News & Events

The Wichita Eagle | Long before cellulosic ethanol became a hot biofuel topic, Doug Rivers was deep into researching the product. From the late 1970s to the mid-1980s, Rivers worked for Gulf Oil for three years and the University of Arkansas for five years researching ways to make it economically feasible to produce cellulosic ethanol on a commercial scale.

“We were reasonably close when the bottom fell out of the oil market in the early 1980s,” Rivers said. “Funding for the research fell off the table.”
That’s been the story of cellulosic ethanol — dating back to the first attempt at the product in 1898 by Germany.

It’s tough work to get it out of the lab and into the gas tanks, and even tougher to maintain a steady flow of funding for research support.

It’s not hard to see that one feeds off the other.

Today, federal funding is good. Rising gasoline and oil prices in recent years caught everyone’s attention.

“If we hadn’t seen oil go up over the last four or five years, we wouldn’t have seen this push toward biofuels,” said Chad Hart, an agricultural economist at Iowa State University.

In March 2007, the federal government awarded $385 million in grants to jump-start six demonstration cellulosic ethanol plants around the country, including one in the far southwest Kansas town of Hugoton.

Another 17 plants — from New York to California — are in various
stages of planning and development, according to the Renewable Fuels Association.

In January, $114 million in federal money was invested in building pilot plants — an even smaller scale than the demonstration plants — to develop ways to make cellulosic ethanol cost-effective.

Colwich-based ICM, the nation’s largest designer of ethanol plants, received a slice of that money to build one of those pilot plants, in St. Joseph, Mo. Construction on the facility, which will be located next to an existing corn ethanol plant that is operated by LifeLine Foods, is scheduled to begin sometime in 2009.

Rivers, who has been the research and development director at ICM since August 2007, moves back and forth between the company’s headquarters and St. Joseph.

“The value has always been there,” Rivers said of cellulosic ethanol.

“Turning something of waste into a valued product has always interested me.”

Non-edible sources

One of the strengths of cellulosic ethanol over grain-based ethanol is the diversity of the biomass products that can be used to make it.

While ethanol is typically produced from the starch contained in grains such as corn and sorghum, cellulosic ethanol is a biofuel refined from non-edible food matter.

It comes from the cellulose found in everything from corn cobs and stalks, wheat straw, wood chips and switchgrass to municipal garbage.

Since transporting the biomass to a cellulosic ethanol plant is a significant cost issue, the geographic diversity of the feedstock is important.

Georgia has a demonstration plant that will use wood chips. Sugar cane stalks are the target for a plant in Florida. The Midwest leans heavily on its wide assortment of biomass.

“We’re not looking at one crop in one area of the country,” Iowa State’s Hart said. “Each area can create their own energy. We may be having trouble with corn one year, but maybe wheat or wood will help us weather the storm.”
In the final form, cellulosic ethanol has the same chemical structure as grain-based ethanol.

“Ethanol is ethanol,” said Chris Standlee, executive vice president of Abengoa Bioenergy.

Most cellulosic ethanol plants will be built next to an existing ethanol plant so there won’t be a need for new infrastructure, said Jim Sturdevant, director of Project Liberty for Poet, the world’s largest ethanol producer. He said one plant also can feed off the energy produced — such as steam — by the other.

Cost still an issue

Getting to plant cellulose, which is wrapped in a rigid structure known as lignin, is a more difficult process than getting to the starch that generates corn ethanol.

“It’s feasible to make it happen,” ISU’s Hart said, “but it’s not cost-effective yet.”
But he said the cost to produce corn ethanol in the 1970s was prohibitive and now is manageable.

“What we’re facing with cellulosic ethanol is the same with any new energy source,” Hart said. “We’ll bring it down incrementally and hopefully reach cost effectiveness.”

Those around the industry can’t agree on just how long that will take.

“The standard line has been that cellulosic biofuels have always been five years away,” said Greg Krissek, director of ICM’s government affairs.

Hart estimated that it costs about $1.60 to produce 1 gallon of corn ethanol. The U.S. Department of Energy wants to see cellulosic ethanol produced at $1.10 per gallon before it considers it economically feasible.

Right now, Krissek said it costs two to three times more to produce cellulosic ethanol than it does corn ethanol. But he projected a cellulosic plant would be operating on a commercial scale by 2012, just inside the standard five-year prediction.

Hart takes a wait-and-see approach.

“There are a lot of logistical issues to work through, which is why those six demonstration plants are key to me,” he said. “That will be the real-world test.”

So far only pilot-size plants have produced any cellulosic ethanol.

Abengoa produced a batch from its wheat straw plant in York, Neb., more than a year ago.

“We want to make it more efficient, more economical,” Abengoa’s Standlee said.

None of the six companies to split that federal grant in 2007 has its demonstration plant up and running. The Georgia plant, which is being built by Colorado-based Range Fuels, is the only one to have started construction.

Abengoa received $76 million to build one of the six, the $300 million Hugoton plant. Standlee said construction will begin next year and will be completed by 2011.

The facility is projected to produce 13 million to 15 million gallons a year. It will be located next to a starch-based plant, which also is scheduled to be completed in 2011 and will use grain sorghum to produce 88 million gallons a year of ethanol.

“It’s going to be a very efficient facility,” Standlee said of the cellulosic plant.
He said the plant will take in 700 tons of biomass per day, using a combination of feedstocks. He said 400 tons will be used to produce the cellulosic ethanol and the other 300 tons to produce energy in a gasified form to run both plants.

Funding for development

There is a federal mandate for refineries to take in 2 billion gallons of cellulosic ethanol by 2012 and blend it with gasoline. By 2022, there is a mandate for 36 billion gallons of renewable fuel, and 21 million of that must come from cellulosic ethanol.

To help make that happen, the blender — which is usually the oil refinery — will receive a $1.01 tax credit for each gallon of cellulosic ethanol it receives.

There is private funding. Qteros, which does cellulosic ethanol research, recently raised $25 million through Series B financing.

But ICM’s Krissek is also banking on the increase of bipartisan support in Washington to keep research funding consistent so cellulosic ethanol can hit the commercial market sooner than later.

Getting that support now with gas prices down and oil around $50 per barrel could politically challenging.

“It may be a little harder politically,” President-elect Barack Obama told CBS’s “60 Minutes” last Sunday, “but it’s more important.

“This has been our pattern. We go from shock to trance… oil prices go up, everybody goes in a flurry of activity. And then the prices go back down and suddenly we act like it’s not important. As a consequence, we never make any progress.”

Sticking with grain-based ethanol has paid off. It now accounts for about 8 percent of the whole gasoline pool, according to the DOE.

ICM’s Rivers said this country needs biofuels now even more than it did it in the 1980s.

“The issues of supply and demand have changed dramatically between what we have today and in the early 1980s,” he said. “We didn’t have China and India in the 1980s (as large consumers of oil).”

Cellulosic ethanol has been described as the silver bullet that will bring energy independence to this country and help fuel the rest of the world.

Krissek wouldn’t go that far.

“It’s one piece of the silver buckshot,” he said. “It’s a very important piece.”