May 28, 2008, 11:37PM
New ethanol plant bets on a better method than corn
Company opens Louisiana plant to find sources other than corn for fuel


By BRETT CLANTON
Copyright 2008 Houston Chronicle


How cellulosic ethanol is made JENNINGS, LA. — The fabled road to U.S. energy independence has wound its way to this small town east of Lake Charles, where a plant opening today could help usher in a new era for ethanol.

The 1.4 million-gallon-per-year demonstration plant will attempt what others have found difficult — to produce large quantities of ethanol as cheaply from agricultural waste and nonfood crops as from corn, the main crop used to make the fuel in the U.S.

It may be a big bet. Some experts say that so-called cellulosic ethanol still costs at least $1-per-gallon more to produce than corn-based ethanol.

But Verenium Corp, the Cambridge, Mass.-based energy firm behind the project, has developed a process it believes will help reduce costs, pave the way for wide-scale cellulosic ethanol production and silence ethanol's detractors.

"The issue isn't, 'is there going to be ethanol,' " Verenium Chief Executive Carlos Riva said Wednesday as he stood outside the just-completed plant. "But how can we do it right?"

President Bush has signed legislation calling for production of 36 billion gallons of biofuels by 2022, five times the current level, to help reduce what he has called the nation's addiction to oil. Ethanol typically is blended with gasoline to stretch the fuel supply and help curb smog-forming tailpipe emissions.

The new law is a boon for companies like Verenium because it shows a clear preference for moving away from corn-based ethanol, which has been blamed for driving up food prices and creating a global food shortage.

More than half of the 2022 target is supposed to come from "second generation" biofuels such as cellulosic ethanol made from switchgrass, corn cobs and wood chips.

And just last week Congress overrode Bush's veto to pass a farm bill that includes a cellulosic biofuels production tax credit up to $1.01 per gallon.

But cellulosic biofuels still face challenges as they vie to be part of the nation's fuel supply.

Huge quantities of so-called biomass must be gathered and transported to make the fuel, likely requiring diesel-powered trucks and farm equipment that make the case for the green fuel less compelling. The process also requires large amounts of water. And there are concerns that, if the fuel takes off, farm land could be diverted from growing food crops to energy crops such as switchgrass, straining food supplies.

But cost has been the big roadblock. Making cellulosic ethanol is more expensive than corn ethanol because it requires specialized enzymes to break down biomass into sugars that can be fermented and then distilled into ethanol.

The Energy Department has a goal to bring the cost of cellulosic ethanol in line with corn ethanol by 2012.

Divya Reddy, an energy analyst with Eurasia Group in Washington, said that may be optimistic, and 2015 may be a more realistic target.

Yet with crude oil trading around $130 a barrel and gasoline approaching $4 a gallon, the economics of producing cellulosic ethanol have become more attractive.

In November, Range Fuels broke ground near Soperton, Ga., on the nation's first large-scale cellulosic ethanol plant. A handful of other cellulosic projects awarded grants by the Energy Department also are moving forward.

By next summer, Verenium expects to begin building a 30 million-gallon-per-year cellulosic plant on the Gulf Coast, possibly in Houston or the Beaumont area, Riva said.

The company also is eyeing sites in Louisiana and Florida and is seeking a major corporate partner to help fund projects.

Verenium likes the Gulf Coast partly because it's an ideal climate to grow sugarcane.

At its Jennings facility, the company is running test batches of ethanol from sugar bagasse — what's left of sugarcane after the sugar has been extracted to make syrup or other products. Brown, mulchy and sweet-smelling, the bagasse sits in big piles at the site.

The company also is partnering with local farmers to grow what it calls energy cane, a low sugar-content plant grown just for ethanol, as well as a dedicated sorghum crop.

A 2005 report from the Energy Department and Agriculture Department estimated that U.S. lands are capable of producing a sustainable supply of 1.3 billion tons of biomass each year, enough to replace almost one-third of the roughly 140 billion gallons of gasoline Americans consume annually.

Bob Dinneen, president of the Renewable Fuels Association, an ethanol trade group in Washington, said Verenium's Jennings facility gives the company a leading role in helping the U.S. move away from petroleum.






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