POET Partners With DSM for Cellulosic Ethanol

Ethanol giant POET is partnering with a Netherlands-based life sciences company with the intention of making advanced biofuels a reality by next year.

POET has announced a joint venture with Royal DSM to commercially demonstrate and license cellulosic bio-ethanol based on their proprietary and complementary technologies. POET–DSM Advanced Biofuels, LLC, is scheduled to start production in the second half of 2013 at one of the first commercial-scale cellulosic ethanol plants in the United States.

The two partners will produce cellulosic ethanol from corn crop residue through a biological process using enzymatic hydrolysis followed by fermentation. The first commercial demonstration of the technology will be at Project Liberty, which is currently being constructed adjacent to POET’s existing corn ethanol plant in Emmetsburg, Iowa. The initial capacity is expected to be 20 million gallons in the first year, growing to approximately 25 million gallons per year.

POET-DSM Advanced Biofuels, LLC, intends to replicate and license the technology to additional plants to be built at the other 26 corn ethanol facilities in POET’s network and license it to other producers in the United States and the rest of the world. The U.S. Environmental Protection Agency (EPA) estimates that in the United States as many as 350-400 new bio-refineries will have to be constructed by 2022 to meet the volume requirement of 16 billion gallons/year of cellulosic bio-ethanol under the Renewable Fuel Standard.

DSM and POET will each hold a 50% share in the joint venture, which will be headquartered in Sioux Falls, South Dakota. The initial capital expenditure by the joint venture in Project Liberty will amount to about $250 million. The closing of the joint venture is subject to regulatory approvals and other customary closing conditions.

As a result of the joint venture project, POET has also announced its intent to decline the $105 million loan guarantee it was awarded by the U.S. Department of Energy (DOE) in September. POET will officially decline the guarantee prior to drawing any funds when the joint venture closes.

Listen to some comments from DSM Managing Board Chairman/CEO Feike Sijbesma and POET CEO Jeff Broin and questions from media during a telephone press conference today: POET-DSM press conference

POET Pipeline Project Postponed

Without a federal loan guarantee, POET has put a proposed dedicated ethanol pipeline project on hold for now, according to company officials.

“We continue to believe that the pipeline is a viable project with tremendous benefits for the country,” said POET Founder & CEO Jeff Broin, “But with little prospects for a federal loan guarantee in the near future we are currently focused on other efforts.”

In March of 2009, POET joined Magellan Midstream Partners to study the feasibility of a dedicated ethanol pipeline. Magellan announced that they placed their interest in the project on hold early last year.

During the period when POET and Magellan were working together, they had conducted preliminary studies of a dedicated ethanol pipeline, but from the beginning they believed that financing for a project of this size would be challenging without a federal loan guarantee.

“While a pipeline could improve the efficiency of ethanol distribution and lower costs for motorists, the system that we have in place today has allowed ethanol to flow seamlessly into more than 90% of the gasoline sold,” said Broin.

POET Continues to Cut Water Use at Ethanol Plants

POET is now more than 75 percent of the way to achieving its water reduction goal of one billion gallons annually by 2015 at the company’s ethanol plants.

This year POET reduced water use by more than 770 million gallons compared to 2009 by using the company’s Total Water Recovery System at their 18th ethanol production facility, POET Biorefining in Chancellor, South Dakota.

“We’ve made reducing water use a priority at our plants, and it shows,” POET CEO Jeff Broin said. “I’m confident that we can reach our overall water use goal.”

Eighteen of POET’s 26 ethanol plants now have Total Water Recovery Systems under the company’s “Ingreenuity” initiative that was instituted in March 2010.

POET Ramps Up Production of Corn Oil for Biodiesel

By the end of 2011, POET will be producing enough corn oil as feedstock for 12 million gallons of biodiesel per year.

POET has been selling Voilà corn oil for biodiesel and feed markets since January. With its patent-pending technology expanding to a total of six plants, POET has increased its capacity.

