SALEM, Ore. -- A Salem business is hoping to turn dairy waste into automobile fuel.

Diesel Brewing would burn dairy waste to create butanol as a renewable fuel. The company plans to open a pilot plant in Salem by the end of the year that would burn a combination of wood and dairy waste.

"We are hoping for a dual-fuel solution ultimately using a combination of the two wastes," said Diesel Brewing's CEO Jeff Raines. "If for some reason we can't get dairy waste, we can run it on wood waste. ... The focus was to go into a non-food-based liquid fuel, and this gets rid of some nasty waste."

Diesel Brewing would burn pellets of dairy and wood to make a gas, which would then be made into butanol.

Butanol is a form of alcohol. When it is made from organic waste it is called biobutanol, which can be blended with gasoline for use in automobiles. There is also limited testing on vehicles that use 100 percent biobutanol.

Andy Aden, a senior research engineer with the biomass center at the National Renewable Energy Lab in Colorado told the Salem Statesman Journal that Diesel Brewing could become the nation's first company to produce butanol using a gasification process.

If it works, the company hopes to build a plant, located near a a large dairy, to produce the butanol.

"Our whole slant is not to make big plants," said Mark Stapleton, president of Diesel Brewing. "Our plan is to create a sustainable rural-type plant."

The dairy, if in Oregon, would get a $5-per-ton tax credit to supply the manure.

"They would pick it up at the dairy," said Jon Vanden Brink, owner of a dairy in Ione. "So as we produce the manure and the straw, it would be picked up. A lot of our costs depend on diesel prices, but (dealing with waste) is one of our larger expenses other than feed and labor."

There are at least six companies worldwide looking at butanol production using a fermentation process.

"Butanol traditionally is made from petroleum," Aden said. "When petroleum was cheap, it was done cheaply. Now, petroleum is expensive, so companies are getting into biofuels."

Diesel Brewing decided it was not cost effective to use the fermentation process.

"With our output estimates and concentrating on butanol, we have a small but fairly profitable plant that is paid off in, say, 10 years with reasonably small ongoing debt service," said Kevin Caldwell, the chief operations officer for Diesel Brewing.

"The same size plant in fermentation would cost closer to $100 million and would not have the output capacity to ever break even let alone make a profit."

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