The Coors brewery in Golden, Colo. and Merrick & Co. of Aurora, Colo., use beer waste to produce 1.5 million gallons a year of the gas substitute ethanol. A second, $2.3 million ethanol-producing plant will open later this month on the site, according to an October 24 story in the Denver Post. The second plant will double ethanol production at the brewery, partly by gathering millions of gallons of spilled beer and feeding it via an underground pipeline to the processing plant. Under a 15-year agreement, Merrick leases land from Coors, buys the beer residuals from the brewer and owns the plant. The ethanol is sold under a contract with Valero Energy Corp., which distributes the ethanol to Diamond Shamrock stations. The beer waste accounts for only a fraction of the expected 4 billion gallons of ethanol sold nationwide next year, but supporters say the plan illustrates the growing demand for gasoline substitutes. Ethanol demand, already at an all-time high nationwide, has increased threefold since 1996. Demand will expand further after federal energy laws that mandate more use of alternative fuels go into effect in the near future, the Post reported. At least 7.5 billion gallons must be used in the U.S. by 2012, fueling nationwide interest in ethanol production. Nationally, at least 83 plants are currently in operation, more than 20 are being built and dozens more are in the planning stages. Opponents of ethanol argue that it costs more to produce, reduces gas mileage and isn’t economically feasible without subsidies.

Originally posted on Fleet Financials

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