Range Fuels at end of road

BROOMFIELD
— Range Fuels Inc., a Broomfield-based biofuels company, appears to be
out of business with the recent foreclosure sale of its troubled
cellulosic ethanol plant near Soperton, Georgia.

The
company’s headquarters office near the Interlocken business park is
vacant, and its phone number is answered by an automated system. Its
website, www.rangefuels.com, is inactive.

Recent messages
left for Range Fuels CEO David Aldous in Colorado and company
founder/investor Vinod Khosla of Khosla Ventures LLC in Menlo Park,
California, were not returned.

“Range Fuels has met the
end of the road,” said Kalib Kersh, an analyst at Lux Research Inc. in
Boston who followed the Colorado company.

“With Range Fuels,
the issue wasn’t funding,” said Alejandro Zamorano Cadavid, a biofuels
analyst at New York-based Bloomberg New Energy Finance. “The problem
with them was absolutely technological. Their situation tells you that
money doesn’t guarantee something’s going to work.”

But
Christine Shapard, executive director of the Colorado Cleantech
Industry Association, believes the state’s biofuels industry overall
still has plenty of potential. She singled out companies such as
ZeaChem Inc. of Lakewood and OPX Biotechnologies Inc. of Boulder as
success stories.

“That sector has been a little bright spot
in the last nine months,” Shapard said. “Our biofuels companies
continue to grow, add employees and get money.

Range
Fuels’ problems included using technology and processes created for the
coal industry for converting wood to cellulosic ethanol, according to
biofuels experts.

Aldous blamed the national recession and
the general public’s lack of support for sustainable fuels for his
company’s difficulties, according to published reports. He also said
it’s tough to do something that’s never been done before.

Started
in 2006 and initially called Kergy Inc., Range Fuels created a system
called K2 to produce cellulosic ethanol from waste materials such as
wood chips and paper pulp on a commercial scale for the first time. The
company’s two-step process involved using heat, pressure and steam to
make synthetic gas, also called syngas, and then converting the gas to
biofuels such as ethanol and methanol.

The company
received an IQ (Innovation Quotient) Award in the Sustainable Business
category in 2007 from the Boulder County Business Report.

The
company raised more than $300 million in government grants and loan
guarantees as well as venture capital, planning to spend some $150
million to build its central Georgia plant. The facility, which is the
country’s first commercial cellulosic plant, started construction in
late 2007 and was first scheduled to open in 2008; it finally started
operating in 2010.

The plant was to create 250 construction jobs and 70 permanent ones, according to the U.S. Department of Energy.

The
facility was expected produce 100 million gallons of ethanol and nearly
3 million gallons of methanol in 2011. But in 2010, the plant did
better making methanol — producing only one batch of cellulosic ethanol
and roughly 4 million gallons of wood-based methanol, which the U.S.
Environmental Protection Agency doesn’t consider a renewable fuel,
according to biofuels trade publications. Range Fuels shut down the
plant in early 2011, citing a technical defect that limited capacity,
and laid off an undisclosed number of workers, according to published
reports.

At that time, Aldous told the Boulder Daily Camera
a handful of headquarters employees were laid off as well, leaving
about two dozen people in Broomfield.

“Range Fuels had
unrealistic ambitions and timelines,” Kersh said. “They were getting
the technology to work, but it’s a very different thing to get a
product to produce at scale.”

After Range Fuels defaulted on
an $80 million loan for the plant from AgSouth Farm Credit in late
2011, the lender foreclosed on the property and sold it in early
January 2012 for $5.1 million to New Zealand-based startup LanzaTech NZ
Ltd. Khosla Ventures also is an investor in LanzaTech, which develops
technology for converting industrial waste into bioethanol.