the president: thank you all very much. ilike to tell people part of my job is to be the educator-in-chief. and today we're ata really interesting facility in north carolina to talk about what's possible; what dreamersare doing to enable us to achieve a very important national goal, and that is to become lessdependent on oil from overseas, thereby ensuring that our national security interests are betterintact and our economic security interests are better intact and that we're better stewardsof the environment. that's what we're here to talk about. but before i do, i do want to thank some people.first, laura sends her regrets. i'm a lucky boy to have her -- (laughter) -- to have heras my wife. we've got a lot of friends here
in carolina, and she sends her best wishesto our carolina friends. i told some folks yesterday, i'm not very objective when itcomes to my wife, but i think the country is really lucky to have her as the first lady.(applause.) we're here at novozymes, which is a companythat makes enzymes. we're going to talk to thomas, who is the president and plant manager,about what they do here, and why it's relevant. before we get there, i do want to say somethingabout steen riisgaard. he's the president and ceo, steen. he flew over from denmark.i can't thank you enough for coming. i appreciate you being here. it's interesting, isn't it,when you're able to sit in north carolina and talk about a danish company that is investingto not only help us become less dependent
on oil, but equally importantly is investingcapital, which enables citizens from the united states to find good work. i toured around the facility, and i askedpeople at the facility how long they had been working here. and a lot of people have beenhere 20-plus years. so for those people who are worried about free trade, i want you toremember that if this country were to wall ourselves off from the world, we would missopportunities to find markets for our products, and at the same time miss opportunities forcitizens who work at a facility like this to find good work. it's in our interests thatwe have free and fair trade. and so i thank you very much, steen, for investingin the united states of america, and i appreciate
the fact that you're sensitive to the needsof the workers here in the united states of america. and i see you're sitting next toyour ambassador. mr. ambassador, welcome. i'm glad you're here. (applause.) a person who understands the vast potentialin the lands here in north carolina to make us less dependent on oil is richard burr.he's the united states senator. i'm proud he's joined us today, and thank you for coming,senator. there you go. (applause.) congressman g.k. butterfield. thank you for being here,g.k. appreciate you coming. (applause.) he's a united states congressman from the neighboringdistrict, but he has enough interest in making sure that we succeed in alternative sourcesof energy, that he's here. he's also on an
important subcommittee in the house. i appreciateyour interest. appreciate you joining us. i want to thank the agricultural commissionerfrom the great state of north carolina, steve troxler, who's joined us today. steve, thankyou for coming. there he is, right there. (applause.) see, steve needs to take an interestin this like he is, because doesn't it make sense to be able to say to our farmers, growwhat you can grow so we become less dependent on oil. i like the idea of a president beingable to say, wow, the crop report is in, we're growing more corn than ever before, whichmeans we're importing less oil from overseas. it's an exciting time to think about thatour farmers not only are going to grow what we need to eat, but it's going to grow whatwe need to run our automobiles.
and that's coming. that's what we're hereto discuss today. i know it sounds like a pipe dream to some -- you know, there goesthe optimistic president talking again. but you're going to hear from some experts here.i'm just a history major. (laughter.) and i'm with ph.d.s. (laughter.) let me remindyou who the president is. (laughter and applause.) but the ph.d.s are providing the brain powernecessary to help plants like this develop technologies that will enable us to convertwood chips into fuels that are running automobiles. it's an interesting time, isn't it, when you'reable to say, we're on the verge of some breakthroughs that will enable a pile of wood chips to becomethe raw materials for fuels that will run your car.
