By KEVIN A. WILSON
Imagine converting virtually any waste--grass, municipal waste, old tires, wood chips--into fuel for your car. A company called Coskata claims it can do this using a patented bioreactor and anaerobic microbes found in nature (microbes that, although they're not genetically modified, are patented). Factories using this proprietary process could produce ethanol for $1 per gallon or less and sell it for twice that much, Coskata claims.
When ethanol-promoting General Motors signed on with a "strategic ownership investment" (large but short of controlling interest) announced at the Detroit auto show, Coskata, a 35-employee company in Warrenville, Illinois, moved into the limelight. Ever since President Bush suggested in his 2006 State of the Union address that we could reduce dependence on imported oil by getting ethanol from switch grass or wood chips, there have been lots of start-ups pursuing this Rumpelstiltskin-like profit-from-straw idea and the federal grants and tax breaks that go with it.
"Most companies doing cellulosic ethanol are trying to use enzymes to digest the sugar out of organic matter," says Wes Bolsen, Coskata vice president. "We don't do it that way."
The bioreactor first phase is essentially an update of old-fashioned gasification, burning the feedstock at up to 4000 degrees Fahrenheit. Some organic materials can be gasified at lower temps. One advantage: Plant fibers also get converted to energy.
Either way, the feedstock is reduced to ash, which has agricultural uses, and carbon monoxide, hydrogen and that nasty greenhouse gas, CO2. Some of the exhaust might need scrubbing, but most of these gases are "fed" to anaerobic bacteria that consume them and emit ethanol as a waste product.
"It's kind of like a fish tank. Bacteria recycle the waste into something beneficial," says Bolsen.
Research was done with microbes floating around in a big tank, but in our visit to Coskata's lab and HQ, tucked into an office park in the western Chicago suburb, we saw early research toward industrialization, in which the microbes would be grown as a slime layer on a dense matrix in a plastic tube. The water-and-gas mixture would bubble through these tubes, and the liquid coming out would be 3 percent or more ethanol. The ethanol comes out through distillation and passing the liquid through a membrane, and the water is reused. Coskata needs only one gallon of water per gallon of ethanol, less than one-sixth of that needed for corn ethanol. The gasification phase produces waste heat that makes a Coskata plant an ideal collocated partner for something like a paper mill. It's a continuous process (you don't want to starve the microbes) so you need a reliable supply of feedstock, but Bolsen says "you could do straw one week and tires the next." Once it's running, the process takes only two-minutes to convert feedstock to ethanol.
Unlike many cellulosic ethanol start-ups, Coskata doesn't aim to go into ethanol production itself. It wants to sell its processes and colonies of its proprietary bacteria to bigger companies that have the massive capital resources to build cost-intensive production facilities.
"We want to provide the software, essentially," says Bolsen. "In our business model, you'd license the process, and we'd help you set up your plant. Say it makes 600,000 gallons a year. You're making money selling ethanol and we're getting a per-gallon royalty. We're back at work in the lab, developing better processes, more efficient organisms, and we come back to you and say, 'We have version 2.0 now. Buy this upgrade, and you'll get 800,000 gallons a year.'"
Besides GM, Coskata's other industrial partner is ICM, builder of most corn-ethanol plants in America. It also has ties to several venture-capital firms and educational and research institutes such as the University of Oklahoma, Oklahoma State University, Brigham Young University and Argonne National Labs. The microbes-Coskata owns rights to five--were discovered by academic researchers funded by the company. By selectively breeding the germs--making them "thoroughbreds," Bolsen says--the company has improved output 100-fold.
If oil companies don't want to be involved or block access to their fuel stations, Bolsen says, there are alternative distribution channels, "big-box retail outlets that have fuel pumps, essentially. They're eager to have this."
A 40,000 gallon/year demonstration plant will be announced on April 24. Then, a new partner would build a production plant making millions of gallons annually. Bolsen says he envisions one more round of drumming up venture capital and eventually an IPO.