Motor fuel from wood tested at Denver plant

Gargi Chakrabarty

Published October 24, 2008 at 12:05 a.m.

Text size

Photo by Brian Lehmann © The Rocky

Bud Klepper, left, chief technical specialist at Range Fuels, gives Agriculture Secretary Ed Schafer a tour of the pilot plant.

More Energy

More stories »

An inconspicuous, 25,000-square-foot pilot plant in Denver holds the key to the nation's energy independence.

Or at least that's what supporters of Range Fuels say.

Among them is U.S. Agriculture Secretary Ed Schafer, who toured the plant Thursday and touted its importance to help wean the country from its addiction to foreign oil and rely instead on domestic alternative fuel.

Broomfield-based Range Fuels plans to open a commercial plant near Soperton, Ga., next year to turn wood waste into fuel using a proprietary technology it has been testing at the Denver plant since January.

Schafer said the falling price of oil should not deter investors or the government from alternative and renewable fuel, and companies such as Range Fuels with "breakthrough technology" deserve support.

"This is a concern we have, that as oil prices come down, the pressure comes off of finding renewable resources," Schafer said. "We need to make sure that we don't slow down but push forward . . . so when oil prices come back up again, we have energy independence."

The Department of Agriculture is looking to guarantee loans of up to $240 million per company developing alternative energy, Schafer said.

Range Fuels CEO Mitch Mandich said the company has yet to apply for those USDA loans.

Backed by Vinod Khosla, co-founder of Sun Microsystems and an ardent supporter of biofuels, Range Fuels is not short of funds.

Public and private investors - Khosla Ventures, Leaf Clean Energy Co., BlueMountain and Pacific Capital Group, with participation by the California Employee Retirement System - all have poured money into the company.

So far, Range Fuels has raised more than $150 million in private funds, said Bud Klepper, inventor of the technology and the company's chief technical specialist. That's on top of $76 million in grants from the Department of Energy and $6 million from the state of Georgia.

A big chunk of the money is being spent at the Georgia plant. Scheduled to go online in 2009, it will produce less than 10 million gallons of ethanol during the first phase, Mandich said.

The United States has an estimated 1 billion tons of biomass available each year, enough for 100 billion gallons of cellulosic ethanol. That potentially could replace a large percentage of the 140 billion gallons of gasoline the nation uses each year.

Mandich said Range Fuels' plants will produce cheaper ethanol compared with corn ethanol, and become self-sufficient in energy, but he declined to reveal how much water would be used.

He said the company has secured sites in other parts of the Southeast to build more plants if the Georgia plant becomes successful.

Klepper, who began experimenting with the technology in the 1980s at a site adjacent to the pilot plant, said he initially was wary of venture capitalists but is happy with the way Khosla, Mandich and others have helped shape the company.

Range Fuels has hired engineers from Australia, New Zealand, India, Canada and other U.S. states to produce cellulosic ethanol that's priced competitively to corn ethanol in 2009 - way ahead of the Energy Department's forecast of 2012.

"I am very grateful that Range Fuels has not spared any expense to get the best talent around the world to make this happen," Klepper said.

Subscribe to the Rocky Mountain News