POET ethanol is among those whose future is looking particularly bright.  The company recently built a pilot-scale plant in Scotland, SD which opened just over a year ago on November 18, 2008.  In the year since, the plant produced 20,000 gallons of cellulosic ethanol from plant waste (corn cobs).

When the plant first started production, its per-gallon costs were $4.13 per gallon -- decent, but hardly something to write home about.  Now, its costs are $2.35 per gallon, and the company is determined to reach $2 per gallon by the time it opens its first commercial scale plant.  In other words, the company is finally set to start raking in profits by offering a relatively affordable non-food source-derive alternative fuel on a broad scale. 

The company will soon open a 25 million-gallon-per-year cellulosic ethanol plant in Emmetsburg, IA.  The project, dubbed Project Liberty, will likely make POET among the nation's largest suppliers of the new biofuel.  Describes Jeff Broin, CEO of POET, "POET has been working on cellulosic ethanol for close to a decade and there were some days that I wasn’t sure we’d be successful. While we still have some challenges ahead, I can say unequivocally that Project LIBERTY will be commercially viable by the time we start up the plant."

The pilot plant cut its costs drastically in many ways.  First it used alternative energy (wind/solar) to provide all of its electricity and the energy used to produce the fuel was cut in half over the year.  Second, it cut its chemical raw materials costs, reducing the cost per gallon by $0.20.  Finally, the biggest cuts came from reducing the cost of the enzymes that POET uses.  The cost of enzymes has already been cut in half, and POET expects that number to drop lower.

Dr. Mark Stowers, Senior Vice President of Science and Technology for POET, says his company isn't done cutting costs. He states, "There are still several opportunities to make the process more efficient, particularly in fermentation. Additionally our enzyme partners have committed to significant additional cost reductions. But significant gains can also be made once we start up the commercial facility and POET uses its 20+ year history in biorefining to drive cost reductions and efficiency improvements in the process."

While there's significant doubts about the economic and social impact of adopting some alternative energy technologies or alternative fuels, cellulosic ethanol certainly seems a smart pick.  First, it does not use any food sources, limiting any economic impact.  Secondly, it promises to put to use energy stored by plants that typically goes to waste in the form of wood waste, landscaping waste, and farm waste.  Third, it provides the opportunity to harvest fuel from fast growing renewable sources such as switchgrass.  In this respect, the effort parallels the efforts to produce biofuel from algae. 

Despite its promise, the cellulosic ethanol industry won't launch without effort -- its success will require innovation like that demonstrated by POET.