Non-Food Cellulosic Ethanol in Mississippi

BlueFire Renewables, focused on changing the world’s transportation fuel paradigm through the production of renewable fuels from non-food cellulosic wastes, has announced an off-take agreement with Tenaska BioFuels for the purchase and sale of all ethanol produced at BlueFire’s planned cellulosic ethanol facility in Fulton, Mississippi.

“This off-take agreement is a significant step forward for BlueFire. It provides immediate revenue once our plant is on-line. Also, it will move BlueFire closer to a debt financing agreement with the Department of Energy and U.S. Department of Agriculture,” stated Arnold Klann, CEO of BlueFire Renewables, Inc. “This is one of the first cellulosic ethanol contracts of its kind in the United States establishing BlueFire as a clear leader in the industry.”

Pricing of the 15-year contract follows a market-based formula structured to capture the premium allowed for cellulosic ethanol compared to corn-based ethanol giving BlueFire a credit worthy contract to support financing of the project. Despite the long-term nature of the contract, BlueFire is not precluded from the upside in the coming years as fuel prices rise.

TBF, a marketing affiliate of Tenaska, provides procurement and marketing, supply chain management, physical delivery, and financial services to customers in the agriculture and energy markets, including the ethanol and biodiesel industries. In business since 1987, Tenaska is one of the largest independent power producers.

“We look forward to a long-term relationship with BlueFire and to collaborating on off-take agreements for future plants as BlueFire continues to expand and bring valuable biofuels to the markets that need it most,” stated Dave Neubauer, TBF general manager and vice president.

The Fulton, Mississippi project will allow BlueFire to use green and wood wastes available in the region as feedstock for the ethanol plant, which is designed to produce approximately 19-million gallons of ethanol per year. Another fully permitted and shovel-ready facility in Lancaster, California will use post-sorted cellulosic wastes diverted from Southern California’s landfills to produce approximately 3.9 million gallons of fuel-grade ethanol per year.

BlueFire Renewables, Inc. was established to deploy a commercially ready, patented, and proven Concentrated Acid Hydrolysis Technology Process for the profitable conversion of cellulosic waste materials (“green waste”) to renewable fuel sources, including cellulosic ethanol, biodiesel, biojet fuel, and drop-in directs. BlueFire is the only cellulose-to-fuel company worldwide with demonstrated production of Biofuels from urban trash (post-sorted MSW), rice and wheat straws, wood waste, and other agricultural residues.

BlueFire received an increase to its grant totaling $88 million under the American Recovery and Reinvestment Act in December of 2009. BlueFire’s biorefineries will be located near markets with high demand for ethanol and will use locally available biomass. This should dramatically reduce delivery costs and increase biofuel supplies, while providing a unique waste processing technology to help America’s cities better manage the increasing problem of overflowing landfills.

Tenaska BioFuels, LLC (TBF) is the biofuels marketing affiliate of Omaha, Nebraska-based energy company Tenaska, one of the leading independent power producers in the U.S. Forbes magazine ranks Tenaska 16th among the largest privately-held U.S. companies. TBF provides independent marketing, transportation, storage, risk management, procurement, and financial services to ethanol and biodiesel market participants.

Tenaska has developed approximately 9,000 megawatts of power generation and manages and operates eight power plants totaling 6,700 MW that it owns in partnership with other companies. Tenaska affiliates also market natural gas, electric power, and biofuels, with Tenaska’s natural gas marketing affiliate (Tenaska Marketing Ventures) regarded as one of the top 10 natural gas marketers in North America. Tenaska affiliates are also involved in private equity fund and acquisition management; fuel supply; natural gas exploration, production, and transportation systems; and electric transmission development.

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