POET Biorefining in Hudson, South Dakota, was the first to produce Voilà. Since then, the technology has been installed in five more POET plants, with more on the way in 2012. Plants that are producing corn oil today are POET Biorefining – Emmetsburg, Gowrie, Jewell and Hanlontown in Iowa. POET Biorefining – Laddonia, Mo., will be coming online next week. The six plants’s combined capacity is about 100 million pounds of corn oil per year.

“Voilà has been a very strong part of POET’s business this year, and I’m excited to see more plants getting this technology,” POET founder and CEO Jeff Broin said. “The more we can diversify into new profitable products, the more successful our plants will be.”

Voilà is just another item on POET’s growing list of products created at its plants. In addition to ethanol, POET produced quality products for animal feed including Dakota Gold distillers dried grains. POET also captures carbon dioxide at seven of its plants for sale to beverage producers, and the company last year unveiled Inviz, a zein product used to replace petroleum-based films and coatings.

See more on Voilà from POET in the following video:

POET CEO Update on Cellulosic Ethanol

Ethanol industry leader POET is making “tremendous strides” in the development of ethanol from biomass for commercial use, according to company CEO Jeff Broin.

Broin talked with farm broadcasters at last week’s National Association of Farm Broadcasting meeting last week in Kansas City to provide an update on Project LIBERTY, a cellulosic ethanol plant project in Emmetsburg, Iowa. “When we got into this research ten years ago, it was a long shot,” Broin said in an interview with Jody Heemstra of KWAT Radio in Watertown, SD. “Today, we’re actually less than $3 on production costs so we’re competitive with gasoline and we’re very excited about that.”

Broin says they have cut enzyme costs by about a third and are planning to use the lignin from a grain ethanol plant next door to power both plants. “We’ll have a 25 million gallon cellulosic plant next to a 50 million gallon grain plant and there will be virtually no fossil fuel used to power those facilities,” Broin says.

Listen to all of Heemstra’s interview with Broin here: Jeff Broin, POET CEO

Farmers Harvest Biomass for Cellulosic Ethanol

Farmers in north central Iowa have harvested 61,000 tons of corn crop residue to produce cellulosic ethanol, but delivery to POET’s Project LIBERTY plant in Emmetsburg is contingent on funding of a federal program that provides incentives for biomass production.

Some 100 farmers are waiting for word on the status of the Biomass Crop Assistance Program (BCAP) in the 2012 federal budget before delivering the bales to POET’s 22-acre biomass storage site in Emmetsburg, where the commercial cellulosic ethanol biorefinery is being constructed.

The biomass harvest is 5,000 tons more than last year and represents an additional 15 contracts with area farmers. POET has a target of 285,000 tons of biomass per year for Project LIBERTY to produce 25 million gallons of cellulosic ethanol per year starting in 2013.

“Biomass harvesting is moving along as planned, and I’m confident we’ll have a large and consistent supply of corn cobs and light stover once Project LIBERTY is running,” POET founder and CEO Jeff Broin said. “Both the farmers and POET Biomass personnel have learned a lot in the last few years about best practices in biomass harvesting, and that experience will pay dividends.”

The goal of these early harvests is to streamline the process for harvest, storage and delivery of biomass to Project LIBERTY. Approximately 300-400 bales will be part of ongoing biomass storage research, and up to 1,500 bales could be used for additional research.

DOE Finalizes Cellulosic Ethanol Loan Guarantee

The Department of Energy has finalized a $105 million loan guarantee to support the development of one of the nation’s first commercial-scale cellulosic ethanol plants.

POETThe loan guarantee and financing allows POET to construct Project LIBERTY, a 25 million-gallon-per-year cellulosic ethanol plant in Emmetsburg, Iowa.

“This project represents a pioneering effort to make broad scale deployment of cellulose ethanol a reality,” said Secretary of Energy Chu making the announcement on Friday. ”Producing the next generation of biofuels can not only reduce America’s oil dependency, it can also create vast new economic opportunities for rural Americans.”

