FEB 2008 American Recycler Newspaper

The nation’s first commercialized cellulosic ethanol facility, designed to turn wood waste into fuel, is under construction and set to open later this year near Soperton, Georgia.

Range Fuels, Inc. has successfully tested close to 30 types of biomass for producing ethanol at its testing facility in Broomfield, Colorado. The commercialized facility in Georgia will use wood waste as its feedstock to produce more than 100 million gallons per year.

“Wood waste has already proven to be a feasible fuel alternative from a production and economic standpoint,” said Mitch Mandich, chief executive officer of Range Fuels.

Range Fuels was one of six companies selected by the Department of Energy (DOE) for financial support in building a commercial cellulosic ethanol plant. As part of the $76 million DOE investment, Range Fuels will receive $50 million for the first 20 million gallon-per-year phase. The remaining $26 million will be provided for construction of the next phase.

Mandich said that unlike other methods of producing cellulosic ethanol, Range Fuels’ technology eliminates enzymes, which have been an expensive component of producing cellulosic ethanol. The company’s proprietary thermo-chemical conversion process, known as the K2 system, uses a two step process to convert biomass to fuel-grade cellulosic ethanol.

The biomass is first fed into a converter. Heat, pressure and steam convert the biomass into a synthesis or syngas. It is then cleaned before entering the second step. The syngas is passed over a proprietary catalyst and transformed into mixed alcohol, which is separated and processed. This maximizes the yield of ethanol for a quality suitable for fueling vehicles.

“The forests of Georgia can support up to two billion gallons a year of cellulosic ethanol production using Range Fuels’ technology,” Mandich said. He said Soperton’s proximity to feedstock supplies and ethanol markets means that transportation costs will be kept low.

Cellulosic ethanol produced from wood waste has a number of advantages compared to corn-based ethanol, Mandich said. “Cellulosic ethanol gives off fewer carbon emissions.” He said cellulosic ethanol reduces greenhouse gas emissions by 85 percent over unreformulated gasoline. Starch-based ethanol, which frequently uses natural gas to provide energy for the production process, reduces greenhouse gases by only 18 to 29 percent, he said.

Range Fuel’s process also uses about one-fourth of the water required by corn-based ethanol plants and an even smaller percentage of projected water use of other cellulosic ethanol processes that use enzymes and organisms to produce cellulosic ethanol, Mandich said.

Ethanol consumption is currently hovering near 7 billion gallons annually and is projected to rise to 11 to 12 billion gallons annually within the next 2 to 3 years, Mandich said. He noted that recently signed federal legislation would boost ethanol demand further.

President George W. Bush signed the “The Energy Independence and Security Act” late last year, which includes a renewable fuel standard that calls for the use of 36 billion gallons of renewable fuels, 16 billion gallons of which are to come from cellulosic ethanol by 2022.

Range Fuels projects that several hundred millions of dollars will be invested in its first cellulosic ethanol plant. In addition to public funding, money for the project is coming from private investors, including Khosla Ventures, a venture-capital firm in Menlo Park, California.

Samir Kaul, a general partner at the firm, would not release the amount of money that Khosla Ventures has invested. But he said there is plenty of money available for cellulosic ethanol projects. “Venture capitalists are pouring money into green energy,” Kaul said.

“Range’s technology can produce cellulosic ethanol cheaply, and has the potential to scale rapidly in a way that other biofuels cannot. We think production costs of $1.25 are reasonable and we expect it to eventually end up below $1.00 per gallon, making it competitive.”

George Douglas, a spokesperson for the DOE’s National Renewable Energy Laboratory in Golden, Colorado, said that wood waste and other cellulosic material could contribute greatly to the nation’s fuel supply. “Market potential for cellulosic ethanol is huge,” Douglas said.

The DOE estimates that the country consumes more than 140 billion gallons of gasoline a year and it estimates about one-third of that could be replaced by various forms of ethanol.

“The economics are improving. The DOE’s goal is to have commercially available cellulosic ethanol at price parity with corn ethanol by 2012 and to have cellulosic ethanol contributing significantly to a 20 percent reduction in gasoline use by 2017,” Douglas said.

“Since there are no commercial cellulosic ethanol plants today, we really don’t know what the per gallon cost would be, but it’s likely about double where we’d like it to be.”

Other firms are also investing in projects to turn wood waste into cellulosic ethanol. Dynamotive Energy Systems Corp. in Vancouver, Canada, plans to invest $24 million in a commercial plant near Willow Springs, Missouri. The plant is designed to convert 200 tons a day of wood-by-products and residues from nearby sawmills into 34,000 gallons a day of fuel.

According the Environmental Protection Agency (EPA), nearly six million tons of wood waste is generated each year. Wood waste includes urban wood waste, wood debris from suburban land cleaning, and rural forestry residuals. Markets for recovered wood vary across the country, but the EPA reports the current market is dominated by mulch and fuel applications.

Harry Boyle, an analyst with New Energy Finance Ltd. in London, recently traveled to the United States to talk to cellulosic researchers and developers. He said that turning wood waste into cellulosic fuel is not yet economical because it has not been scaled up yet. He said that plants like Range Fuels’ in Georgia, once fully operational, would show how economical it is.

Boyle said that these cellulosic ethanol projects would not be feasible without government money providing an accelerator. “Maybe in three or four year’s time it wouldn’t be necessary. But the government is very keen, obviously, to get alternative forms of fuel,” he said.