Range Fuels Finally Gets its Cellulosic Plant Running

After a two year delay, Range Fuels is producing methanol fuel from its commercial-scale cellulosic ethanol facility in Georgia. The company initially said the plant in Georgia would be producing up to 20 million gallons of fuel in 2008. Then it got pushed back to 2009. It is now finally operating in the second quarter of 2010.

The delay is not out of the ordinary for cellulosic ethanol producers. Because of the technical and financial problems companies have been facing, the Environmental Protection Agency scaled back its 2010 mandate for cellulosic fuels from 100 million gallons to 6.5 million gallons.

Range Fuels has gotten over $100 million from high profile investors over the last few years. The company is producing fuels from woody biomass and grasses by turning the feedstock into a syngas. With its proprietary catalyst, Range produces a variety of alcohols that can be processed into fuels like ethanol and methanol.

The first phase of its plant will be used to produce methanol for biodiesel. Later this year, Range expects to start producing cellulosic ethanol. The company also said it will expand start expanding the plant next summer to scale it up to 60 million gallons per year.

Given the slow start for cellulosic ethanol companies, it still remains to be seen whether Range Fuels can follow that time frame. The poor investment climate and the long delays in building cellulosic ethanol plants have severely set back the sector. But investors like Vinod Khosla of Khosla Ventures – which has backed Range Fuels – are still somewhat bullish on cellulosic fuels.

Watch the video below for an interesting interview with Khosla on why he still believes in next generation biofuels.

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