DOE Closes $132.4M Ethanol Loan Guarantee

Just days after backing the nation’s first commercial-scale cellulosic ethanol plant, the U.S. Department of Energy (DOE) is throwing its support behind what will apparently be the second such plant: The DOE said today it closed a $132.4 million loan guarantee to Abengoa Bioenergy to build plant No. 2 – where corn cobs, leaves and husks will be processed into biofuel – in Hugoton, Kan., about 90 miles southwest of Dodge City.

The financing for the project joins a host of loan guarantees closing before the DOE’s Section 1705 program for renewable energy development wraps up today. The program has been under fire in the wake of the Solyndra bankruptcy, but the Obama administration says it has been helping advance clean energy while also stoking job growth. The DOE said the Kansas project will result in 300 construction jobs and 65 permanent jobs.

cellulosic ethanol plant, abengoa

image via Shutterstock

The DOE announcement included the usual collection of infobits on the plant: it will turn out  “23 million gallons of ethanol per year using an innovative enzymatic hydrolysis process”; it will “displace over 15.5 million gallons of gasoline, which will avoid over 139,000 tons of carbon dioxide emissions”; and 90 percent of the project’s sourced components are expected to be produced in the U.S.

But the department also added this note, which as far as we know had not been on previous closing announcements and that appears to be in response to the attacks made on the program in recent weeks: “Loan applications reviewed by the Department have undergone many months of due diligence and often receive bipartisan support.  DOE evaluates the technical aspects of an application to make sure the technology is feasible, work to ensure that projects can be built to scale, do extensive market analysis to ensure there is a place in the market for the product, and evaluate the finances of the project to ensure it is commercially viable. We are confident that supporting these projects will help American companies compete in the global clean energy market.”

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.

  • sukamadek

    Solyndra will seem likeu00a0au00a0drop in the bucket compared tou00a0 theu00a0waste of the failed biodiesel/ethanol scamu00a0that we have suffered many years. We just have yet to see theu00a0light bulb go on in the news media.

  • shit face

    u got a better idea sukamadek ethaol is the best thing out there at the moment our electric power technology is not nothing right now cellu;ose is the way right now also algae materrial into ethanol theres a big thing going on with that. Biodiesal is good for bigger vehicles like airplanes and semi trucks

  • Researcher

    nnI am a high school student and I wrote a paper as part of annextensive high school research project where I have chosen to publish mynresearch paper in an effort to provide a reasonable and objective attempt tongive credible and summative information on the topic of the impact of ethanolnand whether ethanol producing farmers should receive subsidies. Please checknout my website at http://ethanolsubsidies.squarespace.com/nnn