By JOSH FUNK
BLAIR, Neb. (AP) -- The leading maker of the enzymes used to produce biofuels says the declining political support for ethanol hasn't diminished the long-term prospects for the industry making fuel from plants.
Novozymes plans to open a major new enzyme plant in eastern Nebraska next year to better serve the ethanol industry.
"It's a huge potential that's out there," said Adam Monroe, president of Novozymes' North American unit.
Monroe said he thinks the U.S. biofuel industry has grown up a great deal over the past decade, so he's not concerned about the end of the federal ethanol tax credit next year.
"It can now stand on its own two feet and compete," he said.
But Monroe said he thinks the government should continue to support the biofuels industry through policies like the renewable fuels standard, which will require 36 billion gallons of biofuels to be blended into gasoline by 2022, including 16 billion gallons of cellulosic ethanol.
Monroe said the ethanol industry has the potential to provide a much bigger share of the nation's fuel supply than the renewable fuels standard requires.
"It's a bigger solution than a lot of people realize," he said.
The Renewable Fuels Association says the industry is now producing about 13.7 billion gallons of ethanol at more than 200 plants nationwide, which includes 25 plants in Nebraska. That's roughly 10 percent of the 138 billion gallons of gas that were used in the country last year.
Association spokesman Matt Hartwig said the industry is prepared for the end of the 4.5-cent per gallon tax credit ethanol has received for several years.
"Right now, ethanol is very cost-competitive with gasoline without the tax credits," Hartwig said.
Novozymes expects the new enzyme plant, which cost between $160 million and $200 million, to be completed sometime during the second quarter of next year. More than 200 construction workers are spending their days at the site south of Blair to meet that target.
About 56 full-time employees work at the plant already, but that number will grow toward 100 beginning early next year.
Enzymes are strings of protein that can serve as catalysts in many natural and manmade processes. The enzymes produced in Blair will break down the starch in corn or another feedstock, which is a vital part of ethanol production.
In addition to corn-based ethanol, Novozymes is also a player in the emerging cellulosic ethanol business and has been working with the nation's largest ethanol company, Poet LLC, on a pilot cellulosic ethanol plant in Emmetsburg, Iowa.
Cellulose is the woody material in branches and stems that makes plants hard, and the ethanol industry is developing ways to produce fuel from cellulose economically. Once the costs of cellulosic ethanol are similar to corn-based ethanol, companies will be able to produce ethanol from straw, corn stalks, wood pulp and other inedible agricultural leftovers.
Monroe said he expects to see the first wave of commercial cellulosic ethanol plants open in early 2013. And he predicted that cellulosic ethanol will initially cost about $2 per gallon to produce, so it should be able to compete with gasoline.
Hartwig said it has taken longer for cellulosic ethanol plants to get going because of the recession that hit in 2008 just as cellulosic technology was emerging.
The design of the Blair plant reflects Novozymes' optimism about the biofuels industry. The plant has room to be expanded fivefold, and some of the infrastructure for expansion, like concrete foundations for future structures, is being built now.
Blair plant manager Fred Reikowsky says the project has been able to remain on schedule even though last summer's severe flooding along the Missouri River cut off barge traffic to the area. Reikowsky said Novozymes had brought in enough equipment before the flooding that workers were able to stay busy.
The shells of most buildings on the 37-acre complex have been completed, and workers are now assembling the filtration systems and storage tanks inside.
But in one building, rows of giant fermenting tanks remain exposed to the elements at the moment because construction workers are still installing the steel skin of that building.
An elevated network of pipes runs throughout the Novozymes complex connecting the buildings. Different pipes in that network will carry the water, glucose and air needed for fermentation and transport the enzymes through the production process.
The plant will grow microorganisms inside a series of sterile tanks until those organisms create the enzymes needed for ethanol production.
After the enzymes are created, Novozymes runs the product through a series of filters to remove moisture and the microorganisms.
What's left is a concentrated enzyme that can then be mixed to suit the needs of different customers. A blending facility is already operating at the Blair plant and mixing enzymes for customers.
The finished product leaves the site in semitrailer tanker trucks.
Blair was chosen for Novozymes' new plant because the plant will be close to the raw materials it needs and close to its customers. Plus, Nebraska offered relatively cheap electrical power for the plant.
The Blair plant will take over production of Novozymes' biofuel enzymes from the company's North Carolina plant. That facility will then focus on making enzymes for other uses, including detergents, food production and beer brewing.
Novozymes estimates that its products accounted for about 47 percent of the global enzyme market in 2010 and about 65 percent of the biofuel enzyme market.
Sales of biofuel enzymes account for about 18 percent of Novozymes' business.
Novozymes, which is based in Bagsvaerd, Denmark, employs about 5,400 people -- half of them based in Denmark.
Copyright 2011 The Associated Press.