i appreciate the mayor, jenny edwards, here,mayor of franklinton, for joining us. where are you, madam mayor? thanks for coming. proudto see you again. (applause.) and all the novozymes employees, i appreciate you settingthis deal up and i appreciate you putting up with the hundreds who travel with me. (laughter.)and thank you for your warm hospitality. look, here's -- i just told you the goal.the goal is for the united states to be -- to diversify away from old, old ways. and it'spossible. and i do believe it is a proper use of your money, taxpayers' money, to spendto encourage research on interesting ideas. we spent about $12 billion since i've beenyour president to try to stimulate technologies that will literally change the way we live.a lot of that money has gone into clean coal
technologies. if you're worried about dependencyon oil from overseas, then it seems to make sense to me that we ought to be able to havethe technology so that we can better use the resources we have here at home. i don't know if you know this, we've got about250 years worth of coal in america. that's what they estimate. and it makes sense, therefore,to spend money at the federal level to develop technologies so we can burn that coal in environmentallyfriendly ways. the idea is to have zero emission coal-fired plants here in america. and it'spossible, and we're making progress toward that goal. i happen to believe that if you're concernedabout the environment and want to deal with
renewable sources of energy, that we needto pursue nuclear power. those power plants emit zero greenhouse gases. it doesn't requireany hydrocarbons from overseas to run those plants. so we're beginning to license newplants. we're spending money on wind and solar energies. it makes sense to be able to -- asthe price of hydrocarbons goes up, it makes sense that there be alternative sources ofenergy coming to the market as quickly as possible. so we're making pretty good progress. butif you really want to reduce the amount of oil that you consume, you got to reduce theamount of gasoline you use. in other words, if you say, we want to reduce our dependenceon oil, what you really got to do is change
gasoline usage in the united states. and there'sa couple of exciting things that are taking place -- one is new battery technologies.we're spending money at the federal level -- and by the way, there's a lot of privatesector money going into alternative sources of energy. and some day you're going to beable to get in your car, particularly if you're a big-city person, and drive 40 miles on abattery. it's coming. and by the way, the car doesn't have to look like a golf cart.(laughter.) it could be a pickup truck. (laughter.) and that technology is around the corner.and if we're able to drive the first 40 miles, or, say, 20 miles, on gasoline [sic] there'sa lot of big-city folks that will never have to use a drop of gasoline on a daily basis.they'll be driving via electricity. these
are lithium-ion batteries, technology -- sowhen you hear that term, you just got to know there's a lot of folks and a lot of moneyaiming hard to get this to the market as quickly as possible. why? because we've set a goalfor the united states to be less dependent on oil. secondly -- and this is what we're here totalk about today -- is ethanol. it says that the new developments in ethanol -- in otherwords, fuel derived from corn -- can be diversified. here's the problem: right now we're consumingabout 7 billion gallons of ethanol a year made from corn. and it's a pretty standardprocess. people here at this facility have developed the enzymes necessary to break thecorn down in an efficient way so that we can
use ethanol derived from corn. the problem is we got a lot of hog growersaround the united states and a lot of them here in north carolina who are beginning tofeel the pinch as a result of high corn prices. a lot of the cattle people around the unitedstates -- i have got a few of them in my home state of texas -- they're worried about highcorn prices affecting their making a livelihood. in other words, the demand for corn, becauseof agricultural use, and now energy use, is causing corn prices to go up. i bet you theagriculture commissioner is hearing from folks. and so how do -- the question then is, howdo you achieve your goal of less dependence on oil without breaking your farmers -- withoutbreaking your hog raisers -- corn farmers
happen to like it, but i'm talking about the-- (laughter) -- people dependent on corn. and here's how: you develop new technologiesthat will enable you to make ethanol from wood chips, or stalk grass, or agriculturalwaste. and that's what we're here to talk about: is it possible, and if it is possible,how close are we to achieving the technological breakthroughs that i believe are possibleso that our -- so that we're changing our habits. and these are exciting times, they reallyare. i've always said, america needs to stay on the leading edge of technological change.it will mean we remain a really important economy in the world, but it will also meanthat our folks will be able to find good high-paying
jobs. in this case, being on the leading edge oftechnological change means that we'll also be able to deal simultaneous with economicinsecurities that come when china demands more for oil, the world produces less, theprice of oil goes up, and so does the price of gas at the pump here in north carolina;national security concerns where some people who've got oil don't like us, and therefore,may be willing to use their energy resources to try to cause america to take a differentview of the world; and environmental concerns. and all these three concerns come togetherwith technology as the solution. and so thomas, tell people what you do. (laughterand applause.)
