Alico withdraws from cellulosic ethanol project

By Bryan Sims | July 08, 2008
LaBelle, Fla.-based Alico Inc., a land management company, announced in early June that it will no longer explore the construction of a cellulosic ethanol production facility in Florida. In light of Alico's move, New Planet Energy LLC has assumed full ownership of the project.

Alico was slated to receive up to $33 million in grants and loan assistance from the U.S. DOE, and another $2.5 million from the state of Florida to partially offset the costs of a proposed cellulosic ethanol venture. Alico said it will no longer pursue those grants. In addition, Alico will have no further financial commitment or liability to NPE, the DOE or the state of Florida in regard to the project.

During the past year, Alico had been working with NPE on the project, according to Craig Evans, project consultant for NPE Florida LLC. He served as an independent consultant to Alico and handled the day-to-day operations for the project, along with the grant and loan guarantees. "There's been a relationship [between Alico and NPE] for a long time, and it has just grown over time to the point where now, as Alico made this decision, it's actually just a transition," he said. "NPE was already taking on a large role in the project."

Before the transition, Alico was planning to use gasification/fermentation process technology patented and provided by BRI Inc. The technology can produce cellulosic ethanol from virtually any hydrocarbon and/or organic waste material. NPE will continue working with that company. Seattle-based Harris Group Inc. will function as the lead designer and
engineering firm for NPE, as well, Evans said.

According to Evans, NPE will initially install two separate modules, each consisting of a gasifier, a synthesis gas conditioner, a bioreactor and distillation equipment that can produce 4 MMgy of ethanol each for a total of 8 MMgy. NPE intends to operate at an 8 MMgy capacity for at least six months before expanding to 20 MMgy and eventually 100 MMgy, Evans said.

The company has selected a 2,000-acre site in central Florida, Evens said, adding he couldn't divulge any additional details. The plant will be capable of processing feedstocks such as animal manure, unrecyclable paper, untreated lumber from construction and demolition sites, various vegetative wastes, agricultural residues from the citrus industry, seaweed such as kelp, plastics, old tires, and cardboard. Untreated lumber, paper waste and various agricultural wastes will be the initial feedstocks, according to Evans. "We think [we have] the best technology to produce ethanol because of the multiple feedstocks it can take in and obviously the economics associated with it," he said.

According to Alico, the impetus behind its decision to withdraw the partnership with NPE simply boiled down to the risks. "In reaching this decision, [the company] will continue to focus on our core operations of real estate management, including agriculture and development opportunities, to provide returns for our shareholders," said John Alexander, chairman and chief executive officer of Alico.