Will 2011 be the Year?

Cellulosic projects break ground
By Holly Jessen | December 27, 2010
For years, cellulosic ethanol has been five years away from commercial viability. With several companies making significant progress in 2010 towards groundbreaking and five expected to be in production, will 2011 be the year that cellulosic ethanol finally makes its commercial debut? The U.S. EPA, which still projects volumes well below the initial targets, on Nov. 29, announced the final volume requirements for the 2011 renewable fuel standard, with the cellulosic biofuel volume set at only 6.6 million gallons. The EPA named DuPont Danisco Cellulosic Ethanol LLC, Fiberight LLC, KL Energy Corp., Range Fuels Inc. and KiOR, a cellulosic diesel fuel producer, as the companies it expects to produce cellulosic biofuels in 2011. Among the cellulosic ethanol companies hitting significant milestones in late 2010 is Fulcrum BioEnergy Inc. In mid-November, Fulcrum became the first to reach the negotiation phase of the DOE loan guarantee program for its proposed 10.5 MMgy municipal solid waste (MSW) cellulosic ethanol plant near Reno, Nev. Construction is expected to begin by the end of the year, with start of production in 2012. Ted Kniesche, vice president of business development for Fulcrum, tells EPM that the U.S. is on the verge of seeing several commercial-scale cellulosic ethanol plants start construction. "These breakthrough plants, along with consistent energy policy from Washington will lead to even further breakthroughs, more investments and more production," he says. Washington needs to strengthen its support for advanced and cellulosic biofuels in order to maintain this momentum, he adds, suggesting three policies he believes the White House and Congress should support. • The 30 percent investment tax credit that currently benefits renewable power projects should be passed for biorefineries to stimulate capital markets and help bridge the fundraising gap. • A definition of renewable biomass needs to be developed that can accommodate new feedstocks and technologies. • The renewable fuel standard needs continued and strong support, including mandates for advanced and cellulosic fuels. As long as funding from the U.S. DOE doesn't dry up, Arnold Klann, CEO of BlueFire Renewables Inc., agrees that 2011 will be a big year for cellulosic ethanol. BlueFire is very close to securing final DOE loan guarantee approval for a planned 19 MMgy cellulosic ethanol facility in Fulton, Miss. The company announced Nov. 10 that initial site work had begun after it had received its final air, wastewater, and storm water permits from the Mississippi Department of Environmental Quality. Enerkem Inc. has two projects in the works. In November, the DOE issued a Finding of No Significant Impact for the company's proposed 20 MMgy Pontotoc, Miss., MSW-to-ethanol plant. The company expects to start construction in the first half of 2011, with the project built in two phases, 10 MMgy at a time. In addition, construction kicked off in August at the company's 10 MMgy plant in Edmonton, Alberta. Cellulosic ethanol developer INEOS New Planet Bioenergy, a joint venture between INEOS Bio and New Planet Energy LLC, started work in November, tearing down a 35-year old Ocean Spray grapefruit processing plant that has been closed for five years. The company plans to build an 8 MMgy production facility at the Indian River County, Fla., location to process post-recycled MSW and forestry and agricultural waste. In addition, it will produce 6 megawatts of electricity, of which a third will be sold to the grid, according to David King, president of the joint venture. Demolition of the Ocean Spray facility will be complete in January. British firm AMEC, selected as the engineering, procurement and construction contractor, will start construction in May. "The plant will be mechanically complete in the first quarter of 2012 and starting up the second quarter," he says. For King it's very exciting to finally see a physical manifestation after years of talk. 2011 may not be the year that many cellulosic ethanol plants start churning out product, he says, but it's certainly shaping up for a busy year of construction, at the INEOS plant and others. "I think there will be a lot of momentum around the industry in terms of getting steel in the ground," he says.