Blair in the mix for ethanol’s future


June 8th, 2012

Blair, NE – A company with a new facility in Nebraska wants to be part of the next step for biofuels. Novozymes’ new plant in Blair, north of Omaha, will produce enzymes, a key ingredient to unlock ethanol from corn or biomass, like corn stocks or wood pellets. The plant was built with an eye toward what is ahead for ethanol.

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Last week, in a cavernous room filled with a maze of shining, new, steel pipes, Nebraska governor, Dave Heineman, and Blair mayor, Jim Realph, opened the valves to empty a seed pot into one of the tanks. It was like hitting the on-switch for what Novozymes called the largest enzyme factory in North America.

A vial of ethanol enzyme was displayed on a tour of a Novozymes laboratory. (Photo by Grant Gerlock, NET News)

Novozymes is based in Denmark and operates in 130 countries around the world. In Blair, it is the newest resident of an expansive bio-refinery campus situated between the city and the Missouri River. The plant is a $200 million investment, including a $28 million federal tax credit. More than 100 people have been hired to keep it running.

Novozymes is in the business of making enzymes, chemical compounds that are used to make ethanol. Enzymes are proteins which convert starch in corn or cellulose in corn stalks into sugars. Those sugars are then fermented into ethanol.

The Blair facility will soon ship semi-tankers full of enzymes to conventional corn ethanol plants. But company representatives were also eager to talk about what they hope to do next, make enzymes for new kinds of ethanol made from raw materials other than corn. Novozymes has developed some of the most advanced enzymes used to make cellulosic ethanol from corn stalks and other plant material. Speaking outside the factory, Peder Holk Nielsen, head of Novozymes global enzymes business, said the Nebraska plant was built with room to grow.

Enzymes are a byproduct of the fermentation carried out in these giant steel tanks. (Photo by Grant Gerlock, NET News)

“We are really hoping that the cellulosic ethanol business will soon take off in the US and that could be a real game changer both for Novozymes and for a plant like this one,” said Nielsen.

Federal law mandates the use of advanced biofuels like cellulosic ethanol as a way to make more fuel without using more corn. Four years ago, at the time of the groundbreaking for Novozymes’ plant in Blair, the official goal was to produce 500 million gallons of cellulosic ethanol in 2012. Instead, the industry has struggled to keep up with this year’s revised goal of only 8.6 million gallons. Mike Cleary, Director of the National Bioenergy Center at the National Renewable Energy Laboratory, believes the economic downturn played a hand in holding back the industry.

“Some of that delay was certainly caused by the economic downturn and the inability to get financing for putting up the first commercial plants,” Cleary said.

Now cellulosic ethanol is beginning to catch up. The first commercial scale plants in the U.S. are finally being built and should go online next year. Three new plants are planned in Iowa. One is being built in Kansas. Instead of grain, the source of fuel will be wheat straw or corn stover – corn cobs and stalks left over after harvest.

“Corn stover, corn residue, is the largest single volume of agricultural waste in the United States,” Cleary said. “These are pioneer plants. These are the first of their kind in terms of being able to use a lignocellulosic feed stock instead of starch from corn to produce ethanol.”

Within a year or two, Cleary said production of cellulosic ethanol could run up to 100 million gallons. That is still a fraction of the 15 billion gallons of corn ethanol produced each year. But according to Thomas Nagy of Novozymes, it is reasonable to believe cellulosic ethanol can catch up because it is no longer a question of technology or cost.

“It’s not a far-fetched dream that, maybe in 5 or 10 years,” Nagy said. “It’s actually possible to do it now. What we need to have here is the first plants coming in trying to build it up. Then you have the second wave coming in where you start to make substantial amounts of ethanol from plant material, cellulosic material, rather than the corn itself.”

Even with its stalled development, the final goal for cellulosic ethanol is the same – 16 billion gallons per year by 2022. For Mike Cleary, the biggest question between now and then is about policy. How much support can the government afford to meet its own targets on renewable fuels?

“It is, relative to technological cost, it’s the dominating factor.” Cleary said.

The Advanced Energy Manufacturing Tax Credit that helped build the Novozymes plant in Nebraska is up for renewal. A dollar-per-gallon tax credit for cellulosic producers could also expire at the end of the year, before the new plants even go online. And the decision by regulators to allow E15, a stronger mix of ethanol, at the pump is being challenged. Those and other policy questions may add some uncertainty, but Novozymes plans to keep Blair in the mix.

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