Experimental Ethanol Producer Goes Belly Up

A cellulosic ethanol plant in Upton, WY was auctioned on June 12 to the highest bidder after the operator and its parent company separately filed bankruptcies. The plant, owned by Western Biomass Energy LLC, hit the auction block after a Chapter 11 bankruptcy reorganization that forced the company into asset liquidation.

Only months before filing Chapter 11 last Halloween, the company was the first to produce ethanol from sugarcane bagasse. Bagasse is the fibrous waste product left over after crushing sugarcane to extract its juice. Petrobras S purchased 20,000 gallons of the experimental fuel to power a fleet of minivans for a Brazil meeting on sustainable development sponsored by the United Nations.

Western Biomass Energy was a subsidiary of Rapid City, SD-based Blue Sugars Corp., which itself filed voluntary Chapter 7 bankruptcy May 10.

According to a fact sheet from the auctioneer, the plant was commissioned in 2008 after beginning construction in 2006. Its first production trials used pine wood chips before retrofitting equipment through the Petrobras partnership to make it able to process sugarcane bagasse by 2011.

The bankruptcy displaces a team of eighteen individuals, including a plant manager, an operations supervisor, various operators, laborers and technicians, and a welder. According to court documents, parent company Blue Sugars Corp. had $30 million wrapped up in the failed subsidiary. But Western Biomass Energy owed a total of more than $35 million to its creditors.

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