Ethanol Minus the Corn: ATV’s Bill Wiberg on Coskata and Its Big Deal With GM
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bioreactor, where a proprietary strain of bacteria living on tube-shape membranes ferments it to make ethanol and water. Once distilled, the result is 99.7 percent pure ethanol.
Wiberg says the idea of building a company around the syngas-eating bacteria was brought to ATV in early 2006 by seed fund GreatPoint Ventures, which had been working on the idea with researchers at Oklahoma State University and the University of Oklahoma. Todd Kimmel, an entrepreneur in residence at ATV, took on the project, assembling a technology and management team headlined by vice president of engineering Dick Tobey, a 28-year veteran of Dow Chemical, and CEO Bill Roe, who had spent 29 years with Nalco, the world’s largest maker of industrial water-treatment chemicals.
The company operated in secret for more than a year and a half. “Given how much discussion there is about the problems with corn-based ethanol, there didn’t seem to be a lot of advantage to coming out publicly to describe what we are going to do differently,” says Wiberg. “We didn’t want competitors borrowing or mimicking the approach. But there comes a moment when you’ve made sufficient progress and you really do need to engage strategic partners and raise additional capital, and at that point it makes sense to go public.”
The prospect of the GM partnership provided the moment, says Wiberg. “GM is a really interesting and important partner for Coskata for two reasons,” he says. “First, GM has a lot of experience in biofuels and they’ve looked at a wide cross section of the available ideas. The fact that they chose to partner with Coskata is an excellent validation of the technology. The second is that if you look at what it will take to change the ethanol market in the U.S. and take full advantage of the flex-fuel vehicles and create a distribution network for E85, a small company is not going to make that happen. The weight of a company like GM can make a huge difference.”
GM says it plans to use ethanol from Coskata to power test vehicles at its Milford Proving Grounds in Michigan by the fourth quarter of 2008. Right now, though, Coskata is only producing ethanol in small batches of 150 liters, according to Wiberg. The key to the company’s success will be showing that its technology can be replicated on a scale large enough to make the syngas process cheaper than producing ethanol from corn, which currently runs at about $1.70 per gallon. Coskata hopes to get its cost below $1.00 per gallon.
The company has biology going for it. “The microorganisms they have developed produce predominantly ethanol, whereas other approaches to converting syngas to ethanol tend to produce an array of products,” says Wiberg. “That leads to the economic advantage they have and the favorable energy balance. If you make ethanol from corn, you get back 1.3 units of energy for every unit of energy you put in. For Coskata, the number is 7.7.”
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