# U.S. DOE invests another $200 million in cellulosic ethanol



## bioman (Mar 1, 2002)

Finally, some good news regarding an alternative to corn ethanol, but I'm afraid to say that $200 million won't go that far. On the bright side, my company is working with a group called Range Fuels desiging their demonstration plant. The technology holds high promise, but we will have to wait to see what the results yield...

SIOUX FALLS, S.D. (AP) - The Energy Department is expanding its efforts to make cellulosic ethanol cost-competitive by 2012.

Energy Secretary Samuel Bodman on Tuesday announced plans to invest up to $200 million over the next five years to help companies develop small biorefineries that can produce alternative fuel from feedstocks such as prairie grasses, corn stalks and wood chips.

The goal of the small-scale research projects, which are expected to be operational in three to four years, is to assist the long-term development of large-scale biomass-to-fuel plants.

"This research will provide the next necessary step toward developing cellulosic biorefineries that can transform our transportation sector in a clean and cost-effective manner," Bodman said in a release.

In February, the Energy Department awarded $385 million in grants to six companies hoping to build the nation's first large-scale cellulosic ethanol plants.

One of those companies is Sioux Falls-based Poet, which is planning a $200 million modification of its corn-based ethanol plant in Emmetsburg, Iowa.

The process under development with Denmark-based Novozymes and Delaware-based DuPont Co. uses the entire corn plant instead of just the kernel, which is currently used to make most ethanol in the United States. The Energy Department awarded Poet an $80 million grant to commercialize the process.

For its latest solicitation, the department is looking for five to 10 companies that can design, build and operate demonstration plants that are about a tenth of the size as commercial plants. The plants would produce liquid transportation fuels such as ethanol, as well as bio-based chemicals and bioproducts used in industrial applications.

Companies would have to cover at least half of the cost of their projects.

The agency is seeking applicants that demonstrate breakthrough technologies and collaboration between industry, universities and the department's national laboratories. Projects will test key refining processes and help overcome the technical challenges face with full-size commercial plants, the department said.

The Energy Department expects up to $15 million to be available during the current fiscal year, with the remaining $185 million to be awarded over the following four years. Applications are due Aug. 14.

The agency's $585 million investment in cellulosic ethanol is part of the Bush administration's goal to have 20 percent of the nation's fuel supply come from renewable resources by 2017.

By DIRK LAMMERS 
Associated Press Writer 
(c) 2007. The Associated Press. All Rights Reserved.


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## hunter9494 (Jan 21, 2007)

this sounds good, but if these plants consume 100 million gallons of water annually just to process the fibers into fuel (same as corn ethanol plants do) then we are still faced by a huge consmable need for water too.

water will be the next resource to come in short supply.


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## Gohon (Feb 14, 2005)

100 million gallons of water is really not as much as it sounds like. There is 325,851 gallons of water in a acre foot. Just the lake I live on alone covers 102,000 acres which means about 320 of these plants could operate annually with just a one foot draw down. There are literally thousands of coastal mountain lakes along the west coast that are filled by snow melt run off which ends up being dumped into the ocean. These lakes would be a endless supply of fresh water that is never used.


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## hunter9494 (Jan 21, 2007)

true, but unfortunately, at this point in time, most ethanol plants are being built in the midwest, where ground water is their source for ops. just another draw down, besides center pivots needed for corn production, a new strain on a dwindling resource, inpart due to climate change. it's all interconnected. just a thought.


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## djleye (Nov 14, 2002)

Hopefully this can, at some point, replace corn based ethanol. I would love to see this come to fruition.


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## Plainsman (Jul 30, 2003)

I have always supported conservation subsidies over production subsidies. Grasses for cellulose ethanol could replace CRP. It will provide landowners a greater income, and is energy efficient to produce. I think there are about seven units of energy per unit input for cellulose ethanol compared to a net loss for corn ethanol.
What I am getting at in the support comments: I for one would think it would be ok to continue CRP payments on cellulose producing fields if they only harvested ½ of the production each year, and alternated every year, or every third year whichever provided the best cellulose production.. This would provide nesting cover and winter habitat while giving the farmer a double shot. In essence he would be getting his harvest off ½ while getting paid twice as much per acre for the other half (as compared to current CRP payment). This payment would have to work this way, or the farmer would simply harvest all the field. We have to make the payment competitive. I think this would do it with no more expense to the taxpayer than CRP is now. 
While we are at it pay them for wetland restoration also. Then open the door for corporations to purchase carbon credits from those landowners. They could be pulling in multiple sources of income from the same land. Whether or not you believe in global warming, this plan would replace a lot of lost habitat and is worth it from that perspective alone. I say this to avoid the global warming debate. Think habitat and conservation practices over production subsidies.


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## southdakbearfan (Oct 11, 2004)

hunter9494 said:


> true, but unfortunately, at this point in time, most ethanol plants are being built in the midwest, where ground water is their source for ops. just another draw down, besides center pivots needed for corn production, a new strain on a dwindling resource, inpart due to climate change. it's all interconnected. just a thought.


If the information I have heard is correct, most of the ethanol plants locally to where I am draw between 1 and 2 million gallons a day and there are three within 10 miles of here. In aberdeen, the cities draw is on average 8 to 10 million gallons a day.


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## DJRooster (Nov 4, 2002)

Ethanol is OK but it will take more than that to make us energy indepedent. I hate to say it but I think we should take a serious look at more nuclear energy sources.


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## bioman (Mar 1, 2002)

This is one of those good news bad news articles. Good news for farmers, bad news for wildlife...

