GM gives boost to ethanol effort; some plans by others face hurdles

While General Motors has announced it will invest in a new company that plans to produce inexpensive ethanol, plans by others for ethanol production are encountering public opposition or other obstacles, according to news reports.

Local authorities in Conoy Township, Pa., are reviewing a $100 million corn-to-ethanol distillery proposed for construction by Lancaster Biofuels on a 65-acre tract near the Susquehanna River. During public comments at a Jan. 21 meeting, several area residents voiced concerns about the plant, according to an article by Tom Knapp in the Intelligencer Journal. A decision on the application is expected by March 13, according to the article.
Meanwhile, a conflict-of-interest issue is stalling progress on an $82 million ethanol plant planned in Missouri, according to a Jan. 21 report by David A. Lieb of the Associated Press.
Show Me Ethanol LLC, on schedule to open this spring, received conditional approval 15 months ago from State Treasurer Sarah Steelman to benefit from a program in which banks offer below-market interest rates, according to the AP report.

But that condition required Show Me Ethanol to comply with Steelman's strict conflict-of-interest policy for its investors. So far, Show Me Ethanol has been unable to comply, because its investors include a state representative and his wife; the brother of Republican Gov. Matt Blunt; and the wife of U.S. Rep. Sam Graves, R-Mo., according to the AP.

General Motors on Jan. 13 announced a partnership with Coskata Inc. to use the company’s technology to make ethanol from renewable sources, including garbage, old tires and plant waste.

Coskata said in a press release that it uses a proprietary process that uses patented microorganisms and bioreactor designs to produce ethanol for less than $1 a gallon.

“We are very excited about what this breakthrough will mean to the viability of biofuels and, more importantly, to our ability to reduce dependence on petroleum,” GM Chairman and CEO Rick Wagoner said in the statement.

Coskata said its process addresses the issues most often raised about grain-based ethanol production.

The company said that Argonne National Laboratory analyzed Coskata’s process and found that for every unit of energy used, it generates up to 7.7 times that amount of energy, and it reduces CO2 emissions by up to 84 percent compared with a “well-to-wheel” analysis of gasoline.

Coskata said its process uses less than a gallon of water to make a gallon of ethanol compared with three gallons or more for other processes.

Coskata, based in Warrenville, IL, said it can use its technology practically anywhere in the world that a carbon-based feedstock is available.

For GM, this could lead to joint efforts in markets such as China, where growing energy demand and a new energy research center could jumpstart a significant effort into ethanol made from biomass, Wagoner said in the statement.

More immediately, GM will receive the first ethanol from Coskata’s pilot plant in the fourth quarter of 2008. The fuel will be used in testing vehicles at GM’s Milford Proving Grounds.

GM said it produces more than 1 million flex-fuel vehicles a year and has 3.5 million on the road globally.

In the U.S., GM said, it has more than 2.5 million flex-fuel models on the road and is committed to making half its production flex-fuel capable by 2012. GM said it sells 11 E85-capable models this year and will increase that to more than 15 models for the 2009 model year.

GM said it has worked in partnerships with businesses, universities and non-governmental organizations over the last two years to grow the U.S. infrastructure for E85, helping to open 300 fueling stations in 15 states.

The timing of the GM-Coskata partnership coincides with President Bush’s signing of the Energy Independence and Security Act last month, which calls for a dramatic increase in biofuels – from 7.5 billion gallons in 2012 to 36 billion gallons in 2022. Corn- and other grain-based ethanol are expected to account for up to 15 billion gallons of that new standard with 21 billion gallons coming from cellulosic and biomass sources.

Coskata CEO and President Bill Roe said, “We will have our first commercial-scale plant making 50 to 100 million gallons of ethanol running in 2011, and that includes the two years it will take to build the plant.”

The press release did not indicate where the plant would be built.

The partnership includes an undisclosed equity stake for GM, joint research and development into emissions technology and investigation into making ethanol from GM facilities’ waste and non-recyclable vehicle parts.

Coskata said it is a biology-based renewable energy company for economies dependent on oil. Using proprietary microorganisms and transformative bioreactor designs, the company said, it plans to produce ethanol for less than one U.S. dollar per gallon almost anywhere in the world, from a wide variety of input material. The company was founded in 2006 by renewable energy investors and entrepreneurs, including Khosla Ventures, Advanced Technology Ventures, and GreatPoint Ventures.