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Posts tagged “lanzatech”

By Robert Rapier on Oct 16, 2014 with 28 responses

LanzaTech’s Vulnerability

It’s been years since I looked at this article I wrote on LanzaTech in 2007, but today I was made aware that it’s been linked to from an article in Biofuels Digest: Junk or treasure? Looking at carbon monoxide and LanzaTech. LanzaTech CEO Jennifer Holmgren had some comments referencing my previous article that are worth addressing. So let me summarize.

LanzaTech proposes to take waste carbon monoxide from sources like steel manufacturers and ferment that to produce ethanol. Holmgren says that the bacterium they use for their fermentation, Clostridium autoethanogenum, is highly ethanol tolerant. The scientific literature mentions tolerance in the 2% to 4% range, and says that the ethanol production rate slows down beyond 4%. I did see one patent application where they mentioned ethanol via this process in the 5.5% to 6% range.

To my knowledge LanzaTech hasn’t publicly stated the ethanol concentrations they achieve, and this prevents really rigorous calculations. Holmgren states that we needn’t make assumptions since “distillation energy requirements are textbook calculations and easy to calculate.” This only true if we know the ethanol concentration in the solution being distilled. As Holmgren’s own link showed in her response, it takes nearly twice as much steam to distill a 5% ethanol solution as it does a 10% ethanol solution. But without knowing for sure what their ethanol concentration is, we can’t know the energy requirement. So, I gave an example in my previous article to illustrate my point, which is this. CONTINUE»

By Robert Rapier on Mar 20, 2012 with 19 responses

Are You Looking to Invest in the Google of Biofuels?

The Big Names in Biofuels

So you’re hoping to strike it rich by investing in LanzaTech. Or Solazyme. Or KiOR. Or Gevo. After all, some of these companies recently had high-profile IPOs, and they are clearly “hot” given all of the press coverage devoted to them. So perhaps you have decided you want to get in on a potentially unique investment opportunity.

I get more e-mails and phone calls about investments than on any other topic. And it’s not just individual investors. I hear from institutional and private equity investors trying to determine what’s true and what’s hype, and asking whether KiOR or LanzaTech might turn out to be the Google (GOOG) or Apple (AAPL) of biofuels. Before offering any guidance, the first thing I try to do is establish your reason for investing. Are you looking for — in the words of former Fidelity Magellan’s Peter Lynch — a “ten bagger?” Are you looking for a hedge against the end of the oil age? Is this money that you are fully prepared to lose?

The second thing I would ask you is whether you really understand the company, their business model, their competition, and their potential technical challenges. (This is typically why people e-mail me — because they have questions about these things). Let me offer an example from my own investing history to demonstrate why these issues are important by telling you about the worst investing mistake I ever made. CONTINUE»