Energy innovators: Colorado companies squeeze fuel from crops and coal.

• Author: Buchsbaum, Lee
• Position: Blue Sun Biodiesel - KFx Inc. - Rentech Inc

The family built farmhouses, stores and churches, and sent their children off to war to protect their adopted country. Today the town is quiet as the region hemorrhages population and young people are forced to move out to find jobs and another way of life. As Kenny drives his Blue Sun bio-diesel powered tractor out to his fields with his young cousins, he carefully inspects his crop of Canola-like oil-seed plants.

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"It's hard to picture it," he says, "but we're growing a clean-burning energy source right here. Those plants, when refined, will power my tractor, my truck, and your car. With today's high regular diesel prices, we can grow a bio diesel cheaper than continuing to import what we do. And most importantly, Blue Sun is showing that you can keep the money here and bring back jobs and investments to our community."

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With oil hovering in the $60 per barrel range, bio-diesel and coal-derived transportation fuel processes that were dismissed years ago as too expensive are now much more viable. "It wasn't until 18 months ago that the energy industry realized prices were going to remain high enough for alternative energy projects to be profitable," said Mark Koenig, vice president, investor relations, for the Denver-based coal-to-liquids fuel developer Rentech LLC. "There are no silver bullets to our energy problems, but there are many silver bbs, and we're working on some of them."

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Since the United States is dependent on foreign oil for 56 percent of its needs--a share that, according to the U.S. Energy Information Administration, will grow to nearly 70 percent by, 2025 if nothing changes--re-evaluating how we create our energy, and keeping it inexpensive, is a matter of national security.

Rentech and Blue Sun are two of several Colorado companies working to diversify America's fuel sources and ease dependence on foreign supplies. A third is Denver-headquartered KFx, which is developing a process that enriches and upgrades low grade coals into a higher-energy, low-emission product, enabling many utilities to cost-effectively boost efficiency, meet clean-air standards and choose from a wider range of coal deposits, especially the lower-grade coals that are more abundant nationwide.

Westminster-based Blue Sun Biodiesel LLC has developed a high quality, 20 percent (or B20), Canola-based bio-diesel fuel taken from seed grown by independent farmers in Colorado, Kansas and throughout the high plains. This low-emission renewable fuel, currently priced slightly less than regular diesel, is being used by a growing number of vehicle fleets and consumers and sold at the pump in gas stations throughout Colorado--not just in granola-happy Boulder. Best of all, it can be safely used by anyone who drives a diesel, without engine modification.

RENTECH: FILLING YOUR CAR UP WITH COAL

Using coal to power your can is nothing new. In 1925, German engineers Franz Fischer and Hans Tropsch used an indirect coal-liquefaction process, which still bears their name, to produce transportation fuels. During World War II, the Nazis had 25 coal-liquefaction plants producing more than 124,000 barrels daily, meeting 90 percent of the Reich's needs. In the 1950s, as a reaction to South Africa's apartheid policy, many oil producing countries imposed an export ban on the nation. In response, the government helped create the South African Oil Co. to develop a commercial coal-to-liquid transportation fuel (gasoline and diesel) industry. Research has enhanced that process, and SASOL has produced more than 700 million barrels of synthetic fuels from coal since the early 1980s.

Given that in the U.S., according to the EIA, there are more than 250 billion tons of recoverable coal reserves--equivalent to an estimated 800...