Cellulosic developers call for federal support, give updates

By Kris Bevill | February 18, 2011

Representatives from several companies working to commercialize cellulosic ethanol participated in a round table call Feb. 17 hosted by the Biotechnology Technology Organization to make their case for continued federal support of their technologies.

Brent Erickson, executive vice president of BIO, highlighted some of the recent progress made at the USDA to fund biofuels projects, including the recent round of loan guarantee approvals for cellulosic biofuels projects. He noted with disappointment the U.S. DOE’s loan guarantee program, which until recently had “completely failed” to provide support for advanced biofuel companies. He cautioned Congress against rescinding money for the program, stating that it would be unfortunate if funding is pulled from an industry that has just begun to make progress.

Ineos Bio held a ground breaking Feb. 9 for its 8 MMgy cellulosic ethanol facility near Vero Beach, Fla., after receiving a $75 million USDA loan guarantee in January. Dan Cummings, vice president of commercial and external affairs for Ineos Bio, said 50 positions have been filled for the facility already and the project is “scaling up every day.” He pointed out the opportunity for advanced biofuels to provide reduced-emission fuel for the U.S. as well as to potentially export the technology throughout the world, but said federal assistance is still necessary to support the various technologies through the so-called valley of death to commercialization.

Four company representatives participating in the round table urged continued federal support for advanced biofuels, as they also offered project updates.

Coskata Inc. received a $250 million USDA loan guarantee in January for its planned 55 MMgy cellulosic facility. Wes Bolsen, chief marketing officer and vice president of government affairs for Coskata, applauded the USDA for taking a leadership role in funding advanced biofuels projects, but expressed concern regarding the cellulosic biofuels tax credit’s looming 2012 expiration date. He said Congress should grant an extension to the program soon in order to prevent private investors from funding wind and solar projects, which have received a tax credit extension, over biofuels projects.

Chris Standlee, executive vice president for Abengoa Bioenergy, said his company plans to begin construction of its 25 MMgy cellulosic ethanol facility in Hugoton, Kan., by summer. The company is in the final stages of negotiating a loan guarantee with the DOE, he said, adding that federal loan guarantees are critical to these types of projects because traditional financing is simply not available for first-of-a-kind developments. He described the economic impact of Abengoa’s cellulosic project, which will create a minimum of 300 direct construction jobs during the two-year construction phase. Once complete, Abengoa estimates that the facility will provide 65 permanent local jobs, with an annual payroll of more than $5 million. Additionally, Abengoa expects to purchase more than $17 million of feedstock annually from local farmers.

Scott Weishaar, vice president of commercial development for Poet LLC, focused his comments on the Biomass Crop Assistance Program, that is being funded through the 2008 Farm Bill. He pointed to the chicken-and-egg conundrum regarding the development of feedstock and cellulosic biorefineries. “An operational facility cannot afford to sit empty while you build up the feedstock basis,” he said. “So for cellulosic ethanol to happen, we really need to press forward on all fronts simultaneously. BCAP has just begun and we really need to give it a chance to succeed.”