All Eyes on Iowa

Iowa’s corn crop residues soon to become hot commodity
By Kris Bevill | August 15, 2011

After a decade of development, Poet LLC is ready to break ground on its first commercial-scale cellulosic ethanol facility this fall, pending final approval of a U.S. DOE loan guarantee. Jim Sturdevant, the director of Poet’s 25 MMgy cellulosic project, dubbed Project Liberty, said recently that the company began developing its cellulosic technology in 2001 and through the course of testing and validation, the company has been able to increase the efficiency of its production process.

It takes time to develop these technologies, but perhaps even more importantly, it also takes a lot of money. Project Liberty is expected to cost $261.2 million, according to the DOE. In early July, the agency issued a conditional commitment for $105 million to support the project. Sturdevant says financing has indeed been a tremendous challenge and the due diligence portion of the loan guarantee process has been rigorous, but in late July he said he was optimistic that the loan guarantee could be closed by the end of September.

If Poet stays on track and is able to begin constructing the facility this fall, it should produce cellulosic ethanol from corn cobs at about 50 cents more per gallon than gasoline when it churns out the first round of ethanol in 2013. That cost is expected to be reduced as the company works out the kinks of the process and, eventually, it plans to install cellulosic facilities next to all of its 27 corn-based ethanol plants, producing up to 3.5 billion gallons of cellulosic ethanol annually.

Project Liberty is expected to provide a substantial economic boost to its hometown of Emmetsberg, Iowa, supplying 40 permanent jobs at the facility and generating approximately $14 million in additional revenue for area farmers. Also in Iowa, Dupont Danisco Cellulosic Ethanol LLC is making headway on its 25 MMgy commercial-scale cellulosic ethanol facility—Project Blackhawk—which is expected to provide 60 full-time jobs at a facility near the town of Nevada and create additional revenue opportunities for area farmers by way of corn stover.

DDCE is financing most of its project privately, but has been approved for a $9 million grant from the Iowa Power Fund Board in exchange for the promised job creation. Total project costs for Project Blackhawk are expected to exceed $235 million. As of late July, the company had not yet set a groundbreaking date for the plant, but said it should be ready to begin producing in 2013. 

—Kris Bevill