is still developing.
• How it’s used: Ethanol is blended into more than half the gasoline sold in the U.S., mostly in E10 — 10 percent ethanol and 90 percent gasoline. Another product, E85, is 85 percent ethanol and can be used only in specially equipped vehicles.
Sources: Renewable Fuels Association, Chronicle research
