Pacific Ethanol working on deal to build cellulosic refinery in Stockton

Source: Mark Anderson, Staff Writer-Sacramento Business Journal • Posted: Friday, December 20, 2013

Sacramento-based Pacific Ethanol Inc. is working on a deal with Sweetwater Energy Inc. to build a cellulosic biorefinery at the Pacific Ethanol plant in Stockton.

If built, the Stockton biorefinery would be capable of producing up to 3.6 million gallons of cellulosic ethanol. The work is contingent on Rochester, N.Y.-based Sweetwater getting financing and permits.

Sweetwater uses a patented, decentralized process to convert locally available cellulosic material into a sugar solution. Cellulosic material includes materials such as wood waste and crop residue.

Once the sugar solution is created, Pacific Ethanol will ferment it into cellulosic ethanol.

Pacific Ethanol (NASDAQ: PEIX) produces and sells low-carbon renewable fuels in the Western United States. It operates four ethanol production plants, which have a combined annual production capacity of 200 million gallons. The plants are in Stockton, Madera, Boardman, Ore. and Burley, Idaho.

“An important part of our growth strategy is to take advantage of the flexibility of our plant infrastructure to process diverse feedstocks such as sugar, corn, sorghum, and now sugars produced from cellulosic material,” CEO Neil Koehler said in a news release. “The Sweetwater platform moves us towards producing next-generation renewable fuels while providing additional flexibility in sourcing, reducing feedstock costs and enhancing plant operating margins.”

Sweetwater will begin by supplying up to 6 percent of the Stockton plant’s feedstock requirement.

The Sweetwater plant would be built in proximity to Pacific Ethanol’s refinery, said Paul Koehler, spokesman for Pacific Ethanol. Sweetwater’s likely feedstocks would likely be orchard trimmings, agricultural waste, perhaps a dedicated feed crop such as sweet sorghum, and construction and demolition scrap from Northern California.