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Clean Energy Capital to develop first commercial-scale sugarcane ethanol plant in US

Clean Energy Capital LLC, a US private equity firm specializing solely in investments in ethanol, is developing the first major sugarcane ethanol refinery in the continental United States, in the Imperial Valley of California.

The ethanol produced there will meet California’s low carbon fuel standard. The project will cost $575 million and produce 66 million gallons of ethanol annually, enough electricity to meet the needs of 35,000 homes, and enough biomethane to heat 10,000 homes per year. Sweet sorghum, which has similar characteristics to sugarcane, will also be used.

There will be strong demand for ethanol from the refinery because the ethanol produced will meet stringent low carbon fuel mandates imposed anywhere in the US.

—Scott Brittenham, CEO of Clean Energy Capital

Other states are considering adoption of the same low carbon fuel standard as California, including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont and Washington.

The business model locks in prices with long-term contracts for the sale of the ethanol to a major international oil company and the purchase of the sugarcane from local farmers. This will provide greater stability in profit margins, according to Clean Energy.

States such as Alabama, Florida, Georgia, Hawaii, Louisiana, Mississippi, South Carolina and Texas, where sugarcane can be grown, are prime locations for building sugarcane ethanol refineries, Clean Energy says.

Comments

mahonj

Where will they get the water from ?
And how much will they pay for it ?

Reel$$

Good. A brand new alternative energy industry. California will now compete with the midwest corn farmers to produce low cost, low carbon alcohol from biomass. A renewable, sustainable, domestic, JOBS-creating energy source. Good for employment, economy, environment and Energy Independence. A four-way win.

Finally, the program is starting to take the shape it should have long ago. Better late than never.

HarveyD

Improved Australian sugar canes is one of the most productive (per acre) feed stock for Ethanol. Residues can be used to produce cellulosic ethanol and/or animal feed and/or energy to operate the ethanol factories etc.

However, as soon as sugar cane crops become profitable, many farmers will switch from food production to sugar cane production. Reduced food crops will put pressure on most food prices, like most other bio-fuels do.

This actually means higher future fuel and food prices for America.

That may be the price to pay to reduce oil imports and retain our ICE gas guzzlers.

SJC

The Imperial Valley of California grows truck crops like lettuce and tomatoes or at least used to until more Colorado River water started to be used by Arizona. A lot of that water went towards golf courses and fountains in Arizona because they have 1/10th the population of California and no where near the agricultural production.

California blends ethanol into gasoline to meet federal requirements. Senator Feinstein tried to get a waiver because California does not produce ethanol. The argument was that formulated gasoline could be just as clean without ethanol. The waiver was not granted.

With all the agriculture California has the state could produce its own ethanol, but does not. Most of it comes from the midwest by rail car. It is not clear that the growers in the Imperial Valley of California will grow cane instead of truck crops. They have land that is not in production now.

Engineer-Poet

When Imperial Valley production is being shut down because of a lack of water, and the water shortage is almost certain to get worse, basing an energy initiative on wet tropical crops like sugar cane is sheer insanity.

Reel$$

EP - squeeze your wet blanket and there's plenty of water!

Engineer-Poet

You just ask Santa Claus and the Easter Bunny to make California as wet as the Cascades. When you can make it happen, we'll talk.

SJC

"Sweet sorghum, which has similar characteristics to sugarcane, will also be used."

This might make more sense for that area, sweet sorghum takes less water than sugarcane. It seems to take 1/4 the water required for sugarcane and produces better animal feed as part of the process.

http://www.icrisat.org/Biopower/BVSReddyetalSweetSorghumWatersavingJan2007.pdf

Reel$$

Undoubtedly water is an issue with all agriculture in California. One action being taken to address coastal communities is desal:

http://online.wsj.com/article/SB124708765072714061.html

By alleviating some of the residential drain on water supply - desalination may allow domestic energy crops to fill the gap during the transition to electrification.

Engineer-Poet

Now tell us the energy and capital expense of desal, and the economic productivity of using it to subsidize low-value crops like ethanol feedstock.