POET estimates the project will fund approximately 200 construction jobs and 40 permanent jobs and generate around $14 million in new revenue to area farmers who will provide the corn crop residue.

The first commercial cellulosic ethanol plants will demonstrate that the 1 billion tons of biomass available in the United States can be a major force in overcoming the country’s reliance on foreign oil, POET CEO Jeff Broin said. “Financing has been a key hurdle to getting the first commercial-scale cellulosic ethanol plant up and running. We’re excited to show the world the tangible results of a decade of work by our researchers and engineers,” said Broin.

Project LIBERTY will be located next to the existing grain ethanol plant, POET Biorefining Emmetsburg, and will share roads, land and other infrastructure. Additionally, the cellulosic plant will produce biogas as a co-product, enough to completely power itself and eliminate the majority of the natural gas required to operate the adjacent grain ethanol plant.

POET Forms Biomass Alliance with Earth Partners

POET announced a new alliance this week with The Earth Partners to develop “a sustainable supply of biomass that helps restore degraded land.” The project, called Conservation Biomass, will initially be used for heat and power generation and eventually liquid fuel production.

As part of their ongoing ecological restoration work, The Earth Partners will work with farmers and conservation property landowners to grow and sustainably harvest biomass from land with invasive vegetation or land where restorative plant species are grown. POET will then evaluate the best use of the biomass to generate heat, power or for liquid fuel production.

The initial project will deliver Conservation Biomass to POET Biorefining – Chancellor, a 100 million-gallon-per-year grain ethanol plant in Chancellor, S.D. that burns wood waste and landfill gas in a solid fuel boiler to generate all of its process steam. Burning biomass at the plant to generate power will allow the partnership to test the commercial viability of the Conservation Biomass business model at scale. POET and The Earth Partners will continue to research the potential for utilizing Conservation Biomass sources like prairie grasses for cellulosic ethanol production.

Read the story from POET here.

DOE Biomass Conference This Week

Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack will keynote the Department of Energy 4th annual Biomass Conference on Tuesday.

This year’s conference, Biomass 2011, will focus on topics surrounding the use of biomass as a replacement for petroleum to supply the energy, products, and power markets. The Biomass 2011 theme will explore the new horizons of bioenergy technologies and deployment strategies, business practices, policies, and partnerships that will help sustainably transform the energy landscape.

Among those on the conference agenda is POET’s Project LIBERTY Director Jim Sturdevant who will outline the company’s vision for expanding the reach of its technology to other ethanol producers and new feedstocks. He will also show how the industry will spread to make every state an energy-producing state and what that will mean for America’s economy. Sturdevant will join Richard Wynne, Director of Environment and Aviation Policy for Boeing Company; Henry Bryndza, Director of Biochemical Science and Engineering for DuPont and Mark Maher, General Motors Executive Director for Powertrain and Vehicle Integration in a plenary session “Industry Perspectives on Bioenergy” on Wednesday morning.

Loan Guarentee Offered for Cellulosic Ethanol Plant

The government is paving the way for the nation’s first commercial cellulosic ethanol plant in Iowa.

U.S. Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack made the announcement today of a $105 million loan guarantee to support the development of Project LIBERTY, sponsored by POET and located in Emmetsburg, Iowa.

“This project will help decrease our dependence on oil, create jobs and aid our transition to clean, renewable energy that is produced here at home,” said Secretary Chu. “The innovations used in this project are another example of how we are seizing the opportunity to create new economic opportunities to win the clean energy future.”

“Projects like the one we are announcing today show that our investments in next generation biofuels are paying off,” said Secretary Vilsack. “Project LIBERTY will produce up to 25 million gallons of ethanol per year, create over 200 jobs, and generate millions of dollars in revenue for the local economy. This project is an important step in the Obama Administration’s effort to break our nation’s unsustainable dependence on foreign oil and move toward a clean energy economy.”

According to POET officials, the plant will ultimately produce up to 25 million gallons of ethanol per year, generate approximately 200 jobs during construction and 40 permanent jobs at the plant, and bring approximately $14 million in new revenue to area farmers.