Congressman Boswell works to help Blairstown Biofuels Firm

16th September 2010  |    |  0 Comments

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BLAIRSTOWN, IA – Congressman Leonard Boswell and his staff worked to help Fiberight LLC with their efforts in converting waste in ethanol at a meeting at the Blairstown ethanol plant last Thursday.

Boswell met with Craig Stuart-Paul, CEO of Fiberight LLC, said his firm is working to “repurpose” an existing plant, as opposed to building a new, first-generation plant.

He has a pilot plant in Virginia, where his firm has shown that waste can be converted into ethanol. At first, his firm considered moving the ethanol plant in Blairstown to Virginia, but they decided to keep its demonstration plant in Blairstown, after seeing International Paper was nearby with 30,000 tons a year of mill sludge. ADM and Cargill are also nearby. The plant is now running on waste sugars that won’t go into the food market.

Stuart-Paul explained, “You just don’t build a biofuels plant and hope that it works, especially with cellulose. There is a lot of technology and a lot of moving parts. We’ve been through lab scale with a pilot plant in Virginia. Now what this is is a demonstration and reference plant. We’re going to prove all of the processes at full scale at one location and say, ‘Yes it works and you can make money doing it.’   He added that Blairstown site could also be taken to commercial scale.

Just the day before, the firm was awarded an Iowa Power Fund grant, because of the many small landfills in Iowa that are looking at alternative ways for disposal. He observed, “Waste trash has a lot more energy in it than anything else, and it’s already on a truck somewhere. It’s collected 365 days a year, and there’s a lot of it.”

Stuart-Paul first came to the United States from England in 1988, building the first microbrewery in Maryland. He then went into the waste and recycling business, where he gained experience on how to sort and separate trash. “The problem is you always end up with this stinky, organic goosh – food waste and you name it. There’s never been an outlet for it.” What he has worked on is converting that food and paper waste into an organic pulp and liquid. The liquid is run through an anaerobic digester. Sitting next to a 1,100-head dairy farm that provides the methane, which provides all the steam energy into the plant, which takes the cellulosic material and converts it into ethanol. He hopes to link all these things together onto one site.

The biomass is rendered and reduced in a rotating pressure cooker, and it is turned into a pulp. It’s deodorized and sterilized and sent to a wash system. He hopes to convert 300 tons of waste a day.

“It’s dumped on the floor. We push it off onto a conveyor belt, and off it goes,” he said of the process. It is fully automated, with just a couple of people on the floor, he said.

Once the mass is converted into sugars, they can make biofuels.

Boswell asked what he could do to help. “You don’t have to sell me on the idea of going to alternatives. I’m sold. I’m there,” he said.

Stuart-Paul said the financial markets are still somewhat broken, and most banks have “blacklisted” anything to do with ethanol plants. “If we’d been doing this five years ago, there’d be people falling all over themselves to give us cash.”

Boswell said a payback needs to shown, as he was shown with the payback on the Empire State Building, which had a payback of five to six years.

“You’re a part of the green revolution. I think there is money there,” Boswell told Stuart-Paul.

Stuart-Paul said the payback is less than five years based on the costs they have.

They have process guarantees and interested investors, and data to back it up. The question is if it can be scaled to full scale. “The only way to do that is to build a full-scale plant,” Stuart-Paul related. He said it’s been proven it works better at full scale than at the pilot scale.

Where Fiberight needs help is in filing for the USDA 9003 program, which is targeted at biorefineries. “The USDA wanted us to apply. The program could not have been written MORE for us. The problem is you have to get a bank to do it.”

They went through the list of 54 banks given by the USDA. They went to 65 banks. He said, “Sixty of them said ‘Ethanol? No.’” This is happening though it is not corn ethanol, but renewable biofuels.

Financing is based on an 80 percent shortfall, in which if there’s a $10 million loan, USDA will make up $8 million of the loan.

Stuart-Paul is suggesting an approach of selling secured and unsecured bonds, and the only way to get a secured bond is to buy an unsecured bond. “The USDA hasn’t quite got their heads around that. Because essentially the program is a good program, but it’s disconnected.” He said the local people are good to work with. The problem is the policy in Washington, D.C. where tweaks need to be made to the 9003 program.

He wants to get a dialogue with the USDA and the banking community to better align the current issues, and to meet with higher level banking issues. “We just need someone to bully their way through the disconnect to make this thing happen,” Stuart-Paul said.

Boswell vouched for US Secretary of Agriculture Tom Vilsack’s role in alternative energy, saying, “We were in the legislature together. He’s really sincere about the alternatives and investing out in rural areas. He said this one of his high, high priorities.”

Steve Gerber, who runs the Blairstown plant, said the plant now employees 15, and hopes to employ 35 to 40. “Of course, it was zero before we bought it, because it was closed down,” Gerber observed.

Stuart-Paul asked about the energy bill. Boswell said a lot hinges on the results of Nov. 2.

Stuart-Paul also asked for help with the Department of Energy. There are a lot of proposals for $200 million to $250 million plants. “They just won’t get built. There’s too much capital risk.”

After several phone calls to USDA State Rural Development Director Bill Menner’s office, Boswell learned of a meeting with directors from several Midwest states this week in the Amanas. They plan to tour the facility as part of their meeting.

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