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After decades of talk, the ethanol industry is building multimillion-dollar refineries in several states - including Iowa - that will use corn plant residue, wood scraps and even garbage to produce the fuel additive.
The breakthrough comes at a key time for the industry, after the drought heightened criticism about the vast amount of corn used to brew up ethanol rather than be transformed into animal feed or other foods.
The corn crop already was smaller than expected because of drought last year, and livestock groups were especially critical of how 40 percent of the crop being diverted toward ethanol caused corn prices to soar.
The new cellulosic ethanol technology could quiet that criticism while also making use of material largely seen as worthless.
Experts said it hasn't been easy.
“You're fighting against millions, perhaps hundreds of millions of years of evolution and that's sort of the secular equivalent of going against the word of God,” said C. Ford Runge, a University of Minnesota professor of applied economics and law.
Making ethanol from corn is relatively simple, as kernels are cracked and fermented. But to produce ethanol from the woody and fibrous parts of plants, scientists had to figure out a way to break lignin - the tough fibers that plants have developed through evolution to make stems, trees and cornstalks stiff - from the cellulose.
They then must extract the plant's sugars and convert them into ethanol.
Efforts to make that leap have made for a punch line in the industry since the 1980s. Cellulosic ethanol, everyone would say, is just a few years away.
But high oil prices eventually drove companies to spend more on research and development. The government jumped in, too. The 2008 farm bill provided $1 billion in financial incentives to encourage cellulosic development.
“You cannot underestimate the impact on the world of $80- or $90- or even $100-a-barrel oil,” said Monte Shaw, executive director of trade group Iowa Renewable Fuels Association.
Oil futures first reached $100 a barrel in January 2008, marking a quadrupling of price in five years since 2003. Oil trades now at around $95 a barrel.
The push for more ethanol production comes amid federal requirements that the petroleum industry mix 36 billion gallons of the additive into the nation's fuel supply by 2022.
The Environmental Protection Agency has required that 16 billion gallons of that ethanol be cellulosic, providing another incentive for companies to pursue cellulosic research. Only about 25,000 gallons of cellulosic ethanol were produced last year, but 10 million gallons are expected in 2013.
In January 2012, the U.S. Department of Agriculture approved a $25 million conditional loan commitment for a $59.5 million, 55,000-square-foot biorefinery to be built in Blairstown.
Fiberight of Cantonsville, Md., hopes to have the facility completed by the end of 2013. It is being built alongside Fiberight's existing ethanol plant, acquired in November 2009 from Xethanol LLC.