Fulcrum BioEnergy claims proof of waste-to-ethanol tech

Pleasanton, Calif.-based Fulcrum BioEnergy said its demonstration facility has now proved the viability of its waste-to-fuel technology, clearing the path for the startup to begin building a commercial plant capable of producing ethanol at $1 per gallon.

Vice President Rick Barraza told the Cleantech Group today that Fulcrum plans to raise equity and debt in the next six months for the $120 million Sierra BioFuels Plant, to be located 20 miles outside Reno, Nevada. Construction is expected to start in early 2010, with expected completion in 2011.

Fulcrum's process turns municipal solid waste into synthetic gas, or syngas, then converts the syngas into ethanol. The second half of the process is conducted in tubes, and employees built a full-scale reactor tube for the demonstration project at the company's TurningPoint Ethanol Plant in Durham, N.C., this year.

"We have proved the reaction works in the tubes," Barraza said. "So when we put hundreds of those tubes in the Sierra plant, we're confident that the reaction we're looking for will take place."

Fulcrum licensed the gasification technology from Bend, Ore.-based InEnTec, which also developed a plasma arc that removes inorganics from municipal solid waste streams. In October 2008, InEnTec raised $150 million in financing from Lakeside Energy for its plasma-enhanced melter gasification technology (see Solar sector deals continue to shine)

Fulcrum developed the process to convert syngas to ethanol using a catalyst, but the company licensed the the catalytic technology from Nipawin Biomass New Generation Cooperative and Saskatchewan Research Council, which jointly developed and own the technology.

"We're not a technology provider," Barraza said. "We spent a lot of time working with various technology developers to evaluate their processes, stepping back to analyze the different results. We selected, we think, the best technology to bring to market."

Fulcrum has signed contracts for 90,000 tons of municipal solid waste for the Sierra plant, equivalent to the trash from 165,000 people. Barraza declined to name the providers or the financial terms of the supply deal, but he said the facility is expected to produce 10.5 million gallons of ethanol per year. That establishes an efficiency of 120 gallons of ethanol from each ton of trash, which Barraza says puts Fulcrum at an advantage against other biofuel makers.

Certainly, a number of companies are aiming to convert waste into fuel, including Coskata and BlueFire Ethanol.

In August, Rentech said it signed a deal to supply up to 1.5 million gallons per year of renewable synthetic diesel fuel made from biomass and sewage sludge to power the ground-based equipment of eight airlines at the Los Angeles airport starting in late 2012 (see LAX signs first supply deal for synthetic diesel from Rentech). Terrabon has secured investments from Waste Management and Valero Energy for its technology to turn municipal solid waste into potable water and transportation fuel (see Waste Management takes stake in waste-to-fuel startup Terrabon).

But Barraza said there's plenty of room in the market for waste-to-fuel startups thanks to mandates from the U.S. government. The Energy Independence and Security Act of 2007 requires the national supply of 36 billion gallons of renewable fuels by 2022, including 21 billion gallons of advanced biofuels using cellulosic or biomass technology (see Biofuel patents are booming).

"More players creating advanced biofuels puts credibility on this industry," he said. "There's plenty of room for other competitors, and we feel our process with its low-cost production will enable us to serve that market very economically and very profitably."

After the Sierra facility comes online, Fulcrum wants to develop more plants across the U.S. and has already signed feedstock contracts that would allow it to produce 1 billion gallons of ethanol per year, dropping the cost to about $0.50 per gallon. Barraza said that would require about 20 plants, each with a production capacity for 30 million to 60 million gallons per year.

Fulcrum's technology could also be used to produce diesel, butanol and electricity, but the company is focused on ethanol because the economics are very attractive, Barraza said.

The company is backed by U.S. Renewables Group and Rustic Canyon. Barraza declined to specify how much money Fulcrum has raised but said the two companies contributed $14 million last year.

Fulcrum has 16 employees.

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