Web exclusive posted Jan. 19, 2009, at 9:27 a.m. CST

Omaha, Neb.-based cellulosic ethanol development company NextStep Biofuels Inc. has signed a 20-year feedstock procurement contract with Arkansas-based wood processor The Price Cos..

Under the agreement, The Price Cos. will annually supply NextStep Biofuels with up to 500,000 tons of wood-based residues such as woodchips, bark, pulpwood and other tree-based waste products for conversion into cellulosic ethanol.

Mapping out viable solutions for solving feedstock infrastructure is one of the core business strategies of NextStep Biofuels' and the impetus behind the company's agreement with The Price Cos., according to NextStep Biofuels Chief Operating Officer Russell Zeeck.

"We understand the concept that we want strong operational and business personnel that understands site selection and where it fits the feedstock to the site and then how it fits the technology," he said. "Addressing the feedstock infrastructure concern for cellulose is important because without the feedstock infrastructure in place, even if the technology works, the plant can't operate successfully."

According to Zeeck, NextStep Biofuels is currently evaluating sites in Mississippi, Alabama and Arkansas for future cellulosic ethanol facilities where The Price Cos.' feedstocks will be processed.

"We are currently working with the states and negotiating those sites now," Zeeck said, adding that the company is looking at potential sites in the Midwest that could use agricultural wastes instead of woody biomass.

On the technology side, Zeeck said NextStep Biofuels intends to itself license process technology equipment or through joint venture agreements that fit its business model for developing cellulosic ethanol projects.

"That's one of the clear identity differences between us and other cellulosic companies out there now," Zeeck said.