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Western Biomass Energy in chapter 11 reorganization

By Susanne Retka Schill | February 12, 2013

Just months after shipping a load of bagasse-based cellulosic ethanol to Brazil, Western Biomass Energy LLC filed for chapter 11 bankruptcy on Oct. 31. Peter Gross, CEO of Blue Sugars Corp., the parent company of the Upton, Wyo.-based demonstration facility, declined to comment on the filing, beyond saying that a restructuring proposal is in the works.

According to court documents, Western Biomass Energy reported assets of real property worth $391,000 and personal property, mostly equipment in the demonstration facility, of $2.49 million. On the other side of the balance sheet, secured creditors were listed at a total of $31.5 million and unsecured at $3.84 million. Parent company Blue Sugars Corp. (formerly KL Energy) is by far the largest creditor of Western Biomass Energy at $30 million.

The Upton, Wyo., demonstration facility was the nation’s first demonstration-scale cellulosic ethanol facility when it was brought online in January 2008 by KL Process Design Group, the precursor to Blue Sugars Corp. The demonstration facility began by using ponderosa pine thinnings from the Black Hills National Forest in an acid-free, enzymatic hydrolysis process design developed by KL Process Design in collaboration with the South Dakota School of Mines and Technology.     

Brazil’s Petrobras S.A. took interest in the company’s work and entered into a development agreement in 2010. KL Energy Corp. revamped its Utpon, Wyo., demo plant to adapt the process technology for sugarcane bagasse. Approximately 20,000 gallons was produced in 2011 and became the first to receive cellulosic ethanol renewable identification numbers (RINs) as it was shipped to Brazil for testing and to fuel Petrobras’ minivan fleet at the Rio+20 Conference.

The announcement of the shipment to Brazil was accompanied with an announcement on the name change from KL Energy to Blue Sugars Corp. and an announcement that Blue Sugars had extended the development agreement with Petrobras. In those announcements, the two companies said engineering work had begun on Petrobras’ first commercial cellulosic ethanol plant.   

 

 

4 Responses

  1. Ian Gosling

    2013-02-13

    1

    Given an effective pre-treatment process and sufficient enzymes - production of cellulosic ethanol is not the problem. The process economics is the problem. At least sugarcane bagasse is easier to pretreat than pine - less toxins - and should work better for the Brazilians.

  2. Pierre

    2013-02-13

    2

    It appears the price per gallon of Ethanol shipped to Brazil amounted to $$1,750.00 . These people must have Chewed the cellous material, spitting in a bucket then fermenting the residue. These people are a mockery to all those trying to produce Advanced Biofuels

  3. Cliff Claven

    2013-02-15

    3

    Since this was an internal sale of cellulosic ethanol between JV partners Blue Sugars and Petrobras, why did it even qualify for EPA RINs? This was not a true commercial sale. Is this not more biofuel RIN fraud abetted by the EPA?

  4. Cliff Claven

    2013-02-15

    4

    Pierre, how did you computer your per-gallon cost? I have the quantity as 20,069 gallons from EPA EMTS, but no dollar amount for the sale.

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