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By Robert Rapier on Jan 14, 2008 with no responses

Coskata Hype

Several noteworthy energy stories in the past 24 hours, so a few quick posts.

First up is the Coskata news that has everyone talking:

GM Takes Stake in Small Biofuels Firm

Bill Roe, president and CEO of 18-month-old Coskata, said that at full production the company will be able to make ethanol for less than $1 a gallon. He said pump prices should dramatically reflect widespread production of the cheaper new ethanol by 2015 or 2016, when it expects to be building 20 to 25 fuel plants a year.

David Cole, chairman of the independent Center for Automotive Research, which receives a small part of its funding from auto companies, says GM’s move reinforces that U.S. carmakers are serious about developing alternative fuels. He calls the coming growth of cellulosic ethanol “a big deal.”

“Corn-based ethanol has never really been viable, it’s been driven by politics,” he said. “Once you’re into cellulosic or non-food biofuels, the resource base is very, very large and you’re talking about fuel at a buck a gallon. It changes the whole game.”

A growing number of biotechnology companies have been working to make cellulosic ethanol — long more costly than government-subsidized, corn-based ethanol — profitable.

Coskata’s three-step system — sending feedstock through gasification, a bioreactor and an ethanol recovery process — uses proprietary microorganisms and patented bioreactor designs that it is fine-tuning in its offices and laboratories in a Warrenville office park. It says the process is more energy-efficient than existing methods and will enable fuel to be made from a variety of non-food sources, even old tires.

The company says it can make more than 100 gallons of ethanol per ton of dry material, uses a third to a quarter the amount of fresh water for ethanol today and reduces greenhouse gas emissions by as much as 84 percent compared with conventional gasoline.

“We think that the Coskata process brings the first practical cellulosic opportunity to the market,” said GM’s Mark Maher, executive director of powertrain integration.

The first practical cellulosic opportunity? I thought that’s what Range Fuels was doing? Anyway, this story doesn’t mention it, but this is another Vinod Khosla backed venture. Is it legit? I have read through their web pages, and most of their technology has been done by others (like Range Fuels). If they can produce ethanol at high selectivity, that will be a breakthrough. But I will say again: Once you have syngas, I have no idea why you would put it in water and ferment it. Chemically convert it without the water, and avoid the wet purification step.

I will say that the process is over-hyped on their web page. They don’t even have a demonstration unit, and I can promise you the following statement from their Vision page is inaccurate:

Using its proprietary microorganisms and patented bioreactor designs, Coskata will produce ethanol for under US $1.00 a gallon anywhere in the world, from almost any input material.

Think about that. Anywhere in the world? My guess is that unless they found someone to pay a steep tipping fee to get them to take biomass, there is nowhere in the world that they will be able to make ethanol via gasification for under $1/gal.

I am not trying to be a naysayer – and I wish them all the luck in the world – but we heard all this before with TDP – and we know how that turned out. Often if you haven’t built a plant, you tend to underestimate your costs. My prediction is that this is what they will discover as they scale up. But even if they can produce ethanol from gasification at $2/gal, in the long run that will be pretty good.

Are they for real? Not enough information to say. Are there the classic signs of overhype? Definitely.