Leading biofuel company today announced a conditional commitment for a $232.5 million loan guarantee from the U.S. Department of Agriculture to support the construction of a major facility in Oregon.

The Colorado-based company’s first commercial-scale cellulosic biorefinery, a 25 million gallon-per-year facility, will be built across the street from a recently completed demonstration plant in Boardman.

The $390 million commercial plant is expected to create 188 construction jobs, plus an additional 242 indirect jobs for construction and full-time operations.

The USDA’s commitment will allow ZeaChem to move forward with securing financing and beginning construction on the new facility, according to Jim Imbler, president and CEO of ZeaChem. He expects to start building the plant in 2013 and have it come online the following year.

The post ZeaChem lands $232M loan guarantee for Oregon biorefinery appeared first on Daily Journal of Commerce.

The amount of biodiesel and biofuels in the U.S. transportation fuel mix will increase again in 2012, but the amount of cellulosic biofuel, which is made from non-edible plant materials, falls short of original projections.

The Environmental Protection Agency recently finalized the percentage of renewable fuels that all gasoline and diesel refiners and importers will have to blend into their products in 2012. As part of the Energy Independence and Security Act of 2007, the EPA sets fuel standards that steadily increase each year in order to meet a target of 36 billion gallons of renewable fuels by 2022.

The 2012 standards for biomass-based diesel and advanced biofuels are in line with the EPA’s original projections, but a lack of commercial biorefineries for cellulosic fuel contributed to the agency lowering its projection in that category.

Oregon will provide a bit of a boost to the fledgling industry, however. Colorado-based in 2010 broke ground on a 250,000 gallon-per-year biorefinery in Boardman, expected to come online this year. Once the demonstration plant is up and running, the company plans to build another facility across the street that will produce up to 25 million gallons per year. The commercial-scale plant is expected to come online in three years.

But the 2012 standard for cellulosic biofuels, at 8.65 million gallons, is drastically below the 500 million gallons originally planned for 2012. Still, the new target is 2.65 million gallons over the 2011 mandate.

The total volume of renewable fuel proposed for 2012 is 15.2 billion gallons, up from roughly 14 billion gallons in 2011.

The post Cellulosic biofuel requirements fall short in 2012 fuel standards appeared first on Daily Journal of Commerce.

Oregon is becoming an attractive location for biomass plants thanks to a recent extension of tax credits.

Oregon extended its biomass tax credit until 2018, which has made planning for commercial facilities easier.

“It gives our industry and partners the confidence we need that Oregon will support biomass and biochemical production,” said Carrie Atiyeh, public affairs director for ZeaChem Inc., which is building a biorefinery in Boardman. “It’s much more effective than having credits that are only extended by one or two years.”

Construction is 70 percent complete on ZeaChem’s demonstration-scale plant in Boardman. The plant will produce biofuel and biobased chemicals aimed to replace petroleum-based products. Tree farm firm Greenwood Resources is under a long-term contract to provide poplar trees that will be the main feedstock.

The plant is being built in an existing industrial facility at the Port of Morrow, and 75 construction workers are on the job. ZeaChem has an engineering, procurement, and overseeing contract with Kansas City-based Burns & McDonnel. Subcontractors on the project are coming from eastern Oregon, as well as the Tri-Cities area in Washington and a few firms from Portland, Atiyeh said.

ZeaChem is planning a commercial facility across the street from the demo plant that will come online in about three years. The demo plant will have a 250,000-gallon-per-year capacity; the commercial plant will produce up to 25 million gallons per year – scaling up production by 100 times.

The larger plant will bring 275 construction jobs and 65 full-time operations jobs to the Boardman area. ZeaChem has not yet announced any contracts for that project, although Atiyeh said it recently signed contracts that will account for 100 percent of the commercial feedstock.

ZeaChem has completed second-round financing that has raised $40 million, including investments from Valero, one of the largest petroleum refiners in the U.S. The demo facility is supported by a $25 million grant from the U.S. Department of Energy.  ZeaChem is also pre-certified to collect a . Despite the program’s recent scale back, Atiyeh said ZeaChem will almost certainly receive that money as well.

Two electricity-generating biomass facilities are also under consideration. In Klamath Falls, a plant that will produce up to 35 megawatts of electrical power is proposed. Its application for site certification is open for public comment until Aug. 15. Downtown Vancouver, Wash., might also host a biomass facility. Schneider Electric is currently researching the market for the proposed plant’s green electricity and looking into zoning options in Clark County.

The post ZeaChem joins biomass firms with plans in Oregon appeared first on Daily Journal of Commerce.

An ambitious biofuels company this month began pouring the foundation for a demonstration plant – the precursor of a commercial facility – near Boardman.

