Published on January 19th, 2009 | by Jennifer Kho2
Fuel From Utility Poles: Cellulosic Ethanol Heats Up in Cool Economy
Utilities may soon be helping to bring biofuels to your gas tank in an unexpected way. Montreal-based Enerkem recently announced it has finished building what it’s calling its first commercial-scale plant, one that will make cellulosic ethanol, methanol and various biochemicals from discarded utility poles.
After 14 months of construction, the Westbury, Quebec, factory was “mechanically completed” in December, but it isn’t yet fully operational. The company is now working to get the gas part of the plant – the part that will convert the poles into what’s called “syngas,” a mixture that includes carbon monoxide and hydrogen, and will use it to make methanol — up and running now and expects it to be running constantly by early February, CEO Vincent Chornet says.
Enerkem hasn’t set a date for the beginning of the plant’s ethanol operations, he told me. (Liquid fuel is more difficult to make than methanol, so Enerkem won’t have really proven that its syngas is good enough to make ethanol until it actually does so, according to Jim McMillan, a manager at the National Renewable Energy Laboratory’s National Bioenergy Center.)
But while the company originally said the plant would be operational last fall, Chornet insists it hasn’t been delayed. “We’ve kept with the same schedule,” he said.
Once the plant has reached its full capacity, it is expected to be able to convert some 12,000 tons of dry material into up to 1.3 million gallons of cellulosic ethanol per year. That makes it a small factory, one that represents a mid-step between the company’s pilot plant, which can make up to 300,000 gallons per year, and the 10-million-gallon size it ultimately plans to commercialize.
“After all these years, we’re starting a gas plant that will produce premium gas and chemicals with [cellulosic] feedstocks,” Chornet said. “This is a major milestone that opens the door to a whole world of possibilities.”
The Enerkem news is part of a steady stream of cellulosic-ethanol announcements that has flowed out this month. Among other things, the USDA on Friday said it had approved an $80 million loan guarantee for Range Fuels, an Enerkem competitor, while Verenium Corp. (NSDQ: VRNM), another cellulosic-ethanol company, announced plans to build a 36-million-gallon plant in Florida after it had “cranked up” its demonstration plant. Poet started up a pilot cellulosic-ethanol plant, and Ze-Gen and ZeaChem raised $20 million and $34 million, respectively.
The trend is an interesting development in a formidable financial environment. Biofuels companies have taken a beating in the last year, as high corn and soy prices – and relatively low biofuel prices – squeezed margins, leading to layoffs, bankruptcies and cancelled factories. That’s not to say that times aren’t still tough. Last week, Northeast Biofuels filed for bankruptcy and GreenFuel Technologies, a company working to make biodiesel from algae, laid off nearly half its staff.
Cellulosic ethanol has been one of the industry’s big hopes, but it has faced numerous challenges, including higher manufacturing costs and the difficulty of gathering enough cellulosic material, cost-effectively, to feed a factory.
Companies such as Enerkem are taking novel strategies to try to overcome these hurdles. Enerkem’s technology enables it to use feedstocks that might otherwise be more difficult to convert into usable fuel and chemicals. The Westbury plant, for example, is attached to a saw mill that salvages usable wood from the hearts of old utility poles. Because the outer part of the wood is varnished with toxic materials to preserve them for their 25- to 30-year lifespans, only about 10 percent of the wood is reusable and the rest has, until now, ended up in landfills.
Enerkem says its approach will enable it to convert that tainted wood into syngas, which it will clean, then convert into ethanol and methanol using a copper-based catalyst. Perhaps the best part, from a business perspective, is that the material the company is using is “negative cost.” That means – in plain English – that the company gets paid to take it away.
This strategy could give the company an edge in case ethanol prices drop further, McMillan said. “Instead of paying money to put it in a hazardous-waste landfill, to make fuel out of it is a great thing,” he said. “The fact that their model is based on negative-cost feedstocks is very attractive. All things being equal, they can afford to be a little less efficient than a Range Fuels, which has a low cost, but not a negative cost.”
Aside from utility poles, Enerkem plans to use municipal waste and what it calls ICI (industrial/commercial/institutional) waste streams, which are made up of mixed shredded materials including plastics, woods and cardboard.
“We’re not after the residues that come out of sorting centers or from industrial operations that have value – good plastics, for example,” he said. “The [landfill and waste] streams we’re looking into, fortunately for us, have been up in the last 10 years. That’s a more subtle answer to the question: Are you going to miss waste someday?”
Photo courtesy of Enerkem