By ERICA ESTEP
6 News Reporter
VONORE (WATE) - Hundreds of millions of dollars are on the line in hopes of turning grass into fuel. Tennessee taxpayers paid $70 million towards the plan to produce ethanol from home grown switchgrass.
After five years of research and development, those tax dollars have been spent, but is the plan working? 6 News went from the farm to the fuel tank in search of answers.
McMinn County cattle and produce farmer Gale Housley has been growing switchgrass for the bio fuels initiative for three years. He's one of about 60 farmers who signed three-year contracts to join the program.
"If it goes, and we develop a good commercial market, I can envision just lots, acres and acres of this in East Tennessee," said Housley.
Acres of switchgrass for future fuel is the goal of decades of research and more than $200 million invested into the bio fuels initiative started at the University of Tennessee.
Dr. Kelly Tiller was the lead researcher, and was eventually named CEO of Genera Energy.
"Genera is a company that was created as a subsidiary of the UT Research Foundation as a vehicle, a way to develop the partnerships we needed to with private industry, and implement the programs of the bio-fuels initiative," Tiller explained.
"We've looked at the amount of land that's either under utilized, or marginal crop land in the state and think that over a decade or more that we could potentially have a million or so acres in Tennessee that could support purpose grown energy crops like switchgrass," said Tiller. "That could potentially support a million or so gallons of clean fuels."
The investment into what was originally dubbed "Tennessee Grassoline" began in 2007 with the initial $70 million in state funding. Thirty million dollars of those state funds went towards a farm program to demonstrate the feasibility of producing lots of switchgrass.
The remaining $40 million was for partial construction of a demonstration scale bio-refinery in Vonore, as well as other equipment needed to study the best methods of processing switchgrass into ethanol.
Private company Dupont-Danisco put in $20 million more to finish the refinery.
"The original investment the state made in the bio fuels initiative was a five year commitment that was expected to generate all the information and support to then be able to launch a commercial scale industry," explained Dr. Tiller. "We've had great success with that. We are winding down now the use of those, that initial investment, and do not anticipate any more further state investment required to move to a commercial scale."
Federal funds were used to construct the Biomass Innovation Park where the best way to transport, store and pre-process switchgrass is studied.
Tiller says 85% of the more than 60 farmers contracted to fuel this research are still growing the crops.
For Gale Housely, it is was an attractive way to make use of his more marginal land and make money doing it.
"That was kind of a no risk situation going in. If it worked great, and you know, and if it didn't, why you'd go back and do something else," he explained.
Farmers were given seed, and paid $350 an acre just to establish crops for research.
"Switchgrass is a perennial crop. So you have quite a bit of expense up front getting it established, but then it continues to produce year after year without having to replant it," explained Tiller. "So it would be really difficult to get a farmer to make that up front investment if there wasn't a long term market opportunity."
The initial investment was all about research towards turning biomass grown in this region into a viable, eventually profitable energy crop. Some of the switchgrass refined in Vonore is being used as fuel, but that's not the primary purpose.
"Certainly some of the material that we produce ultimately winds up in fuel, but I would say that all of the material we produce winds up in valuable data for us to develop this industry going forward," said Tiller.
The fuel has been tested in the tanks of 200 vehicles being used on UT's campus. The university's fleet has been running on Grassoline for more than a year.
Proving Tennessee could drive the alternative fuel initiative was key to enticing companies like Dupont to invest hundreds of millions more. They plan to take what they're doing inside the demonstration scale refinery in Vonore to a commercial scale in the near future.
"A large scale project, on average, is probably in the $250 to $350 million range," said Tiller. "In order for a company to make that kind of investment, they need to be sure that all of their potential risks, all of their questions are answered."
Dupont has agreed to cover the operating costs of the bio-refinery in Vonore for at least a decade. That's expected to cost $3-5 million a year. That's proof experts say they what they're doing is working to get us one step closer to providing greener fuel alternatives.
"All of that, when you incorporate the entire really new economy, new clean fuel economy, it's a tremendous, in the billions of dollars worth of impact," said Tiller.
When 6 News asked in 2007 about the future of ethanol made from switchgrass in Tennessee, officials said it could produce 4,000 new jobs in rural Tennessee counties, $100 million in new farm revenue, and $400 million in new state and local taxes each year.
Tiller now says those economic impact estimates are "very conservative," but the impact will not be immediate.
"It's based on potential for Tennessee to sustain at least 10 commercial bio-refineries over 10 to 15 years," said Tiller.
A demonstration scale bio-refinery is located in Vonore.
Acres of switchgrass for future fuel is the goal of decades of research and more than $200 million invested into the bio fuels initiative started at the University of Tennessee.
