3 advanced bioenergy projects get $405M in loan guarantees

Three advanced bioenergy projects in Alabama, Mississippi and Florida will receive $405 million in loan guarantees through the farm bill's Biorefinery Assistance Program.

Those projects were among a slew of announcements from the U.S. Department of Agriculture today, all aimed at helping the country toward its goal of producing ethanol from feedstock other than corn, Agriculture Secretary Tom Vilsack said.

"This industry cannot just simply be Midwestern-based or one-commodity-based," Vilsack said in a conference call with reporters. "It really has the potential to be in every part of the country."

Mandated by the renewable fuel standard, the United States has a target of annually producing 36 billion gallons of ethanol by 2022, 16 billion gallons of which must come from cellulosic ethanol.

In rural western Alabama, USDA is providing a letter of intent to Coskata Inc. offering a loan guarantee of $250 million for a cellulosic ethanol biorefinery facility that will use woody biomass as a feedstock. The plant will produce 55 million gallons of ethanol per year.


USDA will give Enerkem Corp. in Pontotoc, Miss., an $80 million loan guarantee to build and operate a biorefinery that will produce 10 million gallons of cellulosic ethanol annually by refining dried and post-sorted municipal solid waste.

In Vero Beach, Fla., a biorefinery operated by INEOS New Planet BioEnergy LLC that will receive a $75 million loan guarantee will use vegetative, yard, wood and municipal solid waste as feedstock.

INEOS Vice President Dan Cummings said that the Florida project is probably furthest along out of the three and that he expects it to be running in early 2012. The project also received a $50 million grant from the Department of Energy in December 2009.

The biorefinery will produce 8 million gallons of cellulosic ethanol a year and "allows for a thing that is plentiful, which is waste, to be utilized rather than putting it into landfills," Cummings said.

The projects are similar to one announced more than a year ago in New Mexico and "will help to create hundreds of jobs," Vilsack said.

The announcements garnered praise from Growth Energy, a voice for U.S. ethanol supporters and producers, and from the Biotechnology Industry Organization.

Along with helping the United States reach its cellulosic ethanol goal, the projects will help "reduce reliance on foreign oil, enhance both our energy and national security, and jumpstart economic growth," said Brent Erickson, executive vice president of the organization's industrial and environmental section, in a statement.

The Agriculture Department will also fund 68 advanced biofuels feasibility studies in 27 states through the Rural Energy for America Program and has made payments of $15 million since October to producers through its Bioenergy Program for Advanced Biofuels.

Farm bill funding?

In conjunction with the agriculture programs, DOE also announced today that it is conditionally offering a $241 million loan guarantee to a renewable facility in Louisiana that will produce 137 million gallons of diesel fuel a year.

Vilsack said he has "tremendous confidence in the capacity of American agriculture to meet any challenge" in energy.

"We wouldn't have all these feasibility studies that we're funding in states across the country, we wouldn't be having these producers who are interested in being part of this effort ... if there weren't a belief on the part of American agriculture and rural America that we can get to 36 billion gallons," Vilsack said.

He also indicated that he was confident the energy programs in the farm bill will have support when Congress hashes out the 2012 farm bill.

A number of energy programs, including the Biomass Crop Assistance Program and the Rural Energy for America Program, are not slated to automatically receive continued baseline funding beyond the current farm bill.

"I think if Congress learns of the success of the fact that we are implementing this and that there's a significant reaction -- positive reaction -- from the countryside," Vilsack said, "I think they'll understand the necessity of making sure that there's adequate financing."

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