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Coskata Inc. grows many microbes in how, in its efforts to find natural bacteria that optimally produce ethanol. These little guys are the key to Coskata's new method. Its current generation features high efficiency, live in-gas in an aerobic environment, and reproduce naturally.

A Coskata employee mans the ethanol reactor.  (Source: Coskata Inc.)

Tubing with selective membranes separates the reactor's output into pure water and pure ethanol.  (Source: Coskata Inc.)
GM and Coskata partner to bring transform the way ethanol is mass produced

At the General Motors section of the North American International Auto Show (NAIAS) at Detroit, the biggest news wasn't cars -- it was fuel.  GM unveiled and detailed its efforts to take Ethanol from a impractical technology into a viable alternative energy strategy.  Not too long ago it looked like the end of ethanol fuel, with advent of a hungry microbial hydrogen production research effort, which promised better efficiency than current ethanol production.

The biggest current downside of current ethanol infrastructure is simply its source; current ethanol can only be produced using the chemical breakdown of sugar-laden crops, such as corn and sugar cane.  This makes ethanol more expensive and extremely agriculture dependent.  Most U.S. experts agree that the amount of land needed to grow enough sugar crops to power the nation's vehicles would be prohibitive.  Microbial hydrogen currently has ethanol trumped on this count, as it can use anything from crop waste to household table scraps as a source of hydrogen.

Ethanol is down, but certainly not out.  An advanced new approach, dubbed "cellulosic ethanol production," developed by Coskata Inc. located in Warrenville, Illinois promises to make ethanol cheaply and efficiently from virtually anything organic-based.  The long list of possible sources include used tires, crop waste, sewage, household kitchen waste, yard waste etc. 

GM, inspired by Coskata's innovation, announced a major partnership with firm last night.  GM reportedly looked into as many as sixteen ethanol startups offering different processes, and picked Coskata as the winner.  GM invested a small amount of equity to cement the relationship, and both firms are aggressively moving ahead to bring the technology to the market. 

The alternative energy auto market is not unfamiliar ground for GM.  The company showcased leading designs with its Provoq fuel cell concept, its Volt electric car, and its fleet of 100 fuel cell-equipped Equinox SUVs that are currently being deployed in California and New York.

In an interview with GM's Vice Chairman of Product Development, Bob Lutz, DailyTech was provided exclusive insight into exactly how this process works.  Lutz, in response to DailyTech's question, began by stating, "All the other companies use enzymes, which are incredibly expensive.  This has been a major stumbling block."

Lutz went on to detail how instead of enzymes -- which are tricky to mass produce and prohibitively expensive -- GM turned to nature.  GM's approach starts rather traditionally by putting the various organic waste materials, such as tires, crops, crop waste and yard waste into a grinder.  The remaining powder is then exposed to plasma, which causes the organic powder to ferment, releasing carbon-chain gas.  It rises into the air where natural anaerobic bacteria eats the gas molecules and excretes ethanol and water vapor.  This mixture then rises, and travels through a series of tubes with a separating membrane.  The yield is pure water and pure ethanol.

"The bacteria are from nature so no patent was needed.  And they reproduce on their own," Lutz explained, excitedly.  The process, Lutz elaborated, is a down-to earth approach that does not use designer organisms or chemicals.  Further it eliminates many steps in traditional or enzymatic processing, including the need for a centrifuge or still. 

The process trumps traditional production in efficiency.  Less than a third as much water is needed to produce a gallon of ethanol, which makes the process more affordable and easier to implement.  Further an analysis of the process conducted at Argone National Laboratory reveals that for every unit of energy Coskata uses, it creates approximately 7.7 times as much energy, a ratio well above current tradition ethanol production.

Lutz emphasizes the importance of reducing reliance on foreign energy via ethanol fuel.  He also explained that the move will take GM and other auto makers "out of the firing line" of accusations that they contribute to everything from "out-of-control global warming, to funding terrorism."

