Iogen Suspends U.S. Cellulosic Ethanol Plant Plans

While we just heard that land management company Alico has decided to nix its plans to build a cellulosic ethanol plant in the U.S., Canadian company Iogen tells us that it, too, is backing away from its intentions to build a cellulosic ethanol plant in the U.S. It’s interesting because both Alico and Iogen were chosen by the Department of Energy in February 2007 to potentially receive funding to build the first of the next-generation of cellulosic ethanol plants in the U.S. that can churn out biofuels made from waste, plant byproducts and energy crops.

Iogen had planned to build a plant in Shelley, Idaho; construction was due to start this year and be completed by 2010. Guess there’s been a change of plans. An Iogen spokesperson tells us that the company has “suspended” its cellulosic plant plans for Idaho to instead focus on its more advanced plant in Saskatchewan, Canada. The spokesperson says that at this time the company won’t be pursuing those DOE funds, which according to the Canadian Press, where we first read of the suspension, included loan guarantees and grant money that was estimated at some $350 million.

The Canadian Press story also quotes one Corey McDaniel, a legislative assistant to U.S. Sen. Larry Craig, who said that Iogen suspended its plant in Idaho because the DOE didn’t offer the company a bigger loan guarantee. Perhaps the DOE’s lack of potential funding for Alico’s planned plant was also a factor behind that company’s decision. Many cleantech advocates have said that loan guarantees from the federal government could be the single most important factor in getting new, large-scale, renewable energy technology built in the U.S.

Regardless of the reasoning, it’s very significant that at least two of the companies that the DOE vetted to possibly receive government funds to build cellulosic ethanol plants are now backing down. Good thing there are other private funding means and the venture world to help get almost of dozen of these things built in the next few years.