Cellulosic Ethanol Looks To Oregon For A Boost

Cellulosic ethanol, much-touted and government-supported but slow to arrive, is on the verge of getting a unique test at a new plant along the Columbia River in northeastern Oregon.

ZeaChem, which has received quite the bundle of grants and loan guarantees from the federal government, said on Monday it had completed construction of a 250,000-gallon-a-year demonstration biorefinery in Boardman, Ore. The plant will use wheat straw and wood – a fast-growing hybrid poplar variety farmed nearby – to make ethanol and chemical products.

There’s excitement that the ZeaChem hybrid process, which relies in part on a microbe found in the guts of termites to break down sugars, could raise ethanol yields by a big margin, while avoiding the food vs. fuels question that comes up when corn is used as a feedstock.

ZeaChem said the plant was completed “on budget,” but it took longer to build than had been expected. In a June 2010 press release in which the company said it had confirmed its ethanol biorefining process, ZeaChem said “the facility will begin to produce cellulosic ethanol in 2011.” In its Monday announcement, the company said production was expected to begin before the end of this year.

The plant began making acetic acid and ethyl acetate in January, and since then has been adding the “back end” facilities that will allow it to convert ethyl acetate to ethanol.

Great patience seems to be required when it comes to waiting for cellulosic ethanol to deliver on its promise. Under the Energy Independence and Security Act of 2007, the U.S. was supposed to produce 500 million gallons of cellulosic ethanol in 2012. The industry has been so laggard in getting off the ground, however, that the Environmental Protection Agency ended up setting the mandate for this year at 8.65 million gallons (and nobody thinks it will be met). Obviously, the outlook does not look good for meeting the long-term mandate of 16 billion gallons — that’s right, billion with a “b” — of the stuff by 2022.

The Obama administration has tried to give the sector a boost in the past year or so, approving loan guarantees for a couple of new plants in the Midwest – one in Kansas and another in Iowa – while continuing to shower largess on ZeaChem.

Back in 2009, the DOE gave it a $25 million grant to build this demonstration project in Boardman. Then, just last October, ZeaChem was one of the industrial partners in a $40 million Department of Agriculture (USDA) grant to the University of Washington for the development of cellulosic ethanol – and another partner was GreenWood Resources, which is growing the poplar trees in the Boardman area for use in the ZeaChem plant.

Ultimately, ZeaChem aims to have a 25 million gallon biorefinery up and running at the Oregon site. To support that, the Obama administration earlier this year used the USDA – and, specifically, the Biorefinery Assistance Program that was part of the 2008 Farm Bill – to conditionally extend a $232.5 million loan guarantee to the Colorado-based company.

Not all of the ZeaChem’s backing is coming from the government, however; in addition to announcing the completion of the demonstration plant, ZeaChem on Monday said it closed series C financing totaling $25 million in new equity.

source: earthtechling