GM plans to aggressively fund Coskata and deploy the technology.  While many alternative energy research technologies languish in the development phase, GM announced that a pilot plant will begin producing fuel before the close of 2008.  By 2011 a full scale plant will come online, capable of producing 50 to 100 million gallons of ethanol a year.  Such a plant would almost amount to 1% of the world's total ethanol production, including ethanol used for industrial sources.

The price per gallon to produce the fuel is approximately $1 per gallon, but Lutz stated that with Coskata profits, shipping, taxes, storage, and a retailer's cut, the fuel would likely raise the price to a still very affordable $2 per gallon. 

Lutz said that while such a fuel would be very attractive to the consumer, the big hold up is the oil companies.  He points out that while GM has sold 6 million flex-fuel vehicles in the U.S. capable of using ethanol, less than 1% of pumps in the U.S. are ethanol-equipped. 

Will GM's new advanced ethanol process win out over hydrogen fuel cells and other efforts?  With promises of mass production by the end of the year, and $2 per gallon fuel costs that don't dip into American agriculture, Coskata and GM might end up in the spotlight a lot in 2008.

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RE: Great, even more ethanol BS
By dluther on 1/14/2008 2:44:25 PM , Rating: 2
we're never going to "solve the energy problem" with waste biomass. It can certainly help reduce the growth in demand somewhat for petroleum, but it's not going to do more than that.

That requires the same old "all-or-nothing" mentality that people tend to get sucked into when thinking about alternative fuels, which is both foolish and wrong.

There are two primary goals of this alternative fuels initiative:

1) Decrease or eliminate our dependence on foreign oil
2) Reduce pollution

with the implicit caveat that we don't break the country while doing it, taking into account the production and transportation energy expenditures.

Ethanol is less efficient than gasoline as a fuel for the reasons you've plainly stated before to the tune of 34%. However as you know, blending ethanol with gasoline at mixtures up to 50% (E50) results in only a 15% MPG reduction which most people *could* live with, given that such a ratio has the happy benefit of nearly a 25% decrease in fuel costs, depending on where you live, with a 16% reduction in pollutants. Of course, this is all dependent on your driving a vehicle that can burn E50...

Compared to the amount of energy the average person consumes in fuel, the amount to be gained from human waste is trivial. The human body is fairly efficient at extracting energy from biomass...and we stuff far more energy in our cars than our mouths in any case.

This is a bit misleading, because you're comparing apples to automobiles. The human body does extract fuel from food, but not even most of it. And while you're mulling that last statement, consider this: who says that humans are the only source of such scatological waste?

I've been a vocal opponent of ethanol because of the source: corn. But I love this method because it solves some fundamental problems with the source feedstock, overcomes the energy expenditure needed to produce it, and can neatly resolve some problems not even remotely associated with fuel production such as what to do with that mountain of sh!t you'll find outside of every feedlot, chicken coop, and even the waste water treatment plants.

Another problem this helps resolve is refining capacity. This past summer's fuel prices didn't have so much to do with the price of imported crude as it did with our capacity to refine it into gasoline.

RE: Great, even more ethanol BS
By TomZ on 1/14/2008 2:56:15 PM , Rating: 2
How does blending in more ethanol reduce the overall fuel costs? Considering the lower MPG, plus the cost of subsidies, it seems that the overall cost would be higher per mile, right?

RE: Great, even more ethanol BS
By dluther on 1/14/2008 7:04:00 PM , Rating: 4
Pretty simply:

1 gallon of gasoline: $3.75
1 gallon of ethanol: $1.50

Combined price: $5.25 = [(3.75+1.50)/2]

Price per gallon of E50 blend: 2.63 (5.25/2)

Percent price reduction: 30% (over gasoline)
Percent MPG reduction: 15% (over gasoline)

plus the cost of subsidies

How much in subsidies does gasoline incur?