mr. nagy: that was a -- that was a nice introduction.thank you, mr. president. you may know, and many of you here -- first of all, i want towelcome you very, very deep from my heart and from all my colleagues here in franklinton,welcome to north carolina, welcome to novozymes, and also welcome to the guests here. (applause.) the president: well, thank you. like you'rethe president, right? mr. nagy: well, you're the president. (laughter.)okay, anyways -- the president: it didn't take him long tolearn, you know. (laughter.) mr. nagy: novozymes is the world's leadingbiotechnology company within the field of industrial enzymes and microorganisms. wemarket more than 600 products around the globe,
and all of these products have the same incommon, that they -- sort of like it's good for environment, it's good for businesses,because when using our products, you use less resources, less energy, less water, and hence,you make better use -- the president: so you make enzymes. mr. nagy: we make enzymes. and enzymes issort of like the key component you need to have when you convert starch or the corn tosugar that you can then make to alcohol or the ethanol. but also, it's got to be thekey component when you want to make your switchgrass or your biomass to sugar and then to ethanol. the president: so the enzyme begins to breakdown the raw materials in a particular raw
material that will enable us to make moreethanol, is that what you're saying? mr. nagy: that is correct. the president: now -- so, is this a -- isthis like a huge distillery? mr. nagy: our plant here? the president: yes. mr. nagy: well, you could say what we do here,we use microorganisms, and the way we make these enzymes is by the use of these microorganisms.and you could compare our process to if you brew beer or wine. we take some agricultureraw materials like starch, again, or corn, and then we ferment the insides, basically,like you would ferment wine. the product here
is the enzymes that we can then ship off toethanol plants around in the u.s. and they use it today to break down the starch in cornand make ethanol. so we are a key provider of a key technology to make this happen foryou. the president: absolutely. and i presume thatone of the bottlenecks to achieving widespread ethanol production is the cost of enzymes.have you seen any appreciable decline in the cost of enzymes since you have been -- mr. nagy: certainly. we have worked with enzymesfor many, many years at novozymes. we have a 60-year tradition of this, and so we arevery, very good at it. we are the leading edge on all the technologies in all the marketswe are, and therefore we are a company dedicated
to innovation, because innovation, as youtalk about, being able to compete with others, innovation is our tool to do so. and so wereinvest more than 10 percent -- actually 13 percent of our annual sales back into r&d. the research we do in cellulosic ethanol rightnow is the biggest research of what we have in the company, where more than a hundredresearchers around the globe work on solving the issues ahead of us. what we have beenable to do since 2000 until we reported it in 2005, on a grant provided to us from departmentof energy, is to reduce the cost of conversion by a factor of 30. the president: i want to repeat, because youactually -- he's talking about your money.
(laughter.) and he said that we gave a grant-- we, the taxpayers of the united states, gave a grant to the researchers of this company,see if they could not reduce the cost of producing the enzymes that would be critical to makingethanol, and this company was able to do so -- reduced the cost by a factor of 30, whichi think is a justifiable use of taxpayer's money to see those kinds of results. mr. nagy: thank you. the president: you got a lot of ph.d.s andadvanced degrees here? mr. nagy: yes, we do. (laughter.) we havea few, yes. the president: you do?
mr. nagy: yes, we do. the president: the reason i mention that isthat part of remaining a competitive society is to make sure our children get a good educationearly, so that it is possible to get advanced degrees -- at least a degree beyond high school.if you want a good job in america, you better go on after high school. the jobs in placeslike this are jobs that require brain power, as much as anything else. and, therefore,the educational system of this state, for example, has been critical in attracting industriessuch as the company we're talking about here. i mean, i go walking through the halls andshaking hands with people -- we got people on -- doing sophisticated computer programming;we got lab technicians who have got advanced
degrees in bioengineering. and my only pointis it reminds me of how important higher education is for this country. and i applaud the folksof north carolina about being on the leading edge of education, and that's why you gotcompanies like here, like this company here, paying pretty good money for jobs, i guess. mr. nagy: that's correct. one of the reasons,and what we really enjoy here is also the -- you alluded to the education system here,but it's an integrated system from community colleges through all the levels at university.and there's a number of universities in the state that we also enjoy very close collaborationamongst. some of them are nc state university, of course.
