Announced last week, Iowa beat out Nebraska as the site for a new cellulosic ethanol plant to be built by DuPont. To be located in either Story County or Webster County, the plant will use corncobs, leaves and stalks as feedstock to make ethanol rather than corn grain.
The plant is the second proposed cellulosic ethanol production facility for Iowa. The first one is a proposed cellulosic plant to be built by Poet LLC near Emmetsburg in northwest Iowa. These two "next generation" biorefineries, along with the 40 corn grain ethanol plants currently operating in the state, will help maintain Iowa's position as the nation's leading ethanol producer.
The Iowa Power Fund board January 12 approved a $9 million grant, $10 million less than DuPont's original request, for the facility that DuPont and partner Danisco hope to have in production by 2013. "We had an attractive offer from the state of Nebraska," says Jennifer Allison Hutchens, spokeswoman for the DuPont/Danisco partnership. "But Iowa's offer was good as well, and we felt that Iowa offered a better source of feedstock and railroad shipping availability."
Still to be decided where this new plant will be built in Iowa
The plant will employ about 60 people once operational. DuPont, which also owns Pioneer Hi-Bred seed company headquartered at Johnston, hasn't specified where the new ethanol plant will be built in Iowa. Possible locations include a site west of Nevada in Story County, at the existing Lincolnway Energy ethanol plant, or west of Ft. Dodge near a Valero Energy ethanol plant or an ethanol plant owned by a British corn processing company, Tate & Lyle. The Tate & Lyle plant isn't quite finished yet, as construction on it was suspended a year ago when ethanol plants weren't making money due to tight margins.
Iowa's offer for the grant was reduced from the $19 million DuPont originally asked for when the state of Iowa and DuPont couldn't agree on terms of what the Iowa Power Fund has called "success payments" or licensing fees from original technology that Power Fund grant recipients eventually may develop with the state money. Roya Stanley, director of the Iowa Office of Energy Independence, which administers the state funding, noted the contrast with the $14.25 million grant the Power Fund gave Poet for the Emmetsburg plant. Poet will share licensing fees for other plants with the state."
This plant is Iowa's bid to move into "next generation" of biofuels
The Poet and DuPont plants are Iowa's bid to remain in the ethanol game when biofuel moves beyond the first generation stage of using only corn grain to make ethanol. The federal government has a renewable fuels mandate that says half of the 36 billion gallons of biofuels to be produced by the next decade will come from cellulosic sources, which include not only corn crop residue but also grasses such as switchgrass and miscanthus.
Iowa is the center of corn grain ethanol production in the U.S. but southern states such as Tennessee and Georgia are a natural place for cellulosic ethanol production from grass, if and when that technology becomes available. "The use of corn cellulose will firm up Iowa's place in ethanol production as we move into the next generation of biofuels," says Stanley. "This gives Iowa opportunities to experiment and work with companies on the harvest and collection of the stover."
Figuring out the best methods of collecting the stover after corn harvest is still a work in progress. Several experiments have taken place in Iowa the past two years. A consortium of ag companies including Monsanto, Deere and Archer Daniels Midland has experimented the past two years by testing various collection methods in eastern Iowa near Amana and Independence. DuPont experimented with farmers in both Story and Webster counties during last fall's harvest. "With several experiments already taking place for harvesting, collecting, handling and storage of the biomass corn crop residue, Iowa can stay ahead in the long-term development of biofuels," adds Stanley.
The Iowa Power Fund was created by the Legislature in 2007. During its brief life, the fund has provided matching grants or loans for 39 projects totaling $51.6 million. Iowa Gov. Terry Branstad during his recent campaign for governor said he may kill the Iowa Power Fund as a way to save money in the state budget. Branstad has yet to say whether he will ask for another Power Fund appropriation from the Legislature after the current money runs out at the end of June 2011.