Biofuel developer Coskata opened a new refinery in Pennsylvania this week and says the "semi-commercial" operation will demonstrate technology the company says can turn almost any biomass into ethanol.

The demonstration plant in Madison, Pennsylvania, uses bacteria to turn almost any organic material into ethanol, and Coskata says it can be scaled up to produce 50 to 100 million gallons annually. The company hopes to open one of these large-scale facilities in the south sometime in 2012 if it can raise the capital. But its primary goal is licensing the technology to other companies.

Coskata says its ability to use a wide variety of feedstock to produce ethanol sets it apart from competitors locked into feedstock such as corn or sugar cane. The company, which is backed by General Motors, is focused on using waste materials instead of food crops, thereby side-stepping the whole food-for-fuel debate.

Wes Bolsen, the company's VP of government affairs, told Wired.com a wide range of material can be used to create ethanol, but "from a cost perspective, municipal waste is probably best."

That means trash may be one fuel of the future.

The cheap municipal waste Bolsen is talking about includes a lot of stuff usually headed for landfills. Of course, the steady supply of cellulosic waste products such as wood chips or the byproducts of sugar cane production is more efficient. But in the contentious world of biolfuel production, Coskata hopes its process of using non-food crop material will help the biofuel industry move forward.

"Any biomass, anything that grew with sunlight, will give you approximately 100 gallons per dry ton," he said.

The company says its secret weapon is the process it uses to create the ethanol. The company takes the feedstock, wood chips in the case of the demonstration facility, and blasts it in a furnace. The resulting hydrogen and carbon monoxide byproducts are then fed to the bacteria, which produce ethanol as a waste product.

"At the core of Coskata technology is our proprietary micro organisms" Bolsen said.

Coskata claims its fuel can cut greenhouse-gas emissions as much as 96 percent over gasoline and that it requires less than half the water required to produce a gallon of gas. It also says its fuel is as much "as much as seven times as energy-positive as the fossil fuel used in the process."

The refinery follows the opening in April, 2008, of a "demonstration-scale" operation that could produce 40,000 gallons annually.

Long before it went bankrupt, General Motors invested an undisclosed sum in Coskata and is testing the fuel at its Milford Proving Ground. The Blackstone Group is also an investor.

The United States consumes 378 million gallons of gasoline daily.

In other cellulosic news, BlueFire Ethanol Fuels says it is scrapping plans to open a second refinery in California, and will instead build it in Mississippi. The company had received a $40 million Department of Energy grant to help finance the California plant but says a "challenging business climate" has pushed them to Mississippi instead.

Photo: Coskata

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