United States Agriculture Secretary Ed Schafer has predicted that the US Department of Agriculture will make the first loan guarantee for a commercial-size cellulosic ethanol plant before the Bush Administration wraps up business next week.
If that plant, a woodchip-based plant on which Range Fuels has broken ground in Soperton, Georgia, lives up to the promise of becoming a commercial success, Mr Schafer believes it will advance the timetable for commercial production of cellulosic ethanol in the US by two years.
"If that investment gets made, if that facility gets up and running, it will jump by two years, I believe, the goal of producing, on a commercialised basis, ethanol from non-corn or non-food sources," Schafer said.
The breakthrough on woodchips could begin a cascade into the production of ethanol from other cellulosic feedstocks, he predicted, adding "it could explode the opportunities for second-generation biofuels".
Mr Schafer said USDA was "rushing its regulations" for the biomass loan guarantee, a program authorised in the new Farm Bill, which allows government guarantees of up to $250 million per biomass facility.
He said it was his intent to complete the loan guarantee for Range Fuels' 100 million-gallon-per-year plant before leaving office.
The plant will produce ethanol from wood chips using the company's thermo-chemical conversion process.
Mr Schafer said he had visited Range Fuels' pilot plant in Denver, Colorado, and said the new process "works".
The company has used its two-step process to produce renewable fuels from trees in Colorado that were killed by the pine beetle and, in Georgia, from pine and hardwoods, according to the Range Fuels web site.
Range Fuels' process "converts non-food biomass into a synthesis gas, or syngas, using heat, pressure and steam, after which the syngas is passed over a proprietary catalyst to yield mixed alcohols. These alcohols are then separated and processed to maximize the yield of ethanol of a quality suitable for use in blending with gasoline to fuel vehicles," the web site explained.
According to a company statement, the Range Fuels plant in Georgia "will initially use wood from nearby timber operations and leftover wood residue over time.
"Construction on the first phase of the plant is scheduled to be completed by the end of 2009, with the production of ethanol and methanol at a run rate of less than 10 million gallons per year to follow in 2010.
"At full scale, the Soperton plant is permitted to produce more than 100 million gallons of ethanol and methanol each year."
Despite his optimism for a breakthrough in commercial cellulosic fuel production, Mr Schafer said this was not the time to let up on production of corn-based ethanol.
Even though the corn-based ethanol industry is in pain from high commodity and falling gasoline prices, he said public policy is on target by supporting supply and demand for corn-based ethanol.