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Poet to make ethanol from corn cobs next year

Corn ethanol producer Poet is getting into the cellulosic ethanol business with a plant that can convert corn cobs and kernel husks into ethanol.

Fuel producer Poet said on Wednesday that it will open an ethanol plant next year that will use corn cobs and fiber from kernels as a feedstock.

Construction on the $4 million pilot facility in Scotland, S.D., will begin by the end of the year and produce 20,000 gallons of ethanol per year.

Next year, it intends to begin work on a larger, commercial-scale plant using this same process that would begin operating in 2011. It is part of a $200 million Department of Energy cellulosic ethanol research effort called Project Liberty, the company said.

There are hundreds of companies investing in making ethanol from plants other than corn, the primary source today. There are already a handful of cellulosic ethanol plants testing out ways to make fuel from wood chips or sugar cane plant residues, rather than food crops. Cellulosic ethanol can also have a lower environmental impact than corn.

Poet's approach is to expand on its corn ethanol operations to make cellulosic ethanol.

It has a process for separating the fiber, in the form of kernel husks, from the rest of the corn. Corn cobs, meanwhile, are typically left on the field and don't add a lot of nutrients to the soil, said Jeff Broin, the CEO of Poet on a conference call with reporters.

Broin said the prospects for commercial cellulosic ethanol are better than ever because of recent technology advances and a huge amount of investment.

"It's no longer a question of if we can produce cellulosic ethanol but when. I don't know if I would be able to say that even a year ago," he said.