Brazil’s Petrobras Turns To South Dakota For New Ethanol Technology

http://blogs.forbes.com/christopherhelman/2010/08/26/brazils-petrobras-turns-to-south-dakota-for-new-ethanol-technology/

Brazil’s oil giant Petrobras announced yesterday that it is investing $11 million in upstart cellulosic ethanol producer KL Energy. Last December I wrote a story (see: Can Cars Run On Trees?) about how the Rapid City, S.D. company has devised a method to make ethanol out of wood chips. This is a smarter way to make ethanol than using heavily subsidized corn, especially in wooded parts of the country with millions of acres of trees killed by the ongoing plague of pine beetles (see: Turning Dead Trees Into Green Heat).

The deal with Petrobras will fund expansion of KL’s demonstration plant in Upton, Wyo., and help the companies explore whether KL’s tree-digesting process will also work on sugarcane bagasse–the stalks and stuff left over after the cane is harvested. The other part of the plan is to integrate KL’s technology into a sugarcane mill being built by Petrobras in Brazil.

Petrobras has high hopes, figuring KL’s technology could increase the ethanol output from existing sugarcane fields by 40%. If it works, this could be a huge deal, not just for Petrobras, which makes 240 million gallons of ethanol a year, but for Brazil–6.75 billion gallons total. Many cars in Brazil can run on any ethanol blend, from E20 to E100. (By comparison, the U.S. uses around 11.5 billion gallons a year.)
(more)