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Money in corn cobs? Research at Scotland seeks to prove there i

SCOTLAND -- There's ethanol, and hopefully money, in corn cobs.

That's what Poet, the world's largest ethanol producer, is banking on with the help of $100 million in grants from the Department of Energy.

Poet is rebuilding and expanding a plant in Emmetsburg, Iowa, that will use separate grain and cellulosic technologies to produce ethanol. When completed, the plant's current 50-million-gallons-per-year ethanol output will be increased to 125 mgy: 100 mgy from grain and 25 from corn cob cellulose.

The Emmetsburg project will cost a total of $250 million and will go online in 2011.

The corn cob cellulosic technology for the Emmetsburg plant -- which has the project name "Liberty" -- has been in development for nearly a year at Poet's research center in Scotland. The research center has developed several proprietary systems for the production of grain- and cellulose-based ethanol, but right now the spotlight is on cob cellulose.

"We haven't given up on developing other forms of cellulosic ethanol, but we've decided to focus on corn cobs because they give a higher yield of ethanol per ton of material, and an ample supply of corn cobs already exists," said research center manager David Bushong.

In the cellulosic process, ground-up cobs go through chemical pre-treatment, fermentation and distillation processes to produce ethanol. The material remaining after distillation goes to a solid fuel boiler and the liquid from the process is moved to an anaerobic digester, which produces biogas in the form of methane and carbon dioxide.

The technology will be used to produce most of Liberty's operational energy as well as ethanol for the marketplace.

"We hope to have the design for Liberty finalized by the end of the year," Bushong said.

Included in the government's $100 million DOE grant package are two grants totaling $20 million that must be used to establish and develop a market for corn cob cellulose.

The cobs Poet used at the Scotland plant throughout 2009 were gathered from farms near Chancellor. This fall, new cob-collecting machinery will be tested in the same area and on selected farms from other states.

"We have an entire group in Poet that's working and researching the most efficient way to harvest cobs. All the major agricultural implement companies, as well as some smaller suppliers, are involved," Bushong said.

This is an entirely new market for a harvest waste product that's normally spewed across fields and left to decompose. There have been concerns that using the cobs will deprive fields of a free source of organic fertilizer, said Bushong.

"We're working with Iowa State and other experts on this and the initial data we have show that corn cobs are not a great fertilizer because they take so long to break down," Bushong said. "We see no detrimental effect in taking the cobs, because most of the corn stover (stalks and leaves) will remain in the fields. Our studies will hopefully confirm that impact."

Poet spokesman Matt Merritt projects that cobs will sell in the range of $30 to $60 a ton, but actual prices have not yet been set. There is also the possibility of government price support during the initial years of the cob market, Merritt said.

Additional unknowns are the costs of cob-gathering equipment and other related expenses.

"What we're trying to do is make it as easy for the farmer to participate as possible, because we need their cooperation to make this work," said Merritt.

Farmers can pile up the cobs and Poet will handle transportation to their plant, he said.

The potential for the new value-added market is staggering. During its year-long testing phase, Poet Scotland used about 1 ton of corn cobs a day. When fully operational, the Emmetsburg plant will use about 770 tons of cobs a day.

Using an average of .65 tons of cobs per acre as a baseline, Merritt figures Poet will need a "few hundred thousand acres of cobs" to make the new system work.

Equally important is the fact that this is a "crop" that can take rough handling and indifferent storage. Corn cobs can be stored on the ground in piles and require no drying or special care.

Whatever the cob market price is, said Bushong, it must be attractive for all involved.

"It's a business," Bushong said, "and once you've paid for those cobs you need to extract 100 percent of their value."

The payback to the state of South Dakota is tremendous, he said. Just as grain-based ethanol has had a positive effect on corn prices, Bushong predicts the new cob technology will add another dimension to the agricultural marketplace and will also produce fuel that will lessen U.S. dependence on foreign oil.

For that to happen, the ethanol market must be expanded, he said.

The federal renewable fuels standard currently allows only a 10 percent ethanol blend in fuels. Poet and other biorefiners would like to see that extended to 15 percent or more to both sell more ethanol and to give consumers alternative blend selections.

If that happens, Poet envisions a string of cob-fueled plants using the company's cellulosic technology.

"There are a lot of corn cobs in the Midwest," Bushong said.