Washington, D.C. - The government agreed Wednesday to invest as much as $80 million in an Emmetsburg biorefinery that will turn corn cobs, not just corn, into fuel ethanol. But the project's developers said still more federal cash will be needed to get farmers to sell their cobs.
The Broin Cos. project was one of six nationwide that were awarded up to $385 million to help build the first commercial-scale factories for producing ethanol from biomass, such as crop waste, garbage and citrus peels.
Cellulosic ethanol, which can be made from plentiful, inedible material that makes up all plants, is key to meeting President Bush's goal of displacing 20 percent of U.S. gasoline use by 2017, said Energy Secretary Samuel Bodman.
The projects "could eventually change the way we run our entire transportation sector in America. It's a big deal," said Bodman.
Jeff Broin, Broin's chief executive, said the Emmetsburg project should be operational by the end of the decade and would "help end America's dependence on foreign oil."
The DOE grant would cover up to 40 percent of the project's construction costs.
However, the company will be seeking an additional $20 million from Iowa to build the refinery. Plus, Broin wants additional funding from Congress to subsidize the cost of buying the 750 tons to 850 tons of cobs needed each day to supply the facility, said Mike Muston, the company's executive vice president for corporate development.
Farmers will need to be paid about $100 a ton to get them to participate, he said. The company hopes to get Congress to foot about half that cost through the 2007 farm bill, he said.
At $50 per ton, taxpayers would pay about $40,000 a day, or about $15 million a year, if the plant operated every day.
Broin needs 300 to 400 farmers within about 35 miles of the facility willing to harvest cobs along with their grain.
Aides to the Senate and House agriculture committees said lawmakers were looking at a variety of ways to promote biofuels development. "What types and levels of support are needed for feedstocks remains to be determined," said Kate Cyrul, a spokeswoman for Sen. Tom Harkin, D-Ia., chairman of the House Agriculture Committee.
Broin intends to begin harvesting tests this year in several states.
The project requires expanding the existing Voyager Ethanol plant south of Emmetsburg, which now produces 50 million gallons of ethanol a year from corn. The completed facility would increase production to 125 million gallons annually, with 25 million to 30 million gallons coming from cobs and kernel hulls. The biorefinery would use waste from the cellulose to generate its own heat and electricity.
The plant would use fermentation technology developed by DuPont at its Wilmington, Del., research facilities. A DuPont subsidiary, Des Moines-based seed giant Pioneer Hi-Bred International, would assist in advising farmers in the Emmetsburg area and determining the best corn hybrids for use in the project. Broin is working with Deere and Co. to modify combines to harvest both the cobs and grain.
In 2003, DuPont received a $38 million matching grant from the Department of Energy to develop cellulosic ethanol from corn plants.
The company is well short of meeting its targeted production costs.
With current technology, Broin can produce ethanol from cellulose for about $2.25 to $2.50 a gallon, Muston said.
By the time the Emmetsburg project is in operation, the company hopes to have lowered the cost through internal research to less than $2 a gallon.
Eventually, the goal is to bring the production cost in line with that of grain-based ethanol, now about $1.30 to $1.40 a gallon after recent increases in the price of corn.
The Energy Department had originally planned to give three projects a total of $160 million but decided to expand the program to accelerate development of the biofuel.
The exact funding for each project, including Broin's, will depend on how well the projects progress and how much money Congress allocates each year, officials said.
Other projects would use everything from yard waste to wheat straw and waste trees. They would test a variety of technologies, including gasification, acids and enzymes, to process the cellulose.
The projects "have their pluses and minuses," said Robert Brown, director of Iowa State University's Office of Biorenewables Programs. "The technology is still at a point that it's difficult to estimate the economics of it."
Reporter Philip Brasher can be reached at (202) 906-8138 or pbrasher@dmreg.comDes Moines Register
