Commercial Biorefinery Update

The clock is ticking on public acceptance of ethanol as the United States' corn-based industry is under relentless attack. With cellulosic conversion technologies as the ostensible lone saving grace for ethanol, EPM takes a look at what fruits the first-quarter '08 produced.
By Ron Kotrba | May 09, 2008
Two years ago the U.S. DOE began its long and arduous task of technology optimization and risk mitigation for commercial production of cellulosic ethanol. This was done through an award of $385 million to six large-scale projects. Even though the DOE is still cutting checks from this original award allotment, first quarter 2008 has seen a project funding revitalization of sorts as the department moves ahead with more grants totaling $114 million slated for four smaller demonstration projects. And there's more—the department also issued a few separate grants in recent months to fund specific technology advances. But it's not just taxpayer money fueling second-generation ethanol schemes, although federal backing certainly helps attract private investment. "We are tied into a lot of what's happening in the private arena," says Larry Russo, biorefinery technology manager within the DOE's Biomass Program. "There's been a tremendous amount of private money in the past 18 months—mostly venture capital—flowing into a lot of these projects making them catch fire a little bit, and getting the technologies out there." But doing the research is not enough. "We need to do the research of course, but then we need to do the pilot testing with our partners, and then scale these things up to get to the point where it can attract financing on its own," he says. "That's what we're doing at DOE—we're buying down the risk by our involvement."

One of the big challenges still facing a U.S. biorefinery build-out is "techno-economical" in nature as Russo characterizes it. In other words, loose technology ends still need cinching up before big-money lenders have enough faith to strike a loan deal for biorefinery projects. Thermochemically, this means improving syngas clean up. "We know that clean up is a very important step so we had a solicitation that was issued just this week (at the end of March) to address not only the clean up, but to address catalyst selection as well," Russo reveals. Biochemically speaking, there is still the lingering need for more cost-effective and higher performing enzymes and more fruitful ethanologens.

Despite all of this, Range Fuels Inc., which broke ground on its 20 MMgy wood-to-ethanol thermochemical plant in Soperton, Ga., is finding success. On April 1, the company announced that it had raised more than $100 million in series B equity financing. This is in addition to the $76 million DOE grant Range Fuels received along with a $6 million grant from the state of Georgia. The company says the $100-plus million will go toward the completion of construction on the 20 MMgy biorefinery. Russo confirms that Range Fuels is the only commercial-scale cellulosic ethanol plant under construction by the end of the first quarter of 2008. Three more projects that were part of the original $385 million award have completed what's called a Phase One award.

"We're awarding these large projects in two phases," Russo tells EPM. "This allows work other than construction to get started to meet the compliance issues—it allows them to dot their i's and cross their t's prior to construction." Because federal money is involved, the national environmental protection act requires proof that a biorefinery project will not detrimentally affect the environment and, if there is a potential for ill effects, tactics to mitigate them must be presented. "All of this takes about a year," he says. To enable progress to start earlier, the DOE decided to cut initial checks post haste to Range Fuels, Poet Energy, Abengoa Bioenergy and BlueFire Ethanol Inc.

Only one of these original six projects is working on a concentrated acid hydrolysis pretreatment—BlueFire Ethanol. The company recently completed testing on decrystalizing, hydrolyzing and filtration equipment from B&P Process Equipment, a vendor out of Saginaw, Mich. B&P Process Equipment engineer Abbey Martin says decrystalization tests using its equipment yielded better results than data from the Izumi, Japan, pilot plant. "We believe that we can now design a commercial unit that will perform better and cost less than a design based solely on the pilot data," Martin says. The vendor equipment testing is part of a larger, "integrated investigation" being conducted for final engineering of BlueFire's full-scale 17 MMgy municipal solid waste biorefinery, the location of which will be at a landfill in Corona, Calif.

Recent ‘10 percent' Demos
The more recent DOE grant award of $114 million announced in first-quarter of 2008 is for four "10 percent" demonstration facilities with two additional projects to be named later.

