Thethirdoffourweeklyarticleslooksathowthefinancialcrisisisslowingeffortstocommercializenext-generationethanol.CellulosicethanolhitsroadblocksTHEBUSINESSOFBIOFUELSThisyearwassupposedtobeabigyearforBlueFireEthanol.Thecompany,basedinIrvine,California,hadplannedtostartoperat-ingitsfirstcommercialcellulosicbiofuelplantbytheendoftheyear,convertingwastefromaneighbouringlandfillintoethanol.Therefin-ery,locatednearLancaster,California,wouldchewupeverythingfromcardboardtohedgeclippingsandproducemorethan11millionlitresofbiofuelayear.Butafteradelayduetopermitissues,Blue-Firefounditselffacingaformidableroadblock:theglobaleconomiccrunch.“Itputusrightinthemiddleofthemeltdown,”sayschiefexecu-tiveArnoldKlann.Withmorefinancingstillneededforconstruction,hesays,thecompanyhasnowpushedtheplant’sstart-updatetolate2010orearly2011.Acoupleofyearsago,Klannwouldhavehadreasontobeoptimistic.Cellulosicethanol—abiofuelthatcanbeproducedfromagriculturalresidue,grassesandmunicipalwaste—wastoutedassuperiortomaize(corn)ethanolbecauseitproducesfewergreenhouse-gasemis-sionsanddoesnotcompetewithfood-supplyneeds.InFebruary2007,theUSDepartmentofEnergyselectedBlueFireandfiveothercom-paniestonegotiateforuptoUS$385millioninfundingforcommercial-scaleplants.Andlaterthatyear,Congressissuedafederalmandatetoproduce61billionlitresofcellulosicbiofuelsannuallyfortransportationby2022.Today,acombinationoftherecession,heightenedinvestorwarinessbroughtonbyfinanciallossesinmaizeethanolandotherhur-dleshaveslowedthecommercializationrush.AccordingtoThinkEquity,aninvestmentbankbasedinSanFrancisco,California,theUnitedStateswillhavethecapacitytoproducelessthan13millionlitresofcellulosicethanolthisyear,anditwillalmostcertainlyfailtomeettheUSEnvironmentalProtectionAgency’s(EPA)pro-jectionof381millionlitresofcellulosicbiofuelsin2010.TwoofthesixcompaniesselectedbytheDepartmentofEnergytonegotiateforcom-mercialplantfundinghavedroppedoutof