Tuesday, March 08, 2011

Market for cellulosic ethanol sours before fuel establishes foothold; Ga. plant too big a jump

Four years after Georgia Gov. Sonny Perdue touted his state's new plant that would turn wood into fuel as part of the expected boom in cellulosic ethanol, the plant is closed after running out of money before becoming commercially viable. The Georgia facility was supposed to be the nation's first commercial-scale cellulosic ethanol plant and the federal government promised $76 million for the project, Josh Goodman of Stateline.org reports. Georgia was hardly alone in "hoping that cellulose from all manner of plant material — from tree waste to grasses to corn husks — would serve as fuels that could clean the environment and end America’s dependence on foreign oil," Goodman writes.

The Georgia plant, which was operated by Range Fuels, was supposed to produce 20 million gallons of fuel in 2009 before increasing to 100 million gallons in subsequent years. "It never happened," Goodman writes. "Today, the facility is closed, at least temporarily." Federal legislation passed in 2007 called for 150 million gallons of cellulosic ethanol to be produced this year, but the U.S. Energy Information Administration projects that less than 4 million gallons actually will be produced. For now commercialization of cellulosic ethanol has been delayed, Goodman writes, noting it remains unclear "whether the reversal reflects the dangers of chasing new technologies or whether the backers of cellulosic ethanol need just a little more patience."

Cellulosic ethanol proponents saw the fuel as a product that could be produced anywhere in the country, unlike corn-based ethanol, and turn obscure plants like switchgrass into cash crops, Goodman writes. So what went wrong? Some say the fuel wasn't ready for prime time when the Georgia plant was built. "You just don’t scale from a chemical lab scientific demonstration up to a $400 million plant in one step," Sam Shelton, the founding director of Georgia Tech. University’s Strategic Energy Institute, said. Others note investor interest in the fuel dropped after oil prices went down following the 2007-08 spike. (Read more)

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