Klann sees bright future for renewable fuel from ag waste

Arnold Klann, president and CEO of BlueFire Ethanol, says his California-based cellulosic business will use ag waste to make alternative transportation fuel as soon as the methods exist to harvest and store it.

The industry will benefit Midwest farmers, he said "Our types of plants would help them by giving them another profit...," he said during a phone interview.

Initially in 1992, Arkenol -- another company owned by Klann -- wanted to use ag waste as the primary feedstock for their cellulosic ethanol. They found certain ag residuals contained lignin, a "glue" that holds the sugar molecules together. By burning the lignin, they could efficiently unlock the sugar molecules to make ethanol.

However, ag waste wasn't considered "credit worthy" by investors because it wasn't harvested or stored for a cellulosic ethanol application.

This made investors -- who are generally hesitant to get involved with new technology as it is -- unwilling to support the project.

Because funding couldn't be found for an ag waste project, BlueFire switched its focus to converting urban waste for alternative transportation fuel. The company wants to build biorefineries on or near landfills, waste collection and waste separation sites to reduce transportation costs and use a reliable, available feedstock source.

Klann said the infrastructure to secure ag waste for cellulosic ethanol is almost in place.

"They're working on it," he said. He sees it becoming a reliable feedstock in the next couple years.

In the meantime, BlueFire is in the final development stages of its first production facility in Corona, with the help of a $40 million grant from the Department of Energy.

It is one of 16 companies, out of 143, that have been invited to put in a formal application for a $200 million DOE loan guarantee under the Energy Policy Act Title XVII program to build a 55 million gallon urban ethanol plant at an as of yet unannounced location.

"It's basically a high concentration acid that's used to dissolve the cellulose into components," such as sugars, lignin and residual minerals, said Klann. Sugar is used for ethanol while lignin is burned for power and steam generation. The acid is re-used so the plant's waste is reduced.

A plant in Japan that converts wood and ag waste to ethanol has paid licensing fees to use their patented process since 2002. Klann said seeing the technology in practice has helped BlueFire receive funding for their U.S. projects.

Eventually, BlueFire wants to build plants across the world.

While the United States has tremendous energy needs, Klann said everyone is dealing with the world's declining oil supply and some countries are challenged with the need to import 100 percent of their energy. Ethanol facilities could make a positive social and economic impact, he said.

"Our technology allows us to help those countries and help those people get the country stabilized and improve that country as a whole," said Klann.

Here in the United States, Klann said both ethanol from corn and cellulose will be needed to meet the country's alternative fuel goals.

"I don't see (corn and cellulosic ethanol) as competing, rather it's the next step in the process of meeting the administration's requirement," he said, referencing President Bush's call to replace 20 percent of the United State's energy needs with alternative fuels by 2017.