From Cow Pies to Clean Power
By Elizabeth Esfahani

(Business 2.0) - A big, Stinkin' problem is piling up on U.S. farms: more than 200 million tons of manure every year. Unfortunately, there's only so much demand for fertilizer. Enter Panda Energy, a $300 million Dallas-based power plant company with an unlikely solution: It wants to convert cow dung into bio-gas fuel, which would in turn power the production of ethanol, a grain alcohol that's mixed with gasoline to create cleaner-burning car fuel.

In February, Panda is breaking ground on its first patty-powered ethanol plant, which should be up and running by late 2006 in Hereford, Texas, a town Panda president Todd Carter calls "the Saudi Arabia of manure." To be competitive in the face of high natural-gas costs, Panda wanted a renewable energy source. "Somebody mentioned manure, and we all chuckled a bit," Carter says. "But when we gave it to our engineers, they efficiently created energy from it." He hopes the innovation will make Panda a top-three producer in the ethanol market, which is now dominated by Archer Daniels Midland and is expected to grow to $15 billion by 2012. Panda also plans to build four more facilities during the next two years, with the goal of replacing as many as 450 million barrels of imported oil each year. And that's no b.s.

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