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subzali
12-05-2008, 10:08 AM
I work at Merrick, and one of our primary clients in my business unit is Range Fuels, mentioned in this article:

BIOFUELS: Celluosic ethanol producers, braced for a race, enter the starting gate (12/05/2008)
Jessica Leber, ClimateWire reporter
Beam by beam, a plant that will churn out millions of gallons of cellulosic ethanol a year is now rising in Georgia. Its owner, Range Fuels, is vying to be the first business in the industry to claim a commercial plant.
Close on its tail, a handful of other companies -- from corn ethanol veterans to startups backed by big-name investors -- are pushing ahead with plans to manufacture non-food-based biofuel using everything from corncobs and wheat straw to waste wood and landfill trash.
The transition of cellulosic ethanol technologies from a lab-bench promise to a mass-production process has been moving quickly. These businesses are in the vanguard of an industry that is now driving the next generation of biofuels to the market.
Whether they can do this and make money is what everyone wants to know. The next three years will bring answers, based on the number of large-scale plants in the works.
Planned Commercial-scale
Cellulosic Ethanol Plants


Over the next three years, producers of cellulosic ethanol will open commercial-sized plants. Aided by a federal mandate and declining costs of enzymes, they will make the gasoline additive from a variety of non-food feedstocks, including corncobs, municipal garbage and wastes from sugar-growing. Click the map to see the details of each plant.
"We are moving as prudently and with as much urgency as possible," said David Aldous, the recently named CEO of Range Fuels and a former executive vice president of Royal Dutch Shell PLC. Aldous said that the plant, which will use heat, pressure and a chemical catalyst to convert wood into fuel, should be ready by late next year.
These pacesetters are assisted by a federal mandate that guarantees an initial baseline market -- 36 billion gallons of biofuels by 2022, only 15 of which can come from corn-based ethanol, a number which that industry is a few years away from hitting.
Helped by cheaper enzymes. Hurt, perhaps, by cheaper oil
Add to this the dropping cost of enzymes -- which now are too pricey by half for technologies that need them to digest the plant material -- and substantial new federal grant and loan guarantee programs, and the nascent industry's prospects have never looked better.
At the same time, though, there are some threatening signs as oil prices plummet, underscoring the volatility of a market that is now wounding corn ethanol. The ethanol industry, remembering the 1980s bust, has seen it all before. But even before emerging cellulosic fuel makers can think about competing with oil, they will first aim to match the price of their corn-based cousins.
And the financial sector's implosion means that financing new and unproven cellulosic "biorefineries" -- which cost two to three times more to build than corn ethanol plants -- will get harder.
"These are not times for the faint of heart," said Aldous.
Of the six commercial projects that won Department of Energy funding last year, two have already been canceled. Range's first commercial plant, backed by biofuel venture capitalist Vinod Khosla and one of the DOE grants, is already well-funded, said Aldous.
"This whole development of this technology is in a sprint. But it is a marathon," said Matt Hartwig, a spokesman for the Renewable Fuels Association.
This may be why today's dire times aren't deterring a number of companies that, like Range, predict that they will begin, and complete, their first commercial projects by 2012 or earlier.
Corncobs, municipal garbage and sugar wastes
"We plan on building 20 plants in the next seven years," said Arnold Klann, CEO of Irvine, Calif.-based BlueFire Ethanol Inc. The company has two plants in the works in California: It is close to breaking ground on a smaller plant in Lancaster, and is negotiating permits and financing for a 20-million-gallon refinery in Mecca. The biggest delay it has faced has been in getting the permits.
BlueFire's facilities will use sorted organic waste from nearby municipal landfills as their fuel feedstock. That decision, said Klann, will make financing BlueFire's plants easier because its suppliers -- city governments -- are far more creditworthy than newer players, such as farmers who will harvest agricultural leftovers for other companies.


