Idaho Straw Value-Added Committee: Southern Idaho

Rural Cooperatives, Jan-Feb, 2006 by Duane Grant

About the group:

The Idaho Straw Value-Added Committee (SVAC), led by Grant 4D Farms, consists of an 86-member steering committee of wheat and barley growers in the southern and eastern third of Idaho. The group is pursuing the formation of a cooperative or producer-owned Limited Liability Co. (LLC) to develop advanced harvesting, storage, pre-processing and transportation systems to supply straw to industrial processors. The systems are being designed to meet the industry standards that growers and suppliers have to comply with to supply feedstock for ethanol and other bio-products.

Business objective:

The committee's objective is to have member-growers supply nearly 1 million tons of high-quality straw" annually to a cellulose ethanol biorefinery. Iogen Corporation, a Canadian firm partially owned by Royal Dutch Shell, is considering the construction of such a refinery in Idaho. Current plans call for a facility capable of processing 600,000 to 800,000 tons of straw annually, with an output of approximately 55 to 65 million gallons of ethanol.

If the committee is successful in forming a cooperative and meeting its production goals, farmers could collectively earn an additional $25 million to $30 million annually, by selling straw products to Iogen. This Idaho industry could produce up to 65 million gallons of ethanol beginning in 2009. This emerging technology not only would invigorate and revitalize Idaho's rural agricultural economy, it would also contribute to the nation's energy, security.

Key players:

The Idaho Wheat Commission, a grower-funded market development agency, funded a 1995 study to quantify the tonnage of straw available across Idaho. Building upon the base knowledge that more than 2 million tons of straw was available for development, the commission conducted several outreach programs to raise awareness of the unused asset. Interested Idaho growers were informed and, working with a variety of groups--including the National Association of Wheat Growers, the Idaho Grain Producers, the Idaho Wheat Commission and the U.S. Department of Energy's Idaho National Laboratory (INL)--began exploring new markets. These efforts culminated in a "straw tour" of Idaho, during which Iogen--as an invited participant--saw the potential of a plant in southern Idaho.

USDA VAPG funding:

The availability and suitability of Idaho straw--as well as numerous logistical issues associated with harvesting and delivering the required 800,000 tons of straw annually--were serious impediments to successfully locating a bio-refinery in Idaho. Growers decided to seek a USDA Rural Development grant for a feasibility study on whether they could supply a large bio-refinery. Grant 4D Farms, serving as lead for the project, was awarded $450,000 through USDA's Value-Added Producer Grant (VAPG) program for planning purposes, including a feasibility analysis, marketing and business operations plans. This initial funding was supplemented by $475,000 in cash and in-kind contributions by project partners, including Iogen, Diamond Z Corporation, Trinity Trailer Corporation, MacRae Custom, D&L Custom, KM Custom and CaseIH Corporation.

The technology:

Iogen, with a significant investment from Petro-Canada, began producing the world's first cellulose ethanol fuel for commercial use in 2004. After looking around the world, it identified southern Idaho as one of the best locations for a straw-to-ethanol facility. Idaho's assets include a highly productive and relatively dry climate, as well as proximity to INL's energy research center.

According to Iogen's Maurice Hladik: "Iogen is an enthusiastic participant in what is probably the most serious and practical research effort into new fundamental approaches of harvesting and transporting massive amounts of feedstock for the cellulose ethanol industry. The cooperative approach by Idaho farmers that took the lead on this initiative, along with USDA, the Idaho National Laboratory and the private sector, has proven to be a highly effective combination of diverse resources and skills to yield such practical results."

Iogen officials say their long-term plans call for siting additional bio-refinery facilities in biomass-basins throughout North America and other continents. Other public and private groups have expressed a similar belief that cellulose ethanol will be viable wherever sufficient quantities of feedstock are available. Consequently, producers of wheat, corn, sugarcane, switch grass and other commodities throughout the United States will have opportunities to access a new market as cellulose bio-refining comes of age.

Collaborative efforts:

Under this partnership, growers and other collaborators have identified and resolved issues related to the quantity and quality of straw to be harvested, use and condition of existing harvesting equipment, alternatives for storing straw and transporting it to a potential biorefinery. The University of Idaho characterized and quantified aspects of feedstock production. Southern Idaho farmers worked with INL and others to understand and resolve issues related to harvesting, storing and pre-processing the feedstock; to protecting the integrity of the straw while in temporary storage; and to clarify methods to transport biofeedstock in compliance with a refinery's product specifications.