Poet, Magellan to study ethanol pipeline

By Anna Austin | March 05, 2009
Web exclusive posted March 19, 2009, at 11:10 a.m. CST

Poet LLC is partnering with Magellan Midstream Partners LP to continue a feasibility assessment of constructing a dedicated ethanol pipeline from the Midwest to distribution terminals in the northeastern U.S.

Poet is one of the largest ethanol producers in the world, operating 26 ethanol production facilities in the U.S., including a 20,000-gallon-per-year cellulosic ethanol plant that is colocated with a 9 MMgy starch ethanol plant. The facility, which commenced operations in late November, utilizes corn cobs as a feedstock.

Since February 2008, Magellan has been exploring the feasibility of constructing a 1,700 mile dedicated renewable fuels pipeline from northwest Iowa to New York harbor. It would gather ethanol from production facilities in Iowa, South Dakota, Minnesota, Illinois, Indiana and Ohio.

The preliminary project cost estimates are in excess of $3.5 billion. Feasibility is dependent on the outcome of ongoing studies addressing technical and economic issues associated with the transportation of ethanol via pipeline, which includes challenges resulting from the corrosive nature of ethanol and how ethanol reacts with other products and substances within the pipeline.

A positive assessment of the project will allow one or both project partners to enter into a subsequent agreement to construct a dedicated ethanol pipeline. According to Magellan, federal legislation revising the U.S. DOE loan guarantee program is critical for a project of this nature to move forward.

Poet presented a progress report of commercializing cellulosic ethanol before a panel of peers assembled by the U.S. DOE in Washington, D.C. on March 18. During the session, which was closed to the public, Poet Project Director Jim Sturdevant discussed the company's Project Liberty, a 25 MMgy cellulosic ethanol plant that is to be built in Emmetsburg, Iowa.

Poet will receive $80 million of the project's $200 million cost through the DOE's Biomass Program, and plans to have the facility operational by 2011.

An open session for the public was held March 19 at the Westin National Harbor in Washington, D.C.