Last week, Poet-DSM held a grand opening of its $275 million cellulosic ethanol facility in Emmetsburg, a facility that will eventually produce 25 million gallons of renewable fuel annually from corncobs, husks and stalks. The event drew an estimated 3,000 guests including King Willem-Alexander of the Netherlands, U.S. Secretary of Agriculture Tom Vilsack, Gov. Terry Branstad and Lt. Gov. Kim Reynolds. The plant is named Project Liberty as it promises to deliver a form of energy that will help make the U.S. less dependent on imported foreign oil.
The cellulosic plant in northwest Iowa could help transform the nation's energy supply and its economy, said Jeff Broin, founder of Poet. "What we see here today is a symbol of what can be accomplished through the miracle of nature, the work of the farmer and the power of human ingenuity -- the complete transformation from a fossil-based economy to a renewable-fuels economy," Broin told the crowd of local farmers, state and federal leaders, and international visitors.
Making fuel for the future, cellulosic ethanol
"It may not be completed in our lifetime, but such a transformation will happen," said Broin. "It has to. There's a limited supply of fossil fuel in the world. How much? No one knows for sure, but there is a limit. It's an undeniable fact. And the solution is here."
Poet, a major producer of ethanol from corn grain, is headquartered at Sioux Falls, S.D. Poet needed more than a decade to develop the cellulosic ethanol technology used in the Emmetsburg plant. Royal DSM, a company based in the Netherlands, partnered with Poet on the project. The list of speakers at the Sept. 3 grand opening included Jeff Broin; Feike Sijbesma, CEO of Royal DSM; USDA chief Tom Vilsack; Michael Knotek of the U.S. Department of Energy; Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds.
The plant represents the next generation in ethanol fuel production, and will convert 770 tons of crop residue per day into cellulosic ethanol. The company has been collecting corn stover from area farmers for several years, stacking it on location at the site of the plant. Poet-DSM will pay about $20 million annually to farmers within 45 miles of the plant for the stover.
Cellulosic ethanol could replace all U.S. oil imports
As of last week, the plant had only produced several hundred gallons of cellulosic ethanol. It is expected to ultimately reach 25 million gallons per year.
Poet-DSM would like to license its cellulosic technology to companies across the nation and around the world. Broin says it has the potential to get about $250 million from bioethanol production and licensing income by 2020. Leaders and investors from China, India and Brazil were at the grand opening to learn more about how the plant operates.
Broin says the U.S. has 1 billion tons of crop cellulose that "goes to waste" and could be used to create 80 billion gallons of ethanol annually -- enough to "replace basically all the oil imports into the U.S." He told the audience: "When you combine seed, soil, sun, imagination and hard work, there is an infinite supply of food and fuel."
Can reduce greenhouse gas and boost Iowa's economy
Vilsack, Iowa's former governor and current U.S. Secretary of Agriculture, said cellulosic ethanol can reduce the nation's carbon footprint, and soften the impact of climate change. Using cellulosic ethanol can reduce greenhouse emissions up to 95% when compared to gasoline. Transportation contributes around 30% of the greenhouse gasses that trap heat and cause the Earth's temperature to climb.
The cellulosic plant at Emmetsburg generates biogas that is used to power both the cellulosic plant and the corn grain ethanol plant Poet operates next door. "This new cellulosic facility is literally taking the impact of millions of cars off the road and cleaning our air," said Vilsack.
In addition, this cellulosic ethanol project and others that follow it have the potential to create a $24.4 billion economic impact on the state of Iowa over 20 years and create thousands of jobs, he said. Today, the project has created 50 jobs and another 65 jobs collecting the biomass corn stover, in the form of big round bales.
Market for corn stover will add value for farmers
"The significance is that we're reducing our reliance on foreign oil," said Vilsack. "Also, there are thousands of jobs created as a result of making cellulosic ethanol and getting it to consumers. And, it's great that farmers will have an added source of income, by having a market for their bales of cornstalks and stover. But for me, the most important factor about Project Liberty is what it says to the young people of Emmetsburg, Iowa, and in other small towns across the USA. That is, there is nothing preventing you from realizing the American dream."
However, there was a cloud hanging over the Sept. 3 celebration and open house, as visitors toured the new facility. The federal Environmental Protection Agency is proposing to scale back how much renewable fuel must be blended into the nation's gasoline and diesel fuel supply. The U.S. EPA has proposed reducing the Renewable Fuel Standard for ethanol and biodiesel. EPA has received 300,000 public comments.
EPA's decision on Renewable Fuel Standard is important
The petroleum industry wants EPA to do away with the RFS. The American Petroleum Institute contends that the U.S. market can't support more than a 10% ethanol blend into the gasoline supply. Most gasoline sold in the U.S. today already contains 10% ethanol. EPA has approved gasoline with a 15% ethanol blend for model-year 2001 and newer vehicles, but gasoline retailers have been slow to offer E15 for sale.
Broin and others involved in the ethanol industry say EPA's final decision on the RFS is expected to be announced soon (yet this summer or in early fall) and is very important to the future of cellulosic ethanol. If EPA scales back the RFS, that action would hinder U.S. investment in the cellulosic technology, says Broin.
The U.S. Department of Energy provided $100 million in grants for Project Liberty at Emmetsburg; the state of Iowa provided $20 million; and USDA invested $2.6 million.
U.S. needs 1,000 biorefineries like Poet-DSM facility
Michael Knotek, a deputy undersecretary of the U.S. Department of Energy, told the crowd at Emmetsburg that the U.S. needs to scale up the use of new cellulosic ethanol technology to increase the nation's energy independence, create jobs, boost the economy and reduce the U.S. carbon footprint.
Knotek pointed out that domestic oil production is increasing "but the fact is that oil is tied to a global market. Problems anywhere in the world cause our economy to respond to price spikes and shortages. Biofuels will break that paradigm."
To do that, and to greatly lessen U.S. dependence on oil, Knotek said the U.S. will need "1,000 refineries like this one at Emmetsburg by 2040. There's an enormous market and role for the agricultural community in providing biofuels." Looking to the future, he estimates the nation will need 60 to 100 billion gallons of cellulosic fuel per year.
The federal government is investing to meet that need to the tune of $235 million next year. "The focus on developing biofuels is really working," says Knotek, as the cost of producing cellulosic ethanol has declined considerably. In 2001, the cost to produce the biofuel, as projected or estimated by the U.S. Energy Department, was $13 a gallon. In 2012 it was $3 a gallon, "creating parity with gasoline. So we're getting there," he said.
A strong, robust Renewable Fuel Standard is needed
Iowa Gov. Branstad told the crowd he's been a renewable fuels supporter since the mid-to-late 1970s, when corn ethanol came on the scene, and the world called the fuel gasohol. "We've come a long way since those days," he said. "Biofuels provide good jobs and good benefits for our local economies all over our state, and lower the costs for fuel options at the pump for consumers."
Pointing to EPA's proposal to scale back the federal Renewable Fuels Standard, the mandate requiring certain amounts of renewable fuels to be blended, Branstad said: "This is not the time to backtrack. This is the time to move forward with exciting new technology. This is the time to stand up proudly and support this industry. It's a race for innovation and economic development, and we're not the only country that's competing."