DOE's cellulosic ethanol funding put to use

By Jessica Ebert
In late February, U.S. Energy Secretary Samuel Bodman announced that six proposed cellulosic ethanol plants would receive a combined $385 million from the agency over the next four years. In October and November, four of the six companies announced that either a cooperative agreement or a technology investment agreement between each company and the U.S. DOE had been negotiated. Project leaders are now drawing down on the grants to move forward with the planning, construction and operation of these facilities.

For California-based BlueFire Ethanol Fuels Inc., the extensive negotiations came as a surprise. "[Being chosen as a recipient] was more like getting a credit card application in the mail saying, ‘Hey, you've been preapproved for a $25,000 line of credit, but now you have to qualify,'" explained Arnold Klann, CEO of BlueFire Ethanol. "Everybody has to negotiate a contract with the DOE." However, those companies that have qualified are now reaping the rewards. Klann said BlueFire Ethanol expects to draw $9 million to $10 million from the grant between now and this spring. This first phase of the partnership will finance the licensing, permitting, design, environmental engineering and other pre-construction development activities. Klann expects to draw the remainder of BlueFire Ethanol's allotted $40 million in phase two of the project: breaking ground and bringing on line a 17 MMgy to 19 MMgy facility that would convert green waste to ethanol in a landfill in Corona, Calif. The project is expected to be operational in mid-2009. "We're moving ahead," Klann said.

Range Fuels was the first company to negotiate a technology investment agreement with the DOE's Office of Energy Efficiency and Renewable Energy. The company will receive $50 million over the next 12 months to build its first commercial-scale cellulosic ethanol plant, according to company CEO Mitch Mandich. "We believe this is the first commercial-scale cellulosic ethanol plant in the world," the chief executive officer said. The company broke ground on the first phase of the project-a 20 MMgy wood-residue-to-ethanol plant-in early November in Soperton, Ga. Mandich expects construction to be complete by the end of 2008. In addition, since the plant is modular, he expects to scale up to 100 MMgy by the end of 2009.

Poet LLC and Abengoa Bioenergy have also received DOE funding. Poet's project involves the expansion of the company's corn-based ethanol plant in Emmetsburg, Iowa. With the maximum $80 million that the company expects to receive from the DOE, it will produce about 31 MMgy of cellulosic ethanol from nearly 850 tons of corn fiber, cobs and stalks per day. Abengoa's proposed plant will produce 11.4 MMgy of cellulosic ethanol from 700 tons of corn stover, wheat straw, milo stubble and switchgrass per day. The company expects to build the plant in Kansas and receive up to $76 million in DOE funding.