Reel$$

EP, ignorance is running rampant recently (nicely alliterative.) Did we suggest desal for agriculture? NO.

We suggested that with the preponderance of population living on California's coast - desal will alleviate the burden on imported water to quench population.

HarveyD

Reel$$...have you been drinking desal water lately? That stuff will make us thirstier and it is better not to use it for cooking, beer, soft drinks etc.

As a whole, USA is not short of fresh water. There are many ways to address this ongoing problem:

1) reduce water waste by 50% over 5 to 10 years. Install water meters with consumption price based on heavier uses.

2) build large fresh water reservoirs, where water is plentiful.

3) build huge East-West and North-South water pipelines to link the water reservoirs with metered end users.

This could become a very profitable business for oil firms....?

Engineer-Poet

I'm not sure if Reel$$ is trying for the title of ReelDumb today, or if he truly believes what he's writing. Forcing cities to use desal instead of simply out-bidding industrial fuel farmers for water amounts to a subsidy for the farmers. If the discriminatory pricing is maintained, cities would find it cheaper to buy the farms for their water rights and the only way to prevent that is to throw up legal barriers to the purchase. Without protectionism, nobody would even think of doing this.

Reel$$ is a very shallow thinker, if he's not just a mouthpiece for some PR firm. (Want to deny it? Tell us your real name, who you work for, and more to the point what news organizations you trust so their sources and slants can be properly appraised.)

SJC

Let's stick to the issues and facts without insulting and demanding from one another. The last I heard agriculture in California uses 85% of the water. Even with more than 36 million people, this is the case. Considering that desalinization is costly, you might make up for a small amount of that 15% that people use and more could go to agriculture, but that is about it.

Reel$$

EP and cohort ai_vin are apparently threatened by challenges to some of their dated ideas. Obviously resource-use MUST be well managed. Instructing people on how to use less water on lawns, gardens and pools will help.

But we can also expect the Imperial Valley farmers considering cane to utilize subsurface drip irrigation. This method used successfully in the Philippines, Brazil, Hawaii, South Africa, cuts water consumption by 70% over center pivot sprinkler irrigation. Sugarcane yields increase 90% from 70.0 tons/ha to 133.5 tons/ha. On par with Brazil's best yields. Water conservation technology must play a part in any fuel crop expansion - especially in water hungry States like Cali.

http://www.netafim.com/article/sugarcane--philippines

Further by co-locating desal next to power utilities, greater efficiencies in intake, outflow, thermal plume management are achieved. Bottom line is desal is an important and increasingly economic step for thirsty California.

Lastly, passenger car biofuels are meant to be temporary transitional substitutes for fossil fuels. As battery technology increases energy density - there will be a decreasing need for light duty liquid biofuels.

SJC

Drip irrigation and sugarcane makes sense. I would imagine that the farmers there will use the best crop with the lowest water use methods. They have contracts for the fuel and thus need contracts for the sugarcane which means the farmers have contracts for the water. They have a policy now that says they must have the water contracts before proceeding.

Engineer-Poet
EP and cohort ai_vin are apparently threatened by challenges to some of their dated ideas. Obviously resource-use MUST be well managed. Instructing people on how to use less water on lawns, gardens and pools will help.
Note how Real$$ directs attention back at cities, while never considering that the best water management may mean not using it to grow biofuels in a desert. The bigger irony is that he is implicitly casting aspersions on RealClimate, while advocating extreme waste.

As an example of how brainless he is, a heat source of 600 kBTU/hr can desalinate about 5000 gal/day, or about 2900 BTU/gallon of water. Irrigated corn requires about 1.2 acre-feet per acre. If each acre produces 200 bushels and each bushel yields 3 gallons of ethanol, that's about 2450 gallons/bu, 820 gallons of water per gallon of ethanol or the heat-equivalent of 30 gallons of ethanol to distill the water to grow 1 gallon's worth of corn.

There are only 2 reasons to advocate something so ridiculous.

