Wednesday, September 30, 2009

Struggling ethanol plants may be bought and converted to biobutanol, an alternate fuel

A Denver-based startup company is looking to retrofit at least five U.S. ethanol plants to make biobutanol, a versatile fuel that can be a gasoline additive and plastic feedstock. Gevo Inc., backed by renewable-energy investors such as Khosla Ventures and French firm Total SA, hopes to acquire financially distressed ethanol plants to make 200 million gallons of biobutanol a year, Russell Gold of The Wall Street Journal reports.

Unlike ethanol, which can't be moved by pipeline, biobutanol, which is made from corn, wheat and a variety of inedible crops, can be mixed into the existing petrochemical infrastructure, Gold writes. "Think of it as a smart biorefinery," Hans Blaschek, director of the Center for Advanced Bioenergy Research at the University of Illinois at Urbana-Champaign, tells Gold. "You are able to utilize more feedstocks and make different products. It's like having a portfolio of stocks versus having a single stock."

Biobutanol is expected to qualify as a biofuel under federal mandates, but isn't without its problems. A bushel of corn yields less biobutanol than ethanol. Proponents maintain that as long as oil prices remain higher than $45 a barrel, biobutanol will be competitive with oil as a plastics ingredient. Todd Alexander, a partner with law firm Chadbourne & Parke LLP, who has handled biofuels financing, told Gold: "Biobutanol holds significant promise as a next-generation fuel, but at this point there isn't commercial-scale production and it remains to be seen which feedstock and which process will be economically viable." (Read more)

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