These projects are smaller scale than the original six and are expected to demonstrate commercial viability by building biorefineries producing 10 percent of an intended commercial volume. Recipients of this latest grant are ICM Inc., Lignol Innovations Inc., Pacific Ethanol Inc., and Stora Enso North America. Awarding the 10 percent projects before announcing funding for the six commercial-scale biorefineries may have made more sense to some, but there is a method to the DOE's madness. "When Congress did the Energy Policy Act of 2005, they decided they wanted to do something to get commercial deployment of cellulosic biofuels out the door," Russo says. "Those first six projects have been worked on for years and years, and were the closest to being ready—the closest to deployment." Ten percent is not a magic number either—it's what Wall Street and conventional financiers told DOE they require to even consider a finance package.

Co-recipient ICM plans to have a 1.5 MMgy pilot plant in operation by the end of 2010, to be located at its St. Joseph, Mo., facility. Its design will be based on a biochemical platform and will use corn fiber, switchgrass, forage sorghum and corn stover as feedstocks. ICM says its 750 employees and support staff will be ready to take the pilot technology to commercial scale by 2012, and existing ICM-designed dry mills have already expressed interest in incorporating the new technology.

Lignol Innovations received funding to help build a 2 MMgy biorefinery using hard and soft wood residues, and will make ethanol, furfural and high-quality lignin. The demo plant will be positioned near a Suncor Energy petroleum refinery in Commerce City, Colo., which intends to purchase all the ethanol produced by Lignol.

With its newly awarded DOE money Pacific Ethanol's 10 percent demo plant will be colocated with the company's Boardman, Ore., corn-based ethanol plant. At 2.7 MMgy, Pacific Ethanol says it will use the BioGasol proprietary conversion process to make ethanol out of the wheat straw, corn stover and poplar residuals from a 50-mile radius surrounding the plant. According to Pacific Ethanol, the demo plant will be operational some time next year with expansion to commercial scale by 2012.

Compared with the six commercial projects, these three new recipients, in addition to Stora Enso North America's proposal, constitute the "next lowest hanging fruit" on the path to commercial production of cellulosic ethanol, Russo says.

More Projects, Pilots and Considerations
Verenium Corp.'s 1.4 MMgy demonstration facility in Jennings, La., was expected to reach "mechanical completion" by March 31, according to the company. EPM could not verify if this was achieved as calls to Verenium spokespeople were unanswered. At the late-February National Ethanol Conference in Orlando, Fla., the DOE announced an additional $34 million to further advance the cost-effectiveness and functionality of enzymes for saccharification of biomass. Verenium, Novozymes Inc., Genencor Inc. and DSM Innovation Center Inc. were all part of that award.

In Upton, Wyo., a 1.5 MMgy plant converting wood waste to ethanol began operating in January. Designed by KL Process Design Group in cooperation with the South Dakota School of Mines, the plant is named Western Biomass Energy and is the culmination of six years of development.

Abengoa Bioenergy's $35 million pilot plant in York, Neb., is operating and other companies with operating pilot plants include Iogen Corp. and Mascoma Corp.

Tracking down every company with plans to develop cellulosic ethanol plants would be a daunting task. Central Minnesota Ethanol Co-op and SunOpta Inc. are working together with intentions to build a 10 MMgy commercial plant located next to CMEC's existing dry mill. The plant is equipped to gasify wood chips to power its ethanol production process—and the same feedstock is intended for its commercial plant. The list goes on.

While the DOE is addressing the "techno-economic" challenges to the commercialization of cellulosic ethanol, critics of biofuels pose a challenge that perhaps even the DOE cannot surmount. "It's plaguing the entire biofuels development and commercialization," Russo says. The notion that it takes more energy to make ethanol than what the fuel itself can put out is what he finds himself addressing most. "We've addressed that for years and years, yet every six months we go through it again. When you're relying on not only the technology but that positive message to draw the financing to establish your momentum, it's a kick in the shin and slows down the developments we could make."

Ron Kotrba is an Ethanol Producer Magazine senior writer. Reach him at or (701) 738-4962.