Construction is under way at Range Fuels' cellulosic ethanol plant in Soperton, Ga., where the company plans to use wood chips as a main feedstock.
In general, cheaper waste residues, whether from a landfill or a farm field, are supplying the first generation of commercial plants. The costs and uncertainties of collecting, storing and transporting these and more advanced dedicated energy crops, such as miscanthus or sweet sorghum, are among the new industry's biggest unknowns.
"When you're shifting agriculture production, that's not something you do quickly," said Douglas Faulkner, undersecretary for rural development at the Department of Agriculture.
Coskata Inc., meanwhile, emerged this year as a small company with big plans. Backed by an undisclosed equity stake from General Motors Corp., it is negotiating with U.S. Sugar Corp. to build the largest plant announced so far. Wes Bolson, the company's chief marketing and business development officer, said the plant would produce ethanol made from unusable sugarcane parts for $1 a gallon -- the lowest initial cost claim.
"This is ready for commercialization today," said Bolson. The main issue, he said, is getting enough biomass to the plant's gates. To produce the planned 100 million gallons a year, the company will have to harvest about a million tons of biomass from a 50-mile radius surrounding the plant. That capacity is near the maximum many say these refineries can economically and sustainably handle.
Together, Range, BlueFire and Coskata are all taking one route that may initially help their bottom lines. Though their processes vary, none rely on costly enzymes that others use. Non-enzymatic production is currently cheaper, according to DOE, although these processes often lend themselves better to the largest-sized plants. The agency, however, predicts that by 2012 both classes of technologies will be comparable at about $1.30 per gallon, more than a dollar's decrease from today's average production costs.
The companies that are relying on enzymes aren't waiting around, however. POET LLC, the world's largest ethanol producer, is preparing to build its first commercial plant in Iowa next year. Its advantages are its size, experience and existing farmer network, said Mark Stowers, POET's vice president of research and development.
The plant will produce both corn and cellulosic ethanol using grain and cobs (ClimateWire, June 16). This so-called "bolt-on" facility will have a lower threshold for profit, he said.
Abengoa Bioenergy Corp., Europe's largest ethanol producer, is pursuing a similar strategy in Kansas.
'Big Oil' is in the running
But for all the talk circulating, the two companies that already have demonstration plants running may be the closest on the stepladder toward commercialization. Both rely on enzymatic technologies and have heavyweight support.
Iogen Corp., backed by Royal Dutch Shell PLC, opened the world's first demonstration plant in Canada and is now scaling up with plans for another plant, though it recently backed out of plans to build in the United States.
Verenium Corp., partnered with BP PLC, is testing a variety of feedstocks, including sugar wastes, at its 1.4-million-gallon Louisiana plant and is looking to locate its first commercial plant in the southern United States, said Kelly Lindenboom, Verenium's communications vice president. The company wants to build a series of 35-million-gallon plants, a capacity it believes will be most manageable because of its compact collection radius of 10 to 15 miles around the plant. Initially, the company hopes to produce ethanol at $2 a gallon, said Lindenboom.
"It's going to take a lot of people to win," said Coskata's Bolson.
Christopher Somerville, director of the BP-backed Energy Biosciences Institute, said he foresees about 1 billion gallons of cellulosic ethanol capacity in place eight years from now. That's about 10 Coskata-sized plants or 30 Verenium-sized ones.
The current players say they are not competing to be first, given that the empty mandate-fueled market has enough room for them all -- at least for now.
Winners of this race may not necessarily produce first
"Over time, the market will shake out the technology winners and losers," said Aldous.
The first plants might even become early casualties of their speed, said Reid Detchon, director of the Energy Future Coalition. The first-mover advantage, he said, may only matter for a "home run" biofuel that requires little adaptation of existing engines.
"You may be first over the finish line, but everyone else is going to learn from your mistakes," agreed Brent Erickson, a vice president of the Biotechnology Industry Organization.
Lindenboom said being among the first does allow Verenium to take advantage of incentives and acquire ideal sites for plants in the South, where the company has focused its efforts because the growing season is long. "It's becoming a real land grab," she said.
While Verenium is vying for dominance in gulf states, what's unique about cellulosic biofuel is its regional focus.
Unlike with crude oil, moving bulky and dispersed biomass long distances to a refinery is not economical. The plants will be driven by the feedstock available in the area.
All the major initial players are focusing on different regions and using feedstocks that play to each area's strengths: wood in Georgia, corn in Iowa, sugar parts in Florida and trash in California.
"The duck hunters go where the ducks are," said Faulkner.