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Corn ethanol maker Poet says it could compete with gasoline in two years

November 18, 2009|By Steven Mufson

Washington — The nation's largest producer of corn-based ethanol said it has slashed the cost of producing cellulosic ethanol from corncobs and that it would be able to compete with gasoline in two years.

Poet LLC, which currently produces 1.5 billion gallons a year of ethanol from corn, said its 1-year-old pilot plant has reduced the cost of making ethanol from corncobs to $2.35 a gallon from $4.13 by cutting capital costs and using an improved "cocktail" of enzymes.

Moreover, the company said it could use a byproduct called lignin as fuel and that it would provide all the energy needed for the cellulosic plant as well as 80% of the energy that would be needed by a conventional corn-based distillery making twice the amount of ethanol.

"Two years ago I would have told you this was a long shot," said Poet Chief Executive Jeff Broin. "Now I'll tell you that we will produce cellulosic ethanol commercially in two years."

Poet, of Sioux Falls, S.D., launched the cellulosic-ethanol pilot plant a year ago in Scotland, S.D., and Broin said the plant had figured out how to cut capital costs by 40%, cut the amount of energy used in pre-treatment stages and lowered enzyme costs.

He said farm equipment manufacturers were already designing, and in two cases selling, equipment needed to collect corncobs from fields.

For farmers, the advance could mean extra income. Broin said an acre of corn could produce 480 gallons a year of corn-based ethanol and 55 gallons more from processing cobs, leaves and husks.

Though it is a large step forward for Poet, the advance would still not assure the U.S. of enough motor fuel supplies or meet the congressional mandate that refiners use 16 billion gallons a year of cellulosic ethanol by 2025. Broin estimated that the nation currently could produce 5 billion gallons a year of cellulosic ethanol from corncobs -- about 3% of current motor fuel consumption -- and perhaps 10 billion gallons eventually.

Other companies are doing research on how to make cellulosic ethanol from raw materials such as wood chips and switch grass.

Broin also pressed the Environmental Protection Agency to relax rules limiting the amount of ethanol that can go into regular gasoline. That limit now stands at 10%; ethanol makers have applied for an increase to 15%. Broin said the EPA must issue a decision by Dec. 1.

"It's critical to move the blend wall for cellulosic ethanol to become a reality," he said.

Oil companies can sell a separate product for vehicles with 85% ethanol, known as E85, but that requires special equipment at gasoline stations and E85 pumps are still rare. In addition, many automobiles are not designed to use large amounts of ethanol, which can damage certain parts. Many vehicles, however, are designed to use either E85 or regular gasoline.

Mufson writes for the Washington Post.

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