Range Fuels receives $80 million USDA loan

By Ryan C. Christiansen | January 12, 2009
Web exclusive posted Jan. 26, 2009, at 10:26 a.m. CST

Range Fuels Inc., a cellulosic ethanol technology company based in Broomfield, Colo., has been awarded an $80 million loan guarantee from the USDA Rural Development program to build a 20 MMgy commercial-scale cellulosic ethanol plant in Soperton, Ga., which will produce ethanol from wood chips.

According to the USDA, this is the first-ever loan guarantee for a commercial-scale cellulosic ethanol plant. The funds will come from the Section 9003 Biorefinery Assistance Program that was authorized by the 2008 Farm Bill to finance the production of biofuels from non-food sources.

According to David Aldous, chief executive officer for Range Fuels, the plant will be built in three phases. During phase one, 125 dry tons of woody biomass will be consumed daily to produce ethanol; during phase two that will increase to 625 tons per day; and during phase three it will increase to 2,625 tons per day.

"It's located in the Million Pines area of Georgia," Aldous said. "There is a very significant supply of wood waste in that area, hundreds of years of supply for our plant." He said the company has an agreement in place with a wood waste supplier for feedstock.

The plant is expected to be mechanically complete during the first quarter of 2010, Aldous said, and Range Fuels will begin commissioning the plant soon thereafter.

Range Fuels has been developing and testing its K2 conversion process over the past eight years and has completed more than 15,000 hours of testing using more than 30 different non-food feedstocks with varying moisture contents and sizes, including wood waste, olive pits, etc. The company's fourth-generation demonstration plant is located in Denver, Colo., which has been operational since early 2008.

Aldous said Range Fuels' technology is unique. "It is proprietary technology," he said. "There are a lot of companies that are doing thermal front-end processes, whether they are pyrolysis or gasification, and there are a lot of other companies using different kinds of back-ends, converting the syngas into ethanol, (but) we use a proprietary catalyst on the back end and we use a proprietary technology on the front end."

Outgoing U.S. Agriculture Secretary Ed Schafer said the federal government's investment in Range Fuels is significant. "The investment in this facility, which will make cellulosic ethanol from wood chips, has the potential to significantly advance the timetable for second-generation ethanol production in this country," Schafer said. "I visited the pilot plant last October and was excited to see how well the technology works."

Aldous said Range Fuels has other plants in the works. "We have several projects in the Southeast that we have already located sites for that are using similar kinds of feedstocks," he said. "We also have plans for diversifying our feedstock to other kinds of biomass. We're fairly feedstock agnostic (but) the feedstock in this business is the critical sourcing point. We can build a plant anywhere, but what we need to do is build our plants where there is an abundance of feedstock and minimize the costs of bringing that feedstock into the plant. Our first few are in the Southeast, but we have had conversations with companies internationally [and for] other kinds of feedstocks. "

Aldous has had exploratory conversations with some corn-based ethanol producers about colocating a Range Fuels plant. "I think there are synergies [for] putting first- and second-generation facilities at the same spot," he said. "The supply chain components are partially addressed. The advantage of our technology is that the front end is a modular design and we can scale up or down fairly easily with the availability of feedstock."