The U.S. Department of Energy awarded grants to six developers — including Abengoa Bioenergy Biomass, which plans to build an experimental refinery in the heart of the massive Hugoton gas field — to help bring ethanol drawn from unconventional sources to market.
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GOVERNMENT HELP

Cellulose ethanol projects financed by the U.S. Department of Energy:

• Abengoa Bioenergy, of Chesterfield, Mo., $76 million for a Kansas plant consuming corn stover, wheat straw, milo stubble and switch grass.

• Alico, of LaBelle, Fla., $33 million for a Florida plant making ethanol, electricity, hydrogen and ammonia from yard, wood and vegetative waste.

• BlueFire Ethanol, of Irvine, Calif., $40 million for a plant located at a southern California landfill. Feedstock will be sorted waste materials.

• Broin Cos., of Sioux Falls, S.D., $80 million to remodel and expand an Iowa plant to run on corncobs, stalks and fiber.

• Iogen Biorefinery Partners, of Arlington, Va., $80 million for a plant in Idaho operating on residue from wheat, barley and rice straw.

• Range Fuels, of Broomfield, Colo., $76 million for a Georgia plant manufacturing ethanol from timber scraps.

Infusion of $385 million in federal funding over the next four years is intended to demonstrate commercial viability of producing ethanol from such materials as crop residue, wood chips and perennial grasses. If cost-effective, these revolutionary methods could relieve price pressure on corn and other food-chain staples now used to distill ethanol.

"All my life I've heard about how we're going to use wheat straw to make something," said U.S. Rep. Jerry Moran, a Kansas Republican from Hays.

Convincing recalcitrant cellulose, the most abundant naturally occurring organic molecule on the planet, to give up fermentable sugars for biofuels is a challenge. The key is finding the right cocktail of enzymes, or another chemical conversion process, to reach the core of cellulose-packing corn stover and cereal straws, saw dust and paper pulp, or crops such as switch grass grown specifically for fuel production.

"If we can figure out how to make ethanol out of wheat stalks or grasses we are golden in Kansas," said Gov. Kathleen Sebelius. "We have a lot of supply."

Samuel Bodman, secretary of the U.S. Department of Energy, was given the chore of passing out federal checks to support development of the second-generation ethanol projects.

"While it requires a more complex refining process," Bodman said, "cellulosic ethanol contains more net energy and results in lower greenhouse gas emissions than corn-based ethanol."

A plant in Florida would make ethanol from yard waste, while a California endeavor would draw from landfill materials to make fuel. Ethanol would come from corn cobs in Iowa, wheat straw in Idaho and timber scraps in Georgia.

The experimental refinery in Hugoton will be a hybrid. Plans call for a $400 million facility capable of annually generating 30 million gallons of cellulosic ethanol and 85 million gallons of traditional grain-based ethanol.

Gerson Santos, director of new technologies for Abengoa Bioenergy, said production from feedstock byproducts, rather than corn or sorghum, was always viewed as costly and impractical. Biotechnology research and manufacturing innovation now suggests the barrier can be broken, he said.

"By using a variety of local biomass crops and crop residue," Santos said, "cellulosic ethanol can be produced in most regions of the country."

Kansas' best option for making cellulosic ethanol would be to grow a perennial grass, said Charles Rice, a professor of agronomy at Kansas State University.

He said switch grass can grow on marginal ground, and 80 percent of the above-ground segment of each plant can be harvested without harming soil carbon levels, a key indicator of soil quality. By contrast, he said, research at Kansas State indicated removing more than two-thirds of corn plant residue from a "no-till" field or more than 10 percent of corn debris from a tilled field for cellulosic ethanol production degraded soil content.

"Kansas is not going to compete with Iowa and Nebraska with their corn ethanol," Rice said. "Cellulose will be good for Kansas."

Ken Frahm, co-chairman of the Kansas Energy Council, has always been skeptical about the economics of cellulosic ethanol. The cost of gathering, transporting and processing massive amounts of crop residue was so much higher than working with corn or sorghum, he said.

"It will take $100 barrel of oil to make cellulosic ethanol feasible," he said.

Sweet crude for December delivery rose last week to a high of $98.62 a barrel on the New York Mercantile Exchange.

Politicians and producers of corn and sorghum, which are consumed by Kansas' 10 existing ethanol plants, are tracking the Hugoton project.

"Conventional ethanol has created a good market for grain sorghum," said Greg Shelor, a Minneola farmer and president of the Kansas Grain Sorghum Producers Association. "The cellulosic ethanol would be made from the crop residue, like sorghum and cornstalks, and that can create an additional revenue stream for growers."

"It's the best play I've seen for agriculture in this country since I've been around," said U.S. Sen. Sam Brownback, a Kansas Republican and former state agriculture secretary.

Hugoton Mayor Jack Rowden said the southwest Kansas community would welcome the creation of 100 jobs at the Hugoton ethanol facility. It is the kind of development, he said, that provides a spark "in the near future and for a long time to come."