This article in the Atlanta-Journal Constitution quotes CEO Mitch Mandich saying that Range Fuels, Inc., a cellulosic ethanol company started by Sun Microsystems co-founder Vinod Khosla, will be the first “profitable” cellulosic plant in the world. But the article also notes that Range Fuels is in line to get a $76 million grant from DOE, plus another $10 million or more in “tax abatements, cheap land and grants” courtesy of the State of Georgia.

Lots of failing firms would look healthy if injected with that much “free” money from taxpayers. Yes, yes, I know. Cellulosic ethanol is an “infant” industry and thus has to be protected from those big bad corn ethanol distillers, er, I mean, oil companies. Alas, most infant industries never grow up.

Wood-chip ethanol gets state’s go-ahead
Treutlen County factory also would produce methanol

By Dan Chapman
The Atlanta Journal-Constitution
Published on: 07/03/07

Range Fuels Inc. — a dot-com billionaire’s bet that pine trees can be turned into fuel — has received key environmental and construction permits from Georgia for a proposed $225 million cellulosic ethanol plant in Treutlen County.

Monday’s announcement lends credence to the Colorado-based company’s contention that it will be the first in the United States to manufacture the commercially unproven energy.

Range Fuels, started by Sun Microsystems co-founder Vinod Khosla, plans to break ground on its 100-million-gallon-a-year factory in Soperton this summer.

“This is an innovative new technology, and we believe we will be the first in the United States, and possibly the world, to build a profitable plant,” said Mitch Mandich, the company’s CEO. “We believe the [technology] will be — and is — feasible.”

Rising oil prices and growing disenchantment with ethanol from corn have fueled the nation’s push into the derivation of energy from pine trees, switchgrass, corn stover, hog waste, garbage, kudzu and more. President Bush proposes the usage of 35 billion gallons of alternative fuels by 2017, a nearly sevenfold increase.

Nationwide 121 ethanol bio-refineries are operating, and 75 are under construction, according to the Renewable Fuels Association. Virtually all, though, use corn, which critics claim is neither energy-efficient nor cost-effective, to produce ethanol. These plants, if built, would produce 12.6 billion gallons of ethanol a year, the trade group estimates, far below what Bush and others deem necessary.

In February, the Department of Energy said that six cellulosic ethanol plants were eligible for $385 million in construction and production grants. Range Fuels is in line for $76 million.

“Corn ethanol is the least desirable form of ethanol in production now,” said Jay Hakes, who ran the federal Energy Information Administration from 1993 to 2000.

“To get real benefits of both oil independence and reduction of greenhouse gases, we need to move as quickly as possible to cellulosic ethanol,” said Hakes, now director of the Jimmy Carter Library and Museum. “That’s why these plants are good news.”

For rural Georgia, in particular. With 24 million forested acres, most in economically hard-hit areas, Georgia has embraced Range Fuels with tax abatements, cheap land and grants that could top $10 million. Forestry officials estimate the state’s trees can produce up to 2 billion gallons of cellulosic ethanol a year.

Range Fuels will primarily use wood chips in Soperton to produce ethanol and methanol, another fuel. Mandich says a tractor-trailer load of Georgia pine chips has been shipped to Colorado for testing. The company is also researching ways to make commercially feasible ethanol from olive pits, switchgrass, old tires and two dozen other raw materials.

Its proprietary technology eliminates enzymes, an expensive ingredient in cellulosic ethanol production, in favor of a “thermo-chemical conversion process,” according to the company. Range Fuels plans to house its ethanol maker in a modular contraption that could be transported to where the trees grow or the hogs go.

“If they’re right that their [technology] is commercially viable, then it moves the ball forward a lot faster than most people in the energy industry thought it was moving,” Hakes said. “It’s encouraging that investors want to invest in it. All of us are hoping that it’s successful.”

Mandich wouldn’t disclose his private company’s fund-raising efforts other than to say “we will continue to be active in the financial markets through the rest of the year.