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E3 Biofuels is in Chapter 11

December 5, 2007

Posted by Nathanael Greene in Moving Beyond Oil , Solving Global Warming

Tags:

biofuels, cleantech, e3biofuels, ethanol, markettransformation

I was surprised to learn that E3 Biofuels in Mead Nebraska filed for bankruptcy back at the end of November. I had been watching the project as a potentially great example of how to maximize the benefits of ethanol from corn and also more generally of smart industrial ecology.

The project, which started operations back in late June but never reached full capacity, integrated local corn, ethanol production, a CAFO, and a manure digester. The ethanol refinery took corn from the neighboring fields and produced ethanol and distiller grains, which were fed wet to the cattle in the CAFO. The cattle produced the manure, which was digested into methane to power the refinery and anhydrous ammonia, which was used to fertilize the corn fields. (The company's web site is still active and has a nice little flash video that goes over the approach.)  The approach wouldn't obviate the economic limitations of corn, but it would dramatically reduce greenhouse gas emissions. It made a ton of sense.

The project's spokesperson says the shutdown is temporary, but they also say they're going to sue the construction contractors, which won't be quick.

According to the The Omaha World-Herald the problem was mechanical.

But problems plagued the plant even before it started operations, [E3 spokesman R. J.] Wilson said. An explosion in a boiler created damage that has kept production from reaching capacity.

"The inability to reach full capacity has made it difficult to achieve the necessary economics," Wilson said.

At the grand opening, Gov. Dave Heineman said the plant would "move Nebraska to the forefront in the renewable-fuels arena." Owner Dennis Langley said he hoped to develop as many as 15 of the plants around the country.

The technology for the closed-loop system is sound, Wilson said.

"It was simply a mechanical failure which was beyond our control."

I certainly hope the technology is sound, but as Robert Rapier points out, a feature of the technology is greater complexity and that makes it riskier. I just hope the bad economics of ethanol mean that this project or something like it will never have a chance now.

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