BlueFire: Making ethanol at the landfill

Talk about your low-cost feedstocks.

BlueFire Ethanol wants to set up a series of small ethanol refineries at the world's finest landfills. The company will convert organic waste--paper, vegetable scraps, etc.--into fuel and then sell it locally. The business revolves around the idea that the feedstock is worthless. Landfill operators pay about $6 a ton to get rid of their trash. By converting it to ethanol the operators eliminate this cost and can qualify for carbon credits. BlueFire operates the ethanol refinery and then sells the fuel.

The first plant, a 3.6 million gallon a year facility that will grow to 12 million gallons a year, will go up in Lancaster, Calif. Later, the company hopes to open larger facilities in Europe and Southeast Asia.

Unlike some ethanol refiners, BlueFire's process does not rely on cutting-edge science. The company breaks down organic matter in an acid bath to obtain the cellulose, and then converts the sugars into ethanol. Still, producing the ethanol costs about 30 percent to 40 percent less than the cost of producing corn ethanol, said Chief Executive Arnie Klann. The lignin, a tough fiber extracted from plants in the acid process, is used to operate the equipment.

"It is old school because it works," Klann said. "Most of what goes into garbage is green waste."

The process is also less energy intensive, and hence less costly, than using plasma technology to eliminate waste, he asserted. Earlier this year, the company landed $15 million in investment from the Quercus Trust (which has also invested in algae fuel maker LiveFuels) and a grant from the Department of Energy.