RE: Great, even more ethanol BS
By masher2 (blog) on 1/14/2008 7:59:19 PM , Rating: 2
> "How much in subsidies does gasoline incur? "

None. In fact the production and sale of gasoline incurs a fairly hefty profit for the state.

Ethanol is just the reverse....every gallon you buy costs you (and me) a sizeable hidden chunk of tax dollars.

RE: Great, even more ethanol BS
By dluther on 1/15/2008 2:36:08 PM , Rating: 2
Again, you with that 'all-or-nothing' attitude...


Not even close.

When I speak of government subsidies, I'm including such non-visible considerations such as:

- Reduced corporate taxes on the petroleum industry
- Hugely reduced sales taxes on gasoline and petroleum
- Government funding of programs that primarily benefit the petroleum industry
- Government financed wars and military actions that only benefit the petroleum industry

Right now, ethanol production needs to be subsidized because that's the only way it will grow to be a self-sustaining industry. And really, name the industry of any importance that hasn't received federal subsidies. I can name a few that have:

- Petroleum
- Public transportation (including rail and air)
- Banking
- Agriculture
- Highway

... the list of distinguished club members continues.

The ethanol production industry needs to be embraced by the petroleum industry instead of shunned like it currently is, because like it or not, the world is slowly but surely moving away from petroleum-based locomotion and energy production.

You won't find me arguing that right now, at this moment, gasoline works better in our cars than ethanol does. Tomorrow is another story.

And the production method mentioned in this article eliminates my objection to ethanol by eliminating the use of our food crops to make it.

RE: Great, even more ethanol BS
By TomZ on 1/14/2008 11:01:09 PM , Rating: 1
According to this web site, the subsidies add $2.21/gallon for ethanol:

Combined price: ($3.75+($1.50+$2.21)) = $3.73

Then considering the MPG hit, it's a net loss.

The moral of the story: It's real easy to underestimate the magnitude of the handouts from the federal government.

RE: Great, even more ethanol BS
By iowafarmer on 1/15/2008 1:07:23 AM , Rating: 2
Here is a recent article published in the Des Moines Register:

They don't seem to editorialize a lot in the article. Cargill and Monsanto are companies that know a little about agribusiness.

I have a degree in math, you and your linked website must be using a new math. Since there are >2.6 gal of ethanol produced per bu of corn I wouldn't mind splitting up the extra "$2.21/gal," over $6 a bu. you seem to be suggesting ethanol production adds to the value of a bushel (56#'s) of corn. Oh wait, even with corn prices at all time highs it's not worth much more that $4/bu at the farm gate, and 100% Ethanol is worth less than $2.21 a gal on the open market. I sure wish I saw all the subsidies from the government you and some other posters seem to think farmers and ethanol produces get because of ethanol. There is a blender tax break for ethanol that the ethanol producer and farmer does not see. It is like a windfall profit for the blender. The zfacts site sure puts an interesting spin on the "facts according to zfacts."

It was recently brought to my attention that there was a popular TV show that used ethanol as "the evil" plot device. I guess that explains why many of the facts I read about ethanol seem to be made up facts, or facts taken out of context to make a point.

I agree with the complaint that the governments shortsighted cheap food policy has hurt the economy in the long run. Policy that resulted in cheap grains with surpluses measured in days when the annual harvest would start encouraged many new uses for grains, especially corn. Ethanol is just one of those uses. So now when it seems we might run out of Corn, Wheat and Soybeans before the next harvest, endusers are getting a little excited about locking in their supply needs. But don't despair, it won't be long until corn is so high priced ethanol producers won't be able to afford to use corn to produce ethanol..... Maybe it won't be long until a bottle of soda is more expensive than a bottle of water.

Think I'll go out to the kitchen right now and make a big tasty bowl of field corn.

