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US Govt.to make loan guaratees for ethanol refineries

WASHINGTON (Reuters) — President George W. Bush will ask Congress for an extra $9 billion for the Energy Department to make loan guarantees for refineries that produce cellulosic ethanol, new nuclear power plants and electric generating plants that reduce greenhouse gas emissions, US Deputy Energy Secretary Clay Sell said Thursday.The request will be included in the White House’s proposed budget for the 2008 spending year, which the administration will send to Congress next Monday.

The Energy Department currently has the authority to make $4 billion in loan guarantees, which is a promise from the government to step in and repay loans made by private lenders in case of default for energy projects.

The White House request, if approved, would increase the department’s loan authority to $13 billion, Sell told reporters while speaking at a Platts energy conference.

Sell said the department has already received about 100 applications for various energy projects, and it could begin issuing the loan guarantees for some of them as early as this autumn. Sell said he would not be surprised if a cellulosic ethanol refinery project would receive a loan guarantee.

The production of cellulosic ethanol — manufactured from switchgrass, woody biomass, corn stalks and other agricultural waste products — has been slowed by production costs.