Friday, November 20, 2009

Top ethanol maker says it has cut cost of cellulosic product to the verge of commercial production

The world's largest ethanol producer says it has drastically cut the cost of producing cellulosic ethanol, giving hope for commercial production in two years. Jeff Broin, chief executive of South Dakota-based Poet, says the company reduced the cost from $4.13 a gallon to $2.35 a gallon during the past year, Ledyard King reports for the Argus Leader in Sioux Falls, the company's hometown.

"Two years ago, I would have told you this was a long shot," Broin told King. "Now I'll tell you that we will produce cellulosic ethanol commercially in two years." However, Broin warns those gains will be for naught if the Environmental Protection Agency doesn't agree to increase the amount of ethanol blended in gasoline. The industry wants the level raised to 15 percent from the current 10 percent.

EPA has said it plans to decide by Dec. 1, but King notes recent rumors suggesting that the agency may delay that decision while it waits for further testing on the effect of ethanol of engines. EPA said in a statement that it remains committed to meeting the deadline. Broin spoke to reporters during a trip to Washington, D.C., to promote ethanol-friendly policies in Congress. He said, "If we remain at (10 percent), cellulosic ethanol cannot become a reality."

Broin said Poet cut cellulosic production costs by reducing energy use, enzyme costs, raw material requirements and capital expenses at its pilot plant in Scotland, S.D.. The company plans to produce 25 million gallons a year of cellulosic ethanol from farm waste at a plant in Emmetsburg, Iowa.

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