RE: Great, even more ethanol BS
By masher2 (blog) on 1/15/2008 8:32:56 AM , Rating: 2
Since there are >2.6 gal of ethanol produced per bu of corn I wouldn't mind splitting up the extra "$2.21/gal," over $6 a bu. you seem to be suggesting ethanol production adds to the value of a bushel (56#'s) of corn. Oh wait, even with corn prices at all time highs it's not worth much more that $4/bu at the farm gate, and 100% Ethanol is worth less than $2.21 a gal on the open market.
For someone with "a degree in math", you've wholly misinterpreted a simple 8th grade word problem. To compute the true cost of ethanol, the amount of corn input isn't required, and you've also confused the hidden costs with the market rate.

The equation is simple:

Total Cost to Consumer = Market Rate + Hidden Cost (this is true for any product subsidized by the government)

To compute in costs per unit, we need Market Rate per unit (price in gallons, which we know) and Hidden cost in gallons. To compute the latter, we simply do this:

Hidden cost/gallon = Total Subsidies Paid / Total Gallons produced.

Now, I don't know if the DATA on that website is correct or not, but they've certainly set up the problem correctly.

RE: Great, even more ethanol BS
By glennerd7 on 1/15/2008 8:47:18 AM , Rating: 2
Masher, I thought you might be interested in this....

This is old news in terms of converting organic material to fuel. A company back in 2003 designed a plant that would take any carbon based material and turn it into oil. Discover magazine ran an article on it back then.

It is really an incredible process. Discover then ran a follow up article in 2006 to see where they were at with it.

After reading the second article it was very disheartening to see all the red tape that the designers have fought. The politicians and special interest groups have made it very difficult to produce anything oil related by taxing the snot out of it. Just from a recycling point of view this is great. The United States could begin digging up our land fills and running the refuse through one of these to lower our foreign oil dependence.

RE: Great, even more ethanol BS
By masher2 (blog) on 1/15/2008 12:07:46 PM , Rating: 2
That's interesting. I heard about the plant when the state Governor had it shut down. Glad to hear its back in operation, and hopefully they'll get to the breakeven point soon.

RE: Great, even more ethanol BS
By Fritzr on 1/15/2008 9:44:38 PM , Rating: 2
More info on this comapy and their version of hydrous pyrolysis is in a Wiki article

The page also has links to more general information on the process.

RE: Great, even more ethanol BS
By iowafarmer on 1/15/2008 10:46:56 AM , Rating: 2
Why don't you enlighten me on the "Hidden Costs." I'd like to plug them into my bank account.

The current farm program is complex. Would you point out the hidden subsidies for ethanol. I think if you look at the farm bill you'll find money for food stamps, school lunch, foreign aid and many other programs. Some minor declining direct payments to farmers were decoupled from production, I see the decoupled payments as a mistake. Other direct payments kick in to keep farmers in business when market prices are so low no farmer could afford to raise corn, beans, wheat etc.; not currently a factor. There are non recourse loans on commodities that the farmer has to repay with interest, often cited as a subsidy. I find it interesting that China has a grain reserve, the USA does not; If you play with fire you get burnt.

There is a blenders tax credit for ethanol, but I wouldn't call that a "Hidden Cost;" lost revenue, sure. The blenders tax credit should encourage infrastructure investment. See article above for GM complaint on blender foot dragging.

I don't see ethanol, especially from corn, as the "answer." However it is not "the evil" either. The fact is ethanol from corn can be done now, but I would think there are better cheaper alternatives being worked on. In a free market the market decides the winners.

RE: Great, even more ethanol BS
By masher2 (blog) on 1/15/2008 12:06:38 PM , Rating: 2
> "Why don't you enlighten me on the "Hidden Costs"

Glad to. A hidden cost is one you don't pay directly. The hidden costs for ethanol are twofold. First is the government subsidy package, which totalled about $3.4B in 2006. That's money you and I pay in taxes, even if we don't see the cost at the pump. The second hidden cost is the lost mileage for ethanol, which forces us to buy more gallons to travel the same distance.

> "I think if you look at the farm bill you'll find money for food stamps, school lunch, foreign aid and many other programs"

Yes. So what's your point? That one government program deserves another?

