USDA nears first cellulosic ethanol loan guarantee

A process operator looks at a general view of the GreenField Ethanol plant in Chatham, Ontario, April 10, 2008.

WASHINGTON (Reuters) - The Agriculture Department is close to issuing its first loan guarantee for a commercial-size plant to make ethanol from cellulose, Agriculture Secretary Ed Schafer said on Friday.

Schafer said during an interview that he believed the final technicalities had been resolved to allow the guarantee. "We're ready to go," he said.

The 2008 farm law created a $320 million dollar loan guarantee program for biorefineries that would produce advanced fuels such as ethanol from cellulose, found in grass and wood. A companion program would share the cost with farmers to adopt biomass crops for making advanced fuels.

(Reporting by Charles Abbott; editing by Jim Marshall)