Biofuel Company Close To $1 Billion Fed Loan

A cellulosic biofuels project, valued at more than $1 billion and consisting of two refineries in Mississippi and another each in Texas and Georgia, appears to be on its way to reality, thanks to a federal government loan guarantee program.

The developer, KiOR, said it had received a term sheet from the U.S. Department of Energy’s Loan Guarantee Program to help build the refineries, which will produce what the industry calls “drop in fuels” for gasoline and diesel. These are fuels that can be used as direct substitutes without having to change a gasoline or diesel engine. In a FAQ for the project, KiOR said it figured the plants could produce some 250 million gallons of the stuff annually from “wood supplies that are sustainably harvested and also used by each of the state’s pulp and paper industries.”

cellulosic biofeuls, KiOR

image via KiOR

Those pulp and paper industries have been hit hard in recent years, leading to high unemployment in the region, so the biofuels plants are eagerly anticipated. KiOR envisions 14,000 jobs created during construction, then 4,000 permanent jobs when the plants are up and running. But there’s still work to be done before that comes to past.

“While the term sheet is an important step in the process, we recognize that more work lies ahead to finalize the loan guarantee and there is no assurance it will be issued until the loan is closed,” said Fred Cannon, president and CEO of KiOR.

Pete Danko is a writer and editor based in Portland, Oregon. His work has appeared in Breaking Energy, National Geographic's Energy Blog, The New York Times, San Francisco Chronicle and elsewhere.

  • If this plant(s) will be realized, it would probably be one of the biggest biorefineries ever build. The plants in the pulp and paper industry are already very large and need a lot of capital investments, but almost 1 billion $ sounds amazing.

    It would be interesting if the produced gasoline will be a first generation biofuel, like bioethanol and biodiesel or even a seconde generation biofuel like BtL (biomass to liquid). Because of the large-scale I suppose it will be a 1.generation plant, because I never heard of a 2.generation plant even close to this size.

    Thank you for the info, it would be great to hear about the developements of this project in the future.

  • This is the way we should go further. We need to save environment and biodiversity together with shrinking job opportunities…
    I hope that this can be adapted in Canada as well.