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GM buys stake in ethanol made from waste
General Motors, eager to ensure a supply of fuel for the big fleet of flex-fuel ethanol-capable vehicles it is building, has joined the rush into alternative energy and invested in a company that intends to produce ethanol from crop wastes, wood chips, scrap plastic, rubber and even municipal garbage.
Rick Wagoner, GM's chairman and chief executive, announced the investment on Sunday in a speech at the opening of the North American International Auto Show in Detroit. The company purchased an equity stake in Coskata, a start-up company in Warrenville, Illinois, that plans to make ethanol without using corn. GM would not say how much it paid or how big a stake it took in the company.
Coskata plans to build a pilot-scale plant this year in Warrenville, William Roe, the president and chief executive of Coskata, said in a briefing with reporters last week. It has demonstrated all the phases of its technology but has not linked them together in an operating plant, he acknowledged.
Putting money into the fuel business is new for car companies, said Jeffrey Leetsma, the president of the Automotive Hall of Fame, in Dearborn, Michigan, and a car historian. "I think this could be new ground," he said.
Henry Ford, he said, established rubber plantations in Brazil to try to break the Dutch cartel, but in the modern era the car companies have generally not invested in fuel.
"I don't really see the logic of it," said Christopher Flavin, president of the Worldwatch Institute, a Washington environmental group. "It's not particularly an industry they know well, or have expertise in." Companies like GM, he said, could be more effective by concentrating on the fuel efficiency of their products..
But Lee Schipper, a visiting scholar at the transportation center of the University of California, Berkeley, said that a new method to make ethanol "presents them with a way of wiggling the industry out of fuel economy standards." California is seeking a standard based on how much carbon is added to the atmosphere, he said, and ethanol made from waste materials could result in substantially less carbon per mile.
"If I were that company and I really believed in the process, why wait for someone else to invest?" he said.
Coskata is one of many companies, and far from the leader, in an emerging world of start-up firms that are making alternative fuels with a mix-and-match approach to existing technologies. In Coskata's case it is a combination of gasification and bacterial action.
The first step is cooking the raw feedstock into synthesis gas, a mixture of hydrogen and carbon monoxide. That gas is cooled and fed to bacteria that consume it and excrete ethanol.
Coskata is not the only company pursuing the gas-to-bacteria-to-fuel route, but claims its process gives more ethanol per ton of raw material — 100 gallons — and uses less water, less than one gallon for each gallon of ethanol.
If it can be done economically, the Coskata process has three large advantages over corn-based ethanol, according to General Motors. First, it uses a cheaper feedstock that would not compete with food production. Second, the feedstock is available all over the country, a crucial point since ethanol cannot be shipped from the corn belt to areas of high gasoline demand in existing pipelines.
In addition, the process appears to require less electricity and natural gas, meaning that making it would not release as much carbon. The product would qualify for a U.S. government tax exemption for ethanol.
Roe said that "at full production, Coskata ethanol should be 50 cents to $1 cheaper than gasoline at the pump," and that the total production cost would be under $1 a gallon when the fuel begins flowing in 2010 or 2011. Mary Beth Stanek, GM's director for energy and environment, said the process showed "near-term readiness" and that no scientific work was involved to commercialize it.
"It's literally just physical building," she said. Her company intends to help get the fuel into pumps around the country, she said. Many of GM's vehicles are already capable of running on a blend of 85 percent ethanol and 15 percent gasoline, but that fuel has not become widely available. Most ethanol is used in a blend with 90 percent gasoline.
Coskata is financed in part by Vinod Khosla, the computer entrepreneur turned venture capitalist, but is only one of the companies he is backing to produce ethanol without corn.
General Motors, eager to ensure a supply of fuel for the big fleet of flex-fuel ethanol-capable vehicles it is building, has joined the rush into alternative energy and invested in a company that intends to produce ethanol from crop wastes, wood chips, scrap plastic, rubber and even municipal garbage.
Rick Wagoner, GM's chairman and chief executive, announced the investment on Sunday in a speech at the opening of the North American International Auto Show in Detroit. The company purchased an equity stake in Coskata, a start-up company in Warrenville, Illinois, that plans to make ethanol without using corn. GM would not say how much it paid or how big a stake it took in the company.
Coskata plans to build a pilot-scale plant this year in Warrenville, William Roe, the president and chief executive of Coskata, said in a briefing with reporters last week. It has demonstrated all the phases of its technology but has not linked them together in an operating plant, he acknowledged.
Putting money into the fuel business is new for car companies, said Jeffrey Leetsma, the president of the Automotive Hall of Fame, in Dearborn, Michigan, and a car historian. "I think this could be new ground," he said.
Henry Ford, he said, established rubber plantations in Brazil to try to break the Dutch cartel, but in the modern era the car companies have generally not invested in fuel.
"I don't really see the logic of it," said Christopher Flavin, president of the Worldwatch Institute, a Washington environmental group. "It's not particularly an industry they know well, or have expertise in." Companies like GM, he said, could be more effective by concentrating on the fuel efficiency of their products..
But Lee Schipper, a visiting scholar at the transportation center of the University of California, Berkeley, said that a new method to make ethanol "presents them with a way of wiggling the industry out of fuel economy standards." California is seeking a standard based on how much carbon is added to the atmosphere, he said, and ethanol made from waste materials could result in substantially less carbon per mile.
"If I were that company and I really believed in the process, why wait for someone else to invest?" he said.
Coskata is one of many companies, and far from the leader, in an emerging world of start-up firms that are making alternative fuels with a mix-and-match approach to existing technologies. In Coskata's case it is a combination of gasification and bacterial action.
The first step is cooking the raw feedstock into synthesis gas, a mixture of hydrogen and carbon monoxide. That gas is cooled and fed to bacteria that consume it and excrete ethanol.
Coskata is not the only company pursuing the gas-to-bacteria-to-fuel route, but claims its process gives more ethanol per ton of raw material — 100 gallons — and uses less water, less than one gallon for each gallon of ethanol.
If it can be done economically, the Coskata process has three large advantages over corn-based ethanol, according to General Motors. First, it uses a cheaper feedstock that would not compete with food production. Second, the feedstock is available all over the country, a crucial point since ethanol cannot be shipped from the corn belt to areas of high gasoline demand in existing pipelines.
In addition, the process appears to require less electricity and natural gas, meaning that making it would not release as much carbon. The product would qualify for a U.S. government tax exemption for ethanol.
Roe said that "at full production, Coskata ethanol should be 50 cents to $1 cheaper than gasoline at the pump," and that the total production cost would be under $1 a gallon when the fuel begins flowing in 2010 or 2011. Mary Beth Stanek, GM's director for energy and environment, said the process showed "near-term readiness" and that no scientific work was involved to commercialize it.
"It's literally just physical building," she said. Her company intends to help get the fuel into pumps around the country, she said. Many of GM's vehicles are already capable of running on a blend of 85 percent ethanol and 15 percent gasoline, but that fuel has not become widely available. Most ethanol is used in a blend with 90 percent gasoline.
Coskata is financed in part by Vinod Khosla, the computer entrepreneur turned venture capitalist, but is only one of the companies he is backing to produce ethanol without corn.