Sunday, February 23, 2014

Will Cellulosic Ethanol Make It?

Des Moines Register:

The line of headlights begins close to 6 a.m. as trucks and other vehicles file into the $250 million construction project south of this northwest Iowa town of 3,900.
Some of the 300 construction workers come from Iowa. But most — with license plates from Nebraska, Texas and Minnesota — fill about every apartment, hotel and trailer in a 30-mile radius. The workers pack the local Casey’s for breakfast pizza, line up at Fareway’s meat counter and drop by Don Jose’s for dinner.
“I’m pretty sure it’s the biggest construction project Emmetsburg has ever seen,” said Daron Wilson, general manager of the plant being built by Poet-DSM. He points out six cranes on the prairie skyline, a sight little seen in Iowa outside of Des Moines or Cedar Rapids.
Poet’s Project Liberty is one of three large-scale U.S. plants that will begin making cellulosic ethanol this year, using corncobs and husks collected from area farmers’ fields. It has taken a decade of research and $120 million in government subsidies at this plant alone to bring the ultra-green fuel to commercial-scale production.
But just as a new industry for Iowa is about to take root, a proposed change in government policy could limit demand for ethanol and send new plants and jobs to other countries. Think Brazil, China or European nations.....T
he proposed change in the federal government’s Renewable Fuel Standard turns the company’s financial plan on its head. Makers of next-generation ethanol will “lose money on every gallon that it sells in the United States” under the EPA proposal, Poet-DSM wrote the agency......
Taxpayers have a lot invested in the plant. The federal government provided $100 million — and Iowa taxpayers, $20 million — to help with developing the technology behind Project Liberty. Royal DSM is investing $150 million in the plant.
Personally, I'm guessing this is a black hole of unprofitable, difficult-to-scale technology. Hopefully, I'm wrong.

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