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PHOTO: BLUEFIRE ETHANOL FUELS INC.
Lactobacillus ? Pediococcus ? Acetobacter ? Brettanomyces ?
Klann, chief executive officer of BlueFire Ethanol, displays the different feedstocks the company will use to make cellulosic ethanol through the company’s Arkenol process.
Capital Concerns Cellulosic ethanol plant developers agree there is still substantial capital—whether it involves varying forms of debt and/or equity—flowing into the cellulosic industry in an effort to accelerate projects to commercial scale. “The capital markets perform when the structure is right and when there is a demand market for the end product,” says Arnold Klann, president and chief executive officer of BlueFire Ethanol. The company has broken ground on a 17 MMgy cellulosic ethanol facility near Palm Springs, Calif., and a 3.2 MMgy facility near Lancaster, Calif. Both would use wood wastes, waste plant material and other refuse-derived biomass. “It’s one of those situations where everyone is waiting to see if the equity markets are going to return to some kind of normalcy,” Klann says. “You do have some equity funds today that have billions of dollars with no place to put their money at the moment.” Another source of capital has been provided by the U.S. DOE in the form of federally funded loan guarantees. In March 2007, the U.S. DOE awarded several grants to cellulosic ethanol companies for technology enhancements and to reassess viable economics applicable to commercialization deployment
strategies. Range Fuels and BlueFire Ethanol are two of six companies that have received federal grant money toward their respective projects. According to John May, managing director for St. Louis, Mo.-based Stern Brothers Co., the DOE federal loan guarantee program should be seen as a “lynchpin” for cellulosic ethanol developers looking to gain May financial footing and to scale up their projects. “I think [the DOE grant program] is an indispensible tool for the industry as it moves toward cellulosic ethanol,” he says. BlueFire Ethanol was awarded $40 million and was the first company to draw down on the grant money. Range Fuels received $76 million to construct its Soperton facility. The company also received an additional $100 million of equity from a Series B round and $6 million from the state of Georgia. The company is also backed by venture capital, including Vinod Khosla’s investment firm Khosla Ventures. “With the DOE guaranteeing a portion
ETHANOL PRODUCER MAGAZINE DECEMBER 2008
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