BlueFire Ethanol plans to begin construction on a new $130 million refinery to make fuel from waste in about a year, CEO Arnold Klann told Greentech Media.
The company still has to pin down financing for the plant in Mecca, Calif., near Palm Springs.
BlueFire has already received part of a $40 million grant from the U.S. Department of Energy (DOE) to help pay for the plant.
Klann said the company plans to raise more money starting in the first quarter of next year.
BlueFire expects the plant to begin turning woodchips, yard clippings and other usable garbage from landfills into ethanol in 2010, he said. The plant will be capable of producing up to 19 million gallons of ethanol per year from some 700 metric tons of greenwaste per day.
“We are taking what society values the least and converting that into liquid fuels,” Klann said.
BlueFire, based in Irvine, Calif., is one of many companies in the United States that aims to convert plants, garbage and woodchips – feedstock that aren’t used for food – into ethanol for powering cars.
The idea to turn nonfood feedstock into fuels may be attractive, particularly given the loud debate over whether using corn to make ethanol has contributed to rising food prices. But no one has yet to build a commercial cellulosic-ethanol plant in the United States.
Some companies have had trouble raising funds because of a slow economy, the difficulty of securing government permits and investor skepticism about making money from costly biorefinery projects (see Plants for Two Cellulosic-Ethanol Plants Scrapped).
Aside from the $40 million DOE grant, BlueFire, which is traded over the counter under the symbol “BFRE,” raised $15 million last December by selling shares and warrants to Quercus Trust.
BlueFire’s 130-million project would be the second project for the company, which recently received a permit from Los Angeles County to build its first refinery close to a landfill near Landcaster.
BlueFire plans to break ground on the Ladcaster facility in September and start producing ethanol in August of 2009, Klann said. The Lancaster plant is expected to cost about $30 million and to produce up to 3.2 million gallons per year.
The company has lined up two customers for the fuels produced at the Landcaster plant, said Klann, who declined to name the customers.
In spite of the small size of the Lancaster plant, BlueFire is promoting it as the first commercial facility in the country to turn biowaste into ethanol. The competition will be intense, however.
Last month, Fulcrum BioEnergy in Pleasanton, Calif. said it would begin building a $120 million ethanol plant close to a landfill about 10 miles east of Reno in Nevada (see Fulcrum BioEnergy Turns Trash Into Treasure). Other ethanol companies, such as Coskata and Range Fuels, also are developing projects to make fuels from garbage (see Coskata Picks Pennsylvania for Pilot Plant and Coskata Begins Building Demonstration Plant).
“There is competition. but no one is real,” Klann said. “A lot of companies are going after it. Only time will tell who’s the right company and who isn’t.”
For its second plant, BlueFire will have to get a permit from Riverside County. BlueFire had originally planned to build the second refinery at the El Sobrante landfill in Corona, which is also in Riverside County.
But it turned out that the time it would have taken to prepare the site and to get the permit was far longer than BlueFire had anticipated, leading the company to seek and receive approval from the DOE in late 2007 to move the project to Mecca, Bluefire Chief Financial Officer Christopher Scott said.
The company announced last October that Petro-Diamond, a subsidiary of Mitsubishi Corp., would buy all the ethanol produced by the Mecca plant. It also said that Colmac Energy would buy the lignin from the Mecca plant and use it as boiler fuel for another biomass power plant in Riverside County.
Both companies have signed letters of intent to buy BlueFire’s products, but final sales agreements haven’t yet been signed, Scott said.
BlueFire aims to produce ethanol at less than $1 per gallon starting with the Mecca plant, Klann said.
Several other companies, such as Coskata and the Alternative Energy Technology Center, also are targeting costs below $1 per gallon (see Cellulosic Firms Match Coskata’s Claims).
And Manta Venture Group and Northwind Ethanol on Tuesday announced they are forming a joint venture, called Mantra NextGen Power, that is reaching for the same goal.