TechPulse 360

First generation biofuels made from corn, sugar cane and other edible crops continue to make steady, if lackluster, progress.

POET, the nation’s largest producer of Ethanol from corn, says production costs at its South Dakota plant are now $2.35 a gallon. In another two years, the company should be able to compete head-to-head with gasoline.

Energy Department favors advnaced biofuels over corn-based ethanol

The price parity may make little difference. On Friday the Energy Department announced its intent to back second-generation efforts that rely on non-edible plants and which promise more energy per acre.

The DOE doled out more than $600 million in funds and loan guarantees to 19 projects. The money, some of which came from the Agriculture Department, was matched by more than $700 million in private and non-federal funds.

With a relatively small number of advanced refineries in the testing or pilot stage, the financing will prove a powerful accelerant as companies validate technologies for large-scale production. Of the total, $336 million is earmarked for the more advanced of these efforts – demonstration and early commercial projects – and will be matched by $537 million of outside funds.

Included on the list are the Bluefire ethanol refinery in Missouri, the Sapphire Energy algae project in New Mexico and the BioEnergy International sorghum project in Louisiana. Sapphire hopes to cultivate algae to produce diesel and jet fuel.

The $283 million of funding for earlier pilot projects will go to efforts proposed by Arymis Technologies, Archer Daniels Midlands, Solazyme (also working with algae), ZeaChem and others.

The push by the Energy Department clearly represents a determined effort to put biofuels back at the top of the nation’s green agenda alongside solar and wind. It will take years to know whether it succeeds. It will be interesting to watch.