Oil price hikes driving push for alternative fuels

TIFTON - For years, Chickasha of Georgia has been making a tidy profit converting cotton seeds into feed for dairy cows and producing cottonseed oil for the snack-food industry.

More recently, the Tifton-based cooperative owned by some 1,500 cotton farmers has begun processing seeds into a premium form of cellulose used to make flat screens for computers.

But what Chickasha President Andy Borem has been thinking most about lately is adding a step at the end of his seed-oil manufacturing process to turn the material into biodiesel fuel, an environmentally friendly alternative to diesel that is quickly becoming a less expensive choice for consumers.

"We're already doing the hard part - taking a seed and converting it into oil,'' Borem said after leading a tour of his plant off Interstate 75 last month. "That's why we're such a fit to do it, if anybody is.''

Borem is among a growing number of Georgia entrepreneurs showing strong interest these days in the alternative-fuels industry.

Politicians are taking notice, too. The push to develop alternative fuels using Georgia crops is playing a part in this year's race for state agriculture commissioner, as might be expected.

But it's also an issue at the top of the ballot. Both candidates for the Democratic gubernatorial nomination, Lt. Gov. Mark Taylor and Secretary of State Cathy Cox, have touted alternative fuels as a priority.

Cox went so far as to announce an initiative setting a target of making farm-grown fuels 25 percent of Georgia's fuel mix by 2025.

Market forces

Investing more money and effort into finding alternatives to burning fossil fuels has long been on environmentalists' to-do list. What's driving the sudden surge of enthusiasm among political and business leaders is economics.

With oil prices hovering around $70 a barrel, the costs of developing and using alternative fuels like biodiesel or ethanol has suddenly become competitive.

"When oil gets above $40 a barrel, that gives you a good reason to start looking at producing ethanol,'' said Nathan McClure, director of forest energy development for the Georgia Forestry Commission. "At $60 a barrel, there's no question about it.''

McClure and others say Georgia is uniquely positioned with its crop mix to take advantage of the growing demand for alternative fuels and become a national leader in the industry.

Three emerging technologies using different source materials appear to hold the most promise here:

•Biodiesel fuel produced from vegetable oil. Peanut oil is particularly easy to convert into biodiesel.

•Ethanol produced from corn. An industry once concentrated in the Midwest is spreading south with the development of heat-resistant corn varieties.

•Ethanol produced from timber. Georgia has more privately owned timberland than any other state.

"There's all kinds of opportunities,'' said Murray Campbell, a farmer from Camilla who also is president and chairman of First United Ethanol, which plans to build a corn-based ethanol plant with a capacity of 100 million gallons a year. "We are at the cusp of something big.''

Biodiesel advantages

Borem said producing biodiesel fuel from vegetable oil holds the most immediate promise because the technology is more advanced.

"Everybody's talking about making a fuel out of something else, but 98 percent of the industry today is vegetable oil,'' he said. "That's where the industry is today. That's where the investment is.''

While Chickasha is set up only to produce cottonseed oil, Borem said it would be easy enough to switch the biodiesel portion of his operation to making oil from peanuts.

Since Chickasha already has the equipment, he said the plant could produce biodiesel fuel for much less than the $1.20 to $1.50 per gallon it costs to make it from scratch.

But Borem said he still hasn't decided whether to take the plunge. He said if oil prices stay high, he would lean strongly toward launching a biodiesel project.

Campbell talks like a businessman very much ready to dive into corn-based ethanol. First United Ethanol's proposed plant would dwarf a facility now operating in nearby Baconton.

Campbell said the burgeoning demand for alternative fuels in Georgia and Florida due to the two states' rapid population growth can overcome the region's relative lack of corn compared to the Midwest, where the ethanol industry was born.

He said it is cheaper to build a plant where the demand is because it costs more to transport the finished product than the raw materials.

"It's become more efficient to build a plant outside the corn belt and move the grain.'' he said.

Like Borem, Campbell said his product - corn-based ethanol - is more developed than the technology for cellulose-based ethanol, which comes from timber.

Timber holds potential

But proponents of cellulose-based ethanol say it has far greater potential in Georgia.

"Historically, the ethanol business has been in the Midwest and they used a resource that was available to them - corn,'' said Jeff Strane, director of the Georgia Department of Economic Development's Innovation and Technology Office.

"We're in the South. Our natural resource is not corn. It's trees. ... We don't have to import timber like we do corn.''

For now, however, cellulose-based ethanol is still in the laboratory. State agricultural researchers in Tifton are working with the University of Georgia, Georgia Tech and a private company - C2Biofuels - on a process for producing ethanol from pine trees.

"The technology is understood,'' Strane said. "The challenge is how you scale that up from making 10 gallons to, say, a million.''

Strane said the researchers expect to have a commercial facility up and running within two to three years, the first of a series of plants the company hopes to build in jobs-starved rural Georgia.

While cellulose-based ethanol would compete with the corn-based variety, Campbell said the alternative-fuels industry holds such promise that there's room for everyone.

"We have corn. We have timber," he said. "People seem to set this up as an either-or. It's not. It is what Georgia should be doing.''