Biofuel complex in works for state
Posted on Tuesday, August 26, 2008
The tiny southeast Arkansas town of Jerome in Drew County would be the launching pad for a $ 236 million biofuel complex that would use algae as one its raw materials, if the plans of a North Carolina developer become reality.
Site preparation has begun for the first of two biodiesel plants, each capable of producing 10 million gallons of fuel annually, said William Horton, president of The DFI Group Inc., a Raleigh-based real estate and commercial development company.
The plants would cost about $ 18 million each to build and take about eight months to complete. They would use a variety of raw materials — including oil extracted from algae grown in former catfish ponds, other oil-bearing plants and animal fats, Horton said.
A third facility, to be built nearby in Ashley County, would produce 110 million gallons of ethanol annually from cellulosic biomass, including “algae cake,” the material that remains after oil is extracted; dedicated energy crops, such as switchgrass; crop residues and logging slash, Horton said. The ethanol plant would cost about $ 200 million to build, he said. Purchase of the land for that plant is being negotiated.
Jerome Bio-Refinery LLC would be owned by an investor group that includes one Arkansan, Phillip Baugh of Monticello, Horton said.
Baugh is the president of National Cottonseed Inc., a 4-year-old business that stores and ships cottonseeds and grains from Jerome, which is on the Union Pacific Railroad’s main line. The Port of Yellow Bend, on the Mississippi River, is 18 miles away, he said.
“This is an ideal location for alternative fuels,” because of the nearby transportation, cropland and catfish ponds, Baugh said.
Many Arkansas catfish farmers this year have been exiting the business because escalating feed and fuel costs haven’t been offset by higher prices.
“Within a 50-mile radius of Jerome, there’s about 25, 000 acres of ponds,” Horton said.
Algae is especially desirable because “you get two products,” Horton said: oil for biodiesel and cellulosic material for ethanol. “You don’t waste anything.”
Marginal farmland near Jerome also would be ideal for switchgrass cultivation, he said.
Horton, who has been trying to build an ethanol plant in North Carolina for more than 20 years, said he has a contract to sell all of the ethanol and biodiesel that Jerome would produce.
Equipment for the plants would come from Stuttgartbased Agri Process Innovations Inc., making it possible to blend raw materials as commodity prices fluctuate, Horton said.
The Jerome biofuel complex would be the first of six for Horton nationwide. The others are planned for West Virginia, South Carolina, North Carolina, Virginia and Texas, he said.
Algae is considered appealing for biofuel production because it grows quickly and wouldn’t require the use of good farmland, and certain species contain extremely high amounts of oil relative to other sources, such as soybeans.
From 1978 to 1996, the U. S. Department of Energy conducted extensive research into the production of biodiesel fuel from algae.
Last October, the National Renewable Energy Laboratory in Golden, Colo., said it would collaborate with Chevron Corp. to develop specific algae strains that could be harvested and processed into transportation fuels.
Cellulosic material has been touted as preferable for biofuel production because it is abundant and widely dispersed throughout the country. Cellulosic feedstocks also are viewed as environmentally friendly.
There is a catch, though. To date, no commercially viable method of making fuel from either algae or cellulosic biomass has been proven.
At least 16 U. S.-based start-up companies are looking at using algae to make biofuels, said Nathan Stone, a researcher at the Aquaculture / Fisheries Center at the University of Arkansas at Pine Bluff.
To succeed, they must grow and harvest a high oil-content algae, Stone said.
“Most of the algae growing in Arkansas catfish ponds in the summer months are ‘blue greens,’ and they don’t store lipids,” he said.
Michael Popp, an agricultural economist at the University of Arkansas at Fayetteville, who is unfamiliar with the Jerome project, said growing algae for biofuel production would be particularly challenging in outdoor ponds.
“That’s not a very controlled environment,” so limiting production to the one desired algae species could be difficult, he said.
The lack of rail access to the Port at Yellow Bend is another “giant problem,” said state Rep. Allen Maxwell, D-Monticello, who has helped arrange meetings for Horton and Baugh with the Arkansas Economic Development Commission, Gov. Mike Beebe, Agriculture Secretary Richard Bell and U. S. Rep. Mike Ross.
“But their idea is that they would build a pipeline to the port,” Maxwell said.
“We’re going to work real hard to make this thing succeed,” he said.
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