the president: good. well, thomas, thanks,buddy. i appreciate it. you handled it well. (laughter.) kevin wenger. yes, kevin, how are you? whatdo you do? dr. wenger: i'm the manager of the r&d groupthat we have here in north carolina for ethanol research. the president: for this company. dr. wenger: for this company, yes. we, aboutfive years ago, decided to invest in a dedicated r&d group for ethanol process development,and we decided to anchor that research group here in north carolina, because the u.s. isreally where the ethanol market has been very
strong. the president: and you've got a degree inwhat? dr. wenger: i have a degree in chemical engineering,ph.d. from colorado state university. the president: good. dr. wenger: and i've been here in novozymessince i finished graduate school in 1994. the president: and so in 1994, were you thinkingswitchgrass into -- (laughter.) dr. wenger: i've always been interested inalternative energy and making ethanol. there wasn't so many jobs related to switchgrassin 1994. (laughter.) the president: well, cellulosic.
dr. wenger: yes. but i was always -- i'vealways been interested in fermentation also, and so novozymes is a fermentation companyand that's how i ended up here. the president: interesting. and so i'd liketo quote what he said. kevin said, "it's going to be a challenge," -- talking about achievingwhat we're talking about here -- "but if we look at how far we've come in the past fiveyears, we have so much momentum, it shouldn't be that tough." and the reason i quote a person who knowswhat he's talking about when it comes to developments necessary to bring the cellulosic ethanolto market, i quote him because i presume in that optimism there's realism.
dr. wenger: yes, i'm very optimistic, butalso i can see how the 20-in-10 goal is very achievable. if you look at what's happeningnow, what's been happening with corn ethanol over the last five years and the developmentsthat are coming in terms of implementation of cellulosic, it's really amazing. thingsare really starting to happen. the president: what he referred to is somethingi should have talked about earlier, and that is i set a goal of the united states reducingour gasoline consumption by 20 percent over the next 10 years. that's the 20-10 goal.in other words, it is a goal. and i mandated a fuel standard that says we'll be using 35million gallons of ethanol or alternative fuel over the next 10 years.
now, the reason i did this is i think it'spossible to do it. and the reason i think it's possible to do it is because of peoplelike kevin telling me it's possible. remember, i'm the history major. (laughter.) and sothe advances you've seen in five years -- if you're able to take yourself back five yearsago to today, it is a noticeable difference, a -- obviously reduced the cost of enzyme,for example, which is an important development. dr. wenger: yes, absolutely, it's a very noticeabledifference and in terms of the number of industry players that are really interested in thistechnology and are also willing to invest in making this technology happen, includingnovozymes as an industry player, it's really amazing what we're seeing over the last fiveyears.
the president: the high price of energy hascaused private capital to say that it's going to be impossible for a society like the unitedstates to sustain its use on gasoline. so whether it be novozymes who is investing,or private sector funds, that money is coming in. they're fueling new research and development.so we've got the government helping, but also you've just got to know that the private sectoris very much involved with trying to invent the technologies necessary to take advantageof a society that recognizes it has to diversify away from energy. and i repeat to you, we're all connected,and so when a chinese economy grows and their demand for oil goes up, it affects the pricethat you pay for gasoline. people got to know
that. and therefore, it's important for usto continue to advance these kinds of research projects. i met dr. mike in greeley, colorado, a yearago. dr. pacheco: golden, colorado. the president: exactly, golden, colorado.how quickly they forget. (laughter.) i am 60. (laughter.) golden, colorado. michael,tell them who you work for. dr. pacheco: mr. president, i work for thenational renewable energy laboratory. we're the leading laboratory for the departmentof energy in the field of renewable energy. we have a very robust program, as you know,in the field of biofuels, and it's focused
right now on cellulosic ethanol. i agree with kevin, your 20-in-10 goal isvery achievable. in fact, the growth of the corn and the biodiesel industry, which sinceyou signed the energy policy act two years ago, have been growing at over 100 percentper year. those fuels are going to make a major portion of that 20 percent. but we haveto, as you indicated, begin the transition to use a broader base of fuels. two years ago we issued a study with usda,two agencies together, that showed that the u.s. could produce enough raw biomass that'sequivalent to about 60 percent of all the oil that we use in the united states. theproblem is that most of that biomass is not
an easy material to convert. it's not likecorn grain. and so our research -- the president: explain to people what you'retalking about. dr. pacheco: things like forest residues,things like fast-growing trees and switchgrass -- the major constituent in that materialis a cellulose fiber, usually accounts for more than half of -- the president: do you know what switchgrassis? tell them what switchgrass is. dr. pacheco: switchgrass is a native grassthat grew in the midwest; it's a grass that grows in relatively poor conditions, it cansurvive droughts very well. the president: rocky soil and dry. soundskind of like parts of texas, doesn't it? (laughter.)
