The EPA may have issued a report anticipating 100million gallons of cellulosic ethanol production in the USA by 2010, but it may have put too many of its eggs into one basket.
Seventy million of those gallons were to come from an Alabama company called Cello Energy, but Cello has now been found guilty in a Federal court of civil fraud for lying to a major investor about its ability to make ethanol from grass and other woody, non-food materials.
The jury has ordered Cello to pay $10.4million in damages after witnesses testified that the cellulosic fuel company was actually showing investors fuel derived entirely from petroleum.
According to reports, Cello has one plant capable of an annual production of 20million gallons of biofuel and three that it was planning to build and that the EPA credited with 50million gallons of cellulosic fuel by 2010.
On the plus side however, the EPA can issue marketable credits that would pump up the value of a gallon of real cellulosic up to $3 – that is about double the price of ethanol on the futures market today. This in turn will offer a substantial boost to legitimate cellulosic refiners and could get it to that 100million gallon level.
However, it is also possible that the EPA may delay the 100million gallon rule until sometime after the start of the year to give the industry more time to get in gear.
