GM invests in ethanol research firm General Motors Corp. announced Sunday that it has taken a stake in a biofuels research firm that aims to widely market $1-a-gallon ethanol as soon as 2011.
"We must radically ramp up the production of ethanol," said GM Chairman and CEO Rick Wagoner, who announced the deal at the North American International Auto Show. "This investment is about getting the technology on the road as fast as possible."
Wagoner didn't say how large an investment the automaker is making in the Warrenville, Ill-based start-up firm Coskata Inc.
Coskata plans to build a plant that can produce 100 million gallons a year of ethanol made by bacteria chewing away at biomass such as woodchips, trash, grasses and other organic materials.
"This is big," said David Cole, chairman of the Center for Automotive Research in Ann Arbor. "It's a game-changer." The bargain price of ethanol, compared with today's $3-a-gallon oil-based gasoline, could convince Americans to actively seek ethanol as an alternative to imported oil, GM officials said.
The automaker has committed to making half of its vehicles flex-fuel capable by 2012, which means they could run on gasoline or ethanol. Coskata, a privately held firm funded by venture capital, is using patented microorganisms developed at two Oklahoma universities to create cellulosic ethanol from biomass. The company also hopes to eventually take auto factory waste and parts of junked cars and turn them into ethanol. Coskata will complete production on a refining facility connected to an existing chemical plant that will produce 40,000 gallons of cellulosic ethanol this year. GM will use the fuel at its proving ground. The fuel will be produced at a multimillion-dollar facility to be built next to an existing facility, largely funded by GM.
For GM, which has helped get 300 E85 ethanol pumps open in the last 18 months in its push to get E85 to all corners of the United States, the deal represents its biggest push yet to promote an alternative to gasoline and help reduce U.S. dependence on foreign oil.
"We need to increase our nation's woefully low number of E85 fueling stations," Wagoner said, noting they account for less than 1 percent of the nation's 170,000 fuel pumps. He said current tax incentives are not getting the job done. GM's director of environment and energy, Mary Beth Stanek, brushed off concerns that GM's announcement was overly optimistic or could go the way of other advanced technology efforts such as the EV1, GM's electric car program. "I really think we're at 95 percent certainty that this is a reality," Stanek said during an interview at Coskata's labs earlier this month. "This is not a high-risk strategy."
Not enough corn grown
The United States is using about 5 billion gallons of ethanol annually, nearly all made from corn. But there isn't enough corn grown to meet the congressionally mandated increases in the decade to come. The energy bill signed into law last month requires the United States to use 36 billion gallons of ethanol annually by 2022, including 21 billion gallons of cellulosic ethanol.
Corn-based ethanol uses a significant amount of water and cropland to cultivate and emits more greenhouse gases than cellulosic ethanol.
It also gets $0.51-a-gallon subsidy from Congress, which has imposed a $0.54 a gallon tariff on imported ethanol, keeping cheaper Brazilian ethanol made from sugar cane out of the United States.
One executive at Coskata joked that the company's labs -- complete with hoods and gloves to work with the organisms -- are reminiscent of the 1971 movie, "The Andromeda Strain." The difference is the sealed plastic hoods are for the protection of the bacteria, not the humans. The bacteria will die if exposed to oxygen.
Most cellulosic researchers fall into one of two camps. One uses enzymes to break down biomass into sugars, which can be made into ethanol through fermentation, similar to how beer or wine is produced. The other way is to use microorganisms to break down the sugar in a method called thermal-cracking or gasification that has been around since the early part of the century.
Coskata uses a thermal process to break down organic material and gasify it. The synthesis gas then goes into a scrubber to remove particulate matter and dust, before entering a bioreactor, where five strains of bacteria produce ethanol by breaking down the gas in a plastic tube with a membrane.
"I think their microbes work quite well," GM's Stanek said. "I don't mean to sound funny but the bugs have been worked out. These are gluttonous organisms. They just gorge and produce so much ethanol."
The Coskata process produces twice as much ethanol over traditional distillation, Bill Roe, the company's CEO and president, said in an interview earlier this month at the company's labs.
That process takes less than one gallon of water to produce a gallon of ethanol. If woodchips were the fuel source, Coskata would need about 3,000 to 4,000 tons daily to produce its target amount of ethanol. Roe said they expect to produce ethanol for between $0.75 and $1.25 per gallon.
He said materials for producing cellulosic ethanol are everywhere: from byproducts of gasoline refining to construction debris. "It's almost free," he said.
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