US DOE to provide $160-mil for biorefinery construction

Washington (Platts)--22Feb2006

The US Department of Energy will provide $160-mil over three years to
help build up to three domestic refineries to convert biomass into
transportation fuels, Energy Secretary Samuel Bodman said Wednesday.

     Bodman, during a visit to an Archer Daniels Midland's ethanol plant in
Decatur, Illinois, also highlighted a Department of Agriculture announcement
of nearly $188-mil in loan guarantees and grants for renewable energy and
energy efficiency projects.

     "This funding will support a much-needed step in the development of
biofuels and renewable energy programs," Bodman said. "Partnerships with
industry like these will lead to new innovation and discovery that will usher
in an era of reduced dependence on foreign sources of oil, while strengthening
our economy at home."

     The $160-mil solicitation is part of President George W. Bush's Biofuels
Initiative, which promotes the use of non-food based biomass, such as
agricultural waste, trees, forest residues and perennial grasses, in the
production of transportation fuels, electricity and other products. Among its
goals, the initiative aims to accelerate research and make ethanol
from cellulosic materials cost-competitive, which officials say offers
the potential to displace up to 30% percent of US fuel by 2030.  

     The goal of the solicitation is to demonstrate that commercial
biorefineries can be profitable once initial construction costs are paid, DOE
said. There is a $100-mil cap on any single-demonstration award, and projects
are required to include industry partners to pay for 60% of the costs.

     Agriculture Secretary Mike Johann's said in Las Vegas Wednesday that his
department would make available $176.5-mil in loan guarantees and nearly
$11.4-mil in grants to support investments in renewable energy and energy
efficiency improvements by agricultural producers and small businesses.

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