Eastern Idaho hamlet Shelley hopes to get one of the first plants that produce ethanol out of wheat and last week the Department of Energy moved one step closer to helping them.
The federal agency that runs the Idaho National Laboratory approved regulations for handing out loan guarantees of up to 100 percent of the cost of building new factories that produce ethanol from cellulose, plant fiber instead of grains. This process uses less energy and chemicals than ethanol plants like the one under construction in Burley.
Cellulose ethanol theoretically reduces the production of greenhouse gases and doesn’t drive up the price of food and livestock feed like corn ethanol does. But there is no free lunch. Cellulose ethanol costs more to produce, at least right now.
Iogen, the Canadian company considering Shelley as the site for its plant, already produces more than 1 million gallons of ethanol in its pilot plant in Ottawa. It wants an $80 million loan guarantee to come to Shelley to build a new plant that would produce 18 million gallons annually.
It will compete in this country with five other companies for the guarantees.
But Canada also approved a plan to invest $500 million in new ethanol plants. That alone could convince Iogen to stay home.
Sen. Larry Craig, said in a press release. last week that he was a strong advocate for Iogen and its plans in Shelley. But his office refused to comment on Iogen Friday because of its policy not to have contacts with the Idaho Statesman, which came after the newspaper's coverage of Sen. Craig’s legal troubles.
When Craig was a leading member of the Senate Energy and Natural Resources Committee in 2005 he helped get the loan guarantee program in the Energy Bill. How much of a role he can play now is unclear.