Iowa A Step Closer To Cellulosic Ethanol Production

Iowa A Step Closer To Cellulosic Ethanol Production

Poet LLC gets offer for $105 million federal loan guarantee to build Iowa's first commercial cellulosic ethanol plant. Construction is expected to begin in August.

Last week ethanol maker Poet LLC received an offer for a conditional commitment for a $105 million U.S. Department of Energy loan guarantee to construct a cellulosic ethanol plant at Emmetsburg in northwest Iowa. That plant, when completed, will produce 25 million-gallon-per-year from corn cobs, leaves, husks and some stalks. The loan puts Emmetsburg out front in the race to have the state's first commercial cellulosic ethanol production facility.

U.S. Energy Secretary Steven Chu announced the offer for a conditional commitment on July 7. "This project will help decrease our dependence on oil, create jobs and aid our transition to clean, renewable energy that is produced here at home," he said. "The innovations used in this project are another example of how we are seizing the opportunity to create new economic opportunities to win the clean energy future."

The federal loan guarantee is one of the last pieces needed in putting together this project that has been five years in the making. A number of key elements are needed to make this project a reality, and funding has been one of them.

A number of key elements are needed to make this project go

Jeff Broin, CEO of Poet, says he's excited his company is about to achieve its goal of bringing the new renewable fuel technology to commercial scale.

"Financing has been one of the biggest challenges to scaling up cellulosic ethanol, to get the commercial production going. The offer for a conditional commitment for a loan guarantee from DOE's Loan Programs Office brings us one step closer to commercial production," Broin says. "We are pleased DOE has offered to support the development of cellulosic ethanol."

"Cellulosic ethanol holds tremendous promise for America," Broin continues. "There is more than one billion tons of biomass available each year that could be used to make enough cellulosic ethanol to completely displace oil imports. Today's announcement brings us closer to making that promise into a reality."

In anticipation of this agreement, Poet began construction at the site last year with a 22-acre integrated stackyard to store the biomass delivered by area farmers. The loan guarantee, if finalized, will allow construction of the plant itself to remain on schedule. Construction of the cellulosic ethanol manufacturing plant is to begin in August and it is expected to be completed in 2013.

Plant construction is to begin in August, production expected in 2013

The plant, dubbed Project LIBERTY, will produce ethanol from corn cobs, leaves, husks and some stalks harvested by area farmers. It will be located next to the existing corn grain-ethanol plant, Poet Biorefining at Emmetsburg. Roads, land and other features will be shared by the two plants, and the co-product from the cellulosic ethanol process will be biogas, enough to power both ethanol plants.

Poet has spent tens of millions of dollars over the last decade working to commercialize cellulosic ethanol, including operation of a pilot cellulosic ethanol plant in Scotland, S.D. Partners in universities, government and private industry have also played key roles in making the process both renewable and profitable.

Here's an update on the progress of Project Liberty so far, and plans for the future, as explained by Jeff Broin:

* Biomass harvesting: Last year, 85 farmers around Emmetsburg harvested 56,000 tons of biomass and delivered it to POET's 22-acre integrated stackyard. That effort will expand this year in a gradual ramp-up to the 300,000 tons of biomass Project Liberty will need annually by the time it starts operating.

* 111% emissions reduction: A third-party life cycle analysis estimated that Project Liberty is carbon negative. That is, a 111% reduction in greenhouse gases. The fact that the ethanol plant uses the residue from an existing crop and produces its own power from the waste stream, are major factors in the significant reduction in emissions.

* Soil quality considerations: Besides emissions, Poet has devoted itself to monitoring soil quality through an ongoing partnership with Iowa State University and USDA. Three years of soil data indicate that for the fields studied, Poet's contracted harvest rates of 1 ton of biomass per acre (approximately 20% to 25% of the biomass on the field) can be consistent with good soil management.

That research will continue, and the data that is gathered will continue to shape harvest practices by farmers in the area.

* Jobs/economic development: A jobs and economic impact study commissioned by the Iowa Power Fund says Project Liberty could generate at least $11.8 billion, and up to $37.8 billion, in economic activity over 20 years. It also would have direct, indirect and induced job totals of 861 to 2,846.

* Production of 3.5 billion gallons of cellulosic ethanol: Poet's first priority is building its first commercial cellulosic ethanol plant. In the future, Poet intends to replicate the process so that it is integrated into all the company's 27 grain-ethanol plants. Longer-term plans include licensing the technology to other ethanol producers and adapting the process to their operations. Altogether, Poet will have a hand in 3.5 billion gallons of cellulosic ethanol production.

DuPont has also announced plans to build a cellulosic ethanol plant

Iowa will potentially be the home of two cellulosic ethanol plants over the next two years. In late June, DuPont said it will build its next generation ethanol plant at Nevada in central Iowa, to make ethanol from corncobs, leaves and stalks. DuPont proposes to invest $275 million in the project and, like the Poet plant at Emmetsburg, expects to begin production in 2013 as well. No date has been set yet for construction of the DuPont plant at Nevada to begin.

For photos and a video about Project Liberty, you can view this release on Poet's website. Poet is the largest ethanol producer in the world and is a leader in biorefining through its efficient, vertically integrated approach to production. The 23-year-old company produces more than 1.7 billion gallons of ethanol and 10 billion pounds of high-protein animal feed annually from 27 production facilities nationwide. Poet also operates a pilot-scale cellulosic ethanol plant, which uses corn cobs, leaves, husk and some stalk as feedstock, and will commercialize the process in Emmetsburg, Iowa. For more information, visit http://www.poet.com.

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