At a time when UT is facing $21 million in academic budget cuts, it's making ready to put big new bucks into a pilot plant for producing ethanol.
In partnership with DuPont Danisco, the university is due to break ground this fall on the new facility in Vonore that will test the feasibility and economic viability of extracting ethanol from switchgrass. UT has committed $40 million toward construction costs, and DuPont Danisco will make an as yet unspecified capital contribution as well as the technology for refinery operation.
UT's share of the operating expenses will stop at the plant's gate with delivery of the many thousand tons a year of switchgrass needed to yield the 250,000 gallons of cellulosic ethanol the pilot plant is expected to produce.
Over the next two years, the university is planning to contract with growers for some 5,000 acres of the scraggly crop. If the contracts adhere to the $450 per acre basis on which initial three-year contracts for 725 acres were made this year, the annual cost of the raw material could run to $2.5 million. Its bulkiness requires that the switchgrass be grown in proximity to the processing plant in order to hold down on transportation costs.
The logistics of growing, hauling, and storing the much larger quantities of switchgrass required for commercial-scale cellulosic ethanol production are just one of many challenges that stand in the way of making it economically viable. Others include developing more efficient processes for extracting the sugars that are distilled into ethanol from plants that are much more resistant than the corn from which most ethanol is derived today, as well as more efficient enzymes for distillation of higher ethanol yields at a lower cost.
DuPont Danisco brings proprietary technologies to the partnership that will support the pilot plant and hopefully lead to breakthroughs that will justify construction of a commercial-scale facility 100 times its size (25 million gallons annually) by 2012 or 2013.
"We know how to do it [i.e. make cellulosic ethanol], but there has to be a more efficient way, and the pilot plant is designed to get us there," says Kelly Tiller, who has emerged as UT's point person on the project. Tiller is a 39-year-old assistant professor of agricultural economics who recently gained the impressive title of CEO of Genera Energy, a company UT formed to spearhead its biofuels initiative.
"There is no magic bullet," Tiller says. "The biggest challenge is pulling all of the pieces together in an integrated way. You've got to have the production of feedstock integrated with the production of useful product...that consumers can afford and that are available where they need them when they need them."
If everything goes as envisioned, private industry will take over realization of a huge biofuels industry in Tennessee that will create thousands of jobs and benefit thousands of farmers. "DuPont Danisco has agreed that if certain conditions are met they will build a commercial facility in Tennessee. If they don't, then we will have opportunities to gain access to their technology to make available to other companies that would locate here," Tiller says.
Estimated cost of a 25-million-gallon biorefinery is on the order of $200 million, and investments on this scale would have to be replicated many times over to meet a stated goal of producing 500 million gallons of ethanol in Tennessee by 2022.
That goal represents the state's proportionate share of a national goal of 35 billion gallons that would displace more than 20 percent of the gasoline consumed in the U.S., which presently totals about 150 billion gallons a year. Well over half the ethanol total is expected to be derived from cellulosic plants; the potential for increasing the seven billion gallons a year presently derived from corn is considered to be limited because of the inflationary pressures it would place on the price of corn-fed livestock.
The federal commitment to fulfilling this goal includes grants for research and construction of pilot plants as well as tax incentives that in effect subsidize the price of ethanol. The Department of Energy has announced that it will invest up to $385 million in six corporate cellulosic ethanol plants across the country—of which the UT/DuPont venture wasn't one. But DuPont Danisco's technology has drawn upon research conducted by DOE's National Renewable Energy Laboratory in Colorado and may benefit from bioenergy research now being conducted at Oak Ridge National Laboratory funded by a $125 million DOE grant.
One appeal of partnering with DuPont is that the chemical giant has a track record of success in commercializing its research through joint ventures. The prime example close to home is the DuPont Tate & Lyle plant in Loudon that's now producing 100 million pounds a year of propandial derived from corn that displaces petrochemicals in a variety of industrial uses and consumer products.
One has to hope the company will be equally successful in its cellulosic ethanol ventures and that not just the state but the nation as a whole will benefit from the big bet that UT is making on biofuels.