'A shot in the arm' _ corn industry cranking up for ethanol boom 
(c) 2007. The Associated Press. All Rights Reserved.

BLOOMINGTON, Ill. (AP) - From New York to California, and even parts of the Deep South, more acres of corn are expected to be planted this year than at any time since World War II as farmers rush to cash in on the surging demand for ethanol.

"It's the price. The price is telling you to go toward more corn," said Mike Olson, who plans to bump corn by 15 percent on his 2,750-acre Illinois farm. He harvested a 50-50 split of corn and soybeans last fall.

After hovering around $2 a bushel for a decade, corn prices have nearly doubled in the last year, pumped to near records by more than 100 ethanol plants that have sprouted as America seeks renewable alternatives to foreign oil. President Bush is talking up alternative fuels and companies like Illinois-based Archer Daniels Midland Co., the biggest ethanol producer in the world, are pouring money into research and development.

On farms across the nation, the lure of more than $100 an acre from corn is too good to pass up in an industry whose fortunes depend on fickle weather, global politics and annual subsidies in the billions.

"I think the country and the leadership of the country have recognized that our addiction to foreign oil is a national security risk that we can't stomach anymore," said Mike Baise, a policy expert with the Indiana Farm Bureau. "I believe that we're going to shift to more bio-based energy in a big way."

Still, some experts warn that the price has nowhere to go but down if the market is flooded, and not everyone has forgotten how a massive grain deal with the Soviet Union in the early 1970s and the 1996 drought in China shot corn prices to record highs -- prices that later wilted.

Keith Blunier, who farms 400 acres in central Illinois, also wonders whether ethanol demand could wane if oil prices drop or other fuel sources prove viable.

"I've been through the '70s and seen the ups and downs," said Blunier, who plans to keep his usual split between corn and soybeans on his farm.

For now, the rush is on.

About 90.5 million acres of corn are expected to be planted this year, up 15 percent from 2006 and the most since 95.5 million acres were planted in 1944. Of the 48 states that grow corn, only Massachusetts is expected to plant less this year.

"I think it's an opportunity for a lot of farmers. It's one that probably only comes along every 20 or 25 years," said Terry Francl, senior economist for the American Farm Bureau Federation.

The five top corn-producing states -- Iowa, Illinois, Nebraska, Minnesota and Indiana -- account for 5.1 million of the projected 12.2 million new acres of corn. To make room, those states will sacrifice 4.3 million acres of soybeans.

The sharpest increases are expected in the land of cotton.

Arkansas, Louisiana and Mississippi this year are expected to boost corn acreage by 133 percent to 195 percent. Combined, the three states are expected to add 1.2 million acres of corn while trimming cotton production by more than a million acres.

"We need a shot in the arm from somewhere and right now it isn't cotton," said Billy Joe Ragland, whose main crop will be corn this year on his farm near Bentonia, Miss. After drought and two rounds of hurricanes over the last three years, he said, "we've got a chance to make a little money for a change."

The USDA estimates cotton acreage will drop 20 percent nationwide this year and soybeans will drop 11 percent. Agriculture Secretary Mike Johanns has downplayed any impact on food costs, saying the USDA anticipates typical 2 percent to 3 percent increases that can be pegged to "a dozen different factors."

Still, there are plenty of unknowns as ethanol commands a growing share of a U.S. corn crop that also feeds cattle, hogs and poultry, and is a food additive that goes into everything from breakfast cereals to candy and beer.

Farm officials say the livestock and poultry industries, which historically use about half the nation's corn crop, will likely try different feeding options or selling animals at lower weights before passing along higher prices to consumers.

"It's not going to happen overnight," said Dale Lattz, a farm management specialist with the University of Illinois extension service. "It would take a year or two for significant effects."

And some contend there will be enough corn for everyone if the planting forecast bears out.

"I think the market got the acres it really wanted to satisfy this global demand," said Jim Bower, owner and president of Bower Trading Inc., a Lafayette, Ind.-based commodities brokerage.

Whether the harvest meets everyone's needs will depend on the weather, and some farmers may choose other crops depending on the planting season forecasts. Analysts also say ethanol-driven demand coupled with the weather uncertainties will make for a volatile corn market.

Many farmers and analysts say corn prices likely won't dip below $3 per bushel this year due to ethanol demand that is expected to consume 3.2 billion bushels of corn, up from 2.1 billion bushels last year.

The American Farm Bureau's Francl predicts prices will stay in the $3 to $5 per bushel range for the next four to five years. Others suggest farmers will be able to adapt if a market emerges for non-corn biofuels.

"If federal policy doesn't change and oil prices stay in the $50 to $65 range, this isn't going to go away for a while," said Bruce Babcock, director of Iowa State University's Center for Agricultural and Rural Development.

Steve Stevens plans about 1,200 acres of corn on a 4,500-acre farm in southeast Arkansas, where cotton and rice have been staples since his father homesteaded the land 70 years ago. Since then, only 100 acres of corn have ever grown there, in a small field planted two years ago when pest problems ruled out cotton.

"It's scary," Stevens said of his switch to corn. "We know cotton, we've done it for a long time. We don't know corn."

Even some farmers familiar with corn aren't changing. Among them is Vance Bauer, who will keep a 50-50 mix of corn and soybeans this year on his 1,800-acre farm near Gowrie, Iowa.

"I'm very optimistic about where we're headed, but I don't know that I'd put myself out on a limb," he said. "I don't want to put all my eggs in one basket."


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## Matt Jones (Mar 6, 2002)

If you're willing to use as many BTU's as needed...you could make a lot of things into fuel.


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