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Biofuel push may take root in Ga.

By DAVID ADAMS
Published February 8, 2007

ADVERTISEMENT [Times photo: David Adams] Forestland owner Hugh Gillis Jr. welcomes development of a biomass fuel plant in Treutlen County, Ga. The Fueling Station: A tampabay.com blog providing practical news on the latest alternative energy solutions.

ATLANTA - Less than two weeks ago when President Bush told the country it needed to produce a whopping 35-billion gallons of biofuels a year by 2017, he may have had Georgia on his mind.

Wednesday, Georgia Gov. Sonny Perdue announced that a plant west of Savannah would soon begin turning pine bark and tree limbs into ethanol, a venture that could turn the state's pine country into the biofuels Saudi Arabia of the South.

"It's going to change the geopolitical nature of the world when you can take a passive waste product like biomass from Georgia and turn it into an alternative fuel," Perdue said.

Colorado-based Range Fuels says it plans to invest $200-million in a production plant capable of generating 10-million gallons of clean-burning ethanol.

Range Fuels says it will be the first company in the United States to build a commercial-scale ethanol plant using cutting-edge cellulosic technology. Unlike more common corn-based ethanol refineries, the cellulosic process can turn almost any organic material - from tree bark to municipal solid waste - into fuel.

Consultations between Bush administration officials and Range Fuels, among others, helped persuade Bush to highlight cellulosic ethanol in his State of the Union speech. Vinod Khosla, the company's founder, has been knocking on doors in Washington for months preaching the merits of cellulosic ethanol.

The cellulosic breakthrough could revolutionize global ethanol production by dramatically increasing the usable raw material, which in the United States is now limited to corn. It would also play a major role in reducing U.S. dependence on foreign oil.

"Together we are really on a historic march to use the natural resources of our country to help promote energy independence, to reduce global warming and to create jobs," said Range Fuels head Mitch Mandich, a former top executive with Apple Computer.

'A perfect storm'

In a race to succeed, several U.S. and foreign companies are experimenting with cellulosic systems. Most are still developing smaller pilot plants with no commercial output.

The technology has been around for several decades, and until recently it was considered a long shot. But the odds have narrowed greatly in the past two years as the science, once largely confined to the lab, has begun to attract major investors and federal research dollars.

"There is a perfect storm in our country today," Mandich said. "A lot of the bright minds from Silicon Valley are being focused on green energy."

Some of those companies are already looking at agriculture-rich Florida as a promising future site for cellulosic ethanol.

"We are talking to a number of people who are looking at sources of ethanol from cellulosic material," said Florida Agriculture Commissioner Charles Bronson, a proponent of biofuels. "We've got the same capability as Georgia," noting the state has 17-million acres of forest.

Range Fuels' innovative cellulosic technology is part of the reason Bush set such an ambitious biofuels goal for 2017.

The president's 35-billion gallon target is strikingly similar to a paper published last year by Khosla, venture capitalist and former founding CEO of computer giant Sun Microsystems.

Khosla, who has invested in seven cellulosic ethanol startups, credits the Bush administration with being alert to the emerging technology. "They (the White House) looked at all of this before deciding it made sense," Khosla said. "They did a lot more homework than people realize. They looked at doability."

U.S. officials recognize the role Khosla plays, though they say he is not alone.

"Vinod is a voice," said Alexander Karsner, Assistant Secretary of State for Energy Efficiency and Renewable Energy. "There are a lot of other folks." He said he sees a growing confluence of science, industry and the financial sector over biofuels.

But Karsner stressed the government's role was not to prescribe "the correct technological pathway," rather to help create the right conditions for products to reach the market.

Capacity breakthrough

Today, the U.S. produces 5-billion gallons of ethanol annually, less than 4 percent of the 130-billion-gallon gasoline market. Ethanol production is limited to the corn belt. But corn cannot supply more than 15-billion gallons annually, according to Mark Yancey, head of projects at BBI International, a Colorado biofuels development company.

But with cellulosic ethanol, production capacity could leap as high as 50-billion gallons, more than one-third of current U.S. gasoline consumption.

The high cost of transportation and the lack of pipelines has also limited the spread of biofuels beyond the Midwest.

Cellulosic ethanol breaks down that barrier by allowing almost any state to use its native agriculture.

Range Fuels plans to start out with a relatively modest 10-million-gallon ethanol plant in Treutlen County (population 6,700), located between Macon and Savannah. The company and state officials say there is enough waste wood from the timber industry to produce as much as 2-billion gallons of ethanol annually, more than one-third of the state's current gasoline consumption of 5-billion gallons.

Typically, 25 percent of the pine tree goes to waste when it is felled, said John Lee, director of the Treutlen County Development Authority.

Georgia has 24-million acres of forestland, covering almost two-thirds of the state. Almost one-third of that is planted with pine timber, with between 500-700 trees per acre.

"I always knew there was value in all that waste," said Hugh Gillis Jr., 57, whose family owns 40,000 acres of forest land.

"But I never imagined I could fuel my truck with it."

Fast Facts:

Range Fuels Inc.

History: Formerly called Kergy Inc.

What it does: A green energy company based in Broomfield, Colo., that converts biomass into fuel-grade cellulosic ethanol using clean energy technologies. Biomass includes all plant and plant-derived material like wood chips, agricultural wastes, grasses, cornstalks, manure, municipal garbage, sawdust and paper pulp. Does not use food products like corn.

Company leaders: Vinod Khosla, founder. Samir Kaul, director. Mitch Mandich, CEO, director.

Source: Kergy, Inc.

Vinod Khosla

Personal: Born Jan. 28, 1955, in New Delhi, India. Married; four children.

Resume: Co-founder Daisy Systems; co-founder, CEO Sun Microsystems, 1982-1986; general partner Kleiner, Perkins, Canfield and Byers venture capital firm, Menlo Park, Calif., 1986 - ; founder Khosla Ventures, 2004 - .

Pioneer: He and partners have been involved in founding or growing billion-dollar businesses such as Juniper Networks and AOL, along with pioneering scientific work, such as the first complete sequencing of a plant genome.

Sources: Who's Who.

[Last modified February 8, 2007, 00:15:22]