Lignol, Suncor suspend cellulosic ethanol project

By Anna Austin | February 04, 2009
Web exclusive posted Feb. 10, 2009, at 5:14 p.m. CST

British Columbia-based Lignol Energy Corp. and Alberta-based Suncor Energy Inc. announced Feb. 9 the companies are not moving forward on an $80 million cellulosic ethanol commercial-scale demonstration plant in Grand Junction, Colo. According to Lignol, the decision was made to discontinue the project as a result of instable energy prices, capital market uncertainty and general market malaise.

Lignol and Suncor have worked closely together for the past three years. In October 2008, Lignol announced it had signed a project agreement with Suncor to construct the facility, after the U.S. DOE approved up to $30 million in project funding in January 2008.

The plant, expected to annually process approximately 100 tons of hard and softwoods as well as agricultural residues such as straw and corn stover, was slated for completion between 2010 and 2011.

Suncor will continue to monitor the progress of Lignol's technology, said Ross MacLachlan, president and chief executive officer of Lignol. He described the decision to suspend the project as practical, and was based on current realities that many companies are facing today. MacLachlan said the companies are fortunate that the decision was reached at an early stage in the project's development and no significant costs were incurred.

"We are currently exploring various alternatives for the $30 million grant from the DOE, including the re-examination of project timelines, site locations and the participation of other industrial partners," MacLachlan said. "We will report on the outcomes of these discussions as they unfold."