A new biofuels plant in southwest Kansas represents the future of ethanol production in the United States, Energy Secretary Ernest Moniz said.
The $500 million biorefinery in Hugoton is one of only three commercially sized plants in the country that use only plant waste, such as stalks and leaves, for production and thus do not compete for food crops. The second-generation ethanol plant operated by Abengoa, a Spanish multinational corporation, began operating in late September and has the capacity to produce 25 million gallons of ethanol per year.
Moniz said the biorefinery was built in the spirit of next-generation biofuels, solar and fossil technologies that reduce greenhouse emissions. The facility also includes a $150 million electric generation plant that powers its ethanol operations while still producing up to 10 megawatts excess that is sold to the local power grid.
"We work across the entire innovation chain with the idea that we need to push innovation and cost reduction at near, intermediate and long timeframes," Moniz said in a phone interview.
The plant is backed by a $97 million design and engineering grant from the Energy Department and a $132.4 million loan guarantee to build the facility. Moniz said the project reflects his department's approach to funding research on novel conversion approaches for biofuels.
"The goal of the program ultimately is to reduce the cost across the board for emission-reducing technologies," Moniz said. He will attend a ceremony to mark the Hugoton plant's grand opening on Friday.
First-generation ethanol replaced 10 percent of the nation's transportation fuel supply — lessening U.S. dependence on imported oil, increasing energy security and cleaning the air, said Chris Standlee, executive vice president for global affairs for Abengoa.
"But the distinction between first generation and second generation is significant," he added. "Even though we produce the same molecule, the way it is produced and the production process and the feedstocks are significantly different."
The cellulosic ethanol that Abengoa produces at Hugoton is roughly 90 percent cleaner than gasoline, compared to first-generation ethanol that is perhaps 20 to 25 cleaner than gasoline, Standlee said. And the plant is the first to use the company's proprietary enzymatic hydrolysis technology that turns biomass into fermentable sugars, which are then converted to ethanol.
At full capacity, the Hugoton plant will process 1,000 tons per day of biomass providing $17 million annually in extra income for local farmers whose agricultural waste would otherwise have little or no value, the company said. About 80 percent of the plant's feedstock will be irrigated corn stalks and leaves, with the remainder coming from wheat straw, milo stubble and switchgrass.
Moniz said this form of ethanol production represents the way forward for the industry.
"The scalable approach for the future is to be using cellulosic feedstock," he said.
The Hugoton plant employs 76 full-time workers with a payroll of $5 million annually, Standlee said.
Abengoa credited the renewable fuel standard — which requires that transportation fuel sold in the United States contains a minimum volume of renewable fuel — for its decision to build the facility in the United States. It chose Hugoton as the location because the dry climate in southwest Kansas allows for easy feedstock storage without the need to cover bales, he said. Another factor was the large volume of cellulosic biomass available within a 50-mile radius of the plant.