Mascoma’s Plan for Ethanol Plant in Michigan Likely Delayed, CEO Says

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they know whether their new methods of making cellulosic ethanol can work on a commercial scale. Investors’ interest in such technologies can fluctuate with the cost of crude oil, which makes ethanol an enticing alternative fuel when crude prices rise and not so attractive when they fall.

Also, U.S. ethanol production capacity is nearly outstripping domestic demand for the fuel—something the industry calls the “Blend Wall.” The name refers to the fact that the U.S. government caps the amount of ethanol that can be blended into gasoline for automobiles at 10 percent of the overall mixture, limiting demand for domestic supplies of ethanol at 12.5 billion to 13.5 billion gallons, according to the Renewable Fuels Association, an industry group in Washington, DC. The nation’s production capacity has already reached 13.5 billon gallons, meaning that country has enough capacity for gasoline mixed with 10 percent ethanol. The ethanol industry is lobbying on Capital Hill to raise the cap on the amount of ethanol that can be mixed into gasoline from 10 percent to 15 percent, and it is seeking expansion in foreign markets for the fuel.

“Just on corn-based ethanol alone, we’re approaching the limits of what the U.S. vehicle population can consume,” says Mark Bünger, a research director in the bioscience group at Lux Research, a market analysis firm based in Boston. “We don’t need lots and lots and lots of more ethanol for a long time.”

Bünger says that companies like Mascoma should look beyond ethanol and use their technology to make other products. South San Francisco-based Solazyme, he notes, is an example of a biofuel developer that has applied its technology in food and cosmetics markets. At Solazyme, algae are used to convert biomass into algal oils that can be used to make fuels and serve as ingredients in animal feed, nutritional supplements, and skin creams.

Brady says that he expects Mascoma to make progress in finding financing for the Kinross plant by late 2010, enabling the firm to break ground on the facility sometime next year. Mascoma researches uses of its technology to transform plant materials into chemicals for products other than ethanol, but its main emphasis is developing transportation fuels from renewable sources.

“We’ll get the financing for Kinross,” Brady says. “It’s just a matter of time.”

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2 responses to “Mascoma’s Plan for Ethanol Plant in Michigan Likely Delayed, CEO Says”

  1. I cannot believe this article. Yet again this company or its founders have hit a brick wall.
    Isn’t it about time that R W Armsrong and their Agresti Biofuels company took this up, at leat with their process you know that making Ethanol from waste will work.