  1. You haven't a lick of common sense.
  2. You are a paid mouthpiece for the fossil-fuel industry.

Engineer-Poet

That'll teach me to preview, won't it?

HarveyD

Fresh water availability will become a real problem in many parts of the world and parts of USA in the not too distant future because:

- 97% of the globe water is saline and only 3% is fresh water.

- 87% of the fresh water is frozen, i.e 2.61% of total

- 11% of the remaining fresh water is in swamps, i.e. 0.33% of total

- 2% of the fresh water is available, i.e. 0.067 % of total

Fresh water is not distributed evenly across the globe. A few countries are blessed with more than what they need but it is not necessarily well distributed within those countries.

- Brazil = 8233 Km3
- Russia = 4498 Km3
- Canada = 3100 Km3
- USA = 3070 Km3
- China = 2838 Km3
- Columbia = 2132 Km3
- Peru = 1913 Km3
- India = 1908 Km3

In USA, where the total fresh water is sufficient, the 10 States using most water are often those that do not have much water and are running in short supply.

Currently, about 70% of the fresh water is used for agriculture, 20% by industries and 10% for domestic uses.

Over 4000 gallons of water are required to produce a single gallon of biofuel.

Over 5000 liters of water are used to produce a single Kg of rice.

It is not a surprise that USA, Canada and Australia have the highest (3000 M3/year) per capita fresh water consumption of all industrial nations. Those three countries also produce the highest per capita pollution (20+ tonnes/year)

Using more of this precious fresh water to produce fuel for our gas guzzlers may not be very wise.

Reel$$

Not biting EP. But we wish you well and value your constructive comments here on GCC.

Harvey, good notes. Indeed 80% of Earth's fresh water is frozen on the Antarctic Continent. An excellent future resource if needed.

An interesting note on desal. While some here dismiss the practicality, Israel is well on its way to running its entire water requirement from desalination - some 750 million cubic meters of fresh water from the ocean.

The newest contribution comes from the world's largest reverse osmosis plant in Hadera, Israel capable of desalinating 127 Million cubic meters of water annually. About 20% of the annual household demand.

SJC

"Over 4000 gallons of water are required to produce a single gallon of biofuel."

I would like to see a link that supports that statement.

If I need an acre foot of water to grow a crop that is less than 400,000 gallons of water. If I can get 1000 gallons of biofuel from that acre, then it is 400 gallons of water per gallon of biofuel, not 4000. Much of the biofuel in the U.S. comes from corn which uses natural rainfall and not irrigation.

This does not include the fact that a lot of the crop went to grain which was made into DDG to feed livestock, the stalks were gasified to create more biofuel and the bio char was returned to the land to provide soil carbon. The carbon in the soil helps retain moisture requiring less water. There is the fact that drip irrigation can be used resulting in even less water required.

HarveyD

SJC & Reel$$ please check www.ci.oswego.or.us (water facts) for water needed to grow one bushel of corn and you will see that much more water is required than you think.

If you add all the water required to make all other ingredients required + to make ethanol, up to your gas tank the grand total is probably much more.

You are very generous with 1000 gals/acre. The best average is closer to 354/gals/acre for corn ethanol. Sugar cane do much better with a best average of 662/gals/acre and sugar beets is one of the best average at 714/gals/acre.

SJC

The statement you made was absolute, over 4000 gallons of water for each gallon of biofuel. When you make absolute statements that means anywhere in the world at any time with any crop.

SJC

Sweet sorghum takes less water than corn and algae does not take more than 4000 gallons of water per gallon of fuel. If you are counting rainfall that would have gone down the river into the ocean, that is different than irrigation water from under ground wells.

HarveyD

Since over 90% of all the ethanol made in USA is with corn, the general water usage would be 90%+ correct. The less than 10% exception may be more variable and could use more or less water.

USA may eventually have to find low cost ways to move huge quantities of fresh water over long distances, mountains, deserts etc to bring it where it is most needed. The Mississippi River could be tapped, north of New Orleans, and an import part could be pushed westward, all the way to South California with multiple selling points along the way.

Very large fresh water pipelines may be used.

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