imagine, however, if you're able to grow agrass where it's rocky soil and dry that you're able to convert into energy. you're talkingabout a major change in the lifestyle of your children and my children and their kids. imean, this is -- anyway, go ahead. (laughter.) dr. pacheco: you're doing very well. (laughter.) the president: i am passionate on the subject.(laughter and applause.) dr. pacheco: but that's a really big part of it, mr. president, beingable to move to those marginal conditions and grow crops in areas where we're not currentlygrowing crops, and then to have those crops that are specifically designed to producefeedstocks that are adapted well for the enzymes that novozymes is producing can really increasethe yield -- that is, how much ethanol we
can make from a ton of biomass. one of the challenges when we started thisproject between nrel and novozymes was that no one in the world really felt like enzymescould be a cost-effective technology in producing ethanol from raw material. today all the leadingresearchers in the world are working in that area because of the partnerships and becauseof the progress that kevin has already talked about. but we're not there yet. and while i'm optimistic,like kevin, there's still a lot of hard work left to do, mr. president. and we have workin the pre-treatment area, we have work still to do in the enzymatic hydrolysis, and westill have research in the fermentation side.
and so doe right now is considering proposalsto work with industry in the area of developing fermentation organisms, which is a reallyimportant part because the yeast, the bugs today that we use to make ethanol won't workin the future with these new feedstocks. so it's really important that we start this transition. at nrel we work with all the other nationallabs. we especially work with argon national lab and pacific northwest and idaho and oakridge.those are all labs that work together within my center, and we try to coordinate our effortsto utilize all the skills at the national laboratories, because each of the labs bringsa unique set of skills to this challenging problem. we also work with a lot of othercompanies, in addition to novozymes. and those
interactions are equally as important, becauseone of the things that we're trying to do, mr. president -- when we talked last yearwe talked about this -- is to try to develop transitions that grow from existing industries.so instead of replacing the corn ethanol industry, we see cellulosic as evolving from it. similarly, we can see how the pulp and paperindustry might be able to evolve into bio refineries. maybe even the massive petroleumrefineries can someday evolve to take biomass materials, and you know we're doing some researchin that area, as well. it's really important that we stay on thistrack, because in the long run, there's no other sustainable source of liquid transportationfuels other than biomass. so we have to succeed
at this. the president: you know, it's interesting,you're probably wondering whether or not automobiles can be easily converted to use ethanol, andthe answer is, absolutely. there's a lot of automobiles in the midwest that are fillingup with 85 percent ethanol, called e85 pumps. it doesn't take much. so one of the barriersto the advent of a lot of ethanol use is not the automobile. it's easy to convert them.as a matter of fact, some of you out there probably have got a car that can use ethanoland you just don't know it -- flex-fuel automobiles, they're called. secondly, the production process. once wefigure out what needs to take place internally,
it's not that expensive, relative to hugegasoline refineries. what will happen is, when you get a wood chip breakthrough, forexample, where it becomes cost effective, you're going to have ethanol production plantsall across north carolina, where the wood chips can be gathered. one of the reasons we keep talking about costs,it's just real practical. somebody is not going to fill up their car with ethanol ifit costs a lot more than gasoline. the consumer is pretty wise, and they care about the environment,no question about it. but if a person is having to drive back and forth to work, they're goingto generally pick the most economically competitive fuel to do that. people want to keep moneyin their pocket, and therefore, if it costs
less using gasoline, they'll use it. so, therefore,that's why we're driving these research dollars, to get the cost of producing ethanol downso it can compete. and it's going to happen, because as that price of oil goes up, theprice of gasoline goes up, which makes ethanol more competitive. and one reason -- just soyou know -- one reason why there's been such a push, is because when the price of oil wentup from early 2001 to where it is today, about $60 a barrel, people saying, we may not beable to sustain this, we better get moving. and that's what's happening. north carolina state. ratna. welcome. thankyou. you're a doctor of? dr. sharma: biological engineering.
