DOE Awards $385M in Ethanol Grants

The Department of Energy awarded $385 million in grants to several companies that plan to produce ethanol. Six bio-refiners scattered from California to Georgia's Treutlen County will share grants with the goal of producing 130 million gallons of cellulosic ethanol by 2011. In January, President Bush called for oil refineries to use 35 billion gallons of alternative fuels by 2017, a fivefold increase.

The Bush administration, keen to reduce dependence on foreign oil, handed out US$385 million in grants Wednesday to companies that plan to produce ethanol, including a Colorado firm building a factory in Soperton, Ga.

Range Fuels, founded by venture capitalist Vinod Khosla, could receive as much as $76 million from the U.S. Department of Energy (DOE) to help turn pine tree branches into fuel to reduce gasoline consumption and climate-harming chemicals.  

The Race Is On

Now, the race to produce the first commercially applicable use of so-called "cellulosic ethanol" shifts into high gear. Range Fuels' officials say they'll win and reap significant patent and financial rewards.

"We will be the first to commercialize the process," vowed Mitch Mandich, chief executive of Range Fuels. "This DOE money helps us get there more quickly and allows us to raise additional money." 

Scientists, though, including researchers at Georgia Tech, question the pine-to-ethanol technology that Range Fuels and other cellulosic producers propose using.

However, Phil Mitchell, an executive with AMEC Engineering & Construction in Tucker, Ga., said the government's $385 million cellulosic bet will pay off. 

"It will eventually be viable. The problems are not insurmountable," said Mitchell, whose company builds factories worldwide and hopes to do business with Range Fuels. "With the government throwing this much money at [cellulosic], I'm convinced we'll get there."

Environmentally Friendly Solution

Cellulosic ethanol, made from trees, sugar cane, switchgrass and other biomass, is touted as an environmentally friendly solution to Middle Eastern oil dependence. Georgia, with 24 million forested acres, offers a steady raw material stream.

Six bio-refiners scattered from California to Georgia's Treutlen County will share the $385 million with the goal of producing 130 million gallons of cellulosic ethanol by 2011. In January, President Bush called for oil refineries to use 35 billion gallons of alternative fuels by 2017, a fivefold increase. 

Mandich announced three weeks ago that Range Fuels will begin building the Soperton plant this spring with the goal of producing 40 million gallons of ethanol within a couple of years. The factory will inhale 1,200 tons of pine waste daily.

It is expected to also produce 9 million gallons annually of methanol, a fuel byproduct used in furniture and other factories. Eventually, Mandich said, Range Fuels could produce a billion gallons of ethanol each in a handful of Georgia factories.

Georgia Gov. Sonny Perdue pegged the initial investment at $225 million.

Source: ecommercetimes.com