POET to Use Corn Cobs - Not Natural Gas - to Power Cellulosic Ethanol Plant

POET has figured out what the rest of the corn-based ethanol industry has failed to grasp: relying on price-volatile fossil fuels to power its plants is bad for business. POET announced Wednesday it will use corn cobs -- specifically the liquid waste created in the cob-to-fuel conversion process -- to power its cellulosic ethanol plant in Emmetsburg, Iowa.

Why is this small step so important? The world's largest ethanol maker is moving towards a sustainable business model that is necessary for survival in an industry plagued with bankruptcies, triggered last year by low gasoline prices, skyrocketing corn and energy costs and a global credit crunch.

The traditional model -- using fossil fuels to power ethanol plants -- places far too much reliance on a volatile commodity. And as Robert Rapier over at R-Squared points out: the industry must get away from inputs that track gasoline if it ever hopes to break free from subsidies.

That's not to say this latest project won't rely on government support -- aka dollars -- to get it going. The $200 million cellulosic ethanol plant in Emmetsburg was funded in part by the Department of Energy. And Sioux Falls, S.D.-based POET is working with the DOE to find ways to help farmers buy equipment needed to harvest the corn cobs, which are typically left on the fields, CEO Jeff Broin said during a conference call Wednesday at the Fuel Ethanol Workshop & Expo in Denver, Colo. The company already has 40 farmers in the Emmetsburg area who are willing to collect corn cobs, Broin said.

But the project could be successful since POET is tapping into a product it already as ample access to.

POET is producing cellulosic ethanol using corn cobs as a feedstock at its pilot plant in Scotland, S.D. The company recently installed an anaerobic digester that will use the liquid waste, made during the cellulosic ethanol process, to produce methane gas. For further description, POET made a short documentary on its plant. Eventually, the digester will be installed at the Emmetsburg plant, dubbed Project Liberty. Methane gas produced via the digester will power the Project Liberty plant as well as an adjacent grain facility. The Liberty plant in Emmetsburg is on schedule to produce 25 million gallons of cellulosic ethanol a year in 2011. It also will produce 100 million gallons of corn-based ethanol.

DuPont and Danisco, in a joint venture, also are building a pilot cellulosic plant that will use corn cobs, and later shift to switchgrass, according to Agriculture Online.

Broin also announced at the expo the launch of a new biomass division devoted entirely to the collection, transport, storage and delivery logistics for corn cobs. Scott Weishaar, the company's vice president of commercial development, will head POET Biomass.

Of course, the success of cellulosic ethanol producers and their ability to meet federal mandates starting in 2010, hinges on the Environmental Protection Agency raising the current 10 percent ethanol-gasoline blend wall to 15 percent, Broin said. The federal Renewable Fuel Standard mandates 100 million gallons a year of cellulosic biofuels starting in 2010. The target rises from there to 250 million gallons/year in 2011.

"If we don't move that blend wall, cellulosic ethanol will be impossible to finance," Broin said during the conference call.

See BNET's previous coverage of the biofuels industry:

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