the president: biological engineering. chemicalengineering. biological engineering. (laughter.) people should be getting the picture thatwe've got a lot of smart people working on this project. when you've got ph.d.s surroundingthe president talking about doing what's right, we've got a lot of brain power working onit. and that's where you're going to get your breakthroughs. so what are you working on? dr. sharma: mr. president, first of all, i'dlike to thank you for your support and interest in the development of these technologies forcellulosic ethanol. i essentially represent all the research ofmy colleagues at north carolina state university
and across the country in different universitieswho have been working in this area of converting residues from the farm, forest, animal operations,possibly even food industry waste to convert it into ethanol and make our country self-reliantand achieve the goal of 20-in-10. but, as has been mentioned, there are challenges.we have to overcome those, and it's possible we can do that. we do need more investmentand funding support, definitely, to speed up this process of achieving this goal in10 years. the president: so what do you think? i mean,how long have you been doing this for? dr. sharma: i've been doing this for aboutfour years. the president: really? so when you got yourph.d. you never dreamt you'd be thinking about
converting wood to oil for fuel. what didyou feel? dr. sharma: well, i was trained as an agriculturalengineer, and i grew up on -- on an ag university campus with farms around me. so i always sawresidues lying around and plants and stuff. and i got my ph.d. in food safety engineeringwhere i learned about microorganisms. so then i saw this opportunity, it was like puttingtogether engineering and microbiology, to process something and get value from somethingthat's typically not -- the president: and there are other peopleat north carolina state working with you on this project? dr. sharma: yes, there are. there are peopleworking on utilizing forest residues, wood
chips for converting to ethanol. there arepeople working on different ag residues -- sweet potatoes, which is a starch, base feedstock,people working on biodiesel, from -- again, from agricultural resources. so there are a lot of people working on overcomingthe challenges of pretreatment and converting the carbohydrates into sugars and then eventuallyfermenting it into ethanol. and my focus has been more on ag residues, like cotton stalks,hays and straws, which would typically not be -- the president: cotton stalks, pretty interesting,isn't it? dr. sharma: they are.
the president: they now get plowed up in theground. your idea is to get them so they can end up in somebody's automobile, not in theground. dr. sharma: exactly. so there is a lot ofpotential. and like switchgrass, which grows in marginal lands. and we have, like you mentioned,a big swine industry in north carolina. so the advantage is we could possibly put thetwo together, use animal waste as a nutrient source to grow the switchgrass and then convertit into ethanol so you're getting energy from waste. the president: so are people pretty upbeatabout it? people -- dr. sharma: well, people who are aware andlooking forward to switching from fossil fuels
to renewable energy, yes, they are. the president: yes, pretty good. dr. sharma: and they feel it's achievable.we can do it. we just need to work a little harder on that. the president: yes. a little more money anda little harder. (laughter.) talk to my man, michael. he's the guy distributing some ofthe money. (laughter.) well, good. thanks, doc. thanks for joining us. i'm sure proudyou're here. nc state is a fine, fine institution. i know you're proud to work there. dr. sharma: yes, i am, definitely.