ZeaChem Inc. will annually produce 250,000 gallons of fuel-grade ethanol from woody biomass at the new bio-refinery. The company recently obtained a guaranteed maximum price for the project under its engineering and procurement contracts with Kansas City, Mo., engineering and contracting firm Burns & McDonnell. That allowed ZeaChem to obtain the remaining money it needed to proceed with the project this month.

Corn-based ethanol producers are bemoaning the loss of a 45-cents-per-gallon federal tax credit that will expire at the end of this year. But production of cellulosic ethanol, which can be made from nonedible plant materials, is still viable, ZeaChem CEO Jim Imbler said.

“The U.S. is like the Saudi Arabia of biomass,” he said. “You can fix the price of your feedstock with cellulosic ethanol in ways you can’t with corn, you stay out of the food-versus-fuel issue and you’re using stuff like wood that’s currently wasted or burned. But we have to be able to compete against crude. We worry more about that than any incentive.”

The ZeaChem demonstration plant will be built on a five-acre site. Waste wood from a nearby poplar tree farm will be used as feedstock for fuel-grade ethanol. The company uses special bacteria to break down woody biomass into sugars that can be converted to ethanol.

“You basically put chopped up trees into a pressure cooker with acid,” Imbler said. “That breaks the wood into sugars, which are converted by a special organism into acetic acid and then ethyl acetate, and on to ethanol. Because our organisms are found in nature, they can eat anything. We’re also testing other locally available feedstock like wheat straw and agriculture waste.”

The Department of Energy this week reported the price of fossil fuels will decline 1.4 percent next month to around $2.29 per gallon. In comparison, ZeaChem’s fuel has a capital cost of less than $4 per gallon and an operations cost of less than $1 per gallon. But Imbler hopes that technological advances will soon lead to lower costs.

But producing cellulosic ethanol is simply not cheap, according to Ron Jones, global practice leader for bio-refining markets for Burns & McDonnell. Construction and operation of the demonstration plant will cost approximately $73 million, according to Carrie Atiyeh, director of public affairs for ZeaChem. Commercial-scale cellulosic ethanol facilities are so large and expensive that companies often need to first build smaller, demonstration plants before they can ramp up.

“This is a rapidly growing market,” Jones said. “The CEO of BP Biofuels recently gave a speech projecting the need for 220 of these facilities by 2030.”

ZeaChem declined to reveal the amount of the guaranteed maximum price contract with Burns & McDonnell for the demonstration facility. However, a $25 million Department of Energy grant last year was awarded for only construction of the components to process the fuel. The cost of the facility, Jones said, will be abated somewhat by use of modular building components and commercially available manufacturing equipment that can be modified.

Burns & McDonnell will rely exclusively on Northwest subcontractors, including Swaggart Brothers of Hermiston, Fought & Co. of Tigard and Precision Industrial Contractors Inc. of Woodland, Wash. Burns & McDonnell will hire additional subcontractors as construction continues, Jones said.

ZeaChem has an option to lease 30 acres of land at the Port of Morrow near Boardman once the company is ready to construct a commercial facility. The company is looking around the country for potential commercial facility sites, but Imbler said Boardman is a prime location. Ethanol production will begin at the demonstration plant in the third quarter of 2011, Imbler said.

“From where we are now, we have barge and rail access and can hit anything on the West Coast,” Imbler said. “Our next plant would look similar to the Pacific Ethanol facility in Boardman. Our hope is that our commercial facility will go right in next to the demonstration plant.”

The post Boardman bio-refinery a test run for big business appeared first on Daily Journal of Commerce.

If you thought fuel didn’t grow on tress, you’d be wrong. ZeaChem Inc., a Colorado-based biorefinery developer, will be converting Oregon poplar trees to cellulosic ethanol fuel at its new biorefinery in Boardman.

The company just broke ground on the $73 million, 250,000 gallon-per-year biorefinery, which will produce ethanol as well as chemicals such as acetic acid and ethyl acetate. Many states and cities today require a 10-percent blend of ethanol in all gas because it is considered a more sustainable fuel source than oil.

GreenWood Resources, which owns a tree farm near Boardman, has partnered with the company to provide the poplar trees used to make the biofuel. Kansas City, Missouri-based Burns & McDonnell will build the new facility

ZeaChem President and Chief Executive Officer Jim Imbler says his company’s process for creating biofuels produces fewer carbon emissions than processes for creating fuel from oil and uses less water than other ethanol production methods. The method can also accommodate a wide variety of feed stocks, Imbler said.

“It doesn’t matter what feedstock we use in the front end,” Imbler said. “Whether its switch grass, hard wood or wheat straw from the area, our economic model is to have a dedicated energy crop supplemented with whatever is available in the neighborhood.”

The project is being funded with a $25 million grant from the US Department of Energy as well as funds from ZeaChem Inc. The facility is expected to be online and producing fuel by 2011.

The post Boardman facility focuses on ethanol appeared first on Daily Journal of Commerce.