Having completed our due diligence on the site, we decided to raise the capacity of this plant to 50 million gallons per year. It is being designed to run on a variety of feedstocks and we are already securing the necessary feedstock streams from the forest products industry to run at capacity when we begin production by mid-2007.

By combining Xethanol’s proprietary technologies with those of PRAJ, we believe that we will have achieved our goal of being a low-cost producer of fuel ethanol from cellulosic materials. With our recent announcement of expanding our Blairstown, Iowa facility to 41 million gallons per year and bringing Augusta on line with 50 million gallons per year, our stated production goals are within our sights.

—Christopher d'Arnaud-Taylor, Chairman and CEO of Xethanol

This site is a prime example of Xethanol’s strategy of exploiting shuttered industrial capacity and converting facilities that already have existing infrastructure to produce ethanol. In doing so, the company is able to save significant time and money in bringing facilities on line. This site, in particular, has millions of dollars in equipment and infrastructure in place and ready to use for ethanol production.

—Lucas Rice, Xethanol’s VP of Operations

Earlier this year, Xethanol acquired Advanced Biomass Gasification Technologies (ABGT) from UTEK. ABGT holds the exclusive worldwide license for MicroGasification technology developed at the Energy and Environmental Research Center (EERC) at the University of North Dakota in Grand Forks.

The MicroGasifier produces syngas from carbon matter to drive a portable, power generation system. Xethanol and EERC are mutually funding a Cooperative Research and Development Agreement (CRADA) to further apply the MicroGasifier in the production of ethanol. EERC will perform system integration of the MicroGasifier for customers.

In acquiring ABGT, Xethanol’s objective is to provide a lower cost alternative to steam boiler power generation with a small footprint waste-to-energy technology utilizing low-cost biomass feedstocks and waste streams. Creating energy from industrial and biomass waste such as lignin, a byproduct of cellulosic ethanol production, and is a critical component of our business model most especially in light of the high cost of oil and natural gas.

—Christopher d’Arnaud-Taylor

Xethanol was formed in Delaware in January 2000 with a focus on the biomass waste-to-ethanol sector of the ethanol industry. (It became a public company in February 2005 through a reverse merger transaction with Zen, a Colorado manufacturer of pottery kilns.)

In January 2005, Xethanol acquired the license agreement to a patented technology developed at the U.S. Department of Energy’s National Renewable Energy Laboratory designed to effectively separate lignocellulosic material into lignin, cellulose and dissolved sugars.

(In December 2005, Xethanol finalized a Cooperative Research and Development Agreement (CRADA) with the USDA Forest Service, Forest Products Laboratory for the purpose of genetically engineering proprietary yeast strains for the efficient production of xylitol, a natural sweetener from the xylose derived from the cellulosic biomass.)