Osage Bio Energy Fuels Up With $300M for Barley Ethanol
As global food prices rise and food riots rock the developing world, grain-based biofuels are coming under heavy fire. But a new grain-based ethanol startup has just secured $300 million for barley-based fuel and it claims its methods won’t impact food supplies — one, because the company will produce locally, and two, because barley is a less energy-intensive crop than corn. Glen Allen, Va.-based Osage Bio Energy received the large private equity commitment from First Reserve Corp. and will use it to build four biorefineries.
Osage Bio Energy was founded in 2007 to pursue barley-based ethanol under parent company Osage Inc., which distributes some 100 million gallons of ethanol annually in the Southeast. There are nearly five million acres of fallow farmland in the Mid-Atlantic and Southeast every winter, Osage estimates, and barley, as a winter crop that requires less fertilization than corn, could be grown locally on these millions of acres and used in their nearby biorefineries.
The startup also says its barley-based ethanol qualifies as an “advanced biofuel” under the Renewable Fuel Standard as part of the Energy Independence and Security Act of 2007. These requirements stipulate that an “advanced biofuel” not be derived from corn, that it use a renewable feedstock and reduce greenhouse gases by 50 percent.
But there are plenty of problems with barley as a biofuel feedstock. The USDA has been looking at its potential, but argues that barley’s abrasive hull, its high viscosity in fermentation, and its low-starch content make ethanol production costs prohibitively high. The USDA also says the byproduct from distilling barley isn’t suitable for livestock.
We’re awaiting comment from Osage so that we can better understand their plan to overcome these barriers. The company says that its biorefineries will also produce a protein co-product that it can feed to cattle, poultry and swine, a potential additional revenue source. Given that this food shortage is already claiming lives, we certainly hope that all future grain-based biofuels are thoroughly vetted.
WTF do we do when this causes beer prices to spike ;-)
And whisky DS… and whisky.
So why is Osage pushing to get a “Locally Undesirable Land Use” location for their operation in rural Southside Virginia? Why are they pushing spot zoning of agricultural land against the wishes of the residents -1400 petitions against the location adjacent to the small town of Chase City? Why not locate instead in existing heavy industrial parks? Why do they think farmers in the vanishing tobacco belt will grow barley for them instead of getting a better price for wheat? Could it be that Osage wants to produce “tax credits” for venture capitalist instead of ethanol? Could it be that they can dazzle and bamboozle the local county government with the offer of a handful of jobs in return for a Heavy Industrial Site on agricultural land? The majority of local citizens do not want their operation, nor do they trust Osage to be good ecological neighbors.
Pardon my ignorance… I am missing something here?
Mr. Rubens opens and closes his article with “riots for food rocking the developing world” and “already claiming lives”. He then tucks in the middle of the article the mention of fallow farmland not being used to save lives or cease the rocking in developing countries. Is Mr. Ruben suggesting or researching incentives to connect this land not being used to quell these food riots all over the world, or is global warming starting to lose some of its political appeal? My wife and I have contributed over $10,000 on our modest income to help impoverished people overseas and my wife just returned from India helping orphans. We are a little sensitive to proponents making emotional appeals for political ends.
As for the 1400 petitions, now as Paul Harvey says it “now for the rest of the story”. There was a very enthusiastic town rally to show support for Osage’s proposal. In an article located at http://www.vancnews.com/articles/2007/08/06/south_hill/news/news01.txt?fromrss=1, a local lifetime resident and supporter of the proposed project said this: “. ”Everybody on our committee wants to see Chase City come back to what it used to be,” said Monty Hightower, a lifetime resident of Chase City and organizer of the evening’s informational and support meeting. ‘We felt that there was so much negative energy towards the company, and that they [The Association to Preserve Mecklenburg County] were spreading a lot of misinformation that we felt that we had to come out and give people a choice.’ Hightower said members of his newly established group have taken the pulse of community opinion in Chase City and found that there is more support for the proposed plant than has been reported. ‘A consensus is that the majority of the community is in favor of it,’ he said.” As Lt. Friday would say to Ms. Wallace, “just the facts, ma’am”.