Georgia looking to become ethanol hot spot
Tree supply makes state natural fit for fledgling industry

SOPERTON - When Colorado-based Range Fuels started looking for a suitable site to build the nation's first cellulose-based ethanol plant, Georgia came calling.

"They told us they had the perfect location," Mitch Mandich, the company's CEO, said last week during a groundbreaking ceremony for the plant in a clearing off Interstate 16 in Treutlen County.

"But we had to understand if there were enough wood resources here in the area. ... We found out there's a reason why there was a festival here last week called the Million Pines Festival."

But even as Range Fuels begins construction on the first commercial application of a promising new technology for producing ethanol, work is well under way in Southwest Georgia on a facility that will make ethanol from corn, a more established fuel stock.

Like Range Fuels, the goal of First United Ethanol in Camilla is to produce 100 million gallons of ethanol per year as a more environmentally friendly alternative to gasoline that ultimately will reduce U.S. dependence on foreign oil.

The first phase of the $225 million Range Fuels plant, with an annual capacity of 20 million gallons, is due to come online by the end of next year, creating 70 full-time jobs in rural Soperton.

First United expects to begin its operations shortly before then, by early next fall.

"We're doing something that's a proven technology," said Murray Campbell, president and chairman of First United Ethanol. "Backers and investors understand the technology and are comfortable with it. ... (But) I think there's room for both corn and cellulose."

Last week in Soperton, Gov. Sonny Perdue made it clear where the state's sentiments lie.

Wood plentiful

While Georgia takes a back seat to Midwestern states in growing corn, its 24 million acres of timberland rank second in the country.

That means a lot of wood wastes - such as wood chips, sawdust and paper pulp - that can be converted into ethanol.

"Right now, when people think of bioenergy, they think of Iowa and corn ethanol," Perdue said. "But we're shifting the focus to Georgia and cellulosic ethanol. It's more efficient. It has no impact on our food supply. It adds value for our farmers, and it keeps wastes out of our landfills."

The federal government also is bullish on cellulosic ethanol.

The U.S. Department of Energy has signed a $76 million agreement with Range Fuels designating the Soperton plant one of six across the nation that will demonstrate the commercial viability of producing ethanol with fuel stocks that are not part of the food supply.

"Cellulosic ethanol contains more net energy and emits significantly fewer greenhouse gases than ethanol made from corn or other feed stocks," Energy Secretary Samuel Bodman said during last week's ceremony.

However, cellulosic ethanol - unlike the corn-based variety - is very much a work in progress.

For one thing, the jury is still out on which process for converting cellulose to ethanol will ultimately prevail.

Researchers at the University of Georgia and Georgia Tech are working with C2Biofuels on a pilot plant that uses a different process than the one being pioneered by Range Fuels.

Either way, at this stage of the technology's development, cellulosic ethanol production requires a huge upfront capital investment.

Corn ethanol is also easier to market. It's found in "E85" fuel, a blend of 85 percent ethanol and 15 percent gasoline, that is sold at filling stations across the country.

On the other hand, Georgia's relatively anemic corn production means corn-based ethanol entrepreneurs like Campbell face the high costs of shipping in much of their stock from out of state.

Corn needed

Campbell said that hurdle could be overcome if Georgia farmers could be convinced to grow more corn. He said the new federal farm bill should help because it includes a provision encouraging peanut farmers to rotate their crops more often.

But state officials are determined to push what they see as Georgia's natural advantage in marketing cellulosic ethanol.

A new state grant program unveiled last week is aimed at making E85 fuel more readily available here.

Until an E85 pump came online 10 days ago in Smyrna, the only E85 fuel to be found anywhere in Georgia was in Perry.

Under the new initiative, station owners could receive up to $20,000 to convert pumps to E85, or up to one-third of the project cost, whichever is less.

While corn-based ethanol dominates the E85 industry, state officials see no reason why that has to continue.

The grant program is designed to foster the spread of E85 fuel containing cellulosic ethanol.

"Conceptually, Georgia's goal is to grow the food stock here, produce the ethanol and biodiesel in the state and consume it in the state," said Shane Hix, spokesman for the Georgia Environmental Facilities Authority.

"As our production rises in the state, our need for more stations increases."