The economy and low gas prices derail another project
By Susan Wilson
An $80 million dollar cellulosic ethanol plant in Colorado was postponed indefinitely based on the current economy and gas prices. Two green energy companies, Suncor and Lignol announced last October that they were entering a joint venture to build the Colorado plant.
Today, Lignol announced that the joint venture was off because of the precarious state of the economy. Last October, the Department of Energy (DOE) awarded the future partners a $30 million grant to build the Colorado plant.
Ross MacLachlan, President and Chief Executive Officer of Lignol stated, “We are currently exploring various alternatives for the US$30 million grant from the DOE including the re-examination of project time-lines, site locations and the participation of other industrial partners. We will report on the outcomes of these discussions as they unfold.”
Interesting considering that Lignol is a Canadian company that decided that the United States plant it received the $30 million to build, was too big a risk.
Lignol is the owner of a special “modified solvent-based pre-treatment technology” for converting non food cellulose into ethanol. The process also yields a number of other useful biochemicals like lignin.
The original process now owned by Lignol was originally developed by General Electric and Repap Enterprises. The Alcell process as it was named, was originally developed as an improved method for creating wood pulp and paper. The process is made up of three stages.
Since the process was originally intended to create pulp for paper mills, the ethanol created was not seen as significant. However, with the steep increase in the price of gas over the last year and the emphasis on finding cleaner fuels, the process is seen as a excellent method for turning non food feedstock into biofuel.
Maybe if the government offered another $50 million, Lignol would be interested in building the Colorado plant. However, with the low cost of gasoline, biofuels are no longer cost effective to produce.
Since most biofuel companies are canceling building plans or closing plants because of the current economic climate, fossil fuel should be shooting up any day now. By the time biofuel companies recover, if they recover, it will be too late.
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February 10th, 2009
What you say is true, fossil fuel is cheap enough now that it is difficult to justify building out the needed infrastructure and delivery mechanisms.
I don’t know that is a bad result. It seems a bit myopic to bemoan lower oil prices because it makes more costly and unproven tech unattractive. The answer is to bring the cost of biofuel in line with current fossil fuel.
I seriously doubt you will see oil shooting up any day now. Global economic conditions and the lower demand currently makes it unlikely.
People are pretty happy with more reasonable fossil fuel costs. There is little infrastructure in place to disperse alternative sources.
Higher fuel costs also drive efficiencies in utilizing dead dinosaur juice. Appliances, cars, insulators, lubrication etc… have all become more efficient.
We are eerily in the same environment now as 1980. A severe contraction in the US economy and cheaper oil. It adds up to the resources being used to jump start the economy and puts alternative energy way down the list of priority.
February 10th, 2009
Well, when the government has to offer so many subsidies just to get this ‘eco friendly’ gas to be produced it’s a risk, especially with a slow economy. They need to make this stuff more cost effective.