> "In a free market the market decides the winners"

That's just the point. Subsidizing ethanol distorts the free market. Alternatives which might truly be cheaper appear not to be, due to the subsidy. Ultimately, that only slows introduction, and forces us to waste resources on less efficient alternatives.

RE: Great, even more ethanol BS
By iowafarmer on 1/15/2008 1:10:03 PM , Rating: 2
$3.4 B is nothing. Administrative costs eat a lot of that. I also think you have lumped some of the program costs of the programs I've mentioned in that figure. A figure that you seem to dislike paying taxes for, but you don't mind paying less for food you buy. It's much like taking money from one pocket and putting it in another. Unless of course you don't think that that tax expense is reflected in the lower price you pay at the grocery store. The farm program could have been viewed as a social program, a cheap food program, it subsidizes production and is reflected in lower prices to the consumer. Ethanol wasn't even on the screen when the last farm bill was passed, so it's a bit of a stretch to ascribe the cost to ethanol. I think they are working on a new one right now.

I do agree the blender tax credit and lack of the tax credit on imported ethanol is troublesome. But I'm not sure the argument that alternative sources of energy production are being suppressed because of the "subsidy" is a bit of a reach. I repeat I do not see ethanol as "the answer." I personally view it as an alternative energy source that is opening the door for other alternative energy sources. But to blame current market conditions entirely on ethanol is to deflect the blame from poor planning in the past. Some people seem to be using Ethanol as a smoke screen and ethanol has become a convenient "evil" plot device.

RE: Great, even more ethanol BS
By masher2 (blog) on 1/15/2008 2:11:00 PM , Rating: 2
> "$3.4 B is nothing."

Whoa there! Glad you're not my congressman. And you have to remember that's just for the very small amount of ethanol already produced. The lion's share of that money is the $2.5B spent on the 51 cent/gal blender credit. Which means if we buy ten times the ethanol, the government subisidy rises to nearly $30B.

> "Administrative costs eat a lot of that"

No they don't...and even if they did, it would change nothing. It's still a hidden cost you and I have to pay regardless.

> "But to blame current market conditions entirely on ethanol"

I don't see anyone doing that. The fact that other problems exist, however, doesn't change the rational analysis of ethanol.

RE: Great, even more ethanol BS
By iowafarmer on 1/15/2008 2:48:22 PM , Rating: 2
I don't see a $2.5B tax not collected as a subsidy. I also see I wasn't writing about the same "subsidy" as you were, sorry.

Actually a lot of bad press is not based on a rational analysis. If corn had not been so dirt cheap ethanol production from corn would never have gained traction. Even now it seems to be economically viable.

RE: Great, even more ethanol BS
By Fritzr on 1/15/2008 9:42:08 PM , Rating: 2
Okay the subsidy cost for ethanol is $2.21 per gal. Now find the equivalent figure for the gasoline. Starting point would be the cost of military ventures to secure oil supply, cost of support for maintaining friendly governments in countries that supply our oil, subsidies (if any) to the various companies transporting, producing & distributing the oil & oil derived products. Add in any other costs that you can find that would not exist without the petroleum economy. When you have done this, then your adding the subsidy cost will be reasonable. You made a mistake that is very basic. You took an equation and added an extra factor to one side without adding the matching factor to the other side. Note the military cost is a lot less for subsidy cost purposes than the published budget, since expenditures for things like US bases, Pacific theatre deployments, NATO commitments etc. are not part of the subsidy cost. There are many "foreign aid" expenditures that are also disguised bribes for oil producers.

The relative costs will matter little a century from now since at that time the petroleum economy will be over. There will likely still be oil production, both extraction and synthetic, but the supply will be unlikely to be enough to support today's lifestyle. Now is the time to plan for the economy that will replace the petroleum economy. If we wait until the oil supply drops below what is required then the time to do the R&D, design & deployment of commercial solutions will no longer be available. Ethanol is not the solution. It is instead one of many solutions that collectively will solve the problem.

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