the president: ryan, where are you from? mr. adolphson: from the university of georgiain athens, georgia. the president: a bold man to come here tonorth carolina. (laughter.) a great school, by the way. what do you do? mr. adolphson: i'm with the university's -- i'min charge of our bio -- our pilot facilities that are looking into early transitioningsome of this technology from the bench out to industry, looking at really the wide, orbroad spectrum of this concept of biomass to energy that includes fuels and includeselectrical and different bio products, and really running the gamut of this whole typeof industry. and we have a pretty large research
facility looking into this at all levels. the president: in athens? mr. adolphson: in athens, yes -- bio-refiningand carbon cycling center that we've recently started in the last two years. the president: what is a bio -- what is acarbon recycling center? mr. adolphson: carbon cycling. the president: carbon cycling. mr. adolphson: right. so we're looking intothe concept of a bio refinery, which mike mentioned, and really taking a little bitbigger picture view, stepping back, not looking
only at ethanol, but counting ethanol as asignificant piece to the puzzle, but looking at all the other products that can be generatedfrom bio mass. you know, similar to a petroleum refinery that takes a barrel of crude anddoesn't just make diesel and gasoline, but 50, 60 other products out of that. so we're looking at our wood chips as thatbarrel of crude, taking that, and turning it into a larger profit stream than just asingle product, and we believe that's going to drive the economics -- the president: what other products? mr. adolphson: there's a whole host of products.you know, the char, the stuff that's in a
thermochemical process, instead of a biologicalprocess, or the sugar platform. the department of energy really breaks up when they talkabout our production of ethanol in two pathways: one is thermochemical and the other is ourfermentation, or our sugar platform that we've kind of been talking about now. the thermochemical platform allows us to takeall these different biomass streams, treat them with heat in a certain way, release allof the energy from those, and we can capture that, turn that into our product. so one product we have left is the carbonthat's left over. we're able to look at that as a soil amendment and take that carbon withoutreleasing it into the atmosphere and put it
back into the ground. and then we have everythingthat comes out of that biomass that we can turn into ethanol and we can turn into specialtychemicals for our chemical industry as precursors to things like nutraceuticals, pharmaceuticals,and then we have the gas that comes off that could be maybe cleaned up and used as a pipeline-qualitygas, like natural gas, to heat homes. the president: all from one big pile of woodchips? mr. adolphson: all from one big pile of woodchips, right. you know, we're at a very unique place -- the president: you've got to dream big inorder to be able to get it done. (laughter.) that's good.
mr. adolphson: we are at a unique place rightnow, and the technology is there. the president: pretty interesting, isn't it?it's -- i'm not so sure if they'd believe me in the coffee shop in crawford if i toldhim what he just told me. (laughter.) but it's possible. mr. adolphson: it is, right. i like to say,we're not there yet, but we can see it from here. the president: you can, yes. mr. adolphson: we've got two -- on the groundin the next 18 months in georgia, we've got a biorefinery taking wood chips to ethanol,we've got a traditional corn ethanol plant
going in, we've got two, what we call, integratedbiorefineries that are going to be pulling mostly -- we have 24 million acres of commercialforest in georgia. so that's a big priority for us. and the pulp and paper industry hasbeen -- has been going other places. the president: are they investing? mr. adolphson: the industry itself? mr. adolphson: the part of the pulp and paperindustry, that is the growers, the land owners, are very interested in finding a market fortheir wood so they can get a higher price for it. i think the paper mills might be lessinterested in paying a higher price for their feed stock than the growers are. but yes,they're definitely investing. the university
and governor purdue has sent a mandate outfor us to really invest in public/private partnerships. so we can take the public money,and he likes to say he wants to see industry with skin in the game, who is able to putmoney and people involved in this effort. and so we're -- we've created a facility.we can locate industry on campus with us, so that when we do develop a technology, thistechnology transfer from academia to industry is seamless. we're excited about that becauseguys like us who are in academia or government, we can provide money and resources, but it'sgoing to be the market that will have to pick it up and take it to get it into the consumers. the president: absolutely, yes. that's prettyinteresting, isn't it? thanks for coming.
