U.S. Provides $136 Million to Develop Transportation Biofuel

The U.S. Department of Agriculture is giving researchers and companies $136 million in grants to produce transportation fuels from trees and grass.

Washington State University and the University of Washington are getting $40 million each to lead teams developing techniques to make gasoline and aircraft fuels from trees, according to an e-mailed statement today from the agency. Iowa State University, the University of Louisiana, and the University of Tennessee also received grants.

The Agriculture Department is awarding the funds as part of an effort to reduce U.S. dependence on imported oil and develop fuels that will have less-harmful effects on the environment than petroleum-based products, according to the statement.

Agriculture Secretary Tom Vilsack announced the grants at Seattle-Tacoma International Airport. Providing that airport with renewable aviation fuel is among the goals of the project led by Washington State University.

The funds will flow to universities, companies and other organizations in 22 states. Weyerhaeuser Co. (WY), Gevo Inc., and ZeaChem Inc. are among the recipients.

ZeaChem received about $12 million as part of the University of Washington-led group and is building a plant near Boardman, Oregon, that will convert hybrid poplar trees into jet and diesel fuel, according to the closely held company’s Chief Executive Officer Jim Imbler.

The grant “gains us a year or so in the marketplace because it allows us just to start earlier,” Imbler said today on a media conference call.

Gevo received $5 million as part of the Washington State University-led group and is also focusing on aviation. The Englewood, Colorado-based company will use the funds to optimize its yeast-fermentation technology to convert wood into isobutanol, which will be processed into jet fuel, according to a statement.

To contact the reporters on this story: Zachary Tracer in New York at ztracer1@bloomberg.net; Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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