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$59.5 million trash-to-ethanol project in Benton County secures funding

Dave DeWitte, The Gazette, Cedar Rapids, Iowa –

A commercial-scale plant to make biofuels from Benton and Linn County trash is poised to become reality with a $25 million USDA loan guarantee announced today.

Secretary of Agriculture Tom Vilsack announced that the agency has approved the $25 million conditional loan commitment to Maryland-based Fiberight LLC and Fiberight Blairstown Operating LLC for their plant in Blairstown.

“It’s important for us to continue to invest in these technologies for a multitidue of reasons,” Vilsack said. ” It is about national security. We become more reliant on our domestic resources. Number two, it’s a job creator.”

Fiberight’s president, Craig Stuart-Paul, said the company has “seven years of bumps and bruises” from its pilot cellulosic ethanol plant in Virginia. He said Fiberight hopes to be in position to draw on the USDA-backed financing from Cedar Rapids Bank and Trust Co. in the spring or summer, and begin construction.

The project calls for converting organic solid waste and industrial pulps into cellulosic ethanol as well as ethanol from seed corn wastes. A new 55,000-square-foot facility will be built alongside the Fiberight’s existing ethanol plant, acquired in November 2009 from Xethanol LLC.

The plant will have an annual output of 3.5 million gallons.

Fiberight plans to create a “hub-and-spoke” system that would put recycling centers in Cedar Rapids and other waste-originating markets. The organic waste would be made into a pulp at those sites and other wastes separated for recycling to reduce the number of truckloads going to the plant.

Benton Development Group’s Renae Becker visited the Fiberight’s Virginia pilot plant last June. She said the plant was down for maintenance when she visited, but had clearly been producing ethanol.

Benton Development Group helped work out a basic memorandum of understanding for the Blairstown plant to receive in-county municipal waste that had been going to the Benton County Landfill.

“The are definitely some hurdles to mull out with Fiberight in how this is going to look and truly get that down on paper,” Becker said. “ I look for it to get there. I think it’s a great thing.”

Cedar Rapids Bank and Trust in Cedar Rapids will be the lender under the USDA program. It’s the largest loan the bank has made, according to Tim White, vice president of business development for the bank, made possible by the USDA backing

White said the bank is fortunate to be “involved in something that truly is going to be innovative,” both with the cellulosic ethanol production and the ability to divert landfill waste.

Fiberight’s application for USDA assistance was slated for consideration last September, but all projects were put under more extensive scrutiny after the August bankruptcy of Solyndra Energy Company, which received a half-billion dollars in Department of Energy assistance.

Fiberight’s project received much additional scrutiny over the ensuing months, Stuart-Paul said. Fiberight has made small quantities of ethanol, but decided against proceeding with production until it had the plant fully developed and was sure it could do a good job.

“W’re operating it to make sure the plant is working fine and we want to keep the local work force as busy as possible,” Stuart-Paul said. “It’s been expensive to keep that.”

International Paper reached an agreement with Fiberight to supply paper waste from its Cedar River Mill in Cedar Rapids as a cellulosic feedstock in May 2010. Fiberight is in discussions with other Cedar Rapids industries to provide organic material, Stuart-Paul said.

Vilsack said U.S. dependence on foreign oil has declined from 60 percent of the fuel consumed to 50 percent in the past three years. He expressed confidence in the USDA’s loan review process, saying the default rate on USDA’s rural loan programs, at 3.5 percent, is below that of commercial lenders.

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