i'm glad you came over. mr. adolphson: thank you, mr. president. we'reexcited to be here. great opportunity. the president: and we're going to end up withterry. terry ruse. mr. ruse: all of the ph.d.s around the table.i don't have one of those, but i -- the president: i'm glad to join you. (laughter.) mr. ruse: i'm happy to report to you thatthe ethanol industry is alive and well and up and taking nourishment. the president: so what do you do? mr. ruse: i am the chief operating officerfor agri-ethanol. that's a privately-held
ethanol company in raleigh. the president: and what do you -- so what-- mr. ruse: we are developing -- our strategicplan is to develop 10, 108-million-gallon-a-year ethanol plants in the -- the president: so you're going to be the manufacturer? mr. ruse: we are going to be the manufacturer.thanks to the vision of dave brady and the guys that own agri-ethanol, i've been ableto develop a really flexible project in that we have a design to start out as a corn plantto process corn. we were building 11,000 foot of track -- big loop track to be able to bringcorn in by rail and take ethanol back out.
in the center of that loop track, we've engineeredthe ability to handle wood chips. we've got all that in place. we have a co2 company thatwill process the co2, anything -- any of the co2 that doesn't go to that direction to makefood grade liquid carbon dioxide will be directed into hydroponic gardening or into growingalgae to support an adjacent biodiesel plant. now we have the real estate to put one ofthose on. the president: so you intend to buy the enzymesfrom this company to run in your plant -- mr. ruse: we have this -- as a matter of fact,we have offered them the opportunity to establish a field research laboratory on our site sothat they don't have to go long distances to get their people and do really ground work--
the president: where is this thing? mr. ruse: it's in aurora, north carolina.it's the first one. it's about 160 miles east of raleigh. the president: and when will you -- are youbuilding it now? mr. ruse: we are ready to break ground. oneof the interesting facts about that is that we have the site completely controlled. wehave it totally permitted. but in trying to talk to the financial people about puttingmoney, i've spent two years trying to convince them that it makes sense to build an ethanolplant in north carolina as much as it does one in iowa. and we haven't gotten that done.and so --
the president: see, you can't build a plantfar away from the raw material. that's the interesting thing about this industry. whathe's basically saying is, is that investors think you have to be in the middle of a cornfield. really. and that's why there's a lot of plants being built in the midwest becausethere's a lot of corn in the midwest. mr. ruse: but because of the fact we're closerto the population density centers for the ethanol, and the animals that we have in northcarolina, we can prove that our plant is as competitive as the plant in iowa. the president: you can't have a centralizedplant and ship your ethanol long distances, either. the production needs to be close tothe raw material and the users, is what you're
saying. and the economics. mr. ruse: that's exactly correct. and this-- each one of these plants will produce about 400,000 tons a year of highly digestible,high protein feed to help the hog farmers, that you alluded to, get over their heartpain of -- the president: high corn. mr. ruse: of high corn. and coming from thefarm, the thing that i understand most is the resiliency of the american farmer. yougive him a good price for the corn, and he will grow the corn. and i think that whenthe march planning report comes out, you'll see closer to 13 billion or 13.5 billion bushelcorn market, and 90 million acres planted
than what we've seen in the past. and so all of the price concerns from theanimal growers and from the wall streeters will be -- the president: will be eased somewhat. that'sright. he's right. it's amazing how the market responds. mr. ruse: and the one last piece of our projectis that we intend to build a green truck stop on each one of these sites that sells biodiesel,sell e10 and e85. the president: that would be good. e10 isethanol -- 10 percent ethanol. mr. ruse: ten percent ethanol and 85 percentethanol and then biodiesel.
the president: the purpose was to give everybodya sense of where a lot of smart people and good capital are moving. smart people arehere working on some amazing technologies that -- you know, that i believe 10 yearsfrom now people will say, gosh, it's interesting that they were worried about this particulartechnology coming to fruition, because it's coming to fruition. and the role of the governmentis to stimulate thought and investment and set goals. and we set a big goal, really have-- reduction of gasoline by 20 percent over the next 10 years. i wouldn't have done that if i didn't thinkit was achievable. part of it is to change our cafe standards on automobiles, which willencourage conservation. the other part is
to change the fuel -- fuel mix across america. and this is a coming time. it really is. andi want to thank those of you who are on the front line of changing it. it must be excitingfor you to be able to work on something so novel and so encouraging and so importantfor our country. i thank the good folks at this important companyfor letting me come by to say hello. i ask for god's blessings on the united states ofamerica. thank you. (applause.)
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