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Published July 07, 2011, 04:51 AM

Officials announce Iowa cellulosic plant loan

DES MOINES, Iowa — Officials announced plans Thursday for a $105 million loan guarantee to help develop the nation's first commercial-scale cellulosic ethanol plant near Emmetsburg.

By: Mike Glover, Associated Press

DES MOINES, Iowa — Officials have rannounced plans for a $105 million loan guarantee to help develop the nation's first commercial-scale cellulosic ethanol plant near Emmetsburg.

When completed, the plant will produce up to 25 million gallons of ethanol per year. Unlike existing ethanol plants, which produce the fuel from corn, the new facility will use stalks, corncobs and leaves to produce ethanol.

The announcement came during a conference call with Energy Secretary Steven Chu and Agriculture Secretary Tom Vilsack.

“Iowa has incredible renewable resources,” Chu said. “Instead of spending that money abroad we should invest it here.”

Chu said that by using byproducts of corn and not the corn itself, the new procedure will end the debate over using corn for fuel or food.

They say ethanol produced at the plant will replace 13.5 million gallons of gasoline annually. Officials say the project is expected to create 200 jobs during construction, then 40 permanent jobs at the plant.

“It will represent immediate job growth in the Emmetsburg area,” said Vilsack, a former governor of Iowa. He said construction on the plant will begin in August, with a total cost of $261.2 million.

“Projects like the one we are announcing today show that our investments in next-generation biofuels are paying off,” Vilsack said. “This project is an important step in the Obama administration's effort to break our nation's unsustainable dependence on foreign oil and move toward a clean energy economy.”

Chu estimated the facility will provide an extra $14 million in revenue for farmers in the Emmetsburg area.

Vilsack said the increased reliance on cellulosic ethanol will move the nation toward the stated goal of reducing by one-third the nation's reliance on imported oil during the next decade.

“This is an important step, but it's one of many steps we're taking,” Vilsack said.

They say the plant eventually will produce 25 percent of the renewable fuel requirements spelled out in law.

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