SOPERTON, Ga. — In what observers called an historic first step towards a reduction in the U.S.’s reliance on crude oil for energy, Georgia became the first state in the nation Tuesday to begin construction of a commercial cellulosic ethanol plant in the small, rural community of Soperton that is surrounded by the agricultural product that will be used to make the fuel — pine trees.

Range Fuels of Broomfield, Co.’s founder, chief executive officer and a busload of employees shuttled in from Atlanta for the ground breaking ceremony, joining the approximate 400 who attended including Gov. Sonny Perdue and U.S. Secretary of Energy Samuel W. Bodman.

When the first phase of construction is completed by the end of 2008, the plant will be producing 20 million gallons of ethanol per year.

The plant will create an initial 70 full-time jobs and 350-indirect jobs that will benefit many of Soperton’s July 2006 estimated population of 2,824. Soperton is located approximately 70 miles northeast of Macon in Treutlen County.

When later phases of the plant are completed, it will be producing 100 million gallons of ethanol per year.

With gas prices noticeably rising above the $3 per gallon mark on Tuesday in many locations en route to Soperton, lobbyists representing alternative fuel and timber concerns who attended the ceremony lauded the project as a critical first step to removing the nation’s reliance on Middle East oil.

“We’re spending $1 billion a day on foreign oil,” said Burl Haigwood, director of program development for Clean Fuels Development Corp. in Washington D.C. and for National Ethanol Vehicle Development in Jefferson City, Mo.

“That buck stops right here in Soperton,” Haigwood said just prior to the official ground breaking. “Analysts on cable news who speculate that ethanol will not be a major fuel source are just critics. There’s one in every crowd. (Ethanol) is not perfect, but this is the next best thing to do.”

Range Fuels’ Soperton plant will use wood and waste from Georgia’s pine forests and mills as its feedstock. The plant will be built on a 280-acre site, but only about 50 acres of the land will be needed for its operation, said Range Fuels CEO Mitch Mandich.

Mandich predicted that the Soperton plant will be the first of many to be built throughout the state of Georgia, a state that has ample renewable pine forests. He also predicted that the cellulosic ethanol produced from pine products will be cheaper and cleaner than its competing corn-produced ethanol.

More importantly, the growing production of ethanol will help drive down the price of the ever inflating per-barrel price of crude oil, Mandich said. He joked that as a resident of California and Colorado, he wasn’t sure Georgia was able to provide the amount of pine trees needed to produce cellulosic ethanol on a mass scale.

And then he got a report from Range Fuels supervisor of projects who visited the proposed Soperton plant site last year.

“There’s a reason you celebrate the ‘Million Pine Festival’ here,” Mandich said, drawing laughter from the attendees.

Gov. Perdue announced a new initiative at the event, dubbed the Bioenergy Corridor. The corridor runs throughout Georgia from Atlanta and Rome to the north, Columbus to the west, Valdosta and Brunswick to the south and Savannah and Augusta to the east. The corridor’s aim is to create partnerships among the state’s research and development, academic, and public and private sectors to focus on ways to create alternative fuel sources in the state to help the U.S. defeat its reliance on fossil fuels as well as to create new jobs and industry for economic growth.

Perdue was instrumental in helping Range Fuels obtain a $50 million grant from the U.S. Department of Energy to build the plant.

“I’m not a historian, but I feel history is in the making,” Perdue said. “Our state will be on the forefront of solving the energy crisis and our reliance on foreign oil... We are shifting the focus to cellulosic ethanol. With 24 million acres of forest, we are second in the nation. We hope Range Fuels will be the first of many bio fuels plant in the state.”

Vinod Khosla, founder of Range Fuels from California, said the plant is part of a declaration of war on combating the monopoly that crude oil suppliers have on the U.S.

“For a few years I have said we need to declare war. Corn ethanol started the war,” Khosla said. “Cellulosic ethanol is the weapon we need to replace foreign oil. This is far bigger than anyone realizes.”

To naysayers who predicted that it would be as many as 10 years before ethanol and the U.S. auto industry could produce enough ethanol and vehicles that run on the fuels to have any impact on the energy crisis, Khosla had a smile to match his stern reply.

“The naysayers say that because we already are dependent on foreign oil, we always will be,” Khosla said. “Ethanol will be cheaper than gasoline. But we spent millions of dollars to develop this technology. We will not now share that technology with these researchers who said this couldn’t happen, just to prove we’re right.”

Khosla and Haigwood noted that General Motors and Ford have made commitments to make half of the vehicles they build with engines that run on E-85, or 85 percent of ethanol blended with 15 percent of gasoline, by 2012, if there are enough ethanol stations to support the vehicles. Perdue noted that Atlanta opened its first ethanol station this week.