Founded by Menlo Park, California-based Khosla Ventures, Range Fuels' (formerly Kergy, Inc.) business model is to design, build, own and operate its plants. The company estimates that the new plant -- combined with others to follow -- will have the capacity to produce over 1 billion gallons of ethanol per year.

"The state of Georgia has provided us with an excellent opportunity to use its abundant renewable natural resources to help solve fuel issues for the country," said Mitch Mandich, Range Fuels CEO. "Thanks to Georgia's environmentally sensitive stewardship of its forests for the past 50 years, Range Fuels can take what is traditionally considered a waste product, and turn it into a source of transportation fuel."

The company's proprietary technology -- known as the K2 system -- eliminates the use of enzymes, which have been an expensive component of traditional cellulosic ethanol production, and transforms otherwise useless products such as wood chips, agricultural wastes, grasses, and cornstalks as well as hog manure, municipal garbage, sawdust and paper pulp into ethanol through a thermo-chemical conversion process.

"Today's announcement is not only great news for Range Fuels, Inc. and Treutlen County, but also our state's forestry industry and Georgia's continued push to encourage biofuels developed from homegrown products," said Georgia Governor Sonny Perdue, who announced plans for the plant during the Georgia Agribusiness Council's annual State Legislative Breakfast yesterday.

In addition to a broad range of biomass to select from, the K2 system is also modular. Depending upon the quantity and availability of feedstock, the K2 system can scale from entry-level systems to large configurations. According to the company, this range of system performance will allow the K2 to be placed near the biomass location reducing transportation costs, and will allow the most economical size system to be deployed.

"The production of cellulosic ethanol represents not only a step toward true energy diversity for the country, but a very cost-effective alternative to fossil fuels. It is advanced weaponry in the war on oil," said Vinod Khosla, managing partner of Khosla Ventures, who recently told a Reuters Global Biofuels Summit that he could see cellulosic fuel prices sinking to $1 per gallon within 10 years.

According to a spokesman from Governor Perdue's office, construction on the new plant is expected to begin later this year.