Posted on Sat, Apr. 19, 2008

Alltech receives ethanol grant

$30 MILLION AWARDED TOWARD BIOREFINERY

By Jim Jordan

JJORDAN1@HERALD-LEADER.COM

The U.S. Department of Energy awarded Alltech a grant of up to $30 million on Friday to help pay for a $70 million project to turn corn and other crops into fuel.

The biorefinery project in Washington County could lead to a statewide chain of ethanol plants.

"It is a huge grant," Alltech CEO Pearse Lyons said. "This is the last thing that was holding us back" from starting the project.

Construction will begin in June, and the refinery could be producing ethanol -- a fuel that can be used in trucks and cars -- in 15 or 16 months.

Ecofin LLC, an Alltech subsidiary, will be in charge of the project, and Excel Engineering will provide engineering services.

The University of Kentucky and the University of Cincinnati are working with Alltech on parts of the project, which is expected to create at least 93 jobs and give local farmers a new market for grains, grasses and related materials, such as corn cobs.

In addition to the federal money, the refinery will be financed by Alltech and by an $8 million incentive package approved in October by the Kentucky Economic Development Finance Authority.

Alltech is the Nicholasville-based biotechnology company that is paying $10 million to be the title sponsor of the Alltech FEI World Equestrian Games at the Kentucky Horse Park in 2010.

Lyons, who founded Alltech in 1980 after earning a doctorate in yeast biochemistry, sees the Washington County biorefinery as the "anchor" for a series of rural biorefineries around the state.

He explained Alltech's Rural Community Biorefinery Program in October in a series of "Fueling the Future of Rural Kentucky" presentations in 12 midsize cities in the state.

The project's "implications for this state are enormous," Lyons declared last fall.

"We are not Silicon Valley," he said. "We have to focus on our agriculture bases."

Speaking at the same media conference, Washington County Judge-Executive John Settles said the biorefinery would mean new jobs and new markets for local farmers.

"I don't see how we can lose," Settles said.

On Friday, Lyons said "the bigger story than the grant is that the federal government is endorsing, or at least putting in a vote of confidence, into this ... biorefinery concept to the tune of $30 million.

"We are the only ones, in fact, to be using this technology," he said. "They have given us until 2010 to have it up and running. We believe in fact we will be up and running in 15 or 16 months."

Friday's announcement by the Department of Energy was the second round of awards for small-scale biorefineries. Four projects received grants earlier this year, and three more, including Alltech, were selected Friday to receive a total of $86 million over four years. The other two projects are in Maine and Tennessee.

Energy Secretary Samuel W. Bodman said the grants announced Friday "will help pioneer the next generation" of biofuels that will be made primarily from non-food materials.

"Sustained investments in cellulosic fuels made from corn cobs, wood chips, switchgrass and other agricultural waste will strengthen our nation's energy security by reducing our dependence on foreign oil," Bodman said.

Animal nutrigenomics center completed

Alltech will cut the ribbon on its new Center for Animal Nutrigenomics and Applied Animal Nutrition at 10 a.m. Sunday in Nicholasville.

The facility, which Alltech says is the first of its kind in the world, is dedicated to the study of the effects of nutrition on gene expression and houses Alltech's research initiatives at its Nicholasville campus. The center is at Alltech's headquarters at 3031 Catnip Hill Pike.

The ribbon cutting will precede Alltech's 24th International Animal Health and Nutrition Symposium, which runs through Wednesday in Lexington. The symposium will feature Gov. Steve Beshear, former U.S. Department of Agriculture Secretary Mike Johanns, former European Union Commissioner David Byrne, and former Kentucky Gov. John Y. Brown.