Government Backs $1 Billion Plan to Make Gasoline from Wood

The Energy Department has offered a Texas company a loan guarantee for a $1 billion project to build four small factories that would turn wood chips into an oil substitute.
The loan guarantee, if finalized, would be about four times larger than any previous guarantee for biofuels. Its aim is to spur industrial-scale production of substitutes for gasoline and diesel from renewable sources beyond food crops like corn and sugar, a goal that many companies are chasing but none has yet achieved.
The company is already working on a small commercial plant in Columbus, Miss., using $50 million borrowed from the state. It has had a small pilot plant operating in Pasadena, Tex., since 2009 and a larger demonstration plant since 2010.
Each of the four plants would produce a synthetic crude oil the company calls “Re-crude,” and one of them would convert that to materials that could be blended directly into gasoline and diesel fuel.
KiOR’s process heats wood chips in a chamber with a controlled amount of oxygen and catalysts to produce a liquid and gases that can be turned into fuel. Several companies have pilot-scale plants that turn wood chips into liquid fuels of various kinds, but none has yet reached the point of industrial-scale production at an acceptable price.
http://green.blogs.nytimes.com/2011/02/03/government-backs-1-billion-plan-to-make-gas-from-wood-chips/