Range Fuels locks-in $100 million investment
By Gargi Chakrabarty, Rocky Mountain News (Contact)
Published April 1, 2008 at 5:58 p.m.
Updated April 1, 2008 at 5:58 p.m.
Range Fuels Inc. has raised more than $100 million in private funds, propelling the Broomfield company forward in its quest to turn wood waste into motor fuel.
Backed by Vinod Khosla, co-founder of Sun Microsystems and an ardent supporter of bio-fuels, Range Fuels said Tuesday the money will be spent completing a cellulosic ethanol plant under construction near Soperton, Ga.
The plant is scheduled to go online in 2009 and will produce 20 million gallons of ethanol annually during the first phase.
An air-quality and building permit allows the company to expand the plant to 120 million gallons a year.
“Range Fuels has an enormous market opportunity and is the company closest to commercializing cellulosic ethanol,” said Walther Lovato, portfolio manager at Passport Capital, a San Francisco, Calif.-based firm that led the private financing drive.
Lovato said Range Fuels will produce cheaper ethanol, compared with both corn ethanol and biochemical processes.
Investors include Khosla Ventures, Leaf Clean Energy Co., BlueMountain and Pacific Capital Group, with participation by the California Employee Retirement System.
Range Fuels last March received $76 million in grants from the U.S. Department of Energy, on top of $6 million from Georgia. It was among six companies developing bio-fuel technologies that got a total of $385 million in federal funds to help build their pilot projects.
The U.S. Department of Energy expects cellulosic ethanol, or ethanol derived from the nation’s abundant forest byproducts, agricultural wastes or energy crops such as switchgrass, to be as cheap to produce as corn ethanol by 2012.
Academics, scientists and Wall Street investors are pouring millions of dollars into researching the fuel, convinced that cellulosic ethanol could replace the nation’s oil purchases from foreign nations.
The United States has an estimated 1 billion tons of biomass available each year, enough to make 100 billion gallons of cellulosic ethanol. That potentially could replace a large percentage of the 140 billion gallons of gasoline the nation currently uses each year.
In contrast, traditional corn ethanol could at best replace only 20 billion gallons, about 14 percent of gasoline use a year, the U.S. Department of Energy estimates.
Range Fuels’ decision to build its plant in Georgia, instead of Colorado, was mostly due to the large quantity of woody biomass available in the Southern state.
Jim McMillan, a bio-fuels scientist at the National Renewable Energy Laboratory in Golden, suggested that Range Fuels’ proprietary thermo-chemical technology is among the more promising for making cellulosic ethanol.
The technology involves gasifying biomass byproducts under intense heat and converting the synthetic gas into liquid fuel.
“They obviously haven’t told us about their technology as much as their investors,” McMillan said. “Obviously, people like what they are hearing and seeing.”
chakrabartyg@RockyMountain News.com or 303-954-2976
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April 1, 2008
8:22 p.m.
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italiaboy9 writes:
I wonder someday if they discover that the process of turning biomass into ethanol will actually increase global warming. What shall we do????!! OH NOES!