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Todd Neeley DTN Staff Reporter

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Monday 02/08/10

Loan Guarantee Process Long for Cellulosic Ethanol

An example of how the federal loan guarantee program has been ineffective for furthering the development of cellulosic ethanol is the delays that wood-to-ethanol developer Range Fuels Inc. has faced, according to Earth2Tech.com.

U.S. Energy Secretary Steven Chu fast-tracked some $25 billion in loans and loan guarantees, created as part of the Energy Policy Act of 2005.

The process already has taken more than a year for Range Fuels.

The company secured a conditional commitment for an $80 million loan guarantee from USDA in January 2009.

Just last week Range Fuels filed to raise the $80 million in debt financing to build out its first commercial plant in Soperton, Ga.

Range Fuels completed half of its plant as of October 2009.

Loan guarantee recipients are required to secure their own share of financing to qualify.

(Earth2Tech.com, Feb. 5, 2010)

(http://earth2tech.com/…)

DTN: Last week Obama administration officials talked about the need to streamline the loan guarantee program to make it more user-friendly. The ethanol industry doesn’t like the program because it employs a one-size-fits-all system that isn't favorable to cellulosic ethanol. Even if the rough spots are smoothed over in the program, it still provides little incentive to lenders to put their money at risk on new cellulosic ethanol technologies. We've heard stories that some companies have unsuccessfully sought out these types of loans from more than 100 lenders in some individual cases. (Todd Neeley)

Posted at 9:42AM CST 02/08/10 by Todd Neeley

Comments (4)

Is this another example of "constructive interference" that our law makers and governmental officials build into any alternative fuel support programs that may be detrimental to the interests to "the oil industry"? It is apparent that "Big Oil" is pervasive in our society, and probably cannot be dislodged.

Posted by Robert Lawler at 7:00AM CST 02/09/10

Maybe it is "Big Oil" in collusion with "Big Wall Street"? Not so much. Chalk it up to the slow-moving wheels of behemoth government.

Posted by Joe Sagraves at 9:46AM CST 02/09/10

Secretary Chu doesn't seem to care about Celulosic Ethanol. He thinks all Electric Cars are the answer and wants to jump directly to that by 2015. He is projecting an enormous drop in battery prices and increased performance by then. Even if these extremely optimistic projections are true what about the massive infrastructure changes. Everywhere you see a gas station today a you would need a charging station or battery exchange station. Nobody has even seriously looked at this. This is not possible to do that quick. We are going to have to take all the steps along the way and Celulosic Ethanol is one of those steps.

Posted by Earl Retherford at 10:52AM CST 02/09/10

Maybe DoE and USDA move a little slow, but lets look at who they are giving money to. Here's one other way to look at Range Fuels -- They first got $76 mil from DoE 3 years ago to build a 40 million gallons per year (MGY) ethanol plant. A couple of years ago Range said the first phase would be only 20 MGY, then decreased that estimate to 10 MGY, and then said that 10 MGY would be 50-50 ethanol and methanol. Then they got the $80 mil USDA loan guarantee a year ago. Last week the EPA RFS2 final rule says that now Range is only going to have a 4 MGY unit up and running this year, and it is all methanol!!! So Uncle Sam is into these guys for $160 million and all he gets is 4 MGY of methanol?? I'd like to see a DTN story on why Range has spent so much money (they've raised over $100 mil from private sources) to get so little. Seems like a Bait and Switch scheme?? Isn't the main problem with how slow cellulosic ethanol is evolving is that it is just too expensive??

Posted by john laufenberg at 5:31PM CST 02/09/10

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	July2010
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11	12 Aventine Races to Finish Ethanol Plant Racecars run Faster, Cleaner on Ethanol Study Finds Lowland Switchgrass Varieties Outperform Upland New Mobile Biofuels Processor Developed University of Toledo Receives Grant to Study Algae Biofuels 4 more...	13 EPA Considers Slash in Mandate for Cellulosic Ethanol Didion Ethanol to Help Water Quality as Part of Agreement Archer Daniels Midland Inaugurates Nebraska Ethanol Plant Proposed Wisconsin Ethanol Plant Plan Stalls Oakfield Capital Acquires Biofuel Company from BP	14 Group Pushes for E100 Ethanol Exports Down 58 Percent in May Ethanol tax Break may Ride on US Energy Bill Pacific Ethanol Shares Take Hit Ethanol from Waste Means big Dollars 1 more...	15 Greene: 'CBO Report Shows Folly of Corn Ethanol tax Credit' Ethanol Group Backs Phase out of Blenders Credit Ethanol Blamed for Toro Snow Blowers Recall Blog: 'They Need an app for Zero-Ethanol Fuel'	16 Cellulosic Ethanol Industry: BP's Verenium Acquisition a 'Good Move' Ethanol Industry Scrambles to Keep Incentives EPA Still Betting on Cello Energy to Meet Next-gen Biofuel Target Novozymes, Dedini to Produce Cellulosic Ethanol in Brazil	17
18	19 SDSU Researcher Studying Reuse of Ethanol Enzymes Huge Ethanol Refinery Opens in Denmark DOE: Ethanol Blend Wall to Hurt Corn Prices Pipeline Project Gets Boost Livestock, Poultry Sectors Call for End of Ethanol Subsidies	20 BP Acquires Verenium's Cellulosic Biofuels Platform Danisco Sues Novozymes in London Court Over Enzyme Patent U.S. Automakers on Track for More Ethanol Vehicles Study Shows Ethanol Production, Corn Demand Will Grow With or Without Subsidy and Tariff	21 Ethanol Production Restarts at Sunoco Plant Tanzania Expert: Cassava Can Help Beat Poverty Green Plains, BioProcess Algae to Expand Algae Project WSU Works on a Better Jet Fuel House Committee Weighs Cut of 20 Percent in Ethanol Subsidy	22 Dire Warning Issued for Loss of Ethanol Subsidy State Senate Candidates in Minnesota Oppose Ethanol Subsidy Arizona Sees Increase in Ethanol Fuel Violations Ethanol Elevates Kinder Morgan's Second Quarter	23 Ethanol Opponents Form Coalition to Oppose E15 Oil Spill Puts Target on BP's Back FAO Warns Against Jatropha Biofuels Hype Commercial Airlines Hope to get 1 Percent of Fuel from Biofuels by 2015 Glacial Lakes Energy Adds Corn Receiving Station 1 more...	24
25	26 Wall Street Journal: 'Survival of the Fattest' Report: 'Ethanol Pumps $2.5 Billion into Minnesota Economy' Oil Spill Boosts Alabama Ethanol Sales Philippines to Allow Ethanol Imports Biofuels to Help Clean up Chernobyl Land 1 more...	27 Ethanol, Agriculture Groups Push for E12 Has VEETC Really Helped Ethanol Industry? The Economics of US Ethanol Policy Biomass Innovation Park set for Construction Biofuels Firm Raises $110 Million for Biomass Crude Technology	28 Zimbabwe Government to Allow Private Investment in Energy Sector EU Shows Growth in Ethanol Production, Use Blender Pumps Get UL Certified Green Car Passes Test at NSS Groups Rally to Fight Against E15	29 Isolux Corsan: Contract for Colombia Biofuel Facility New Tool for Improving Switchgrass Novomer Awarded $18.4M in Federal Stimulus Funds Alfalfa Joins Feedstock Choices for Ethanol Agriculture to Benefit from E15	30	31

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