Alternative-Ethanol Firm Gets Funding
Wall Street Journal:
A group of investors is placing one of the biggest bets yet on a type of ethanol production that doesn’t involve food crops.
Range Fuels Inc., a start-up in Broomfield, Colo., on Tuesday is announcing $130 million in new equity funding. The money will go toward the first phase of construction on a plant in Soperton, Ga., which is expected to create ethanol using wood material that typically goes unused when timber is harvested. The company, which has received a $76 million grant commitment from the U.S. Department of Energy, expects the plant to be the first of its kind to operate on a commercial scale.
The effort comes as publicly traded ethanol companies have taken a pounding in the markets, reflecting rising corn prices and a widening debate over the environmental impact of the cultivation, processing and shipping necessary to bring the fuel additive to market. Other types of biofuels made from food crops — or from crops grown on land that environmental activists argue would be better used for growing food — also have come under attack.
Amid the concerns, investors are racing to back companies that are developing technology to convert cellulosic biomass, or fibrous plant material, into ethanol. And some investors argue that Range Fuels and others using what is called a thermochemical process to convert cellulosic material have the best chance of success. “It is dramatically cheaper,” said Vinod Khosla, a Silicon Valley billionaire whose personal investment vehicle is backing the start-up and four others using cellulosic feedstocks.
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