First Sustainable Ethanol to Mass Market?

February 7th, 2008 by Guest Contributor

So, I have a confession. Jeff had to publish my mostly-finished post for our anniversary this week, because I was asleep on a plane. I was invited to Chicago for nine hours (no thanks to the weather) on behalf of GM, to tour the laboratory of Coskata, the auto manufacturer’s newest–and perhaps smartest– investment. The few bloggers and journalists who braved the cold met with the company’s executives for Q&A and a lengthy PowerPoint. (Obviously, GM paid my way for the trip. I’d never pay to go on a trip where air time > ground time.)

I won’t go into the details of the tour, the PowerPoint, the partnership, the process that Coskata uses, the partnership that Coskata announced on the 6th with one of the largest ethanol refinery builders, (under embargo–we can expect details of partnerships like this to literally leak out consistently over the next year, similar to the strategy that GM is using to re-release all of its SUV lines as hybrids) or anything else, because they’ve all been covered so well here:

GroovyGreen’s coverage of the tour and PowerPoint

GM Announces Biofuel Partnership: Cheap, Green Ethanol?

Economic Conditions Shifting in Favor of Ethanol

Coskata partnerhship with ICM Announcement

Update: EcoGeek has a post up too, but they don’t link to any of ours. 😉

Now that you’ve read all that, I’m going to muse a little bit on the takeaways from this partnership and what to look out for.

In case you didn’t read all that, here’s the short version. Coskata was born out of research at OU, OSU, and BYU on ethanol-producing anaerobic (oxygen = bad) bacteria dug out of swamp-like areas and bred selectively to maximize their slime-ahol productivity.

The company’s R&D chief compared them to thoroughbred racehorses… repeatedly. But, we saw the little guys work in the lab, and gosh darnit, they make ethanol. He claimed they’ve achieved a 50x increase in productivity since the lab opened last June. Last June?!

The advantage their process has is that the bacteria’s food is any gasified organic matter. It only relies on gasification, which is a mature and commercialized process. I think someone said if wood were used to gasify wood, about 7% of the mass per capita would be used to heat the gasification. They’re pretty efficient. I thought, why not use renewables to generate the power? But then again, why not just use plasma?

What’s next?

The company plans to have a demo plant operational this year that will produce 40,000 gallons of renewable ethanol by the end of next year to be tested at GM’s nearby proving grounds.

After that, the company has aggressive plans to both build their own plants (likely through a close strategic partnership like the one just announced with distillery-builder ICM; Wes Bolson, Coskata’s VP of Biz Dev came to them via ICM) and license their “Coskata Process” to other builders in roughly a 5:1 license:build ratio. It sounds like they plan to build next to all low-hanging fruit first, and then sit back and reap the licensing fees once the market scales sufficiently and margins start to fall.

What is the low-hanging fruit?

Coskata execs envision a country with each state containing two or more facilities generating enough ethanol from local resources to virtually eliminate our oil dependence. They can achieve local production because anywhere they can buy organic matter for less than $50/dry ton, with it they can produce 100 gallons of ethanol that’s 50 cents cheaper than gas. This includes wood, storm debris, switchgrass, (sorted) garbage, tires…

And coal. As Steven Balogh of GroovyGreen asked pointedly, “Wouldn’t it be cheaper to make ethanol with coal?” (subtext: I cannot fall for it, your altruism stinks of a ruse.)

Coskata execs looked around nervously and emphasized that while coal would (at least, initially) be quite a bit cheaper than waste streams and sustainably-produced feedstocks, it doesn’t stack up all the other metrics of success. (subtext: We need environmentalist support to get this off the ground. Yes, coal will be used for a while until other waste streams can be commodified and taken advantage of to actually get them to consumers well below the price of gas, but if I tell you that now you’ll never support me, it’s for your own good, so trust my ‘fib’ and settle down.)

When I pressed them on the difference in price point, they–strangely–said they knew the answer to that but weren’t going to share.

Despite the potential for tomfoolery from the likes of coal, I have to say: I’ll take it. Yes, global warming sucks and is going to suck a lot worse in the future. But right now, we need to get our energy economy and infrastructure together in the next ten years if we’re going to have any chance of avoiding all hell breaking loose when an energy crisis hits. Coal schmoal, as long as it’s going to a good cause: bridging the gap to sustainable energy independence.









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